Report

WEIR-BDK VALVES HUBLI

DECLARATION

I hereby declare that this project work entitled as, “Study of

Performance Appraisal System and its Effectiveness” in WEIR-BDK VALVES, Hubli,

is my work, carried out under the guidance of Mrs. Kalpana Rao, Mr.R.Murli and my

faculty guide Prof Shweta M.

This report is neither full nor in part has ever been submitted

for award of any partial fulfillment of any other degree of either this university or any

other university.

Um e Habiba Patel

KLES’s INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH HUBLI


ACKNOWLEDGEMENTS

Preparing a project of this nature is an arduous task and I was fortunate enough to get

support from a large number of people to whom I shall always remain grateful. It is proud

privilege for me to acknowledge with deep sense of gratitude, my indebtedness to my

reverted faculty guide Prof.Shweta.M for her valuable guidance, profound advice and

persistent encouragement that has lead to successful completion of my project.

My sincere thanks are given to each of WEIR-BDK VALVES members for their

participation in my efforts, through the time I have learnt from them and appreciated the

opportunity they have afforded me in undergoing my project. I am particularly thankful to

Mrs.Kalpana Rao for her unfailing patience and guidance during the research and preparation

of this report.

Submitted by

Um e Habiba Patel



INDEX

A) Executive Summary

i. Introduction Of The Project

ii. Objectives

iii. Methodology

iv. Analysis

v. Conclusion

B) Industry Profile

C) An Overview Of Performance Appraisal System

i.Definition And Meaning Of Performance Appraisal System

ii.Performance Appraisal System and performance management system

iii.Types Of Performance Appraisal System

D) An Overview Of The Project

i. Objectives

ii. Methodology

iii. Analysis

iv. Suggestions

v. Conclusion

E) Bibliography

F) Annexure



EXECUTIVE SUMMARY

i) INTODUCTION OF THE PROJECT



The whole study is divided into two parts. Out of which first part contains the

organization study and second part contains area undertaken for the study.

The project was undertaken by to gain practical aspects of the working of an

organization as a whole. This project report has been executed entitling at Weir-BDK Valves

Hubli.

The main objective of the project is “To study the performance appraisal system

and its effectiveness”.

The project study is all about performance appraisal system followed in the

organization. The project is mainly concentrated on finding the effectiveness of performance

appraisal system followed in the organization. The collection of required information is done

through personal interview, with the help of questionnaire and secondary data that was

available in the company.

Need for the study:

Different industrial organization will have different types of performance appraisal

system. In the strategic management the aims of the performance are based on manufacturing

process of the industry and the type of industrial organization.

The aims differ based on the performance norms decided by the top management.

Before the acquisition of the organization by WEIR India was a public undertaking. Thus the

aims and intentions of performance appraisal differ compared to private sector organization.

Hence, the aim of the project is to know performance appraisal system and its process

practiced before acquisition and to suggest changes if any, so that it would be helpful for

WEIR-BDK Valves to carry forward with the performance appraisal system.

ii) OBJECTIVES OF THE STUDY



a) To study the existing performance appraisal system followed in the

organization.

b) To study the outcome/ result of the performance appraisal system that is

practiced by the organization

c) To study the effectiveness of performance appraisal system with respect to

the employees of the company.

d) To suggest changes and improvements in the performance appraisal system if

required.

Scope and benefit of the study:

The project will help to evaluate the effectiveness of employee’s performance

appraisal system followed by the organization.

This study will help to collect the opinion of the employees about the

performance appraisal system of the organization.



Limitations of the study:

During my internship study with the WEIR-BDK Valves the difficulties I observed

was during the sample survey.

There was difficulty in finding out the employees who knew about the

performance appraisal system.

Thus I categorized my survey into two parts i.e., questionnaire and the

interview.

Questionnaire was circulated to the white collar employees and interaction and

interview was done with the blue collar employees.

The response of the respondents may not be accurate thinking that the

management might misuse the data.

iii) METHODOLOGY

Type of research:

This is descriptive research method.

Sample size:

A sample size of 100 respondents was selected to undertake the study

50- Blue collar

50- White collar



Source of data collected:

Primary data:

Primary data was collected by interacting with the organization employees, various

departmental managers and through questionnaire.

Questionnaire was prepared and explained to the respondents so as to access them in

giving prompt and unbiased response.

Secondary data:

The secondary data was collected with the help of organization manuals and from the

records of individual employees.

Sampling Method:

Non- probability convenience sampling method was used



iv) FINDINGS(through questionnaire)

Performance is not reviewed frequently.

Performance review takes place only once that is after completion of the probation

period of every individual employee.

94% of the employee’s opinion was that the performance appraisal is conducted

only after completion of the probation period.

This may not give realistic assessment of performance evaluation.

36% of the employee’s opinion was that there is no performance appraisal

conducted in the organization, because they were not aware of the concept of

performance appraisal system.

94% of the employees stated that it is necessary to conduct performance appraisal

system.

From the study it was found that 38% of the employees received reward in the

form of salary increment, 40% of the employees received reward in the form of

bonus payment and 22% of the employees received reward in the form of

promotions.

Majority of the employees i.e., 90% felt that the present performance appraisal

system is ineffective.



FINDINGS (through interview)

1) From the study it is clear that the employee's performance have been evaluated

only once i.e., after their probation period.

2) Having evaluated the performance the employee is either provided with 2

increments, 3 increments or 4 increments.

3) Monetary increment in CTC and promotions are also provided to the

employees.

4) But the 16%, 30% and 17% of the employees' performance hasn't been

evaluated since 1 year, 2 years and more than 2 years respectively.

5) There are 8% of the employees whose performance hasn't been evaluated at all

since the date of their joining.



v) SUGGESTIONS

Periodicity of the performance appraisal system must be increased to

quarterly for a realistic assessment of the performance.

Along with performance punctuality, experience, creativity, loyalty must

also be considered while promoting an employee.

Performance appraisal format should be reliable, accurate and measurable.

Performance appraisal reports must use SWOT techniques and provide

scope for further career development in the organization.

The superiors who evaluate the performance must provide feedback to the

employees to improve performance.



CONCLUSION:

This study helped me to understand the performance appraisal system and the

effectiveness of it in an organization.

In order for the employees to develop and learn they need to know what they need

to change, where (specifically) they have fallen short, and what they need to do.

If a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much

information to an employee. It just says the manager is dissatisfied with

something. In order to make it meaningful and promote growth, far more

information must be added to the appraisal process and the related information

should be transparently shared with the employee.

Most employees resist being classified at the low end of the scale. Employees who

are low rated are more likely to resist the evaluation of the superior and argue,

claiming that personal bias was involved in the ratings.

Thus from the study I think that the present system does not achieve the end

objective in an effective manner. Hence needs an improvement.



INDUSTRY PROFILE



INTRODUCTION

Keeping pace with the global growth, the BDK group was found in 1978 by Shri.

Bharat Khimji. The group has been guiding on a heritage of initiative & innovation, offering

along with its 8 associate companies – a wide spectrum of industrial valves designed for the

needs of chemical & petrochemical industries worldwide. For more than 3 decades, BDK

valves & other products have enjoyed sustained & have lasting reputation in both domestic &

global markets.

Weir group plc, UK through its Indian group company Weir India Private

Limited having its registration office at 219, Ansal chambers-2, Bhikaji Cama place, New

Delhi-110066 completed acquisition 0f Valve Business of ‘BDK Engineering Industries

limited at Hubli, Karnataka with effect from 11th October 2010. The unit at Hubli has been

renamed as “WEIR BDK VAKLVES- A UNIT OF WEIR INDIA PRIVATE LIMITED”.

With acquisition of weir BDK Valves- a unit of Weir in Indian Private Limited” At

Hubli (‘WEIR BDK’), the Weir group has now three units in India, with two units already

operating from Bangalore, India.



MANUFACTURING EXCELLENCE

Weir BDK pioneers in designs and manufacturing of

Gate valves

Globe valves

Check valves

Ball valves

PFA lined valves

Diaphragm valves

Butter fly valves

Plug valves

Knife gate valves

WEIR BDK caters to major sectors like

Nuclear/thermal power plants

Oil gas

Steel & metallurgical plants

Refineries and petrochemicals

Pulp, paper & fibre industries

Chemical

Pharmaceuticals

Process and Sugar

Water treatment plants

Fertilizers and agrochemicals

Sewage & effluent treatment plants



EXPORTS

WEIR BDK exports its products to various countries in the world like

Australia

Newzealand

Malaysia

Thailand

Singapore

Japan

Taiwan

Philippines

Indonesia

United kingdom

Denmark

Germany

France

Spain

Austria

South Africa

Kenya

Middle east

USA

Canada



COMPANY PROFILE

Name of unit/ company : WEIR BDK VALVES –a unit of weir India private limited

Constitution : private limited company

Sales head quarters : 47/48, gokul road, hubli-580030 (Karnataka state)

Telephones : (0836) 4248444/2333930

Fax : (0836) 4248484/2330799

E-mail : [email protected]

Registered office : 219, Ansal chambers-II, BHIKAJI CAMA PLACE NEW DELHI-

110066

Telephone : (011) 26162543

Fax : (011) 460322296

Factory location : 47/48, GOKUL ROAD, HUBLI-580 030 (KARNATAKA STATE)

Telephone : (0836) 4248444/2333930

Fax : (0836) 4248484/2330799


mailto:[email protected]


NATURE OF THE BUSINESS

BDK is engaged in manufacturing the valves & supplying them to the different required industries

like chemical, processes, refineries, petrochemicals, fertilizer, pharmaceuticals, oil exploration,

thermal and nuclear plants, food and beverages, effluent treatment and sewerage, water treatment,

cooling plants, mining and water supply. Therefore they are into B2B i.e. business to business. The

company is operating through its different branches which work in getting the indent from the clients.

VISION: To be the most admired company in the production of valves industry.

MISSION: To design, To manufacture, To market, Quality products at competitive prices to the

entire satisfaction of the customer & attain market leadership through continual improvement.



PRODUCTS:

Diaphragm Valve Butterfly Valve Gate Valve Globe Valve

Check Valve Ball Valves Plug Valve

Pumps:

Process Pumps

BDK – NS slurry Pumps

Multi – stage Pumps

Automatic self cleaning Filters.



AREA OF OPERATION

BDK is operating at the international level. There are many clients inside & outside

India for BDK valves. As the quality of the product is superior so there is good demand. The

company has the following associate companies & overseas customers.

COMPETITORS: -

There are many players in Valve industry; BDK has maintaining its position in the

competitive market through various strategies. The following are the competitors for the

company.

1. AUDCO valves

2. KSB valves

3. MVL Hubli

4. Fouress Bangalore

5. L&T Mumbai

1. Nilton



AWARDS & ACHIEVEMENTS (CERTIFICATION):

Certification is an integral and an ongoing process at BDK, besides being approved

for all government compliances they are also approved by most consulting and contracting

companies.

They are ISO, API, CE, EMS, OHSAS & CRN approved.

American Petroleum Institute Certification

CE Certification - TUV Certification Body for Pressure Equipment of RWTUV

Systems GmbH.

ISO Certificate - TUV Certification Body for QM Systems off RWTUV Systems

GmbH

ISO-14001:2004 Certificate - TUV Certification Body for Environmental

Management System.

BS-OHSAS 18001:2007 Certificate - TUV Certification Body for Occupational

Health and Safety.



WORK FLOW MODEL: -

Procedure:

1. The company will make an offer suitable for the customer.

2. A purchase indent or letter is sent to the company by the customer & a copy is sent to

the sales co-ordination department.

3. This department will send back an enquiry or request to BDK which sends a purchase

order & offer to the head of the sales co-ordination.

4. Sales co-ordination will prepare the contract review. The objective of the review is to

prepare an order assurance after understanding the customers’ requirements

thoroughly & ascertaining the capability of BDK.

5. Six copies of the work order prepared are sent to planning department, marketing

department, zonal office, customer, master file & to the engineering file.



6. Quality assurance plan is prepared by the sales co-ordination department & sent

production planning & control assurance department & customer if applicable.

7. Status of the product is given to the customer, an inspection by the customer is been

arranged if the customer needs to have look at the product manufactured.

DEPARTMENTS: -

1. Accounts Department:

The dept plays vital role by providing and maintaining details of every financial activities

of the company.

Objectives:

To provide accurate and complete systematic information of financial activities.

To maintain all the books of accounts and financial documents.

To prepare periodic financial statements of the company like profit & loss account, trial

balance & balance sheet pertaining to the company.

Functions:

Preparation of daily cash & bank book.

Receipt & payments.

Maintenance of sales & purchase register

Preparation of sales tax returns.

Preparations of central excise duty returns & income tax returns.



WEIR-BDK deals with the following banks:

Syndicate bank located in Hubli for domestic transactions.

Canara bank located in Hubli for export transactions.

ICICI bank.

2. Design & Development:

Functions:

1. Design and development of new products, existence of existing proven range and

standard existing product with some additional feature as per customer requirement.

2. Preparation, release, revision and control of manufacturing drawing, sales drawing,

materials list, general assembly drawing and technical signification and directions.

3. Assisting department for their requirement of fixture, gauges & other tooling when

requested.

4. Disposal of design concession margin non conformity review committee.

5. Maintenance & updating of national, international standards.

6. Attending customer complaints, technical discussion with customer whenever referred

to.

7. Co-ordination with other department for development activities.

8. To continuously improve the quality of the products.



Responsibilities:

1. To design reliable products to meet customer’s specification through design review

design verification and design validation.

2. Issue of drawings and technical’s specification for facilitating procurement,

processing and verification for conformance of products to specified requirements.

3. To perform and control design changes.

4. Non conformance review, disposition, corrective & preventive.

5. To maintain quality documents & records.

6. To identify training needs and to plan & organize for the same.

3. Training Department:

This department is headed is meant to provide training to the personnel performing

activity effecting quality. This department is maintained by the officials of the

personal department.

Procedure:

1. The HOD identifies the annual training needs of the personnel in their

department, which unless provided will affect the quality of work.

2. Personnel performing special process are trained & given certificates on the

basis of appropriate education, training & experience required.

The training needs which are identified are communicated to the HOD training so that

he can prepare for the annual training programme and co-ordinate for providing

training either internally or externally. Unscheduled programmes are conducted as &

when required according to the needs.



Responsibility of HOD Training Department:

1. To organize training for identified participants pertaining to common topics.

2. Maintenance of quality documents and records.

4. Time Office

This department is headed is by Shri. Murali

Personnel mean the relation between management and workers. Personnel department

is also known as “TIME OFFICE”

Time Office Department:

It is a branch of personnel departments (HRD). Time office is a key to personnel

office. Time office performers the basic function of the personnel department. It maintains

the arrival and departure time of all the staff members. The person who looks after the

records of the records of the time office is timekeeper. The company issues an attendance

card (punch card) to every worker before going to the work place; the worker gets the

attendance card signed in the office. The workers are also required to sign the attendance

register to avoid the misrepresentation or escaping tricks of workers while going out of the

department. Workers are required to insert their punch card in the factory. The time office

sends these records to the personnel department. These records will help in wage fixation,

salary fixation, salary fixation, granting of leave and allowances to workers.

Attendance: This department records the time (i.e. the time of workers in and out of the

company) through punch card system right at the entrance by the time officer.



5. Material & Stores Department:

Objectives:

1. To plan and procure materials and services confronting to specified requirements

through continual improvements.

2. Store & preserve materials till they are issued for use.

In purchase department purchasing activity is carried on which is made after the

order is accepted by the planning department. It maintains the bill of the materials list

to know requirement of raw materials. According to technical specifications of the

companies selected vendors.

Types of vendors:

1. Casting vendors

2. Bought vendors.

Company procures 32 types of raw materials from 100 suppliers. Who are evaluated

& selected to their performance & product quality.

Suppliers supply the materials according to the given delivery date.

6. Production, Planning and Control Department:

The department is concerned with the planning for the production process. It

plans what is to be produced, what are the requirements to be fulfilled for the process

of production. And also controls the production process.

Objectives:

1. To plan & meet the production targets as per the customer specifications.

2. Plan for the manpower & equipment.

3. To organize the layout of machine shops & assemblies for effective operations.



Contract review is prepared as per the client’s product catalogue & the

engineers plan. According to the contract details the production of the product is

carried out at the end of each month.

7. Sales co-ordination department:

This department helps in collecting orders from the customers through agents,

dealers & salesmen. This department also attends to the complaints & suggestions

given by the customers. It has 10 zonal offices throughout India known as BDK

marketing services Pvt. Ltd.

The associated manufacturing concerns of WEIR- BDK in Hubli are:

1. Zenith Machines & tools Pvt.Ltd.

2. TP Pumps & Valves Pvt.Ltd.

3. S L Flow Control

4. Valves Pvt Ltd

5. Perfect Actuators & Control Pvt Ltd

Procedure:

1. The company will make an offer suitable for the customer.

2. A purchase indent or letter is sent to the company by the customer & a copy

is sent to the sales co-ordination department.

3. This department will send back an enquiry or request to BDK which sends a

purchase order & offer to the head of the sales co-ordination.



4. Sales co-ordination will prepare the contract review. The objective of the

review is to prepare an order assurance after understanding the customers’

requirements thoroughly & ascertaining the capability of BDK.

5. Six copies of the work order prepared are sent to planning department,

marketing department, zonal office, customer, master file & to the

engineering file.

6. Quality assurance plan is prepared by the sales co-ordination department &

sent production planning & control assurance department & customer if

applicable.

7. Status of the product is given to the customer, an inspection by the customer

is been arranged if the customer needs to have look at the product

manufactured.

8. In case of any missing of details a forwarding letter is sent to BDK & a copy

of the letter to the customer.

8. Quality Assurance Department:

Objectives:

1. To maintain consisting & correct appraisal of quality of the product at all the stages of

manufacturing till the product is dispatched such that the required product quality is

achieved, maintained & improved.

2. To develop necessary competence in the department for meeting specific quality

requirements.



Responsibilities:

1. To draw quality plans or inspection plans.

2. Inspection of incoming & in process production.

3. Final product inspection & testing.

4. Identification & traceability of products.

5. Inspection & test status.

6. Calibration & control of inspection, measuring & test equipment to maintain

identification & traceability for the same.

7. To plan for inspection & test resources.

8. Non conformance review, disposition, corrective and preventive action.

9. Maintenance of quality documents & records.

10. To identify training needs & to plan & organize wherever required.

11. To fix & remove API monogram is required.



SWOT ANALYSIS

Strengths:

BDK provides quality at affordable prices prompt delivery and the unflinching

commitment to excel.

BDK is large scale supplier of valves & pumps.

The group’s product has been enjoying a sustained presence in the national *

international markets in the chemical & process industries.

BDK follows standard system for all their activities.

In the market the company is recognized by their quality.

This is ISO standardized company.

Weakness:

Due to lack of suppliers they are unable to provide proper accessories.

Cost of maintenance standard is more.

Opportunities:

They have many competitive manufacturers in the market.

They have an opportunity to increase their supply to no. of industries.

There is no restriction for movement of products in the world due to globalization

There are many foreign countries still to be covered.

Company has an opportunity to diversify its business to FMCG market due to its

experience

Threats:

Their main raw material is casting & foundries for which they have to heavily depend

on outsiders which may affect their yield during recession.



AN OVERVIEW OF THE PERFORMANCE

APPRAISAL SYSTEM



i) Introduction to Performance Appraisal

Once the employee has been selected, trained and motivated, he is then appraised for his

performance. Performance Appraisal is the step where the Management finds out how

effective it has been at hiring and placing employees. If any problems are identified, steps are

taken to communicate with the employee and remedy them.

“Performance Appraisal is a process of evaluating an employee’s performance in terms

of its requirements”.

Performance Appraisal can also be defined as the process of evaluating the performance

and qualifications of the employees in terms of the requirements of the job for which he

is employed, for purposes of administration including placement, selection for

promotions, providing financial rewards and other actions which require differential

treatment among the members of a group as distinguished from actions affecting all

members equally.

Importance and Purpose

Performance Appraisal has been considered as the most significant an indispensable tool for

an organization, for an organization, for the information it provides is highly useful in making

decisions regarding various personnel aspects such as promotion and merit increases.

Performance measures also link information gathering and decision making processes which

provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,

selection, training and compensation. Accurate information plays a vital role in the

organization as a whole. They help in finding out the weaknesses in the primary areas.

Formal Performance Appraisal plans are designed to meet three needs, one of the

organization and the other two of the individual namely:

They provide systematic judgments to back up salary increases, transfers, demotions

or terminations.



They are the means of telling a subordinate how he is doing and suggesting needed

changes in his behavior, attitudes, skills or job knowledge. They let him know where

he stands with the Boss.

Superior uses them as a base for coaching and counseling the individual.

On the basis of merit rating or appraisal procedures, the main objectives of

Employee Appraisal are:

To enable an organization to maintain an inventory of the number and quality of all

managers and to identify and meet their training needs and aspirations.

To determine increment rewards and to provide reliable index for promotions and

transfers to positions of greater responsibility.

To suggest ways of improving the employee’s performance when he is not found to

be up to the mark during the review period.

To identify training and development needs and to evaluate effectiveness of training

and development programmes.

To plan career development, human resource planning based potentials.

There are four key elements in the appraisal system:

1. Set objectives - Decide what the Team Leader wants from the employees and agree these

objectives with them.

2. Manage performance - Give employees the tools, resources and training they need to

perform well.

3. Carry out the appraisal - monitor and assess the employees' performance, discuss those

assessments with them and agree on future objectives.

4. Provide rewards/remedies - Consider pay awards and/or promotion based on the

appraisal and decide how to tackle poor performance.



PERFORMANCE APPRAISAL AND PERFORMANCE

MANAGEMENT

It is sometimes assumed that performance appraisal is the same thing as performance

management. But there are significant differences. Performance appraisal can be defined as

the formal assessment and rating of individuals by their managers at, usually, an annual

review meeting. In contrast performance management is a continuous and much wider, more

comprehensive and more natural process of management that clarifies mutual expectations,

emphasizes the support role of managers who are expected to act as coaches rather than

judges and focuses on the future.

Performance appraisal has been discredited because too often it has been operated as a

top-down and largely bureaucratic system owned by the HR department rather than by line

managers. It was often backward looking, concentrating on what had gone wrong, rather than

looking forward to future development needs. Performance appraisal schemes existed in

isolation. There was little or no link between them and the needs of the business. Line

managers have frequently rejected performance appraisal schemes as being time consuming

and irrelevant. Employees have resented the superficial nature with which appraisals have

been conducted by managers who lack the skills required, tend to be biased and are simply

going through the motions.

Performance appraisal compared with performance management

Performance appraisal Performance management

Top-down assessment Joint process through dialogue

Annual appraisal meeting Continuous review with one or more

formal reviews

Use of ratings Ratings less common

Monolithic system Flexible process



Focus on quantified objectives Focus on values and behaviors as well as

Objectives

Often linked to pay Less likely to be a direct link to pay

Bureaucratic – complex paperwork Documentation kept to a minimum

Owned by the HR department Owned by line managers

TRADITIONAL METHODS OF APPRAISAL

Some of the traditional methods of appraisal are explained below:

1. Ranking

In this, the superior ranks his/her subordinates in order of their merit, from best to

worst.

- It is done in a competitive group.

- It is done by placing the appraisee on numerical scales i.e. 1st, 2nd, 3rd etc. in the

total group.

- Ranking of an appraisee on his job performance/traits against that of another

member.

2. Person-to-Person/Paired Comparison

Under this method the appraiser compares each employee with every other employee,

one at a time.

- Certain key performance areas/traits are developed. E.g.: Leadership, Creativity,

Initiative etc.

- A scale for each factor is designed.

- A scale of people is also created for each factor.

- Each Appraisee is compared to every other person on the scale.

- Certain scores for each factor are awarded to the appraisee.



3. Grading

- Certain categories of traits/performance criteria, which are worth of appraising, are

established. E.g. cooperativeness, self-expression, dependability, job knowledge

etc.

- The actual performance (Key performance area) of an employee is then compared

to the predetermined grade definitions.

- Appraisee is allotted with the grade, which describes his performance in the best

possible manner.

- Any grade that is selected should be well defined.

4. Graphic Scales

- A printed form, one for each person to be rated is used.

- The factors included in the form are Employee characteristics such as leadership,

cooperativeness, enthusiasm, loyalty etc. or Employee contribution which

includes quantity and quality of work, specific goals achieved, regularity of

attendance, responsibility assumed etc.

- The traits can be evaluated on continuous scale – the appraiser places a mark along

a continuum (range).

- The best method to use is the “multiple” type of scale wherein one has to “tick

off” the box, which suits the description of an appraisee’s performance.

- Certain types of graphs are prepared based on these derived ratings.

5. Checklist

- A series of questions are presented concerning an appraisee’s behavior.

- The appraiser has to reply to the questions in either negative or positive tone-

(Yes/No).



- The value of each question may be weighted i.e. one can have predetermined scale

and scoring to those questions.

6. Essay

- A blank form is given to the appraiser.

- The form contains main heading such as employees’ characteristics, attitudes, job

knowledge, potential etc.

- The appraiser is asked to put in words his impressions about the employee.

- It contains factual and concrete knowledge.

- It gives specific information about the employee.

7. Confidential Reporting

- It is the most traditional way of appraising employee’s performance. The basic

assumption here is that since the superior is in direct contact he knows his

subordinates better than any other and hence his appraisal would be more

appropriate.

- The superior writes a paragraph or so about his subordinate’s strengths,

weaknesses, intelligence, attitude to work, attendance, conduct and character,

work efficiency, etc.

8. Critical Incident Method

- Initially a set of noteworthy (good or bad) on-the-job behaviors is prepared. This is

usually in the form of incidents.

- These incidents are given to a group of experts who assign scale values depending

upon the degree of desirability for the job.

- This checklist is used by superiors for evaluating the employees.

- This method helps in identifying the key areas where the employees are weak or

strong.



- It emphasizes rating on objective evidence and helps in counseling.

9. Forced Choice Technique

- In forced choice system the appraiser is forced to choose one from among a group

of 4 statements that best fits the individual being rated and one which least fits

him.

- Each statement is given a value or a score.

- The evaluator does not know the score value of statements; hence he cannot show

any favor towards the appraisee.

- The method of arranging the traits involves a long process from getting the

description of “good” or “bad” employees to establishing their validity and

reliability.

10. Behaviorally Anchored Rating Scales (BARS)

- Behaviorally Anchored Rating Scales (BARS) are anchored with descriptive

alternative behaviors.

- For every given category of behavior or performance, statements are ordered in an

ascending or descending order of excellence.

- Although these scales represent job-relevant dimensions of performance, they still

pose problems in determining which actually, observed behaviors match with

specifically anchored performance scales.

- Despite this difficulty, BARS are a significant improvement, since they require

less inference on the appraiser’s part as against traditional rating approaches.



NEW FRONTIERS TO PERFORMANCE APPRAISAL

In recent years the system of performance appraisal is becoming more and more transparent

wherein the employee, who is being appraised, is involved in the process. The objectives or

targets are set with mutual understanding between the appraisee and his immediate superior.

The feedback regarding his performance is given to the appraisee with areas of improvement

by disclosing his strengths and weakness and the opportunities available. I will take you into

details of these new frontiers to Performance Appraisal viz:

I. Management by Objectives (MBO)

II. Balanced Scorecard

III. 360º Feedback

I. MANAGEMENT BY OBJECTIVES

1. Management by Objectives is basically a process whereby the superior and the

subordinate managers of an enterprise jointly identify its common goals, define

each individual’s major areas of responsibility in terms of the results expected of

him and use these measures as guides for operating the unit and assessing the

contribution of each of its members. Management by Objectives is primarily to

change the behavior and attitude towards getting an activity or assignment

completed in a manner that it is beneficial for the organization. Management by

objectives is a result-oriented process, wherein emphasis is on results and goals

rather than a prescribed method. A number of companies have had significant

success in broadening individual responsibility and involvement in work planning

at the lowest organizational levels.

2. The concept rests on a philosophy of management that emphasizes integration

between external control (by managers) and self-control (by subordinates). It can

apply to any manager or individual no matter what level or function, and to any

organization, regardless of size.



For instance, the number of quality articles to be churned out in a week at a

publishing house is, let’s say, five. This is the goal of the organization. This goal

has to be set in coordination with the writers. The emphasis here again would be

on accomplishing this task flawlessly over the week rather than the setting of a

method to accomplish the same. You are giving them a free hand to decide as to

how they want to work in order to accomplish target. This gives the employee

both responsibilities as well as authority to do a job. The employees are now

responsible for its success or failure and it is their baby. It is a VERY SMART

MANAGEMENT TOOL where the employee is involved in the decision making

process.

3. Management by Objectives is a five-sutra process having following basic steps:

i. Set Organizational Goals:

This envisages that organizational goals and business strategies are expressed

clearly, concisely and accurately. They are periodically reviewed. They

should be challenging enough to motivate the employee. Clear and attainable

goals help channel energies towards desired behavior and let the employee

know the basis on which he will be rewarded. At this time, any appropriate

changes in the organization structure should be made: changes in titles, duties,

relationships, authority, responsibility, span of control and so forth.

ii. Joint Goal Setting:

This step establishes short-term goals, which are performance oriented,

between the management and the employee. The responsibilities are clarified

to the employees through organizational charts and job description. The goals

decided by the employee need to complement the goals of the management.

They also need to be flexible to accommodate new ideas without losing

individual responsibilities. Moreover they should be easily quantifiable. For

example:



To prepare process and transfer to the office superintended, all account

payable vouchers within three working days from the receipt of the

voucher.

To hold weekly meetings with all employees.

To use program evaluation and review technique (pert) for all new plant

layouts.

iii. Performance Reviews:

This step suggests frequent performance reviews between the manager and the

employees. During the initial stages the meetings be held once a month and

later could be quarterly. For maximum benefit these meetings should be

scheduled for more than once a year.

iv. Set check posts:

Establishment of major check posts to measure progress. This is merely to

check that the employee surges towards his premeditated (planned) goal

without any disruptions. These check levels should be higher in the initial

stages and then gradually reduce. This demands that the manager should be

on constant alert and exercise sound judgment.

v. Feedback:

The employees who receive frequent feedback about their performance are

highly motivated than those who do not. However, one has to ensure that the

feedback is relevant and specific. This helps the employee and the manager

understand where they stand.

II. 360 FEEDBACK



With the movement in the eighties to find new strengths and productivity through

employee empowerment came the idea of performance appraisals from subordinates,

their superiors, their peers and themselves – “360 º feedbacks.”

AN OVERVIEW OF THE PROJECT



i) OBJECTIVES OF THE STUDY

To study the existing performance appraisal system followed in the

organization.

To study the outcome/ result of the performance appraisal system that is

practiced by the organization

To study the effectiveness of performance appraisal system with respect to

the employees of the company.

To suggest changes and improvements in the performance appraisal system if

required.

ii) METHODOLOGY

Type of research:

This is descriptive research method.

Sample size:

A sample size of 100 respondents was selected to undertake the study

50- Blue collar

50- White collar



Source of data collected:

Primary data:

Primary data was collected by interacting with the organization employees, various

departmental managers and through questionnaire.

Questionnaire was prepared and explained to the respondents so as to access them in

giving prompt and unbiased response.

Secondary data:

The secondary data was collected with the help of organization manuals and from the

records of individual employees.

Sampling Method:

Non- probability convenience sampling method was used



ANALYSIS



1. Age:

Analysis: From the above diagram it is clear that 30% of the employee’s age lies between 18-25 years, 46% of the employee’s age lies between 25-30 years, 8% of the employee’s age lies between 30-35 years and 16% is above 35 years.

2. Qualification:



Analysis: The figure above depicts that 30% of the employees are graduates and the remaining 70% are diploma holders.

3. Work Experience:

Analysis: From the above figure we can say that 32% of the employees experience lies between 2-3 years, 36% are working from more than 3 years and 16% of the employees experience lies between 0-1 year and 1- 2 years.

Interpretation: This shows that people are working from long period of time but the performance has not been evaluated frequently, which would affect their efficiency level.



4. Practice of performance appraisal system

Analysis: It is clear that 94% of the employees have stated that the performance appraisal system is conducted in the organization but 6% of the employees stated that there is no performance appraisal conducted.

Interpretation: This shows that 6% of the employees are not aware of the concept of performance appraisal system.

5. Necessity of performance appraisal system

Analysis: For this parameter the answer of the employees was same as the above one, i.e., 94% of the employees feel that performance appraisal is important and 6% feel that it is not important or not required.

6. Kind of reward received:



Analysis: Now this figure shows a clear picture of the rewards received by the employees. i.e., 22% received promotion 40% received bonus payment 38% received salary incrementInterpretation: we can easily interpret that rewards are given to all the employees in one or the other form though there is no proper performance appraisal system carried out.

7. Frequency of performance appraisal system

Analysis: From the figure it is clear that 94% of the employees have stated that performance appraisal is conducted after completion of the probation period and only 6% stated that it is conducted yearly.



Interpretation: This analysis says that employees who have joined before one year have undergone performance appraisal once after completion of their probation period and they think that it is carried out every year.

8. Reason for conducting performance appraisal system in your organization

Analysis: Here 60% of the respondents stated that the reason for performance appraisal system in the organization is to provide increments/ decrements and 40% stated that it is conducted to facilitate promotions, transfer and termination decisions.

9. Satisfaction from the performance appraisal and reward system:

Analysis: From the study it is clear that 86% of the employees are not satisfied and 14% of the employees are satisfied with the reward and performance appraisal system.



Interpretation: 14% of the employees are not satisfied because they do not get rewards and promotions on the basis of their performance, instead it is just generic method followed.

10.Extent of the issues covered in the performance appraisal system:

Analysis: It can now be analyzed that majority of the issues covered under the performance appraisal system are personality behavioral.

11.Increments received till date:

Analysis: The increments received by the employees are depicted in the figure above, viz: 56.67%- received monetary increment in CTC 28%- received 2 increments 10%- received 3 increments 5%- received 4 increments



FINDINGS (through interview)

%of employees whose performance is evaluated

%of employees whose performance is not evaluated since the following years

% of employees whose performance is not evaluated at all

Increments provided

Promotions provided

1year 2 years More than 2 years

2 increments - 4%

10% of the employees have been promoted after the performance evaluation.

16% of employees’ performance is not been evaluated since 1 year

30% of employees’ performance is not been evaluated since 2 years

17% of employees’ performance is not been evaluated from more than 2

There are 8% of employees whose performance haven’t been evaluated.

3 increments - 8%

Monetary increment in



CTC - 54% years

vi) SUGGESTIONS

Periodicity of the performance appraisal system must be increased to

quarterly for a realistic assessment of the performance.

Along with performance punctuality, experience, creativity, loyalty must

also be considered while promoting an employee.

Performance appraisal format should be reliable, accurate and measurable.

Performance appraisal reports must use SWOT techniques and provide

scope for further career development in the organization.

The superiors who evaluate the performance must provide feedback to the

employees to improve performance.



CONCLUSION:

This study helped me to understand the performance appraisal system and the

effectiveness of it in an organization.

In order for the employees to develop and learn they need to know what they need

to change, where (specifically) they have fallen short, and what they need to do.

If a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much

information to an employee. It just says the manager is dissatisfied with

something. In order to make it meaningful and promote growth, far more

information must be added to the appraisal process and the related information

should be transparently shared with the employee.

Most employees resist being classified at the low end of the scale. Employees who

are low rated are more likely to resist the evaluation of the superior and argue,

claiming that personal bias was involved in the ratings.



Thus from the study I think that the present system does not achieve the end

objective in an effective manner. Hence needs an improvement.

E) BIBLIOGRAPHY

BOOKS:

Human Resource Management – Subba Rao

Human Resource Management – Ashwatappa

COMPANY DOCUMENTS:

Company profile

Company broachers



Company prospectus

F) ANNEXURE

PERFORMANCE APPRAISAL SURVEY

Dear Sir/Madam,

I am pleased to introduce myself as Um-e-Habiba Patel student of

KLE’s IMSR College Hubli. As part of our curriculum I have undertaken a study on

“PERFORMANCE APPRAISAL SYSTEM” At your esteemed organization. Kindly spare

your time to fill the following information required. I assure you that the information

provided by you will be kept confidential.

Name: Department:

Designation:

QUESTIONNAIRE

1) What is your age group?



a) 18-25 b) 25-30 c) 30-35 d) Above 35

2) What is your qualification?

a) Diploma b) Graduate c) Post graduated) Doctorate

3) How long have you been in present job?

a) 0-1 year b) 1-2 years c) 2-3 years d) Above 3 years

4) Is performance appraisal conducted in your organization?a) Yes[ ] b) No [ ]

5) Is it necessary to conduct performance appraisal?a) Yes b) No

6) Which kind of reward did you get from the superior for your performance?a. Salary Increment [ ] b. Appreciation [ ]

c. Promotion [ ] d. Bonus Payment [ ]

7) Are you able to achieve your target set by the Performance Appraisal System?a) Yes [ ] b) No[ ]

8) How frequently performance appraisal is done?a) Yearly b) Half yearly c) Quarterlyd) After completion of the probation period

11) Why do you have Performance Appraisal System in your Organization?

(Please tick as many boxes as appropriate)

a. Retention Strategy [ ] b. Reward Allocation [ ]

c. Identification of Training & Development needs [ ]

d. Provide increments/decrements [ ]

e. Facilities Promotions & Transfers & Termination Decisions [ ] f. Career Planning [ ]

12) Are you satisfied with Performance Appraisal System of this company?a) Yes [ ] b) No[ ]

9) Are you satisfied with reward system of this company?a) Yes [ ]b) No [ ]



10) To what extent were the following issues covered in the Performance Appraisal System in

your Organization.

a. Your achievement of work objectives b. Your Personality and Behavior

Discussed [ ] Discussed [ ]

Not discussed [ ] Not discussed [ ]

c. Your Training & Development need d. Your career aspirations & Plans

Discussed [ ] Discussed [ ]

Not discussed [ ] Not discussed [ ]

13) After the evaluation of your performance how many increments have you received?a) One increment b) Two increments c) Three incrementsd) More than three increments

THANK YOU

Existing Format

Performance & Potential Appraisal

Name of the employee: Designation:




To be rated on a 10 point scale

1 2 3 4 5 6 7 8 9 10

Functional excellence

Customer

Focus(Internal/external Integrity

Leadership

Team Work

Potential to handle higher role

Overall PerformancePerformance highlights/ example for demonstrated potential

Strengths

Development/ Training need

Name of the Supervisor : Signature:

Designation :

Report

Documents

Transcript of Report