Post on 28-Jul-2015
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
EXECUTIVE SUMMARY
The most important, and truly indeed the truly unique contribution of management in the
20th century was the fifty –fold increase in the productivity of the manual worker in
manufacturing. The most important contribution management needs to make in the 21 st
century is similarly to increase the productivity of knowledge work and knowledge
workers who are their most valuable assets. ” A worker, who controls, modifies and
involves in the decision making in a knowledge organization is referred to as a
knowledge worker. An organization which uses or produces knowledge is referred to as
a knowledge organization. Managing knowledge workers is directly related to the
transformation of business organizations over the time. There is a fundamental shift seen
in the focus, sources and processes of innovation and value creation in the modern
business entities. Managing knowledge workers helps in the growth of the organization
as “innovation and productivity of the knowledge worker is unleashed. Managing
knowledge workers is the un-tackled challenge of today’s managerial force. This is
because the knowledge worker is unique in all aspects (psychologically, sociologically
and physiologically). The knowledge workers in today’s knowledge era are conceptually
strong and carry the means of production with them. They do not like to be led and are
clever and intellectually creative. The knowledge based businesses need to be focused on
the productivity of their capital – that is, the productivity of the knowledge worker .One
of the means by which this can be achieved is by developing an appropriate performance
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
appraisal system exclusively for the modern day knowledge workers . An effective
performance appraisal system can be used to create team synergy, build trust, impart
conflict management techniques, and develop team working and team development skills
in knowledge organizations. Therefore it is necessary to develop various better, new and
efficient methods to judge the productivity of the Knowledge workers. An increase in the
productivity of the human capital will correspond to the increase in the performance of
the knowledge organization as a whole.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
INTRODUCTION
Business environment is changing fast as a response to evolving conditions .Change is
inevitable in every aspect of life and organizations are no exception to this. The third
wave of human socio-economic development is described by Charles Savage in "Fifth
Generation Management." The first wave was the Agricultural Age with wealth defined
as ownership of land. In the second wave, the Industrial Age, wealth was based on
ownership of Capital, i.e. factories. Modern organization as emerged from the industrial
revolution. The cotton mill and the railroad were first. But while unprecedented, they
were still based on the manual labour as was all earlier work , whether it was farming ,
manufacturing , clearing cheques by hand etc. This was the case as late as 50 or 60 years
ago, even in the most highly developed economies.
In the Knowledge Age i.e.; the third wave, wealth is based upon the ownership of
knowledge and the ability to use that knowledge to create or improve goods and services.
Product improvements include cost, durability, suitability, timeliness of delivery, and
security. A large and growing percentage of value creation in the 21st century economy
results from "knowledge work."
In the face of enormous changes in the business environment of India backed up by
liberalization of economy, globalization of business, modernization of technology,
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
changing lifestyles, global competitive pressures and large scale employment ,a need
exists for a fresh look at the human resource .Multinationals, foreign investors and
NRI’s entering the Indian in a big way, communist countries adopting the path of
capitalism and large scale technology transfer, all such factors necessitates a wider
perspectives of human resource .
The society has been subject to continual change and evolutions over time.Gone are the
days of stable environment and relatively few changes; now change has become the
order of the day. Changes may be caused by Political , Economic, Social , Technical,
Legal or Ethical/ Environmental(PESTLE) upheavals, and these changes can be in the
form of paradigm shifts in the organization’s cultural, operational, technical ,
administrative, commercial procedural areas. The manufacturing based industrial
society of the post war period has evolved more and more into a service society, and
more recently into the so- called information society. According to the leading
management thinkers, the manufacturing, service, and information sectors will be based
on knowledge in the coming age, and business organizations will evolve into knowledge
creators in many ways.
Peter Drucker is one of the earliest thinkers who noticed a sign of this great
transformation. He coined the terms “knowledge work” and “knowledge worker” around
1960(Drucker, 1993, p.5). According to his book, Post Capitalist Society (1993), we are
entering “the knowledge society” in which “the basic economic resource” is no longer
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
capital, or natural resources, or labour, but “is and will be knowledge”, and where
“knowledge workers” will play a central role (p.7)
Drucker (1993) suggested that one of the most important challenges for every
organization in the knowledge society is to build systematic practices for managing a self
transformation. The organization has to be prepared to abandon knowledge that has
become obsolete and learn to create new things through:
1) Continuing improvement of every activity
2) Development of new applications from its own successes and
3) Continuous innovation as an organized process.
Drucker (1991) also points out that an organization has to raise productivity of
knowledge and service workers in order to meet the challenges
The 21st century has witnessed the emergence of knowledge work and the knowledge
worker – let alone their emergence as the chief source of capital in our knowledge based
society and economy. This is a profound change as when there was a change into the
machine driven economy a few decades back, maybe an even greater one.
The large business in the knowledge era is more likely to resemble a hospital or a
symphony orchestra than a typical manufacturing company. In the Knowledge Age, 2%
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
of the working population will work on the land, 10% will work in Industry and the rest
will be Knowledge Workers.
The effective management of knowledge workers is one of the greatest challenges facing
organization today. Human resource management and knowledge management is needed
in every organization that is interested in growing, stabilizing, diversifying, renewing,
developing become more dynamic in playing leadership roles. Unless the valuable
human resource is properly nurtured, trained and developed, organization effectiveness
would not be achieved .So human resource management has emerged as the most
spectacular field of management in India.
The traditional management process included planning, organizing, directing, leading,
and controlling activities in order to accomplish organizational objectives. The
traditional form of managing human resource will no longer work in the knowledge era.
The single greatest challenge facing managers in the developed countries of the world is
to raise the productivity of knowledge and service workers. This challenge, which will
dominate the management agenda for the next several decades, will ultimately determine
the competitive performance of companies. Even more important, it will determine the
very fabric of society and the quality of life in industrialized nation (Drucker, 1993,
p.69)
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
1.1 Knowledge Organizations
Knowledge organizations are organizations that either use or produce knowledge, where
innovation and creativity is the most important input.
The knowledge organization is composed largely of specialists who direct and discipline
their own performance through organized feedback from colleagues, customers, and
headquarters. It is an information based organization.
Knowledge organization pose their own special management problems like motivating
and rewarding the knowledge workers , creating a vision that can unify an organization
of knowledge workers , devising a management structure that works with task forces ,
and ensuring the supply ,preparation and testing of top management people.
1.2 Knowledge Workers
The term was coined by Peter Drucker in 1959, is one who works primarily with
information or one who develops and uses knowledge in the workplace. “Knowledge
worker (also referred to as intellectual worker or brain worker) is someone who is
employed due to his or her knowledge of a subject matter, rather than their ability to
perform manual labor.” It includes those in the information technology fields, such as
computer programmers, systems analysts, technical writers and so forth. The term can
also refer to people outside of information technology but who are hired for their
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
knowledge of some subject, such as lawyers, teachers, and scientists. The success of the
knowledge organization depends on the performance of its knowledge workforce.
A Knowledge Worker's benefit to a company could be in the form of developing
business intelligence, increasing the value of intellectual capital, gaining insight into
customer preferences, or a variety of other important gains in knowledge that aid the
business.
Today less than one fifth of the workforce is blue collared. Knowledge workers now may
comprise two fifth of the workforce, and they have a supervisor but are not subordinates.
In the area of their expertise they are their supervisors.
The critical feature of a knowledge workforce is that its workers are not labour, they are
capital. A knowledge based workforce is qualitatively different from a less skilled one.
They are the major creators of wealth and jobs.
In traditional workforce, the worker serves the system, in a knowledge organization the
system must serve the workforce. Employee’s maybe the greatest liability, but people are
considered as the greatest opportunity.
Knowledge worker (instead of just machine capital) are thought to integrate the best of
hierarchy, self-organization and networking Each dictates a different communications
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
and rewards system, and requires activation of knowledge-sharing and action learning.
Knowledge workers work in an environment described as a knowledge network.
1.3 Management of Knowledge Workers
In order to manage the Knowledge Workers of the 21st century it’s mandatory to know
about the technologies that the knowledge worker employs and how he manages his
knowledge. Knowledge Management ('KM') comprises a range of practices used by
organizations to identify, create, represent, distribute and enable adoption of what it
knows, and how it knows it.
Knowledge may be accessed at three stages: before, during, or after knowledge-related
activities. Successful KM program needs, on the one hand, to convert internalized tacit
knowledge into explicit codified knowledge in order to share it, but, on the other hand, it
also must permit individuals and groups to internalize and make personally meaningful
codified knowledge they have retrieved from the KM system.
What made the traditional the traditional workforce productive was the systems like
Fredrick Winslow Taylor’s “one best way”, Henry Ford’s “assembly line” or Edward
Deming’s “Total Quality Management.” The system enabled individual workers to
perform without much knowledge or skill .In fact, on an assembly line and in TQM
shops, a highly skilled individual can be a threat to co workers and to the entire system.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
But in a knowledge organization , it is the individual worker’s productivity that makes
the entire system successful .The knowledge organization must be structured around
goals that clearly state management’s performance, expectations for the enterprise and
for each part and specialist and around organized feedback that compares results with the
stated performance expectations so that every member can exercise self control .The
other requirement of the knowledge based information is that everyone take information
responsibility .The knowledge based organization has its own special management
problems .Some of them are as follows:
Developing rewards, recognition, and career opportunities for knowledge
workers
Creating unified vision in an organization of specialists
Devising the management structure for an organization of task forces
Ensuring the supply, preparation , and testing of top management people
The knowledge based businesses need to be focused on the productivity of their capital –
that is, the productivity of the knowledge worker.
1.4 Traditional Performance Appraisal
1.4.1 Introduction
Performance appraisal is the assessment of the performance of an individual
systematically and in orderly sense. Performance appraisal should not be negatively
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
understood to assessing the past performance. But this should be taken in positive sense.
It is a device to measure the potentials, which an employee has to make use of them in
future development of individuals and organization. This is reason why an organization
can sustain and the employees can be retained in the Organization till their retirement.
1.4.2 Meaning
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or a group of employees on a given job and
his potentials for future development. It consists of all formal procedure used in working
organizations to evaluate personalities, contributions and potentials of employees.
1.4.3 Objectives of Performance Appraisal
To provide feedback to employees so that they come to come to know where
they stand and can improve there job performance.
To provide valid database for personnel decisions concerning placements, pay,
promotion, transfer, punishment, etc.
To diagnose the strengths and weakness of individuals so as to identify further
training needs.
1.4.4 Uses of Performance Appraisal
Performance appraisal provides valuable information for personnel decisions
such as pay increases, Promotion demotions, transfers, and terminations.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
It helps to judge the effectiveness of recruitments, selection, placement, and
orientation systems of organization.
It is useful in analyzing training and development needs.
1.4.5 Limitations of Traditional Performance Appraisal
1) Error in rating:
Performance appraisal may not be valid indicator of performance and potential of
employees due the following types of errors:
Halo effect
Stereotyping
Central tendency
Constant error
2 )Lack of reliability:
Reliability implies stability and consistency in the measurement. Lack of consistency
over time and among different raters may reduce the reliability of performance
appraisal. Inconsistent use of measuring Standards and lack of training in appraisal
techniques may also reduce reliability. Different qualities may not give proper weight
age. Factors like initiative or subjective and can not be qualified.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
3) Incompetence:
Raters may fail to evaluate performance accurately due to lack of knowledge and
experience.
Negative approach: Performance appraisal looses most of its value when the
focus of management is on punishment rather than on development of
employees.
Multiple objective : Rates may get confused due to too many objective or
unclear objectives of performance appraisal
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
1.4.6 Steps of Traditional Performance Appraisal System
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Establishing standards of Performance
Communicating performance expectations
Measuring actual Performance
Comparing actual performance with standards laid
Discussion of appraisal with employees
Corrective actions
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
1.4.7 Traditional Performance Appraisal process
Prepare - prepare all materials, notes, agreed tasks and records of performance,
achievements, incidents, reports etc - anything pertaining to performance and
achievement - obviously include the previous performance appraisal documents and
a current job description and understand how performance appraisal system works.
Organize the paperwork to reflect the order of the appraisal and write down the
sequence of items to be covered.
Inform - ensure that the appraisee is informed of a suitable time and place, and
clarify purpose and type of appraisal - give the appraisee the chance to assemble data
and relevant performance and achievement records and materials. If the appraisal
form does not imply a natural order for the discussion then provide an agenda of
items to be covered.
Venue - ensure a suitable venue is planned and available - private and free from
interruptions - observe the same rules as with recruitment interviewing - avoid hotel
lobbies, public lounges, canteens - privacy is absolutely essential.
Layout - room layout and seating are important elements to prepare also - don't
simply accept whatever layout happens to exist in a borrowed or hired room - layout
has a huge influence on atmosphere and mood - irrespective of content, the
atmosphere and mood must be relaxed and informal - remove barriers - don't sit in
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
the boss's chair with the other person positioned humbly on the other side of the
desk; you must create a relaxed situation, preferably at a meeting table or in easy
chairs - sit at an angle to each other, 90 degrees ideally - avoid face to face, it's
confrontational.
Review and measure - review the activities, tasks, objectives and achievements one
by one, keeping to distinct separate items one by one - avoid going off on tangents or
vague unspecific views. Keep an order of follow. Concentrate on hard facts and
figures, solid evidence - avoid conjecture, anecdotal or non-specific opinions,
especially about the appraisee. Being objective is one of the greatest challenges for
the appraiser - as with interviewing, resist judging the appraisee in your own image,
according to your own style and approach - facts and figures are the acid test and
provide a good neutral basis for the discussion, free of bias and personal views.
Agree an action plan - An overall plan should be agreed with the appraisee, which
should take account of the job responsibilities, the appraisee's career aspirations, the
departmental and whole organization's priorities, and the reviewed strengths and
weaknesses. The plan can be staged if necessary with short, medium and long term
aspects, but importantly it must be agreed and realistic.
Agree specific objectives - These are the specific actions and targets that together
form the action plan. As with any delegated task or agreed objective these must
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
adhere to the SMARTER rules - Specific, Measurable, Agreed, Realistic, Time-
bound, Enjoyable, Recorded. The objectives can be anything that will benefit the
individual, and that the person is happy to commit to.
Agree necessary support - This is the support required for the appraisee to achieve
the objectives, and can include training of various sorts - external courses and
seminars, internal courses, coaching, mentoring, shadowing, distance-learning,
reading, watching videos, attending meetings and workshops, workbooks, manuals
and guides; anything relevant and helpful that will help the person develop towards
the standard and agreed task.
Invite any other points or questions - make sure to capture any other concerns.
Close positively - Thank the appraisee for their contribution to the meeting and their
effort through the year.
Record main points, agreed actions and follow-up - Swiftly follow-up the meeting
with all necessary copies and confirmations, and ensure documents are filed and
copied to relevant departments.
1.4.8 The Tools and Technique
There are several methods and techniques available to the managers to appraise the
performance of their employees.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Traditional Appraisal Techniques
Straight Ranking Method
Man-to-Man Comparison Method
Grading
Graphic Rating Scale
Forced Choice Description
As services overtake the manufacturing and agriculture sectors, developing quality
knowledge workers is the single most demanding and often frustrating challenge for
organizations. The emphasis is to develop an organization where managers need to be a
benevolent guardians rather than a traditional boss. Therefore it is necessary to develop
various better, new and efficient methods to judge the productivity of the Knowledge
workers. An increase in the productivity of the human capital will correspond to the
increase in the performance of the knowledge organization as a whole. The traditional
methods of performance appraisal do not work for efficient management of knowledge
workers.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
RESEARCH DESIGN
Management is often defined as “getting things done through people”. The role of the
personnel function is to provide guidance and support on all matters relating to an
organization’s employees. The aim is to help management to deal effectively with
everything concerning the employment, development, reward and well-being of people
and the relationship that exist between management and the workforce.
A further key role for the personnel function is to play a part in the creation of an
environment which enables people to make the best use of their capabilities and to
realize their potential to the benefit of both the organization and themselves. Human
resource management is thus essentially a business-oriented philosophy concerning
the management of people in order to achieve competitive advantage.
Research design may be defined as the arrangement for data collection and analysis of
data in the manner that aims to combine relevance to the research purpose with economy
in procedure. It is a conceptual structure within which research is conducted.
The research that is made is direct personal research conducted with the help of
questionnaire in the type of research adopted. It aimed at expanding the frontiers of
knowledge and does not directly involve pragmatic problems. The research design is
purely and simply the frame work or plan for a study that guides the collection and
analysis of data. The study was conducted as an exploratory sampling survey method to
collect primary and secondary data.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
2.1Title of the study
“A STUDY ON THE EFFECTIVENESS OF PERFORMANCE
APPRAISAL SYSTEMS IN KNOWLEDGE ORGANISATIONS IN
BANGALORE”
2.2 Statement of the problem
The IT industry, being a knowledge-based sector, requires a workforce that is highly
competent. Also, the demanding nature of work in the industry requires effective
strategies like sound performance appraisal systems to retain its workforce. With
growing demand for Indian IT professionals overseas and with multinational IT
companies establishing their offices in India, managing employees becomes very
difficult.
The study titled “A STUDY ON THE EFFECTIVENESS OF PERFORMANCE
APPRAISAL SYSTEMS IN KNOWLEDGE ORGANISATIONS IN BANGALORE” is
to identify the areas in the performance appraisal systems that can be improved to
increase employee productivity and quality of knowledge workers in knowledge
organizations.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
2.3 Review of literature
Literature review is one of the prime parts of dissertation. The very basic purpose of the
literature review is to gain insight on the theoretical background of the research problem.
This chapter deals with the various theoretical backgrounds necessary to carryout this
project. After the purpose and scope have been defined, the researcher is faced with one
of the most difficult problem of obtaining and gathering the desired information or data.
It is mandatory that care must be taken while collecting data because data constitute the
foundations on which the superstructure of statistical analysis built. The literature review
helps the researcher to gain strong theoretical basis of the problem under study and also
helps to explore whether any one has done research on the related issue. That's why
literature review helps one to find out the path of problem solving. The results obtained
are purely interpreted and policy decisions are taken.
The source of information may be either primary or secondary. When the investigator
collects first- hand data for the purpose at hand, such data is known as primary data. On
the other hand, if you obtain the data from the published or unpublished sources such
data will constitute secondary data.
For the present dissertation also information where collected from both primary and
secondary sources. Primary sources constitute questionnaire and personal interview.
Most of the theoretical information needed is collected from different textbooks,
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
magazines and web sites. Those constitute a significant information source for the
present study. Literature reference mainly concentrated on HRM and particularly the
magazines and articles about Managing knowledge workers and knowledge organization
concerns.
2.4 Source of data
Primary source of data: It is the original source from which all the researchers
directly collect data that have not been previously collected. A Questionnaire is
used to collect data. Primary data was gathered by consulting and filling up
questionnaire by operating level employees in the different departments of the
company.
Secondary source of data: Two types of secondary data were collected for the
preparation of the project report, internal data was generated from company's
brochure, manuals and annual reports and External data on the other hand, was
generated from magazines, research books and internet (Websites).
2.5 Actual Collection of Data
Questionnaire and personal interview method was applied to collect the actual data for
the research study. This helps the employees were more comfortable, free to participate
fully in the interview by giving the required information and express their feelings
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
without inhibition. Apart from the interview methods, following tools also has been used
for data collection:
Company Records: Company records like annual reports; HR manual etc, has given
valuable information for the present study.
Internet: Various websites also provided significant contribution in data collection.
Magazines: Magazines like 'HRM Review', Effective Executive etc have been worked
as key informants in data collection.
2.6Sampling techniques
Random sampling: Random sample gives every unit of the population a known and
known zero probabilities of being selected. Since random sampling implies equal
probabilities to every unit in the population, it is necessary that the selection of sample
must be free from human judgment. It no unit can be included more than once it is
known as simple random sampling.
Sample size: An optimum sample size of 100 has been taken. It includes employees
working as Applications Engineer/ Projects Development Engineer.
Sample description: The sampling is done through probability sampling on random
sampling.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Sampling is simply the process of learning about the population on the basis of a
sample. Thus in sampling techniques instead of every unit of the universe only a part of
the universe is studied and conclusions are drawn on the basis for the entire universe.
A sample is a sub set of population units.
The researcher has adopted stratified sampling. In order to get the information
concerning the population attempts to design a more efficient sample than by the simple
random procedure.
2.6.1 SAMPLE SIZE:
The researcher’s main concentration is to reduce the cost substantially, now if the
researcher surveyed relatively smaller number of units would mean relatively high cost
per interview. Hence sample size consists of fifty (100) for this research.
2.6.2 SAMPLE DESCRIPTION:
The researcher conducted the survey as well as collected the information only
from the officials both appraiser and appraise of all the companies referred.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
2.7 Objectives of the study
Performance Appraisal is a systematic evaluation of the individual with respect to
his performance on the job and his or her potential for development. The study
emphasizes on the effectiveness of performance appraisal in knowledge organizations
and its impact on the productivity of knowledge workers. It also emphasizes to enhance
the following in a knowledge organization
To rate the performance appraisal systems adopted at various knowledge
organizations in the IT sector
To asses the modern trends involved in judging the performance appraisal of
knowledge workers
To study whether the present performance appraisal system motivates the
knowledge worker to increase his productivity
To study the influence of the type of performance appraisal system employed and
the authority conducting the same on the motivation of the knowledge workers to
perform better in the future.
2.8Scope of the study25
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
The study is done to understand the performance appraisal practices in various
knowledge organizations in Bangalore and bring out the best practice that is effective in
increasing the productivity of the k. worker and k. organization. The scope of the study
involves in suggesting options the creation of a standardized model performance
appraisal protocol for future organizations.
The scope of the study is IT & ITES companies like TCS, INFOSYS, ORACLE, IBM,
and FIDELITY situated in Bangalore. The targeted segments are few employees (100) of
these companies. This was the best sample to conduct the research in a short span of
time.
2.9Research methodology
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
2.9.1 METHODOLOGY
The secondary data may be used as the soul for a research study. Since in many
search situations one cannot conduct primary research because of physical, legal or cost
influences. The researcher classified the secondary data, depending upon the gathering or
distribution sources, the primary data as well as external secondary data. The researcher
provided or complied the data in its normal operations within its premises. The
researcher has collected the company profile and sample profile from the various internal
reports prepared by the firm. Researcher from the central library, government sources,
commercial sources, and industrial sources as well as from the Internet has obtained the
external secondary data resource. In the present scenario, the Internet facilitate the
researcher in such a way that where the researcher can collect every possible data.
Perhaps, it includes the profile of the company, library sources as well as historically
significant research studies.
2.9.2 TYPE OF RESEARCH
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
The research design constitutes the blue print for the collection, measurement and
the analysis of data. The research design is the plan and structure of investigation so
conceived as to obtain answers to research questions. The plan is the overall scheme
program of the research.
The researcher has adopted descriptive research studies. In order to investigate
difference between the existing and the expected system of appraisal.
2.9.3HYPOTHESIS
In attempting to arrive at decisions about the populations, on the basis of sample
information it is necessary to make assumptions or guesses about the population
parameter involved. Such an assumptions is called statistical hypothesis, which may be
true. The procedure, which enables us to design on the basis of sample, regards whether
hypothesis is true or not is called test of hypothesis or test of significance.
In the test of hypothesis it begins with an assumption or hypothesis is called null
hypothesis.
Null Hypothesis:
The null hypothesis assures that there is no significant difference between the
statistics and the population parameter and whatever observed difference is there is
merely due to fluctuation in sampling from the same population. Null hypothesis is
usually devoted by the symbol Ho. Any hypothesis that contradicts the Ho (Null
Hypothesis is called an Alternate Hypothesis and is devoted by a symbol H1)
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
2.9.4 HYPOTHESIS TESTING
Ho: The effectiveness of Performance Appraisal is less than 75%.
H1: The effectiveness of Performance Appraisal is more than 75%.
To test the hypothesis z-test is been used. The total number of respondents who
involved in the survey was 100 out of these 59 employees rated the present Performance
Appraisal System as an effective one.
Ho: P<0.75
H1: P>0.75
Level of significance is 1%.
Table value= 1.96.
Ps = X/N
Where X= number of respondents saying the present Performance Appraisal is effective
one.
N= number of respondents.
Ps= 59/100 = 0.59
P = 0.75
Q = 1- 0.75= 0.25.
Z = (Ps-P)/ [(PQ)/N]
Z= (0.933-0.75)/ [(0.75*0.25)/45]
Z= 2.835
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Interface:
Since Z>1.96, null hypothesis is rejected at 1% level of significance and conclude
that the effectiveness of Performance Appraisal at these companies is 75%. Thus null
hypothesis is rejected in favour of alternative hypothesis.
Implication:
The Performance Appraisal in the top 5 knowledge organizations in the IT sector is
effective and if some more inputs and formats are added to the present system, it will be
more efficient.
2.9.5 INSTRUMENTATION TECHNIQUE:
TOOLS FOR DATA COLLECTION
The secondary data are collected from company magazines, journals, text, book
and articles and primary data are original source from which the researcher directly
collects data have not been previously collected. In the present study, primary data has
been collected using questionnaire. For the purpose of collecting the same respondents
have been selected. In this study primary data plays a vital role for analysis,
interpretation, conclusions and suggestions.
The type of questionnaire adopted in the study is opened ended questionnaire and closed
ended questionnaire wherein it will be helpful to extract the result within our limit.
The researcher has to exercise great care in choosing the method on the basis of
the couple of criteria on consideration, which he thinks are important in the survey. So
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
within the given short span of time if the researcher would like to go ahead with mail
survey or E-mail survey or personal observation never be cost effective. So in order to
overcome from all these issues the researcher has done the actual fieldwork by personal
survey. In this process the researcher has submitted a well-structured questionnaire to the
respondent by meeting them personally. The prime motive of the survey is based on the
questioner .A questioner was developed for the current research study with the
consultation of the HR manager of the company. It has been designed as the primary
research instrument. Questioners were distributed to respondents and they were asked to
answer the question given in the questioner.
The questioners were used as an instrumentation technique because of the reason that the
questioner were arranged in a specific order and were logically interconnected for
research study. The advantage of structured questioner lies in the reduction if
interviewers and interpreter's biased in quicker and less costly interviewing and of course
in easier tabulation of results. Finally, coding and analyzing was done for each question's
response to reach in the findings, suggestions and to the conclusions about the topic.
2.10 Data analysis & interpretation
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
The data collected are tabulated according to the respondent's response using percentage,
aggregates sources which are essential for study of which help in proper analysis of the
data and also graphs is used in analysis for easy quick interpretation. The data collected
is classified, edited and tabulated.
Editing: - It is the process by which data are prepared for subsequent coding. As it is a
very subjective process, it is necessary that a person who is will qualify and trained
should entrust with this responsibility. Editing is the process of examining errors and
omissions in collected data and making necessary corrections. If there is some
inconsistency in the response or responses are entered in the questionnaire or when it
contains only a partial or a vague answer.
Tabulation:- The process of tabulation that is been done after filling the questionnaire is
tabulation, the number of tabulations will depend on the number of variables, while the
number of responses to a question will depend on the sample size, tabulation may be
done by hand or by machine. If the numbers of variables in a survey are small in size
then it is tabulated by hand, on the other hand, when the numbers of variables involved
in the survey are large than it is more appropriate to opt for machine tabulation. The data
was then analyzed by means of descriptive statistics, Arithmetic averages, and
percentages and ratios were computed and then used to draw inference on the result.
2.11Limitations of the study
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
The study was limited to knowledge organizations in only one sector (few
companies in the IT sector)
The analysis was made based on the assumption that the information given by the
respondents was all correct.
When a group of respondents are answering the questions their responses are
mutual through cross-reference and this may have caused myopia in data, which
deal individual perception.
The researcher could contact only limited number of respondents.
The limitation of time period of three months was a constraint.
2.12Chapter Scheme
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Chapter1 - Introduction
Researcher has given introduction about knowledge workers and knowledge
organizations and its historical background and various aspects about need for
new performance appraisal systems in these organizations.
Chapter 2 - Research Design
Deals with Research Design of the study which includes Statement of the Problem, Review of literature , Objectives of the Study , Scope of the Study, Hypothesis of the study, Methodology of the study, Methodology of the study, Sampling and limitation of the study.
Chapter 3 - Profiles
It deals with profile of the Industry and Company profiles. It explains History of
the company Organizational structure, product profile, Achievements of the
company, Welfare facilities followed in the selected IT companies.. Turnover,
profit etc...
Chapter4 - Data Analysis & Interpretation
Deals with analysis and Interpretation of the data collected from the respondents.
Chapter 5 - Findings , Suggestions & Conclusions
Deals with findings, conclusions and recommendations which were found after
interpreting and analyzing the data.
3.1 INDUSTRY PROFILE
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Indian companies are gaining size and strength, but they may be too slow to take on the MNCs.
The figure is $2.6 billion. This is the combined value of the nine big-ticket global outsourcing
contracts that Indian IT services firms bagged during the fiscal year.
The big wins have certainly propped up top lines, but one aspect overshadows them, the
majority has come in the commoditized applications maintenance space. Reason: the
Indian majors still don’t have the scale to go after big-budget contracts in segments like
remote infrastructure and consulting services. The industry still derives 63 percent of its
revenues from the application development and maintenance (ADM) area.
The revenue mix looks lopsided if you consider players individually. The largest
company TCS, saw 69.3 per cent of its Rs.13,386 crore revenues in 2005-06 came from
ADM work. For Infosys, the figure was over 50 per cent of Rs.9,521 crore. High-end
segments like consulting services, for instance, accounted for just 3.5 pent cent of
Infosys’ revenues, while for TCS it was less than 2 per cent. Wipro derives 60.4 per cent
of its revenues from this segment. The balance comes from BPO (largely voice based
services) and new service lines like remote infrastructure management. Satyam
Computer Services gets 50 per cent of its revenues from ADM work, while HCL
technologies’ share is 50 per cent. “The problem is that over time Indian companies may
get saddled with the commoditized work”, says a NASSCOM official.
Recently, all five players started focusing on growing high-end businesses- infrastructure
management, consulting, engineering services, etc. a good bit of this growth will come
from acquisitions, some of which is already under way- Wipro just bought US- based.
Last year, TCS bought Sydney- based Financial Network Services, which brings on
broad a core- banking solution. The question is will the Indian majors be able to build
critical scale in high-end businesses before their multi-critical mass in India? A Forrester
35
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
analyst says Infosys and TCS should shore in at least 10-15 per cent of revenues from
consulting services by the year end. And if that doesn’t happen, customers may choose to
offshore their high end work to an Accenture or an IBM.
The year 2004-2005 was another successful year for the Information Technology (IT)
industry in India with total software and services revenues recording a high of $22
billion for the year 2004-2005. The employee base also showed a whopping increase to
cross the one million mark in the year 2005. However, despite the growth in the overall
employee base, companies were struggling to retain their existing employees.
Analysts observed that managing attrition in the industry was important because skilled
professionals formed the crux of this knowledge-intensive industry. What's more, the
cost of recruitment and training was a huge expense for most IT firms. Handling the
menace of attrition was therefore very important to IT companies. Attrition affected the
quality of service and also led to higher Training & Development expenditure, affecting
the overall performance of the organization.
IT companies in India were taking steps to counter the rising levels of attrition.
Companies were beginning to realize the importance of factors other than salary with
which to motivate their employees to stay.
A healthy work environment, continuous employee learning, work-life balance,
recognition and corporate brand building were some of the key initiatives taken up by IT
companies in recent years to manage attrition. In 2004, Infosys Technologies Limited
(Infosys) devised a policy of taking security deposits from fresh graduates who joined
the company at the entry level to discourage them from leaving the company during the
training period whereas Wipro Technologies Ltd (Wipro) started a matchmaking service
for its employees. The purpose of this service was to help employees chose their life
36
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
partners within Wipro in the hope that if employees picked spouses from the same
company, they could spend more time together, say while traveling/dining etc. thereby
improving the work-life balance.
By 1995 there was a new trend of 'poaching' of employees by rival IT firms. Poaching
necessarily meant luring skilled employees of a rival company by offering better pay and
fringe benefits. Over the years, more and more software professionals were also
immigrating to foreign countries, particularly to the US.
By late 1998, the Y2K problem was hanging over companies across the globe and
software services from Indian IT service companies were increasingly in demand.
In 1999, of the total number of H1-B visas given to foreign workers by the US, half were
to Indian IT professionals.
In 2006 the US Senate approved a sweeping immigration Bill that, among other
provisions, proposes doubling of the H-1B visa for skilled foreign workers from 65,000
to 115,000. The new quotas would kick in starting 2007 once approved by the House of
Representatives, whose version of the Bill does not contain the H-1B clause. The senate
Bill also exempts immigrants with certain advanced degrees from the H-1B caps.
The average starting yearly salary in computer software jobs, in that year was $ 60,000 -
nearly 10 times the average salary for a computer professional in a comparable job in
India. The employee turnover in 1999-2000 in Indian IT companies was around 15-20%
with the cost of replacing an employee running at over 120% of the salary per employee.
Commenting on the situation, a recruitment agency said, "The headhunt is on because
the warning is in the air. Qualified techies are migrating to the West for fat paychecks
37
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
and attractive lifestyles. If the trend continues, India will face a terrible shortage of
software engineers in the next three years."
The IT sector in India witnessed explosive growth in 1999-2000, with the industry
generating export revenues of over $4 billion. In view of this situation, firms in India
started hiking the pay for software professionals. The internet boom in the year 2000
contributed to an upward trend in the US stock market where major Indian software
companies like Wipro and Infosys, had their stock listed. This was also reflected in the
Indian stock market with share prices of companies like Infosys experiencing a rapid
increase. ESOPs made IT employees in India millionaires overnight as prices of IT
stocks sky-rocketed. Many international firms started expanding their businesses and
India was their first choice due to its immense talent pool of skilled IT professionals. As
more and more international companies set up their offices in India, the requirement of
skilled professionals also went up. Indian IT firms catered largely to the needs of the US,
which meant that events in the US had a strong influence on the revenues of these
companies.
Smart companies know that it takes more than on-boarding to retain and motivate new
employees.
Even as Indian tech majors cash in on the growing demand for off shoring, they face
rising attrition and wage inflation that could pressure margins.
The gross addition needed per top Indian vendor every year is estimated at
25,000.
38
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
IBM's headcount in India is at 38,500 and it is planning for an additional 50,000
over the next 12-15 months.
Accenture has nearly 20,000 people in India and is targeting a staff of 50,000 in
south-east Asia by 2009
Financial service back offices have added 20,000 people in the last three years
Wage inflation for the Indian tech industry averaged 12-14 per cent in FY06
Wipro's attrition at the end of FY06 was 16 per cent up from 14 per cent at the
start of the year.
Techies never had it so good. With the Indian tech sector growing at a fast clip, they're in
great demand. What's more, there are enough global vendors wanting to grow their India
outfits-IBM and Accenture are among the most aggressive. Little wonder then that
attrition for Indian IT firms is inching up, despite fairly good increases in salaries of
between 12-16 per cent over the last two years.
At the end of March Financial Year 2006, Satyam's attrition had touched 19.2 per cent
and even TCS which normally is given to boasting about its low attrition has become a
trite more subdued now that the number is nudging 10 per cent. That's up from 8.7 per
cent in Q3FY06. For Infosys too, the March quarter saw attrition at 11.2 per cent, far
higher than the 9.7 pr cent in March 2005.
The situation has been worse for Tier II players: Patni Computers has hit the 20 per cent
mark, driving down the net profit for the March quarter to 19 per cent below guidance.
Retaining people has become more difficult and attrition is an issue not just because it
means higher costs for training, but because it could result in loss of business
momentum. For fixed price contracts, it could even mean a financial loss.
OFF SHORING STORY GETS BETTER
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
And no company is willing to give up growth just when there are orders aplenty and
large ones too such as ABN Amro, General Motors and Pearl BPO, to name a few.
Recent data from TPI, a consulting firm, says that Indian companies have been able to
increase their share of large deals from 1 per cent in 2004 to 3 per cent in 2005.
Moreover, their share in deals of over $50mn increased to 6 per cent in 2005 from 2 per
cent in 2004(based on the number of deals). Very large deals are being broken down and
restructured so that Indian firms have a better chance of bagging orders.
Indeed, companies need not fear any fall in the growth of volumes as the off shoring
story only continues to get better. Cognizant has indicated that it would grow revenues at
42 per cent in CY06 to $1.26 bn while enterprise software companies such as Oracle and
SAP are optimistic on licence revenues. CIOs in the US are saying IT budgets should
grow by 7.8 per cent over the next twelve months.
IT MAJORS MAKING HAY
Not surprising then that companies are mining their clients faster: Wipro now has 29
clients billing more than $20 million compared with 22 at the start of the year. TCS has
nine $50mn clients today as against five in Q1FY06 and 31 $20 million clients up from
25 in March last year. Across product domains such as package implementation (PI) or
infrastructure management and BPO, Indian firms are fast scaling up their operations.
Even newer businesses such as consulting or testing services are growing fast. The good
news is that Indian firms have been able to reduce the contribution from commoditized
segments such as application development and maintenance (ADM): for companies such
as Infosys and Satyam ADM contributes only half of what it used to five years back.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Wipro's R&D practice is getting stronger allowing it to depend less on traditional spaces.
Besides, the geographical spread too is getting better with firms making greater inroads
into Europe: in FY06, Infosys earned 24.5 per cent of its revenues from Europe, up from
22.3 per cent in FY05.
For TCS revenues from Europe constituted 24.3 per cent in Q4FY06 compared with 22
per cent in Q1FY06 while for Wipro Europe accounts for nearly 33 per cent of revenues.
So, the revenue outlook appears to be fairly good with pricing expected to remain stable.
Infosys has announced a 28-30 per cent growth for FY07. If Wipro's guidance for Q1
appears weak at 4 per cent, it's more to do with a couple of big clients ramping down, say
analysts, who believe volumes will pick up in subsequent quarters.
THE HIRING SPREE
IT firms will not be able to tap into the opportunity unless they have the right people and
enough of them. The problem today is that there are many numbers of companies in the
market looking for people. Cognizant has indicated that its head count would go up by
42 per cent in CY06 over CY05- Cap Gemini and CSC have more than 60 per cent of
their offshore employees in India and are looking to add more.
Apart from global IT firms, captive centres among big banks, too are on the rise. One
estimate for a set of such centres has seen employment rise to 80,000 from just 20,000 in
March 02. In FY06, the Indian IT industry is estimated to have recruited around 30-35
per cent more people than in the previous year : Wipro added 11,471 people while TCS
added 21,140.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
If players are to continue to grow at 25-28 per cent, between them they would need at
least 50,000-60,000 people every year, according to a conservative estimate. The
requirement from the BPO space alone is estimated at more than 100,000 annually.
FATTER WAGE BILLS
The expansion of captive units and ramp-ups by global vendors will mean wage
inflation, especially at the middle management level, where there is a shortage of talent.
Raises, say industry watchers, could exceed those of last year (13-17 per cent in FY06)
perhaps settling in the range of 15-17 per cent.
Satyam Computers, managing director, Ramalinga Raju has said that salaries for off-
shore employees will go up by 18-19 per cent while on-site salaries would increase by 5-
6 per cent in FY07. In the last 18 months, Satyam has raised salaries twice -in October
04 and April 05.
Sasken, it is heard, will be offering raises of around 15-20 per cent for offshore
professionals while TCS is understood to be looking at hikes of between 10-15 per cent.
Players such as Patni too would need to up salaries in line with peers if it want to retain
people.
Jaitirth Rao, CEO, Mphasis said on the analysts call that the problem was not so acute at
the entry level because the supply from the campuses was more or less adequate. The
demand, Rao indicated, was highest at the middle level.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
It's for these professionals that global majors are willing to offer raises of 30-40 per cent.
To cope with the situation, companies are trying to hire more fresher - in other words,
increasing the bottom of the pyramid.
However, making do with younger teams without jeopardizing execution will be a
challenge. They are also building up infrastructure in Tier II and Tier III cities where the
cost of living is lower and therefore the salaries paid out can be lower.
MARGINS UNDER PRESSURE
For those who believed that the tech story was all but over because wage inflation would
eat into margins, the Infosys March quarter numbers were the last nails in the coffin.
With revenues up just 3.6 per cent sequentially and margins dipping by 226 basis points,
the results were woefully below the Street's expectations.
But, Infosys guidance for the current year has been more than heartening: it is confident
of being able to turn in a 28-30 per cent top line growth and an EPS of Rs 114-116, a rise
of 26.4-28.4 per cent.
Nonetheless, analysts are unanimous in predicting a fall in operating margins of between
100-150 basis points in FY07, across the industry. Companies can of course, make up for
higher costs by increasing the offshore component of revenues, keeping a check on sales,
general and administration costs and managing the bench more effectively so that
utilization and revenue per employee improves.
Offshore utilization, currently at between 65-70 per cent has room for improvement and
with pricing expected to remain stable, there are not too many worries on that front. So,
while NASSCOM targets for Indian IT-ITES exports at $60bn by 2010 from $23bn in
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
FY06 (estimate) a CAGR of 26-27 per cent, may well be achieved, margins may get a
little bruised in the process.
Various industry-academia’s meet and round tables organized by NASSCOM arrived at
specific conclusions regarding the problems faced by the Indian ICT industry in the area
of HR development. IT industry and academic concerns today are centered on the
following issues:
Developing faculty and dealing with shortages of teachers
Standardizing the curriculum (and its delivery process)
Focusing on teaching and examination practices
Upgrading infrastructure
Conducting advanced studies and special research projects (based on current
market requirements) in emerging technology areas
Cultivating Analytical thinking
Building strong fundamentals and concepts
Applying knowledge
Building soft and communication skills
Encouraging and incentivizing universities and institutions (especially lesser
known ones) to establish linkages with the recognized
institutes/association/industry players, globally
Improving the standards of the existing government and private educational
institutes
ICT industry experts, business intelligence analysts and academia have been focusing
on developing a strategic roadmap for India's HR development program. According
to these segments, IT workforce development can be catalyzed through the following
endeavors:
44
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Increasing industry-academia linkages through interactive platforms such
as workshops/summits/programs/focused research, etc. to ensure
relevance of IT skills provided
Encouraging corporate to launch mentorship or knowledge enhancement
programs for institutes and colleges under the aegis of industry
associations such as NASSCOM
Exposing students to projects from the Ist and IInd year of college
education
Identifying-from existing or commissioned research-the needs of the ICT
sector in terms of number of persons/skill sets required within various
disciplines, levels (graduate, post-graduate, doctoral) and time-frames
Strengthening India's professional education (through curricula, faculty,
infrastructure, pedagogy improvements), in line with the IT industry's
requirements
Exploring Industry-Academia alliances in the form of FDP (Faculty
Development Programs) for both the IT Services and ITES-BPO sectors
and EDP (Entrepreneurship Development Cells)
Standardizing curricula for IT services and ITES-BPO at the
undergraduate and post graduate levels
Creating case studies on the existing Industry-Academia partnerships in
the Country
Defining policies (with the help of the AICTE; MCIT and MHRD):related
to infrastructure development and grants
Improving the quality of skills produced, especially from Tier II and III
cities and institutions
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Enabling faculty within the public and private institutional framework to
support IT capability development efforts
THE INDIAN IT WORKFORCE MARKET: Building World-Class Manpower
Relevantly skilled manpower, considered as one of India's primary edge in the global
ICT markets, has remained one of the key concerns and challenges for the country's IT
sector. While India currently boasts one of the world's largest, most qualified pools of
scientific and engineering manpower, growing global demand for appropriately skilled,
industry-oriented professionals and a gradually enlarging demand-supply gap, are
expected to test to the limits, India's ICT manpower development capabilities.
The country is at an important juncture in its history, having completed the transition
from an agrarian economy to a fully-fledged, first-world economy, operating at the
leading edge of contemporary technology. A key element in taking the country forward
and maintaining its growth momentum will be the provision of a highly skilled and
competent global workforce.
Having apt IT and management skills, in fact, is assuming an ever-greater importance, in
the current day environment, where the ICT sector is emerging as a major driver of the
Indian economy.
Clearly, the way forward for India is quality education that conforms to key global
standards and creates professionals that are equipped with international-level
certifications and accreditations.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
ICT manpower development today, is not only crucial for sustaining the growth of the
Indian economy, it is also important for maintaining the country's edge in the global
markets, where competition is on the rise.
THE INDIAN ICT SECTOR: FACING MANPOWER CHALLENGES
According to recent NASSCOM estimates, the Indian ICT industry will contribute 7
percent of the country's GDP by 2009, providing direct employment to more than 2.2
million people and indirect employment to nearly twice that number.
The Indian IT software and services market is expected to grow to US$ 50 billion by
2009, recording a CAGR of 27 percent. However, NASSOM estimates suggest that the
supply of skilled IT manpower may fall short of requirements by 2009, if specific issues
are not addressed and India's HR challenges successfully met.
Industry surveys have also shown that while India is expected to be one of the few
manpower surplus countries capable of meeting global requirements, the manpower is
unlikely to be readily deployable on account of ineffective education and skills
development.
A 2001 World Bank Study on Science and Technology Manpower in India had shown
that generic shortcomings in India's education system would be a hurdle in the path of
quality ICT manpower development.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
According to the study, the Indian ICT sector would face the manpower challenges:
Inability of the IT services and ITES-BPO industries to maintain and share
common infrastructure facilities across institutions
Shortage of skilled faculty for providing relevant, industry-oriented training
Inadequate industry exposure
Increasing discrepancy between the education focus and the quality of skills
developed at top-tier educational institutions and other private and public
centers of learning
Lack of correlation and synchronization between the existing technical
education system and industry requirements-absence of adequate academia-
industry linkages
Rigidities in the curriculum and evaluation system.
3.2 COMPANY PROFILES48
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
3.2.1 Oracle
Oracle has been the center of innovation for business software—birthplace of the first
commercially available relational database, the first suite of Internet-based applications,
and the next-generation enterprise-computing platform, Oracle Fusion.
Today, Oracle is the largest business software company in the world, with more than
320,000 customers, including 98 of the Fortune 100. And Oracle's 85,000 global
employees—including more than 20,000 developers working full-time on Oracle
products—are critical to that success. Projects at Oracle provide a peek into more than
100 teams developing Oracle's global products and services. Graduates and prospects
around the world use this snapshot of the Oracle development organization to guide their
interest in future employment with the world's largest enterprise software company.
Oracle's business is information—how to manage it, use it, share it, and protect it. For
three decades, Oracle has helped governments and businesses around the world drive
their enterprises based on quality, real-time information. We invite you to join the
committed developers and managers that make it all possible.
3.2.2 IBM
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
International Business Machines Corporation, abbreviated IBM and nicknamed "Big
Blue" (for its official corporate color), is a multinational computer technology and IT
consulting corporation headquartered in Armonk, New York, United States. The
company is one of the few information technology companies with a continuous history
dating back to the 19th century. IBM manufactures and sells computer hardware and
software, and offers infrastructure services, hosting services, and consulting services in
areas ranging from mainframe computers to nanotechnology.
IBM has been known through most of its recent history as the world's largest computer
company and systems integrator. With over 388,000 employees worldwide, IBM is the
largest and most profitable information technology employer in the world. IBM holds
more patents than any other U.S. based technology company and has eight research
laboratories worldwide. Widely acclaimed for its highly talented workforce, the
company has scientists, engineers, consultants, and sales professionals in over 170
countries.
IBM employees have earned three Nobel Prizes, four Turing Awards, five National
Medals of Technology, and five National Medals of Science. As a chip maker, IBM has
been among the Worldwide Top 20 Semiconductor Sales Leaders in past years, and in
2007 IBM ranked second in the list of largest software companies in the world.
3.2.3 Infosys
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
"Our assets walk out of the door each evening. We have to make sure that they
come back the next morning."
N R Narayana Murthy
Chairman and Chief Mentor, Infosys Technologies Ltd.
Infosys Technologies Limited (BSE: 500209, NASDAQ: INFY) is a multinational
information technology services company headquartered in Bangalore, India. It is one of
India's largest IT companies with 104,850 professionals (including subsidiaries) as of
Mar 31, 2009. It has offices in 22 countries and development centers in India, China,
Australia, UK, Canada and Japan
Infosys went public in 1993. Interestingly, Infosys IPO was undersubscribed but it was
"bailed out" by US investment banker Morgan Stanley which picked up 13% of equity at
the offer price of Rs. 95 per share. The share price surged to Rs. 8,100 by 1999 making it
the costliest share on the market at the time. At that time, Infosys was among the 20
biggest companies by market capitalization on the Nasdaq well ahead of Adobe Systems,
Novell and Lycos.
According to Forbes magazine, since listing on the Bombay Stock Exchange till the year
2000, Infosys' sales and earnings compounded at more than 70% a year. In the year
2000, President of the United States Bill Clinton complimented India on its achievements
in high technology areas citing the example of Infosys.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
In 2001, it was rated Best Employer in India by Business Today. Infosys won the Global
MAKE (Most Admired Knowledge Enterprises) award, for the years 2003, 2004 and
2005, being the only Indian company to win this award and is inducted into the Global
Hall of Fame for the same.
Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt
Associates. In 2007, Infosys received over 1.3 million applications and hired less than
3% of applicants.
In April 2009, Forbes rated Infosys among the 5 best performing companies in the
software and services sector in the world. In 2009, Infosys was considered one of the
Business Week’s 50 Most Innovative Companies.
3.2.4 TCS
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Tata Consultancy Services Limited (TCS) (BSE: 532540, NSE: TCS) is a software
services and consulting company. It is India's largest provider of information technology
and business process outsourcing services. The company is listed on the National Stock
Exchange and Bombay Stock Exchange of India.
TCS is part of one of India's largest and oldest conglomerates, the Tata Group, which has
interests in areas such as energy, telecommunications, financial services, manufacturing,
chemicals, engineering, materials, government and healthcare.
In 2007, TCS launched its Co-Innovation Network, a network of TCS Innovation Labs,
startup alliances, University Research Departments, and venture capitalists.
In addition to TRDDC, TCS has 19 Innovation Labs based in three countries.
TCS is considered one of the largest private sector employers in Indian with a core
strength in excess of 130,000 individuals.TCS claims to have one of the lowest attrition
rates in the Indian IT industries.
3.2.5 Fidelity
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Established nearly 40 years ago, FIL Limited operates in markets outside the Americas.
The company and its subsidiaries manage over $157.3 billion for major institutions and
millions of investors around the world. Fidelity encourages fund managers to develop
their individual flair, while basing every investment choice on the most rigorous
research.
FIL Limited, together with our US affiliate, Fidelity Management & Research LLC, has
an unrivalled global team of nearly 1000 investment professionals that covers 95% of
world market capitalisation.Fidelity Mutual Fund has won awards which is indeed
recognition of our investment philosophy. Fidelity National Financial, Inc., through its
subsidiaries, provides title insurance, specialty insurance, claims management, and
information services.
The company primarily provides title insurance, escrow, and other title related services,
including collection and trust activities, trustee’s sales guarantees, recordings, and
reconveyances. It also offers flood, home warranty, homeowners’, automobile, and
personal lines insurance policies. In addition, the company provides outsourced
insurance claims management services to corporate and public sector entities, as well as
offers information services in the human resources, retail, and transportation markets.
It markets and distributes title and escrow products and services to national residential
mortgage lenders, real estate investment trusts, and developers in the residential and
commercial market sectors of the real estate industry. The company markets its specialty
insurance products through an in-house agency, independent agents, and brokers.
4.1 Frequency of Performance Appraisal
Table 4.1
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency PercentValid
PercentCumulative
Percent
Valid half yearly 100 100 100 100
Source: Primary Data
Analysis was done to find out the frequency of the performance appraisal system in top 5 knowledge organizations in the IT sector. Out of 100 respondents all respondents said that the performance appraisal system takes place on a half yearly basis.
The employees are satisfied with the duration of the performance appraisal. A half yearly analysis of their performance motivates them and helps them do the required changes to improve their performance
Figure 4.1
4.2 Motivation for future performance
Table 4.2
55
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid Percent Cumulative Percent
Valid yes 81 81 81 81no 19 19 19 100Total 100 100 100
Source: Primary Data
Analysis was done to find whether the existing performance appraisal system in top 5 knowledge organizations in the IT sector motivates their knowledge workers to perform better. Out of 100 respondents 81 respondents said that the existing performance appraisal system motivates them to perform better and 19 respondents said that the existing performance appraisal system does not motivate them to perform better
More than 80% of the employees in knowledge organizations are motivated after the performance appraisal. The knowledge workers prefer documentation and transparency in the Performance Appraisal System
Figure 4.2
4.3 Relation of Performance Appraisal results and promotion/ onsite duties
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Table 4.3
Frequency Percent Valid Percent
Cumulative Percent
Valid highly related 19 19 19 19
unrelated 22 22 22 41
related 59 59 59 100Total 100 100 100
Source: Primary Data
Analysis was done to find whether the results of performance appraisal system in top 5 knowledge organizations in the IT sector relate to the promotion and onsite duties of knowledge workers. Out of 100 respondents 19 respondents said that the promotion and onsite duties are highly related to their performance, 59 respondents said that the promotion and onsite duties are related to their performance and 22 respondents said that there is no relation between the promotions / onsite duties and performance of the knowledge workers
More than 50% of the employees in knowledge organizations are of the opinion that their performance appraisal results correspond to their promotion and better performance also favour onsite duties
Figure 4.3
4.4 Judicious implementation of Performance Appraisal by employees
Table 4.4
57
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid Percent Cumulative
Percent
Valid yes 56 56 56 56no 28 28 28 84to certain extent 16 16 16 100
Total 100 100 100Source: Primary Data
Analysis was done to find whether the employees in top 5 knowledge organizations in the IT sector consider the performance appraisal system seriously and judiciously implement the same. Out of 100 respondents 56 respondents said that they judiciously implement and follow their performance appraisal, 28 respondents said that they do not judiciously implement and follow their performance appraisal and 22 respondents said that they to a certain extent judiciously implement and follow their performance appraisal
More than 50% of the employees in knowledge organizations are of the opinion that they judiciously implement and follow their performance appraisal
Figure 4.4
4.5 Performance Appraisal and success of organization
Table 4.5
58
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid Percent
Cumulative Percent
Valid yes 37 37 37 37to a large extent 63 63 63 100
Total 100 100 100Source: Primary Data
Analysis was done to find whether the existing performance appraisal system in top 5 knowledge organizations in the IT sector correspond to the success of the knowledge organization. Out of 100 respondents 37 respondents said that an effective performance appraisal system is important for the success of the organization and 63 respondents said that the effective performance appraisal system is to a large extent necessary for the success of the organization.
Performance appraisal system motivates and encourages knowledge workers to perform better and thus indirectly leads to the increase in productivity and correspond to the success of the organization.
Figure 4.5
4.6 Objectives and goals informed before appraisal
Table 4.6
59
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent
Valid Percent
Cumulative Percent
Valid rarely 9 9 9 9sometimes
36 36 36 45
always 55 55 55 100Total 100 100 100
Source: Primary Data
Analysis was done to find whether the corporate goals and objectives are informed before the performance appraisal in top 5 knowledge organizations in the IT sector. Out of 100 respondents 55 respondents said that the corporate goals and objectives are informed always before the performance appraisal and 36 respondents said that the corporate goals and objectives are informed sometimes before the performance appraisal and 9 respondents said that the corporate goals and objectives are not informed sometimes before the performance appraisal
Thus more than 50% of knowledge workers confirm that their tasks are well informed and defined before the performance appraisal takes place.
Figure 4.6
4.7 Type of Performance Appraisal
Table 4.7
Source: Primary Data
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Analysis was done to understand the preference of type of performance appraisal by knowledge workers in top 5 knowledge organizations in the IT sector. Out of 100 respondents, 50 respondents said that they prefer an informal performance appraisal method, 19 respondents said that they prefer a formal performance appraisal method and 31 respondents said that the performance appraisal system should employ a method that is both formal and informal.
Figure 4.7
Frequency Percent Valid Percent Cumulative Percent
Valid formal 19 19 19 19informal 50 50 50 69
both 26 26 26 954 5 5 5 100
Total 100 100 100
4.8 Persons conducting the Appraisal
Table 4.8
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid Percent Cumulative Percent
Valid superior 13 13 13 13
peers31 31 31 44
self 30 30 30 74
all of them26 26 26 100
Total 100 100 100Source: Primary Data
Analysis was done to understand the preference of employees on the best authority to conduct the performance appraisal in top 5 knowledge organizations in the IT sector. Out of 100 respondents, 30 respondents said that they prefer a self performance appraisal method, 31 respondents said that they prefer a informal performance appraisal method with peers 13 respondents said that they prefer a formal performance appraisal method with superiors and 26 respondents said that the performance appraisal system should include superiors, peers and self and employ a method that is both formal and informal.
Figure 4.8
4.9 Effectiveness of existing Performance Appraisal System
Table 4.9
62
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid Percent
Cumulative Percent
Valid highly effective 59 59 59 59
effective 36 36 36 95
ineffective 5 5 5 100
Total 100 100 100Source: Primary Data
Analysis was done to find whether the existing performance appraisal system is effective in top 5 knowledge organizations in the IT sector. Out of 100 respondents 59 respondents said that the existing performance appraisal system is highly effective and 36 respondents said that the performance appraisal system is effective and 5 respondents said that the performance appraisal system is ineffective.
More than 50% of the knowledge workers in knowledge organizations are satisfied with the existing performance appraisal system
Figure 4.9
4.10 Knowledge workers unleashing knowledge
Table 4.10
63
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Frequency Percent Valid PercentCumulative
Percent
Valid yes 95 95 95 95no
5 5 5 100
Total 100 100 100Source: Primary Data
Analysis was done to find whether the employees in top 5 knowledge organizations in the IT sector are given freedom to bring about innovative practices in their work. Out of 100 respondents 95 respondents said that they are given ample freedom to bring about innovative practices in their work.
Thus knowledge organizations encourage their knowledge workers to bring about innovation and creativity thus unleashing their talents and knowledge.
Figure 4.10
4.11 Relation between performance appraisal results and motivation for performance and promotion/ onsite duties
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Table 4.11.1
Cross tabulation
Countrelation of performance appraisal results and
promotion
Totalhighly relate unrelated related
motivation for performance
yes16 13 52 81
no 3 9 7 19
Total 19 22 59 100Source: Primary Data
Table 4.11.2
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square8.941a 2 0.011
Likelihood Ratio 7.926 2 0.019Linear-by-Linear Association
1.345 1 0.246N of Valid Cases
100
Source: Primary Data
Interpretation
The chi square result shows that =8.941a, df=2, and p value= .0011 indicating that the significance value is less than 0.050 (5% level of significance). Hence there is a significant relation between the performance appraisal results and motivation for performance and promotion/ onsite duties.
Figure 4.11
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Relation between performance appraisal results and motivation for performance and promotion/ onsite duties
4.12 Relation Between objectives and goals informed before appraisal and knowledge workers unleashing knowledge (by giving them freedom to innovate)
Table 4.12.1
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Cross tabulation
Countknowledge workers unleashing
knowledgeTotalyes no
objectives and goals informed before appraisal
rarely 9 0 9
sometimes31 5 36
always 55 0 55Total 95 5 100
Source: Primary Data
Table 4.12.2
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square9.357a 2 0.009
Likelihood Ratio10.691 2 0.005
Linear-by-Linear Association2.574 1 0.109
No of Valid Cases100
Source: Primary Data
Interpretation
The chi square result shows that =9.357a, df=2, and p value= .009 indicating that the significance value is less than 0.050 (5% level of significance). Hence there is a significant relation between the objectives and goals informed before the performance appraisal and knowledge workers unleashing knowledge (by giving them freedom to innovate)
Figure 4.12
Relation Between objectives and goals informed before appraisal and knowledge workers unleashing knowledge
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
4.13 Relation Between motivation for future performance and preferred appraise
Table 4.13.1
Cross tabulation
68
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Count
persons conducting appraisal system
Totalsuperior peers selfall of them
motivation for performance yes 11 25 29 16 81
no 2 6 1 10 19Total 13 31 30 26 100
Source: Primary Data
Table 4.13.2
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 11.296a 3 0.01
Likelihood Ratio 12.205 3 0.007
Linear-by-Linear Association 2.245 1 0.134
No of Valid Cases 100
Source: Primary Data
Interpretation
The chi square result shows that =11.296a, df=3, and p value= .001 indicating that the significance value is less than 0.050 (5% level of significance). Hence there is a significant relation between motivation for future performance by the knowledge worker and the authority conducting the performance appraisal.
Figure 4.13
Relation Between motivation for future performance and preferred appraise
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
4.14 Relation between the preferred performance appraisal type and the preferred appraise
To measure the Relation between the preferred performance appraisal type and the preferred
appraise following hypothesis was formulated.
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
H0: The preferred appraise don’t have a significant impact on the performance appraisal type.
H1: The preferred appraise has a significant impact on the performance appraisal type.
Table 4.14.1
Cross tabulation
Count
persons conducting appraisal system
Totalsuperior peers selfall of them
performance appraisal type
formal 0 5 7 7 19informal 0 22 9 19 50both 8 4 14 0 26
4 5 0 0 0 5Total 13 31 30 26 100
Source: Primary Data
Table 4.14.2
Chi-Square Tests
Value df Asymp. Sig. (2-sided)Pearson Chi-Square 71.665a 9 0
Likelihood Ratio 71.713 9 0
Linear-by-Linear Association 21.636 1 0N of Valid Cases 100
Source: Primary Data
Interpretation
The chi square result shows that =71.665a, df=9, and p value= .000 indicating that the significance value is less than 0.050 (5% level of significance). So the null hypothesis (H0) is being rejected and hence there is a significant relation between the preferred performance appraisal type and the preferred appraise.
Thus, we can say from the results obtained that majority of knowledge workers
prefer appraisal done in an informal way and from the sample 30% prefer appraisal
by self and 31% by superiors, peers and self.
Figure 4.14
71
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Relation between the preferred performance appraisal type and the preferred appraise
4.15Relation between motivation of knowledge workers and success of organization
To measure the Relation between motivation of knowledge workers and success of organization the following hypothesis was formulated.
H0: The motivation of knowledge workers don’t have a significant impact on the success of organization
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
H1: The motivation of knowledge workers has a significant impact on the success of organization
Table 4.15.1
Cross tabulation
Count
performance appraisal and success of organisation
Totalyes to a large extentmotivation for performance
yes 24 57 81no 13 6 19
Total 37 63 100Source: Primary Data
Table 4.15.2
Chi-Square Tests
Value df
Asymp. Sig. (2-sided)
Exact Sig. (2-sided)
Exact Sig. (1-sided)
Pearson Chi-Square 9.935 1 0.002
Continuity Correction 8.341 1 0.004
Likelihood Ratio 9.646 1 0.002 Fisher's Exact Test 0.003 0.002Linear-by-Linear Association 9.836 1 0.002
N of Valid Casesb 100 Source: Primary Data
Interpretation
The chi square result shows that =9.935, df=1, and p value= .002 indicating that the significance value is less than 0.050 (5% level of significance). So the null hypothesis (H0) is being rejected and hence there is a significant relation between the motivation of knowledge and the success of organization
Thus, we can say from the results obtained that motivating knowledge workers will
go a long way in making the knowledge organization successful, as the knowledge
workers carry the means of production and set their own standards of quality.
Figure 4.15
73
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Relation between motivation of knowledge workers and success of organization
4.16 Relation between effectiveness of existing performance appraisal system and success of organization
To measure the Relation between effectiveness of existing performance appraisal system and success of organization following hypothesis was formulated.
H0: The presence of an effective performance appraisal system don’t have a significant impact on the success of organization
74
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
H1: The presence of an effective performance appraisal system don’t have a significant impact on the success of organization
Table 4.16.1
Cross tabulation
Count
effectiveness of existing performance appraisal system
Totalhighly
effective effective ineffectiveperformance appraisal and success of organization
yes33 4 0 37
to a large extent
26 32 5 63
Total 59 36 5 100Source: Primary Data
Table 4.16.2
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square22.360 2 0
Likelihood Ratio 25.716 2 0Linear-by-Linear Association
20.665 1 0No of Valid Cases
100
Source: Primary Data
Interpretation
The chi square result shows that =22.360, df=2, and p value= .002 indicating that the significance value is less than 0.050 (5% level of significance). So the null hypothesis (H0) is being rejected and hence there is a significant relation between the effectiveness of existing performance appraisal system and success of organization
Thus, we can say from the results obtained that the presence of an effective and customized performance appraisal system exclusively for the knowledge workers will correspond directly to the overall success of the knowledge organization.
Figure 4.16
75
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Relation between effectiveness of existing performance appraisal system and success of organization
5.1 FINDINGS
The study conducted to analyze the effectiveness of performance appraisal systems in
the top 5 knowledge organizations situated in Bangalore revealed several findings. It
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
involved a study on the trends and preferences of knowledge workers corresponding
to their performance appraisal system.
The findings were observed by taking into account the response of the employees via
questionnaire and the views of the HRD Department.
The findings of the study are as follows:
The knowledge organizations encourage their knowledge workers to bring about
innovation and creativity thus unleashing their talents and knowledge
There is a significant relation between the preferred performance appraisal type
and the preferred appraise
There is a significant relation between the motivation of knowledge workers and
the success of organization
There is significant relation between the performance appraisal results and
motivation for performance and promotion/ onsite duties.
There is a significant relation between the effectiveness of existing performance
appraisal system and success of organization
The presence of an effective and customized performance appraisal system
exclusively for the knowledge workers will correspond directly to the overall
success of the knowledge organization.
77
Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
80% of the employees in knowledge organizations are motivated after the
performance appraisal. The knowledge workers prefer documentation and
transparency in the PAS
50% of the employees in knowledge organizations are of the opinion that their
performance appraisal results correspond to their promotion and better
performance also favour onsite duties
50% of the employees in knowledge organizations are of the opinion that they
judiciously implement and follow their performance appraisal
More than 50% of knowledge workers confirm that their tasks are well informed
and defined before the performance appraisal takes place
31% respondents said that the performance appraisal system should employ a
method that is both formal and informal .The performance appraisal system
should include superiors, peers and self.
5.2 CONCLUSION
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
The two fast moving trends are changing the way companies manage talent. If the
companies don’t pay attention to these facts, they’ll lose their competitive edge even
before they know it. To remain competitive – maybe even to survive – businesses will
have to convert themselves into organizations of knowledgeable specialists. Best practice
calls for emphasis on relationships, collaboration, and professionalism, and for de-
emphasis of formal performance measures. Costs need to be reduced and assets need to
be grown. Knowledge workers have been raised to the platform of being capital assets of
knowledge organizations. The task no longer programmes the knowledge worker. The
knowledge worker is responsible for his own contribution. The knowledge worker
should be made accountable in terms of quality and quantity of work with respect to the
time and cost. The principles of manual worker productivity have long become obsolete.
Therefore it is necessary to develop various better, new and efficient methods to increase
and judge the productivity of the Knowledge workers. An increase in the productivity of
the human capital will correspond to the increase in the performance of the knowledge
organization as a whole. The traditional methods of performance appraisal do not work
for efficient management of knowledge workers. Innovative practices should be brought
out in the existing performance appraisal system employed.
5.3 SUGGESTIONS
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Effectiveness of Performance Appraisal Systems in Knowledge Organizations in Bangalore
Based on the findings, suggestions are made with a view to add value to the present
performance appraisal system employed in the Knowledge organizations under study.
The following are some of the suggestions given to enhance the efficiency of the
performance appraisal system and thus improve the productivity of knowledge workers.
The duration of the performance appraisal system may be reduced and can be
conducted after each project as it might help the knowledge organization in the
knowledge management
Concepts such as 360 degree appraisal along with the self performance appraisal
should be encouraged in knowledge organizations as the knowledge worker
decides the task and the quality
The performance appraisal results should relate to the knowledge workers
promotion or onsite duties as this is taken as a motivation for improved
performance
Innovative practices should be encouraged as this may lead to the unleashing of
productivity of the knowledge worker
Job rotation, flexi timings, freedom to experiment and communities of practice
should be encouraged within knowledge organizations.
80