PREFACE

The student opting for M.B.A. Programme have to prepare a project report on a

particular firm or Industry as an integral part of their studies, designed to develop the

students' skills in analyzing practical problems though the application of theoretical

Concepts & techniques of management.

Practical knowledge is must & important for any person so as to make the best use

of his theoretical knowledge. It plays an important role to develop the practical view

of students. The concepts reinforced in the classroom would be better exposed if it

could be actually observed being practiced.

Being M.B.A. student, I also got the valuable opportunity to learn the practicability of

theories, which helped me a lot to develop and become skillful.

I conducted my Project report at CREATIVE CASTING LIMITED. The report, which

follows, is an outcome of my effort, which is prepared in partial fulfillment of the MBA

program. The facts and figures mentioned in the report are absolutely true to my

knowledge. Reader of this report is hence requested to keep the information

confidential and not use it for any other purpose.

ACKNOWLEDGEMENT

For successful completion of my project study, I need the support of many people

right from the stage of conceiving the idea to completion of report. It is difficult for a

single person to do the job efficiently without interaction & involvement of others.

Firstly, I would like to express my gratitude towards ______________ for giving me

an opportunity to get practical exposure through this project study.

I thank ______________________________________________ for giving me

Valuable Guidance and providing facilities to successfully complete my Grand

Project.

I am also grateful to all others who had directly or indirectly helped me in completion

of this project.

TABLE OF CONTENT

Chapter Content Page No.

Executive Summary

1 Research Methodology

2 Introduction to industry

3 Introduction to Creative casting ltd.

History and development

Product Range

Organization chart

Competitor

International Business

SWOT analysis

Quality Policy

4 HR management at CCL

5 Theoretical framework of Performance Appraisal

Objective of performance appraisal

Scope of Performance Appraisal

Effects of Performance appraisal On Careers of

EmployeeHow to conduct Performance appraisal

Method of performance Appraisal

6 Performance management at CCL

7 Data Analysis and Interpretation

8 Suggestion

9 Bibliography

EXECUTIVE SUMMARY

Human resource management is concerned with the people who work in the

organization to achieve the objectives of the organization. It concerns with

acquisition of appropriate human resource, developing their skills and

competencies motivating them for the best performance and ensuring their

continued commitment to the organization to achieve organizational

objectives. HRM refers to the activities and functions designed and

implemented to maximize organizational as well as employees’ effectiveness.

Human Resource Management has become an important aspect for the fast

development of an organization. It plays an important role managing the

people efficiently. Considering its importance, the need for it has been felt at

every organization and therefore it has wide scope. Success of every

business enterprise depends on its human resource. The main objective of

HRM is to maximize the return on investment from the organization’s human

capital.

Performance Management System is essential to the success of organization

because it influences the effort expended by employees, which in turn, drives

bottom-line business results. Performance Management System helps an

organization identify, recruit, motivate, and retain key employees. People

differ in their abilities and their aptitudes. There is always some difference

between the quality and quantity of the same work on the same job being

done by two different people. Performance management of Employees are

necessary to understand each employee’s abilities, competencies and relative

merit and worth for the organization.

Project starts with introduction of the company and its HR system, second

part is about the process of performance appraisal in CCL. Last part is about

the analysis of the data.

RESEARCH METHODOLOGY

◈ OBJECTIVES OF STUDY

Following were the objectives of the study:-

1. To study the various methods of “performance appraisal” applied in CCL

2. To identify the needs of “Performance appraisal system in CCL”

3. To know whether employees are satisfied with the performance appraisal

system.

4. To study the effect of performance appraisal on employees in CCL.

5. To suggest changes if any in performance appraisal system.

◈ RESEARCH METHODOLOGY

RESEARCH DESIGN

A research design is a framework to prepare plan or study. It is useful as a

guide to collect the data and analyzing it. It is a blue print that is followed in

completing the study. Research design is the conceptual structure within

which the research will be conduct.

Type of Research : The study is descriptive in nature.

SAMPLING DESIGN:

Sample Size : 50 employees

Sampling Technique : Convenient Sampling.

SOURCES OF DATA COLLECTION:

Primary data will be collected through structured questionnaire

and interview.

Secondary data will be gathered through HR related magazines,

journals, business newspapers, internet and website of the

company.

DATA ANALYSIS

It will be done with the help of Pie and Bar Chart.

LIMITATION

1) This project is restricted to study purpose only and can be used keeping in

view the object that is made for.

2) The respondent in the project may not reveal important / confidential

information pertaining to the company policy and for this the project

should be used keeping in view the said limitation.

3) Finding of the study will be based on the assumptions that respondents

have given correct information.

INTRODUCTION TO THE INDUSTRY

The Indian steel industry has made a rapid progress on strong fundamentals over

the recent few years. The industry is getting all essential ingredients required for

dynamic growth. The government is backing the industry through favorable industrial

reforms, while the private sector is supporting it with investments worth billions of

dollars. Even in the tough times of economic slowdown, the industry succeeded to

sustain its positive growth momentum on the strong fundamentals of domestic

demand from construction, automobile and infrastructure sectors.

Steel industry has a major role to play in the economic growth of India. With new

global acquisitions by Indian steel giants, setting up of new state-of-the-art steel

mills, modernisation of existing plants, improving energy efficiency and backward

integration into global raw material sources, India is now on the centre of the global

steel map. Consumption of steel in the construction sector, industrial applications,

and transport sector has been on the rise and special steel usage in engineering

industries such as power generation, petrochemicals and fertiliser industry is also

growing.

India has retained its position as the 5th largest producer in 2010 and recorded a

growth of 11.3 per cent as compared to 2009. India has also emerged as the largest

sponge iron/direct reduced iron (DRI) producing country in the world in 2010, a rank

it has held on since 2002. Sponge iron production grew at a CAGR of 11 per cent to

reach a level of 20.74 million tonne (MT) in 2009-10 as compared to 14.83 MT in

2005-06. India is expected to become the second largest producer of steel in the

world by 2015-16, on account of growing steel demand, rich resources base of iron

ore, skilled manpower and vast experience of steel making and the huge capacity

expansion planned and being executed in the steel sector.

With the expanding consumer market, Indian steel industry is likely to receive huge

domestic and foreign investments. Nearly 222 memorandums of understandings

(MoUs) for planned capacity of around 276 MT have been signed between the

investors and various State Governments, mostly in Orissa, Jharkhand, Chhattisgarh

and West Bengal.

India has recorded a growth of over 8.6 per cent, producing 6.35 MT of steel in

March 2011 as against 5.85 MT in the corresponding month in 2010, according to

World Steel Association (WSA).

Steel exports has increased by 17.3 per cent as it reached an estimated 2.46 MT,

while steel imports were at an estimated 5.36 MT, a growth of 2.8 per cent in 2010.

Introduction to Creative Castings Limited

A company established since 1980 is premier investment castings manufacturer in India. It manufactures quality castings for specific needs of clients by engineering them to client’s satisfaction.

Company is accredited as ISO - 9001 certified by RWTUV - Germany

AD - Merkblatt WO-TRD 100 Certified by RWTUV - Germany.

Well known foundry by Indian Boiler Regulations

Name of Company

Creative Casting Limited

(IS09002 Company)

Location

Junagadh (Gujarat)

Registered Office

102, GIDC, Phase-2, Dolatpara,

Junagadh-362001

Year of Establishment

1979-1980

Board of Directors

Shree Dhirubhai Dand, Chairman

Shree R. R. Bambhania, MD

Shree N. C. Vadgama, Director

Shree M. P. Thummer, Director

Shree S. M. Thanki, Director

Shree V. R. Vaishnav Director

Chairman

Shree Dhirubhai Dand

Managing Director

Shree R. R. Bambhania

Company Secretary

Nitin S. Shah

Bankers

State Bank of India

Circle Chowk, Junagadh

History & Development

According to the information provided by the industry, this firm has been started on

partnership basis in 1979-80. The company was started for the purpose of

manufacturing Steel Casting. This was India's fifth company producing steel casting,

well qualified for experienced engineers for C. A. had promoted this company.

In the year 1985, this partnership firm was converted into "Pvt Ltd Co.". The

company is being in corporate under the Companies Act 1966. The factory &

registered office is located in GIDC at Junagadh which is eligible for various

incentives as an industrial backward area. Commercial production was started on 1st

of April 1981. Main goal of the promoters at the time of establishment was to fulfill

the demand of steel casting. On 27th march, 1991 they shifted their unit to GIDC

Phase-2 as the demand and production is increased as a result of good market

share was captured.

From 6th October 1994, it was converted into "Limited Company". This action of

promoters showed their advancement in market regarding time, money and policy.

At the demand of steel casting is growing on, market of this industry was reached at

international level and also obtained good reputation in market. The company is still

growing on and has captured good market share.

Chairman

Managing Director

Marketing Production

Sr. Vice President

Personnel Administration

Personal Manager

Labour Office

Time Keepers

Labourers

Sr. VP Operation

VP Marketing

Dispatch

Sr. VP Operation

VP Quality Assurance &

Quality Control

Production Engineers

Head of Departments

Labourers

Hence, we can say that this company has large development and growth in the

bearing industry. The main reason behind this is high quality and increasing demand.

Organization Chart

PRODUCT RANGE

Castings for the process valves and pump industry covering check, globe, ball

diaphragm valves, pump castings and impellers, power generation, switchgear and

electrical industries, defence, mechanical handling and allied engineering industries

COMPETITORS

The world is full of competition. There is no single area or field left where there is no

competition. Even a small business unit has cut throat competition in the market. It

has to face the rivals at each and every stage of its progress.

Creative Casting Ltd. also has competitors in its field. They are manufacturing steel

and alloy castings which need a high amount of investment. The main competitors of

this company are as follow:

1) IPCL, Bhavnagar

2) Steel Cast, Bhavnagar

3) Prevail Casting Ltd., Rajkot

There are about 40 small units in only Rajkot which can be competitors of the

company at some level.

But yet, Creative Casting Ltd. has maintained its stand in the market due to their

quality assurance. CCL believes in healthy competition which helps them in their

development. They maintain a very good relationship even with their competitors.

Hence, they believe in a very sound progress of their company. Although the

demand for steel & alloy casting is not FMCG goods & thus, only because of such

reason, there are few companies in manufacturing this kind of products.

INTERNATIONAL BUSINESS

Creative Casting Ltd. is one of the companies like all others that export its product

out in the different countries. They have variety of products been manufactured. As

per the demand of the customer the products are been exported. Mainly the

business is done in the countries like USA, UK, Italy, Germany, Australia, Japan,

Poland & Denmark. Here, from the international market the company's.

representative / buyer inquires & consults the CCL, and considering the cost & the

quality of the product they place the order if they are satisfied with the quotation by

negotiation. The company's profit margin for the international market depends on the

quantity ordered & the current market condition of the company.

SWOT ANALYSIS

Every existing firm has their own strength, weakness, opportunity and threat. These

four aspects have their importance in each and every existing business. It is possible

that strength of one unit may be weakness for another and opportunity for one

becomes threat for another.

As every company, Creative Casting Ltd. also has its own strength, weakness,

opportunity and threats. They face all these aspects and after proper structuring

them they prepare the strategy to proceed further.

Strength:

High degree of customization

Strong support of domestic& international market

Increasing demand

Weakness:

Dependency on raw material

Low availability of raw material

Opportunity :

Tremendous export opportunity by optimum utilization of resources

Threats:

Losing market share

Reduces demand by local competitors

QUALITY POLICY

We will deliver to our customers – internal & external, products & services

information at all times to clearly established requirements.

“DO IT RIGHT THE FIRST TIME EVERY TIME”

To achieve this, we will create an environment that encourages our employees and

suppliers to prevent derivations.

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human resource management is concerned with the people who work in the

organization to achieve the objectives of the organization. It concerns with

acquisition of appropriate human resource, developing their skills and competencies

motivating them for best performance and ensuring their continued commitment to

the organization to achieve organizational objectives. This definition applies to all

types of organizations like Industry, business, government, education, health or

social welfare of the people.

HRM refers to activities and functions designed and implemented to maximize

organizational as well as employees' effectiveness.

So, we can say that the personnel management is that part of management, which

covers all the related facts with its function like manpower, planning, selection

process and methods of training and development performance appraisal promotion

and transfer, industrial relation.

In "Creative Casting ltd.", the head of the personnel department is G. N. Khandla and

there are total 202 workers working in the company.

In their duty time, half hour recess is given to the workers and one hour recess is

given to the staff members. The company's time keeping system is given below:

No. Shift Time Hours

1

2

3

A

B

C

6AM to 2PM

2PM to 10PM

10PM to 6AM

8 hours

8 hours

8 hours

CCL has three shifts for the labours and one shift for the administrative workers.

Director

Vice President Administration

Personnel Manager

Assistant Personnel

Time Keeper

Labours

PERSONNEL DEPARTMENT CHART

HUMAN RESOURCE PLANNING

“HR planning is the process of determining manpower requirements and the means

for meeting those requirements in order to carry out the integrated plan of the

organization”.

HR planning means to prepare the planning in advance regarding the number of

employees required in the future of the company. It estimates the requirement for the

employees needed by the company. Also it plans for training, development,

utilization, transfer, promotion, motivation and compensation and strategy to utilize

them efficiently.

The personnel manager of the company takes complete care of HR planning. As in

the company the workers work in three different shifts. And a machine requires

minimum three labours at a time and so there exists fifteen different machines so a

least 45 labours are needed in a single shift at a time. So, in each and every shift 45

labours must be placed. And if the scarce of human resource is been noticed the HR

planning must be done and a best one is to be chosen for the company. But

selection, recruitment and placement of the personnel has to pass through the formal

procedure of the company. This procedure has been discussed in detailed in four

coming sub points.

So, in CCL HR planning is done effectively for the best coming future of the

organization and of the employees of the organization. Organization depends on the

employees and the employees depend on the organization because of their mutual

interest. With the help of the HR planning the organization gets bests of the selected

employee in the organization and according to the employee's performance they get

their remuneration, so no chance of injustice done between the employees of the

organization. This is only possible with the help of the HR planning in the

organization.

RECRUITMENT, SELECTION & PLACEMENT OF PERSONNEL

Recruitment has been regarded as the most important function of personnel

administration, because unless the right type of people are hired, even the best

plans, organization charts and control system would not do much good.

CCL, for recruiting the personnel, CCL pays to the local newspaper for

advertisement through which the maximum no. of people can know about the

vacancy in the company that is to be filled. So, the maximum no. of applicants can

apply for the job. Through this process the company can occupy the right people, at

the right time and at the right place.

And then the selection procedure is concerned with securing relevant information

about an applicant. This information is secured in a number of steps or stages. The

objective of selection process is to determine whether an applicant meets the

qualifications for a specific job and to choose the applicant who is most likely to

perform well in the job.

Selection is a long process, commencing from the preliminary interview of the

applicants and ending with the contract of employment. At each stage, facts may

come to light lead to the rejection to the applicant and thus the complexity of a

process usually increases with the level and responsibility of the position to be filled.

And at last, the 2nd last step of the selection process two to three of the applicants

forms are to be passed over to the top management. And from those applicants the

best alternative is been chosen by the higher authority and than the placement is

done.

And after the placement of the personnel, first fifteen days of the job of the individual

is been introduced with each and every individual working in the company and the

respective heads of the department. That is the overall introduction of the company

is been given to the individual.

The final placement of the individual is been done after 6 months from the date

he/she has joined the company at the end of these 6 months the overall performance

and the behaviour of the person is been summed up and from that performance

report the individual salary and his final placement is been decided.

TRAINING AND DEVELOPMENT

In organizational development, the related field of training and development (T & D)

deals with the design and delivery of learning to improve performance, skills, or

knowledge within organizations.

In some organizations the term Learning & Development is used instead of Training

and Development in order to emphasize the importance of learning for the individual

and the organization.

"Training is the systematic modification of behaviour through learning which occurs

as a result of education, instruction, development and planned experience".

- Micheal Armstrong

CCL company prefers on the job training so, on the job training is given to every

fresh candidates of the company. The first six months of employee in the company is

been considered as the training period of the employee. As, he/she is been working

under supervision for six months.

Where, "Development is the program by which executive's capacities to achieve

desired objectives are increased".

In simple words, we can say that, training is the process of learning a sequence of

programmed behaviour and development is the training of a person for a bigger and

a higher job.

Performance Appraisal Policy

Performance appraisal is a systematic assessment of the individual's performance

and potential for development at his work place. In simple words, performance

appraisal is the process where employees come to know about their overall

performance on the job which is done either by third person or their supervisors.

Performance appraisal measures job knowledge, quality and quantity of output,

initiative, leadership abilities, supervision, dependability, versatility, judgements, co-

operation, health, etc. in an employee. It covers the entire behaviour of the employee

on the job.

CCL goes for Performance appraisal for all the labours as well as for the

administrative staff of the company either for every six month or once in a year as

per the requirement.

Through the results of Performance appraisal program the salary and the promotion

of the employee is been decided. And if any of them is noticed under the low range

of points than the problem of that employee is been asked and proper incentives and

motivation is been given to that particular individual, so that his energy is boosted up

to achieve the goals of the company and of his own.

Wage and Salary Administration

Wage and salary administration refers to the establishment and implementation of

sound policies and practices of employees' compensation.

Each and every employee works in the company for some earnings. If this earning is

not given according to what the employee has work then this might cause the

grievance or dissatisfaction in them. It is very necessary to give adequate wages to

the employee. It is their right and the primary duty of every company. Remuneration

is of two types:

Monetary Benefits

For examples wages, salary, incentives, fringe benefits like provident fund,

gratuity fund, mediclaim, accident relief, etc.

Non-monetary Benefits

For examples club membership, furnished house, holiday, comfortable

working, job rest, Car, etc.

Thus, the salary of the workers and the employees of the company i.ie. in CCL is

been distributed between them as under:

(1) Rs. 3,500- to 4,500- for all the labours.

(2) Rs. 5,000- to 20,000 for staff members.

(3) Rs. 35,000- salary is provided to the Managerial cadre.

And all these salaries is been decided on the quantity and quality of the work in the

company that has been perform by him/her at that particular job. Then too,

satisfaction of both i.e. the employee and the company is been considered equally.

PROMOTION, TRANSFER AND DEMOTION POLICY

Promotion is a term which covers a change and calls for greater responsibilities and

usually involves higher pay and better terms and conditions of service and therefore,

a higher status or rank.

According to Scott & Clothier, "A promotion is the transfer of an employee to a job

which pays more money or one that carries some preferred status”.

And in CCL, promotion is given on two basis:

(1) Promotion on the basis of the overall performance

(2) Promotion on the basis of the seniority

So, this is policy of the company for the promotion of the candidate already working

in the company.

And as there is no demotion of the employees, there doesn't exist any demotion

policy in the company.

And in case of transfer in this company, the transfer is only possible in the inter-

department. And the head of the department holds the authority.

WELFARE POLICY

Every employee work at their best for the betterment of the company. Now, it is the

duty of the company to think the betterment of the employees. Employee welfare

refers to physical, mental morale and emotional wellbeing of an individual.

Employees work day and night so that company can progress. They are the real

asset of the company. A company must think of how best they can utilize these

assets and how they can nurture them.

The significance of the employee welfare has increased because it increase the

loyalty of workers, less labour turnover, high productivity, job satisfaction, healthy

industrial relations, motivation and retention of employees, minimizes social evils,

improve the image of the company.

And thus, CCL provides various benefits to their workers:

(1) 20% Bonus on Diwali to all the employees of the company

(2) 500 grams of sweet to each employee of the company on Dashera

(3) free medical service to workers and their family

(4) negligible cost of tea twice a day

(5) increment in salary once in a year to the employees

TIME KEEPING SYSTEM

Following are the purpose of time keeping system used in this company:

1. To maintain the regularity to the company

2. To maintain the personal records of all the employees.

3. It makes operations of the organization smooth and efficient by indicating o

each employee to his duty time

4. To keep the records to employee's presence, absence, overtime and other

matters of the job.

5. It is one kind of responsibility to the labours and of the labours.

TRADE UNIONS & DISPUTE MANAGEMENT

In CCL, there does not exists the trade unions. So, the grievance occurred in the

employees, labours os in the management of the company that is been solved

among themselves very peacefully. That is the dispute management is done

amongst themselves if any problem occurs. That too in this company problem arises

in very rare cases. And is been solved under mutual understanding without asking

help from the third party existing outside the company.

So, in short it can be said that the transactions and the relations are been handled

peacefully and so the company is a happy going company for the industrial market.

THEORETICAL FRAMEWORK OF PERFORMANCE APPRAISAL

Performance appraisal is a formal system that evaluates the quality of a

worker’s performance; an appraisal should not be viewed as an end in itself, but

rather as an important process within a broader performance management system

that links:

• Organizational objectives

• Day-to-day performance

• Professional development

• Rewards and incentives

What is the purpose of performance appraisal?

• Professional development such as identifying strengths and weaknesses in

performance, implementing strategies for improvement

• Determining organizational training and development needs

• Making and validating administrative decisions like pay, promotion,

placement, and termination.etc.

• Identifying systemic factors that are barriers to, or facilitators of, effective

performance.

Objectives of Performance appraisal:

To review the performance of the employees over a given period of time.

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

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to identify

the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the

organization.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees

Scope of Performance appraisal

Provide employees with a better understanding of their role and

responsibilities.

Increase confidence through recognizing strengths while identifying

training needs to improve weaknesses.

Improve working relationships and communication between supervisors

and subordinates.

Increase commitment to organizational goals; develop employees into

future supervisors.

Assist in personnel decisions such as promotions or allocating rewards,

and allow time for self-reflection, self-appraisal and personal goal setting.

Effects of Performance appraisal On Careers of Employee:

Performance appraisal helps to identify the hidden talents and potential of the

individuals. Identifying these potential talents can help in preparing the individuals for

higher responsibilities and positions in the future. The performance appraisal

process in itself is developmental in nature. It is also closely linked to other HR

processes like helps to identify the training and development needs, promotions,

demotions, changes in the compensation etc. A feedback communicated in a

positive manner goes a long way to motivate the employees and helps to identify

individual career developmental plans. Based on the evaluation, employees can

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

career progression. Performance appraisal encourages employees to reinforce their

strengths and overcome their weaknesses

Fundamentals of an appraisal system

To develop a successful performance appraisal system, two criteria need to

be met

• Relevance and applicability to everyday work practice

• Acceptability to appraisers and workers.

A systematic approach to performance appraisal can help ensure that these

two important criteria are met.

How to conduct a performance appraisal

The following five-step approach to conducting a systematic performance

appraisal is recommended:

1. Identify key performance criteria

2. Develop appraisal measures

3. Collect performance information from different sources

4. Conduct an appraisal interview

5. Evaluate the appraisal process.

Step 1: Identify key performance criteria

Perhaps one of the most challenging aspects of setting up a performance

appraisal is deciding what to assess. In essence, four key dimensions of

performance should be considered in a performance appraisal.

Key Dimensions of Performance:

Competencies : Knowledge, skills, and abilities relevant to

performance

Behaviors : Specific actions conducted and / or tasks

performed

Results / outcomes : Outputs, quantify able results, measurable

outcomes and achievements, objectives attained

Organizational citizenship

behaviors : Actions that are over and above usual job

responsibilities

To ensure that the performance criteria are relevant to work practice and

acceptable to appraisers and workers:

i. Base the performance criteria on an up-to-date job description

ii. Develop criteria in consultation with appraisers and workers

Step 2: Develop appraisal measures

Once clear and specific performance criteria have been developed, the next

step is to decide how to assess workers’ performance. It is recommended that a

structured and systematic approach is taken to assessing performance. Problems

that arise when an unstructured “blank sheet” approach is used include:

• Increased chance of appraiser errors

• Knowledge, skills and abilities most critical to job performance may be

overlooked

• Reduced consistency between appraisers

• Perceptions of “subjectivity” in evaluations, which may in turn, reduce

workers’ satisfaction with, and acceptance of, appraisals.

Step 3: Collect performance information from different sources

Once the appraisal measures are developed, the next step involves collection

of accurate performance information. A common trap is to begin noting observations

of workers just before conducting appraisals. This is likely to give an inaccurate

picture of a worker’s performance. Ideally, workers’ performance should be observed

in a systematic way over time .This method ensures the accuracy of information

about their performances.

Traditionally, it has been the sole responsibility of managers / supervisors to

assess performance. However, other organizational members can be a valuable

source of information as they are likely to have exposure to different aspects of a

worker’s performance. This approach is known as 360-degree feedback. For

instance, coworkers can provide valuable information on teamwork skills, and

subordinates can provide useful information on leadership style.

Five different sources of performance appraisal information are considered here:

i. Manager / supervisor appraisals

ii. Self appraisals

iii. Coworker appraisals

iv. Subordinate appraisals

v. Client appraisals.

Step 4: Conduct an appraisal interview

The next step in a performance appraisal is to conduct the appraisal interview. The

two central purposes of the appraisal interview are to:

• Reflect on past performance to identify major achievements, areas

that require further development, and barriers / facilitators to effective

performance

• Identify goals and strategies for future work practice.

Step 5: Evaluate the appraisal process

As with any organizational system, the performance appraisal process should

undergo regular review and improvement.

METHOD OF PERFORMANCE APPRAISAL

1. Graphic rating scale

2. Paired Comparison

3. Forced choice approach

4.Easy Appraisal

5. BARS

6. Checklist method

7. Critical incident method

8. 3600 appraisal

Methods

1. Graphic Rating

Scale: A performance appraisal that rates the degree to which the employee has

achieved various characteristics.

1) The graphic rating scale is the most common type of appraisal used.

2) Various characteristics such as job knowledge or punctuality are rated by the

degree of achievement.

3) The rate usually receives a score of 1 to 5, with 5 representing excellent

performance.

4) Some forms allow for additional comments.

2. Paired-comparison Approach: A performance appraisal that measures the

relative performance of employees in a group.

1) This is a method of performance evaluation that results in a rank ordering of

employees to come up with a best employee.

2) This type of approach measures the relative performance of employees in a

group.

3. Forced-choice Approach: A performance appraisal that presents the

appraiser with sets of statements describing employee behavior; the appraiser must

choose which statement is most characteristic of the employee and which is least

characteristic.

4. Easy Appraisal: Sometimes the supervisor must write a description of the

employee’s performance. The easy appraisal is often used along with other types of

appraisals, notably graphic rating scales. They provide an opportunity for

supervisors to describe aspects of performance not thoroughly covered by an

appraisal questionnaire.

The disadvantage of this method is that their quality

depends on the supervisor’s writing skills.

5. Behaviorally Anchored Rating Scales:

A performance appraisal in which the employee is rated on scales containing

statements describing performance in several areas.

This is a method of performance appraisal that is tailored to the organization and

positions within that organization.

Some organizations pay behavioral scientists or organizational psychologists to

create behaviorally anchored rating scales.

6. A checklist appraisal is a record of performance, not an evaluation by

the supervisor. It contains a series of questions about the employee’s performance.

The supervisor checks boxes to answer the questions yes or no. The human

resources department has a key for scoring the items resulting in a rating of the

employee’s performance.

7. Critical-incident Appraisal: A performance appraisal in which the

supervisor keeps a record of incidents that show positive and negative ways the

employee has acted; the supervisor uses this record to assess the employee’s

performance. Some of the important forms of ranking for performance appraisal are

given below, based on Oberg, 1972; and Monga, 1983:

(a) Alteration ranking method The individual with the best performance is

chosen as the ideal employee. Other employees are then ranked against this

employee in descending order of comparative performance on a scale of best

to worst performance. The alteration ranking method usually involves rating

by more than one assessor. The ranks assigned by each assessor are then

averaged and a relative ranking of each member in the group is determined.

While this is a simple method, it is impractical for large groups. In addition,

there may be wide variations in ability between ranks for different positions.

(b) Paired comparison The paired comparison method systematizes ranking

and enables better comparison among individuals to be rated. Every

individual in the group is compared with all others in the group. The

evaluations received by each person in the group are counted and turned into

percentage scores. The scores provide a fair idea as to how each individual in

the group is judged by the assessor.

(c) Person-to-person rating In the person-to-person rating scales, the names

of the actual individuals known to all the assessors are used as a series of

standards. These standards may be defined as lowest, low, middle, high and

highest performers. Individual employees in the group are then compared with

the individuals used as the standards, and rated for a standard where they

match the best. The advantage of this rating scale is that the standards are

concrete and are in terms of real individuals. The disadvantage is that the

standards set by different assessors may not be consistent. Each assessor

constructs their own person-to-person scale which makes comparison of

different ratings difficult.

(d) Checklist method The assessor is furnished with a checklist of pre-scaled

descriptions of behaviour, which are then used to evaluate the personnel

being rated (Monga, 1983). The scale values of the behaviour items are

unknown to the assessor, who has to check as many items as she or he

believes describe the worker being assessed. A final rating is obtained by

averaging the scale values of the items that have been marked.

(e) Behaviourally anchored rating scales (BARS) This is a relatively new

technique. It consists of sets of behaviourial statements describing good or

bad performance with respect to important qualities. These qualities may refer

to inter-personal relationships, planning and organizing abilities, adaptability

and reliability. These statements are developed from critical incidents

collected both from the assessor and the subject.

(f) Assessment centres This technique is used to predict future performance

of employees were they to be promoted. The individual whose potential is to

be assessed has to work on individual as well as group assignments similar to

those they would be required to handle were they promoted. The judgment of

observers is pooled, and paired comparison or alteration ranking is

sometimes used to arrive at a final assessment. The final assessment helps in

making an order-of-merit ranking for each employee. It also involves

subjective judgment by observers.

8. 360-degree Performance Appraisal: Evaluating Employees From All

Angles

Traditional performance appraisals, as discussed above, can be both subjective and

simplistic. At times, they can also be deemed to be "political". In an attempt to

improve this methodology, some companies have turned to 360-degree appraisals.

360 appraisals pool feedback from a department's internal and external customers to

ensure a broader, more accurate perspective of an employee's performance.

360-degree performance appraisal is an attempt to answer the question: "How can a

supervisor evaluate an employee he or she sees only a few hours each week?"

Using internal and external clients

360-degree performance appraisals offer an alternative by which organizations may

gain more useful performance information about employees. Because all

clients/customers an employee comes into contact with can conceivably have input

into the performance appraisal, this methodology can also makes them more

accountable to their customers.

Using a courtroom metaphor, one could say that, rather than having a single person

play judge, 360-degree appraisal acts more like a jury. People who actually deal with

the employee each day have an opportunity to create a pool of information from

which the appraisal is written. Internal clients may include supervisors, subordinates,

co-workers, and representatives from other departments. External customers may

include clients, suppliers, consultants and customers.

Perceived fairness

Given the use of a wide variety of sources for information in the 360-appraisal

process, this method provides a broader view of the employee's performance.

Frequently, the employee on whom the appraisal is being done (the ratee) will feel

that the process is more fair.

Validity

Very often, an employee's peers know their behaviors best. Consequently,

employees cannot hide as easily in 360-degree appraisals.

PERFORMANCE APPRAISAL AT CCL

While on the job, performance reviews of every employee are done every six month

or year. The reviews are done with a view to helping the individual excel at his/her

workplace. In case there are any training requirements, these are noted and acted

upon in the coming quarter. Also, the goals and objectives for the employee are re-

visited for

The performance appraisal mechanism is carried out at CCL for promotional

purposes

These are done so as to motivate the employee and improve his performance level.

The method is as follows:

a) Establishment of performance standards with the employees

b) The goals are set mutually as per measurable standards.

c) The actual performance is hence measured.

d) After measuring of the actual performance, the same is compared with the

standards set

e) The appraisal is then discussed with the employees.

f) And finally, if need arises corrective action is initiated. For this purpose the

corrective action is actually identified through brainstorming exercises initiated

by the departmental heads at CCL. It is then measured as a tool to evaluate

the past performances of the employees.

Some of the methods used at CCL are:

1. Key Performance Index

2. 360 Degree Feedback

3. Paired Comparisons

4. Behaviorally Anchored Rating Scale

1. KPI-Key Performance Index

It is based on the performance level of the employee generally classified on the

basis of:

Targets achieved

Ratings through supervisor’s feedback forms

Punctuality and regularity

Day to day performance

This is given after every module at the centers.

Thus we can observe that the appraisal system is not a biased one but based on

performance and productivity basis. All the respective heads of the employee

together with the senior persons at the center brainstorm and then give the

promotion.

2. 360 Degree Feedback

This feedback system involves the participation of:

Coworkers – 40%

Subordinates - 20%

Superior - 40%

Thus the feedback given by these members at CCL is considered under a holistic

view and then the employee is given a performance appraisal. This evaluation

method involves 40% feedback from the coworkers which says that the employee

should not only maintain good rapport with the senior or junior but majorly with the

coworkers also.

3. Paired Comparisons

The evaluator compares all possible pairs of subordinates on their overall ability to

do the job. Due to the subjectivity of evaluating overall performance some managers

use a number of different job related dimensions when comparing.

4. Behaviorally Anchored Rating Scale (BARS)

It is a sophisticated method of evaluating the employee based on the employee

behavior. It is a numerical scale that is anchored by the seniors of the organization at

various centers. This is highly confidential and the information is sent in sealed

envelopes and opened only at the time of the final evaluation. There is no further

discussion regarding this scaling, thus it is not given enough weight age.

DATA ANALYSIS AND INTERPRETATION

1. What do you think that the company should take into consideration

during appraisal

Experience (Seniority)

Performance

Response

Experience (Seniority) 68%

Performance 32%

Experience (Seniority) Performance0

10

20

30

40

50

60

70

68

32

About 68% of the respondent says that the appraisal should be performance based.

The reason for saying Seniority by 32% respondent is because, at CCL have

observed there are some staff who are above the age of 40 and have experience of

average 15-20 in the same field. They prefer saying that seniority should be the base

of performance evaluation.

2. Do you think that, biasness prevents in the appraisal system.

Yes

No

Response

Yes 56%

No 44%

YES NO0%

10%

20%

30%

40%

50%

60%

56%

44%

It is observed that 56% of the respondent says that biasness prevents in the system.

This biasness may be due to towards those middle level and senior staff who are

associated with the company from the very beginning and are very instrumental in

the growth of the company.

3. Would you like to continue with the company if not appraised

properly?

Yes

No

Response

Yes 32%

No 68%

YES NO0%

10%

20%

30%

40%

50%

60%

70%

32%

68%

32 % of the respondent seems to be Loyal to the company when they

responded that they would like to still get associated with the company, even

if their appraisal is not to the mark of their expectation. However it was from

my personal observation, those respondents who have said “yes” are those

staff who are senior in the system and not willing to change anymore.

4. Do you think that appraisal should be twice in a year?

Yes

No

Response

Yes 72%

No 28%

YES NO0%

10%

20%

30%

40%

50%

60%

70%

80%

72%

28%

72 % of the respondents are willing to give their best and prove themselves in order

to get a change to be appraised properly. They are of the view that they should be

appraised twice in a year in order to get a fair chance to get promoted and / to get

other gain that the company is offering

5. Do you think that the company appraisal system has enough

transparency?

Yes

No

Response

Yes 60%

No 40%

YES NO0%

10%

20%

30%

40%

50%

60%

60%

40%

60 % of the response was that the appraisal system has enough transparency and

the rest denied. Management should try to overcome this belief among the staff, by

having interaction and by defining everybody’s goal and Key Responsibility Area

(KRA’s) against their achievements.

6. Do you think that after appraisal, enough time is devoted by the

management for resolving any grievances

Yes

No

Response

Yes 36%

No 64%

YES NO0%

10%

20%

30%

40%

50%

60%

70%

36%

64%

It is apparent from the above response that management is not devoting enough

time to overcome the grievance of the employee. This should be rectified and as

stated above some concrete steps should be taken in terms of defining what is

expected from each employee i.e. everybody KRA’s should be in place..

7. Is training and development need taken care by the

management

Yes

No

Response

Yes 50%

No 50%

YES NO0%5%

10%15%20%25%30%35%40%45%50%

50% 50%

From the above response, still about 50% of the employees feel that their Training

and Development needs are not taken care and for this management should from

time to time undergo/ organize some Training and Development in order to groom

their employees to be competent in today’s world and give their best.

8. Are you satisfied with the appraisal system

Yes

No

Response

Yes 60%

No 40%

YES NO0%

10%

20%

30%

40%

50%

60%

60%

40%

40 % of the respondent are not satisfied with the Performance appraisal system

and should be taken into consideration by the management to make it more

transparent.

SUGGESTIONS OF THE STUDY

1. Every employees KRA should be well defined in the

organization and should be communicated from the beginning

of the year and the performance should be than compared with

what was expected and what the employee has done.

2. Every employees need for Training and Development should be

identified and should be taken care off. This will help the

company in retaining the employee and can be given additional

task to perform.

3. Proper communication should take place between the appraiser

and appraisee in order to have more transparency and clear the

doubt from both the sides.

4. If possible, management should introduce appraisal system

twice in a year, looking to the cost and time involved.

CHAPTER

BIBLIOGRAPHY-

o C.R KOTHARI

o C.B GUPTA

o 360 DEGREE APPRAISAL (TV RAO)

Website:

o www.yahoo.com

o www.creative-cast.com