Project Report-gitam Final Part b - Pavan

8/6/2019 Project Report-gitam Final Part b - Pavan

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CHAPTER 1:

INTRODUCTION

HRD:

It is the process of helping people to acquire competencies. It is an organized learning

experience aimed at matching the organization need for human resource with the individual

need for career growth and development. In an organizational context Hrd is a process by

which employees of an organization are helped in continous and planned way to:

y Acquire or sharpen capabilities require to perform various functions associated with

their present or expected future roles

y Develop their general capabilities so that they may able to discover their own inner

potentialities and exploit them for their own and organizational requirements

y To develop an organizational culture where superior-subordinate relationship, team

work and collaboration among different submits are strong and contribute

organizational wealth , motivation and pride for the employees

FEATURES OF HRD:

y Human resources development is planned and systematic approach to the development

of people

y Human resource development is a continous process of developing the competencies,

motivation, dynamism and effectiveness of employeesy Human resource development is an inter disciplinary concept

y Human resource development has both micro and macro aspects

OBJECTIVES OF HRD:

y To provide a comprehensive frame work and method for the development of human

resource in an organization

y To generate systematic information about human resources for purpose of man power

planning, placement, succession planning and the like.

y To increase the capabilities of an organization to recruit, retain and motivate talented

employees

y To create a climate that enables every employees to discover , develop and use his or

her capabilities to a fuller extent, in order to further both individual and organizational

goals



FUNCTIONS OF HRD DEPARTMENT

y Develop a HR philosophy for the entire organization

y K eep inspiring the line managers to have a consistent desire to learn and developy Constantly plan and design new method and systems of developing and

strengthening the HRD climate

y Be aware of the business/other goals of the organization and direct all their efforts

to achieve these goals

y Monitor effectively the implementation of various HRD subsystem/mechanisms

y Work with unions and associations and inspire them

y Conduct human resource process research, organizational surveys and renewal

exercises regularly

Performance appraisal:

Performance appraisal is the process of assessing the performance and progress of

employee or group of employees on a given job and his potential for future development.

According to Flippo´ Performance appraisal is the systematic, periodic and an impartial

rating of an employee¶s excellence in matters pertaining to this present job and his potential

for a better job´

It is used as a mechanism by supervisors to

y Understand the difficulties of their subordinates and try to remove their difficulties

y Understand the strengths and weakness of their subordinates and help of subordinates

to realize these

y Help the subordinates to become aware of their position contribution

y Encourage subordinates to accept more responsibilities and challenges

y Help subordinates to acquire new capabilities

y Plan for effective utilization of talents of subordinates

OBJECTIVES OF STUDY

y To provide a valid database to personnel department for taking decision

concerning placements, pay, promotion,transfer,punishment etc

y To diagnosis the strength and weakness of individuals so as to identify further

training needs



y To Provide coaching , counseling, mentoring , career planning and motivation to

subordinates

y To develop positive, superior subordinate relations and there by reduce grievances

y To facilitate research in personnel department

CHARACTERISTICS:

y It is process consisting of series of steps

y It is a systematic examination of an employees strengths and weaknesses in

terms of his job

y It is a scientific and objective study

y It is an ongoing process

y The main purpose of performance appraisal is to secure information necessary

for making objective and correct decisions on employees

USES OF PERFORMANCE APPRAISAL

y It provides valuable information for personnal decisions such as pay, increase,

promotion

y It helps to judge the effectiveness of recruitment, selection, placement and

orientation system of the organization

y It is useful in analyzing and development needs

y It can be used to improve performance through appropriate feedback, giving

counseling to employeesy It facilitates Human resource planning, career planning and succession planning

A competitive spirit is created and employees are motivated to improve their

performance

Process of performance appraisal

y Establishing performance standards ±the appraisal process begins with the superior

setting up the criteria to be used for appraising the performance of employee. The

criteria¶s are specified with the help of job analysis, which reveals the contents of job.

The criteria should be clear, objective and in wiring.

y Communicating the standards- the standards are conveyed to the employees and the

evaluators. A feedback regarding the standards should be obtained from the

evaluators and the employees for revision and modification



y Measuring performance ±this requires choosing the right technique of measurement,

identifying the internal and external factors influencing performance and collecting

information on results achieved

y Comparing the actual with standards-actual performance is compared with the predetermined performance standards. Such comparison will reveal the deviation,

which may be positive or negative

y Discussing the appraisal-The results of the appraisal are communicated to and

discussed with employees. Along with the deviations, the reason behind them are also

analysed and discussed. Such discussion will enable the employee to know his

weaknesses and strengths

y Taking corrections-through mutual discussions with employees, the steps required to

improve performance are identified and initiated. Training, coaching, counseling etc

are examples of corrective actions that help to improve performance

METHODS OF PERFORMANCE APPRAISAL

Several methods and techniques are used for evaluating employee performance

TRADITIONAL METHODS

y R anking method: In this Evaluator assigns relative ranks to all employee

performance

y Man-to-man compression methods: In this method, certain factors are

selected for the purpose of analysis and the rater for each factor designs ascale. A scale of man is also created for each selected factor. then each man

to be rated is compared with man in scales, and certain scores are awarded to

him. In other words , a whole man is compared to a key man in respect of

one factor at a time.This method is used in job evaluation and is known as

factor comparison method

y Paired comparison method:This is a modified form of man to man

ranking. Here each employee is compared with all others in pairs on at a

time. The number of times an employee is judged better than other

determines his rank.Comparison is made on the basis of overall

performance

y Forced distribution method- In these techniques the rater appraises an

employee according to a pre determined distribution scale. It is assumed that

it is desirable to rate only 2 factors by this method that is job performance

and promotion ability. For this purpose a five poking performance scale is



used without any descriptive statement& employees are placed between two

extremes of good and bad performance

y Graphic rating scale methods: The rater is given a printed form for each

employee to be rated. The form contains several characteristics relating to

the personality and performance of employee. Intelligence, attitude, qualityof world, leadership skills , judgment etc are some useful characteristics. this

method allows a statistical tabulation of scores and a ready comparision of

scores among the employees is possible. The approach is multi dimensional

as several significant dimensions of the job can be considered in evaluation

y Critical incident method: In this method the superior keeps a written

record or critical events and how different employees behaved during such

events. The rating of the employee depends on the positive or negative

behaviours during these events, these critical incidents are indentified after

thought study of the job and discussions with the staff. y Group appraisal method: Under this method, a group of evaluator¶s

assesses employee. This group consists of the immediate supervisors of the

employee, other supervisors having close contact with the employers work ,

HOD and a personnel expert. The group determines the standards of

performance for the job, measurers actual performance of an employee,

analysis the causes of poor performance and offers suggestions for

improvements in future

y Grading method: Under this method the rater considers certain factors, and

marks them accordingly to a scale. The selected factor may be analyticalability, cooperation, dependability, self expression, job knowledge. They

may be grades as µA¶-outstanding µB¶- very good µC¶ ±good/average µD¶-

fair. The actual performance of an employee is then compared with these

definitions and he is allotted the grade which best described his performance

y Free essay method: In this method ,the supervisor makes a free form, open

ended appraisal of an employee in his own words and puts down his

impression about the employee. This is factual and concrete



General Demerits in Traditional Techniques

Many of the above traditional performance evaluation techniques have internal

weaknesses.

Managers generally are not qualified to assess personality traits, and most managers areeven not properly trained to conduct evaluation and performance interviews. They have

very vague notions of the purpose of evaluations. Hence, they do a poor job.

Some managers discourage good performance by over-emphasising shortcomings and

almost neglecting good work. Others have little effect on poor workers because they tend to

sugar-coat their criticisms. Consequently the real message is lost.

Rater¶s personality also plays an important part in the effectiveness of evaluation

programmes. Some raters are by temperament, overtly harsh and give low ratings to all

subordinates. Others are too lenient and give everyone a good rating; some raters play

favourites, some are victims of µhalo¶ effect.

The relative status of raters in their organization is a factor that is important to the

validity of performance appraisal. Using more raters or endorsements by a superior reduces

rater bias and increases validity of appraisals.

Multiple-Person Evaluation Methods

1. By design, the methods of performance evaluation described so far are supposed to

be used for evaluating employees one at a time-with no direct comparisons between

employees. In this section, three techniques that compare one employee¶s

performance with that of one or more others will be discussed. While they differ in

some ways, all three of these techniques yield a similar kind of information: a list of

employees ranked from best to worst.

Ranking : In their simplest form, ranking ask a supervisor to generate a list of subordinates

in order on some overall criterion. This can be very difficult to do if the supervisor is

asking to rank a large number of subordinates ± over 20, say. Also, it is much easier for the

supervisor to rank the best and worst employees in a reliable way then it is to rank the

average ones. Because of this difficulty; a variation of simple rankings is alternative

rankings. In this approach, the evaluators pick the top employee first, then the bottom



employee next. Then the second best is chosen, followed by the second worst. This process

is followed until all persons have been ranked.

P aired comparison: This approach was designed to make the ranking process easier for the

supervisor and perhaps more reliable, especially when there are many people to rank.Rather than asking the supervisor to rank everyone at once, the paired comparison method

presents the supervisor with a series of cards, each of which contains only two

subordinates¶ names. The supervisor is then asked to choose which of these two persons is

the higher performer. Thus, only the performance of these two individuals is beings

considered. For the technique to work properly, every possible pair of subordinates must be

presented to the supervisor. In this way, she or he must rank each person one at a time,

against all other persons to be ranked. The final ranking is then determined by counting

how many times a given employee was chosen as the better performer across all of the

comparisons.

Forced distribution: The forced distribution system is similar to grading on a curve. The

rater is asked to rate employees on the basis of some organizationally determined,

preexisting distribution of categories.

It would be true in an organization whether a supervisor is told by the company to use a

particular distribution. A supervisor with all exceptional subordinates will necessarily have

to rate some poorly; a supervisor with mediocre subordinates will have to rate some

highly.

A variation of forced distribution is the point allocation technique (PAT). In PAT, each

rater is given a number of points per employee in the group to be evaluated, and the total

points for employee¶s times the number of employees evaluated. The points are allocated

on a criterion basis. Forced distribution and PAT are most likely to used by superiors but

could by used by peers or subordinates.

y Ford Motor has used a forced distribution grading system that resulted in

many complaints. The HR Journal discusses the Ford Motor informal

system.



MODERN METHODS:

360-Degree Feedback System

A 360-degree feedback, system collects performance information from multiple

parties, including one¶s subordinate¶s peers, supervisor and customers. Corporations like

GE, Reliance, Crompton Greaves, Wipro, Infosys, Thermax, NTPC, Thomas Cook, SBI,

Aditya Birla Group, Mafatlal Group etc., are all using this tool to discover home truths

about their mangers. Although originally developed as a fact-finding and self-correction

technique, the 360-degree feedback comes from multiple sources.

R ole of HR Department in 360-degree Appraisal. The role of HR department in 360-

degree appraisal in that of facilitator. The department consolidates the appraisal inputs,

identifies the points of consensus, and provides feedback to the appraisee so as to overcome

the weaknesses as identified in the appraisal. The presence of a facilitator also acts as a

buffer, preventing the appraisee from attacking those who provided honest inputs. The

department also devises action plans for overcoming those weaknesses.

Behaviorally anchored rating scales . Smith and K endall developed what is referred to as

the behaviorally anchored rating scale (BARS) or the behavioral expectation scale (BES).

The BARS approach relies on the use of critical incidents to serve as anchor statements on

a scale. A BARS rating from usually contains 6 to 10 specifically defined performance

dimensions, each with five or six critical incident ³anchors.´

A BAR usually contains the following features:

Six to ten performance dimensions are identified and defined by raters and ratees.

The dimensions are anchored with positive and negative critical incidents.

Each rate is then rated on the dimensions.

Ratings are fed back using the terms displayed on the form.



The exact construction of BARS is too complex for presentation here. However, it should

be noted that usually two to four days are needed to develop a BARS. The result of the

developmental work is a jargon-free rating scale that is closely related to the requirements

of a given job.Identify critical incidents: Persons with knowledge of the ³identity job´ to be appraised

describe specific examples of both effective and ineffective job behaviours.

Select performance dimesions: The persons then cluster the behavioral incidents into a

similar set of performance dimesions

R etranslate the incidents: Another group of knowledgeable persons assign each incident to

the dimension that it best describes. Incidents for which there is less than 75% agreement

with the first group are not retranslated

Assign scale to the incidents: The second group rates each incident on a 7 to 9 point scale.

Rating is done on the basis of how well the behavior described in the incident represents the

performance on the appropriate dimensions ,means average and standard dimensions are

then calculated for the scale values assigned to each incident

Develop final instrument: A subset of the incidents that meet both the retranslation and

standard deviation criteria is used as a behavioural anchor for the final performance

dimensions. A final BARS instrument typically comprises of a series of vertical scales that

are endorsed by the incidents. Each incident is positioned on the scale according to its mean

value.

R ater Problems

Even if the system is will designed, problems can arise if the raters are not cooperative and

well trained. Supervisors may not be comfortable with the process of evaluation, or what

Douglas McGregor called ³playing God.´ This if often because they have not been

adequately trained or have not participated in the design of the program. Inadequate

training of raters can lead to series of problems in completing performance evaluations,

including:



Problems with standards of evaluation.

Halo effect.

Central tendency error.

³Recency of events´ error.

Contrast effects.

Personal bias (stereotyping; ³similar to me´).

Standards of evaluation. Problems with evaluation standards arise because of perceptual

differences in the meaning of the words used to evaluate employee. Thus, good, adequate,

satisfactory, and excellent may mean different things to different evaluators. If only one

rater is used, the evaluation can be distorted. This difficulty arises most often in graphic

rating scales but may also appear with essays, critical incidents, and checklists.

The halo effect At one time, it was believed that halo errors in ratings were the major

problem in performance evaluation. Halo error occurs when a rater assigns ratings for

several dimensions of performance on the basis of an overall general impression of the

rate.

A problem with understanding and dealing with halo error is that the ratings represent an

error only if they are not justified. That is, imagine that our computer programmer deserve

high ratings on the three dimensions of performance other than programming. Even though

the manager was basing the ratings on a general impression, they could represent an

accurate evaluation. In other words, it is important to realize that there is a difference

between halo errors and true halo, which occurs when uniformly high or low rating across

different aspects of performance are actually justified by the ratee¶s performance.

`Central tendency error A central tendency error occurs when a rater avoids using high or

low ratings and assigns average ratings. Thus, it offers little information for making HRM



decisions regarding compensation, promotion, training, or what should be fed back to

ratees. Raters must be made aware of the importance of discriminating across ratees and the

use of evaluation. This sometimes stimulates raters to use less central.

³R ecency of events´ error One difficulty with many of the evaluation systems is the time

frame of the behavior being evaluated. Raters forget more about past behavior than current

behavior. Thus, many persons are evaluated more on the results of the past several weeks

then on six months average behavior. This is called a ³ recency of events´ rating error .

Contrast effects Recall that with the individual performance evaluation techniques each

employee is supposed to be rated without regard to other employees¶ performance. Some

evidence, however, suggests that supervisors have a very difficult time dong this. If a

supervisor lets another employee¶s performance influence the ratings that are given to

someone else, then a conrtrast effect has occurred. For example, when the performance of

an average employee is evaluated immediately after the performance of an outstanding

employee, the supervisor might end up rating the average persons as ³below average´ or

³poor.´

Contrast effect can also occur when a supervisor unknowingly compares employee¶s

present performance with their past performance and this comparison affects ratings. Those

who have been poor performers in the past could get rated ³above average´ if they improve

their performance, even if the improvement actually only brings their performance up to

³average.´

Contrast effects are another rating problem that is difficult to eliminate. Fortunately,

this type of error seems to dissipate over time, as more information about employees¶

performance is gathered.

Personal bias error A personal bias rating error is an error related to personal bias held by

a supervisor. There are several kinds of personal bias errors. Some can be conscious, such

as blatant discrimination against someone because of sex or race. Or some supervisors

might try to ³play favorites´ and rate people they like higher than people they don¶t like.



Other personal bias errors are more subtle, and the supervisor might be totally unaware

of them. For example, an error sometimes occurs when a rater gives a higher rating because

the ratee has qualities or characteristics similar to rater¶s.

Personal bias errors have been detected in many studies of performance evaluation.Research indicates that personal linking can affect the attributions a manager makes about a

subordinate¶s level of performance as well as the kind of feedback that he or she will give.

However, ³trait´ ratings seem to be more strongly affected than ³outcome´ ratings by

personal biases such as liking. Moreover, errors associated with ratee¶s sex and races do

occur. The effect of these errors is generally small when supervisors have adequate

performance-related information upon which to base ratings, but even small effects for

characteristics such as sex, age, and race are cause for concern. Thus, organizations should

attempt to eliminate even small effects for these characteristics.

EliminatingR ater Errors

As mentioned earlier, behavior-based rating scales were originally designed to help

eliminate the kinds of rating errors just described. But when such scales didn¶t demonstrate

any consistent superiority over other rating formats, researchers began to concentrate more

on the rating process. In other words, more recent efforts to improve performance

evaluations in organizations have centered on helping raters to more accurately observe,

recall, and report behavior.

R ater training One popular way to improve manager¶s ability to conduct effective

performance appraisals is through rater training programs.

Training alone will probably not solve all the problems of performance appraisal, unless

raters are motivated to use the system effectively and unless they are given the opportunity

to observe their subordinates performance errors.

Avoiding Problems with Employees

For the evaluation system to work well, the employees must understand it and feel that it is

a fair way to evaluate performance. In addition, they must believe that the system is used



correctly for making decisions concerning pay increases and promotions. Thus, for a

performance evaluation system to work well it should be as simple as possible-unnecessary

complexity in rating forms or other evaluation procedures can lead to dissatisfaction among

employees. The system should also be implementing in a way that fully informs employeesabout how it is going to be used.

One way to help foster understanding about the system is to allow employees to

participate in its development. It can also be helpful if they are trained in performance

evaluation methods so they can better understand how difficult the process can be. Self-

evaluation can be a useful addition to an evaluation system, especially for purpose of

facilitating performance evaluation discussions with a supervisor.

Appraisal Interview and Feedback

The post appraisal interview is an essential part of the performance appraisal system.

The employee gets useful feedback information about how effectively and efficiently he is

able to discharge the assigned duties. It also gives the opportunity to the employee to

explain his views about the ratings, standards, rating methods, internal and external causes

for low level of performance. The appraiser gets a chance to explain the employee his

rating, the traits and behaviors he has taken into account for appraisal, etc. He can utilize

this opportunity to offer constructive suggestions, and help guide and coach the employee

for his advancement. The post appraisal interview helps both parties to review standards,

and set new standards based on the experience gained. It, thus, serves to meet the following

objectives.

To let employees know where they stand;

To help employees do a better job by clarifying what is expected of them;

To plan opportunities for development and growth;



To strengths the superior-subordinate working relationship by developing a mutual

agreement of goals;

To provide an opportunity for employees to express themselves on performance-related

issues.

Tell and sell interview.

The basic purpose of this interview is to: (1) let the employee know how well he is

dong, (2) gain the employee¶s acceptance of the appraisal, and (3) draw a plan of improve

for him. The basic assumption behind providing appraisal feedback in this manner is that

employees have some deficiencies and they need to be convinced about these deficiencies

and how appraiser¶s suggestions for improvement are relevant for overcoming the

deficiencies. This type of appraisal interview is more appropriate for new and young

employees who are inexperience¶s, feel insecure, and want the advice of the superior.

Tell and Listen Interview.

The basic objective of this interview is to communicate the appraisal results to the

employee and then listen to his reactions sympathetically. For this purpose, the interview is

dividing into two parts; the first part covers the strong and weak points of the employee¶s

work performance; and the second part is used to thoroughly explore the employee¶s

feelings about the appraisal and its results. The basic advantage of this interview is that it

creates good relationship between the interviewer and the employee; the employee

develops a favorable attitude towards the superior. It helps in developing employee-centric

orientation in the organization.

Problem-solving Interview.

In this interview, the basic objective is not just to communicate the appraisal results

to the emoloyee but to invite him how he sees the problem and what actions he feels

necessary, in order to overcome those problems. The interviewer stimulates the employee

to think about improving his own performance improvements suggested by the employee.



Though this process, the emoloyee tends to understand his job requirements better and

develop actions that are in tune with meeting those requirements.

CHAPTER 2:

PROFILE OF THE ORGANISATIONSteel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1%

by weight, depending on the grade. Carbon is the most common alloying material for iron, but

Various other alloying elements are used, such as manganese, chromium, vanadium, and

tungsten. The steel industry is often considered to be an indicator of economic progress,

because of the critical role played by steel in infrastructural and overall economic

development.

Between 2000 and 2005, world steel demand increased by 6%. Since 2000, several

Indian and Chinese steel firms have risen to prominence like Tata Steel (which bought Corus

Group in 2007), Shanghai Baosteel Group Corporation and Shagang Group. ArcelorMittal is

however the world's largest steel producer. Tata Steel was the only major private sector

company involved the production of steel in India. Sail and Tata Steel have traditionally been

the major steel producers of India. In 1992, the liberalization of the India economy led to the

opening up of various industries including the steel industry. This led to the increase in the

number of producers, increased investments in the steel industry and increased production

capacity. Since 1990, more than Rs 19,000 crores (US$ 4470.58 million) has been invested inthe

steel industry of India. India has now emerged as the eighth largest producer of steel in the

world with a production capacity of 35MT. Almost all varieties of steel is now produced inIndia.



India has also emerged as a net exporter of steel which shows that Indian steel is being

increasingly accepted in the global market.

The growth of the steel industry in India is also dependant, to a large extent, on the level of

consumption of steel in the domestic market. Steel consumption is significant in housing and

infrastructure. In recent years the surge in housing industry of India has led to increase in the

domestic demand for steel. More than 3500 different varieties of steel are available in the

steel

industry of India. These can however be classified into two broad categories -

Flat Products - Flat products include plates and hot rolled sheets such as coils and sheets.Flat products are derived from slabs. One of the major uses of steel plates is in ship building.

Long Products - Long products include bars, rods, wires, ropes and piers. These arecalled long products due to their shapes. Long products are made from billets and blooms.Long products are mostly used in housing and construction and also in rail tracks.

RINL PROFILE

y To meet the growing domestic needs of steel, Govt. of India decided to set up anintegrated steel plant at Visakhapatnam. An agreement was signed with erstwhileUSSR in 1979 for cooperation in setting up 3.4 Mt integrated steel plant atVisakhapatnam. The foundation stone for the plant was laid by the then prime minister on 20th January 1971.

y The project was estimated to cost Rs. 8397.28 Based on process as on 4th quarter of 1981.

However, on completion of construction and commissioning of the whole plant in 1992, the

cost escalated to around Rs.8,500 Cr. unlike other integrated steel plant in India,



Visakhapatnam steel plant (VSP) is one of the most modern steel plant in the country. The

plant was dedicated to the nation on 1st

August 1992 by the then prime minister, PV

Narasimharao.

y A new company

R

ashtriya lspatN

igamL

imited (RINL

) was formed on 18 February1982.

Visakhapatnam Steel Plant was separated from SAIL and RINL was made the corporateentity of

Visakhapatnam Steel Plant in April 1982.Visakhapatnam Steel Plant, popularly knownas Vizag

Steel , is one of the major steel producers in India. Vizag Steel Plant has been

Conferred Navratna status on 17 November 2010.

y Founded in 1971, the company focuses on producing value-added steel, with 214,000tonnes

Produced in August 2010, out of 252,000 tonnes total of salable steel produced. It is the only

Integrated steel plant in the country to be certified for ISO 9001:2000,ISO 14001:2004

and OSHAS 18001:1999. Vizag Steel Plant is the only Indian shore-based steel plant, and it

has

massive land, up to 19,000 acres (7,700 ha), and is poised to become up to 20 MT in a single

campus and turnover in 2009-2010 was 10,600 Crores. Recently it has gone for expansionfrom

3.1 MT to 6.3 MT with an investment of 9000 crores.

VISION OF RINL- To be a continuously growing world class company we shall

Harness our growth potential and sustain profitable growth. Deliver high quality and cost competitive products and be the first choice of

customers. Create an inspiring work environment to unleash the creative energy of people Achieve excellence in enterprise management. Be respected corporate citizen, ensure clean and green environment and develop

vibrant communities around us.



MISSION OF RINL- To attain 16 million ton liquid steel capacity through technological

up-gradation, operational efficiency and expansion; augmentation of assured supply of raw

materials; to produce steel at international standards of cost and quality; and to meet the

aspirations of the stakeholders.

OBJECTIVES OF RINL- Expand plant capacity to 6.3Mt by 2011-12 with the

mission to expand further in subsequent phases as per Corporate Plan

y Revamping existing Blast Furnaces to make them energy efficient to

contemporary levels and in the process increase their capacity by 1 Mt, thus

total hot metal capacity to 7.5 Mty Be amongst top five lowest cost liquid steel producers in the world

y Achieve higher levels of customer satisfaction

y Vibrant work culture in the organization

APPRAISAL POLICY IN VISAKHAPATNAM STEEL PLANT

OBJECTIVES

1. To increase awareness of tasks/ targets and the responsibilities of executives at all

levels through performance planning

2. To provide for reliable, valid and objective assesment of executives performance

through the process of a multi tier assessment on specific performance and potential

factors

3. To distinguish between differing levels of performance on relative basis

4. To identify the development needs of the executives

5. To provide the basis for determination of merit, efficiency and suitability for the

purpose of promotion.

6. To facilitate the process of executive development through tasks/targets setting, self

review , performance analysis



SCOPE

The appraisal policy will cover all(non board level) executives including JO./JOs and

deputationists .For the purpose of assessment, the executives are grouped in 3 categories-

JO to E4, E5 to E6, E7 to E9 and each category will have a specific type of formAppraisal process

A. Performance planning

B. Self appraisal& Mid-term review- performance review discussion(PRD-1)

C. Self appraisal& Final performance Review-(PRD-2)

D. Performance assessment

E. Development plan

F. Final assessment/grading

Performance planning

1.Jobs are identified on the basis of annual production plan, annual/quarterly business plan

and overall mission and objectives of the organization

The appraisal policy comes into force from the assessment year 1999-2000 and will continue

to be in force till further notice

2.Based on the job identified for the respective division/department a few K ey performance

areas may be identified for each executive and not less than 5 quantifiable and observable

tasks/targets with specific time frame will be set for each appraise by the reporting officer in

consultation with the former. This will be communicated to the appraise by 12th april of

every year of assessment

Self appraisal& Midterm review-Performance review discussion(PRD-1)

1.The self appraisal shall be filled up by the appraise in the 1st week of October for the

midterm review by the reporting officer.



2. In the midterm appraisal, the appraise shall factually report on the extent of fulfillment of

tasks and targets, constraints faced and help required to meet the short fall. The appraise

should avoid self evaluation of performance

3. On submission of self appraisal, the reporting officer shall hold an mid term performancereview discussion(PRD) session with the appraise. In PRD session the reporting officer and

the appraise will discuss:

a. Extent of tasks/targets fulfilled

b. Constraints faced

c. Shortfall and its reasons

d. Measures to avoid future setback in tasks/targets achievement

e. Help required

f. Thrust areas for next six months

g. Modification/substitution of tasks if any

4. After PRD session, the appraise and the reporting officer shall sign the self appraisal and

mid term review report

Self appraisal and final performance review- performance review discussion(PRD-2)

1. At the end of the assessment year , the appraise shall fill up the self appraisal and

submit it to the reporting officer for the final performance review by 12th of april

2. The self appraisal shall reflect fulfillment of tasks/targets set for the second half of the

appraisal year , constraints faced and also the performance highlights for the entire

year ie from april 1st to 31st march

3. After submission of self appraisal, the reporting officer shall hold performance review

discussion session with the appraise and will discuss:

a. The extent of tasks/targets fulfilled

b. Constraints faced

c. Shortfall and its reasons

d. The highlights of performance of the year

e. Suggestions for improvement of performance



The outcome of performance review discussion will be noted in specific form and signed

by appraise and the reporting officer

PER FOR MANCE ASSESSMENT

1.

The performance of the appraise will be assessed after the final performance reviewsession is held

2. Multi tier assessment: The assessment of performance will be done through a multi

tier system of assessment by the reporting officer, reporting officer(O) , reviewing

officer and by performance review committee

3. The reporting officer will assess the appraise on following factors , each factor will

carry a maximum factor score

Performance factors and potential factors the potential factors vary for all the 3 levels

Ex middle level executives have the power to plan, organize and take decisions , top

level people act as leaders

The total score is for 100

Score range

86& Above - O

70 to 85 - A

50 to 69 - B

49& below - C

The performance of appraise will be assessed after final performance review session is

held. The assessment of performance will be done through a multi-tier system of

assessment by reporting officer. Reviewing officer and by a performance review

committee. The reporting officer will asses the employee on performance factors and

potential factors. Performance factors include-quantity of output, quality of output,cost

control/consciousness etc . . and potential factors like intiatve communication,sense of

responsibility etc .. . and these factors differ from JO-E4, E5-E6,E7-E9. The outputs

will be classified into grades (O,A,B,C)



y The reporting officer after duly filling in the part d of performance assessmentwill sign the performance assessment sheet in the given column will forwardthe appraisal form to the reporting officer if any. If there is no reporting

officer the assesment form shall be forwarded to reviewing officer by prescribed time.

y Performance assessment by reviewing officer ±the reviewing officer will get theeappraisal form from reporting officer. He rates the employee on th factorslisted. The reviewing officer follows the same principle as followed by thereporting officer.

Assessment of integrity- in part D of performance appraisal space is given for

assessing the integrity of employee the reporting officer and the reviwing officer will

fill this column in case if the reporting officer and the reviwing officer are not sure

abiut employees integrity then the column is left empty.

ROLE OF APPRAISAL CELL- This cell helps in compiling the total scores basedon assessment on each individual factor by reporting officer and reviwing officer by

taking into accuount the weightahge. The weights are as- reporting officer -50%,

revieing officer-25%. In case of executives who directly report to CMD then

assessment of CMD will have 100% weightage. The appraisal forms of all appraises

will be put to prc along with analysis of appraisal data of concerned appraisal gorpup

by giving the number of appraises in each category and percentage of distributonin

differnrt grades by appraisal cell. The appraisal group consist of appraises belonging to

sections/depts. Functionally related to each other and are considered as one LOP for

promotion.

FUNCTIONING OF PER FOR MANCE R EVIEW COMMITTEE (PR C)



The constitution of PRC for different levels will be indicated separately. The

PRC will receive following information from personnel dept.

i)appraisal forms of all appraises

ii)the total credit score of each appraisee

iii)analysis of appraisal data of concerned appraisal group with

percentage appraises distributed in different grade.

iv)other data as relevant.

5)DEVELOPMENT PLAN- The part E of performance appraisal form provides for recommendation regarding development plan of appraise based on his weakness and

strengths

A code list of development programmes is given separately which can be used for

recommending training progarmmes. While recommending a development plan,

justification for such recommendation may be provided taking into consideration the benefit to employee and the company.

Development is often viewed as a broad, ongoing multifaceted set of activities (training

activities among them) to bring someone or an organization up to another threshold of

performance. This development often includes a wide variety of methods, e.g., orienting

about a role, training in a wide variety of areas, on the job training, coaching, mentoring and

forms of self-development. Some believe that development is a life-long goal and

experience.



These reasons include:

Increased job satisfaction and morale among employee

Increased employee motivation

Increased efficiencies in processes, resulting in financial gain

Increased capacity to adopt new technologies and methods

Increased innovation in strategies and products

Reduced employee turnover

Enhanced company image, e.g., conducting ethics training

Risk management, e.g., training about sexual harassment, diversity training

The importance of human resources management to a large extent depends on

human resource development.

Appraisal ratings play a major role in promotions especially in vsp. Vsp has a separate

promotion policy also for both executives and non executives.

HIGHLIGHTS OF PER FOR MANCE APPRAISAL SYSTEM IN RINL

y Performance assessment is a multi-tier assessment which means it will be done

by a reporting officer ,reviewing officer and by a performance reviewcommittee.

y Initially the reporting officer will complete the assessment program and after his

signature it will be forwarded to reporting officer . in case of no reporting

officer it will be forwarded to reviewing officer.

y The potential factors are different from J0-E4,E5-E6,E7-E9.



y In case of executives in E7-E9 who are under CMD the CMD himself is the

reporting officer and his assessment will have 100% weightage and often the

CMD acts as chairman of Performance review committee.

y If the employee is deputed to other department then the line manager of that

department is the reporting officer.y Subsequent to reporting officer reviewing officer will rate the employee as done

by the reporting officer.

y After all the assessment is done the appraisals are forwarded to appraisal cell

to compute all the scores and then they are sent to performance review

committee(PRC).

MEMORANDUM OF UNDERSTANDING

Rashtriya Ispat Nigam Limited (RINL) and Ministry of Steel agree to enter into

Memorandum of Understanding for the year 2010-11. It consists of:

1. Vision,Mission and objectives of RINL2. Exercise of enhanced autonomy and delegation of financial powers

3. Performance Evaluation parameters and targets4. Commitment/ assistance from the government5. Action plan for implementation and monitoring of MOU

VISION,MISSION AND OBJECTIVES OF RINL

VISION- To be a continuously growing world class company, and to

achieve that VSP shall:

y Harness our growth potential and sustain profitable growth.

y Deliver high quality and cost competitive products and to be the firstchoice of customers.

y Create an inspiring work environment to unleash the creative energy in people.

y Achieve excellence in enterprise management.



y Be a respected corporate citizen,ensure clean and green environment anddevelop vibrant communities around us.

MISSION-To attain 16 million tonne liquid steel capacity through technological

upgradation, operational efficiency and expansion, augmentation of assured supply of

raw materials, to produce steel at international standards of cost and quality and to

meet the aspirations of stakeholders.

OBJECTIVES-

y Expand plant capacity to 6.3 Mt by 2011-12 with the mission to expandfurther in subsequent phases as per corporate plan.

y Revamp existing Blast furnace to make them energy efficient tocontemporary levels and in the process to increase their capcity by 1.0Mt, thus total hot metal capacity to 7.5 Mt.

y Be among top five lowest cost liquid steel producers in the world.

y Achieve higher levels of customer satisfaction.

y Vibrant work culture in the organization.

y Be proactive in conserving environment, maintain high levels of safetyand addressing social concerns.

2.0 AUTONOMY AMD DELEGATION OF FINANCIAL POWERS

RINL has exercised the powers available to it under Miniratna to incur

capital expenditure on new projects, modernization and augmentation of its existing

facilities.

RINL has furnished data which qualifies RINL to be a navaratna company as

per DPE guidelines and has formally requested ministry to take up the case for

accordance of navratna status. This will enhance autonomy and delegation of financial

powers including that of investments/JV abroad for its raw material security.



3.0 PERFORMANCE EVALUATION PARAMETERS AND TARGETS

RINL undertakes to achieve tafets with respect to the identified

parameters during 201-11. These parameters are broadly divided into 2 catogories i.e

common parameters and specific parameters.

The common parameters include static finanacial parameters and dynamic

parameters. The static financial parameters are further divided into 3 groups i.e profit

related ratios, financial indicators and financial returns.

The dynamic parameters have been divided into sector specific and enterprise specific

parameters including sustainable development and CSR.

Major assumptions made for financial estimates for 2010-11 are as under:

Average net sales realizations (NSR per tonne)of Rs 27000/- and Rs

16000/- have been considered for saleable steel and pig iron respectively.

Prices of major raw materials considered are as follows:

Imported Coking Coal Qty (lakh tonnes) FOB price ($ per tonne)

Carry forwardcoal(hard)

5.50 300

New coal (hard) 29.828.25

140125

Total new coal (hard) 38.07 137

Total coking coal (hard) 43.57 157

Soft coking coal 3.99 105



Freight component of $27 and $38 have been considered for imported hard coking

coals and soft coking coals respectively for 2010-11.

Iron ore- basic price considered for iron ore is given below:

1.iron ore lump:Rs 2206/t

2. iron ore fines:Rs 1791/t

3.CLO : Rs 2642/t

4. freight :Rs 685/t

4.0 Commitment/ assistance from the government

y To help in allotment of iron ore deposits in the country to RINL ascaptive mines for meeting iron ore requirements.

y Import duty on steel products to be increased from present level of 5%

to 15% to support the domestic steel industry.y To increase export incentive in the form of duty exemption pass

book(DEPB) to 15% for iron and steel products without value cap.

y To include semis,wire rods,rounds and re-bars in restricted list of imports.

y Reduce the prices of domestic coals and iron ore.

5.0 Action plan for implementation and monitoring of MOU

The performance of RINL with respect to MOU targets will be closely

monitored on monthly basis by CMD,RINL. Quarterly review meetings will also be

organized at board level of RINL and suitably at ministry of steel level also to

monitor the performance.



STATIC FINANCIAL PARAMETERS

ITEMS UNIT BUDGET

Financial performanceindicat

Gross margin/gross block

% 6.25

Net profit/net worth % 0.98

Gross profit/capitalemployed

% 6.53

Financial indicators %

Gross marginGross sales

Financial returnsPBDIT/total

employment

Added value/grosssales

Rs cr.Rs cr.

Rs lakhs/ employee

100010500

5.270.08

QUALITY AND VALUE ADDED STEEL

ITEM UNIT BUDGET

Defectives in saleablesteel

% 0.99

Value added steel production in saleablesteel

% 0.45



TRAINING MANDAYS

ITEM TAR GET

Training mandays 1,60,000

Sector specific parameters

ITEMS UNIT TAR GET

Saleable steel production

mt 3.10

BF productivity t/cum/day 1.77

Ld converter

productivity

t/cum/day 21.97

Labour productivity t/cum/year 363

Enterprise specific parameters 2010-11

ITEMS UNIT TAR GET

Frequency rate (safety) rate 1.50

Specific energy

consumption

Gcal/t ls 6.64

Specific water

consumption

Cum/t ls 3.03

Disposal of granulated

slag produced

% 90



Commitment of

expenditure on CSR

activities

Rs cr 6.00

CHAPTER 3:

METHODOLOGY

The data obtained for the study is from two sources :

1. Primary Sources

2. Secondary Sources

Primary Sources-The data is required for the study has been obtained from

executives working in the organization and by interacting with them who deal

with performance appraisal and who has complete knowledge about performance

appraisal. The data obtained through primary sources is:

i)Appraisal policy

ii)Assessment of performance for JO-E3,E4-E6,E7-E9 (the factors considered for

assessing for each level, Mid-term review, Performance review discussion, Performance

review committee etc«

iii)Memorandum of understanding ( Targets, Achievement, Deliverables etc. .

.iv)Disclosure of appraisal ratings judgment by dev dutta.

V)Promotion policy (Stroke promotions, vacancy based promotions, merit based

promotions.



Secondary Sources-The data is also collected from JO level officers to executives in

E7,E8 . .

Their perception about the existing performance appraisal system is collected in the

form of questionnaire by approaching them personally and based on the answers

provided by them in questionnaire the data is tabulated and analyzed and a

comprehensive opinion of employees about the existing system is formed.

Limitations of the Study- The study was conducted and the conclusions were drawn

under the assumption that the data provided by the employees is correct.

The data was collected by giving questionnaires randomly to employee of every cadre

but not every employee working in the department.

Time Consuming process

Performance appraisal is the title of the study,the sample size of study is 200. We have

selected employees in every department from grades J0 to E9. We have collected data

through questionnaire method

Analysis part is shown in the form of pie charts



CHAPTER 4DATA analysis and interpretationBlast furnance

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Project Report-gitam Final Part b - Pavan

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