Performance appraisal (MBA summer training project) (Report File)

PROJECT REPORT ON THE STUDY ON
PERFORMANCE APPRAISAL SYSTEM
in
SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF
INDUSTRIAL TRAINING
For
MASTER OF BUSINESS ADMINISTRATION (2015-17)
TO BY
DR. SATINDER KUMAR JASTINDER PAL SINGH
ROLL NO- 15421163
Department: School of Management Studies
Punjabi University Patiala

i
CERTIFICATE
This is certified that the project “PERFORMANCE APPRAISAL SYSTEM AT
SOLITAIRE INFOSYS” is a bonafide work done by Jastinder Pal Singh Roll No.
15421163 a student of Punjabi University, Patiala in partial fulfilment of the requirement for
the award of Master of Business Administration by Punjabi University Patiala during the
academic year 2015-2017.

ii
ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organization. I would like to extend my since thanks to
all of them.
At the outset, I thank the faculty and Head of the department School of Management Studies,
Punjabi University, Patiala, whose guidance is an asset for me for completion of this project.
I am highly indebted to guide Amarjit Arora for their guidance and constant supervision as well
as for providing necessary information regarding the project & also for their support in
competing the project.
I would like to express my gratitude towards my parents & members of solitaire infosys Career
Development for their kind co-operation and encouragement which help me in completion of
this project.
My thanks and appreciation also go to my colleague in developing the project and people who
have helped me out with their abilities.
JASTINDERPAL SINGH
Roll No - 15421163

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INDEX
Content Page No
Certificate
Acknowledgement
Index
List of Tables
List of Figure
i
ii
iii
iv
v
Chapter 1
Project Introduction
Project Introduction 1-3
Chapter 2
Introduction To Company
2.1 History of The Company 5
2.2 Company Overview 5
2.3 Company Structure 7
2.4 Product Range 7
2.5 Future Projections 8
Chapter 3
Industry Profile
3.1 Introduction to Industry 11
3.2 Product Range 14
3.3 Market Share 15
Chapter 4
Research Methodology
4.1 Objectives of The Research 18
4.2 Research Design 18
4.3 Review of Literature 19
4.4 Sampling Plan 46
4.5 Data Collection 47
Chapter 5
Data Analysis And Interpretation
48-67
Chapter 6
Conclusions & Suggestions
68-70
Bibliography 71
Questionnaire 72
Annexure 76

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List of Tables
Table Page No
Product Of Company 7
Goals Of Performance Appraisal 30
Difference Between Traditional And Modern (Systems)
Approach To Appraisals
38
Tables For Questioner
Table For Question : 1 49

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List of Figure
Figure Page No
Performance Appraisal Process Chart 36
Awareness Of Performance Appraisal System Chart 49
PA Of Employee Is Assessment Chart 51
Task Setting Chart 52
Quarterly Task Setting Assignment Chart 53
Self Appraisal System Chart 54
Objectivity And Reducing Biasness Chart 56
Skill Possessed By An Appraiser Chart 57
Regular Feedback On Performance Chart 58
Feed Back Is Beneficial For Improving Performance Chart 59
Current PAR Is An Effective Tool Chart 60
Current PAR System Chart 61
Opinion Is The Relevance In PA Chart 62
Existing PAR System Chart 63
PA System V/S Development Of Employee Chart 65
Satisfied With Current PA Chart 66
Responsibility Of Management For Pa 67

1
CHAPTER-1
PROJECT
INTRODUCTION

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The objective of the study is to prepare a detail field report on the performance appraisal
procedure of SOLITAIRE INFOSYS and its linkage with other system of human resource
management (training, promotion, transfer, etc.).
 To know the attitude and behavior of the employees of SOLITAIRE INFOSYS .
 To study about the various performance appraisal techniques, uses, etc.
 To understand the working environment of SOLITAIRE INFOSYS.
Purpose of the Study:
1. In general, the purpose of the study is to know the system of performance appraisal in
SOLITAIRE INFOSYS.
2. Besides, the purpose of the study is to fulfill the partial requirement.
3. To understand satisfaction among employees of SOLITAIRE INFOSYS.
SCOPE OF THE PROJECT
The study on performance appraisal system provides many scopes as the productivity is
entirely depend upon the performance.
 To implement the appropriate performance appraisal method.
 To understand the role of motivation and job satisfaction which are vital for
performance
 To know about the performance appraisal system at SOLITAIRE INFOSYS ,
Patiala.
 To know about the impact of performance appraisal in the growth of SOLITAIRE
INFOSYS .
 To know about the working condition of the employees.

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LIMITATION OF THE PROJECT
 The employees were biased to give the information.
 Some of the information might not be exactly correct.
 Time constraint was a serious problem as time was limited.

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CHAPTER – 2
INTRODUCTION
TO COMPANY

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2.1 History of the Company
Solitaire Infosys Inc. was a dream came into existence over five years ago with a strong
aspiration of becoming a best IT service provider around the globe. Presently,
Solitaire Infosys is already leading the race with its competitors. Being nurtured by a team of
experienced and sensitive people .We try to bond emotionally with our clients and love to go
an extra mile to satisfy their needs, which is the reason that we hold the edge in the league.
At Solitaire Infosys Inc. we provide the experience, expertise and capabilities that enable
organizations to accelerate their service processes, deliver more service value and realize
breakthrough results in the markets they serve. Now our clients not only appreciate our
comprehensive range of services, our innovative, streamlined and cost effective solutions, but
more importantly, they appreciate our high level of excellent customer service which is
unparalleled in the industry.
2.2 Company Overview
Company aim To be a dynamic, vibrant and value-based global IT service providers
centered around customer, employee and societal goals.
To be a class leading and innovative IT Services Company
By class-leading and developing we mean:
 Dependability, delivering to promise
 Chances for our people to grow and develop
 Opportunities and risks always being handled
 Highly motivated, capable and invested manpower
 Master shareholder return

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Strategy of the Company
At SOLITAIRE, with our strategy to create new markets and market trends with our
innovative approach, engagements and high-end services, we help our clients to adapt the
fast-moving market trends and to make them the market leaders. We operate with a
philosophy of partnering with the client to maximize and enhance their applications ROI.
This leverages our product engineering heritage to build cutting-edge applications for
matching with customer’s changing business requirements.
VISION, MISSION AND CORE VALUES
Vision
Global corporation enriching lives and enabling business transformation for our customers,
with leadership in chosen technologies and markets. Be the first choice for employees and
partners, with commitment to sustainability.
Mission
We enable business transformation and enrichment of lives by delivering sustainable world
class technology products, solutions and services in our chosen markets thereby creating
superior shareholder value.
Core Values
• We shall uphold the dignity of every individual
• We shall honor all commitments
• We shall be responsible corporate citizens
• We shall be committed to Quality, Innovation and Growth in every Endeavour

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2.3 Company Structure
SOLITAIRE INFOSYS is a leading Software and Web Application Development Company,
based in Mohali (Chandigarh), that provides high quality comprehensive services to
enterprises across a wide range of platforms and technologies. Our major areas of expertise
are in providing quality, cost effective software or web development.
Different wings in company according to work structure are:-
i. Website Designing
ii. Web Development
iii. Mobile Applications
iv. Digital Marketing
v. Maintenance
2.4 Product Range
There are many type of services provided in different Wings. These services are as under :
Wing Website
Design
Web
Development
Mobile
Applications
Digital
Marketing
Maintenance
Services
Website
Designing
Services
Php
Development
Unity 3D SEO
Services
App
Maintenance
PSD To
XHTML
Conversion
.Net
Development
Phone Gap SMO
Services
CMS App
Maintenance

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Services
WP Theme
Customization
CMS
Development
Iphone App
Development
PPC ERP
Maintenance
Flash And 3D
animation
E-Commerce
Development
Android App
Development
Email
Marketing
Website
Maintenance
Logo &
Identity
Design
Window App
Development
2.5 Future Projections
The Company focus on understanding the diverse and mission-critical needs of each of our
clients. To understand is to be able to deliver. The competence and experience of our
company gives us a competitive edge by making sure we provide the best services and
products to our clients. Our high quality standards enable us to deliver reliable and error-free
software applications, despite their complexity.
The Company provide Web design/Web development, B2B & B2C E-commerce solutions,
SEO & Web Promotions strategies implementation consulting services to both domestic as
well as international clients at the most affordable rates.
Operating excellence
 A safe, fun and professional work environment
 Good relationships with industry and other partners

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 Respect for the rights and ambitions of our employees
 Honorable, value-driven business relations

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3.1 Introduction to industry
Overview of Indian IT Industry The Indian IT industry is growing steadily despite the global
meltdown in the year 2009. When the whole of the world witnessed the negative growth,
Indian IT industry still managed to register a growth of 5.5%. The industry is about to
register the historic landmark of US $ 50 billion exports this year, according to NASSCOM
President, Som MIttal. The domestic market is also slotted to witness 12% growth, this year.
Potential size of India’s offshoring industry is estimated at US $ 120 to 180 billion by 2015.
The industry currently employs around 1 million people and provides indirect employment to
around 2.5 million people. It is expected to add another 1, 50,000 jobs in the next fiscal
according to NASSCOM.
Indian IT/ ITes sector is growing substantially with its
 expansion into varied verticals
 well differentiated service offerings
 increasing geographic penetration
The phenomenal success of the Indian IT- ITeS industry can be attributed to the favorable
government policies, burgeoning demand conditions, healthy growth of related industries and
competitive environment prevalent in the industry. The interplay of these forces has led to
putting the industry on the global map.
Government Initiatives:
After the economic reforms of 1991-92, major fiscal incentives provided by the Government
of India and the State Governments, like, liberalization of external trade, elimination of duties
on imports of information technology products, relaxation of controls on both inward and
outward investments and foreign exchange, setting up of Export Oriented Units (EOU),
Software Technology Parks (STP), and Special Economic Zones (SEZ), has enabled India to
flourish and acquire a dominant position in world’s IT scenario.
In order to alleviate and to promote Indian IT industry, the Government of India had set up a
National Task Force on IT and Software Development to examine the feasibility of

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strengthening the industry. Venture capital has been the main source of finance for software
industry around the world. In line with the international practices, norms for the operations of
venture capital funds have also been liberalized to boost the industry.
The Government of India is also actively providing fiscal incentives and liberalizing norms
for FDI and raising capital abroad.
Financial Assistance:
While the underlying theme of 2010 was that of steady recovery from recession, thanks to the
accelerated recovery in emerging markets, worldwide spending in IT products and services
increased significantly in 2011. In 2011, India’s growth has reflected new demand for IT
goods and services, with a major surge in the use of private and public cloud and mobile
computing on a variety of devices and through a range of new software applications.
High inflow of FDI in the IT sector is expected to continue in coming years. The inflow of
huge volumes of FDI in the IT industry of India has not only boosted the industry but the
entire Indian economy in recent years. Foreign direct investment (FDI) inflow rose by more
than 100 per cent to US$ 4.66 billion in May 2011, up from US$ 2.21 billion a year ago,
according to the latest data released by the Department of Industrial Policy and Promotion
(DIPP). This is the highest monthly inflow in 39 months.
Foreign technology induction is also encouraged both through FDI and through foreign
technology collaboration agreements. India welcomes investors in Information Technology
sector. Greater transparency in policies and procedures has made India an investor friendly
platform. A foreign company can hold equity in Indian company’s upto 100%.
Research & Development:
To support Research & development in the country and promoting Start ups focussed on
technology and innovation, a weighted deduction of 150% of expenditure incurred on
inhouse R&D is introduced under the Income Tax Ac. In addition to the existing scheme for
funding various R&D projects have been funded through new scheme like Support
International Patent Protection in Electronics & IT (SIP-EIT), Multiplier Grants Scheme
(MGS).
The government has initiated the setting up of an Open Technology Center through NIC
aimed at giving effective direction to the country on Open Technology in the areas of Open

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Source Solutions, (OSS), Open Standard, Open Processes, Open Hardware specifications and
Open Course-ware. This initiative will act as a National Knowledge facility providing
synergy to the overall components of Open Technology globally.
Regulations:
After the economic reforms of 1991-92, liberalization of external trade, elimination of duties
on imports of information technology products, relaxation of controls on both inward and
outward investments and foreign exchange and the fiscal measures taken by the Government
of India and the individual State Governments specifically for IT and ITES have been major
contributory factors for the sector to flourish in India and for the country to be able to acquire
a dominant position in offshore services in the world. The major fiscal incentives provided by
the Government of India have been for the Export Oriented Units (EOU), Software
Technology Parks (STP), and Special Economic Zones (SEZ).
Challenges:
Cyber security and quality management are few key areas of concern in today’s information
age. To overcome such concerns in today’s global IT scenario, an increasing number of
ITBPO companies in India have gradually started to emphasize on quality to adopt global
standards such as ISO 9001 (for Quality Management) and ISO 27000 (for Information
Security). Today, centers based in India account for the largest number of quality
certifications achieved by any single country.
India aims to transform India into a truly developed and empowered society by 2020.
However, to achieve this growth, the sector has to continue to re-invent itself and strive for
that extra mile, through new business models, global delivery, partnerships and
transformation. A collaborative effort from all stakeholders will be needed to ensure future
growth of India’s IT-ITeS sector. We will need to rise up to the new challenges and put in
dedicated efforts toward providing more and more of end-to-end solutions to the clients to
keep the momentum going.
India is now one of the biggest IT capitals in the modern world and has presence of all the
major players in the world IT sector. HCL, Wipro, Infosys and TCS are few of the household
names of IT companies in India.

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Future prospects:
Globalization has had a profound impact in shaping the Indian Information Technology
industry. Over the years, verticals like manufacturing, telecom, insurance, banking, finance
and lately the retail, have been the growth drivers for this sector. But it is very fast getting
clear that the future growth of IT and IT enabled services will be fuelled by the verticals of
climate change, mobile applications, healthcare, energy efficiency and sustainable energy.
The near future of Indian IT industry sees a significant rise in share of technology spend as
more and more service providers both Indian and global target new segments and provide
low cost, flexible solutions to customers.
By 2015, IT sector generate revenues of USD 130 billion (NASSCOM) which will create a
transformational impact on the overall economy. IT spending is expected to significantly
increase in verticals like automotive and healthcare while the government, with its focus on
e-governance, will continue to be a major spender.
3.2 Product Range
IT Services
The IT services segment aggregated export revenues of USD 43.9 billion, accounting for
nearly 58 percent of total exports and a growth of 9.9 percent over FY2012.
Indian IT service offerings have evolved from application development and maintenance,
to emerge as full service players providing testing services, infrastructure services,
consulting and system integration.
Within that, IT outsourcing exhibited strong growth, in line with global trends, driven by
increased spend in the remote infrastructure management, application management,
testing and service oriented architecture segments. Cloud computing, mobile computing
gained credence in FY2013 as it offered clients access to best-in-class process
management at reduced capital expenditure levels.

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Business Process Management
The BPM segment has been reinventing itself in the past few years and is expected to be
the fastest growing at 12.2 percent and estimated to gross USD 17.8 billion in FY2013.
Increased acceptance of platform BPM solutions was the key highlight, as providers
increasingly focused on transforming client businesses through a mix of re-engineering
skills, technology enablement, and new service delivery methods.
ER&D, OSPD and Software Products
Engineering research and development (ER&D), outsourced software product
development (OSPD) and software products segments are estimated to generate exports
of USD 14.1 billion, a growth of nearly 9 percent over FY2012. ER&D firms are
increasingly developing capabilities that are enabling them to participate across all stages
of development, thereby delivering high-end services to customers. Disruptive
technologies – cloud, mobility, social media and big data/analytics, are playing a
significant role in driving growth of OSPD and software products
3.3 Market Share
Information technology (IT) industry in India has played a key role in putting India on the
global map. IT industry in India has been one of the most significant growth contributors for
the Indian economy. The industry has played a significant role in transforming India’s image
from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global
player in providing world class technology solutions and business services. The industry has
helped India transform from a rural and agriculture-based economy to a knowledge based
economy.
Information Technology has made possible information access at gigabit speeds. It has made
tremendous impact on the lives of millions of people who are poor, marginalized and living
in rural and far flung topographies. Internet has made revolutionary changes with possibilities

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of e-government measures like e-health, e-education, e-agriculture, etc. Today, whether its
filing Income Tax returns or applying for passports online or railway e-ticketing, it just need
few clicks of the mouse. India’s IT potential is on a steady march towards global
competitiveness, improving defense capabilities and meeting up energy and environmental
challenges amongst others.
IT-ITeS sector in India, with the main focus on increasing technology adoption, and
developing new delivery platforms, has aggregated revenues of USD 88.1 billion in FY2011,
while generating direct employment for over 2.5 million people. Out of 88.1 billion, export
revenues (including Hardware) has reached USD 59.4 billion in FY2011 while domestic
revenues (including Hardware) of about USD 28.8 billion.
Finacial year ‘15
 The Indian IT/ITES industry earned revenue of over US$ 146 bn during FY15. Out of this, exports
accounted about 67% of the industry’s revenue.
 In terms of growth by industry verticals, BFSI, Telecom/Hi-Tech, Manufacturing, and Retail are the
most important at 41%, 18%, 16%, and 10% shares respectively.
 The USA accounts for about 62% of the export revenue followed by the UK and Continental
Europe, with 17% and 11% respectively. Other regions such as Asia Pacific are catching up, with a
contribution of 8%.
 At the end of FY15, India’s share in the global outsourcing market stood at 55%.

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CHAPTER-4
RESEARCH
METHODOLOGY

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4.1 OBJECTIVES OF THE RESEARCH
Research methodology is a systematic way, which consists of series of actions or
stepsnecessary to effectively carry out research and the desired sequencing of these steps.
Theresearch is a process of involves a number of interrelated activities, which overlap and
dorigidly follow a particular sequence. It consists of the following steps:
Objectives :
 Formulating the objective of the study
 Designing the methods of data collection
 Selecting the sample plan
 Collecting the data
 Processing and analyzing the data
4.2 RESEARCH DESIGN
Research Design refers to "framework or plan for a study that guides the collection and
analysis of data". A typical research design of a company basically tries to resolve the
following issues:
 Determining Data Collection Design
 Determining Data Methods
 Determining Data Sources
 Determining Primary Data Collection Methods
 Developing Questionnaires
 Determining Sampling Plan
(1) Explorative Research Design: Explorative studies are undertaken with a view to know
more about the problem. These studies help in a proper definition of the problem, and
development of specific hypothesis is to be tested later by more conclusive research designs.

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Its basic purpose is to identify factors underlying a problem and to determine which one of
them need to be further researched by using rigorous conclusive research designs.
(2) Conclusive Research Design:Conclusive Research Studies are more formal in nature and
are conducted with a view to eliciting more precise information for purpose of making
marketing decisions.
These studies can be either:
a) Descriptive or
b) Experimental
Thus, it was mix of both the tools of Research Design that is, Explorative as well as
Conclusive.
4.3 REVIEW OF LITERATURE
Performance appraisal has been defined by different scholars in various ways. Some of the
important definitions are as follows:
Dale S. Beach, “Performance appraisal is a systematic evaluation of the individual with
respect to his or her performance on the job and his or her potential for development.”
Randall S Schhuler,“performance appraisal is formal structure system of measuring
and evaluating an employee’s job related behaviour and outcomes to discover how
and why the employee is presently perfuming on the job and how the employee can

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perform more effectively in the future so that the employee, organization and society
all benefits.”
Dale Yoder, “Performance appraisal includes all formal procedures used to evaluated
personalities and contributions and potentials of group members in a working organization. It
is a continuous process to secure information necessary for making correct and objective
decisions on employees.”
Performance appraisal from employee point of view-“A performance appraisal is
meant to help employees their strengths and shortcomings and receive compensation
accordingly.”
Mcgreror (1957) suggested that, employees should be appraised on the basis of short-term
goals, rather than traits, which are jointly set by the employee and the manager.
H.C. Shiva Prasad (2010 done work to check the performance of Indian software
professionals (SPs) Data were collected from 441 software and senior software engineers
from eight Indian software firms. The team leaders assessed the performance of software and
senior software engineers on 16 items. The exploratory and confirmatory factor analyses of
scores on 16 items of the instrument suggest six dimensions of performance. They are work-
efficiency, personal resourcefulness, inter- and intra-personal sensitivity, productivity
orientation, timeliness, and business intelligence. The dimensions have reliability and high
convergent validity. SPs having more years of experience, higher need for achievement, and
higher need for social power are high performers. Human resource managers can evaluate the
performance of SPs holistically on six dimensions for training, reward administration, job
rotation, and promotion decisions.

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INTRODUCTION TO THE TOPIC
HUMAN RESOURCE MANAGEMENT AND PERFORMANCE APPRAISAL
SYSTEM:
Performance appraisal system and human resource management are related to each other.
A performance appraisal is a review and discussion of an employee'sperformance of assigned
duties and responsibilities. The appraisal is based on results obtained by the employee in
his/her job, not on the employee's personality, characteristics.Before, I dwell in detail on the
topic; I would like to touch certain factors of Human Resources Management.
The performance appraisal is part of a larger system known as the performance management
system. This system is the approach to the management of people using performance,
planned goals and objectives, measurement, feedback and recognition to motivate people to
realize their maximum potential. Performance appraisal involves the setting of clear
quantifiable goals and objectives and assessing individual performance against these
measures.
Human Resource Management involves management functions like planning, organizing,
directing and controlling. It involves procurement, development, maintenance of human
resource. It helps to achieve individual, organizational and social objectives. Human
Resource Management is a multidisciplinary subject. It includes the study of management,
psychology, communication, economics and sociology. It involves team spirit and team
work. It is a continuous process. Why Is Human Resource Management Important to All
Managers? Why are these concepts and techniques important to all managers? Perhaps it's
easier to answer this by listing some of the personnel mistakes which we cannot afford while
managing. For example, you don't want to:
 Hire the wrong person for the job
 Have your people not doing their best
 Waste time with useless interviews

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 Have your company taken to court because of discriminatory actions
 Have your company cited under federal occupational safety laws for unsafe practices
 Have some employees think their salaries are unfair and inequitable relative to others
in the organization
 Allow a lack of training to undermine your department's effectiveness
 Commit any unfair labor practices.
HR now focuses on strategic initiatives like mergers and acquisitions, talent management,
succession planning, industrial and labor relations, and diversity and inclusion.
All global companies are focused on retaining the talent and knowledge held by the
workforce. All companies are focused on lowering the employee turnover and preserving
knowledge. New hiring not only entails a high cost but also increases the risk of the
newcomer not being able to replace the person who was working in that position before. HR
departments also strive to offer benefits that will appeal to workers, thus reducing the risk of
losing knowledge.
The second definition of HRM encompasses the management of people in organizations from
a macro perspective i.e. managing people in the form of a collective relationship between
management and employees. This approach focuses on the objectives and outcomes of the
HRM function whatever the definition we use the answer to the question as to “what is
HRM?” is that it is all about people in organizations. No wonder that some MNC’s
(Multinationals) call the HR managers as People Managers, People Enablers and the practice
as people management. HR manager is responsible for managing employee expectations vis-
à-vis the management objectives and reconciling both to ensure employee fulfillment and
realization of management objectives.
Employee relations generally deal with avoiding and resolving issues concerning individuals
which might arise out of or influence the work scenario. Strong employee relation depends
upon healthy and safe work environment, cent percent involvement and commitment of all
employees, incentives for employee motivation, and effective communication system in the
organization. Healthy employee relations lead to more efficient, motivated and productive
employees which further lead to increase in sales level.

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When the employees do not behave as per accepted norms of behavior, it is known as
employee indiscipline. Absenteeism, change in employee’s behavior, slow performance and
grievances are all forms of employee indiscipline. Thus, when the employees fail to meet
management expectations in terms of standard performance and behavior, it is referred to as
indiscipline. In such cases, it must be ensured by the management that steps should be taken
so that employee’s behavior is in conformity with the managerial expectations.
Similarly, the employees also expect from the management to provide them a safe working
environment, fair treatment, proper incentives, participation in decisions, and needs
satisfaction. The failure on part of management to meet these expectations is termed as
employee grievance.
When the employees fail to meet their own expectations whether in terms of personal goals,
career goals, performance, self-respect, etc. it is referred to as employee stress. Excessive
workload, insufficient workload, peer pressure, excessive/unreasonable use of authority by
the management, lack of promotional opportunities, nature of job, etc. all again lead to
employee stress.
An effective grievance redressed system should be there and Stress management strategies
should be followed in the organization.
SCOPE OF HUMAN RESOURCE MANAGEMENT
Human resources are undoubtedly the key resources in an organization, the easiest and the
most difficult to manage! The objectives of the HRM span right from the manpower needs
assessment to management and retention of the same. To this effect Human resource
management is responsible for effective designing and implementation of various policies,
procedures and programs. It is all about developing and managing knowledge, skills,
creativity, aptitude and talent and using them optimally.
It also focuses on managing physical and emotional capital of employees. Considering the
intricacies involved, the scope of HRM is widening with every passing day. It covers but is
not limited to HR planning, hiring(recruitment and selection), training and development,
payroll management, rewards and recognitions, Industrial relations, grievance handling, legal

24
procedures etc. In other words, we can say that it’s about developing and managing
harmonious relationships at workplace and striking a balance between organizational goals
and individual goals.
The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it
concisely. However, we may classify the same under following heads:
 HRM in Personnel Management: This is typically direct manpower management
that involves manpower planning, hiring (recruitment and selection), training and
development, induction and orientation, transfer, promotion, compensation, layoff
and retrenchment, employee productivity. The overall objective here is to ascertain
individual growth, development and effectiveness which indirectly contribute to
organizational development. It also includes performance appraisal, developing new
skills, disbursement of wages, incentives, and allowances, travelling policies and
procedures and other related courses of actions.
 HRM in Employee Welfare: This particular aspect of HRM deals with working
conditions and amenities at workplace. This includes a wide array of responsibilities
and services such as safety services, health services, welfare funds, social security and
medical services. It also covers appointment of safety officers, making the
environment worth working, eliminating workplace hazards, support by top
management, job safety, safeguarding machinery, cleanliness, proper ventilation and
lighting, sanitation, medical care, sickness benefits, employment injury benefits,
personal injury benefits, maternity benefits, unemployment benefits and family
benefits.
 It also relates to supervision, employee counseling, establishing harmonious
relationships with employees, education and training. Employee welfare is about
determining employees’ real needs and fulfilling them with active participation of
both management and employees. In addition to this, it also takes care of canteen
facilities, crèches, rest and lunch rooms, housing, transport, medical assistance,
education, health and safety, recreation facilities, etc.
 HRM in Industrial Relations: Since it is a highly sensitive area, it needs careful
interactions with labor or employee unions, addressing their grievances and settling
the disputes effectively in order to maintain peace and harmony in the organization. It

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is the art and science of understanding the employment (union-management)
relations, joint consultation, disciplinary procedures, solving problems with mutual
efforts, understanding human behavior and maintaining work relations, collective
bargaining and settlement of disputes.
 The scope of HRM is extremely wide, thus, cannot be written concisely. However, for
the sake of convenience and developing understanding about the subject, we divide it
in three categories mentioned above.
PROCESSES IN HUMAN RESOURCE MANAGEMENT
Each organization works towards the realization of one vision. The same is achieved by
formulation of certain strategies and execution of the same, which is done by the HR
department. At the base of this strategy formulation lie various processes and the
effectiveness of the former lies in the meticulous design of these processes.
The following are the various HR processes:
 Human resource planning (Recruitment, Selecting, Hiring, Training, Induction,
Orientation, Evaluation, Promotion and Layoff).
 Employee remuneration and Benefits Administration
 Performance Management.
 Employee Relations.
The efficient designing of these processes apart from other things depends upon the degree of
correspondence of each of these. This means that each process is subservient to other.
 Human Resource Planning: Generally, we consider Human Resource Planning as
the process of people forecasting. Right but incomplete! It also involves the processes
of Evaluation, Promotion and Layoff.
 Recruitment: It aims at attracting applicants that match a certain Job criteria.
 Selection: The next level of filtration. Aims at short listing candidates who are the
nearest match in terms qualifications, expertise and potential for a certain job.
 Hiring: Deciding upon the final candidate who gets the job.
 Training and Development: Those processes that work on an employee on board for
his skills and abilities up gradation.

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 Employee Remuneration and Benefits Administration: The process involves
deciding upon salaries and wages, Incentives, Fringe Benefits and Perquisites etc.
Money is the prime motivator in any job and therefore the importance of this process.
Performing employees seek raises, better salaries and bonuses.
 Performance Management: It is meant to help the organization train, motivate and
reward workers. It is also meant to ensure that the organizational goals are met with
efficiency. The process not only includes the employees but can also be for a
department, product, and service or customer process; all towards enhancing or
adding value to them.
Nowadays there is an automated performance management system (PMS) that carries
all the information to help managers evaluate the performance of the employees and
assess them accordingly on their training and development needs.
 Employee Relations: Employee retention is a nuisance with organizations especially
in industries that are hugely competitive in nature. Though there are myriad factors
that motivate an individual to stick to or leave an organization, but certainly few are
under our control.
Employee relations include Labor Law and Relations, Working Environment, Employee
health
and safety, Employee- Employee conflict management, Employee- Employee Conflict
Management, Quality of Work Life, Workers Compensation, Employee Wellness and
assistance programs, Counseling for occupational stress. All these are critical to employee
retention apart from the money which is only a hygiene factor.
All processes are integral to the survival and success of HR strategies and no single process
can work in isolation; there has to be a high level of conformity and cohesiveness between
the same.
PERFORMANCE
A performance management discussion should be uncomplicated but detailed enough to give
employees a clear indication of what is required of them in their jobs. The focus is on

27
dialogue. It is important when a performance expectation is set to determine how it will be
measured.
Employees are performing well when they are productive. Productivity implies both concern
for effectiveness and efficiency, effectiveness refers to goal accomplishment. However it
does not speak of the costs incurred in reaching the goal. That is where efficiency comes in.
Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output
for a given input, the greater the efficiency. It is not desirable to have objective measures of
productivity such as hard data on effectiveness, number of units produced, or percent of
crimes solved etc. and hard data on efficiency.
In addition to productivity as measured in terms of effectiveness and efficiency. Performance
also includes personnel data such as measures of accidents, turnover, absences and tardiness.
That is a good employee is one who not only perform well in terms of productivity but also
minimizes problems for the organization by being to work on time, by not missing days and
by minimizing the number of work-related accidents.
APPRAISAL
Appraisals are judgments of the characteristics, traits and performance of others. on the basis
of these judgments we assess the worth or value of others and identify what is good or
evaluation of employees by supervisors. Employees also wish essential for making many
administrative decisions, selection, training, promotion, transfer, wage and salary
administration etc. Besides they aid in personnel research.
PERFORMANCE APPRAISAL
Performance appraisal is an important part of human Resource management. Without HR,
performance appraisal will not work. Performance appraisal aims at achieving the
organizational goals and objectives. It focuses on minimization of cost and maximization of
benefits and profits. It is:

28
1) Goal oriented
2) Result oriented
3) Enhance the performance
4) Achieve the organizational goals
Performance appraisal thus is a systematic and objective way of judging the relative worth of
ability of an employee in performing his task. Performance appraisal helps to identify those
who are performing their assigned tasks well and those who are not and the reasons such
performance.
Performance appraisal is the assessment of individual’s performance in a systematic way. It
is a developmental tool used for all round development of the employee and the organization.
The performance is measured against such factors as job knowledge, quality and quantity of
output, initiative, leadership abilities, supervision, dependability, co-operation, judgment,
versatility and health. Assessment should be confined to past as well as potential performance
also. Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
The performance appraisal is the process of assessing employee performance by way of
comparing present performance with already established standards which have been already
communicated to employees, subsequently providing feedback to employees about their
performance level for the purpose of improving their performance as needed by the
organization.
As said above the very purpose of performance uprising is to know performance of
employee, subsequently to decide whether training is needed to particular employee or to
give promotion with additional pay hike. Performance appraisal is the tool for determining

29
whether employee is to be promoted, demoted or sacked (remove) in case of very poor
performance and no scope for improvement.
Every corporate sector uses performance appraisal as a tool for knowing about the employee
and take decisions about particular employee.
OBJECTIVES OF PERFORMANCE APPRAISAL
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right
job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
ADVANTAGES OF PERFORMANCE APPRAISAL
It is said that performance appraisal is an investment for the company which can be justified
by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed or
demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages
for employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which include bonus,
high salary rates, extra benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.

30
3. Employees Development: The systematic procedure of performance appraisal helps
the supervisors to frame training policies and programmes. It helps to analyze strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It also
helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes in
selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees
and employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a) Through performance appraisal, the employers can understand and accept skills of
subordinates.
b) The subordinates can also understand and create a trust and confidence in superiors.
c) It also helps in maintaining cordial and congenial labor management relationship.
d) It develops the spirit of work and boosts the morale of employees.
GOALS OF PERFORMANCE APPRAISALS
General Goals Specific Goals
Developmental Use
Individual needs
Performance feedback
Transfers and Placements
Strengths and Development needs
Administrative Decisions / Uses
Salary
Promotion

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Retention / Termination
Recognition
Lay offs
Poor Performers identification
Organizational Maintenance
HR Planning
Training Needs
Organizational Goal achievements
Goal Identification
HR Systems Evaluation
Reinforcement of organizational needs
Documentation
Validation Research
For HR Decisions
IMPORTANCE OF PERFORMANCE APPRAISAL
Performance appraisal provides important and useful information for the assessment of
employee's skill, knowledge, ability and overall job performance. The following are the
points which indicate the importance of performance appraisal in an organization:
Performance appraisal helps supervisors to assess the work performance of their
subordinates.
1. Performance appraisal helps to assess the training and development needs of
employees.

32
2. Performance appraisal provides grounds for employees to correct their mistakes, and
it also provides proper guidance and criticism for employee's development.
3. Performance appraisal provides reward for better performance.
4. Performance appraisal helps to improve the communication system of the
organization
5. Performance appraisal evaluates whether human resource programs being
implemented in the organization have been effective.
6. Performance appraisal helps to prepare pay structure for each employee working in
the organization.
7. Performance appraisal helps to review the potentiality of employees so that their
future capability is anticipated.
Performance appraisal activity to be carried out smoothly in a business organization, various
methods that lead to make inferences and predictions, are adopted that, in turn, would be
useful to bring a conclusive evidence to the overall performance of the employees. And the
sole purpose of any method is to make observation thoroughly about the performance of the
employees and otherelated factors so as to let them know where they stand and advise them
how they need to improve their performance. They are also to be notified for their weak areas
in which they need to put extra efforts to achieve a satisfactory level of performance or for
which they are to be trained. The process of performance appraisal also includes determining
promotion for those who deserve and the transfer in case it is to benefit both, the employee as
well as the organization.
It is necessary for a business organization to carry out the activity of performance appraisal
periodically as it entails twofold beneficial effect. To a business it does help to grow
strengthening total organizational competencies and creating effectiveness and efficiency. To
the employees, making them realize their full potential, it becomes a source to motivate them
to do their jobs in the best way.
Benefits of Performance Appraisal:
One of the most significant benefits of performance appraisal is that, in the rush and bustle of
daily working life, it offers a rare chance for a supervisor and subordinate to have "time out"
for a one-on-one discussion of important work issues that might not otherwise be addressed.

33
Almost universally, where performance appraisal is conducted properly, both supervisors and
subordinate have reported experience and beneficial as positive.
Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and
correct existing problems, and to encourage better future performance. Thus the performance
of the whole organization is enhanced.
For many employees, an "official" appraisal interview may be the only time they get to have
exclusive, uninterrupted access to their supervisor. Said one employee of a large organization
after his first formal performance appraisal, "In twenty years of work, that's the first time
anyone has ever bothered to sit down and tell me how I'm doing."
The value of this intense and purposeful interaction between a supervisors and subordinate
should not be underestimated.
Role of Performance Appraisal in Training and Development:
Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur -
for a supervisor and subordinate to recognize and agree upon individual training and
development needs.
During the discussion of an employee's work performance, the presence or absence of work
skills can become very obvious - even to those who habitually reject the idea of training for
them.
Performance appraisal can make the need for training more pressing and relevant by linking
it clearly to performance outcomes and future career aspirations.
From the point of view of the organization as a whole, consolidated appraisal data can form a
picture of the overall demand for training. This data may be analyzed by variables such as
sex, department, etc. In this respect, performance appraisal can provide a regular and efficient
training needs audit for the entire organization.

34
Performance Appraisal and Recruitment and Induction:
Appraisal data can be used to monitor the success of the organization's recruitment and
induction practices. For example, how well are the employees performing who were hired in
the past two years?
Appraisal data can also be used to monitor the effectiveness of changes in recruitment
strategies. By following the yearly data related to new hires (and given sufficient numbers on
which to base the analysis) it is possible to assess whether the general quality of the
workforce is improving,
Staying steady, or declining.
Employee Evaluation:
Though often understated or even denied evaluation is a legitimate and major objective of
`performance appraisal.
But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative
and developmental priorities appear to frequently clash. Yet at its most basic level,
performance appraisal is the process of examining and evaluating the performance of an
individual.
Though organizations have a clear right - some would say a duty - to conduct such
evaluations of performance, many still recoil from the idea. To them, the explicit process of
judgment can be dehumanizing and demoralizing and a source of anxiety and distress to
employees.
It is said by some that performance appraisal cannot serve the needs of evaluation and
development at the same time; it must be one or the other.

35
USES OF PERFORMANCE APPRAISAL
Performance appraisal is crucial tool in the hands of the management to bring about greater
agility and responsiveness in human resources of an organization. Performance appraisal is
the foundation of much human resource decision. Therefore, it has multifarious uses as
depicted below:
 Performance improvement: Performance feedback allows the employee,
manager and personnel specialists to intervene with appropriate actions to
improve performance.
 Compensation adjustments: Performance evaluations help decision-makers
determine who should receive pay raises. Many firms grant part or all pay
increases and bonuses based upon merit, which is determined mostly through
performance appraisals.
 Placement decisions: Promotions, transfers and demotions are usually based on
past or anticipated performance. Often promotions are a reward for past
performance.
 Training and development needs: Poor performance may indicate the need for
retraining. Likewise, good performance may indicate untapped potential that
should be developed.
 Career planning and development: Performance feedback guides career
decisions about specific career paths one should investigate.
 Staffing process deficiencies: Good or bad performance implies strengths or
weakness in the personnel department’s staffing procedures.
 Informational inaccuracies: Poor performance may indicate errors in job
analysis information, human resource plans, or other parts of the personnel
management information system. Reliance on inaccurate information may have
led to inappropriate hiring, training, or counseling decisions.
 Job design errors: Poor performance may be a symptom of ill-conceived job
designs. Appraisals help diagnose these errors.
 Equal employment opportunity: Accurate performance appraisals that actually
measure job elated performance ensure that internal placement decisions are not d
iscriminatory.

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 External challenges: Sometimes performance is influenced by factors outside the
work environment such as family, financial, health or other personal matters. If
uncoveredthrough appraisals,the human resource department may be able to provi
de assistance.
 Feedback to human resources: Good/bad performance throughout the
organization indicates how well the human resource function is performing
advertisements.
PERFORMANCE APPRAISAL PROCESS
Performance appraisal is planned, developed and implemented through a series of steps:
1) Establish Performance Standards.
Appraisal systems require performance standards, which serve as benchmarks against which
performance is measured. In order to be useful, standards should relate to the desired results
of each job. Appraisals must have a clear- cut criteria. Performance standards must be both to

37
the appraiser and the appraisee. The performance standards of goals must be developed after
a thorough analysis of the job. Goals must be written down. They must be measurable within
certain time and cost considerations.
2) Communicate the Standards.
Performance appraisal involves attract two parties; the appraiser who does the appraisal and
the appraise. whose performance is being evaluated. Both are expected to do certain things.
The appraiser should prepare job descriptions clearly, help appraise set his goals and targets;
analysis results objectively; offer coaching and guidance to appraise whenever required and
reward good results. The appraiser should be very clear about what he is doing and why he is
doing. For this purpose, the performance standards must be communicated to appraise and
their reactions are noted initially. These standards must be revised or modified as and when
required.
3) Measure Actual Performance.
After the performance standards are set and accepted, the next step is to measure actual
performance. This requires the use of dependable performance measures, the ratings used to
evaluate performance. Performance measures in order to be helpful must be easy to use,
reliable and report on the critical behaviors that determine performance. Generally, managers
regarding how to measure actual performance use four common sources of information:
personal observation, statistical reports, oral reports and written reports.
4) Compare Actual Performance with Standards and Discuss the Appraisal.
Actual performance may be better than expected and sometimes it may even go off the track.
The assessment of another person's contribution and ability is not an easy task. It has serious
emotional overtones as it affects the self-esteem of the appraise. Any appraisal asked on
subjective criteria is likely to be questioned by the appraisers and leave him quite dejected
and unhappy when the appraisal turns out to be negative.

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5) Taking Corrective Action, if Necessary.
Corrective action is of two types: The one, which puts out the fires immediately and the other
one, which strikes at the root of the problems permanently. Immediate action sets things right
and get things back or track, whereas the basic corrective action gets to the source of
deviations and seems to adjust the difference permanently. Basic corrective step seek to find
out how and why performance deviate.
Difference between Traditional and Modern (Systems) approach to
Appraisals
Categories Traditional Appraisals Modern, Systems Appraisals
Guiding Values
Individualistic, Control oriented,
Documentary
Systematic, Developmental, Problem
solving
Leadership
Styles
Directional, Evaluative Facilitative, Coaching
Frequency Occasional Frequent
Formalities High Low
Rewards Individualistic Grouped, Organizational
TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS
Numerous methods have been devised to measure the quantity and quality of performance
appraisals. Each of the methods is effective for some purposes for some organizations only.
None should be dismissed or accepted as appropriate except as they relate to the particular
needs of the organization or an employee.

39
Broadly all methods of appraisals can be divided into two different categories.
 Past Oriented Methods
 Future Oriented Methods
PAST ORIENTED METHODS
1. Rating Scales: Rating scales consists of several numerical scales representing job related
performance criterions such as dependability, initiative, output, attendance, attitude etc. Each
scales ranges from excellent to poor. The total numerical scores are computed and final
conclusions are derived.
Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large
number of employees covered, no formal training required
Disadvantages – Rater’s biases
2. Checklist: Under this method, checklist of statements of traits of employee in the form of
Yes or No based questions is prepared. Here the rater only does the reporting or checking and
HR department does the actual evaluation.
Advantages – economy, ease of administration, limited training required, standardization.
Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give
relative ratings.
3. Forced Choice Method: The series of statements arranged in the blocks of two or more
are given and the rater indicates which statement is true or false. The rater is forced to make a
choice. HR department does actual assessment.
Advantages – Absence of personal biases because of forced choice.
Disadvantages – Statements may be wrongly framed.
4. Forced Distribution Method: here employees are clustered around a high point on a
rating scale. Rater is compelled to distribute the employees on all points on the scale. It is
assumed that the performance is conformed to normal distribution.

40
Advantages – Eliminates
Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.
5. Critical Incidents Method: The approach is focused on certain critical behaviors of
employee that makes all the difference in the performance. Supervisors as and when they
occur record such incidents.
Advantages – Evaluations are based on actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement
are high.
Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close
supervision; feedback may be too much and may appear to be punishment.
6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors
determine the points. They are said to be behaviorally anchored. The rater is supposed to say,
which behavior describes the employee performance
Advantages – helps overcome rating errors.
Disadvantages – Suffers from distortions inherent in most rating techniques.
7. Field Review Method: This is an appraisal done by someone outside employees’ own
department usually from corporate or HR department.
Advantages – Useful for managerial level promotions, when comparable information is
needed.
Disadvantages – Outsider is generally not familiar with employees work environment,
Observation of actual behaviors not possible.
8. Performance Tests & Observations: This is based on the test of knowledge or skills. The
tests may be written or an actual presentation of skills. Tests must be reliable and validated to
be useful.
Advantage – Tests may be apt to measure potential more than actual performance.
Disadvantages – Tests may suffer if costs of test development or administration are high.

41
9. Confidential Records: Mostly used by government departments, however its application
in industry is not ruled out. Here the report is given in the form of Annual Confidentiality
Report (ACR) and may record ratings with respect to following items; attendance, self
expression, team work, leadership, initiative, technical ability, reasoning ability, originality
and resourcefulness etc. The system is highly secretive and confidential. Feedback to the
assessee is given only in case of an adverse entry.
10. Essay Method: In this method the rater writes down the employee description in
detail within a number of broad categories like, overall impression of performance, promote
ability of employee, existing capabilities and qualifications of performing jobs, strengths and
weaknesses and training needs of the employee.
Advantage – It is extremely useful in filing information gaps about the employees that often
occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing skills of rater and most of them are
not good writers. They may get confused success depends on the memory power of raters.
11. Cost Accounting Method: Here performance is evaluated from the monetary returns
yields to his or her organization. Cost to keep employee, and benefit the organization derives
is ascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are
collection of different methods that compare performance with that of other co-workers. The
usual techniques used may be ranking methods and paired comparison method.
 Ranking Methods: Superior ranks his worker based on merit, from best to worst.
However how best and why best are not elaborated in this method. It is easy to
administer and explanation.
 Paired Comparison Methods: In this method each employee is rated with another
employee in the form of pairs. The number of comparisons may be calculated with
the help of a formula as under
N x (N-1) / 2

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FUTURE ORIENTED METHODS
1. Management by Objectives: It means management by objectives and the performance is
rated against the achievement of objectives stated by the management. MBO process goes as
under.
 Establish goals and desired outcomes for each subordinate
 Setting performance standards
 Comparison of actual goals with goals attained by the employee
 Establish new goals and new strategies for goals not achieved in previous year.
Advantage – It is more useful for managerial positions.
Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting
short-term goals rather than important and long-term goals etc.
2. Psychological Appraisals: These appraisals are more directed to assess employees
potential for future performance rather than the past one. It is done in the form of in-depth
interviews, psychological tests, and discussion with supervisors and review of other
evaluations. It is more focused on employees emotional, intellectual, and motivational and
other personal characteristics affecting his performance. This approach is slow and costly and
may be useful for bright young members who may have considerable potential.
3. Assessment Centers: An assessment center is a central location where managers may
come together to have their participation in job related exercises evaluated by trained
observers.Assessees are requested to participate in in-basket exercises, work groups,
computer simulations, role playing and other similar activities which require same attributes
for successful performance in actual job.The characteristics assessed in assessment center can
be assertiveness, persuasive ability, communicating ability, planning and organizational
ability, self confidence, resistance to stress, energy level, decision making, sensitivity to
feelings, administrative ability, creativity and mental alertness etc.
Advantages – well-conducted assessment center can achieve better forecasts of future
performance and progress than other methods of appraisals. Also reliability, content validity

43
and predictive ability are said to be high in assessment centers. The tests also make sure that
the wrong people are not hired or promoted.
Disadvantages – Costs of employees traveling and lodging, psychologists, ratings strongly
influenced by assessee’s inter-personal skills. Solid performers may feel suffocated in
simulated situations. Those who are not selected for this also may get affected.
4.360-Degree Feedback: It is a technique which is systematic collection of performance data
on an individual group, derived from a number of stakeholders like immediate supervisors,
team members, customers, peers and self. In fact anyone who has useful information on how
an employee does a job may be one of the appraisers. This technique is highly useful in terms
of broader perspective, greater self-development and multi-source feedback is useful. 360-
degree appraisals are useful to measure inter-personal skills, customer satisfaction and team
building skills. However on the negative side, receiving feedback from multiple sources can
be intimidating, threatening etc. Multiple raters may be less adept at providing balanced and
objective feedback.
ROLE OF PERFORMANCE APPRAISAL IN HR
Human resource department plays an important role in designing and implementing
performance appraisals. Infact, the HR team acts as mediator between the functional heads or
reviewing authorities and the employee. It is the human resource team’s responsibility to
ensure a smooth implementation of the appraisal process.
Every individual is rated based on the performance exhibited by them. So in HR, which delt
with human resources it’s very essential and crucial to check the performance. Performance
appraisal plays a significant role in HR for managing, developing, and improving employees
and organization as well as its performance.
The first and the foremost responsibility of HR team are to design the entire appraisal
process. Make sure the process is simple and does not take too much time. The HR team
needs to know the responsibilities assigned to each and every employee for them to create
and design a system where their overall achievements can be rated with respect to their key
responsibility areas. An individual representing the MIS team cannot rate himself/herself on

44
the KRAs of a marketing professional. As a HR professional, you need to sit with the
functional heads of all departments so that you exactly know what all tasks have been
assigned to which all team members.
The employees need to be fully aware of the performance appraisal process. The criterion of
performance appraisal needs to be very clear and transparent. Provide proper training to
employees so that they take the entire process of performance appraisal gracefully and
sportingly. You need to make them understand that appraisals are done not to downgrade or
insult anyone but help individuals set realistic goals and expectations for themselves and
work towards it. There are employees who do not appreciate the idea of performance
appraisal and feel it is just a waste of time and energy filling elaborate forms. It is the HR’s
responsibility to change this perception. Performance appraisal is just not a method to
increase one’s salary but provide feedbacks to employees and guide them accordingly. Call
employees on a common platform and make them understand the importance of appraisal
process and how would it help them in their respective careers.
The HR team also needs to sit with the reviewing authorities to ensure appraisals are done on
time and only the deserving employees get the benefits. Appraisals should not be for
everyone but only for those who have worked really hard all through the year. You need to
help and sometimes also guide the managers and supervisors so that a fair appraisal is done
and no deserving employee is at loss. You can also give your valuable feedback to the
functional heads based on your day to day interaction with the employee concerned. Apart
from his /her routine work, how one behaves at the workplace, what is his relation with
superiors/ fellow workers, punctuality, and discipline also play an important role in
performance appraisal.
Once the appraisal is done, it is your responsibility to hand over the increment letters or
review reports. Make sure the letter is handed only to the employee concerned and not to
anyone else. Appraisals and increments ought not to be discussed in public. Your role does
not end here. As a HR professional, you need to ensure employees are satisfied with the
appraisal process. You need to explain an individual as to why he/she has got or not got a
salary hike .Immediately arrange a meeting with his superior if you are not able to handle the
situation or find a solution.

45
ROLE OF PERFORMANCE APPRAISAL IN MOTIVATION
Motivation greatly helps in enhancing the performance. Motivated employeeswill put
maximum efforts for achieving the organizational goals. Motivation enables and encourages
them to show better performance which results in high productivity. It acts as a stimulant for
improving the performance of employees which provide great success and growth. The
employees should be given more incentives for increasing the performance. Different
motivational techniques like financial motivators and non financial motivators like
Recognition, Participation, Status, Competition, Job enrichment greatly helps in enriching the
performance appraisal.
Motivation occupies an important place and position in thewhole management process. This
technique can be used fruitfully for encouraging workers to make positive contribution for
achieving organizational objectives. Motivation is necessary as human nature needs some
sort of inducement, encouragement or incentive in order to get better performance.
Motivation of employee’s offers may benefits to the organization and also to the employees.
Motivation acts as a technique for improving the performance of employees working at
different levels.
Motivation of employees is one function which every manager has to perform along with
other managerial functions. A manager has to function as a friend and motivator of his
subordinates. Motivation is useful in all aspects of life and even our family life. The same is
the case with business.
ROLE OF PERFORMANCE APPRAISAL IN JOB SATISFACTION
When the employees are satisfied with the job that they are doing which include good
working conditions, benefits and incentives, recreation facilities, etc. They will work more.
Hence their performance can be apprised which results in high productivity, growth, and
success. Satisfied job enable employees to provide their best talent and to enhance their
performance. Job satisfaction can be defined as that which gives employees the motivation to
continue with the daily work or makes him actually want to go to work or gives him an urge
to take up a new assignment or project. One of the factors that leads to job satisfaction is
recognition and encouragement where an organization has a good evaluation system and the

46
employee’s work is recognized and then he is encouraged and motivated to continue
contributing to the organization.
According to Vroom (1964), job satisfaction focuses on the role of the employee in his or her
workplace hence defines job satisfaction as effective orientations on the part of individuals
towards work roles which they are currently occupying.
Job satisfaction should be considered as one of the main factors when looking at efficiency
and effectiveness of organizations. The new managerial paradigm that insists employees are
to be treated and considered as human beings who have their own needs, personal desires and
wants is an excellent indicator of the importance of job satisfaction in many organization.
The performance appraisal systems increase the fairness and transparency of the evaluation
process and guide individuals and supervisors towards targeted improvement strategies. They
also protect both the employee and the institution from potential bias and ensure that
employees receive fair and accurate feedback. However these should be tailored to suit the
necessary employee aspirations as noted by the department or organization at large. If staff is
to have positive attitude towards the appraisal system, the performance appraisal should
undergo regular review and improvement. For example, focus groups or surveys could be
conducted to gauge staff perceptions of the appraisal process. Successful performance
appraisal depends to some extent, on the ability of supervisors to make sound assessments
and on the careful compilation of pay structure. A good scheme should result in a reduction
in labour turnover and an increase in morale and output.
4.4 SAMPLING PLAN
Sampling method – Direct contact and questioner
Sample Size = 20 Employees

47
4.5 DATA COLLECTION
Data Sources:
 Secondary Data through Internet
 Primary Data through Questionnaire
 Contact Method
 Personal Interaction
Primary data
 Direct personal observation
 Indirect oral interviews
 Information through manuals& websites
 Information through questionnaire filled by respondents
Secondary data
Secondary data means that are already available they refer to the data which have already
been collected and analyzed by someone else when the researcher utilizes secondary data that
has to look into various sources where he can obtain. In this case he certainly not confronted
with the problems that are usually data nor did unpublished data associate data associated
with the collection of original data secondary data may either be published.

48
CHAPTER-5
DATA ANALYSIS
AND
INTERPRETATION

49
Performance Appraisal is the important aspect in the organization to evaluate the employees
performance. It helps in understanding the employees work culture, involvement, and
satisfaction. It helps the organization in deciding employee’s promotion, transfer, incentives,
pay increase.
During my efforts to find out the position of performance appraisal at SOLITAIRE
INFOSYS, , I took the support of a questionnaire (Annex.-I). The employee’s respondent to
the questions differently on the same issues even. It also revealed that certain employees are
not aware of the performance appraisal policy of the . However, to make the findings more
elaborate, explain it with the help of pie charts. The pie-charts refer to each question and its
finding separately
1. Are you aware with the current “Performance Appraisal system” of SOLITAIRE
INFOSYS?
(a) Yes (b) No
Aware 90
%
Unaware 10
%
90%
10%
Awareness of Performance appraisal system
Aware Unaware

50
Interpretation:
This pie chart is shows about 90% of officers are aware of current performance appraisal
System
& 10% are not aware of current PAR System. The position has also depicted in the chart.
Awareness of performance appraisal system motivates to do the people in a better way.
Therefore, it is necessary that the management make all the employees aware of their
appraisal systems.
2. Performance Appraisal of Employee Is Assessed By
(a)Point system (b) Mark system
(c)Grade system (d) Not aware
PA of employee is assessed by
Point system 85%
Mark system 10%
Grade system 5%
Not aware 0%

51
Interpretation:
About 85% of employees performance appraisals is assessed by point system, 10%through
Mark System,5% of grade system, and 0% are not aware of any group. This shows that
employees are assessed by different methods.
3. Task setting by appraise and appraiser provides objective while appraising
the performance appraisal of the appraise
(a)Agree (b) partially agree
(c)Neutral (d) disagree
85%
10%
5%
0%
PA of employee is assessed by
Point system Mark system Grade system Not aware

52
Task setting
Agree 50%
Partially agree 30%
Neutral 10%
Disagree 2%
Interpretation:
About 50% of employees agree that task Setting provides objectives in appraising their
performance.Less than 30% of the employees are partially agreed with the
statement and 10% are neutral & 2% are disageed and not fill the questionnaire.
50%30%
10%
2%
Task setting
Agree Partiallyagree Neutral Disagree

53
4. Whether the quarterly task setting assignment Completed by the 15th of first month
of each quarter. if no give reason.
(a)Yes (b) No
Quarterly task setting assignment completed
Yes 95%
No 5%
Interpretation:
About 95% employees says yes for completing Quarterly Task setting in time, rest due to
some reason it’s not completed in time, such cases lack of seriousness &ambiguity.5%says
no for completing Quarterly Task setting in time.
95%
5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Yes No
Quarterly task setting assignment completed
Quarterlytask setting assignment completed

54
5. Self-Appraisal System proves to be effective while appraising the appraise
(a)Agree (b) Partially agree
(c)Neutral (d) Disagree
Self-Appraisal System
Agree 60%
Partially agree 20%
Neutral 10%
Disagree 10%
60%
20%
10%
10%%
Self Appraisal System

55
Interpretation:
Above 60% of the employee agree that self-appraisal system proves to be effective, 20% are
partially agree and rest of officers do not completely agree with it.
6. Who in your opinion should be the responsible for ensuring objectivity and reducing
biasness inthe “Performance Appraisal” system?
(a) Appraiser and Appraisee.
(b) Appraiser, Appraisee& peer.
(c) Appraiser, Appraisee, Peer, & Subordinates.
Ensuring objectivity and reducing biasness in the
Performance Appraisal system
Appraiser and Appraisee 78%
Appraiser, Appraisee& peer. 10%
Appraiser, Appraisee, Peer,
& Subordinates.
10%
Blank questionnaire 2%

56
Interpretation:
About 78% of officers says that appraiser and appraise should be responsible for ensuring
objectivity and reducing biasness in the “Performance Appraisal system. 10%are says
appraiser &appraisee and peer & 10% says appraiser & appraise and peer &subordinate, 2%
do not fill the questionnaire.
7. Skill possessed by an Appraiser varies as they move from one grade to another.
Skill possessed by an Appraiser
Agree 40%
Partially agree 30%
78%
10%
10%
2%
ensuring objectivity and reducing biasness the
“Performance Appraisal system
Appraiser and Appraisee Appraiser, Appraisee & peer.
Appraiser, Appraisee, Peer, & Subordinates. Blank questionnaire

57
Neutral 16%
Disagree 15%
Interpretation:
More than 40% employees agreed that skill possessed by an employee vary ,30%are
partially agree and 16% are Neutral ,less than 15% are not agreed with the.shift in grade.
8. Are you getting regular feedback on your performance from your Appraisal?
(a)Yes (b) No
40%
30%
16%
15%
Skill possessed by an Appraiser
Agree Partiallyagree Neutral disagree

58
Regular feedback on your performance from your
Appraisal?
Yes 80%
No 20%
Interpretation:
About 80% employees are getting regular feedback on their performance. Lessthan 20% are
not getting regular feedback.
9. Feed back is beneficial for improving your performance
(a) Agree (b) Partially agree
0
80%
20%
Yes No
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Regular feedback on your performance from your Appraisal?
Regular feedback on your performancefrom your Appraisal?

59
(c) Neutral (d) Disagree
Feed back is beneficial for improving performance
Agree 70%
Partially agree 20%
Neutral 10%
Interpretation:
About 70% of employees agree that feedback is beneficial for improving their performance,
20% are partially agreed
70%
20%
10%
Feed back is beneficial for improving performance
Agree Partiallyagree Neutral

60
and 10% are neutral.
10. Current “Performance Appraisal” system is an effective tool for evaluating the
employee‘s performance
(d)Neutral (d) Disagree
current PAR is an effective tool
Agree 65%
Partially agree 20%
Neutral 15%
65%
20%
15%
Agree Partially
agree
Neutral
0%
10%
20%
30%
40%
50%
60%
70%

61
Interpretation:
65% of the employees accept that current PAR is an effective tool for evaluating the
employee performance, 20% partially agree with this and 10% are having neutral opinion.
This speaks that unawareness of the role of their appraisal all employees are not agreeing
performance appraisal as an effective tool.
11. Does current “Performance Appraisal” system reflect the training need of an
employee?
(a)Yes (b) No
Accept that current PAR System
Yes 80%
No 20%
80%
20%
Accept that current PAR System
Yes No

62
Interpretation:
About 80% of employees accept that current PAR System reflect the training need, whereas
20% are not accepting on the training need. Though employees feel that their training needs
are arrived at but training is not provided to the fullest extent.
12. What is your opinion in the of relevance “Performance Appraisal” system?
(A) Deciding promotion (b) Deciding incentives
(c) Training & development (d) programme Succession planning
Opinion is the relevance PA
Deciding promotion 40%
Deciding incentives 40%
Training & development 10%
Programme succession planning 10%
40%
40%
10%
10%
Opinion is the relevance PA
Decidingpromotion Decidingincentives
Training & development Programmesuccession planning

63
Interpretation:
40% of the employees consider that there is relevance of PAR system in deciding promotion,
40% are deciding incentives and 10% agree with training and development, 10% are
accepting the programme succession planning.
13. The existing “Performance Appraisal” system ensures due recognition talented
employee in terms of promotion, rewards and others.
Accepts the existing PAR system
Agree 52%
Partially agree 28%
Neutral 12%
Disagree 10%
52%
28%
12% 10%
0%
10%
20%
30%
40%
50%
60%

64
Interpretation:
52% of employees accepts the existing PAR system ensure due recognition talented
employee in term of promotion ,rewards and others, 28% are partially agree and 12% are
neural ,10% are showing disagree with the system.
14. Do you think that existing “Performance Appraisal” system help full in wholesome
development of employee?
(C)Neutral (d) Disagree
PA system is help full in wholesome
development of employee?
Agree 55%
Partially agree 25%
Neutral 10%
Disagree 10%

65
Interpretation:
More than 55% of employees completely agree that the existing PAR system is helpful
in wholesome development of employee and 25% are partially agree,10%disagree, 10% are
neutral.
15. Are you satisfied with the current “Performance Appraisal” system?
(a)Yes (b) No
Satisfied with current PA
Yes 90%
No 10%
55%
25%
10%
10%
PA system is help full in wholesome development of
employee?

66
Interpretation:
About 90% of the officers are completely satisfied with the current PAR system, rest 10% are
not satisfied with the current performance appraisal system.
16. Would you say management is responsible to
(a) Innovativeness (b) Personal problem
(c) Official problem (d) Career aspiration
90%
10%
Satisfied with current PA
Yes No

67
Management is responsible to you?
Innovativeness 20%
Personal problem 40%
Official problem 10%
Career aspiration 30%
Interpretation:
About 20% of the employees say management is responsible to your innovativeness and 40
% says only personal problem, 10% are on the official problem 30% stands for career
aspiration.
20
40
10
30
0
5
10
15
20
25
30
35
40
45Management is responsible to your
Managementis responsible to your?

68
CHAPTER-6
CONCLUSION &
SUGGESTIONS

69
FINDINGS
1) Presence of a firmly implemented career plan- good sense of growth
2) High proportion of routine work- during training and immediately after.
3) Organization climate-
o Well analyzed goals are set.
o Good and effective performance appraisal strategies applied.
o All the strategies are fair and objective.
o The employees are well aware of what is expected of them.
o Proper feedback is not given to the management staff.
o Suggestions and innovations are not rewarded.
o Supervisors are patient with the employees’ problems.
o Good performance leads to annual increments and promotions.
o Training and development programs are not very effective and helpful.
o The purpose of Performance Appraisal System followed in the company is
fulfilled.
SUGGESTIONS
 Transparent career planning for all officers.
 Informal calling as and when they need.
 Giving chance in decision making.

70
 Reward for employee work.
 Proper interactions with seniors.
 Effective training and development programs should be held.
 Improve competency of the workers.
 The company should concentrate more on individual development.
CONCLUSION
The study reveals that all the employees are not aware of the Performance Appraisal system.
As the performance appraisal system motivates the employees to achieve the goals, the
management should make the systems of Performance appraisal more clearly to the
employees.
However, SOLITAIRE INFOSYS lately has linked the performance bonus system which is
linked to the performance appraisal rating of the employees.
Technological advances mean that performance management is no longer an isolated HR
initiative and can be integrated into our day-to-day lives.
Based on the vast study & analysis I can say that the Top management role needs tremendous
change towards the role of facilitator. Positive performance appraisal for an organization is
an asset, whereas negative the liability the same way as good employees are assets and bad a
liability. Positive performance appraisal, whereas motivate the people to improve on the
other hand give an opportunity to the corporate houses to identify the area of
improvement/development in their assignments.
At SOLITAIRE INFOSYS , I find that well analyzed goals are set and effective performance
appraisal strategies applied. All the strategies are fair and objective. Almost all the
employees are well aware of what is expected of them, except the lower rank employees.
There is need to reward the innovations and suggestions on merits. There is need of
constructive analysis of performance appraisal while deciding the training.

71
BIBLIOGRAPHY
 Websites:-
 www.slinfy.com
 https://en.wikipedia.org
 https://www.linkedin.com
 http://www.managementstudyguide.com/human-resource-management.htm
 www.helpme.com
 www.equitymaster.com
 https://www.enterprisecanadanetwork.ca
 http://iimahd.ernet.in
 http://ficci.in

72
Questionnaire
1. Are you aware with the current “Performance Appraisal system” of SOLITAIRE
INFOSYS?
(a) Yes (b) No
2. Performance Appraisal of Employee Is Assessed By
(a)Point system (b)Mark system
(c)Grade system (d)Not aware
Opinion about Features of Performance Appraisal System
3. Task setting by appraise and appraiser provides objective while appraising
the performance appraisal of the appraise.
(c)Neutral (d) disagree
4. Whether the quarterly task setting assignment completed by the 15th
of first month of
eachquarter if no give the reason
(a)Yes (b)No
5. Self-Appraisal System proves to be effective while appraising the appraise.

73
(a)Agree (b)Partially agree
6. Who in your opinion should be the responsible for ensuring objectivity and reducing
biasness the “Performance Appraisal” system?
(a)Appraise andAppraisee.
(b)Appraiser, Appraisee& peer.
(c)Appraiser, Appraisee, Peers, & Subordinates.
7. Skill possessed by an Appraiser vary as the moves from one grade to another.
8. Are you getting regular feedback on your performance from your Appraisal?
(a)Yes (b) No
9. Feedback is beneficial for improving your performance.

74
10.Current “Performance Appraisal” system is an effective tool for evaluating theemplo
yee‘sperformance.
(d)Neutral (d) Disagree
11. Does current “Performance Appraisal” system reflect the training need
of anemployee?
(a)Yes (b)No
12. What is your opinion is the relevance “Performance Appraisal” system?
(A)Deciding promotion (b) Deciding incentives
(c) Training & development (d) programme Succession planning
13.The existing “Performance Appraisal” system ensures due recognition talented
employee in terms of promotion, rewards and others
14. Do you think that existing “Performance Appraisal” system is help full in
wholesome development of employee?

75
15. Are you satisfied with the current “Performance Appraisal” system?
(a)Yes (b) No
16. Would you say management is responsible to you?
(a)Innovativeness (b) Personal problem
(c)Official problem (d) Career aspiration

76
ANNEXURE
Designation. ________________________________________________
Department._________________________________________________
Grade, scale________________________________________________

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