CHAPTER 1

1
INTRODUCTION
Human Resource (or personnel) management, in the sense of getting things done through
people, is an essential part of every managers responsibility, but many organizations find it
advantageous to establish a specialist division to provide an expert service dedicated to
ensuring that the human resource function is performed efficiently.
Performance ppraisal is the process of assessing the performance and progress of an
employee or a group of employees on a given !ob and his " their potential for future
development. #t consists of all formal procedures used in the $or%ing organizations to
evaluate personalities, contributions and potentials of employees.
Performance appraisal is a process of summarizing, assessing and developing the $or%
performance of an employee. #n order to be effective and constructive, the performance
manager should ma%e every effort to obtain as much ob!ective information about the
employee&s performance a possible. Performance ppraisal is a revie$ and discussion of an
employee&s performance of assigned duties and responsibilities based on results obtained by
the employee in their !ob, not on the employee&s personality characteristics. Personality
should be considered only $hen it relates to performance of assigned duties and
responsibilities.
#t is a structured formal interaction bet$een a subordinate and supervisor, that usually ta%es
the form of a periodic intervie$ (annual or semi'annual), in $hich the $or% performance of
the subordinate is examined and discussed, $ith a vie$ to identifying $ea%nesses and
strengths as $ell as opportunities for improvement and s%ills development.
#n many organizations ' but not all ' appraisal results are used, either directly or indirectly,
to help determine re$ard outcomes. (hat is, the appraisal results are used to identify the
better performing employees $ho should get the ma!ority of available merit pay increases,
bonuses, and promotions. )y the same to%en, appraisal results are used to identify poorer
performers, $ho may re*uire some form of counselling, or in extreme cases, demotion,
dismissal or decreases in pay.
2
OB1ECTIVES OF THE STUDY
To carry out the study we framed the following objectives
+. #dentification of the techni*ue of performance appraisal follo$ed in ,-P
.. /mployee attitude to$ards the present appraisal system.
0. (o identify and suggest measures to improve effectiveness specifically from *uality perspective.
1. (o study, identify and suggest measures to improve effectiveness specifically from
*uality perspective.
2. (o study and analyze the executive performance system and effectiveness.
3. (o understand the gap bet$een %no$ledge, s%ill and attitudes that exist and see ho$ this gap can be
filled by planned guidance and training.

4//5 67R (H/ -(859
:anaging the performance of the employees is one of the toughest challenges $hich the
organizations are facing today as this completely depends upon the employees
commitment, competence and clarity of performance. #f managed efficiently through a $ell
planned re$ard practice and feedbac% mechanism, a performance management system can
serve as an important tool for employee motivation and development. (he need for the
introduction of a robust system of performance management $as felt during the period
$hen the traditional performance appraisal mechanism started failing and its limitations
$ere surfacing up. (he performance appraisal system of the earlier period $as missing
ob!ectivity as the diameters or the parameters for measuring performance $ere not clearly
specified and the focus $as on traits instead on behaviors or measurable targets. s a result,
the employees morale and motivation to $or% $as adversely affected due to an absence of
a transparent feedbac% mechanism and lac% of employee involvement in the entire process
of appraisal. performance management system overcomes the dra$bac%s of the
traditional performance appraisal system by maintaining a futuristic approach instead of
assessing the past contributions of the employees for evaluating the performance of the
employees.
3
Performance management is a strategic tool and is holistic in nature as it pervades in
every activity of the organization $hich is concerned $ith the management of individual,
team and the overall organizational performance. (he process is indispensable and very
important for an organization as it is concerned $ith establishing a culture in $hich the
individuals and teams can excel by continuously improving in terms of s%ill sets and the
business processes.
5ecisions regarding various personnel aspects such as promotion and merit increases.
Performance measures also lin% information gathering and decision ma%ing processes
$hich provide a basis for !udging the effectiveness of personnel sub'divisions such as
recruiting, selection, training and compensation.
ccurate information plays a vital role in the organization as a $hole. (hey help in
finding out the $ea%nesses in the primary areas.
Performance ppraisal has been considered as the most significant an indispensable tool for
an organization, for an organization, for the information it provides is highly useful in
ma%ing
6ormal Performance ppraisal plans are designed to meet three needs, one of the
organization and the other t$o of the individual namely;
(hey provide systematic !udgments to bac% up salary increases, transfers,
demotions or terminations.
(hey are the means of telling a subordinate ho$ he is doing and suggesting
needed changes in his behavior, attitudes, s%ills or !ob %no$ledge. (hey let him
%no$ $here he stands $ith the )oss.
-uperior uses them as a base for coaching and counseling the individual. 7n the
basis of merit rating or appraisal procedures, the main ob!ectives of /mployee
ppraisal are;
(o enable an organization to maintain an inventory of the number and *uality of
all managers and to identify and meet their training needs and aspirations.
(o determine increment re$ards and to provide reliable index for promotions and
transfers to positions of greater responsibility.
4
SCOPE OF THE STUDY
(he study covers various aspects li%e employee details, $or% nature, !ob
specification, %no$ledge, and personality development of employees of the organization.
(he scope of any performance appraisal should include the follo$ing; provide employees
$ith a better understanding of their role and responsibilities< increase confidence through
recognizing strengths $hile identifying training needs to improve $ea%nesses< improve
$or%ing relationships and communication bet$een supervisors and subordinates< increase
commitment to organizational goals< develop employees into future supervisors< assist in
personnel decisions such as promotions or allocating re$ards< and allo$ time for self'
reflection, self'appraisal and personal goal setting.
(o %no$ the function of the organization as a $hole and as $ill to %no$ ho$ the
policies are made and implemented and conveyed to the employees. (he study is to %no$ in
brief about the follo$ing departments.
Performance appraisal system in ,-P.
Human Resource 5evelopment 5epartment.
6ollo$ing departments $ere approached for survey during the pro!ect;'
Plant personnel
=7==P(coco oven coal chemical plant)
/- >6(/ngg. shop > 6oundry )
( > 5= 5epartment
/5 $or%ers build in.
5
METHODOLOGY
(o get information about satisfaction level of employees from performance appraisal
system and its effectiveness a stratified sample survey $as conducted. 6or the present study
of the data has been collected from the follo$ing $ays.
RESEARCH DESIGN:
Research 5esign refers to ?frame$or% or plan for a study that guides the collection and
analysis of data?. typical research design of a company basically tries to resolve the
follo$ing issues;
a) 5etermining 5ata =ollection 5esign
b) 5etermining 5ata :ethods
c) 5etermining 5ata -ources
d) 5etermining Primary 5ata =ollection :ethods
e) 5eveloping @uestionnaires
(1) Explorative Research Design:
/xplorative studies are underta%en $ith a vie$ to %no$ more about the problem. (hese
studies help in a proper definition of the problem, and development of specific hypothesis is
to be tested later by more conclusive research designs. #ts basic purpose is to identify
factors underlying a problem and to determine $hich one of them need to be further
researched by using rigorous conclusive research designs.
6
(2) Conclusive Research Design:
=onclusive Research -tudies are more formal in nature and are conducted $ith a vie$ to
eliciting more precise information for purpose of ma%ing mar%eting decisions.
(hese studies can be either;
a) 5escriptive or
b) /xperimental
(hus, it $as mix of both the tools of Research 5esign that is, /xplorative as $ell as
=onclusive.
DATA COLLECTION:
Data Sources:
(he data re*uired for the study has been through the follo$ing sources.
Responses from employees through *uestionnaire
4ecessary information from HR departments has been collected through records and
register.
#nformation $as also ta%en from !ournals, broachers, annual reports, magazines.
Responses from the $or%ers through *uestionnaires.
(he study has a scope of learning about the various programs 7rganized by the
personnel department till date and the programs $hich are going to organize and also the
analytical based programs $hich $e $ill suggest based upon the survey.
7
(he analysis $ill be based upon management re*uirement, individual re*uirements,
conditions prevailed etc., and the basic approach for the collection of primary date is by
conducting a survey $ith the help of a *uestionnaire.
(he study has been made $ith the help of information collected from . sources they are;
Primary sources
-econdary sources
Primary sources:
(he primary sources data are those $hich are collected a fresh and for the first time
and thus happen to be original in character.
Primary data is gathered through *uestionnaire from employees and $or%ers. (he
primary source of my study includes mainly the information given by the employees and
also through the discussions orientation classes given by the executives of the different
departments in the organization.
Secondary sources:
-econdary data are those, $hich have already collected by someone else, and
secondary data is collected through various records maintained by the personnel department
and manuals of the organization.
7rganizational Aebsites
4e$s Paper > :agazines
7rganizational Biterature
Bibrary )oo%s
8
Cournals and )ulletins
nnuals Report
B#:#((#74-;
Limitations of the present study are specified below:
(he findings of the present study cannot be generalized as they are based
purely limiting to the one unit of this singular organization $ithout giving any comparisons
to the practices in similar industry. )eing a company spread all over #ndia, for all practical
reasons and limitations, $e may not be able to travel to all -teel Plant units. (hus, this
study limits to the ,isa%hapatnam -teel Plant only.
(his study is more of professional oriented. Hence it cannot be constructed to denote and "
or purported to standardize as a model for this pro!ect.
(he time constraint there to study all the policies of ,-P, as it is a very fast
topic.
-ample size collected is not very large.
-ub!ectivity on this part in interpretation and analysis.
fe$ limitations and constraints came in $ay of conducting the present study,
under $hich the researcher had to $or% are as follo$s;
D lthough all attempts $ere made to ma%e this an ob!ective study, biases
on the part of respondents might have resulted in some sub!ectivity.
D (hough, no effort $as spared to ma%e the study most accurate and useful,
the Esample -izeF selected for the same may not be the true representative of
the =ompany, resulting in biased results.
The study is however subjected to certain limitations;
(he time factor is a ma!or limitation. (he $hole study $as conducted $ithin a period
of 12 days.
9
(he study does not cover non'executives, some executive cadre and chair man and
managing director. (he study confines itself only to assistant managers and general
managers.
-tudy is *uality perspective has only been *ualitative the information gathered in this
regard is mostly through information discussion.
7nly the existing system is studies and no attempt has been made to identify and
analyze any ne$ and dynamic performance system due to its constraints.
10
CHAPTER 2

INDUSTRY PROFILE

11
INTROCUTION TO STEEL INDUSTRY IN INDIA
#ndia got into the steel ma%ing in the early .G
th
century $hen CR5 (ata set up
the first steel mill in the country in +HGI in Camshedpur. -ince then, the steel industry has
undergone a lot of changes but the (ata #ron and -teel =ompany continues to be the largest
private steel ma%er in the country. (he steel industry in the IGs and JGs $as dominated by
(#-=7 > -#B. Aith the price control regime in place, the steel companies could turn in a
profit $ithout any ma!or effort. )ut the situation soon changed $hen the country decided to
open the door for foreign investment in +HH+. (he pricing mechanism of Coint Plant
=ommittee, $hich has been operating form +H31, $as abolished $ith effect from Canuary
+HH..
#n the initial economic reforms, industrialists sa$ the economy gro$ing at IK per
annum and since steel consumption is directly lin%ed to the gro$th in economy, it $as
assumed that demand for steel in the country $ould explode. (his led to huge flo$ of
investments into the steel industry and many /6 based steel units $ere set up. (he +
st
phase (+H+1'+H1I) of its evolution can be traced to the beginning of the .G
th
century $hen
the steel industry made a beginning as an icon of active patriotism, than%s to the pioneering
spirit of E-$edishF entrepreneurs in the private sector. (his period sa$ a small but viable
steel capacity of about + million tones.
lthough the initial years !ustified these assumptions and steel consumption really
too% off, this scenario $as not to continue for ling. (he political instability and the resultant
slo$ do$n in reforms sa$ the economic gro$th slo$ing do$n. (he south /ast sian
economic crises $ere of course, the final nail on the coffin.
5uring the second phase (+H1I'+HH.) in the hands of the early planners this industry
became an important instrument for attaining rapid economic gro$th because of the
inherent advantage en!oyed by it. 6irstly, #ndias fast reserves of the basic ra$ materials
conferred a certain competitive advance to this industry. -econdly the $ide' ranging
lin%ages, both for$ard > bac%$ard sector has $ith the rest of the economy made it an ideal
catalyst for generating and sustaining economic development.
5uring the 1 decades, the #ndian -tate invested heavily in creating large scale
integrated capacities in the public sector as a part of the overall development strategy
aiming at self sufficiency in the heavy > basic industries. (he ensure state control at the
12
commanding heights of the economy, large'scale capacity creation $as reserved for the
public sector units (P-8) in a predominantly mixed economic environment.
Introduction of industry:
Rashtriya #spat 4igam Bimited ' ,isa%hapatnam -teel Plant (R#4B',-P) popularly %no$n
as L,izag -teel the LPride of -teel, a leading =entral P-8 under the :inistry of -teel is
the first shore based #ntegrated -teel Plant in the country.
,izag -teel %no$n for its L@uality > L=ustomer -ervice is a mar%et leader in longs $ith a
share of about +GK. #t has been supplying various grades of steel for construction of
pro!ects of 4ational importance $hich include :etros, Po$er -ector, )ridges, 4uclear
complexes and several others. R#4B',-P has exported finished products to countries li%e
8-, 8/, (hailand, )angladesh, 4epal, -ri Ban%a etc. #ts products are made from +GGK
virgin steel, maintaining stringent tolerances both in chemistry > physical properties.
R#4B',-P has a $ide mar%eting net$or% spread across the country and is the Epreferred
steel ma%erF for the customers.
(he Movernment of #ndia has decided to set up an integrate -teel Plant at ,isa%hapatnam to
meet the gro$ing domestic needs of steel. ,isa%hapatnam -teel Plant $as the effect of the
persistent demands and mass movements. #t is another step to$ards increasing the countrys
steel production.
(he decision of the Movernment to set up an integrated steel plant $as laid do$n by
the ten Prime :inister -mt. #ndira Mandhi. (he Prime :inister laid the foundation stone on
.Gth Canuary +HI+.
Vision:
(o be a continuously gro$ing $orld class company.
Harness our gro$th potential and sustain profitable gro$th
5eliver high *uality and cost competitive products and be the first choice of customer
=reate and inspiring $or% environment to unleash the creative energy of people
chieve excellence in enterprise management
13
)e a respected corporate citizen, ensure clean and green environment and develop
vibrant communities around us
Mission:
(o attain +3 million tons (:t) li*uid steel capacity through (echnological up'gradation,
operational efficiency and expansion< augmentation of assured supply of ra$ materials< to
produce steel at international standards of cost and *uality< and to meet the aspirations of
the sta%eholders.
Objectives:
/xpand plant capacity to 3.0 :t by .GGJ'GH $ith the mission to expand further in
subse*uent phases as per the =orporate Plan.
-tabilize 3.0 :tpa expansions by .G+.'+0 $ith the mission to expand further in
subse*uent phases as per corporate plan
Revamping existing blast 6urnaces to ma%e them energy efficient to contemporary
levels and in the process increase their capacity by + :tpa, thus total hot metal
capacity to I.2 :tpa
)e amongst top five lo$est cost li*uid steel producers in the $orld
chieve higher levels of customer satisfaction
,ibrant $or% culture in the organization
)e proactive in conserving environment, maintaining high levels of safety >
addressing social concerns
Human Resource Management as VSP
Human Resource :anagement (HR:) is the function $ithin an organization that focuses
on recruitment of, management of, and providing direction for the people $ho $or% in the
organization. HR: can also be performed by line managers.
14
HR: is the organizational function that deals $ith issues related to people such as
compensation, hiring, performance management, organization development, safety,
$ellness, benefits, employee motivation, communication, administration, and training.
Human resource:
/very organization is essentially a combination of physical and human resources
(HR). Physical resources refer to materials, money and machines pre'arranged by the
organization for production or trade. Human resources on the other hand, refer to the
%no$ledge, education, s%ills, training and proficiency of the members of the
organization. ll organizational resources are important for achieving the ob!ectives
of an organization.
EHuman resources are a $hole consisting of inter'related, inter'dependent and
interacting physiological, psychological, sociological and ethical components.F
Human Resource Development:
Human Resource 5evelopment (HR5) is the frame$or% for helping employees develops
their personal and organizational s%ills, %no$ledge, and abilities. Human Resource
5evelopment includes such opportunities as employee training, employee career
development, performance management and development, coaching, mentoring, succession
planning, %ey employee identification, tuition assistance, and organization development.
HRD philosophy in Visakhapatnam Steel Plant:
/mployees of the organization are greatest and most valuable resources.
Ahole on the one hand, HR5 should appropriately harness the employee potential
for the attainment of the company ob!ective, the company on the other, as its
corporate responsibility, should crate and enabling climate $here in human talent
gets the best opportunity for self expression, all round development and fulfillment,
15
People are more than mere resources and therefore it $ill be the companys sincere
endeavor to treat people $ith all the respect and that is $arranted $hen employees
are seen as more mere instrumentalities.
HR5 as a management function $ill be given a place of strategic priority, along $ith
function li%e production, maintenance, materials on finance in the overall scheme of
management action in the company.
HR5 does not refer to training alone, nor is it !ust a ne$ name for training.
#n R#4B",-P HR5 refers to creative and innovative initiatives in several
management functions for the development and gro$th of employees
HR5 should eventually be a core philosophy of all management actions and should
not remain merely a departmental" sectional activity.
ll functional and divisional heads responsible of various activities of the company
$ill imbibe the HR5 spirit and suitability integrates HR5 into their plans, decisions
and actions.
HRD objectives of Visakhapatnam Steel Plant:
(o provide initially a suitable match bet$een employee competence level and
companys $or% re*uirements
(o faster an appropriate climate and culture $hich nurtures employee competence
and ade*uate motivational levels for the application of their abilities to assigned
!obs"roles $ith re*uired commitment.
(o enable employees see% greater identification $ith the company by fusing
management decisions and actions $ith the re*uisite care, concern and
developmental approach.
(o initially enable the employees and the organization achieve its mission and
ob!ectives and business goals through HR5
Introduction on Performance Appraisal system:
16
lmost every organization in one $ay or another goes through a periodic ritual, formally or
informally, %no$n as performance appraisal. Performance appraisal has been called many
things. (he formal performance appraisal has been called a tool of management, a control
process, an activity and a critical element in human resources allocation. 8ses for
performance appraisal have included e*ual employment opportunity considerations,
promotions, transfer and salary increases. Primarily performance appraisal has been
considered an overall system for controlling an organization.
Performance appraisal may be defined as a structured formal interaction bet$een a
subordinate and supervisor, that usually ta%es the form of a periodic intervie$ (annual or
semi'annual), in $hich the $or% performance of the subordinate is examined and discussed,
$ith a vie$ to identifying $ea%nesses and strengths as $ell as opportunities for
improvement and s%ills development. lmost every organization in one $ay or another
goes through a periodic ritual, formally or informally, %no$n as performance appraisal.
(herefore, it can be said that, performance appraisal means systematic evaluation of the
personality and performance of each employee by his supervisor or some other person
trained in the techni*ues of merit rating. #t employs various rating techni*ues for comparing
individual employees in a $or% group, in term of personal *ualities or deficiencies and the
re*uirements of their respective !obs. (o *uote dale 9oder,F performance appraisal includes
all formal procedures used to evaluate personalities and contribution and potential of group
members in a $or%ing organization. #t is a continuous process to secure information
necessary for ma%ing correct and ob!ective decisions on employees.F (he comparison of
performance $ith !ob re*uirements helps in finding out the merit of individual employees in
a $ee% group. -upervisor or an independent appraiser may do rating.
(he meaning of the $ord EappraisalF is Eto fix a price or value for somethingF. (his is used
in finance in terms such as pro!ect appraisal or financial appraisal $here a value is attached
to a pro!ect. -imilarly performance appraisal is a process in $hich one values the employee
contribution and $orth to the organization.
Performance appraisal can be defined as a system of measuring employees performance
relative to the assigned or agreed ob!ectives. (he process starts $ith the supervisor and or
$ith the subordinate agreeing on specific ob!ectives that need to be met on an agreed time
period. (he ob!ectives that are used in the Performance appraisal stem from the main
17
organizational ob!ectives that are reduced to 5epartmental goals and no$ to individual
goals.
Performance ppraisal is an important component of the information and control system. #n
todays flexible organizations, performance evaluations provide an effective $ay for
managers to clarify performance goals and standards to enhance future individual
performance. (hus, the purpose of performance appraisal is to improve the organizations
performance through the enhanced performance of individuals. (he performance appraisal
system;
#s an organizational necessity.
#s based on $ell defined ob!ective criteria.
#s based on careful !ob analysis.
8ses only !ob related criteria.
#s supported by ade*uate studies.
#s applied by trained *ualified raters.
#s applied ob!ectively throughout the organization.
=an be sho$n non discriminatory as defined by la$.
)y focusing the attention on performance, performance appraisal goes to the heart of
personnel management and reflects the management&s interest in the progress of the
employees.
Objective of Performance Appraisal:
(here are mainly t$o purposes for $hich performance appraisal is used by an organization;
(+) (o improve the $or% performance of employees by helping them realize and use their
full potential in carrying out the firms missions< and
(.) (o provide information to employees for use in ma%ing $or% related decisions, more
specifically, appraisals serve the follo$ing purposes.
18
+) ppraisals generate information to support administrative decisions. Promotions
transfers and reassignments, demotions and terminations are action based at least in part on
performance.
.) ppraisals provide feedbac% to employees and thereby serve as vehicle for personal or
career development because feedbac% provides;
N Reassurance that they are contributing and doing the right thing
N $areness of the impact on the desired results
N measure of the ade*uacy of performance (*uality, *uantity, speed etc.)
N Recognition of the importance and value of their performance.
0) 7nce the development needs of employees are identified appraisals can help establish
ob!ectives for training programmerrs. (hus evaluations provide a basis for changing
performance plans, including ob!ectives and standards of behaviors as business plans and
conditions change.
1) s a result of proper specifications of performance levels, appraisals can help diagnose
organizational problems. (hey do so by identifying training needs and the %no$ledge,
abilities, and other characteristics to consider in hiring, and they also provide a basis for
distinguishing bet$een, effective and ineffective performers.
2) ppraisals are used as criteria in test evaluations. (he rationale for differential treatment
of employees needs to be consistent $ith companys values, philosophy and strategy. #t also
needs to be balanced $ith the desire for collaboration, rather than competition and conflict,
sought in (@:.
Performance Appraisal - process map:
19
Methods of Performance Appraisal:
=urrently most of the companies are using one of the follo$ing Performance ppraisal :ethods;
+) 03G 5egree ppraisal :ethod
.) Rating -cale :ethod
0) :anagement by 7b!ective :ethod
20
8nder the 03G 5egree appraisal method the employee is rated from all angles i.e., by the superiors,
subordinates, peers, suppliers, distributors, customers and clients. 8nder the :anagement by 7b!ective
method the employee goals are set mutually by the employee&s and the management. nd the employees
are rated based on the accomplishment of these goals. 8nder the Rating -cale method each employee trait
or characteristic is rated on a scale that usually has several points ranging from ?poor? to? excellent? (or
some similar arrangement).(he traits assessed on these scales include employee attributes such as $or%
*uality, cooperation, initiative, punctuality and technical competence, etc. (he selected traits should be in
some $ay relevant to the appraisers !ob.
Performance Appraisal Policy in RINL:
#n Rashtriya ispat nigam limited (,isa%hapatnam steel plant), this appraisal policy is introduced in +HHH'
.GGG
OB1ECTIVES :
#ncrease a$areness of tas%s"targets responsibility of executives at all levels through Performance
Planning
Provide reliable, valid > ob!ective assessment of performance on specific performance and
potential factors
5istinguish differing levels of performance on relative basis
Provide basis for determination of merit, efficiency > suitability for purpose of promotion
#dentify developmental needs of executives
6acilitate process of executive development through tas%s"target setting, self revie$ performance
analysis > t$o $ay communication bet$een appraise and appraiser.
=overs all 4on )oard level executives including C7s"C-7s > 5eputizes up to /'I grade.
/xecutives grouped under three categories > have specific type ( colour ) forms
C7 to /'1< ( 9ello$ colour)
/'2 "/'3< ( Pin% colour)
/' I ( Mreen colour)
/xecutives in /'J or above grade have been provided separate form by 5P/ from .G+G'++.
Appraisal process:
Performance Planning
-elf ppraisal > :idterm Revie$ ' Performance Revie$ 5iscussion ( PR5 #)
21
-elf appraisal > 6inal Performance Revie$
Performance ssessment
5evelopment Plan
6inal assessment " grading
Performance planning: )ased on the !obs, OPs are identified for each executive in consultation $ith the
Reporting 7fficer. 4ot less than 2 *uantifiable targets $ith specific time frame are set on the +.
th
pril of
every year.
Self appraisal & midterm review - Performance review discussion (PRD I):
-elf appraisal to be filled up by apprise in the +
st
$ee% of 7ctober detailing about on the extent of
fulfillment of tas%s" targets for the period pril ' -eptember, constraints faced and help re*uired. Reporting
officer to hold a :idterm PR5 session to discuss about;
/xtent of tas%s " (argets fulfilled
=onstraints faced
-hortfall > its reasons
:easures to avoid future setbac% in tas%s " targets achievement
Help re*uired
(hrust areas for next six months
:odification " substitution of tas%s, if any
fter PR5 session, apprise > Reporting 7fficer to sign the self appraisal > midterm revie$ report
Self appraisal & final performance review:
5etail about extent of fulfillment of tas%s"targets set for the period 7ctober P :arch, constraints faced,
highlights of performance for the year
pprise to fill up the self appraisal for final performance revie$ by +.th pril
5etail about extent of fulfillment of tas%s"targets set for the period 7ctober P :arch, constraints
faced, highlights of performance for the year
5uring PR5, Reporting 7fficer to discuss $ith apprise about
/xtent of tas%s " (argets fulfilled
=onstraints faced
22
-hortfall > its reasons
Highlights of performance
-uggestions for improvement of performance
Performance
Assessment on performance and potential factors:
Multi tier assessment: First by Reporting 7fficer, Reporting 7fficer (7) and Revie$ing 7fficer
Final assessment; by Performance Revie$ =ommittee (PR=)
Development plan: )ased on the strengths"$ea%nesses of the executive, training programmerrs are
recommended ta%ing into consideration benefit to the individual and the organization.
Final assessment / grading: maximum of 0 total factor scores are a$arded to the appraisal by the
Reporting 7fficer, Reporting 7fficer (7) and Revie$ing 7fficer. (he $eight ages assigned are as follo$s
Officer Weight ages
Reporting 7fficer 2GK
Reporting 7fficer (7) .2K
Revie$ing 7fficer Q.2K
#n case there is no Reporting 7fficer (7), the $eight age for Revie$ing 7fficer $ill be 2GK.
23
Factors for Assessment Factor Score
1O-E4 E5-E6 E7
Performance 70 60 40
Potential 30 40 60
(he total credit score is computed by the appraisal cell by multiplying the factor score given by the
authority and the $eight ages given to them.
Grading:
ppraisal =ell $ill provide the total scores of the appraisal in a given ppraisal Mroup in descending order
$ith primary grades as per the score range as under;
Score Range Grade
J3 and above 7
IG to J2
2G to 3H )
1H and belo$ =
distribution pattern has to be follo$ed by the Reporting and Revie$ing 7fficers $hile grading
the performance levels of the appraise

Grade of Executives\(Maximum ceiling)
7 8p to +GK
8p to .GK
) 4ot less than 22K
= 8p to +2K
(he final grades are converted into credit points as under for the purpose of computing mar%s at the time of
promotion as under;

Grade Credit Points
7 HG
I2
) 3G
= 1G
24
Performance Assessment:
5one after final performance revie$ session
:ulti tier assessment
6irst by Reporting 7fficer, Reporting 7fficer(7) and Revie$ing 7fficer
6inal assessment by Performance Revie$ =ommittee ( PR=)
Performance Assessment: Comparative statement showing factors for assessment of
executives in various grades:
Factors for Assessment Factor Score
1O-E4 E5-E6 E7
Performance Factors
@uantity of output +2 +G +G
@uality of output +2 +G +G
=ost control"consciousness +G +G +G
Cob %no$ledge and s%ill +G +G 4
5iscipline +G +G 4
House"Record Oeeping G2 4
(eam Aor%ing > Bateral =o'
ordination
G2 G2 4
5evelopment of -ub'ordinates"
bility to learn
4
G2 +G
Total 70 60 40
Potential Factors
#nitiative +G +G 4
=ommunication +G +G 4
25
=ommitment > -ense of
Responsibility
G2 G2 4
:anagement of Human Resources G2 G2 G2
Planning > 7rganizing 4 G2 +G
Problem nalysis > 5ecision :a%ing 4 G2 +2
bility to build a strategic vision 4 4 +G
Beadership > (eam )uilding 4 4 +G
)usiness -ense 4 4 +G
Total 30 40 60
Grand Total ( Factor Score ) 100 100 100

#45#- -(//B -=/4R#7
#ndian -teel industry has al$ays remained isolated and protected by Movernment,
$here the steel industry $as never expected to generate profit from business, but $as
expected to provide employment tot ht unemployed. Presently #ndia is operating $ith open'
hearth furnaces. (he existing e*uipment, energy and labour in #ndian -teel industry are
much lo$ than the developed countries
#ndian -teel industry generates a significant among of $aste materials, $hich can
cause environmental problems. (he four aspects of EAaste :anagementF namely P residue
reprocess, recycle and recovery do not hold much ground in the #ndian -teel #ndustry. (he
#ndian companies cannot spend more for pollution control. (he energy consumption per
tone is 2G'+GGK higher than that of the #nternational norms
(he #ndian steel industries have developed a bit in the recent years. (he production is
going on properly. :any techni*ues are being implemented in the steel industries. (he
countrys aim is to sell *uality steel. (he government is also helping the steel industries in
this basis. (he apparent consumption of steel in sho$n belo$;
26
(he development of steel industry in #ndia should be vie$ed in con!unction $ith the
type and system of government that had been ruling the country. (he production steel in
significant *uality started after a +HHG. (he gro$th of steel industry can be conveniently
started by dividing the period into pre and post independence era. #n the period of pre
#ndependence steel production $as +.2 million tons per year, $hich $as raised to H.G
million tones of target by the seventies. (his is present of the bold steps ta%en by the
government to develop this sector.
PROBLEM OF STEEL INDUSTRY
4on'availability of good *uality ra$ material is another problem faced by iron and
steel industry. (he modern giant blast furnace needs high'grade iron ore and good
metallurgical coal.
6urther, the industry is unable to get good *uality co%e and manganese is $hich the
principal ra$ materials next to iron ore are unfortunately most of our resources of
manganese ore are of poor *uality besides the non availability of good *uality ra$ material,
regular supplies of ra$ materials are very much handicapped due to the absence of good
transport facilities. nother problem faced by the steel industry related to the difficulty in
getting zinc supplies for the continuous galvanizing line.
TECHNICAL PROBLEMS
)hilai had executed orders for shipment of rails to #ran, -outh Oorea and :alaysia.
)ecause of technical limitations, Rour%ela plant is unable to substitute aluminum and Rinc
for the production of galvanized sheet apart from source internal technical problems< our
technology in the field of steel production is not a developed one $hen compared to other
advanced countries. 6or instance, Capan is able to produce superior *uality steel though they
are importing ra$ material and additional material from other countries.
GOVERNMENT CONTROL AND PRICING POLICY
-ince +H1+, #ndia steel and iron industry $as almost completely state regulated. )oth
prices and distribution of steel $ere under the control of Movt. (he Movt. decided to remove
statutory control over the price and distribution of all, but a fe$ categories $ith effect from
27
+
st
:arch +H31 the Movt., supervise the steel and iron inducted according to the
recommendation of Ra!a committee. )ut Ra! committee in fixing the steel price didnt
regulate the price of the ra$ materials.
Growth of Steel Industry
(he gro$th in a chronological order is depicted belo$;
S No Year Growth
+. +J0G 7sier :arshall Heather constructed the first manufacturing plant at
port'motor in :adras presidency.
.. +JI1
Cames /rs%ine founded the )engal frame $or%s.
0. +JHH
Camshedi!i (( initiated the scheme for an integrated steel plant
1. +HG3 6ormation of (#-=7
2. +H++ (#-=7 started production
3. +H+J (#-=7 $as founded
I. +H1G'+H2G 6ormation of :ysore iron and steel initiated at )hadravathi in
Oarnata%a
J. +H2+'+H23 6irst five'year plant P (he Hindustan -teel Bimited (H-B) $as born
in the year +H21 $ith decision of setting up three plants each $ith +
million tones ingot steel per year at Rour%ela, )hili, 5urgapur.
(#-=7 started its expansion programmerr.
H. +H23'+H3+ -econd five P year plan P bold decision $as ta%en up to increase
the ingot steel output in #ndia to 3 million tons per year and its
production at Rour%ela, )hilai and 5urgapur -teel plant started.
+G. +H3+'+H33 (hird five'year plant P 5uring the plant the three steel plants under
H-B, (#-=7 > (#-=7 $ere expandedQ
28
++. +H31 )o%aro -teel Plant came into existence
+.. +H33'3H Recession period ' (ill the expansion programmerrs $ere actively
existed during this period
+0. +H3H'I1 6ourth five'year plant ' -alem -teel Plant started. Bicenses $ere
given for setting up of many mini steel plants and rerolling mills
government of #ndia. Plants in south are each in ,isa%hapatnam and
Oarnata%a. -#B $as formed during this period on .1
th
Canuary +HI0.
+1. +HI1'IH 6ifty five'years plan P (he idea of setting up the fifth integrated steel
plant, the first re P base plant at ,isa%hapatnam too% a definite shape.
t the end of the fifth five'year plan the total installed capacity from
six integrated plants $as up to +G.3 million tons.
+2. +HIH'+HJG nnual plan. (he /rst$hile soviet union agreed to help in setting up
the ,isa%hapatnam -teel Plant.
+3. +HJG'+HJ2 -ixth five'year plant P Aor% on ,isa%hapatnam -teel plant started
$ith a big bang and top priority $as accorded to start the plant.
-chemes for modernization of )hilai -teel Plant, Rour%ela steel plant,
5urgapur steel and (#-=7 $ere initiated. =apacity at the end of sixth
five'year plant form six integrated plants stood ++.2G million tones.
+I. +HJ2'H+ -eventh five'year plant P /xpansion $or%s at )hilai and )o%aro steel
plant completed. Progress of ,isa%hapatnam steel Plant pic%ed up
and the nationalized concept has been introduced to commission the
plant $ith 0G :( li*uid steel capacities by +HHG.
+J. +HH.'+HHI /ighth five'year plan P (he ,isa%hapatnam -teel Plant $as
commissioned in +HH.. (he cost of plant has become around JI22
cores. ,isa%hapatnam -teel Plant started the production and
modernization of other steel plants is also duly engaged.
+H. +HHI'.GG. 4inth five'year plant P Restructuring of ,isa%hapatnam -teel Plant
and other public sector underta%ings.
29
.G. .GGI'.G+. /leventh 6ive 9ear Plan P /xpansion of ,isa%hapatnam -teel
Plant(first and second phases) including other selected P-8s.
Steel Plants with Foreign Collaborations
Annual Productions at Various Steel Plants
S
No
Plant Collaboration Capacity
of Finished Steel
Products
Annual
Production
+. Rour%ela -teel Plant Aest Mermany I,.G,GGG tons
.. )hilai -teel Plant 8--R I,IG,GGG tons
0. 5urgapur -teel Plant )ritan J,GG,GGG tons
Original to Expand
30
S No Plant
Collaboration Capacity of
Finished Steel Products
+. Rour%ela -teel Plant Aest Mermany
.. )hilai -teel Plant /rst$hile 8--R
0. 5urgapur -teel Plant )ritan
1. )o%aro -teel Plant /rst 8--R
S No PLANT ORIGINAL
MT/Year
EXPANDED
MT/Year
+ Rour%ela -teel Plant +.G +.J
. )hilai -teel Plant +.+ ..2
0 5urgapur -teel Plant +.G +.3
1 (#-=7 +.G ..G

COMPANY PROFILE
A BRIEF PROFILE OF VISAKHAPATNAM STEEL PLANT:
BACKGROUND:
(he Movernment of #ndia has decided to set up an integrated -teel Plant at
,isa%hapatnam to meet the gro$ing domestic needs of steel. ,isa%hapatnam -teel Plant
$as the effect of the persistent demands and mass movements. #t is another step to$ards
increasing the countrys steel production.
(he decision of the Movernment to set up an integrated steel plant $as laid do$n by
the ten Prime :inister -mt. #ndira Mandhi. (he Prime :inister laid the foundation stone on
.G
th
Canuary +HI+.
(he consultant, m"s : 4 5astur > co (Pvt) Btd. submitted a techno'economic
feasibility report in 6ebruary +HI., and detailed pro!ect report for the plant, $ith an annual
capacity of 0.1 million tons of li*uid steel.
(he Movernment of #ndia and 8--R signed an agreement of +.
th
Cune +HIH for the
co'operation in setting up 0.1 million tones integrates -teel Plant. (he pro!ect $as estimated
to cost to Rs.0, JHI..G crores based on prices as on 1
th
@uarter of +HJ+. Ho$ever, on
completion of the construction and commissioning of the $hole plant in +HH., the cost
escalated to Rs J,I22 crores based on prices as on .
nd
@uarter of +HH1.
31
8nli%e other integrated -teel Plants in #ndia, ,isa%hapatnam -teel Plant is one of the
most modern steel plants in the country. (he plant $as dedicated to the nation on +
st
august
+HH. by the then Prime :inister, -ri P.,.4arasimha Rao.
4e$ technology, large'scale computerization and automation etc, are incorporated in
the Plant at the international levels and attain such labour productivity, the organizational
manpo$er has been rationalized. (he manpo$er in the ,-P has been limited to +I,2GG
employees. (he plant has the capacity of producing 0.G million tones of li*uid steel and
..323 million tones of saleable steel.
#t has set up t$o ma!or )last furnaces, the Modavari and the Orishna, $hich are the
envy of any modern steel ma%ing complex.
(he economy of a nation depends on core sector industries li%e iron and steel. -teel is
the basic input for construction, machines building and transport industries. Oeeping in
vie$ the importance of steel the follo$ing integrated steel plant $ith foreign collaborations
$as constructed in the public sector in the post independence era.
Background:
S.No Year Growth
1. 20.01.1971 The foundation stone of plant was laid by Smt. Gandhi
2. 12.06.1979 An agreement was signed between Government of India
and the erstwhile USSR for setting up of an Integrated Steel
Plant of produce structural & long products on the basis of
detailed project report prepared by Dr.M.N.Dustur &
Company
3. 01.02.1982 The construction of the Plant started
4. 18.02.1982 Government of India formed a new Company called
Rashtriya Ispat Nigam Ltd. (RINL) and transferred the
responsibility of constructing, commissioning & operating
the plant at Visakhapatnam from Steel Authority of India
Ltd. To RINL.
5. 1988 In view of the critical fund situation and need to check
further increase in the plant costs, a rationalized concept
was approved which was to crores Rs. 6849 crores based on
4
th
quarter of 1988.
32
6. 1uly 1992 Finally all the units were constructed and commissioned at
a cost of Rs.8526 crores. The Plant was dedicated to nation
by the then prime Minister of India Late Sri P.V.
Naarsimha rao
-ince =ommission ,-P has already crossed many mile stones in the fields of
production, productivity > exports. =o%e rate of the order 2GH %g"(on of Hot metal,
average converter life of .J31 heats an average of .0.3 heats per se*uence in continuous
)loom caster. -pecific energy consumption of 3.GI M Og"ton of li*uid steel, a specific
refractory consumption of J.H1 %g and a labour productivity of .32 (on"man year are some
of the pea%s achieved (during the year .G1'G2) in pursuit of excellence.
VSP Technology: State-of-the Art
I meter tall =o%e 7ven )atteries $ith co%e dry *uenching
)iggest )last 6urnaces in the country
)ell'less top charging system in )last 6urnace
+GGK slag granulation at the )f =ast House
-uppressed combustion P B5 gas recovery system
+GGK continuous casting of li*uid steel
E(emporalF and E-temcorF cooling process in B::: > AR: respectively
/xtensive $aste heat recovery systems
=omprehensive pollution control measure
Main Products of VSP:
(a) Steel products :
+. ngles +G. 4et =o%e
.. )illets ++. =oal tar
0. =hannels +.. nthracene oil
33
1. )eams +0. HP 4aphalene
2. -$uares +1. )enzene
3. 6alts +2. (oulene
I. Rounds +3. zylene
J. Re'bars +I. Aash oil
H. Aire Rods
(b)By-products:
+. Mranulated slag
.. Bime 6ines
0. mmonium -ulphate
VISION:
To be a continuously growing world class company.
Ae shall,
Harness our gro$th potential and sustain profitable gro$th
5eliver high *uality and cost competitive products and be the fist choice of
customer
=reate and inspiring $or% environment to unleash the creative energy of
people
34
chieve excellence in enterprise management
)e a respected corporate citizen, ensure clean and green environment and
develop vibrant communities around us
MISION:
(o attain +3 million tone (:t) li*uid steel capacity through (echnological up'
gradation, operational efficiency and expansion< augmentation of assured supply of ra$
materials< to produce steel at international standards of cost and *uality< and to meet the
aspirations of the sta%eholders.
OB1ECTIVES:
/xpand plant capacity to 3.0 :t by .G++'+. $ith the mission to expand further
in subse*uent phases as per the =orporate Plan.
-tabilize 3.0 :tpa expansion by .G+.'+0 $ith the mission to expand further in
subse*uent phases as per corporate plan
Revamping existing blast 6urnaces to ma%e them energy efficient to
contemporary levels and in the process increase their capacity by + :tpa, thus
total hot metal capacity to I.2 :tpa
)e amongst top five lo$est cost li*uid steel producers in the $orld
chieve higher levels of customer satisfaction
,ibrant $or% culture in the organization
)e proactive in conserving environment, maintaining high levels of safety >
addressing social concerns
CORE VALUES:
35
Aith a vie$ to running the business in a transparent manner meeting the needs and
expectation of the sta%eholders, it $as felt desirable to give utmost importance to the value
-ystem in the company. ccordingly, R#4B has finalized its =ore ,alues, $hich are
brought out belo$.
Commitment
Customer satisfaction
Continuous improvement
Concern for environment
Creativity & innovation.
HR Policy:
Ae, at ,isa%hapatnam -teel Plant, believe that our employees are the
most important resources. (o realize the full potential of employees, the company is
committed to;
Provide $or% environment that ma%es the employees committed and motivated
for maximizing productivity
/stablish systems for maintaining transparency, fairness and e*uality in
dealing $ith employees
/mpo$er employees for enhancing commitment, responsibility and o
accountability
/ncourage team$or%, creativity, innovativeness and high achievement
orientation.
Provide gro$th and opportunities for developing s%ill and %no$ledge
/nsure functioning of effective communication channels $ith employees.
36

MA1OR SOURCES OF RAW MATERIALS
#ron 7re lumps > fines )ailadilla, :.P
)6 Bime -tone Caggayyapet, .P
-:- Bime -tone Caisalamer, Ra!asthan
)6 5olomite 5ubai
-:- 5olomite :adharam, .P
:anganese 7re =hipurupalli, .P
)oiler =oal (alcher, 7rissa
=o%ing coc% ustralia
Aater supply 9eluru canal, ndhra Pradesh
Po$er supply =aptive po$er plant
MAJOR UNITS
DEPARTMENTS ANNUAL CAP.
(000T)
UNITS (3.0 MT STAGE)
COKE OVERNS 2,261
3 Batteries each of 67 ovens &
7 Mts Height
SINTER PLANT 5,256
2 Sinter machines of 312 Sqm
grate area each
BALST FURNACE 3,400
2 Furnaces of 3200 cum
volume each
STEEL MELT SHOP 3,000
3 LD Converters each of 150
Cum. Volume and size 4 strand
bloom casters
37
LMMM 710
4 Stand finishing MILL
WRM 850
2 x 10 Stand finishing MILL
MMSM 850
6 Stand finishing MILL
MAN POWER PROFILE OF VSP
S No Category of Employees No of Employees
+ /xecutives 5214
. 4on'/xecutives (=harge man,
(echnicians, :inisterial -taff and
Ohalasis
12611
Total 17825
Main Productions of Visakhapatnam Steel Plant
S No STEEL PRODUCTS BY PRODUCTS
1. Angles Nut coke
2. Billets Coke dust
3. Channels Coal tar
4. Beans Anthracene oil
5. Squares H P Naphalene
6. Flats Benzene
7. Rounds Tolunene
38
8. Rebars Zylene
9. Wire works Wash oil
10. ---------------------- Granulated slag
11. ---------------------- Lime fines
12. ---------------------- Ammonium Sulphate
PERFORMANCE INFORMATION
PRODUCTION PERFORMANCE: (000 TONS)
YEAR HOT METAL LIQUID STEEL SALEABLE
STEEL
2000-01 3165 2909 2507
2001-02 3485 3083 2757
2002-03 3941 3356 3056
2003-04 4055 3508 3169
2004-05 3920 3560 3173
2005-06 4153 3603 3237
2006-07 4046 3606 3290
2007-08 3913 3322 3074
2008-09 3546 3145 2701
2009-10 3900 3399 3167
2010-11 3828 3425 3072
2011-12 3778 3310 2990
2012-13 3998 3456 3010
39
COMMERCIAL PERFORMANCE (Rupees in Crores)
YEAR SALES TURNOVER DOMESTIC
SALES
EXPORTS
2000-01 3436 3122 322
2001-02 4081 3710 371
2002-03 5059 4,433 626
2003-04 6169 5400 769
2004-05 8181 7933 248
2005-06 8469 8026 443
2006-07 9131 8487 424
2007-08 10433 9878 555
2008-09 10,408 10329 79
2009-10 10,635 10,284 351
2010-11 11,517 11095 422
2011-12 14462 14047 416
2012-13 15451 15041 410
40
FINANCIAL PERFORMANCE (Rupees in Crores)
YEAR GROSS
MARGIN
CASH
PROFIT
NET
PROFIT
2000-01 504 153 -291
2001-02 690 400 -75
2002-03 1162 975 521
2003-04 2073 2023 1547
2004-05 2462 2451 2008
2005-06 2383 2355 1251
2006-07 2633 2584 1363
2007-08 3515 3483 1943
2008-09 1268 1183 934
2009-10 1282 825 796
2010-11 1412 1247 658
2011-12 1167 1110 752
2012-13 1265 1250 845
41
EMPLOYEES DEVELOPMENT PROGRAMMERS:
THORUGH TRANING & DEVELOPMENT CENTRE:
(raining programs conducted converting a total number of 11,1JJ employees,
$hich includes employees covered by (>5= (.H,JH. number), HR5, -afety
5ept. and =#-6 6ire Aing thus achieving ++.13 man days of training per
employee per year.
(hrust is given to departmental refresher programs covering over +G,GGG
employees $hich is +GGK gro$th over last year. 7n the Cob (raining covered
IGG0 employees. .1 -7Ps and +H. -:Ps $ere translated into (elugu.
=ompetency :apping :odel has been developed and executed in -inter
Plant covering =harge man to /'1 level.
Aith regard to *uality of training, in reaction level feedbac% JI.+.K
participants rated S1 on a 2'point scale, in learning lever J1K participants
scored S3GK mar%s in post raining tests, in application level feedbac%,
controlling officers rated S0.2 for J+K participants on 2'point scale.
032 employees $ere trained on =ritical /*uipment (raining and .GG
employees $ere trained on =ritical ctivities training (to ta%e care of the
critical contractual !obs).
42
(rade (ests $ere conducted for +3JH employees for the #nter =luster
promotions in different Aor%s and 4on'$or%s 5epartments.
E8%%u PrarichayamF, a boo% on -teel ma%ing in (elugu has been revie$ed,
edited and printed and $as released during the (raining Aee% ,aledictory
6unction.
Refurbishing of (>5= auditorium and =onference Hall has been done.
4e$ class room furniture procured. (hree class rooms $ere air conditioned. 1
B=5 pro!ectors procured and fixed in the class rooms. (he ambience of
(rainees Hostel and (>5= canteen $ere improved.
uditorium facilities and necessary help extended in organizing and
conducting 02 programs including ,R855H# summit, #R/6=74'.GG3,
A#P- 6unctions etc.
+J3 @= Pro!ects have been submitted to :- 5epartment against a target of +J
@=s during the year.
.GJ suggestions generated in (>5= against the target of +0G during the year.
ACHIEVEMENTS AND AWARDS OF VISAKHAPATNAM STEEL
PLANT
43
(otal *uality, latest technology, sophisticated e*uipment, up to date %no$ledge, high s%ills,
cost consciousness, production $ith less cost and customer satisfaction have become the
hallmar% of ,-P.
(oday, ,-P is moving for$ard $ith an aura of confidence and $ith pride amongst its
employees $ho are determined to give their best for the company to enable it to reaches
heights in organizational excellence.
In 2012-13 :
Sales of By-Products:
5uring .G+.'+0, all time record sales of by'products of Rs 1.1 =rs $as achieved. (he
performance represents a gro$th of 03K over that of .G++'+.. (he sales of )y'Products
during the year .G+.'+0 and .G++'+. are given in the follo$ing table.
44
#tem .G++'+. .G+.'+0 K Mro$th over
++'+.
)y'Products Rs 0J3 =rs Rs 1.1 =rs 1.K
E-Marketing:
#n line $ith the companys ob!ective of realizing sales at competitive prices $hile
promoting transparency, thrust on Pauction mode of sales $as continued an overall sale of
Rs. .1+ =rores $as achieved through e'auctions. (he brea%'up of $hich is as sho$n belo$;
4o of e'auctions -ales ,olume
-aleable -teel HH1 2I,GGG t
Pig #ron and related products ++ 3,GGG t
)y Products, I2 +.1J,GGG t
Inventory Control;
#nventory of saleable steel $as maintained at optimum levels throughout and the year ended
$ith an inventory of ., .H,GGG tons.
5istrict Bevel 5ealerships (5B5s)" R#4B'R5-;
novel R#4B'Rural 5ealership -cheme (R5-) $as introduced by the company in Canuary
.G++. s per this -cheme, rural dealers are registered at bloc% and panchayat level
locations, so as to promote consumption of steel in rural areas and enhance reach in rural
mar%ets beyond those covered by 5istrict Bevel 5ealers.
Global Steel Industry;
Aorld crude steel production in .G+. registered highest ever yearly production
of +1+1 :t P a gro$th of +2K over .G++ $hich is 2K higher than the previous pea%
of +013mt in .GGH. 5eveloping countries li%e china and #ndia contributed by scaling
ne$ pea%s and developed economies registered *uantum !ump from the lo$ of .G++,
$hich $as ho$ever far short of their earlier pea%s.
=ountry .G+0 :t .G+. :t K Mro$th
=hina J.3.I 3I0.3 +G.0
45
Capan +.H.3 JJ.2 .H.0
8- +GG.2 IJ.. 1G.0
#ndia IJ.0 3J.2 H.3
Russia 33.H 3G.G ++.2
-outh Oorea 2J.1 1J.3 .G..
Mermany 10.J 0..I 00.H
Aorld +312.2 +021.H .G.J
(he ma!ority of countries have recorded double'digit percentage rises in .G+0
relative to .G+.. (he largest of these are found in the more economically developed
regions. /uropean 8nion, 4orth merica and 7ceania'$hose mar%ets declined the
most in the do$nturn of .G+..
#n .G+1, strong gro$th in steel production is expected in -outh merica and the
:iddle /ast. lthough the impact of this $ill be relatively small on the $orld total
$hen compared to the dominance of china. Mains in the industrialized nations are
li%ely to be modest :/P- forecast a year'on'year increase of approximately 1.1K for
global steel production in .G+2.
:/P- Mlobal =rude -teel Production 6orecast (:illion (ons)
Region .G+. .G+0
/8 .I +HJ.H +H...
mericas +I2.0 +J..+
sia H11.. H31.0
7thers +J3.I +H3.2
Aorld$ide +2+1.G +2J2.G
##. STRENGTHS AND WEAKNESSES;
-trengths Aea%nesses
vailability of funds Bac% of level playing field vis'T'
46
bility to raise funds
vailability of land and layout
for expansion up to .G:t >
proximity to port
#mage as *uality producer >
value for money supplier
-uperior basic technology at
inception time
=utting edge technology in
expansion to 3.0:t
=ommitted $or%force
vis others due to lac% of captive
iron ore > co%ing coal mines
-ingle location company P only
long products, exposed to cyclic
mar%ets
5ue for ma!or capital repairs
and modernization
-teep rise in cost of production
and fall in margins.
High cost of servicing huge
e*uity.
-ubdued international >
sluggish domestic mar%ets.
III. OPPORTUNITIES AND THREATS
7pportunities (hreats
#ncreased Potential demand
a$aiting to be tapped.
#mproved investment in
infrastructure.
Pro!ected gro$th in steel
consumption.
#mproved availability of ports >
Bogistics.
5iversifying to ne$ product mix
li%e xles etc.
-tiff competition'entry of many
ne$ producers'C-PB, dhuni%,
)hushan, :aithan, -hyam steel,
#spat etc.
Price cut by competitors.
#ncreasing ra$ material prices >
shift of value chain to$ards ra$
materials.
7ligopolistic coal supply side.
-ingle iron ore supplier P
located in disturbance prone
areas.
Predominant secondary sector in
long products.
/xpansion of capacities by the
competitors and entry of
47
international players.
Higher *uality of life in ,-P
vis'T'vis surrounding areas.
V. OUTLOOK FOR THE COMPANY IN 2014-15 :
Likely capacity additions in the next two years are as shown below :
Bi%ely =apacity dditions in the country :t
/xisting =apacity =apacity Bi%ely by
.G+1'+2
Public sectors
-#B .G.J1 1G.1G
R#4B 1.GG H.0G
Private -ectors
(ata H.JG +H.GG
/ssar 1.3G +1.2G
C-A 3.3G ++.GG
#spat #ndustries 0.3G 1..G
C-PB ..1G +G.12
)hushan -teel,
)ushan po$er > -teel
..GG 2.JG
7thers U -econdary 0+.GG 01..G
I..J1 +.G.J2
,#. RISKS & CONCERNS:
reas of =oncern;
48
+. Rising input prices particularly #ron 7re, =oal and :anpo$er cost.
.. ging production units for more than .G years.
0. (imely commissioning and stabilization of /xpansion 8nits.
1. :aximization of net sales realization.
2. Bess flexibility in changing the product'mix $ith available mills.
3. -ingle type product i.e. only long products.
I. Bac% of steel as compared to other steel producers having :ines.
J. =ontinuation of -luggish steel consumption.
In 2012-13:
COST REDUCTION MEASURES
(he companys commitment to$ards containing costs continued during the year $ith the
follo$ing measures;
4ut co%e in partial replacement of metallurgical co%e in )last 6urnace.
8se of :etallurgical $aste to partially replace #ron 7re fines at -inter plant.
)lending of different types of straight co%ing coals to reduce =arbon Rate.
8sage of BPM for bloom cutting, in place of cetyl gas in ==: +, . and 0.
8tilization of B5 slags in -inter Plant (-P) and )last 6urnace ()6) to reduce
consumption of Bimestone.
8tilization of Bime dusts in -:- by $ay of )ri*uetting the lime.
Reclamation of scrap from maintenance activities and use in -:-.
#mprovement in tundish life from 1.H0 to 2..I Heats.
=onservation of po$er
Aater conservation.
=ollection and processing of copper scrap from electric motors, tuyeres, etc.
Marketing Performance Highlights
49
Registered best ever -ales (urnover of Rs.+G302 =r. since inception. (he -ales
(urnover corresponds to a target fulfillment of +GJK against :78 target of Rs. HJ3+
=r.
(he sales volume of -aleable -teel during the year stood at 0.+0+ :t, registering a
gro$th of .GK over .G++'+..
(he sales of ,alue dded -teels constituted I2K of -aleable -teel sales. Premium
for ,alue dded -teels over :ild -teels sho$ed improvement during the year.
/xports value of Rs.02+ =r. has been achieved during the year .G++'+., against
Rs.IJ =r. in .G+G'++.
Exports
,-P exported both Pig #ron and -aleable -teel during the year. #n .G+.'+0, /xport -ales of
+12 thousand tons of Pig #ron and 2J thousand tons of -aleable -teel have been achieved.
(he /xport -ales stood at Rs.02+ cr. during .G++'+..
Value Added Steels
#n .G++'+., ..03 :t of ,alue dded -teel Products have been sold compared to +.HJ :t in
the year .G+G'++, representing a gro$th of +HK. -ales of ,alue dded -teel as a
percentage of (otal -aleable -teel stood at I2.0K during .G++'+..
Project Sales
5uring the year .G+.'+0, 3.2H la%h tons (including #nternal =onsumption at ,-P) of steel
products have been sold to Pro!ect =ustomers, compared to 3.I+ la%h tons in the year .G++'
+..
Employees' Grievances
R#4B has a $ell laid do$n procedure for handling employees& grievances through
committee system viz. rea Mrievance Redressal 6orm (MR/6), =entral Mrievance
Redressal 6orm (=/4MR/6). (he redressal of employees& grievances are coordinated by
the Ronal Personnel /xecutives $ho send monthly progress report on the number of
employees& grievances received and redressed etc. for compilation, computerization and
monitoring. (he entire system of redressal of grievances is monitored centrally by
Personnel =oordination -ection. (he status on employees& grievances received via
redressed" disposed of is given belo$;
50
SAFETY & HEALTH
-afety is given due importance and the implementation of 7H-- +JGG+ has ensured a safe
$or% culture in the organization.
R#4B',-P $as successfully certified for the latest version of 7H-- +JGG+;.GGI in :ay
&GH. =ontinuous efforts on the implementation of safety standards, monitoring of ris%
control and other proactive measures have resulted in reduction " elimination of potential
hazards.)
ctivity has been a$arded to an external agency and the $or% started in -ep &GH.
(he follo$ing proactive measures $ere also underta%en to inculcate safety a$areness;
7rganization of interactive sessions bet$een contract $or%ers, contract supervisors
Recognized trade union representatives on ?$or%ing at height?.
-afety training programmerr on ?-ite safety and Road safety?
-afety appliances exhibitions $ere organized.
=ampaign on ?Hazards of using mobile phone $hile driving? $as conducted.
lecture on ?=onstruction -afety? by Ct. =hief #nspector of 6actories $as organized
covering incharges of Pro!ects and supervisors of contractors.
CORPORATE SOCIAL RESPONSIBILITY
R#4B in its o$n $ay is committed to social upliftment and is a$are of its obligations to the
society and is in the forefront of serving the society through its =-R initiatives. .K of its
net profit is earmar%ed for =-R activities. (he =-R initiatives cover /nvironmental care,
/ducation,
Health care, People care, Peripheral development, cultural /fflorescence, Help during
natural =alamities and as a Responsible =orporate =itizen rendering an helping hand to
lead a meaningful life etc.
Environmental Care:
. (he flo$ of $ater from natural spring to storage tan% is due to gravity and does not re*uire
any electrical po$er supply to operate. (he supply is perennial so the $ater problem is
solved permanently.
(he scheme $as implemented under trying conditions in remote tribal areas of Paderu and
=hintapalli. (he pro!ect cost $as Rs.+J.JG Ba%hs > about +0GG people $ere benefitted.
51
Education:
s stated, focus has been upon infrastructure development in the field of education. .G
number of school buildings have been constructed in 1 RH =olonies and other resources
li%e 5es%'cum')enches and play e*uipment have been provided to schools. =-R
5epartment provided scholarships for ..2 students belonging to economically and socially
marginalized sections of society.
Health Care:
:edical =amps $ere continued to be organized as part of =-R initiatives in all RH
=olonies and Peripheral ,illages around the plant. (hese camps (02 in number) covered
about 2GGG persons and +.20 persons benefitted from =ataract -urgery.
Oing Meorge Hospital, ,isa%hapatnam (Rs.J Ba%hs) a Orushi 7rthopedic Aelfare -ociety,
,isa%hapatnam (Rs.I.02 Ba%hs) $as extended financial support for procurement of medical
e*uipments. (he beneficiaries are +GG"day > .G"day (approx.) respectively.
People Care:
(,alue; Rs.20.+I Ba%hs > beneficiaries; .3G.G approx. ) /mbar%ing to mitigate the
hardships faced by the residents of RH=s and tribal areas, the follo$ing schemes $ere
implemented;
5uring the s$eltering summer months, drin%ing $ater $as supplied through tan%ers to 1
RH =olonies benefitting +2GGG people per day, for a period of 31 days.
AREAS OF CONCERN
6rom the above -A7( matrix emerging issues " concerns are as follo$s;
(i) -hort term > :edium term
s a result of continuous operation of the plant at higher capacities in special steel
production, many of the plant e*uipment $arrant immediate revamp and capital repairs.
8tmost attention on maintenance related aspects is re*uired so as to ensure up%eep of these
e*uipments till the time ma!or revamps " capital repairs are carried out.
(a) Ra$ :aterial prices;
Profitability $ill be adversely impacted by steep escalation in prices of ma!or ra$ materials;
N #ron ore prices by 12K over +st Can. .G+0 levels.
52
N #mported co%ing coal prices for the +
st
*uarter of .G+0'+1 by 33K over the contract prices
of .G+.'+0.
(b) :odernization > =apital Repairs
5ovetailing of revamping programmer of -teel :elt -hop (-:-) and -inter machines $ith
that of =ategory'# =apital repairs of )last 6urnaces is re*uired, so as to minimize the loss in
production on account of shutdo$ns in these units for carrying out ma!or revamps " =apital
repairs.
In 2011-12:
OPERATIONAL PERFORMANCE:
R#4B has been surpassing the rated capacities of its production units since .GG+ and
continued the same trend for the year .GGJ'GH. R#4B recorded capacity utilization of +G1K,
+G2K > +G.K in Hot :etal, Bi*uid -teel and -aleable -teel respectively despite
production curtailment in the second half of the year.
OTHER HIGHLIGHTS
#nstallation of combined blo$ing facilities in B5'0 are done in 6eb& GH. Replacement of
existing Mas =utting :achine $ith a ne$ machine in ==:'+ $as implemented in :ar& GH.
=ommissioning of t$o units of rgon tan%s in -P for the supply of rgon gas for
combined blo$ing facilities.
Highest ,alue added production of .G,GJ,01. t $ith a gro$th of 3K over GI'GJ.
#ncrease in ,alue dded Heats (+2+H. nos) $ith a gro$th of +2K over GI'GJ.
,alue added production $.r.t -aleable -teel is I1K and is the best since inception.
Hot metal > Bi*uid -teel crossed 2J :t > 1I :t Bandmar% on ++.G..+..
ENVIRONMENT MANAGEMENT
#n the year .GG++'+., the company $as audited by :"s ),=# for continuation of #-7
+1GG+;.GG1 certificate, $hich is valid till .G+0. (he company, in its endeavor to move
beyond adherence to stipulated norms, has identified pro!ects $orth Rs. 0H+.3 =rores to
53
improve environmental performance out of $hich pro!ects $orth Rs..1.13 =rores are
already implemented.
Major Environmental projects completed during 2011-12.
PR758=(#74 P/R67R:4=/ ( :#4/-;
:ine .G++'+. .G+G'++
:adharam 5olomite
:ine (la%h tons) 2..I 3.31
Caggayyapeta Bimestone
Achievements:
+J.1K excess 7ver'burden handled over last year in :adharam 5olomite :ine
-lo$"4on'moving items $ere reduced by Rs 1G la%hs at Caggayyapeta Bimestone
:ines stores.
Marbham :anganese :ine registered a gro$th of .0 K in dispatch as compared to
.G+G'++.
(he dispatch of River -and from -arepalli -and :ine is .3,3+2 (ons, a gro$th of
0.3HK over that of .G+G'++.
Project Sales
5uring the year .G++'+., 3.I+ la%h tons (including #nternal =onsumption at ,-P)
have been sold to Pro!ect =ustomers compared to I..+ la%h tons in the year .G+G'++.
CORPORATE GOVERNANCE REPORT
(he =ompany strives to attain high standards of corporate governance. Hence,
though not mandatory, a separate section on =orporate Movernance is annexed and forms
part of the 5irectors& Report.
SECRETARIAL COMPLIANCE REPORT
-ecretarial =ompliance Report confirming compliance to the applicable provisions
of =ompanies ct, +H23 and applicable rules there under, though not mandatory, obtained
from a practicing =ompany -ecretary, is annexed and forms part of the 5irectors& Report.
AUDITORS' REPORT
54
(he -tatutory uditors& Report on the ccounts of the =ompany for the 6inancial year
ended 0+st :arch, .G+. is enclosed to the 5irectors& Report at nnexure'#.
C&AG COMMENTS
=omments of the =omptroller and uditor Meneral of #ndia (=>M) on the accounts of the
=ompany and Replies thereto are enclosed at nnexure'##.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
ETC.
#nformation re*uired under -ection .+I(+)(e) of the =ompanies ct, +H23 read $ith the
=ompanies (5isclosures of Particulars in the Report of )oard of 5irectors) Rules, +HJJ
regarding /nergy =onservation, (echnology bsorption and 6oreign /xchange earnings
and outgo during the 6inancial year .G++'+. are furnished in the nnexure' to the report
and also in 6orm' and 6orm') annexed to this report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
(he 6oreign /xchange earnings during the year .G+G'++ $ere Rs.IJ.JH crores as against
Rs.223.GH crores during the previous year. (he 6oreign /xchange 7utgo during the year
.GGJ'GH $as as.0H+G.0G crores (including Rs 0GH.20 =r on /xpansion) as against
Rs..02J.3+ crores (including Rs +GG..3 =rores) during the previous year.
PARTICULARS OF EMPLOYEES
(here $as no employee of the company $ho received remuneration in excess of the limits
prescribed under -ection .+I(.) of the =ompanies ct +H23 read $ith the =ompanies
(Particulars of employees) Rules, +HI2.
DIRECTORS RESPONSIBILITY STATEMENT
55
Pursuant to provisions of -ection .+I (.) of the =ompanies ct, +H23, the follo$ing
statement relating to nnual ccounts for the financial year ended 0+st :ar..G+. is made;
i) (he applicable ccounting -tandards had been follo$ed in the preparation of the nnual
ccounts for the financial year .G++'+..
ii) (he 5irectors had selected such accounting policies and applied them consistently and
made !udgment and estimates that are reasonable and prudent so as to give a true and fair
vie$ of the state of affairs of the company at the end of the financial year and of the profit
or loss of the company for that period.
iii) (he 5irectors had ta%en proper and sufficient care for the maintenance of ade*uate
accounting records in accordance $ith the provisions of this ct for safeguarding the assets
of the =ompany and for preventing and detecting fraud and other irregularities.
iv) (he 5irectors $ill prepare the nnual ccounts on a ?going concern? basis.
In 2010-11:
Operational Strategy
deliberate strategic trade'off $as arrived at, in favour of maximizing production of
value added
-teel, against achieving incremental gro$th in overall volume of production.
(his strategy helped not only in offsetting ever increasing costs of input materials, but
also helped in achieving higher levels of contribution and profitability.
Mro$th in Pro!ect sales by 1GK $as also a ma!or contributor to this achievement of
surpassing sales targets.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 2010-11
A. INDUSTRY STRUCTURE AND DEVELOPMENT
Economic Conditions and Steel Market
Ho$ever, business confidence in sia remained high, unli%e the declines experienced in
the 8- and /urope. (he international steel mar%ets $ere characterized by high demand,
driven in particular by the expansive trend in =hina. s per the ##-# report, $orld crude
steel output reached +010.2 :illion metric tons (:t) for the year .G+G, an increase of I.2K
56
over .GGH. (he total production *uantity represents the highest level of crude steel output in
history and it is the fifth consecutive year that $orld crude steel production gre$ by more
than IK. Aithout =hina, $orld crude steel production $ould have gro$n only at 0.0K.
7ther )R#= countries also maintained relatively high gro$th, $ith #ndia and )razil
recording I.0K and H.0K increase respectively.
Raw material markets remained tight in 2!
Aith continued gro$th in steel demand, the situation on the global iron ore mar%et
remained tight in .G+0.
(here $as a +GK year'on'year increase in price (fob) of iron ore fines. (he tightness in the
iron ore mar%et at mid'year .G++ $as in part due to a decrease in domestic iron ore
production in =hina and an increase in steel production.
Sales value during the last 3 years
(otal steel sales volume during .G++'+. stood at ..H1 million tons.
5omestic steel sales of ..JJ million tons $are registered during .G+G'++. (he focus during
the year $as on the development of actual user base in the domestic mar%et. round 3+K of
the steel $as supplied to the actual user segment in .G+G'++ compared to 2HK during the
previous year .GGH'+G.
Exports
/xports of iron and steel products $ere restricted to meet the domestic re*uirements, in line
$ith the Movernment of #ndia expectations to give priority to the domestic sales.
s a result during the year .G++'+., 3. thousand tons of steel products and .22 thousand
tons of Pig #ron $ere exported as compared to +.+ thousand tons of steel and +2H thousand
tons of Pig #ron in .G+G'++. Ho$ever in terms of value, there $as a gro$th of 0+K in
exports as compared to previous year mainly due to buoyant steel mar%et all over the globe.
(he exports of #ron and -teel products $ere made to the countries li%e 4epal, -rilan%a,
(hailand, #ndonesia, Capan, :alaysia etc.
Value Added Steels
5uring the year, special thrust $as given on improving sale of value added products, $hich
has given rich dividends. 6or the year .G++'+., +J..I la%h tons of value added steel
57
products have been sold compared to ++.++ la%h ton during the last year i.e., .G+G'++,
representing a gro$th of 31K.
Performance in Project Sales
6or the year .G++'+., I..+ la%h tons (including internal consumption at ,-P) have been
sold to Pro!ect =ustomers compared to 2.22 la%h tons (including internal consumption at
,-P) in the year .G++'+., representing a gro$th of 0GK. /astern > 4orthern Regions
registered significant gro$th rates of .JK and 0JK respectively.
In 2010-11:
Sales Performance
)est ever sales of Rs. H+2+ =rs since inception $as registered during .G+G'++ $ith
:78 target fulfilment of +G2K $hich is JK more than the sales turnover of Rs.
J1H+ =rs. in .G+.'+0 5omestic sales of Rs. JI.3 =rs. #n .G+G'++ $as also the best
ever since inception.
/xpenditure on #nterest, )an% charges and #nsurance costs $hile improving interest
earnings on surplus funds.
(he =ompany has ta%en up $ith M7# for early Redemption of Preference -hares
=apital so as to bring do$n the capital base.
(he )oard of 5irectors had approved Redemption of Preference -hares of Rs.012
=rores for the year .GGH'+G and Rs.IGG cr. for .G+G'++.
Rural marketing and new outlet
(i) Aith a vie$ to ma%ing steel available in rural areas, additional 3G nos. of 5istrict Bevel
5ealers (5B5s) $ere appointed in -outhern -tates namely ndhra Pradesh, Oarnata%a,
(amilnadu, Oerala and Pondicherry, ma%ing ,-P&s presence in each and every district in
-outh, ta%ing the total number of 5B5s to HH nos.
(ii) (hree numbers of ne$ =onsignment -ales gencies (=-) $ere appointed in Raipur,
Pondicherry > Camshedpur. =oastal transportation could help in improving the overall
dispatches and reduce dependence on rail and road transport.
58
CRM initiatives
(i) 6or the first time /'poll has been introduced in R#4B",-P portal vizagsteel.com for
capturing on line customer feedbac%.
(ii) number of activities during the year has been ta%en to$ards improving customer
satisfaction, li%e *uic%er settlement of *uality complaints, ans$ering to customer *ueries
through portal in .1 hours, monitoring customer delivery norms etc.
MATERIAL MARKETING REVIEW
5uring the year .G+G'++, timely availability of bul% and other ra$ materials re*uired
for higher level of production $as ensured. 6urther to overcome uncertainties on
availability of re*uired *uantum of materials, your =ompany, entered into :78s $ith
4#4B"::(= for B: =o%e, $ith 4B=7 for luminum :etal and $ith -#B for
supply of structural steel for expansion.
Other initiatives include the following:
Coint ,enture :78 $as signed $ith :7#B for producing -ilicon :anganese and
6erro :anganese.
6or $idening coal supplier'base, expression of interest (/7#) of suppliers (to deal
$ith the =ompany on long term basis) $as invited. (he response $as satisfactory and
follo$'up actions $ere ta%en up. 6or #mported =o%ing =oal (#==) three ne$ firms
$ere short listed through /xpression of #nterest.
(he procurement policy for #== and B: co%e $as finalized during the year.
2- $as implemented in almost all areas of -tores for better house%eeping and service.
fe$ large size coal vessels $ere engaged, diversion of vessels from one port to the
other for discharge operations, etc. $ere gone in to achieve cost reduction.
/fforts to reduce cost on account of logistics $ill continue.
:78 $ith regard to ?#ntegrity Pact? $as signed $ith (ransparency #nternational
#ndia and the same is being implemented in the tenders.
59
Raw material and capital mines
(he performance of :adharam 5olomite :ine for the year .G+G'++ $as satisfactory
$ith production of 3,2I,G.G tons and all time dispatch record of 3,2G,030 tons of
dolomite.
(he performance of Caggayyapeta Bimestone :ine for the year .G+G'++ $as
satisfactory $ith all time production record of 1,2I,3.G tons and dispatch record of
1,21,G.3 tons of limestone.
(he K gro$th in respect of CB: production $as ++.20K and dispatch $as +..1HK as
compared to .GGH'+G.
(he production of :anganese at Marbham :anganese :ine $as good i.e., +0,GI3
tons and dispatch $as H,03+ tons.
?/xpression of interest for ac*uisition of hard co%ing coal mines abroad? $as placed
in the =ompany&s $ebsite. Responses from ustralia, 8- and =anada $ere received.
(he /valuation =ommittee constituted by the :anagement is follo$ing and
revie$ing the lin%ages for all the ra$ material re*uired for expansion of steel plant to
3.2 :( stage.
-imilarly offers for Coint ,entures participation for operating Bo$ -ilica Bimestone
:ine in the -ultanate of 7man are in progress.
CORPORATE SOCIAL RESPONSIBILITIES
9our =ompany firmly believes in giving bac% to the society. (o give thrust to the =orporate
-ocial Responsibility, a separate 5epartment $as formed.
9our =ompany has become a :ember of the Mlobal =ompact 6orum under the
aegis of 8nited 4ations 7rganization.
9our company has framed the policy of =orporate -ocial Responsibility of
R#4B",-P and $as approved by the )oard. ccording to the approved policy,
financial contributions can be extended by R#4B",-P to (a) various -ocially
)eneficial Pro!ects in and around ,-P, (b) in the district of ,isa%hapatnam (c) in
the -tate of ndhra Pradesh and (d) in =ountry at large.
(he )oard has also prescribed to contribute ..GK of the 4et Profit (P( less
accumulated losses, if any, carried for$ard) of the =ompany of the previous year
to$ards =-R activities.
60
9our company started contributing for developmental $or%s in RH =olonies and
peripheral villages.
HUMAN RESOURCE MANAGEMENT REVIEW
9our company lays great emphasis on Human Resource 5evelopment.
5uring the year, efforts $ere focused to$ards facilitating the organization to meet the
challenges of the ne$ business realities in the changing economic scenario.
Oeeping in vie$ the expansion of the plant, emphasis is being placed on specific
position related training needs and there is an attempt to customize programmers, to
the extent possible.
(hrust also continued on optimum utilization of the human resources to achieve the
higher productivity and establishment of $or% culture in line $ith the HR Policy
Man power
5uring the year .G+G'++, 2G2 programmers $ere organized (+10 in'house and 03.
external), covering a total no. of 3.GI employees (0HI1 executives and ..00 non'
executives).
+2 4os. of internal )usiness > :anagement @uizzes ():@s) $ere organized. total of
0+J student trainees !oined for undergoing pro!ect'based"field $or% by $hich an amount
of Rs. 2,+G,32G"' $as generated as training charges.
0 teams $ere sponsored for 0.nd 4ational =ompetition of 9oung :anagers (4=9:)
conducted by #:, 4e$ 5elhi and one team bagged #st position in the Regional Round
and0rd position in the Mrand 6inale.
MARKET SURVEY
9our =ompany conducted mar%et -urvey to assess the various specifications and
grades in Aire Rods and Rounds around the country in various end use segments to
assess the demand and the competitors presence.
(his $ould be an input to implement the -ustainability Plan in .GGI'GJ to identify
and increase presence in high value products and develop niche segment.
61
(his $ould also assist in mar%eting products from expansion mills catering to ne$
special steel grades.
CORPORATE PLAN 2020
#ndia has been $itnessing a ma!or transformation in the steel sector $ith surging
demand for steel, $hich closely follo$s the enhanced gro$th rate of the economy.
#n order to meet the gro$ing demand, it $as decided to revise the =orporate Plan,
$hich $as prepared in the past aiming at expansion to +G :t by .G.G.
#n line $ith the decision to revise the =orporate Plan, different $or%ing groups $ere
constituted. #nitially, the ,ision, :ission and 7b!ectives $ere revie$ed and revised.
-ubse*uently =apacity )uild up Plan $as prepared. )ased on these, the pproach
Papers $ere prepared by various $or%ing Mroups.
(he pproach papers $ere integrated and the =orporate Plan .G.G $as prepared.
(he =orporate Plan envisages expansion of Plant capacity in four phases.
#n the Phase'+ and Phase'., the capacity is planned to be raised to 3.J :t by .GGJ'GH
and J.2 :t by .G+0'+1 respectively.
8p to Phase'., the Plant $ill continue to be in the long products segment.
-ubse*uently, it is planned to diversify into flat products.
#n Phase'0 and Phase'1, the capacity $ill be increased to +0.G :t by .G+1'+2 and
+3.G :t by .G+I'+J respectively.
(he ballpar% figure of investment for all the four Phases of expansion $as placed at
about Rs .3,GGG cr.
#t $as proposed to explore and adopt technologies li%e 6#4/V, 8-#R74,
H#-:/B(, :#5R/V etc. from Phase'0, if found cost effective. 6or ra$ material
security, it $as planned to have captive iron ore and coal mines.
s far as Human Resource :anagement is concerned, it $as planned to develop a
highly motivated, innovative and competent $or%force. Babour productivity of about
+GGG tons per man'year has been envisaged by .G.G.
(he =orporate Plan .G.G $as released by the -ecretary, :inistry of -teel, and
Movernment of #ndia during the R#4B 6ormation 5ay -ilver Cubilee =elebrations at
,isa%hapatnam.
SEGMENTWISE OR PRODUCT WISE PERFORMANCE
62
5uring the year .G+G'++, the total sale of steel in tons $as 0..33 million of $hich the
5omestic steel sales $as 0.+12 million and $as the highest ever since inception and
also registered a gro$th of +K over previous year.
round 2HK of the domestic steel sale $as supplied to the actual user segment in
.G+G'++.
VALUE ADDED STEELS
-ale of value added steel products $as ++.++ la%hs tons in .G+G'++ against H..I la%hs
tons in .GGH'+G, representing a healthy gro$th rate of .GK.
(he percentage of value added steel sales in the total sales of saleable steel stood at
01K in .G+G'++, $hich is the highest ever recorded till date.
5uring the year, 3. ne$ products $ere introduced in the mar%et. round 3.. la%hs
tons of special steel $as supplied to the automobile sector against 2.G la%hs tons in
.GG2'G3 registering a gro$th of .1K.
CHAPTER 3
63
THEORETICAL FRAMEWORK
1. To carry out the study we framed the following objectives
.. #dentification of the techni*ue of performance appraisal follo$ed in ,-P
64
0. /mployee attitude to$ards the present appraisal system.
1. Revie$ of the current appraisal system in order to
a. /nhance productivity
b. ttain global standards
2. (o Provide -uggestions > Recommendation from the study conducted.
Importance and Purpose
Performance ppraisal has been considered as the most significant an indispensable
tool for an organization, for an organization, for the information it provides is highly
useful in ma%ing decisions regarding various personnel aspects such as promotion
and merit increases.
Performance measures also lin% information gathering and decision ma%ing processes
$hich provide a basis for !udging the effectiveness of personnel sub'divisions such as
recruiting, selection, training and compensation.
ccurate information plays a vital role in the organization as a $hole. (hey help in
finding out the $ea%nesses in the primary areas.
6ormal Performance ppraisal plans are designed to meet three needs, one of the
organization and the other t$o of the individual namely;
(hey provide systematic !udgments to bac% up salary increases, transfers,
demotions or terminations.
(hey are the means of telling a subordinate ho$ he is doing and suggesting
needed changes in his behavior, attitudes, s%ills or !ob %no$ledge. (hey let him
%no$ $here he stands $ith the )oss.
-uperior uses them as a base for coaching and counseling the individual. 7n the
basis of merit rating or appraisal procedures, the main ob!ectives of /mployee
ppraisal are;
(o enable an organization to maintain an inventory of the number and *uality of
all managers and to identify and meet their training needs and aspirations.
65
(o determine increment re$ards and to provide reliable index for promotions and
transfers to positions of greater responsibility.
Introduction to Performance Appraisal
7nce the employee has been selected, trained and motivated, he is then appraised for
his performance.
Performance ppraisal is the step $here the :anagement finds out ho$ effective it
has been at hiring and placing employees.
#f any problems are identified, steps are ta%en to communicate $ith the employee and
remedy them.
Performance ppraisal is a process of evaluating an employees performance in
terms of its re*uirements.
Performance ppraisal can also be defined as the process of evaluating the
performance and *ualifications of the employees in terms of the re*uirements of the
!ob.
WHAT IS ~PERFORMANCE APPRAISAL?
Performance ppraisal is defined as the process of assessing the performance and
progress of an employee or a group of employees on a given !ob and his " their
potential for future development.
#t consists of all formal procedures used in $or%ing organizations and potential of
employees.
ccording to 6lippo, EPerformance ppraisal is the systematic, periodic and an
important rating of an employees excellence in matters pertaining to his present !ob
and his potential for a better !ob.F
CHARACTERISTICS
66
+. Performance ppraisal is a process.
.. #t is the systematic examination of the strengths and $ea%ness of an employee in
terms of his !ob.
0. #t is scientific and ob!ective study. 6ormal procedures are used in the study.
1. #t is an ongoing and continuous process $herein the evaluations are arranged
periodically according to a definite plan.
2. (he main purpose of Performance ppraisal is to secure information necessary for
ma%ing ob!ective and correct decision an employee.
PROCESS
+. /stablishing performance standards
.. =ommunicating the -tandards
0. :easuring Performance
1. =omparing the actual $ith the standards
2. 5iscussing the appraisal
3. (a%ing =orrective ction
LIMITATIONS
+. /rrors in Rating
.. Bac% of reliability
0. 4egative approach
1. :ultiple ob!ectives
2. Bac% of %no$ledge
METHODS OF PERFORMANCE APPRAISAL
(he foregoing list of ma!or program pitfalls represents a formidable challenge, even
considering the available battery of appraisal techni*ues.
67
)ut attempting to avoid these pitfalls by doing a$ay $ith appraisals themselves is
li%e trying to solve the problems of life by committing suicide.
(he more logical tas% is to identify those appraisal practices that are
(a) :ost li%ely to achieve a particular ob!ective
(b) Beast vulnerable to the obstacles already discussed.
)efore relating the specific techni*ues to the goals of performance appraisal stated at
the outset of the article, # shall briefly revie$ each, ta%ing them more or less in an
order of increasing complexity.
(he best'%no$n techni*ues $ill be treated most briefly.
ESSAY APPRAISAL
#n its simplest form, this techni*ue as%s the ratter to $rite a paragraph or more
covering an individual&s strengths, $ea%nesses, potential, and so on.
#n most selection situations, particularly those involving professional, sales, or
managerial positions, essay appraisals from former employers, teachers, or associates
carry significant $eight.
.
GRAPHIC RATING SCALE
(his techni*ue may not yield the depth of an essay appraisal, but it is more consistent
and reliable.
(ypically, a graphic scale assesses a person on the *uality and *uantity of his $or%
(is he outstanding, above average, average, or unsatisfactoryW) and on a variety of
other factors that vary $ith the !ob but usually include personal traits li%e reliability
and cooperation.
#t may also include specific performance items li%e oral and $ritten communication.
FIELD REVIEW
68
(he field revie$ is one of several techni*ues for doing this.
member of the personnel or central administrative staff meets $ith small groups of
ratters from each supervisory unit and goes over each employee&s rating $ith them to
(a) #dentify areas of inter'rate disagreement
(b) Help the group arrive at a consensus
(c) 5etermine that each ratter conceives the standards similarly. .
FORCED-CHOICE RATING
Bi%e the field revie$, this techni*ue $as developed to reduce bias and
establish ob!ective standards of comparison bet$een individuals, but it does not involve the
intervention of a third party.
MANAGEMENT BY OB1ECTIVES
(o avoid, or to deal $ith, the feeling that they are being !udged by unfairly high
standards, employees in some organizations are being as%ed to set ' or help set ' their o$n
performance goals
RANKING METHODS
6or comparative purposes, particularly $hen it is necessary to compare people $ho
$or% for different supervisors, individual statements, ratings, or appraisal forms are
not particularly useful.
#nstead, it is necessary to recognize that comparisons involve an overall sub!ective
!udgment to $hich a host of additional facts and impressions must someho$ be
added.
(here is no single form or $ay to do this.
(he best approach appears to be a ran%ing techni*ue involving pooled !udgment.
(he t$o most effective methods are alternation ran%ing and paired comparison
ran%ing.
69
1. "Alternation ranking#$
Ran%ing of employees from best to $orst on a trait or traits is another method for
evaluating employees.
-ince it is usually easier to distinguish bet$een the $orst and the best employees than
to ran% them, an alternation ran%ing method is most popular.
Here subordinates to be rated are listed and the names of those not $ell enough to
ran% are crossed.
(hen on a form as sho$n belo$, the employee $ho is highest on the characteristic
being measured and the one $ho is the lo$est are indicated.
(hen chose the next highest and the next lo$est, alternating bet$een highest and
lo$est until all the employees to be rated have been ran%ed.
2% "&aired'com(arison ranking#$
(his techni*ue is probably !ust as accurate as alternation ran%ing and might be more
so.
)ut $ith large numbers of employees it becomes extremely time consuming and
cumbersome.
ASSESSMENT CENTERS
-o far, $e have been tal%ing about assessing past performance.
Ahat about the assessment of future performance or potentialW
#n any placement decision and even more so in promotion decisions, some prediction
of future performance is necessary.
Ho$ can this %ind of prediction be made most validly and most fairlyW
360 DEGREE FEEDBACK
70
:any firms have expanded the idea of up$ard feedbac% into $hat the call 03G'
degree feedbac%.
(he feedbac% is generally used for training and development, rather than for pay
increases.
:ost 03G 5egree 6eedbac% system contains several common features.
ppropriate parties P peers, supervisors, subordinates and customers, for instance P
complete survey, *uestionnaires on an individual.
03G degree feedbac% is also %no$n as the multi'ratter feedbac%, $hereby ratings are
not given !ust by the next manager up in the organizational hierarchy, but also by
peers and subordinates.
ppropriates customer ratings are also included, along $ith the element of self'
appraisal.
7nce gathered in, the assessment from the various *uarters are compared $ith one
another and the results communicated to the manager concerned.
nother techni*ue that is useful for coaching purposes is, of course, :)7.
Bi%e the critical incident method, it focuses on actual behavior and actual results,
$hich can be discussed ob!ectively and constructively, $ith little or no need for a
supervisor to ?play Mod.?
Advantages
#nstead of assuming traits, the :)7 method concentrates on actual outcomes.
#f the employee meets or exceeds the set ob!ectives, then he or she has demonstrated
an acceptable level of !ob performance.
/mployees are !udged according to real outcomes, and not on their potential for
success, or on someone&s sub!ective opinion of their abilities.
(he guiding principle of the :)7 approach is that direct results are observed easily.
(he :)7 method recognizes the fact that it is difficult to neatly dissect all the
complex and varied elements that go to ma%e up employee performance.
71
Disadvantages
(his approach can lead to unrealistic expectations about $hat can and cannot be
reasonably accomplished.
-upervisors and subordinates must have very good ?reality chec%ing? s%ills to use
:)7 appraisal methods.
(hey $ill need these s%ills during the initial stage of ob!ective setting, and for the
purposes of self'auditing and self'monitoring.
,ariable ob!ectives may cause employee confusion. #t is also possible that fluid ob!ectives may be
distorted to disguise or !ustify failures in performance.
Benefits of Performance Appraisals
:easures an employees performance.
Helps in clarifying, defining, redefining priorities and ob!ectives.
:otivates the employee through achievement and feedbac%.
6acilitates assessment and agreement of training needs.
Helps in identification of personal strengths and $ea%nesses.
Plays an important role in Personal career and succession planning.
=larifies team roles and facilitates team building.
Plays ma!or role in organizational training needs assessment and analysis.
#mproves understanding and relationship bet$een the employee and the reporting
manager and also helps in resolving confusions and misunderstandings.
Plays an important tool for communicating the organizations philosophies, values,
aims, strategies, priorities, etc among its employees.
Helps in counseling and feedbac%.
72
Rating Errors in Performance Appraisals
Performance appraisals are sub!ect to a $ide variety of inaccuracies and biases
referred to as &rating errors&. (hese errors can seriously affect assessment results. -ome of
the most common rating errors are; '
Leniency or severity: - Beniency or severity on the part of the ratter ma%es the assessment
sub!ective. -ub!ective assessment defeats the very purpose of performance appraisal.
Ratings are lenient for the follo$ing reasons:
a) (he rate may feel that anyone under his or her !urisdiction $ho is rated
unfavorably $ill reflect poorly on his or her o$n $orthiness.
b) He"-he may feel that a derogatory rating $ill be revealed to the rate to detriment
the relations bet$een the ratter and the rate.
c) He"-he may rate leniently in order to $in promotions for the subordinates and
therefore, indirectly increase his"her hold over him.
Central tendency: -
(his occurs $hen employees are incorrectly rated near the average or middle of the
scale. (he attitude of the ratter is to play safe.
(his safe playing attitude stems from certain doubts and anxieties, $hich the ratters have
been assessing the rates.
Halo error: -
halo error ta%es place $hen one aspect of an individual&s performance influences the
evaluation of the entire performance of the individual.
(he halo error occurs $hen an employee $ho $or%s late constantly might be rated high
on productivity and *uality of output as $ell as on motivation.
-imilarly, an attractive or popular personality might be given a high overall rating.
Rating employees separately on each of the performance measures and encouraging
ratters to guard against the halo effect are the t$o $ays to reduce the halo effect.
Rater effect; '
73
(his includes favoritism, stereotyping, and hostility.
/xtensively high or lo$ score are given only to certain individuals or groups based on
the ratter&s attitude to$ards them and not on actual outcomes or behaviors< sex, age, race
and friendship biases are examples of this type of error.
Primacy and Regency effects: -
(he ratter&s rating is heavily influenced either by behavior exhibited by the rate during
his early stage of the revie$ period (primacy) or by the outcomes, or behavior exhibited
by the rate near the end of the revie$ period (regency).
6or example, if a salesperson captures an important contract"sale !ust before the
completion of the appraisal, the timing of the incident may inflate his or her standing,
even though the overall performance of the sales person may not have been encouraging.
7ne $ay of guarding against such an error is to as% the ratter to consider the composite
performance of the rate and not to be influenced by one incident or an achievement.
Performance dimension order: -
($o or more dimensions on a performance instrument follo$ each other and both
describe or rotate to a similar *uality.
(he ratter rates the first dimensions accurately and then rates the second dimension to
the first because of the proximity.
#f the dimensions had been arranged in a significantly different order, the ratings might
have been different.
Spill over effect: -
(his refers lo allo$ing past performance appraisal rating lo un!ustifiably influence
current ratings.
Past ratings, good or bad, result in similar rating for current period although the
demonstrated behavior does not deserve the rating, good or bad.
ROLES IN THE PERFORMANCE APPRAISAL PROCESS
a) Reporting Manager
74
Provide feedbac% to the revie$er " H75 on the employees behavioral traits
indicated in the P:- Policy :anual
/nsures that employee is a$are of the normalization " performance appraisal process
ddress employee concerns " *ueries on performance rating, in consultation $ith the
revie$er
b) Reviewer (Reporting Manager`s Reporting Manager)
5iscuss $ith the reporting managers on the behavioral traits of all the employees for
$hom he " she is the revie$er
Ahere re*uired, independently assess employees for the said behavioral traits< such
assessments might re*uire collecting data directly from other relevant employees
c) HOD (In some cases, a reviewer may not be a HOD)
Presents the proposed Performance Rating for every employee of his " her function to
the 4ormalization committee.
H75 also plays the role of a normalization committee member
7$ns the performance rating of every employee in the department
d) HR Head
-ecretary to the normalization committee
ssists H75s " Reporting :anagers in communicating the performance rating of all
the employees
e) Normalization Committee
5ecides on the final bell curve for each function in the respective )usiness 8nit "
=ircle
Revie$s the performance ratings proposed by the H75s, specifically on the up$ard "
do$n$ard shift in ratings, to ensure an unbiased relative ran%ing of employees on
overall performance, and thus finalize the performance rating of each employee.
75
PRO1ECT REPORT ON "PERFORMANCE APPRAISAL" LITERATURE
REVIEW AND CONCEPT FORMULATION
Human Resource (or personnel) management, in the sense of getting things done
through people, is an essential part of every managers responsibility, but many
organizations find it advantageous to establish a specialist division to provide an
expert service dedicated to ensuring that the human resource function is performed
efficiently.
EPeople are our most valuable assetF is a clichX, $hich no member of any senior
management team $ould disagree $ith.
9et, the reality for many organizations are that their people remain under valued,
under trained and underutilized.
6ollo$ing are the various functions of human resource management that are essential for
the effective functioning of the organization;
+. Recruitment.
.. -election
0. #nduction
1. Performance ppraisal
2. (raining > 5evelopment
Definition of Questionnaire
Bist of a research or survey *uestions as%ed to respondents, and designed to extract specific
information. #t serves four basic purposes; to
(+) =ollect the appropriate data,
(.) ma%e data comparable and amenable to analysis,
(0) minimize bias in formulating and as%ing *uestion, and
(1) (o ma%e *uestions engaging and varied.
76
Some disadvantages of questionnaires:
@uestionnaires, li%e many evaluation methods occur after the event, so participants
may forget important issues.
@uestionnaires are standardized so it is not possible to explain any points in the
*uestions that participants might misinterpret.
(his could be partially solved by piloting the *uestions on a small group of students
or at least friends and colleagues.
#t is advisable to do this any$ay.
7pen'ended *uestions can generate large amounts of data that can ta%e a long time to
process and analyze.
7ne $ay of limiting this $ould be to limit the space available to students so their
responses are concise or to sample the students and survey only a portion of them.
Respondents may ans$er superficially especially if the *uestionnaire ta%es a long
time to complete.
(he common mista%e of as%ing too many *uestions should be avoided.
-tudents may not be $illing to ans$er the *uestions.
(hey might not $ish to reveal the information or they might thin% that they $ill not
benefit from responding perhaps even be penalised by giving their real opinion.
-tudents should be told $hy the information is being collected and ho$ the results
$ill be beneficial.
(hey should be as%ed to reply honestly and told that if their response is negative this
is !ust as useful as a more positive opinion. (he *uestionnaire should be anonymous.
Some advantages of questionnaires:
(he responses are gathered in a standardised $ay, so *uestionnaires are more
ob!ective, certainly more so than intervie$s.
Menerally it is relatively *uic% to collect information using a *uestionnaire.
Ho$ever in some situations they can ta%e a long time not only to design but also
to apply and analyse (see disadvantages for more information).
77
Potentially information can be collected from a large portion of a group.
(his potential is not often realised, as returns from *uestionnaires are usually lo$.
Ho$ever return rates can be dramatically improved if the *uestionnaire is
delivered and responded to in class time.
+. =ollection information through *uestionnaires
-ome countries reflected by supplying partial information, particularly related to financial
data.
.. /valuation of the *uestionnaires through tables
0. Meneral evaluation of the replies
1. 5ensity of sediment monitoring net$or%
2. /xceptional cases
3. =ontent of summary table
I. /valuation of the replies on the *uestionnaires
J. -hortcomings of the report
Performance Standards
Ho$ does the (eam Beader decide $hat&s acceptable and $hat&s unacceptable
performanceW (he first step in ans$ering this *uestion is to establish $ritten
-tandards.
Performance expectations are the basis for appraising employee performance.
Performance standards let the (eam Beader to compare the employee&s performance
$ith mutually understood expectations and minimize ambiguity in providing
feedbac%.
Having performance standards is not a ne$ concept< standards exist $hether or not
they are discussed or put in $riting.
Ahen the (eam Beader observes an employee&s performance, he usually ma%es a
!udgment about $hether that performance is acceptable.
-tandards identify a baseline for measuring performance.
78
6rom performance standards, the (eam Beader can provide specific
6eedbac% describing the gap bet$een expected and actual performance.
Guiding Principles
/ffective performance standards;
-erve as an ob!ective basis for communicating about performance.
/nables the employee to differentiate bet$een acceptable and unacceptable results.
#ncrease !ob satisfaction because employees %no$ $hen tas%s are performed $ell.
#nform ne$ employees of your expectations about !ob performance.
Characteristics of Performance Standards
-tandards describe the conditions that must exist before the performance can be rated
satisfactory.
performance standard should;
)e realistic, in other $ords, attainable by any *ualified, competent, and fully trained
person $ho has the authority and resources to achieve the desired result .
5escribe the conditions that exist $hen performance meets expectations.
)e expressed in terms of *uantity, *uality, time, cost, effect, manner of performance,
or method of doing )e measurable, $ith specified method(s) of gathering
performance data and measuring performance against standards.
Performance Appraisal Effectiveness MBA (Human Resources)
Expressing Standards
(he terms for expressing performance standards are outlined belo$;
Quantity; -pecifies ho$ much $or% must be completed $ithin a certain period of time.
Quality; 5escribes ho$ $ell the $or% must be accomplished. -pecifies accuracy,
precision, appearance, or effectiveness.
Timeliness; ns$ers the *uestions, by $henW , Ho$ soonW , 7r $ithin $hat periodW
Effective Use of Resources; 8sed $hen performance can be assessed in terms of
utilization of resources; money saved, $aste reduced.
79
Effects of Effort; ddresses the ultimate effect to be obtained< expands statements of
effectiveness by using phrases such as; so that, in order to, or as sho$n by.
Manner of Performance; 5escribes conditions in $hich an individual&s personal
behavior has an effect on performance, e.g., assists other employees in the $or% unit in
accomplishing assignments.
Method of Performing Assignments; 5escribes re*uirements< used $hen only the
officially prescribed policy, procedure, or rule for accomplishing the $or% is acceptable.


80
CHAPTER 4
QUESTIONNAIRE & ANALYSIS


QUESTIONNAIRE ON PERFORMANCE APPRAISAL SYSTEM.
Respected -ir":adam
# 9alagala 4agavinay, -tudent of 5r. B.)ullayya P.M =ollege,( ndhra university). s a partial fulfilment of
my course :), a pro!ect title EPerformance ppraisal -ystem in ,-PF is being underta%en. (herefore, # $ould li%e to re*uest
you to %indly fill up the *uestionnaire given belo$ to able me substantiate and complete my pro!ect. (he information that you
have furnished $ill be %eep confidential and strictly used for academic purpose only.
81
(han%ing you for your valuable time and help $ith best regards.
P/R-74B #467R:(#74
4ame;
/mployee 4o;
5esignation;
5epartment;
/':ail ddress;
Please tic% the appropriate options for the statements given belo$.

+. -ince ho$ long have you been $or%ing in this companyW
a) Y+ year b) +'0 years c) 0'3 years d) bove 3 years
.. re you a$are about performance appraisal systemW
a) 9es b) 4o
0. #s performance appraisal essential in the organizationW
a) 9es b) 4o
1. Aas you performance evaluated earlierW
a) 9es b) 4o
2. Ho$ often is the performance appraisal doneW
a) nnually b) /very 3 months c) Ahen there is need only d) can&t say
3. #s the appraisal system helping you to improve your performanceW
a) 9es b) 4o
I. Aho assess your performanceW
82
a) -elf b) -upervisor c) 5epartment head d) -ubordinates
J. 5o you have a set of clear established goals"ob!ectives"performance criteriaW
a)9es b)4o c)can&t say d)ny other(Please specify)
H. -atisfaction level regarding present appraisal methodW
a) High satisfaction b) -atisfaction c) 5issatisfaction d) can&t say
+G. 5oes the result meet your expectationW
a) 9es b) 4o
++. Ho$ do you feel during appraisalW
a) :otivation b) /ncourage c) 5iscourage d) =riticized
+.. Ahat is your reaction $hen you heard about the appraisal decisionsW
a) Happy b) )ad c) 6ear d) )ored
+0. re your strengths and $ea%nesses informed to you after appraisal programW
a) 9es b) 4o
+1. Aere you given any advices"suggestions to improve your Aea%ness"#ncapabilityW
a) 9es b) 4o
+2. 5oes your superior provide you in terms of actual data on your performance"targetsW
a) 9es b) 4o c) can&t say
+3. Ahile ta%ing decisions relating to transfers and promotions is the performance to be the primary criteriaW
a) gree b)5isagree c)-trongly agree d)-trongly disagree
83
+I. Have you received any a$ards for good performanceW
a) 9es b) 4o
+J. #s present system of performance appraisal perfect tool for promotions and incrementsW
a) gree b)5isagree c)-trongly agree d)-trongly disagree
+H. 5oes your department facilitate the career opportunitiesW
a) 9es b) 4o
.G. (he performance appraisal helps to $in co'operation and team $or%W
a) -trongly agree b) gree c) 4either agree 4or 5isagree
d) 5isagree e) -trongly disagree


84
Kind of performance appraisal

S I
No. Options Percentage Respondents
+ -elf ppraisal 1GK JG
. 03G 2K +G
0
nnual
Performance
appraisal 2GK +GG
1
=onfidential
report 2K +G
(otal +GGK .GG

85

=7::/4(;'
(he above table + sho$s that most of the respondents (1GK) are strongly agree. -ome
of them are agree(2GK).over all other is (2K)$ho disagree and above this may be, the
employees in vsp are satisfied to do $or% $ith pleasure due to various reasons li%e $or%
culture , latest technology and so on
#t is found rather appear that the organization providing favorable climate to
employees in their $or% life. so ,employees of vsp are happy to $or% $ith the organization.
86
1) Does Performance appraisal system encourage people to plan their
work in before
S I
No. Options Percentage Respondents
1 Agree 50 +GG
2 Disagree 10 .G
3
Strongly
Agree 40 JG
4
Strongly
Disagree 0 G
100 .GG
87
=7::/4(;'
(he above table . sho$s that respondents agree (2G K.). 5isagree (+GK) -trongly disagree (GK) and
remaining strongly (1GK).$ith the statement performance appraisal system encourages people to plan their
$or% $ell in advance.
(his *uestion or case in more relevant to executives and supervisors. but incidentally the non executives
$ere also of the same opinion that means they are also very $ell a$are of $or% planning and duties
allotted to them.
(his is found that organization $or% procedure to production achievement is very good and the
relation of performance assessment procedure is effective.

Performance appraisal in VSP mainly focus on

88
S I
No. Options Percentage Respondents
1 Potential 10 .G
2 Performance 24 1J
3 Both 65 +0G
4 None 1 .
Total 100 .GG


COMMENT:
89
(he above table sho$s that respondents(32K) employees in ,-P mainly focus on both performance and
potential types appraisals ,$here it also sho$s (.1K) of employee only focus on performance $here it
gives correct information,(+GK) this total gives remaining focus on potential factors of an employee.
Which method of Evaluation is used to measure the
targets & tasks in VSP
S I
No. Options Percentage Respondents
1 Points 40 JG
2 Bar codes 0 G
3 Grades 60 +.G
4 None 0 G
Total 100 .GG
90
COMMENT:
The above table explains maximum respondents(3GK) $ants to measure the tas%s and
targets in grades because it gives direct information $ith each grade explanation and
remaining (1GK) of respondents $ant to %no$ tas%s in points.
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2) Do you think performance appraisal should be taken
S I
No. Options Percentage Respondents
1 Quarterly 30 3G
2 Half yearly 50 +GG
3
Once in
cluster period 19 0J
4 None 1 .
Total 100 .GG
92

COMMENT:
The above table explains maximum respondents (2GK) $ant to ta%e performance appraisal
should be ta%en in half yearly because it gives proper information of an employee in an
organization ,remaining (0GK) $ant to performance appraisal should be ta%en in *uarterly
and remaining (+HK) $ant to give in once in a cluster ,only +K specifies nothing.
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3) How many subordinates works under you
S I
No. Options Percentage Respondents
1 0-5 30 3G
2 6 to 10 45 HG
3 above 20 5 +G
4 None 20 1G
Total 100 .GG
94
COMMENT:
(he above table explains about number of subordinates $ho $or%s under each superior
$here the respondents (12K) of employees $or%ing under them ,remaining (0GK) have
maximum of 2 subordinates $or%ing under each superior,(2K) have above .G employees
under them .this explains only about the $or%ers in each superior.
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4) Do you think that performance appraisal helps to know the strength
and weakness of Subordinates
S I
No. Options Percentage Respondents
1 Agree 50 +GG
2 Disagree 30 3G
3 Strongly agree 20 1G
4 Dis agree 0 G
Total 100 .GG
96
=7::/4(;
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(he above table explains about does the performance appraisal system helps in %no$ing the
strength and $ea%ness of subordinates to this statement employee are agree (2GK) and
employee are strongly agree (0GK).so employee (2GK) are agree to this system is useful to
%no$ing the strength and $ea%ness of subordinates and it is important activity to assess the
performance of the employee.
#n the interaction $ith de employees, it has been expressed by them that their disagreeness
is not $ith respect to the system of performance evaluation but, their disagreeness $ith
respect to *uestion that this is meant for sub ordinates.
5) What is the Best performance appraisal system in relevant to
applications in VSP
S I
No. Options Percentage Respondents
1 360 35 IG
2 Self appraisal 35 IG
3
Online 1ob
allotment 8 +3
4 Both 20 1G
5 None 2 1
Total 100 .GG
98
=7::/4(-;
99
(he above table explain us about the best performance appraisal in ,isa%hapatnam steel
plant according to employees agree $ith self appraisal and 03G degree
appraisal(02K),ho$ever remaining (.GK) of respondents felt as it is both (self as $ell as
03G).
6) Is it necessary to supply feedback in performance appraisal
S I
No. Options Percentage Respondents
1
Strongly
Agree 40 JG
2
Strongly
disagree 5 +G
3 Agree 50 +GG
4 Disagree 5 +G
Total 100 .GG
100
Who conduct the appraisal system
S I
No. Options Percentage Respondents
1 Supervisor 10 .G
2
Controlling
officer 60 +.G
3
reporting
officer 30 3G
101
4 None 0 G
Total 100 .GG
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(he above table sho$s that the total number of respondents (3GK) $ill conduct controlling
officers $here they have higher appraisal performance, the remaining (0GK) $ill be
conducted by reporting officer and superior $ill conduct (+GK).
Is it important to maintain the employee records/
data/documents related to performance appraisal
(or) confidential report
S I
No. Options Percentage Respondents
1 PA or CR 30 3G
2
Need for
Character
record 30 3G
3 Transparency 40 JG
4 None 0 G
Total 100 .GG
103
COMMENT:
(he above table sho$s that the total number of respondents (1GK) agree to represent
transparency of the record,(0GK) of the employee $ant maintain character record $hich
even includes(0GK) confidential reports in %no$ing the performance of employee record
information.
7) Have you ever suggested any modification to add/del
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performance appraisal in booklet
S I
No. Options Percentage Respondents
1 Yes 70 +1G
2 No 20 1G
3 None 10 .G
Total 100 .GG
105
=7::/4(-;
(he above table sho$s that the total number of respondents(IGK) agree that they have the
chance to suggest some modification such as M:,M:,5:. Remaining (.GK) employee
disagree because they thin% that it is not their right to suggest any thing in the boo%let.
8) Did you face any problem in performance appraisal ,If ~Yes What
are the
Problem: ____________
Solution: ____________
S I
No. Options Percentage Respondents
1
Openly
expressing 10 .G
2 Hesitating 20 1G
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3
Express w/o
self details 30 3G
4 None 40 JG
Total 100 .GG
107
=7::/4(;
(he above table sho$s that respondents (1GK ) are not $illing to express their problems .s
(.GK )of the employees are hesitating to express their problems . Remaining (0GK) $ants
to express their problems $"o giving their details and the rest (+GK) are openly expressing
their problems, $hich says that even though they are having problems they dont $ant to
express.
SUMMARY
(he graphical analysis for the various units clearly sho$s that the companys
performance appraisal programs are very beneficial to the $or%men and also the HR
department has been successful in implementing appraisal programs $hich have met the
needs of the $or%men and also beneficial to the company.
Performance appraisal for all the $or%men in various units li%e Ono$ledge sharing
programs, (echnical, behavioral has been really beneficial to all the $or%men and also to
the employees.
108
(he *uestionnaire is one of the most important in performance appraisal program $hich has
been undergone by many of the $or%men and many have been of the opinion that it is one
of the most important performance analysis program analyzed by the company.
CHAPTER 5
FINDINGS
109
SUGGESTIONS
CONCLUSION
FINDINGS
6rom the survey on $or%men it is clearly evident that most of them are satisfied $ith the
appraisal programs provided by the organization.
(he R#4B',-P, ,isa%hapatnam has put in its best efforts in implementing various
activities for the $elfare of $or%men.
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(he appraisal programs have been fruitful to the organization as the productivity
levels as $ell as the overall $or% efficiency of the employees have increased after the
*uestionnaire programs.
Ho$ever in the survey,
Ae have found that some of the employees have attended the *uestionnaire programs
even though they have been called for it.
/ven though there is pollution in the electrolysis department, the company has been
successful in tac%ling this problem by providing the $or%men $ith various guarding
e*uipments.
(his appraisal $ill help to %no$ the performance of each and every employee
through appraisal system, $here steel plant provided annual performance system .it also
provides different stages of appraisal forms /'I,'2 etc.
Ahere it can be differeciated by providing different color representation to each
grade employees $hich also includes 4on'technical and (echnical employees.
Aithout this appraisal the performance of employee can be %no$n at different stages
from subordinates and superiors.
SUGGESTIONS
+) (he ob!ective of the *uestioner is highly sensitive, such information shall be utilized
only for analyzing the data $hy, it cannot be considered for evaluation of the system
as a $hole.
.) #n such %ind of *uestionnaire name, department, employee no, should not be optional.
0) 7nline performance appraisal system $ill be more beneficial to both employee
>employer.
1) ppraisal system should be more transparent so that each employee can improve
himself.
2) (o learn the sub!ect is very essential for manager, it is occasion.
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3) #n ,-P, proper manger appraisal system is useful, so $e can suggest other
organization.
I) (here should a$areness about performance appraisal.
#n the past four years of employment in ,isa%hapatnam it is found a $ell
educated"*ualified $ere employed in cluster ,), = posts of $or%men cadre(4on'
executives.)
(he above can be understand in simple manner that
+) 6or the posts of %alasi out of around 0GG number it is found more than .2G $ere
$ith higher *ualifications varying from #(#U#nter to degree" /ngineering"post
graduation.
.) 6or the post of technicians out of around 1GG member it # s found more than
2GK$ere $ith higher *ualification varying from diploma")-=").(ech.
#t is understood form the above because of the importance of the !ob
and its related Payment"$ages many of the educate people are opting employment
in ,isa%hapatnam though it is underemployment.
Hence it is relevant to have a reloo% $ith respective assessment of
performance of the individual"employees at cluster ,),= levels of $or%men.
Oeeping of the individual"employees at cluster ,) employees annual assessment
is in the form of annual confidential report has to be changed by incorporating t$o
more parameters(4ine parameters are existing)
The parameters that can be suggested are:
+) #447,(#,/4/--; ' #ndigenous *uality to bring out the innovative ideas of
the employees $hich $e can expect even from the cluster $or%men also as they
$ere highly *ualified.
.) B/,/B 76 -O#BB"O47AB/5M/;'(o assess the actual level of s%ill
possessed by each employee especially in these lo$ carde so asa to have a data
their s%ill $ith respective to the *ualification that of irrespective to the cadre,
$hich may useful to deploy or redeploy at appropriate positions.
112
#t is found from the both executives and non'executive performance system
form that of self appraisal and confidential report the potentials facts of
innovativeness is not available.
(he factor EinnovativenessF is also one of the core values of ,isa%hapatnam. #n
additional to that ,isa%hapatnam having a different forum receive the innovative
ideas from bottoms of the $or%ing level and up all higher levels.
The forums are:-
+) -uggestions scheme
.) -amalochana
0) -6==(-hop floor corporative committee)
1) -6==(-afety committee)
2) 5epartment production committee
Hence it is suggest the potential factor called EinnovativenessF can be considered
as an appropriate assessment factor to incorporate in both self appraisal and =R for both
executive >non executive respectively .thus $ill definitely help organization as $ell the
individuals to gro$ further.ie
#n our vie$ this %ind of appraisal should be future pro!ected to =/7',#=/
PR/-#5/4(- or any such supervisor.
113
CONCLUSION:
#ron and -teel play a significant role in the gro$th of the economy of the country and in
every manufacturing sector they are the most essential elements that are re*uired. Hence
#ron and -teel industries have achieved very high significance in the present developing era.
7ut of all the steel industries present in #ndia, ,isa%hapatnam -teel Plant is the
one that proved itself to be one of the best developing organization. (he Prime ministers
a$ard for the best #ntegrates -teel Plant $as a$arded to ,-P in the recent past. (his depicts
the success level of the organization. /ven though this organization faced as severe setbac%
fe$ years ago, it recovered and achieved success $ith in a very short period, $hich sho$s
the determination and hard $or% of the employees and as $ell as the efficiency of the
directors and other higher officials of the organization.
-uccess cannot be achieved sole handedly and hence it is the hard $or% devotion,
dedication and determination of the employees of the ,-P that made this organization to
flourish at greater heights. (he net profit of the organization for the year .GG0'.GG1 $as
nearly +2.+ cores (Provisional). (his sho$s the extraordinary performance of the
organization.
(his pro!ect helped me to %no$ the $or%ing conditions, fter having analyzed the
data, it $as observed that practically there $as no appraisal in the organization. (o be an
effective tool, it has to be on the continuous basis. (his is the thing that has been
mentioned time and again in the report, as, in the absence of continuity, it becomes a
redundant exercise. )efore actually deciding drafting $hat should be the %ind of appraisal
the follo$ing things should be ta%en care of;
114
+. (he very concept of performance appraisal should be mar%eted throughout the
organization. 8nless this is done, people $ould not accept it, be it ho$ important to the
organization.
.. (o mar%et such a concept, it should not start at bottom, instead it should be started by
the initiative of the top management. (his $ould help in percolating do$n the concept
to the advantage of all, $hich includes the top management as $ell as those belo$
them. (his means that the top management has to ta%e a $elcoming and positive
approach to$ards the change that is intended to be brought.
0. 6urther, at the time of confirmation also, the appraisal form should not lead to
duplication of any information. #nstead, detailed appraisal of the employees $or%
must be done P $hich must incorporates both the $or% related as $ell as the other
personal attributes that are important for $or% performance.
1. #t should be noted that the appraisal form for each !ob position should be different as
each !ob has different %no$ledge and s%ill re*uirements. (here should not be a
common appraisal form for every !ob position in the organization.
2. (he !ob and role expected from the employees should be decided $ell in advance and
that too $ith the consensus $ith them.
3. neutral panel of people should do the appraisal and to avoid sub!ectivity to a
mar%ed extent, ob!ective methods should be employed having *uantifiable data.
I. (he time period for conducting the appraisal should be revised, so that the exercise
becomes a continuous phenomenon.
J. (ransparency into the system should be ensured through the discussion about the
employees performance $ith the employee concerned and trying to find out the grey
areas so that training can be implemented to improve on that.
115
BIBLIOGRAPHY
)UMAN RESOURCE MANA*EMENT ' &%SU++A RAO
)UMAN RESOURCE MANA*EMENT ' AS,ATA&&A
)UMAN RESOURCE MANA*EMENT - &ERSONNE. MANA*EMENT / .%M%&RASAD
)UMAN RESOURCE MANA*EMENT - &ERSONNE. MANA*EMENT / STE&)EN &%
RO++INS
116
http://www.vizagsteel.com
www.indiasteel.com
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