Performance Appraisal

Performance Appraisal
INTRODUCTION
Human resource is of paramount importance the success of any
organisation. It is a source of strength and aid. Human resources are the wealth
of an organisation which can help it in achieving its goals. Human resource
management is concerned with the human being in an organisation. It reflects a
new outlook which views organization’s manpower as its resource and assets.
Human resource is the total knowledge, skills, talents and aptitudes of an
organization’s workforce. The resourcefulness of various categories of people
and other people available to the organisation can be treated as human
resources. In the present complex environment, no business or organisation
can exist and grow without appropriate human resources. So human resource
has become the focus of attention of every progressive organisation.
DEFINITION OF HUMAN RESOURCE MANAGEMENT

“Human resource management is the planning, organizing, directing and
controlling of procurement, development, compensation, integration,
maintenance and reproduction of human resources to the end that individual,
organizational and societal objective are accomplished.”
NEED FOR HUMAN RESOURCE MANAGEMENT

Human resource management help in creating a better understanding
between employees and management. It help worker’s in accomplishing
individual and organizational goals. This approach has been attracting the
attention of management professional in the last decade or so.
HRM is considered essential due to the following reasons:

1. Better industrial relations.
2. Develop organizational commitment.
3. Coping with changing environment.
4. Change in political philosophy.
5. Increased pressure on employees.
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HUMAN RESOURCE MANAGEMENT OBJECTIVES AND

FUNCTIONS :
The primary objective of HRM is to ensure the availability of a competent
and willing work force to an organisation. Beyond this, there are other
objectives, too. Specifically, HRM objectives are four fold-societal,
organizational, functional and personal..
Societal objectives: To be ethically and socially responsible to the need and

challenges of society while minimizing the negative impact of such demands
upon the organisation. The failure of organisation to use their resources for the
society’s benefit in ethical ways lead to restrictions.
Organisational Objectives: To recognize the role of HRM in bringing

about organizational effectiveness. HRM objectives is not an end in itself. It is
only a means to assist the organizational with its primary .
Functional objectives: To maintain the department’s contribution at a level

appropriate to the organisation‘s needs. Resources are wasted when HRM is
either more or less sophisticated to suit the organisation ‘s demands.
In simple words Performance Appraisal may be understood as the

assessment of an individual’s performance in a systematic way, the performance
being measured against such factors as job knowledge, quality and quantity of
output, initiative, leadership abilities, supervision, dependability, co-operation,
judgment, versatility, health and the like. These are some of the factors, which
are considered when an employee is been appraised. The employee is not only
assessed on past performance alone, potentials of the employee for future
performance are also assessed.
The Appraisal System for the Wage group was introduced on 15 th
December 1986, and for the Officers it was on 19th September 1987.
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Performance Appraisals Fact:
Performance Appraisals allow you to have written records of your
employee’s performance, get more productivity form workers through goal
setting, and have an objective means of data.
Theoretical Introduction
Definition:
“It is the systematic evolution of the individual with respect to his or her
performance on the job and his or her potential for development”.
“Performance Appraisal is a formal, structured system of measuring and
evaluating an employee’s job, related behaviors and outcomes to discover how
and why the employee is presently on the job and how the employee can perform
more effectively in the future so that the employee, organization and society all
benefit.”
The above definition includes employee’s behavior as part of the
assessment. Behavior can be active or passive do something or do nothing. Either
way, behavior affects job results.
Specifically, the appraisal data and information will be useful in the

following areas of HRM:
 Remuneration Administration
 Validation of Selection Programmers
 Employee Training and Development Programmers
 Promotion, Transfer and Lay-off Decisions
 Grievance and Discipline Programmed
 HR Planning
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COMPANY PROFILE:
INTRODUCTION TO SOAP INDUSTRY

Soap is one of the commodities, which have become an indispensable part
of life of the modern fantasy world. Since it is non-durable consumer goods.
There is a large market for it. The whole soap industry is experiencing changes
due to innumerable reasons such as government relations. Environment,
toxicological allergy problems, increases in cost of raw material etc.
The changing technology and even existing desire by the individuals and
the organization to produce a better product at a mere economical rate has also
acted as Catalyst for the dynamic process of change, more and more Soap
manufactures are trying to capture a commanding market share by introducing
and maintaining acceptable products. The soap industry in India faces a
cutthroat Competition while multinational companies dominate the market.
They are also facing severe threat from dynamic and enterprising new entrances
especially during 1991-92.
Looking back at the history of soaps and detergents. Human kind knew
about the soap 2000 year ago. Roman was known to have been considerable
users of soaps and during the period of Roman Empire state right was collected
as sources of ammonium carbonate for cleaning purpose.
In 17 AD when pliancy and Elder accidentally discovered the soap, when
roasted meat over flowed on the glow of ashes, this lump like product was soap
that has forming and cleaning character. Since then, the first commercial batch
has made and marketed by M/s Bristol soap marketers and had on in 1192 AD.
Then from 1662 AD the first patent for making soap was taken in London and
old consumption of Soap was said 2 Lakhs tons per annum and it was in the year
that even the field in a big way.
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Indian Soap industry has seen several ups and downs in the last 30 to 40
years in the year 1964, due to this India faced severe shortage of fats due to
foreign exchange crisis again in the year 1975 due to severe crunch in India
northwest Soap Company established first soap industry in 1887 at Meerut.
Following the Swedish movement in 1905, few more factories set up and they
were:
1. Mysore Government factory at Bangalore.
2. Godrej Soaps in Bombay.
THE INDIAN SOAP INDUSTRY SCENARIO:

The Indian soap industry has long been dominated by hand full of
companies such as
1. Hindustan Levers Limited.
2. Tate Oil Mills (Taken over by HLL )
3. Godrej Soaps private Limited.
The Indian Soaps industry continued to flourish very well until 1967-68.
But began to stagnate and soon it started to recover and experienced a short
upswing in 1974. This increase in demand can be attributed due to
1. Growth of population.
2. Income and consumption increase.
3. Increase in urbanization
4. Growth in degree of personal hygiene.
Soap manufacture has 2 Classification, Organized and unorganized sector.

KSDL carries under organized Sector.
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PRESENT STATUS:
MARKET SCENARIO
India is the ideal market for cleaning products. The country’s Precipitate
consumption of detergent powders and bars stands at 1.6 Kg and soap at 543
GM. Hindustan Liver, which towers over the cleaning business, sells in all over
the cleaning business but the tiniest of Indian settlements.
The u.4 lakhs tons per annum soap market in India in crawling along at
4%. The hope lies in raising Rupee worth, the Potential for which has high
because the Indian soap Market is pseudo in nature and it is amazingly. Complex
being segmented not only on the basis of prices benefits. But even a range of
emotions with in that is outlining framework.
PROBLEMS OF SOAP INDUSTRY:

Soap industry faces some problems increase of Raw Materials. The major
ingredients like soap ash, Linear alkyl, benzene and Sodium. Tripoli Phosphate
posse’s number of serious problems in terms of availability. The demand supply
gap vegetables oil is 1.5 to 2 Lakhs tons and is met through imports. In recent
times, price of caustic soda has shown ashes in the cheaper verities of Soaps are
quite high.
HISTORY
India is a rich land of forest; ivory, silk, sandal, precious gems and
magical charms of centuries. The most enchanting perfumes of the world got
their exotic spell with a twist of sandal. The world’s richest sandalwood
resource is from one isolated stretch of forestland in South India that is
Karnataka.
The origin of perfumed sandalwood and its oil in Karnataka, which is
used in making in sandal soap. It is well known as Fragrant Ambassador of India
& Sandalwood known as a liquid Gold.
By the Inspiration of H.H.Maharaja of Mysore late
H.H.Jayachamarajendra Wadeyar, the trading of sandalwood was exported to
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Europe and New destination, but with commencement of First world War India
faced Severe Crisis on the business of sandalwood.
This situation gave rise to start of an industry, which produces value
added products which the consumption of Sandalwood oil.
Hence H.H.Maharaja of Mysore created this situation as an opportunity
by sowing the seed of present KS&DL. The project was shaped with the
engineer skill and expertise of the top level.
Late Sir M.Visveswarayya, the great engineer is the man behind the
project.
Today’s famous Mysore sandal soaps credit goes to late Sri S.G.Shastri
who tried to improve the process of soap making. He was an eminent scientist in
the field of Research & Development. Hence he was sent to England to master
the final aspect of soap manufacturers.
The Maharaja of Mysore & Diwan Sir. M.Visveshwaraya established the
Government Soap factory during the year 1918. The factory was started a very
small unit near K.R.Circle, Bangalore with the capacity of 100 tons P.A. in 1918.
The factory shifted its operation to Rajajinagar industrial area, Bangalore in July
1957. The plant occupies an area of 42 acres (covering soap, detergent and fatty
acid division). On the Bangalore – Pune Highway easily accessible by transport
services and communication. In November 1916 the Mysore sandal soap was
put into the market after sincere effort and experiments were undertaken to
evolve a soap perfume blend using sandalwood oil as the main base to
manufacture toilet soap. Another sandal wood oil division was established
during the year 1944 at Shimoga.
ORIGIN OF ORGANIZATION:
Karnataka produces 701 of the World’s sandal wood oil. The maharaja of
Mysore then realizing this fact was inspired to start a factory producing soap
which could be made out of plenty available sandal wood oil. In the year 1918
the Company came into existence under the name Government Soap Factory.
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This factory started at a moderate scale in year 1916 the first produced by
this was washing soap in addition to this Viz. also produced the toilet soap in the
year 1918. The toilet soap of the company was made up of sandal wood oil.
In 1950 Government decided to expand the factory in two stages. The
first stage to expansion was done to increase the output to 700 tons per year and
was completed in the year 1952 in the old premises.
The next stage of expansion was implemented in 1954 to meet growing
demand for Mysore sandal soap and for this purpose Government of India
sanctioned license to manufacture 1500 tons and 75 tons of glycerin per year.
The expansion project worth of 21 lakhs includes the shifting of the factory to a
newly laid industrial suburban of Bangalore.
The factory started functioning in this new premise from 1st July, 1957
from this year onwards the tills date the factory had newer looked back it has
achieved growth and development in production scales and profits.
The industry has 2 more division one at Shimoga and another at Mysore
where sandal wood oil is extracted. These two units are functioning from 1970
and only during 1984 manufacturing of perfumed and premiere quality
Agarbatties at Mysore division were started. Right from the first log of
sandalwood that rolled in to the boiler room in 1916, the company has been
single – minded pursuit of excellence. The project takes place with a lot
engineering skill and expertise of top-level team under the leadership of Sir.
M.Visveshwaraiah, Prof. Warson and Dr.Subrough like this soap factory was
started as a small unit and now it has grown up to a giant sizes.
RENAMING:
On 1st October 1980 the Government soap factory renamed as “Karnataka
soaps and detergent limited” The Company was registered as a public limited
company. Today Company produces varieties of products in the toilet soaps
detergent, Agarbatties and talcum powder.
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OBJECTIVES OF KS & DL COMPANY:
 To serve the national economy
 To attain self – reliance
 To promote uphold its image as symbol of traditional products
 To promote purity and quality products and thus enhance age old –
charm sandal oil
 To maintain the brand loyalty of its customer.
 To supply the products mentioned above at most reasonable and
competitive
 To build upon the reputation of Mysore soap based on pure sandal oil.
TRADEMARK OF KS & DL
The “SHARABHA”
The carving on the cover is the Sharabha; the trademark of KS & DL.
The Sharabha is a mythological creation from the pureness and embodies
the combined virtues of wisdom, courage and strength. While is illustrated in its
unusual from the body of a (on with the head of an elephant. It wad adopted as
an official emblem of KS& DL to symbolize the philosophy of the company.
The Sharabha is the symbolized power that removed imperfections and
impurities. The maharaja of Mysore has his official emblem adopted it. And
soon took its pride of place as the symbol of the government soap factory of
quality that reflect a standard of excellence of Karnataka soaps and detergent
limited
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SLOGAN
“ NATURAL PRODUCTS WITH EXOTIC FRAGRANCES”
GLOBAL FAVORITES FOR THEIR NATURAL GOODNESS

KS & DL has a long tradition of maintaining the highest quality standard,
right from the selection of raw materials to processing and packing of the end
product. The reasons why its products are much in demand globally and are
exported regularly to UAE, Brahmin, Saudi-Arabia, Kuwait, Qatar, South
America. The sandalwood oil of course, is much sought after by the leading
perfume houses of the world. The entire toilet soaps of KS & DL are made from
oils and fats of vegetables origin and are totally free from animal fats.
POLICY OF KS&DL
 Seek purchase goods and services from environment responsible

suppliers.
 Communicate its environment policy and best practices to all its
employee implications.
 Set targets and monitor progress through internal and external audits.
 Strive to design and develop products which have friendly
environmental impact during manufacturing.
 Reuse and recycle materials wherever possible and minimize energy
consumption and waste.
BIRDS EYE VIEW OF KS&DL
1918 – Government soap factory started by Maharaja of Mysore and the

Mysore Sandal soap was introduced into the market for the first time.
1950 - The factory output raised to find terms
1. Renovating the whole premises.
2. Installing new boiler soap building plant and drying chamber.
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1954 – Received license from government to manufacture 1500 tons of soap
and 75 tons of glycerin per year.
1957 – Factory shifted its operation to Rajajinagar industrial area.
1974 –Mysore sale international limited was appointed as the sole selling
agent.
1975 –The RS 3 Crores synthetic detergent plant was installed based on
Ballestra SPA (Italy) technology.
1980 -On 1st October 1980 the government soap factory a public sector
enterprise was renamed by “Karnataka soap $ Detergent Limited”
1981 – A) Production capacity was increased to 6000 tons
B) Rs.5 Crores fatty acid plant was installed with the technical
Collaboration from Europe.
1984 – Manufacturing of Perfume and premium quality at Mysore division.

1985 – Production capacity was raised to 26000 tone pa. A large variety of
toilet soap at attractive shapes and colors introduced to meet the Variety
of tastes of consume.
1992 –The Board for industries and financial reconstruction (BIFR), New
Delhi in December for rehabilitation.
1996 – The BIFR approved the rehabilitation scheme in September.
1999 - ISO 9002 Certificate for quality assurance in production, installation
and Servicing.
2000 –ISO 14001 certificate pertaining to environmental management
System.
2003 – In may the BIFR, New Delhi declared the company to be out of the
Purview.
2004 – The company launched herbal care soap.
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AN ISO 9002 COMPANY
KS & DL with a tradition of excellence of over eight decades is
committed customer delight, through total quality management and continuous
improvement through the involvement of all employees. KS&DL has got ISO
9002 certificate.
To improve the quality management system and to facilitate TQM in the
process of soap and detergent. To management took decision to obtain ISO 9002
by end of March 1999. Accordingly action play has drowned up to contribution,
the committee for the purpose during October 1998 with a mission statement.
According to the company constitution of officers go for the formation in
all the area of the company’s operation. Particularly production, procurement,
quality assurance, store maintenance. The company gives initial training
inclosing conducting employee’s awareness program document quality manual
and quality system procurement of presumes approach of ISO 9002.
In this direction company obtained the guidance from gualgi

Consultancies, Bangalore and Bureau of Indian Standards, Bangalore.
Accordingly company standards registered for ISO 9002 by the end of March to
the Bureau of Indian Standards. Obtained the certificate by the end of March
1999 itself.
This is to project in the national and international market and also to
improve quality of products offered to the consumers with the assurance of
quality in the message.
ISO 14001
The company is being in the facts of moving goods, company being
located in the heart of the Bangalore city. The top management of the company
took the decision to get the ISO 14001 and become model to other public sector
for the techniques used and also to other government units to spread the message
of maintenance.
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The clean and green objectives 14001, the constitutes core committee of
officers of 6 months to study the impact of various processes during
manufacturing covering the Bangalore complex for soap detergent in this
direction. Company gave program of the awareness of 14001.
As per the time schedule can be able to register by the end of February to
meet the entire objectives and target by completing all the stages recommended
for certification. On March, 2000, ISO 14001 with tandem complied with ISO
9002 will facilitate to improve the corporate brands in the global market it will
help the company to improve the profits. Year after Year long-term basis. The
environment management system adopted in the company through this motive as
follows:
 Conservation of energy
 Conservation of Surrounding
 Conservation of resources.
Equipped with latest technology and backed by full-fledged control and
R&D support, KS&DL is marching confidentially a head in the new millennium.
constantly developing new products KS&SL meets the changing preferences of
its customers.
SWOT ANALYSIS OF KS&DL:-
STRENGTHS:-
 only soap in India that contains pure sandal and almond oil
 Certified by ISO
 World’s largest production of sandal wood oil
 4.Brand name form decades in soap market
 4.Brand name form decades in soap market
 Brand name form decades in soap market 6.Diversified product range help
the company to maintain stability.
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WEAKNESSES:
 Distribution network weak in north and east
 Absence of television advertisement
 Neglecting freshness aspect
 High oriented cost due to excessive labour force
 Low turnover resulting in low profit.
OPPORTUNITIES:-
 Traditional benefits that sandal is good for skin
 Skin care is just gaining importance among consumers
 Government support and large production capacity.
 Advantages of being in the industry for a long time
THREATS:-
 Other competitor’s products such as Rexona, Moti, Santoor etc.
 Existence of vase market and huge demand.
There is a need for renovation of plant and machinery
 Government policy may reduce growth potential.
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PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL
Mysore Sandal Soap

Mysore Sandal Gold Soa
(125gm) (75gm, 125gm & 150gm)
Mysore Sandal Special Soap Mysore Sandal Baby Soap

(75gm) (75 gm)
Three-In-One Gift Pack – (SJR) Mysore Rose Soap (100gm)

3Tabs(150gm Each)
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Six-In-One Gift Pack-6 Tabs (150gm)

Powders (50 gm, 100 gm)
Agarbathis (20gm, 50gm, 100gm) Detergents (75gm, 150gm)
(Agarbathis (20gm, 50gm, 100gm) Baby Powders (50gm, 100gm)
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KS&DL AT GLANCE
Incorporated Name - Karnataka soaps and Detergents limited.

Address - Karnataka soaps and detergents limited
Mysore Emali : Mysoresandal @ vsnl.com
Website : www.mysoresandal.com.
Year of Establishment - 1918
Constitution - Wholly owned by Govt. of Karnataka
Management - Govt.of Karnataka & Financial Institution
Nominates Board of Director.
Chairman & MD with IAS Cadre
Rename - 1980
Trademark - The trademark is SHARABHA. It is the
Body of lion with the head of an elephant
means blending the majesty of lion with
Strength of an elephant.
Production range - Toilet soaps, bar soaps, Detergents Cakes
Agarbathies, Airfreshners, Talcum Powder,
Baby products, Glycerin (Industrial Grade)
Process know how - The facility is a pioneer in the manufactures
Of various soaps and technology
Imported from Italy.
Capacity of the Unit - Licensed capacity is title 46000 metric tons
Per annum
Cost of the project - Rs.22.94 Crores.
Working Capital - 10.49 Crores.
Sources of Finance - Loans from IDBI, IFCI, ICICI, Corporation
Bank, Canara Bank, SBM
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ORGANISATION STRUCTURE
Chairman
MD
Executive Marketing G.M. A.G.M.

Director Director Finance (H.R.D)
G.M. D.G.M
Production (P&M)
D.G.M
D.G.M. (D&M)
(S.O.D) A.G.M
(U&T)
G.M
R&D/QAD
A.G.M
(Stores)
D.G.M
(M.TL)
A.G.M
(C&S)
Objective of the Study
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The main objectives of the study to have a systematic and comprehensive
Performance Appraisal system, which includes:
 Focusing on the Key areas of Performance;

 Identifying areas of outstanding performance beside those, which need
improvement;
 Providing scope for discussion and feedback as related to performance;
 Linking training and development need for enhancing performance and
career growth;
 Delineation of clear-cut objectives and goals; Improve communication
skills and increase the trust between the Rater and the Ratee.
 To determine whether HR programs such as selection, training and
transfers have been effective or not.
 To determine whether the employees are satisfied with the current
performance appraisal programe.
Scope of The Study

The area of the study primarily concentrates, to find out the effectiveness
of Performance appraisal in organizations.
The study is conducted for a period of one month; the data has been
surveyed through internal sources.
Scope of study for the Organizations:

To get the information based on facts regularly for the impact of
Performance Appraisal on its employees. Based on the finding of the study, the
Company can formulate its future policy schemes and motivate its existing
employees.
To implement remedial measures on the basic of facts brought out during
the study and recommendations made.
This study also helps to improve the performance appraisal methods
employed in the organization, and also the productivity of the executives.
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ASSUMPTIONS
The following are the assumptions made before collecting the data
1. it is assumed that respondents would answer the questions faithfully.
2. it is assumed that respondents answering the questions would have no
difficulty in understanding the questions.
LIMITATIONS OF THE STUDY
1. The study is purely for academic purpose.

2. An in-depth study of a subject like performance appraisal in a short span of
time is quiet difficult.
3. The company could not reveal some facts about the company which are
highly confidential
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REVIEW OF LITERATURE
The history of performance appraisal is quite brief. Its roots in the early
20th century can be traced to Taylor's pioneering Time and Motion studies. But
this is not very helpful, for the same may be said about almost everything in the
field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of
work performance, appraisal really dates from the time of the Second World War
- not more than 60 years ago.
Yet in a broader sense, the practice of appraisal is a very ancient art. In the
scale of things historical, it might well lay claim to being the world's second
oldest profession!
There is, says Dulewicz (1989), "... a basic human tendency to make
judgements about those one is working with, as well as about oneself."
Appraisal, it seems, is both inevitable and universal. In the absence of a carefully
structured system of appraisal, people will tend to judge the work performance of
others, including subordinates, naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational, ethical
and legal problems in the workplace. Without a structured appraisal system, there
is little chance of ensuring that the judgements made will be lawful, fair,
defensible and accurate.
Performance appraisal systems began as simple methods of income
justification. That is, appraisal was used to decide whether or not the salary or
wage of an individual employee was justified.
The process was firmly linked to material outcomes. If an employee's
performance was found to be less than ideal, a cut in pay would follow. On the
other hand, if their performance was better than the supervisor expected, a pay
rise was in order.
Little consideration, if any, was given to the developmental possibilities
of appraisal. If was felt that a cut in pay, or a rise, should provide the only
required impetus for an employee to either improve or continue to perform well.
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Sometimes this basic system succeeded in getting the results that were intended;
but more often than not, it failed.
For example, early motivational researchers were aware that different
people with roughly equal work abilities could be paid the same amount of
money and yet have quite different levels of motivation and performance.
These observations were confirmed in empirical studies. Pay rates were
important, yes; but they were not the only element that had an impact on
employee performance. It was found that other issues, such as morale and self-
esteem, could also have a major influence.
As a result, the traditional emphasis on reward outcomes was
progressively rejected. In the 1950s in the United States, the potential usefulness
of appraisal as tool for motivation and development was gradually recognized.
The general model of performance appraisal, as it is known today, began from
that time.
Few issues in management stir up more controversy than performance
appraisal.
There are many reputable sources - researchers, management
commentators, psychometricians - who have expressed doubts about the validity
and reliability of the performance appraisal process. Some have even suggested
that the process is so inherently flawed that it may be impossible to perfect it
( Derven, 1990, for example).
At the other extreme, there are many strong advocates of performance
appraisal. Some view it as potentially "... the most crucial aspect of
organizational life" (Lawrie, 1990).
Between these two extremes lie various schools of belief. While all
endorse the use of performance appraisal, there are many different opinions on
how and when to apply it.
There are those, for instance, who believe that performance appraisal has
many important employee development uses, but scorn any attempt to link the
process to reward outcomes - such as pay rises and promotions.
This group believes that the linkage to reward outcomes reduces or
eliminates the developmental value of appraisals. Rather than an opportunity for
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constructive review and encouragement, the reward-linked process is perceived
as judgmental, punitive and harrowing.
For example, how many people would gladly admit their work problems
if, at the same time, they knew that their next pay rise or a much-wanted
promotion was riding on an appraisal result? Very likely, in that situation, many
people would deny or downplay their weaknesses.
Nor is the desire to distort or deny the truth confined to the person being
appraised. Many appraisers feel uncomfortable with the combined role of judge
and executioner.
Such reluctance is not difficult to understand. Appraisers often know their
appraisees well, and are typically in a direct subordinate-supervisor relationship.
They work together on a daily basis and may, at times, mix socially. Suggesting
that a subordinate needs to brush up on certain work skills is one thing; giving an
appraisal result that has the direct effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to
workplace disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument which claims that
performance appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process
by which rewards - which are not an unlimited resource - may be openly and
fairly distributed to those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations.
Performance appraisal - whatever its practical flaws - is the only process
available to help achieve fair, decent and consistent reward outcomes.
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PERFORMANCE APPRAISAL :
A performance appraisal, is a method by which the job performance of

an employee is evaluated (generally in terms of quality, quantity, cost, and time)
typically by the corresponding manager or supervisor. A performance appraisal
is a part of guiding and managing career development. It is the process of
obtaining, analyzing, and recording information about the relative worth of an
employee to the organization. Performance appraisal is an analysis of an
employee's recent successes and failures, personal strengths and weaknesses, and
suitability for promotion or further training. It is also the judgement of an
employee's performance in a job based on considerations other
than productivity alone.
People differ in their abilities and their aptitudes. There is always some
difference between the quality and quantity of the same work on the same job
being done by two different people.Performance appraisals of Employees are
necessary to understand each employee’s abilities, competencies and relative
merit and worth for the organization.Performance appraisal rates the employees
in terms of their performance.
Performance appraisals are widely used in the society
The history can be dated back to the 20th century and then to the second
world war when the merit rating was used for the first time. An employer
evaluating their employees is a very old concept.It is an indispensable part of
performance measurement.
Performance appraisal is necessary to measure the performance of the
employees and the organization to check the progress towards the desired goals
and aims.
The latest mantra being followed by organizations across the world being
– "get paid according to what you contribute" – the focus of the organizations is
turning to performance management and specifically to individual performance.
Performance appraisal helps to rate the performance of the employees and
evaluate their contribution towards the organizational goals. If the process of
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performance appraisals is formal and properly structured, it helps the employees
to clearly understand their roles and responsibilities and give direction to the
individual’s performance. It helps to align the individual performances with the
organizational goals and also review their performance.
Performance appraisal takes into account the past performance of the
employees and focuses on the improvement of the future performance of the
employees. Here atnaukrihub, we attempt to provide an insight into the concept
of performance appraisal, the methods and approaches of performance appraisal,
sample performance appraisal forms and the appraisal softwares available etc.
An attempt has been made to study the current global trends in performance
appraisal is the process of obtaining, analyzing and recording information about
the relative worth of an employee. The focus of the performance appraisal
is measuring and improving the actual performance of the employee and also
the future potential of the employee. Its aim is to measure what an employee
does.
According to Flippo, a prominent personality in the field of Human resources,
"performance appraisal is the systematic, periodic and an impartial rating of an
employee’s excellence in the matters pertaining to his present job and his
potential for a better job." Performance appraisal is a systematic way
of reviewing and assessing the performance of an employee during a given
period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the
employee. It helps to analyze his achievements and evaluate his contribution
towards the achievements of the overall organizational goals.
By focusing the attention on performance, performance appraisal goes to
the heart ofpersonnel management and reflects the management's interest in the
progress of the employees.
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Objectives Of Performance appraisal:
 To review the performance of the employees over a given period of time.

 To judge the gap between the actual and the desired performance.
 To help the management in exercising organizational control.
 Helps to strengthen the relationship and communication between superior
– subordinates and management – employees.
 To diagnose the strengths and weaknesses of the individuals so as to
identify the training and development needs of the future.
 To provide feedback to the employees regarding their past performance.
 Provide information to assist in the other personal decisions in the
organization.
 Provide clarity of the expectations and responsibilities of the functions to
be performed by the employees.
 To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.
 To reduce the grievances of the employees
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Appraisal Process:
Objectives of Performance
Appraisal
Establish Job Expectations
Design an Appraisal
Programme
Appraise Performance
Performance Interview
Use Data for Appropriate

Purpose
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METHODS OF APPRAISAL
Broadly, appraisal can be classified into

 Traditional methods.
 Modern methods.
Methods
Traditional methods Modern methods
Graphic Rating Scales Management By Objectives

Ranking method Behaviorally anchored rating scale
Paired comparison method Psychological Appraisal
Forced Distribution Method Assessment Centers
Checklist method Human resource accounting
Essay of free form Psychological appraisal
Group appraisal 360-degree appraisal
Confidential report
Critical Incident Method
 Simple
 Weighted
 Forced chose method
Traditional method
1.Graphic rating scale :- In this method the performance of an employee are
measured or judge and recorded on a scale this is an also oldest and widely used
technique it is also called liner rating scale or simple rating scale the appraiser
are provided with printed form to measure the performance of an each and every
employee it contains number of objective behaviors qualities and characters to be
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rated like attitude interest job knowledge initiative ability leadership qualities
emotional stability quality and quantity of work e.t.c
The rating scale is of two types continuous rating scale and
discontinuous rating scale. In continuous scale the number will be giving 0 1 2 3
4 5 were as in discontinuous scale the appraiser assign the points to each degree.
The performance regarding each character or behavior are assessed by this points
2.Ranking method :- In this method the employees are rank from best to worst
on some aspects or characteristics. The appraiser finds the employee with highest
performance and the first rank will be given then the rater select the next highest
and gives rank. Similarly employees are selected and ranks are given. Ranking
method is easy and in expensive it is applicable only when the number of
employees is less
3. Paired comparison method :- In this method the appraiser rank by

employees by comparing one employee with all other employees in a group one
at a time.
Ex: - A B C D is the employees to be assessed in the organization N (N-1)/2 is

the formula used to find out the number of comparison to be made After
comparing the employees the rater is going to find out who is best or worst.
 If the employee number is less the comparison can be made easily.
 If the number of employees is more then the technique will be more then
time consuming
This method is applicable only when the number of employees is very less
4. Forced distribution method :- The appraiser rate is employees at the higher

rate or at the lower end of the scale in the earlier methods. To over come these
high or low ratings the forced distribution methods has been develop. In this
method after assigning points to the performance of each employees has to
distribute his rating in the form of normal frequency distribution this method
eliminates central tendency and leniency error The rater use this method
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based on the assumption that all groups of employees will have same
distribution of excellent, good, average, below average, and unsatisfactory
5. Check list method :- It is a simple rating technique. The supervisor is

provided with the a list of statement or words or phrases and ask to check the
statement regarding the performance of an employee
There are 3 types of checklist method they are:
a. Simple checklist method :- It consists of large number of statements
related to the employee’s behavior the appraiser check the behavior of
an employee as positive or negative (yes or no)
b. Weighted check list method :- In this type certain points will be given
for each items that are related to the behavior of employee are multiplied
by the weights of statements and co-efficient are added.It is very
expensive to design and it takes lot of time to prepared.
c. Forced choice method :- In this method a number of statement are
prepared for each statement four descriptive statement will be given the
appraiser is ask to select one option that mostly describer the employees
behavior the option which are provided may be positive or negative
6. Critical incident method :- The employees are related discontinuously that is

once in a year or twice in a year depending upon norms of the company. The
performance rated may not reflect the real and overall performance of an
employee therefore a continuous appraisal method is used in case the supervisor
continuously records the critical incident of the employee performance of the
employee on the basis of observation and what he ask noted down.
7. Essay of free form :- In the case the rater will right a short essay describing
each employees performance. The strength, weakness, of the employees is
identified and the righting is made. A good appraisal is based on the righting
ability of the rater
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8.Group appraisal :- In this method the employee is appraised or evaluated by a
group of evaluators the group consist of immediate supervisor, other supervisor
who have close contact with the employees work H.O.D or manager and
consultants. This method is widely used for purpose of promotion, demotion
e.t.c. The group appraiser the performance of an employee compares the actual
performance with standard find out the deviation and suggestion will be given.
9. Confidential report :- It is a traditional method of performance appraisal the
appraiser is going appraise the performance of the subordinates based on
observation and judgment. The appraiser keeps is judgment and report
confidentially the superior does not allow the employee the performance states.
The report will be with respect to the strength, weakness, intelligence attitude
towards the work sincerity, commitment, punctuality character, friendliness
MODERN METHOD
1. Behaviorally anchored rating scale (BARS) :- It is a combination of both

rating scale and critical incident method. In this method the critical incidence are
identified and the rating will be done on this to find out the performance of the
employees.
It involves the following steps
 Collect critical incidence
 Identify performance dimensions
 Re-classification of incidence
 Assigning scale values to the incidence
 Producing the final instruments
2. Assessment center :- It is one of the modern methods of performance

appraisal. In this method the performance of the employees are assessed in one
particular place or a center. Various experts do the assessment of
individual employees by using various techniques. The techniques are in baskets,
role-play, case study, and transactional analysis e.t.c
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3 Human resource accounting :- It deals with cost and contribution of HR to
the organization cost of the employees includes man power planning cost,
recruitment, selection, placement training development e.t.c Employee
contribution is the money value of the employee service (what contribution is
there from employee side) The performance of an employee can be measured in
terms of the contribution in an organization . If contribution is more than the
cost then the performance will be good or positive performance. If the
contribution is less than the cost then the performance will be bad or negative
performance. If the contribution is equal the cost then it is average or moderate
cost performance
4.Management by objective :- Is a process were by the superior and subordinate

managers of an organization jointly identify its common goal define each
individual major areas of responsibility in terms of result expected and use this
measure for operating the unit and assign the contribution of its members
It focus on anticipatively set goals that are tangible, verifiable and measurable, it
mainly deals with what is to be accomplish rather than how it is to be
accomplished.
The supervisor and subordinate jointly discuss whether the subordinate achieve
the goals are not. If not, they should identify the reason for devotion and they
have to rectify it
5. Psychological appraisal :- This appraisal is conducted to assess the

employees potential it consist of
 In-depth interview
 Psychological test
 Consultation and discussion with the employees
 Discussion with the superior, subordinate and peers
 Review of other evaluation
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The appraisal is made in the area of interpretation ability, emotion
stability, motivational responses, analytical ability, interpretation and judgment
skill, ability to forecast, and etc.
The psychological appraisal result will help in decision making with
regard to placement of employees career planning tanning and development
6. 360-degree performance appraisal : - If the appraiser is by supervisors,

peers, subordinates, end users, consultants and employees themselves. Then the
appraisal is called 360 degree performance appraisal.
All this parties without bias makes the appraisal
Measuring employee performance

Performance appraisal form provides the basis for the performance
review, providing the feedback to the employees and the final rating of the
employee. It also facilitates various other HR decisions and career development
plans and decisions of the employees. Therefore,performance appraisal from
should be filled with utmost care and objectivity.
The most difficult part of the performance appraisal process is

toaccurately and objectivelymeasure the employee performance. Measuring the
performance covers the evaluation of the main tasks completed and the
accomplishments of the employee in a given time period in comparison with the
goals set at the beginning of the period. Measuring also encompasses the quality
of the accomplishments, the compliance with the desired standards, the costs
involved and the time taken in achieving the results.
Measuring employee performance is the basis of the Performance

appraisal processes and performance management. Accurate and efficient
performance measurement not only forms the basis of an accurate performance
review but also gives way to judging and measuring employee potential.
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For the purpose of measuring employee performance, different input
forms can be used for taking the feedback from the various sources like the
superior, peers, customers, vendors and the employee himself. All the
perspectives thus received should be combined in the appropriate manner and to
get an overall, complete view of the employees’ performance. Observation can
also be exercised by the superior to obtain information. Some suggestions and
tips for measuring employee performance are:
• Clearly define and develop the employee plans of action (performance)

with their role, duties and responsibilities.
• Organizational outcomes or the achievement of organizational goals
should also be kept in mind.
• Focus on accomplishments and results rather than on activities.
• Also take note of the skills, knowledge and competencies and behaviors of
the employees that help the organisation to achieve its goals.
• If possible, collect the feedback about the performance of the employees
through multi-point feedback and self-assessments.
• Financial measures like the return on investment, the market share, the
profit generated by the performance of the team should also be
considered.
For an organisation to be an effective organisation and to achieve its

goals, it is very important to monitor or measure its’ and its employee
performance on a regular basis. Effective monitoring and measuring also
includes providing timely feedback and reviewsto employees for their work and
performance according to the pre-determined goals and standards and solving the
problems faced. Timely recognition of the accomplishments also motivates the
employees and help to improve the performance.
Measuring the performance of the employees based only on one or some

factors can provide with inaccurate results and leave a bad impression on the
employees as well as the organisation. For example: By measuring only the
activities in employee’s performance, an organization might rate most of its
employees as outstanding, even when the organisation as a whole might have
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failed to meet its goals and objectives. Therefore, a balanced set of measures
(commonly known as balanced scorecard) should be used for measuring the
performance of the employee.
The most difficult part of the performance appraisal process is

toaccurately and objectivelymeasure the employee performance. Measuring the
performance covers the evaluation of the main tasks completed and the
accomplishments of the employee in a given time period in comparison with the
goals set at the beginning of the period. Measuring also encompasses the quality
of the accomplishments, the compliance with the desired standards, the costs
involved and the time taken in achieving the results.
Measuring employee performance is the basis of the Performance

appraisal processes and performance management. Accurate and efficient
performance measurement not only forms the basis of an accurate performance
review but also gives way to judging and measuring employee potential.
For the purpose of measuring employee performance, different input

forms can be used for taking the feedback from the various sources like the
superior, peers, customers, vendors and the employee himself. All the
perspectives thus received should be combined in the appropriate manner and to
get an overall, complete view of the employees’ performance. Observation can
also be exercised by the superior to obtain information. Some suggestions and
tips for measuring employee performance are:
• Clearly define and develop the employee plans of action (performance)

with their role, duties and responsibilities.
• Organizational outcomes or the achievement of organizational goals
should also be kept in mind.
• Focus on accomplishments and results rather than on activities.
• Also take note of the skills, knowledge and competencies and behaviors of
the employees that help the organisation to achieve its goals.
• If possible, collect the feedback about the performance of the employees
through multi-point feedback and self-assessments.
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• Financial measures like the return on investment, the market share, the
profit generated by the performance of the team should also be
considered.
For an organisation to be an effective organisation and to achieve its

goals, it is very important to monitor or measure its’ and its employee
performance on a regular basis. Effective monitoring and measuring also
includes providing timely feedback and reviewsto employees for their work and
performance according to the pre-determined goals and standards and solving the
problems faced. Timely recognition of the accomplishments also motivates the
employees and help to improve the performance.
Measuring the performance of the employees based only on one or some

factors can provide with inaccurate results and leave a bad impression on the
employees as well as the organisation. For example: By measuring only the
activities in employee’s performance, an organization might rate most of its
employees as outstanding, even when the organisation as a whole might have
failed to meet its goals and objectives. Therefore, a balanced set of measures
(commonly known as balanced scorecard) should be used for measuring the
performance of the employee.
Writing Performance Appraisals
The written performance appraisal document should ideally contain 3

basic sections:
Performance elements
A performance element is a general description of an employee’s overall

responsibility in a particular area of work. Performance elements are basically
the job description of the employee clearly describing the roles and
responsibilities expected from him.
Performance standards
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Performance standards are the expected or the desired level of the tasks to
be accomplished by the employee.
Actual performance
This section records the data of the actual performance of the employee,
his accomplishments, successes and failures, his on-the-job performance, his
strengths and weaknesses.
Plans for employee development
The developmental requirements (the training needs) felt or found by the

appraiser for the employee.
An overall rating
An overall rating for the employee’s overall performance like satisfactory

performance, unsatisfactory performance, requires improvement etc.
The common errors that creep in the writing the appraisals and should be
avoided are:
Halo effect:
Halo effect is the tendency of the rater to allow one aspect of a man’s
character to influence his overall rating of the employee.
Central tendency
Central tendency is the tendency of the rater to give average ratings to the
employee without actually appraising or condemning them.
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Recent behaviour (the pitchfork effect)
As per the human nature, it is a common tendency to rate the people on

the basis of their moat recent behaviour and forgetting the events and their
performance in the starting of the period.
Stereotyping an employee on the basis of the performance of his/her team

is another common error. Therefore, with proper preparation, training and effort,
writing appraisals can be converted from a time consuming activity into a
meaningful activity for the employee and the organization.
Relationship Between Performance Appraisal and Organizational

Performance
Performance appraisal processes are one of the central pillars of

theperformance management which is directly related to the organizational
performance and have a direct impact on it. Employee performance ultimately
effects the organizational performance and objectives.
Relationship between Appraisal and Organizational Performance
According to a few HR professionals, the appraisals have no value for the

organisation as there is no direct relationship in performance appraisals and the
organizational performance. Also, there is no strong evidence to prove that
appraisals positively impact the performance of the employees. But the HR
professionals who see the organizational performance as a result or sum of the
employee’s performance, argue that apart from the direct benefits to the
organisation, appraisals contribute to employee satisfaction, which in turn leads
to improved performance.
For an organisation to be effective, the goals, the standards and the action
plans need to be planned well in advance. Thus, performance appraisal facilitates
the achievement of organizational goals. It also facilitates the optimal use of the
organizational resources.
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Performance appraisal is the strength of performance management, which
in turn effects the organizational performance. It helps to identify and overcome
the problems faced by the employees in their work.
Performance appraisals a double edged sword
Performance appraisal is like a double edged sword for an organisation.

Although it has many benefits for the organisation, various studies have also
revealed that performance appraisals have the equal probability of having a bad
impact on the organizational as well as the employee performance.
Where the performance appraisal improves the work performance and

employee satisfaction, it can also demotivate employees and leaving a bad
impression on the good employees. Most of the employees do not approve of
continuous performance monitoring and performance appraisals, and also
consider it as a burdensome activity. According to Professor Kuvaas
"Performance appraisals and other tools which involve feedback and target
management should be adapted to the employee’s individual needs and
characteristics. Otherwise, there is a risk of harming the good employees without
being able to help the less good."
Performance appraisal processes can create a sense of insecurity in the

working environment and can become an obstacle in achieving the required
changes in the attitudes and the performance of the employees. The element of
bias in the appraisals can also worsen the situation.
Therefore, performance appraisals can effect the organizational

performance both positively and negatively, and should be dealt with care and
expert knowledge and experience
The Performance appraisal form should be filled by the immediate

supervisor or manager of the employee in order to ensure that the appraiser if
fully acquainted with the performance, responsibilities, targets and standards of
the employee. All the instructions and guidelines on the appraisal form should be
read and followed carefully.
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• Be prepared with all the details of the performance, the standards, job
description and the past appraisals of the employee.
• Clear and unambiguous description of the employee performance should
be given in terms of average, above average, good and excellent
performance.
• The focus should be on the employees’ behaviour throughout the year and
not just his recent performance.
• Quantify the ratings, wherever possible, to ensure easy comparability.
• Substantiate and support your rating, and attach all the necessary
documents (if required).
• Apart from the defined performance objectives and results, discuss the
related issues as well covering all the aspects of the performance.
• When filling the appraisal form, be honest and objective.
Every organisation conducts performance for assessing the performance

of the employees and the organisation. But if not conducted properly, they can
give a false impression about theperformance of the employeesand affect the
overall performance of the organisation; therefore, there is a need to train the
appraisers to ensure the maximum effectiveness of the process.
Studies have revealed that appraisals are often conducted by the managers
and the supervisor who sometimes, are themselves not aware of the procedures to
be followed. They should be explained the importance and the implications of
the Performance appraisal to the organisations, the methods to be followed, the
principles and theprocesses of the appraisal.
All managers and supervisors who consult performance appraisals should

be given training for the following:
• Methods, techniques and guidelines for setting goals and objectives

• How to evaluate the performance and rate the employees
• Standards for performance documentation
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• How to complete a performance appraisal form
• How to maintain objectivity in the appraisal
• Questioning techniques for appraisals
• Responding to employee reactions
• Improves rapport and communication
• Building morale and motivating employees
• Observing and measuring performance
• Tracking results
• Structuring the interview with the focus on improving performance
• Feedback techniques (providing constructive feedback)
• How to deal with non-performers and people who refuse to co-operate
• Post review actions
The training can be given by conducting special workshops by

professional HR consultants or qualified and experienced HR professionals of
human resource management. The venue for the purpose can be a suitable
seminar hall, training room, conference hall, boardroom, or at some place away
from the workplace like some hotel etc.
Current Global Trends In Performance Appraisal Program
The performance appraisal process has become the heart of thehuman

resource management system in the organisations. Performance appraisal defines
and measures the performance of the employees and the organisation as a whole.
It is a tool for accessing the performance of the organisation.
The important issues and points concerning performance appraisal in the

present world are:
1. The focus of the performance appraisals is turning towards career

development relying on the dialogues and discussions with the superiors.
2. Performance measuring, rating and review systems have become more
detailed, structured and person specific than before.
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3. Performance related pay is being incorporated in the strategies used by the
organisations.
4. Trend towards a 360-degree feedback system
5. The problems in the implementation of the performance appraisal
processes are being anticipated and efforts are being made to overcome
them.
6. In India, the performance appraisal processes are faced with a lot of
obstacles, the most prominent being the lack of quantifiable indicators of
the performance.
GLOBALTRENDS
The emergence of following concepts and the following trends related to

Performance appraisal can be seen in the global scenario:
• 360 Degree Appraisal
360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees’ performance
comes from all the sources that come in contact with the employee on his job.
Organisations are increasingly using feedback from various sources such as peer
input, customer feedback, and input from superiors. Different forms with
different formats are being used to obtain the information regarding the
employee performance.
• Team Performance Appraisal
According to a wall street journal headline, "Teams have become

commonplace in U.S. Companies". Most of the performance appraisal techniques
are formulated with individuals in mind i.e. to measure and rate the performance
of the individual employee. Therefore, with the number of teams increasing in
the organisations, it becomes difficult to measure and appraise the performance
of the team. The question is how to separate the performance of the team from
the performance of the employees. A solution to this problem that is being
adopted by the companies is to measure both the individual and the team
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performance. Sometimes, team based objectives are also included in the
individual performance plans.
• Rank and Yank Strategy
Also known as the "Up or out policy", the rank and yank strategy refers to
the performance appraisal model in which best-to-worst ranking methods are
used to identify and separate the poor performers from the good performers.
Then the action plans and the improvement opportunities of the poor performers
are discussed and they are given to improve their performance in a given time
period, after which the appropriate HR decisions are taken. Some of the
organisations following this strategy are Ford, Microsoft and Sun Microsystems.
Appraisal as Employee Motivation Mechanism
Keeping in mind the growing attrition rates and the employee

dissatisfaction among the employees, the HR professionals are approaching and
using the performance appraisal as a fuel to motivate employees. The latest trend
being followed by the HR professionals is to use the performance appraisal and
review process as a motivating mechanism. Various surveys and studies have
testified the relationship between performance review, pay and motivation.
Other than the traditional goal of accessing the performance of the

employees, Performance appraisals and reviews can be used as a tool to reinforce
the desired behaviour and competent performance of the employees.
One of the most motivating factors for the employees, in the Performance
appraisal processes is to receive a fair an accurate assessment of their
performance. Inaccurate evaluation is one reason because of which most
employees dread going through performance appraisals. An employee always
expects his appraiser to recognize and appreciate his achievements, support him
to overcome the problems and failures.
The discrepancies and the inaccuracies in the performance review can

demotivate the employees, even if there has been an increase in the salary. Such
inaccuracies can kill the innovating and risk taking enthusiasm and spirit in the
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employees. Similarly, inaccurate reviews with no hike in compensation can
increase the attrition rate in the organization, forcing the employees to look out
for other options.
An employee prefers an accurate performance review with no increase in

the salary oer inaccurate performance review with an increase in salary.
Employees, who receive both accuracy and a pay increase during their
performance review, are likely to be the most motivated. Therefore, performance
appraisal (review and its consequence in the form of compensation adjustments)
has the potential of motivating employees and increasing their job satisfaction.
Performance Appraisal Process - Key to Change organizational Culture
The performance appraisal process provides an opportunity for

introducing organizational change. It facilitates the process of change in the
organizational culture. The interactive sessions between the management and the
employees, the mutual goal setting and the efforts towards thecareer
development of the employees help the organization to become a learning
organization. Conducting performance appraisals on a regular basis helps it to
become an ongoing part of everyday practice and helps employees to take the
responsibility of their work and boosts their professional development.
Various studies in the field of human resources have already proved that
performance appraisal process can affect the individual performance (in a
negative or positive way), thus having an impact on the collective performance.
Performance appraisal: An opportunity for an organisational culture shift
• Performance appraisal process focuses on the goal setting approach

throughout the organisation.
• Performance appraisal helps the clarity and understanding of the roles and
responsibilities of the employees.
• The performance appraisal processes have the potential positive effects on
recruitment
• It increases organisational effectiveness i.e. what to do and how to do
through a formal and structured approach.
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• Some evidence of the beneficial effects of team rewards
Therefore, performance appraisal is also an important link in the process

of change inorganization culture.
Linking Compensation to Performance
One of the latest strategies being followed in all sectors through out the
world for retention and talent management is "linking compensation to
performance". Commonly known as” Performance pay" or "Performance based
pay", it links the compensation of the employees to their performance and their
contribution to the organizational goals. Therefore, periodic performance reviews
play a vital role and provide the basis of performance related pay.
Commissions, incentives and bonuses, piece rate pay help the employer to
pay the employee according to their productivity and hard work.
The process of performance based pay involves:
• Deciding and clearly defining the performance goals and the performance
measures
• Setting the target bonus for different levels of performances
• Measuring the performance of the employee
• Giving rewards and bonus according to performance
Organizations are also designing variable compensation plans for various

roles and positions in the organization.
Types of Performance Pay
• Merit pay – The first step to performance pay, merit pay means setting
some basic salary according to the position and the rank of the employee
and the variable part of the salary is based on the periodic performance
reviews.
• Profit Sharing – Sharing the profits of the enterprise with the employees
as bonus.
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• Incentives and Performance Bonus – Rewards for special
accomplishments or fulfillment of the targets set such as sales
commission.
• Gain sharing - Sharing of gains as a result of the increased performance of
the employees with them.
Although performance related pay has always been a topic of discussions

and controversies with many arguments against it, but it has also been proved
that performance based pay motivates employees to perform better and earn, and
encourages learning, innovation, creativity, problem solving and empowerment
which can be facilitated through proper performance measurement and reviews.
Performance Appraisal in Government Organizations
The commitment to the performance appraisal system in public

organizations in India is very low. Low commitment and lack of accountability
are the major reasons for the low institutionalization of the performance appraisal
processes in government organizations.
Performance appraisal in Government Organizations is not directly linked

to rewards, training or promotions due to which the approach towards the whole
process remains unprofessional. There is a lack of the appropriate atmosphere
and professional approach towards the performance appraisal system and the
objective of the whole exercise is defeated.
The most common method of Performance appraisal that is used in most

of the government organisations is confidential report (popularly known as CR)
written by the superior of the employees.
The following are the major discrepancies found in the performance

appraisal processes being followed at the government organizations.
o Most of the indicators used for measuring the performance the employees
are not quantifiable in nature, making it difficult to measure the
performance.
o Due to the lack of accountability and job security, most government
employees have a laisser faire attitude towards their work.
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o Unavailability of the job descriptions for many employees.
o Most of the objectives in government organisations are unchallenging,
unrealistic and not timely reviewed and updated.
o It is difficult to measure the average performance of the government
employees.
o Unprofessional and unstructured approach towards the process.
o There is often a lot of bias and subjectivity involved in the ratings given
by the superiors.
o Lack of complete information on appraisal forms due to expertise and
relevant training; often, the appraisals are not conducted on a regular
basis.
o In government organisations, team appraisal is often not possible.
o Other HR decisions like rewards, training or promotions are not directly
linked to the results of the performance appraisal process.
PERFORMANCE APPRAISAL AND TQM :
According to Sashkin and Kiser,"Total Quality Management (TQM) may

be defined as creating an organisational culture committed to the continuous
improvement of skills, teamwork, processes, product and service quality and
customer satisfaction."TQM refers to the continuous improvement in the quality
of work of all employees with the focus on satisfaction of the customers.
Elements of TQM are:
 Meeting customers requirements,

 Continuous improvement
 Empowerment of employees.
 Both TQM and Performance appraisal/ evaluation are focused on
increasing the productivity of the organisation through continuous
improvement. They both facilitate the systematic management of all the
processes, actions and practices at all levels in the organization.
 Some of the benefits of both the performance appraisal and TQM are:
• Improvement in the performance of the employees
• Brings quality consciousness
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• Better utilization of resource
• Commitment to higher quality
But there also exists a few other schools of thought which refute the
compatibility of the TQM and performance appraisal. According to them, both
TQM and Performance appraisals differ in their fundamental nature,
characteristics and requirements making it impossible to combine them.
Some fundamental differences between the two are as follows:
• TQM is team – based whereas performance appraisals are designed for

individuals i.e. it undermines teamwork.
• TQM focuses on customer satisfaction whereas performance appraisal
focuses on the improving the performance of the employees.
• Performance appraisal generally results in some rewards like increased
pay etc. whereas TQM may or may not yield visible results.
Performance appraisal can sometimes, encourage an employee to focus on

his personal goals (like his promotion) rather than the organisational goals.
Therefore, the suitable practice should be chosen carefully by the top
management and the leaders of the organisation.
Purpose Of Performance Appraisal
Performance Appraisal is being practiced in 90% of the organisations

worldwide. Self-appraisal and potential appraisal also form a part of the
performance appraisal processes.
Typically, Performance Appraisal is aimed at:
 To review the performance of the employees over a given period of time.

 To judge the gap between the actual and the desired performance.
 To help the management in exercising organizational control
 To diagnose the training and development needs of the future
 Provide information to assist in the HR decisions like promotions,
transfers etc.
 Provide clarity of the expectations and responsibilities of the functions to
be performed by the employees
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 To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development
 To reduce the grievances of the employees
 Helps to strengthen the relationship and communication between superior
– subordinates and management – employees
Analysis for Improving Performance
Any performance review process is incomplete without the feedback to

the employees. The feedback could be given in the review discussion. Review
discussions are semi formal, scheduled, periodic interactions – usually bimonthly
or quarterly – between a manager and his employee. The basic purpose of the
review discussion is to analyze the performance of the employee in the past to
improve the performance of the employee in future.
A review discussion is an opportunity to coach, mentor, learn and

understand. The manager encourages his/her employees to critically reflect over
progress made on thePerformance appraisal plan and to develop creative, yet
feasible alternatives for problem areas.
The manager uses this opportunity to:
• Review the performance of the each employee individually.

• Discuss the problems faced by the employees during the course of action.
• The solutions tried, and the degree of success achieved in solving the
problems faced.
• Revisit with the employee, his/ her annual plan for the remaining time
period and develop revised action plans, if necessary.
Review discussions reassure the employees that each one of them has
structured opportunities for one to one interaction with the manager once every
two or three months during the year. These opportunities are important as they
provide an important chance for performance monitoring or development
mentoring. The aim of the performance review discussions is to share
perceptions, solve the problem faced during the course of the action, decide on
the new goals jointly and provide a feedback to the employee for the past
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performance i.e. to look at his strengths and weaknesses and also help to chart
out a career plan for the employee.
The focus of these performance review discussions should not bet o judge
the employees’ past performance; rather it should be to motivate the employee to
improve his future performance and reinforce his good behaviour.
Performance Appraisal Softwares
The growing size of the organisations, the competition in the labour

market and the importance of the performance management and appraisals have
given way to the use of performance appraisal softwares. Many companies
providing the HR services and the software companies provide the performance
appraisal softwares.
The performance appraisals softwares
Automate the appraisal processes and assist the HR by adding online

capacities to the processes. The performance appraisal software can be
customized according to the needs of the organisation. The various forms and
other processes can be designed in accordance to the practices being followed in
the organisation.
The software standardizes the appraisal process. The software applications

also have guidelines for the users to guide them throughout the process, alerting
the users about the errors and mistakes (if any), suggesting the appropriate
language to be used, provides a systematic records of the necessary documents to
the rater and the HR Department.
Several software packages are available which also provide the 360
degree reviewprogram so that employees can get a multi-rater feedback about
their performance.
Benefits of using Performance appraisal softwares :
By using the performance appraisal softwares, an organisation can reap

the following benefits:
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• The performance appraisal software can be implemented organisation
wide, covering all the employees at the levels (from lowest rank to top
management) and across all the branches of the organisation throughout
the world.
• Designed with the latest technologies, they are easy to understand and
make things structured, organized and standardized throughout the
organisation.
• Performance Measures, KPI and KRA’s, goals and objectives for each
employee, team and department can be weighted and listed according to
their importance and priority.
• Use of the standard performance appraisal softwares can help to reduce
the subjectivity and the bias in the ratings of the appraisers.
• It facilitates the calculations and adjustments of the performance related
pay and other related HR decisions.
• Automatic reminders can be sent to the employees and the concerned
authorities for the due appraisals.
• It helps the HR department in appraising the performance and to manage
the performance of the employees efficiently and effectively.
• Helps to improve the productivity of the employees and employee
retention in the organisation.
• Keeps a detailed record of the past performances and the Performance
Reviews of the employees.
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Succession Planning and Performance Management
Succession planning is ensuring the right people in the right place at the
right time. It is a part of HR planning for the organization and involves finding
the right people to take higher responsibilities in the organization. The success of
the organization is largely dependent on the quality of its human resources and
leaders of the organisations. Succession planning is proactive in nature and
results in the creation of a talent pool of candidates with the required potential
and competencies who can take the high positions in future and help in the
growth of the organization.
Succession planning is being practiced since a long time now and has
become an indispensable part of corporate strategy in most of the organizations.
One of the best approaches to succession planning is "performance based
succession planning".
HR planning for the probable future needs is a challenge for the HR

managers and the performance review and can help tremendously to attain this
challenge. Performance appraisal process (like performance reviews and
competency assessment) and succession planning together can help to
strategically identify and develop the required talent pool.
Apart from the various other factors, succession planning is based on:
• The positions for which the planning is being done

• The current and past performance levels of the employees
o Performance rating
o Competency mapping
• How have the selected employees managed to improve since their last
review?
• The growth potential and the attitude of the employees.
• Their ability to meet the changing and increased level of standards and
measurements set by the management.
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Succession planning is a complicated process and requires time and
ongoing effort. Therefore, performance appraisal and review process helps to
judge the knowledge, skills, attitude, competencies and potential of the
employees and finding the mentoring and coaching requirements if any and thus
identifying the right candidates for taking future responsibilities i.e. succession
planning.
For example at Wipro, the succession planning programme is called

Talent Review and Planning (TRP), Wipro conducts regular quarterly talent
engagement and development (TED) reviews, and action plans of each SBU and
vertical are reviewed and a talent pool of the suitable identified candidates is
prepared.
Therefore, performance based succession planning helps in creating a

required talent pool of employees for the future needs of the organisation.
Use of IT in Performance Appraisal
The rapid developments in the information technology have not left any
sphere of the human work life untouched. The organisations are growing in size,
functions, are working across nations and thus are becoming more and more
complex to handle. More and more organisations are integrating information
technology (IT) in their human resource (HR) activities to improve their
effectiveness.
Technology helps to measure and manage the employee performance. It

helps to automate the processes of HR and save time and cost and reduce the
efforts required and the paperwork. According to a survey, more than 30 percent
of the respondent organisations are already using or are planning to buy software
for the performance management in the organisation.
To help and automate the processes of Performance appraisal

management, organisations are increasingly taking the help of various
performance management softwares like
• workforce performance management (WPM) suite systems and

• talent management softwares
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which help to systematically record all the data about the employee
performance, pre-determined targets and the results achieved, compensation,
succession planning and other related HR systems. The various forms can be
filled online and can be submitted to the HR.
The information is systematically stored in metrics where the current

employee performance can be compared with the targets and the standards.
These systems also help to analyze the training needs of the employees,
systematically monitor their progress and their review and feedback and the
improvement in the performances. Such software systems are provided by IT
companies which they help to implement and integrate in the processes of the
organisations. The organisations today have the choice of buying a ready to use
licensed software package or can get a customized software system prepared
according to its own needs and requirements.
Challenges Of Performance Appraisal
An organization comes across various problems and challenges Of

Performance Appraisal in order to make a performance appraisal system
effective and successful. The main Performance Appraisal challenges involved in
the performance appraisal process are:
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• Determining the evaluation criteria
Identification of the appraisal criteria is one of the biggest problems faced

by the top management. The performance data to be considered for evaluation
should be carefully selected. For the purpose of evaluation, the criteria selected
should be in quantifiable or measurable terms
• Create a rating instrument
The purpose of the Performance appraisal process is to judge the

performance of the employees rather than the employee. The focus of the system
should be on the development of the employees of the organization.
•Lackofcompetence
Top management should choose the raters or the evaluators carefully.

They should have the required expertise and the knowledge to decide the criteria
accurately. They should have the experience and the necessary training to carry
out the appraisal process objectively.
•Errors in rating and evaluation
Many errors based on the personal bias like stereotyping, halo effect (i.e.
one trait influencing the evaluator’s rating for all other traits) etc. may creep in
the appraisal process. Therefore the rater should exercise objectivity and fairness
in evaluating and rating the performance of the employees.
•Resistance
The appraisal process may face resistance from the employees and the
trade unions for the fear of negative ratings. Therefore, the employees should be
communicated and clearly explained the purpose as well the process of appraisal.
The standards should be clearly communicated and every employee should be
made aware that what exactly is expected from him/her.
Performance Review
The performance review meeting should not be strictly formal nor should
it be completely informal in nature. Ideally, the review meeting should be
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structured, semi – formal meeting which needs prior preparation by the appraiser
as well as the employee for it to be effective.
Following are some points that need to be prepared before the review
meeting of Performance appraisal:
Inform the concerned employees the date, time and place for the review meeting
well in advance.
 Review and be prepared with each and every employee’s
 Job description
 Performance standards
 Planned performance goals
 Performance measures collected throughout the time period
 The critical incidents details
 Past appraisals of the employees.
 Be ready with all the important dates
 Give the employee a copy of the appraisal form
 The appraiser needs to completely understand the standards for the

employees at same level to maintain the consistency in the process.
 Prepare what to say and how to say it calmly.
 The feedback should be prepared in quantifiable measures where ever

possible.
 The appraiser should be familiar with the performance review form and
the details
 The employee and the appraiser both should be prepared to discuss and
figure out the future goals and training needs
 They should be mentally prepared for constructive feedback
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 Collect as many evidences to support your point as possible like the
monthly, quarterly progress reports.
Performance Appraisal Feedback
Performance appraisal process is incomplete without the feedback given

to the employee about his appraisal and his performance. But the way of giving
as well as receiving the feedback differs from person to person and their way of
handling and their outlook towards the issue.
According to a popular saying:
"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM

FOUNDATION WITH THE BRICKS OTHERS HAVE THROWN AT HIM."
Therefore, On the part of the person receiving the feedback, the following
points are important to be taken care of:
 The employee should have a positive attitude towards the feedback

process
 He should listen to the suggestions of the appraiser calmly and try to
incorporate them in his plans.
 He should not hesitate to ask for the help of his superiors.
 Should have a co-operative attitude during the feedback meeting.
 Don’t judge the appraiser as a person.
 Should take the feedback objectively.
 Should not judge the appraiser as a person on the basis of the feedback.
On the part of the appraiser or the manager / person giving the feedback,
the following points are to be taken care of:
 The appraiser should make the receiver feel comfortable during the
feedback meeting.
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 The appraiser should make it a two – way conversation i.e. let the
employee speak.
 Listen to the employee and note his points, suggestions, problems etc.
 The appraiser should not adopt a confrontational approach towards the
meeting. The goal is not to criticize the employee.
 Provide a constructive feedback to the employee i.e. in a way which will
motivate him to perform better.
 Have a positive attitude towards the process
 Try to understand the reasons of his failure.
 Be fair and objective
 Prepare yourself for what to say and how to say.
 Make the appraisal feedback meeting useful and productive for the
organization and the employee.
Active Performance Appraisal Conversation
Active conversation plays an important part in the performance

reviewmeeting. The appraiser should ensure that the meeting has a two way
conversation and that the employee should get a fair chance to speak. The
"manner" of giving the feedback of the performance of the employee is very
important. The conversation should have an optimistic and motivating tone.
Some important points that should be taken care of in the active

performance appraisal conversationare:
1. Make it a two-way conversation. An effective Performance appraisal

review requires an interactive discussion with an open agenda. Try to
formulate questions that seek the employee’s ideas and input. This will
help the employee feel you value his or her opinions. Give the employee a
fair chance to put forward his ideas; let him speak.
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2. Be a good listener. Remember to be an active listener and to pick up on
your employee’s verbal and nonverbal cues. Listen to his ideas and
problems.
3. Address what’s important to the employee. Since job satisfaction is the
most important factor affecting an employee’s attitude (and therefore his
or her level of performance and value to your company), an effective
review should delve into areas that include issues most important to that
employee.
4. Lead with the positive. It’s important to reaffirm the employee’s strengths
at the beginning of the review. Since job security is the number one
concern of most people, the performance review is a good time to tell an
employee how much you value their contributions to your business.
5. Don’t be confrontational. It’s important not to criticize the employee in
general terms. The goal is to evaluate job performance and not the person.
A performance review that turns into a gripe session misses the
opportunity to raise employee morale.
6. Positive reinforcement – emphasizing what has been done well so that it
will be done even better in the future and making only constructive
criticisms (i.e. those that point the way to improvement).
7. Exchange of views - Ensuring that the discussion involves a full, free and
frank exchange of views about what has been achieved, what needs to be
done to achieve more and what the appraiser think about their work the
way they are managed and their aspirations.
8. Agreement - jointly coming to an understanding about what has to be
done by both parties to improve performance, knowledge and skills and
overcome any work problems raised during the discussion.
Employee Training Needs Assessment
A "training needs assessment", or "training needs analysis", is the

systematic method of determining if a training need exists and if it does, what
training is required to fill the gap between the standard and the actual
performance of the employee. Therefore, training needs analysis is
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• Systematic method of determining performance discrepancies
• Causes of performance discrepancies.
\Reasons to conduct training needs analysis
• Identify the deficiencies

• Determine whether employees lack KSAs
• Benchmark for evaluation of training
• Makes sure training is provided to the right people
• Increases the motivation of training
Training needs analysis includes:
• ORGANIZATIONAL ANALYSIS – It includes the analysis of
o Mission & strategies of organization

o The resources and their allocation
o Internal environment- attitudes of people
• OPERATIONAL ANALYSIS
 Determine KSAs required for standard performance
 Job analysis
• PERSON ANALYSIS
 Specific areas of training required by the individual
 Whether an individual is capable of being trained
 The data regarding the person analysis can be collected through-
 Performance data
 Behavioral and aptitude tests &
 Performance appraisal
Performance appraisal can significantly help in identifying the training

needs of the employees. Performance appraisal helps to reveal the differences
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and discrepancies in the desired and the actual performance of the employees.
The causes of the discrepancies are also found whether they are due to the lack of
adequate training or not. The employee can also tell about his training
requirements (if any) in his self appraisal. A performance appraisal after the
training program can also help in judging the effectiveness of the program.
How To Complete Performance Appraisal Form
Performance appraisal form provides the basis for theperformance review,

providing the feedback to the employees and the final rating of the employee. It
also facilitates various other HR decisions and career development plans and
decisions of the employees. Therefore,performance appraisal from should be
filled with utmost care and objectivity.
The Performance appraisal form should be filled by the immediate

supervisor or manager of the employee in order to ensure that the appraiser if
fully acquainted with the performance, responsibilities, targets and standards of
the employee. All the instructions and guidelines on the appraisal form should be
read and followed carefully.
• Be prepared with all the details of the performance, the standards, job
description and the past appraisals of the employee.
• Clear and unambiguous description of the employee performance should
be given in terms of average, above average, good and excellent
performance.
• The focus should be on the employees’ behaviour throughout the year and
not just his recent performance.
• Quantify the ratings, wherever possible, to ensure easy comparability.
• Substantiate and support your rating, and attach all the necessary
documents (if required).
• Apart from the defined performance objectives and results, discuss the
related issues as well covering all the aspects of the performance.
• When filling the appraisal form, be honest and objective.
How a Performance Appraisal Could Be Effective
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The performance appraisal is just one step in a performance management
system; however, employees often see only the culminating performance
appraisal meeting as the only factor in an employer evaluating their job
performance. Beginning with the tools to make your performance management
system effective, your annual evaluation can be a meeting to which employees
look forward rather than having your employees dread their performance
appraisal meetings.
Performance Management System Fundamentals
The basis of a good performance management system is in the planning

process. As you launch your business, give serious consideration to the type of
performance management system you believe is best suited to your workplace.
The performance management system your company utilizes must be congruent
with your company philosophy, mission and values. Defining your company
philosophy, mission and values starts with your business plan and carries out
through your company practices. Before constructing a performance appraisal
that you believe will work, consider the fundamental steps in designing a
performance management system. These steps include developing job
descriptions and job specifications, identifying performance standards, and
formulating the types of rewards and recognition you offer for good
performance.
Constructing Job Descriptions And Job Specifications
Accurate, thorough job descriptions and job specifications are an essential

component of an effective performance appraisal. The author of "Writing the
Effective Performance Appraisal," Marry Anne Hahn, notes: "Know the job
accountabilities of the employees. This entails familiarity not only with the job
description and department standards for quality and productivity, but the variety
of skills it takes to do the job well. The more specifically supervisors can
describe the jobs performed by staff, the more specifically they can tailor their
review writing to the level that individual employees have mastered them."
Without knowing the company's expectations and reviewing the tasks, duties and
responsibilities, your employees are lacking the necessary tools to great
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performance. Many publicly available resources provide valuable information to
help you construct job descriptions. One resource is the U.S. Bureau of Labor
Statistics Occupational Outlook Handbook, 2010-11 Edition. This online
resource contains basic responsibilities for thousands of job titles. Job
specifications, on the other hand, address the physical and mental capabilities an
employee must possess to perform well in his role with your company.
Establishing Performance Standards
Performance standards define the amount of work, effort or employee

tasks necessary to reach a predetermined level of performance. For example, if
you have a sales representative whose work is evaluated by the number of sales
made each quarter, you could establish a performance standard based on the sales
revenue she generates. The standards for exceeding your company's expectations
for sales reps could equal 50 sales per month, 30 sales for meeting expectations
and 10 sales per month for performance that falls below expectations. Another
example from a qualitative perspective could be a human resources employee
relations specialist who effectively lowers turnover through planning, organizing
and evaluating employee opinion surveys. Assessing a performance standard for
improving employee engagement would be a suitable task for your employee
relations specialist to make your performance appraisal effective.
Implementing Rewards And Recognition
Most employees want to know what the rewards are for different levels of
performance. Look at your company's compensation structure and select the type
of rewards you believe are equitable for each level of performance. If you reward
low-performing employees at all, they will receive a minimum increase or bonus
in exchange for the work performed during the appraisal period. High performers
are generally rewarded with a salary increase and perhaps a bonus--this
motivates employees to continue providing top performance, and bestows
rewards and recognition due for excellent performance, aptitude and initiative.
Communication
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Communication is a critical element of your company's performance
management system and the performance appraisal specifically. During new-hire
orientation, take time to explain to new employees how their performance will be
evaluated. It's important to explain the system and the appraisal process--
employees can better determine how to self-evaluate their performance if they
understand the performance standards on which their performance appraisals are
based. Importantly, your supervisors and managers must be trained to administer
a performance appraisal that is not dreaded by the manager and the employee.
Many employees approach the performance appraisal meeting with such
trepidation that the ordeal becomes the least-liked part of working. Don't let that
happen. Keep your entire staff informed about your company's expectations and
how they can exceed those expectations.
Performance Appraisal Exercises
Effective performance appraisal can boost employee performance and

business results.
Performance appraisal is important for small businesses as well as large,

but unfortunately many businesses don't take maximum advantage of this
opportunity to coach, counsel and develop employees. Simple performance
appraisal exercises can help managers and supervisors feel more comfortable--
and be more effective--when evaluating their employees.
Turning Mushy Into Meaningful
One of the keys to effective performance appraisal is specificity. Mushy

feedback make it virtually impossible for employees to understand how they can
improve their performance. Lin Grensing-Pophal, a business consultant and
author of "Human Resource Essentials", recommends the following
exercise to help managers learn how to give more meaningful feedback.
"Use the SMART acronym, which is an acronym often used for planning
activities, but it works just as well here," she says. SMART stands for
specific, measurable, attainable, realistic and timely. Ask managers to bring in
examples of feedback they've given in the past and consider how that
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feedback could meet each of these criteria. Importantly, says Grensing-Pophal,
managers should not wait until the formal review process to provide feedback. It
should be as immediate as possible, when praising and when offering
constructive feedback.
Role-Play
Role-playing can be a great exercise to help managers become more

comfortable with conducting performance appraisal. A variety of scenarios can
be provided based on common or specific interactions. Role-play can be a good
one-on-one exercise as well where human resources professionals or the
managers' managers can serve in the role of employee and work with the
manager to perfect feedback skills by practicing various approaches and
responses.
If I Were Hearing This...
Turn the tables on managers by asking them to imagine themselves as the

recipient of the performance appraisal they are about to give to an employee.
What additional questions would they have? What objections might they raise?
What specific examples would be helpful to clarify how performance could be
improved. And, on the flip side, managers should also consider that even positive
evaluations are sometimes handled ineffectively--,being specific, whether
delivering positive or constructive feedback, is critical.
Feedback From Those Evaluated
It can be very instructive for managers to seek feedback from employees

about the effectiveness of their performance appraisal skills. Although this can
be difficult to do, for those who feel comfortable asking for this type of
feedback, it can be very helpful in terms of pointing out what went well and what
might improve the next time around.
How to Prepare a Performance Appraisal
A performance appraisal, also called an employee evaluation, is a way for

managers to keep tabs on employee performance when running a business. The
appraisal is a measurement tool that lists key behaviors and duties essential to
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your work process—you, as the manager, are responsible for rating the employee
on each of these points.
Step 1
Determine the most important factors or attributes that you want your
employees to display while on the job. For instance, "arrive on time," "quality
control" or "good customer service." List all of these factors in bullet point
format for reference as you develop your performance evaluation form.
Step 2
Prepare the performance appraisal form with a listing of questions based

on your requirements as listed in Step 1. Categorize your list of questions into
sections on the form so that it's simpler for you and the employee to follow. For
instance, you might have a section on punctuality, another regarding the
employee's responsiveness to customer inquires and yet another regarding
dependability.
Step 3
Create a rating scale to use on your appraisal form for each question on
the sheet. For instance, you can rate the employee on a scale of 1 to 5, where 1
shows a need for improvement and 5 is for exceptional work.
Step 4
Fill out your appraisal sheet for each employee. Take your time when
choosing ratings using your own knowledge of the employee's work as well as
feedback from customers and co-workers if possible. This is called 360 degree
feedback.
Step 5
Prepare questions and comments, in addition to the ratings, that you want
to speak with the employee about at the actual review. You can enter the
comments directly on the form or jot down notes for your own reference on a
separate page. For instance, you might want to ask an employee how she
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managed to improve her sales percentages in such a short period of time so that
you can use that information in your sales training procedures.
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Step 6
Make a copy of the filled form for the employee to keep for his own
records after you complete the review meeting. Keep your copy of the appraisal
in the employee's file.
How to Respond to an Employee Performance Appraisal Discussion
A performance appraisal is an official evaluation of an employee, usually

completed by a supervisor or senior-level management. The appraisal process
helps the employer determine whether an employee's job performance is
satisfactory. It also gives the employee insight into his strengths and weaknesses
in the workplace. If you participate in a performance appraisal discussion of an
employee, there are several ways your response can aid in the evaluation process.
Step 1
Remain objective during the discussion of the performance appraisal.

Avoid allowing your personal emotions, anger or indifference to set the tone for
the meeting. The University of California at Berkeley recommends coaching,
rather than judging, in a performance appraisal discussion to avoid placing
blame. Use objective evaluations to encourage the employee to assume
responsibility for improving his work performance.
Step 2
Formulate a comprehensive evaluation of the employee's attributes, skills,

accomplishments and shortcomings. Don't focus solely on positive or negative
characteristics during the discussion time. Working with Insight recommends
weighing all of the information to refine your perspective concerning the
employee's overall performance. Take notes during the appraisal discussion, so
you can effectively discuss the worker's best attributes and weakest qualities.
Step 3
Focus the appraisal discussion on the employee's most important job

responsibilities. Don't allow the discussion to revolve around insignificant details
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that are unrelated to the employee's workload. Working with Insight states that
most supervisors are concerned with about 20 percent of an employee's job tasks,
so it is critical to focus on those priorities. For example, discuss the employee's
ability to complete projects, his punctuality, attainable benchmarks, the quality of
his output and his ability to work with others. Avoid discussing the employee's
political views, communication styles or personal habits, unless they are directly
related to his job performance.
Step 4
Don't compare the employee to co-workers. It's acceptable to rank

employees against other workers if their job tasks are similar and factual data
differentiates their skill levels. For example, if both employees are in sales and
one has closed more deals, it is appropriate to compare the sales numbers. Use
output comparisons to determine if the employee is as productive as other
workers. Don't discuss how the employee ranks against other workers if the job
responsibilities vary, the pay grades diverge or performance expectations are
individualized
Arguments Against Performance Appraisal
A large number of managers, human resource professionals, human

resource consultants and researchers are recommending companies to get rid of
the performance appraisal systems. The main argument given by the researchers
is that the system of performance appraisals itself is based on a few wrong
assumptions and it fails to fulfill its basic purpose.
The major arguments against performance appraisal given in favour of

abolishing the performance appraisals are:
The first and the foremost argument is the fact that discrepancies between
the theory and its application. There is often a disconnect between the theory and
the practical implementation.
PA is a bitter process for most of the employees which can create

emotional pressures and stress for the employees
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 The focus of the PA process is too narrow i.e. just to determine the
rewards and punishments for the employees by measuring their past
performance.
 PA is often looked upon as a tool to control the employees by the

superiors which dampen the intrinsic motivation of the employees.
 Most of the managers and superiors are not trained enough to carry the
processes in the appropriate and the structured manner.
 PA process increases the dependency of the employees on their superiors.
 PA process encourages accountability, approvals and discourages the

spirit of creativity and initiative by employees and also demotivates them.
 Performance appraisal are conducted by managers who are often not

trained to be appraisers. This obstructs the genuine feedback, as it
includes subjectivity and bias of the raters leading to incorrect and
unreliable data regarding the performance of the employees.
 PA can adversely affect the morale of the employees and create

dissatisfaction among them, thereby affecting the organizational
performance.
 Performance appraisals and reviews are often time consuming, with faulty
methods to measure performances and generating false results and the
decisions taken can be politically influenced.
An example to support the above mentioned points would be the case of

an call centre employee - The appraisal of a call center employee is based on the
amount of work they do, the number of calls they receive, the amount of revenue
they collect, the average time they append on each call. But if analysed, all these
factors depend on other factors like the response of the callers, the availability of
the information asked for, the nature of the calls etc. which are often not
considered during appraisals. But the employee being aware of all these factors,
the situation can create stress and dissatisfaction among the employee.
KSOU, Mysore 70
Performance appraisal tools can cause erosion of employee motivation
when not used properly.
Businesses use performance appraisals as tools to determine how

effectively employees achieve goals, grow in job scope and communicate with
others. Managers can choose from a variety of appraisal schemes and, when used
properly, these can prove very effective in gauging employee performance.
Despite this, performance appraisal systems are not without problems and
drawbacks. Evaluators must use these tools properly and fairly to avoid the
pitfalls and possible push-back from employees.
Limited Perspective
Traditional performance review tools involve only the manager’s view of

his subordinate’s performance. If the manager supervises several direct reports
and also reports to his own supervisor, he probably has a limited amount of time
to actually observe his employee in action and see how he overcomes problems
and roadblocks to achieving objectives as well as how effectively he
communicates with others. Many companies overcome this drawback by
employing peer review-based appraisal tools that take into account the
employee’s working relationship with customers, coworkers, vendors, direct
reports and supervisors. By collecting the views of these other frequent employee
contacts, the scope of the evaluation widens allowing for more objective
assessment of performance.
KSOU, Mysore 71
Erosion of Motivation
Companies that use performance appraisals as the sole tool when doling
out pay increases run the risk of added conflict between supervisors and
subordinates, and eroding employee motivation to improve. The conflict arises
because subordinates want the largest pay increase possible, but managers often
have limited funds for these increases. The manager wants the subordinate to
improve the weak areas of his performance. Improvement requires the manager
and employee work together, but when pay is tied to performance appraisals,
employees often focus on their strong behaviors rather than trying to improve
their weak points. This can lead to intense arguments over the appraisal and
allotted pay increases, eroding employee motivation and the manager-
subordinate relationship.
Time Consuming
Many appraisal tools that offer the most objective view of an employee’s
performance are also the most time consuming. One of the most popular peer-
review models, the 360-degree feedback appraisal model, requires training of
evaluators and careful crafting of customized survey questions. The evaluation
process itself can take up two or more weeks at a time, depending on the size of
the company.
Subject to Appraiser Bias
Managers bring their own biases and subjective notions to the appraisal
process. Bias can also skew the results of the more objective peer review-based
appraisal schemes, causing employees to lose faith in the system and not to see
them as credible measures of performance. Employees must see these systems as
fair and just for the process to work properly
KSOU, Mysore 72
Problems of rating:
Performance Appraisals are subject to a wide variety of inaccuracies and
biases referred to as ‘Rating Errors’. These errors occur in the rater’s
observations, judgment and information processing and can seriously affect
assessment results. The most common rating errors are:
1. Leniency or Severity:
Leniency or Severity on the part of the rater makes the assessment
subjective. Subjective assessment defeats the very purpose of performance
appraisal.
2. Central Tendency:
This occurs when employees are incorrectly rated near the average or
middle of the scale. The attitude of the rater is to play safe. This safe
playing attitude stems from certain doubts and anxieties that the raters
have while assessing the rates.
3. Hallo Error:
A Hallo Error takes place when one aspect of an individual’s performance
influences the evaluation of the entire performance of the individual. In an
organization, a hallo error occurs when an employee who works late
constantly might be rated high on productivity and quality of output as
well as on motivation.
4. Rater Effect:
This includes favoritism, stereotyping and hostility. Excessively high or
low scores are given only to certain individuals or groups based on the
rater’s attitude towards the rate, not on actual outcomes or behaviors, sex,
age, race and friendship biases are examples of this type of error.
5. Primacy Effects:
The rater’s ratings are heavily influenced either by behavior exhibited by
the rate during the early stages of the review period (Primacy) or by
outcomes, or behavior exhibited by the rate near the end of the review
period (Regency).
KSOU, Mysore 73
6. Perceptual Set:
This occurs when the rater’s assessment is influenced by previously held
beliefs.
7. Performance Dimensions Order:
Two or more dimensions on performance instrument follow or closely
follow each other and both describe or rotate to a similar quality.
Research Methodology of The Study

A central part of research activity is to develop an effective research
strategy or design. Methodology involves the most suitable methods of
investigation. The nature of research instrument, the sampling plan and the type
of data are also chalked out in this.
The research design constitutes the blue print for the collection,
measurement and analysis of data. It aids the researcher in the allocation of his
limited resources by posing crucial choices from which choices can be made.
Naturally Research design is the plan and structure of investigation. So
conceived as to obtain answers to research question. The plan is the overall
scheme or program of the research.
Types of Research:
Descriptive Research:
Has been used to describe what existed in the market/field outside where
the project study was conduct. Description of goods, customers, business
processes, buying habits etc.
Casual Research:
Has been used to classify, categorize and compare similarities and
differences observed in the various samples studied.
KSOU, Mysore 74
Exploratory Research:
Has been used to explain the various phenomena in terms of similarities
and differences.
Primary Data:
Those data, which are collected first hand, either by the researcher or by
someone else especially for the purpose of study is known as primary data.
Primary data are original source from which the researcher directly collects data
that have not been previously collected. In the present study, primary data has
been collected using questionnaire. For the purpose of collecting the same,
respondents have been selected. In this study primary data plays a vital role for
analysis, interpretation, conclusions and suggestions.
Secondary Data:
Those data, which are collected by the researcher by referring some books
and referred text for the purpose of study, are known as secondary data.
Secondary data are main source from which the researcher collects data.
In the present study, secondary data has been collected using books, texts articles
and magazines. In this study secondary data plays a vital role for analysis,
interpretation, conclusions and suggestions.
The researcher has adopted the Exploratory Research in order to study and
find information in detail for the sake of making this project acceptable to
university.
Sampling Method
Sampling:
It is the process of learning about the population on the basis of sample
drawn from the lot within the population and keeping it as a pivotal point for
study. Thus in the universe is studied and the conclusions are drawn for the
entire universe. A sample is a sub-set of population units.
KSOU, Mysore 75
Methods of Sampling:
The various type of sampling can be grouped under two broad heads:
Probability sampling and Non-probability sampling.
Probability Sampling Method:

Simple or Unrestricted Random Sampling:
Simple random sampling refers to that sampling technique in which each
and every unit of the population has an equal opportunity of being selected in the
sample.
Stratified Sampling:
Stratified random sampling is one of the random methods, which is
carried out by using the available information concerning the population and
attempts area made to design a more efficient sample than the ones obtained by
the simple random procedure.
Systematic Sampling:
A Systematic sample is formed by selecting one unit at random and then
selecting additional units at evenly intervals until the sample has been formed,
which is of a fixed number. This method is popular and more often used in those
case where a complete list of the population from which sample is to be drawn is
available.
Multi-Stage Sampling or Cluster Sampling:

Under this method, the random selection is made of primary, intermediate
and final units from a given population or stratum, for example out of 10
numbers the 1st, the 5th and 10th numbers are selected as samples.
KSOU, Mysore 76
Non-Probability Sampling Methods:
Judgments Sampling:
In this method of sampling the choice of sample items depends
exclusively in the judgments of the investigator. In other words, the Investigator
exercises his judgments in the choice and includes those items in the sample,
which he thinks are most typical in the universe with regard to the characteristics
under investigation.
Convenience Sampling:
A convenience sample is obtained by selecting ‘convenient’ population
units. The method of convenience sampling is also called as the ‘chunk’. A
chunk refers to that fraction of the population being investigated which is
selected neither by probability nor by judgment but by convenience, (example 1st,
5th, 10th and 15th).
Quota Sampling:
Quota sampling is a type of judgments sampling and is perhaps the most
commonly used sampling technique in non-probability category.
The researcher has adopted the Simple or Unrestricted Random Sampling.
Data Collection Tool

This study is based on primary data collection through a questionnaire.
Questionnaire is used for collecting the data is a closed end questionnaire. This
type of closed end questionnaire will be helpful to extract the result within our
limits. In an open end questionnaire the choice is left to respondent, so the
answer executed will be a different kind and will be difficult to analyze. So the
research opted for a closed end structured questionnaire, infact some of the
questions are open ended.
KSOU, Mysore 77
Questionnaire is classified into four main types:
Structured Non-Disguised:
It is the one where the listing of question in a pre-arranged order and
where the object of enquiry is revealed to the respondent.
1. Structured Disguised:
In this type of questionnaire, the research does not disclose the object of
the survey, because he feels that if the respondent comes to know the object of
the survey, he may not be objective in giving the necessary information.
2. Non-Structured Disguised:
A non-structured questionnaire is one in which the questions are not
structured and the order in which they are to be ask from the respondent is left
entirely to the researcher.
3. Non-Structured Non-Disguised:
Where the purpose of the enquired is disclosed to the respondents, the
questionnaires are known as non-structured and non-disguised. The researcher
has adopted the Structured Non-Disguised
.
Statement of Problem
The study involves finding out the level of the employee satisfaction and
also it includes who plays the vital role in the process of performance Appraisal.
It also focuses to study the impact pf Performance Appraisal, the Quality or the
standard of the Appraisal , opinion of the employee. It will be easier for the
company to provide the best when the employee’s requirement is well
understood and it reduces the waste of time and materials when employee’s
expectation are well understood. /it is essential that any company intending to
implement Performance Appraisal program go about it in a planned manner.
Improve your company’s results, with a performance appraisal system that
really works!
Is your Performance management system as good as it can be?
KSOU, Mysore 78
 Do you have measurable goals that reflect your corporate strategy?
 Do all of your employees understand your corporate goals and how
they can support them?
 Do all of your employees have measurable goals that align with your
corporate goals?
 Do your employees understand how they are doing compared to there
goals?
 Do your managers and employees have the skills to modify their goals as
business conditions change?
 Do managers have the performance information they need to truly pay
for performance.?
Operation Definitions Of Concepts
Performance Appraisal:
It is the systematic elevation of the individual with respect to his or her
performance on the job and his or her potential for development.
Ratee:
The ratee may be defined as the individual, work group, or organization. It is
also possible to defined the ratee at multiple levels.
Rater:
Rater is the one who rates the rate’s performance. Raters can be immediate
supervisors, specialists from HR department, subordinates, peers,
committees, self-appraisals, or a combination of several.
Self-Appraisal:
If the employee himself or herself evaluates his or her performance is known
as Self-Appraisal
KSOU, Mysore 79
Remuneration:
Remuneration is the compensation an employee receives in return for his or
her contribution to the organization.
Lay-off:
A lay-off is a temporary separation of the employee from his or her employer
at the instance of the latter without any prejudice to the former.
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DATA ANALYSIS AND INTERPRETATION
Distribution of the respondents based on necessity of Performance Appraisal for

an individual.
Table 1.
Particulars Number of Respondent Percentage

Yes 100 100
No 0 0
Don’t know 0 0
Total 100 100
Source: Primary data
Analysis:
The above table shows that 100% of the respondents think Performance
Appraisal is necessary for an individual.
Graph 1
100
R 80
E
S 60
P
O
N
40
D
E 20
N
T 0
S
Yes No Don’t know
PARTICULARS
Classification of the respondents based on effectiveness of performance

appraisal in an organisation
KSOU, Mysore 81
Table 2:
Completely Agree 75% 75%
Some What Agree 10% 10%
Agree 15% 15%
Disagree 0 0
Total 100 100

Source: Primary Data
Analysis:
Appraisal is effective in an Organization 10% think it is some what agreeable,
15% think it is agreeable, making the performance appraisal effective in an
organization.
Graph2
80%
R 70%
E
S 60%
P 50%
O
N 40%
D 30%
E
N 20%
T 10%
S
0%
Completely
Some
Agree
What Agree
Agree
Particulars
KSOU, Mysore 82
THE TABLE SHOWES THE PURPOSE OF PERFORMANCE APPRAISAL
Table:3
Rating No. of respondents Percentage
Promotion 10 20
Increment of salary 10 20
Improve the performance of employee 30 60
Transfer 0 0
Analysis:
From the above data it is clear that the 30no. of employees are says
improve performance of employee and some bodies sates in both in promotion
and increment of salary.
From the above data it is clear that is shows the performance appraisal is
improve the performance of an employee and some once are says there is both in
promotion and increment of salary
GRAPH 3
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Table: 4
Classification of the respondents based on work experience in K S& DL
Work experience Percentage of

Number of respondents
respondents
Less than 6 months 21 42%
6 months to 1 year 17 34%
1 year to 2 years 5 10%
More than 2 years 7 14%
Total 50 100%
Interpretation:-
From the above table, it can be observed that majority of the respondents
that is 42% of them are having experience of less than 6 months, 34% of them
have experience more than 6 months but less than 1 year, 14% of them have
more than 2 years and 10% have experience of more than 1 year but less than 2
years.
Classification of the respondents based on work experience in KS&DL
Graph: - 4
Table: - 5
KSOU, Mysore 84
Classification of the respondents based on their view about productivity increase
due to performance appraisal implementation.
Performance appraisal
helps in increasing Percentage of
Number of respondents
productivity respondents
Not at all 6 12%

Rarely 8 16%
Occasionally 18 36%
Constantly 18 36%
Total 50 100%
Source: - Primary data
Interpretation:-From the above table, it can be observed that all the respondents
place their opinion that performance appraisal objective is used for all above
listed factors, 36% of them agree occasionally, 16% of them agree rarely and
12% of them agree that performance appraisal will not increase the productivity.
Graph: - 5
Classification of the respondents based on their view about productivity increase
due to performance appraisal implementation
KSOU, Mysore 85
Table 6:
Yes 75 75
No 15 15
Don’t know 10 10
Total 100 100
Analysis:
The above table shows that 75% of respondent say they are given the
feedback and 15% of the respondents say the feedback is given to them and 10%
says they don’t know.
Graph 6:
80
70
60
50
40
30
20
10
0
Yes No Don’t
know
Distributions of the respondents on the basis of what parameters they

think are necessary for assessing their performance.
KSOU, Mysore 86
Table 7
Quality of Work 75 75%

Quality of your Work 50 50%
Timeliness 20 20%
Cost Effectiveness 30 30%
Need For Supervision 54 54%
Interpersonal Impact 10 10%

Analysis:
The above table shows that 75% of the respondents think Quality of work
is necessary for assessing their performance, 50% of the respondents think it is
Quality of their work, 20% of the respondent thin it is Timeliness, 30% of them
think it is Cost Effectiveness, 54% of them think it is the Need For Supervision
and 70% of them think it is Interpersonal Impact which is necessary for assessing
their Performance.
80
Graph 7
60
40
20
0
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Distribution of the respondents basis of whether the Performance

Appraisal helps an executive to focus on Key Performance Areas.
Table 8:
Yes 100 100
No 0 0
Total 100 100
Analysis:
Appraisal helps an executive to focus on key Performance Areas and non of
respondents think that Performance Appraisal does not help an executive to
focus on Key Performance Areas.
Graph 8:
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
KSOU, Mysore 88
0%
Yes No
Table shows employees satisfaction about Performance Appraisal done in

a company
KSOU, Mysore 89
Table 9:
Rating No. of respondents Percentage
Yes 45 90
No 5 10
Analysis:
From
Yes the above
data it is
clear that in
No. of respondents; 10; 10%
No. of respondents 50 samples
Percentage
45
employees
Percentage; 90; 90% are rated
satisfied
and 5
employees are rated not satisfied. From the above data it is clear that in 90% of
employees are rated satisfied and 10% employees are rated not satisfied
Graph 9:
Distribution of the respondents on the based on their satisfaction about the

existing Performance Appraisal System.
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Table 10:
Fully Satisfied 100 100
Not Satisfied 0 0
Total 100 100
Analysis:
The above table shows that 100% of the respondent are satisfied with
the existing Performance Appraisal system and non of the respondent are
satisfied.
Graph 10:
100
90
80
RESPONDENTS
70
60
50
40
30
20
10
0
Fully Satisfied Not Satisfied
PARTICULARS
Distribution of the respondent based on the methods of performance
appraisal followed in their organization.
KSOU, Mysore 91
Table11
Particulars Number of
Percentage
Respondent
360 degree Performance
60 60%
Appraisal
Self- Appraisal 0 0
Critical incident method 0 0
Two Factor Comparison 0 0
Peer-Appraisal 0 0
Superior/Subordinate 75 75%
Alternative Ranking
0 0
Method
Analysis:
The above table shows that 60% of the respondent thinks the method
followed is 360 degree Performance Appraisal, none of the respondent is aware
of Self Appraisal, Critical Incident Method, Two Factor Comparison, Peer-
Appraisal and Alternative Ranking Method, 75% of respondent think
Superior/Subordinate appraisal.
Graph 11:
80
60
Respond 40
ent
20
0
Particulars
Source : primary data
Distribution of respondents of their awareness of different performance
appraisal systems in related industries.
KSOU, Mysore 92
Table12:
Particulars
Number of Respondent Percentage
Yes 75% 75%
No 0 0
Don’t known 25% 25%

Analysis:
75% of the respondents say that they are aware of different performance
appraisal methods followed in other related industries, none of them says no to
this method.
Graph 12
0.8
0.7
0.6
0.5
Respond
0.4
ent
0.3
0.2
0.1
0
Yes No Don’t
Particularsknown
Distribution of the respondents based on whether their organization

appraisal system is up to the standard of the industry.
KSOU, Mysore 93
Table 13 :
Acceptable 75 75%
Some what acceptable 0 0%
Not upto standard 25 25%
Don’t known 0 0%
Source: primary data
Analysis:
75% of the respondents say that their industries performance appraisal
system is acceptable and none of them say their Performance Appraisal system is
somewhat acceptable,25% of them say they are not upto standard.
Graph 13:
80
60
Respon 40
dent
20
0
Particulars
Distribution of respondent based on weather the Performance Appraisal in

their organization is foolproof or not?
Table 14:
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Particulars
Number of Respondent Percentage
Completely 75 75%
Partial 0 0%
Don’t know/cant say 25 25%
Source : Primary Data
Analysis:
75% of the respondent claim that the performance appraisal is foolproof in
their organization completely,25% says don’t know/cant say.
Graph 14:
80
70
60
50
Respond
ents 40
30
20
10
0
Particulars
KSOU, Mysore 95
Findings
 The study conducted shows that 100% of the respondents think
Performance Appraisal is necessary for an individual.
 75% of the respondents think Performance Appraisal is effective in an
Organization 10% think it is some what agreeable, 15% think it is
agreeable, making the performance appraisal effective in an organization.
 None of the Employee are aware of Remuneration Administration, 44% of
the respondent are aware of validation and selection Programs, 75% of the
respondent are aware of Employee Training and Development Programs,
25% of the respondent are aware of Promotions, Training and Layoff
Decisions, non of the respondent are aware of Grievance and Discipline
Programs 50% of them are aware of Human Resource Planning.
 75% of respondent say they are given the feedback and 15% of the
respondents say the feedback is given to them and 10% says they don’t
know.
 75% of the respondents think Quality of work is necessary for assessing
their performance, 50% of the respondents think it is Quality of their
work, 20% of the respondent thin it is Timeliness, 30% of them think it is
Cost Effectiveness, 54% of them think it is the Need For Supervision and
70% of them think it is Interpersonal Impact which is necessary for
assessing their Performance.
 100% of the respondents think Performance Appraisal helps an executive
to focus on key Performance Areas and none of respondents think that
Performance Appraisal does not help an executive to focus on Key
Performance Areas.
 50% of the respondents have ranked the Reporting Offices overall
impression about the as first, 24% of the respondents have ranked their
Promoability as second, 38% have ranked the jobs that you are able to
perform or qualified to perform as first, 34% of them have ranked their
Strengths and weakness as second,42% of them have ranked the Training
and Development required by them as third.
KSOU, Mysore 96
 100% of the respondent are satisfied with the existing Performance
Appraisal system and non of the respondent are satisfied.
 60% of the respondent thinks the method followed is 360 degree
Performance Appraisal, none of the respondent is aware of Self Appraisal,
Critical Incident Method, Two Factor Comparison, Peer-Appraisal and
Alternative Ranking Method, 75% of respondent think
Superior/Subordinate appraisal.
 75% of the respondents say that they are aware of different performance
appraisal methods followed in other related industries, none of them says
no to this method.
 75% of the respondents say that their industries performance appraisal
system is acceptable and none of them say their Performance Appraisal
system is somewhat acceptable,25% of them say they are not upto
standard.
 75% of the respondent claim that the performance appraisal is foolproof in
their organization completely,25% says don’t know/cant say.
 It can be observed that majority of the respondents that is 48% of them
place their View upon the frequency of performance appraisal should be
on a monthly basis.
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Suggestion
This study is excepted to contribute for building and maintaining a base of
committed employees who are profitable for the organization.
A good performance Appraisal system to be valid must be,

 Relevant
 Not Contaminated
 Not Deficient
 Timely and continuously monitored.
Before implementing a Performance appraisal System the organization should

be answerable to these question,
 Is Performance Appraisal system Valid?
 Is it Reliable?
 Is it Sensitive?
 Is it Practical?
 Is it Acceptable?
 Is it been made known to all the employees?
 Is it really worth spending on performance appraisal program’s
KSOU, Mysore 98
Conclusion
 As most of the respondents say that they are not given the feed back, it
would beneficial for both the organization and the individual if the
individual is given the feedback regarding his/her performance as the
standard of his/ her working improves.
 Communication skills play a very important role in the expansion of the
organization; the employees should be given communicational trainings
so that they can communicate with the customer with ease.
 As most of the respondents say that it is the individual himself who plays the
vital role in the performance appraisal, Self Appraisal should be given
more prominence.
 Required Training a Development courses given to the employees have to be
more effective. Necessary feedback regarding strength and weakness
should be provided to the employees.
 A healthy and good working environment should be provided for the
employees and executives to interact easily and take joint decisions for the
betterment of the organization.
 Emotions/ emotional feelings should be avoided in the assessment of
individuals in performance appraisal.
KSOU, Mysore 99
Bibliography
 Human Resource and Personal Management

K.Aswathappa
 Managing Human Resource
Wayne F.Casio
 Executive Guide to Human Resource Management
Bhaskar Chatterjee
 Organization Behaviour
Fred Luthans
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Annexure
“A study on performance appraisal at KARNATAKA SOAPS AND
DETERGENTS LIMITED”
DEAR Sir / Madam.,

I am pleased to introduce my self as an graduate Student (MBA) from
KARANATAKA STATE OPEN UNIVERSITY As part of our curriculum ,
I am doing a project titled “A STUDY OF PERFORMANCE
APPRAISAL” in your esteemed organization.
I would be pleased if you could spare your precious Time in filling this
Questionnaire and I assure you that the information Provided by you would be
kept confidentially.
AGE :
QUALIFICATION :
DEPARTMENT :
DESIGNATION :
YEARS OF EXPERIENCE :
1. Is Performance Appraisal necessary for an individual?

Yes No Don’t know
2. Do you think Performance appraisal is effective in an

Organization?
Completely agree Somewhat agree
Fully agree Disagree

3.Does performance appraisal helps in increasing the productivity?
a) Not at all b) Rarely
c) Occasionally d) Constantly
4.What should be the frequency of the appraisal?
KSOU, Mysore 101

a) Once in 15 days b) half yearly
c) Monthly d) annually
5. Have you ever been appreciated by the company for your performance?
a) Not at all
b) Many times
c) Occasionally
6. Is the requirement of training as specified by you in the Executive
Performance Appraisal form given to you?
Yes No Don’t know
7. Tick the parameters, which you think are necessary for assessing your
performance?
Quality of work Quantity of your work
Timeliness Cost Effectiveness
Need for Supervision I nterpersonal Impact
8. Does the Performance Appraisal help an executive to focus on

key Performance Areas?
Yes No
9.. Are you satisfied with the existing performance appraisal System?
Full satisfied Not Satisfied
10. Who do you think, plays the most vital role in the Performance Appraisal
Process?
Self Reporting Officer
Reviewing Officer Higher Authority
11. Are you aware of different Performance Appraisal system in
related industries?
Yes No Don’t know
12. Do you think your organizations Performance Appraisal System is up to

the industry standard?
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Acceptable Somewhat acceptable
Not up to standard Don’t know/cant say
13. What methods of performance appraisal is applied\followed in your

company?
360-degree Performance Appraisal
Self-Appraisal
Critical incident method
Two factor comparisons method
Peer Appraisal
Superior/Subordinate Appraisal
Alternative ranking method
14. What do you think is the purpose of performance appraisal

Promotion ( ) Transfer ( )
Increment of salary ( )
Improve the performance of employee (
15. How do you feel about the appraisal process?
Very interesting ( ) Interesting ( )
Not interesting ( )
16. How do you rate your current performance appraisal system?
Very good ( ) Good ( )
Average ( ) Poor ( )
KSOU, Mysore 103

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Performance Appraisal

DEFINITION OF HUMAN RESOURCE MANAGEMENT

NEED FOR HUMAN RESOURCE MANAGEMENT

HRM is considered essential due to the following reasons:

HUMAN RESOURCE MANAGEMENT OBJECTIVES AND

Societal objectives: To be ethically and socially responsible to the need and

Organisational Objectives: To recognize the role of HRM in bringing

Functional objectives: To maintain the department’s contribution at a level

In simple words Performance Appraisal may be understood as the

Specifically, the appraisal data and information will be useful in the

INTRODUCTION TO SOAP INDUSTRY

THE INDIAN SOAP INDUSTRY SCENARIO:

Soap manufacture has 2 Classification, Organized and unorganized sector.

PROBLEMS OF SOAP INDUSTRY:

GLOBAL FAVORITES FOR THEIR NATURAL GOODNESS

 Seek purchase goods and services from environment responsible

BIRDS EYE VIEW OF KS&DL

1918 – Government soap factory started by Maharaja of Mysore and the

1984 – Manufacturing of Perfume and premium quality at Mysore division.

In this direction company obtained the guidance from gualgi

SWOT ANALYSIS OF KS&DL:-

Mysore Sandal Soap

Mysore Sandal Special Soap Mysore Sandal Baby Soap

Three-In-One Gift Pack – (SJR) Mysore Rose Soap (100gm)

Six-In-One Gift Pack-6 Tabs (150gm)

Agarbathis (20gm, 50gm, 100gm) Detergents (75gm, 150gm)

(Agarbathis (20gm, 50gm, 100gm) Baby Powders (50gm, 100gm)

Incorporated Name - Karnataka soaps and Detergents limited.

Executive Marketing G.M. A.G.M.

Objective of the Study

 Focusing on the Key areas of Performance;

Scope of The Study

Scope of study for the Organizations:

LIMITATIONS OF THE STUDY

1. The study is purely for academic purpose.

A performance appraisal, is a method by which the job performance of

Performance appraisals are widely used in the society

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

Establish Job Expectations

Use Data for Appropriate

Broadly, appraisal can be classified into

Traditional methods Modern methods

Graphic Rating Scales Management By Objectives

3. Paired comparison method :- In this method the appraiser rank by

Ex: - A B C D is the employees to be assessed in the organization N (N-1)/2 is

4. Forced distribution method :- The appraiser rate is employees at the higher

5. Check list method :- It is a simple rating technique. The supervisor is

6. Critical incident method :- The employees are related discontinuously that is

1. Behaviorally anchored rating scale (BARS) :- It is a combination of both

2. Assessment center :- It is one of the modern methods of performance

4.Management by objective :- Is a process were by the superior and subordinate

5. Psychological appraisal :- This appraisal is conducted to assess the

6. 360-degree performance appraisal : - If the appraiser is by supervisors,

Measuring employee performance

The most difficult part of the performance appraisal process is

Measuring employee performance is the basis of the Performance

• Clearly define and develop the employee plans of action (performance)

For an organisation to be an effective organisation and to achieve its

Measuring the performance of the employees based only on one or some