CHAPTER-1

1
 INTRODUTION
 OBJECTIVES OF THE
STUDY
 NEED FOR THE STUDY
 LIMITATIONS
 METHODOLOGY

2
 I N T R O D U C T I ON

KR S P HA R M A C E U T I C A L S P V T L T D

KRS Pharmaceuticals pvt ltd, Visakhapatnam is a

manufacturer of bulk drugs and intermediates. It produces drugs
namely Omeprazole, Lansoprazole and Rabibrazole sodium.KRS
pharmaceuticals pvt ltd have a best infrastructure to manufacture
products of world class quality conforming to GMP norms. It has
adequate production capacities with specialized equipments to meet
the growing market demand.

KRS pharmaceuticals came into scenario by the “OCEAN

PHARMACOAT PVT LTD” to cut down the delivery timeline and
to make pellets more affordable. This has two production units one
in Jinn ram Mandal, Medak close to Hyderabad and the other is in
Parawada Mandal, Visakhapatnam.

 The unit in Hyderabad is considered as KRS unit 1. Its facility

is spread across 8100sq meters at Gaddapotharam. KRS unit1
has a dedicated facility for the manufacturing of APIs with
capacity of 99KL of intermediate reactors and 9KL of Pharma
reactors.
 The unit in Visakhapatnam is considered as KRS unit 2. Its
facility is spread across 30400 sq meters at JNL Pharma City.
It is involved in the production of intermediates with
humungous capacity of 165KL of intermediate reactors and
22KL of Pharma reactors.

3
Silent features:

 Eco friendly surroundings.

 Unidirectional flow of materials.
 Production on campaign basis.
 Corridors at highest positive pressure.
 Purified water generation to meet the pharmacopeia
requirements.
 Oil and moisture free compressed air.
 Capacity to manufacture 0.5-500kg batch size.
 Annual capacity of 1400MT for pellets and 90MT for APIs.
 Fully and sophisticated equipped and quality controllable
laboratories.
 Well established QA systems to support on documentation
requirements.
 Good experienced team in RA to meet regulatory requirements
by providing DMFs.
 Fulfill the requirements of the standards of the regulatory
authorities.
 Well equipped lab with latest qualified test instruments
qualified and experienced chemists.

4
OBJECTIVES OF THE STUDY:

The present study is on the “Human Resource

Development” on the Performance Appraisal of the KRS
Pharmaceuticals Pvt ltd.

In the present system of the global competitions the objectives

has been studied from the micro level to evaluate the performance of
the employees and take the decisions regarding the rewards and
punishments to the employee for their work done in the organization.

The following are the specific objectives of the study:

 To study about the performance appraisal system of the

organization.
 To ensure the performance of the employees.
 To present the organizational profile of the KRS
pharmaceuticals pvt ltd with a focus on Human Resource
Development department.
 To review the HR department activities of KRS
pharmaceuticals pvt ltd with a specific focus on
performance appraisal
 To make necessary suggestions to bring about meaning
relationship between the employees efforts and efficiency of
the organization.
 To know the performance standards of the KRS
pharmaceuticals pvt ltd.

5
NEED FOR THE STUDY:

People need competencies to perform tasks. The nature of the

job is constantly changing due to the changes in environment,
technology, organizational goals and strategies. It has become a
challenging task for the organizations in the public, private, joint and
cooperative sector to cope up with growing competition due to on
slot of globalization. In order to survive in this competitive era, the
organizations have to focus on improving its performance. In this
backdrop is an effort to examine the Performance Appraisal aspects
of the organization.

Every organization has a size of the irrespective s it should

conduct the performance appraisal to all the employees irrespective
of their work and behavior towards the organization. By this
organization can evaluate the behavior of the employees in the work
spot.

 Quality output of the organization.

 A good supervision over all the employees
 How to motivate the employees
 Minimizing job dissatisfaction on turnover
 HR decisions

6
LIMITATIONS OF THE STUDY:

The available information is not adequate for studying the

entire organizations attribute towards the Performance Appraisal.

The limitations in this study are noticed as follows:

 The data provided is very limited.

 Depth of the matter is not possible.
 Some of the employees are not willing to give detailed
information when asked the questionnaire.
 Response of the employees may be based.
 The collection of the data done in the project study is
based on my own perception
 As the period of study is less , time acted as a limitation
factor

7
METHODOLOGY

The present study is confined to different departments of

KRS Pharmaceuticals pvt ltd such as personnel department,
administration department, mechanical department, maintenance
department. Therefore it is hoped that the study in KRS
Pharmaceuticals pvt ltd can give effective results and meaningful
conclusions. The study also gives scope for suggestions and
improvements if any.

Research is commonly refers to search for knowledge. We

can also define research as scientific search foe pertinent information
on specific topic.

Research methodology is a way to systematically solve the

research problem. The following are sequential steps followed for
this methodology.

 Questionnaire
 Research design
 Sampling method
 Data collection
 Data analysis and interpretation.

8
RESEARCH DESIGN:

To any project research plan is designed for a

systematic follow up of findings.

 The grade of employees o be sampled

 The sample size
 The questionnaire format
 Analysis and interpretation
 Conclusions and suggestions

QUESTIONNAIRE:

Questionnaire is a way of collecting information from the

respondents. It contains a set of questions to find the effectiveness of
organizing in retaining the talent .

SAMPLING METHOD:

Data is the facts in the form of quantitative dewing with

any problem it is often found that data is inadequate and therefore it
becomes necessary to collect the data that are appropriate. So the
data can be classified into

 Primary data
 Secondary data

9
PRIMARY DATA:

Primary data is that which is collected as fresh and this

happens to be original character. Data is collected through

 Questionnaire method
 Interview method

Questionnaire method:

Questionnaire is prepared and pre-tested before using it

for data collection. Questionnaire is circulated to all technicians and
non-technicians for data collection. It is a structured one consisting,
which are close and having fixed response pattern with multiple
answers.

Interview method:

The study also includes obtaining information from

knowledgeable persons. The interview is an informal and
unstructured one with component and articulate individuals,
executives and professionals organization .

10
SECONDARY DATA:

Secondary data is that, which are ready available. This

data is already been collected and analyzed by someone else. It is
gathered from the organization reports, various publications and
journals are browsed through some websites.

 Manuals of different departments

 Hose journals of KRS pharmaceuticals pvt ltd
 Circulars and statements of KRS pharmaceuticals
pvt ltd

11
CHAPTER-2

12
 INDUSTRY PROFILE

 COMPANY PROFILE

13
 INDUSTRY PROFILE

KRS PHARAMACEUTICALS PVT LTD

Ocean Pharmacoat Company was first found in the year 2000

by Mr.B.L.Swamy and Mr. Basulu Narendra with the objective of
producing and catering pharmaceutical pellets using Novel Drug
delivery systems. KRS pharmaceuticals pvt ltd being the second unit
of Ocean Pharmacoat Company in Visakhapatnam is the
manufacturer of bulk drugs and intermediates. It deals with the
major intermediates like Omeprazole, Lansoprazole, and
Rabibrazole Sodium.

KRS Pharmaceuticals is a fast growing organization

established by a team of dedicated professionals with over decades
of experience in the pharmaceutical industry with specific reference
to the development and manufacture of various APIs.

The company’s forte is the customized development and

manufacture of various Active Pharmaceutical Ingredients (APIs).

Innovation in the field of medicine and pharmaceuticals is an

ongoing process. The objective is to provide cost effective quality
medicines to mitigate the sufferings of mankind. KRS provide
complete solutions for quality products. Innovation of new
molecules is an ongoing process in the Product Development Lab.

14
 Today Ocean Pharmacoat is a one stop destination offering
complete solution for Pharmaceutical pellets be it an enteric coated
or sustained release, immediate or delayed release, Controlled or
even modified release. Besides this, with Ocean Pharmacoat one has
a wide range of products to choose from irrespective of the strength
or dosage forms.

A team of qualified and experienced technical personnel,

well equipped manufacturing facility and quality control,
documentation system conforming to GMP requirements, have been
instrumental in maintaining their premium position in the Pharma
industry.

KRS Pharmaceuticals Company has the best infra structure

to manufacture products of world class quality, conforming to GMP
norms. KRS Pharmaceuticals Pvt Ltd has adequate production
capacities with specialized equipments to meet the growing market
demand.

Acquisitions:

Much before the acquisitions, Ocean Pharmacoat for their

pellet production had to heavily depend upon other companies for
their Bulk Drug requirements, it was then that the founder’s dreamt
of having their own indigenous facility of API’s and Intermediates to
cut down on the delivery timeline and make pellets more affordable
by having an indigenous facility.

15
 Transpiring the dream into reality did not take much
time as Ocean Pharmacoat acquired 100% stake in KRS
Pharmaceuticals, having two production facilities one of those
spread across 30400 Sq. meters dedicated for the production of
Intermediates and API’s. in Visakhapatnam and with the other
production facility situated in the outskirts of Hyderabad.

Soon after the acquisition of KRS, Ocean

Pharmacoat in order to further strengthen it’s portfolio in pellets
acquired Cyma Life Sciences which is having a State of the Art
facility for pellets production. Such is the potential of the plant that
immediately upon its inception, Cyma Life Sciences, the subsidiary
company of Ocean Pharmacoat has signed a multimillion dollar deal
with one of the top companies in India for marketing their
formulations in various Latin American markets using our pellets.

Now with the acquisition of two important companies

in its portfolio, Ocean Pharmacoat has consolidated its positions in
the industry as a serious player not only in the business of
manufacturing of Pellets but also venturing into the manufacturing
of Active Pharmaceutical Ingredients and its Intermediates thus
supporting the Pellets production indigenously as well effecting the
expansion plan through exports of APIs and its Intermediates.

16
 COMPANY PROFILE

SPECIALIZATION:

The main specialization of the KRS

pharmaceuticals pvt ltd is customized solutions contract
manufacturing and development of APIs in their facility.

VISION:

The vision of KRS pharmaceuticals pvt ltd is to have

a meaningful relation with the end users and understanding
customers’ needs. They continuously strive to help their customers
to sharpen their competitive edge by making medicines cost
effective and affordable to enhance their business value. Aspiring to
be among the top players in the industry by delighting customers
with quality product and justified pricing both domestically and
internationally.

STRENGTHS:

KRS pharmaceuticals have strong customer base

and have CRAMS with major Pharma companies. The clients of
KRS Pharma are spread around the globe. A team of highly
motivated, qualified and experienced technical personnel is adopted
to manage different functions of the organization. Quality forms the
crux of our organization. We follow this mantra in our day to day

17
practice by having qualified and dedicated staff with an expertise in
handling GMP and cGMP compliant plants

QUALITY POLICY:

The quality department of the KRS pharmaceuticals

pvt ltd follows GLP recommendations and fulfills the requirement of
standards of the regulatory authorities. The lab is well equipped with
latest qualified test instruments, qualified and experienced chemists,
who believed in the mission for quality not only in the products but
at each process stage. The quality assurance department ensures that
the product are manufactured and tested as per the requirements of
GMP

QUALITY POLICY COVERS…

 Qualified vendors.
 Qualified equipments.
 Qualified personnel.
 Well documented training program.
 Validations.
 Approved sampling and testing procedures.
 Calibrations of monitoring and measuring equipments.
 Change control and deviation control.
 Safety, health and environment.

18
PRODUCTS:

This company mainly concentrates in the manufacturing

of the products like

 Anti-ulcerative(Omeprazole, Esomeprazole, pantoprazole and

Rabibrazole)
 Anti fungal(itraconazole)
 Anti depressant(sertraline hydrochloride)
 Anti histamine(levo cetirazine dihydrochloride)
 Anti emetic(Domperidone)
 Benign prostatic hyperplasia
 Anti convulsant(tpiramate)
 Gabapentin
 Iron chelator
 Losartan potassium
 Deferasirox

It produces the products in the pellets form. Ocean

Pharmacoat specializes in modified release and multiple dosages in
pellets form (MUDFs) besides offering complete solution for
Pharmaceutical pellets be it an enteric coated or sustained release,
immediate, delayed and even Controlled release.

19
 Ocean Pharmacoat along with its subsidiary firm Cyma Life
Sciences offers wide range of products to choose from irrespective
of the strength or dosage forms.

We also cater most of the therapeutic segments like the Anti

Ulcerative range, Analgesic, Cardiovascular, CNS, Anti Infective
etc. Besides this, our unique selling proposition also lies with
products like Orlistat 30%, 50 % and 60%, Tamsulosin Hcl SR
Pellets 0.16, 0.2 and 0.4%, Mebeverine Hcl ER pellets 30%,
Mebeverine Hcl SR pellets 50%, Tizanidine Hcl SR Pellets 6% etc.

We also provide lot of options to our customers by offering

products of combined dosage form like: Rabibrazole sodium EC
pellets + Domperidone SR pellets, Esomeprazole EC pellets +
Domperidone SR pellets.

Owing to huge capacities, Ocean Pharmacoat produces large

quantities under Contract manufacturing for leading pharmaceutical
companies.

The other noteworthy aspect of is that it constantly

endeavours to meet the current regulatory requirements by
continually upgrading personal skills of its qualified staff and
facilities.

20
CORE VALUES:

This company consists of the following core values

which are mentioned as follows…

 Trustworthy
 Entrepreneurial development
 Innovativeness
 Concern for the environment
 Respect and care for others
 Passion to excel

21
CHAPTER-3

22
 HR MANAGEMENT

 FUNCTIONS

23
HUMAN RESOURSE MANAGEMENT

An organization is made up of four resources namely, men,

material, money and machine, out of these the first one is living one
and the other three are non living. It is the human has make use of
non-human resources. Hence people of the most signification in an
organization.

Besides being men, human resources differ from non-

human resources in other respects also. Human resources are
heterogeneous in senesce that they differ in personality, perception,
emotions, values, attitudes, motives, thoughts, their behavior is often
inconsistent and unpredictable all the other resources efficient but
human resources with the passage of time better educated and more
over the skills are some of the distinguishing features of mode man ,
resources and in efficient manner. Due to competitive and complex
business environment retaining qualified and competed employees
has become in a challenge.

Human resource management is the planning, organizing,

directing, and controlling of the procurement, development,
compensation, integration, maintenance and separation of human
resources to the end that individual, organizational and social
objectives are accomplished.

Human resources are the most valuable assets of the KRS

Pharmaceuticals Pvt Ltd and Ocean Pharmacoat ltd. It takes almost
care to keep its human resources satisfied and motivated. The

24
performance and resulting productivity of KRS Pharmaceuticals is
an indicator of the satisfaction level of its employees for the
betterment of the human resources. KRS Pharmaceuticals has laid its
own vision, mission, strategies and objectives to its company.

HR VISION:

To attain the organizational excellence by developing and

inspiring the true potential of the KRS Pharmaceuticals human
capital and providing opportunities for growth, innovations and
enrichment of its employees and the company.

HR MISSION:

To create value based organization by inculcating a culture

of learning, creativity and teamwork and aligning business priorities
with the aspiration of our people leading to development of an
empowered responsive and competitive human capital.

HR OBJECTIVES:

The objectives of the HR department are as follows:

 To foster a climate of creativity.

 To provide a work environment that is a source of creativity
and enjoyment.
 To develop and sustain core values.
 To provide opportunities for growth and development.
 To inculcate a spirit of learning and enjoying challenges.

25
  To provide job contentment through empowerment
accountability and responsibility.
 To demonstrate fairness, equality of opportunities and respect
to all the members of the organization.

HR SPIRITS:

Satisfaction of customers.
Pride.
Integrity
Role model
Involvement and commitment
Transparency
Spirit of team work

26
FUNCTIONS

The HR Department has to perform the general managerial

functions like planning, organizing, directing, controlling and
coordination. It also consists f the operating functions like human
resource, employment, industrial relations etc.

The primary objective is the creation and distribution of

goods and services. The HR department assists those who are
engaged in sales and distribution and in finance. The secondary
function or objective includes profit covering salaries and other
compensation for salaries.

The other objectives relates to the satisfaction of community

and social objectives such as serving the customer honesty,
promotion of a high standard of living in the community.

The HR key functions are as follows:

 Administering promotions
 Release of annual increments
 Payment of RLTE (Reimbursable Local Travel
Expenses)
 To give conveyance loans, house building loans to
those not living in quarters.
 To pay LTC (Leave Travel Concessions)
 To clear probation
 To send returns to head office

27
  Administration of the employment exchanges
(compulsory notification of vacancies) act, 1959.
 Communicating with labor department and other
statutory departments.
 Learning and development
 Wage management and distribution
 Maintenance of attendance particulars
 Calculation of leaves and holidays
 Corporate social responsibility
 Administration
 Labor welfare

The important functional units of HR department, through

which important functions are carried out, they are listed as below…

 Time office
 Contract cell
 Dispatch section
 Canteen
 Hospital
 Guest house
 Corporate social responsibility and legal cell

Besides performing the above functions, the HR head act as the

communication and liaison officer.

28
 STRUCTURE OF HUMAN RESOURCE
MANAGEMENT

Description:

At present executive director of KRS Pharmaceuticals private

ltd was RAVI KUMAR PASALA. The associate HR manager was
S. SATYA. The general manager is Mr. RAVI KUMAR. There are
two junior executives each one performing various functions. Apart
from these there is a regular staff of 8 members who work in
different units.

The structure of the flow of functions in the department is as

follows:

29
 HR HEAD

ASSOSIATE MANAGER HR

EXETUTIVES

Jr. MANAGERS

GENERAL STAFF

MESSENGERS

30
HUMAN RESOURCE PLANNING:

Planning for human resource is more important than any

other resource. The management of the human resources begins
from human resource planning. It is the basis for most of the other
resources. Planning is a course of action done by considering of
what to do? How to do? When to do? And who will do a particular
task in the organization.

It may be defined as the process by which an organization

should move from its current manpower position. It is the process by
which an organization ensures that it has the right number and kind
of people, at the right place, at the right time capable of effectively
and efficiently completing the tasks that will help the organization to
achieve its overall objectives.

In KRS Pharmaceuticals pvt ltd, human resource planning is

mainly focused on the number of people to be absorbed and the kind
of people required.

RECRUITMENT:

EDWIN B. FLIPPO defined requirement as the process of searching

for prospective employees and stimulating to apply for the jobs in
the organization. The main objective of recruitment is to attract
people with multi-dimensional skills and experiences that will suit
for the present and future organizational strategies.

31
 Currently, there is no recruitment in KRS Pharmaceuticals pvt
ltd for the workmen crate. Recruitments are being made in executive
crate. But the process is being dealt by the head office at Hyderabad
through campus placements.

SELECTION:

While recruitment refers to the process of identifying and

encouraging prospective employees, selection is a process of picking
individuals (out of the pool of job applicants) with requisite
qualifications and competence to fill the jobs in the organization.
Recruitment attracts many but selection seeks to eliminate as many
unqualified. The key to employee selection is ‘to choose those who
are most likely to perform their jobs with maximum effectiveness
and to remain with the organization .

As there is no recruitment in KRS Pharmaceuticals pvt ltd,

there is no selection process being conducted.

PLACEMENT:

Placement is the determination of the job to which an

accepted candidate is to be assigned and his assignment to that job. It
is the matching of what the supervisor has reason to think he can do
with the job demands (job requirements), it is a matching of what he
imposes (in strain, working conditions) and what he offers in the

32
form of payroll, companionship with others, promotional
possibilities etc.,

In KRS Pharmaceuticals pvt ltd, the newly selected and oriented

employees are placed and are assigned the jobs that are to be
performed by them.

INDUCTION:

Induction is the process of receiving and welcoming an

employee into the organization. When he first joins a company and
giving him the basic information he needs to settle down very
quickly and happily start work in the organization.

In KRS Pharmaceuticals pvt ltd, induction programs will be

conducted to the newly selected employees by exposing them to
various areas of the organization.

NON-CORE ACTIVITIES:

As there is no recruitment process in KRS Pharmaceuticals Pvt

Ltd, the required man power is procured through contractors by
hiring contract labor.

The non–core activities are the activities that are not connected
with the direct manufacturing process and administration. Some of
the non–core activities in the organization are as follows:

33
  Cleaning and maintaining the factory premises.
 Cleaning the machinery used in the manufacturing process and
other machinery.
 Cleaning and maintaining of the floor of the plant.
 Cleaning the rooms and dusting the furniture in various
departments.
 Transport of raw materials into the plant.
 Loading of raw materials into the plant and converting them
into finished goods.
 Painting and anti-rust works.
 Work at stores.
 Canteen.
 Security.
 Transport for employees working in the organization.
 Guest house maintenance.
 Gardening.
 Sanitation

Employing persons for these non-core activities will increase

the burden of the organization. Hence the above activities are give n
to contract.

The head of the department, after determining the manpower

requirements in the respective departments shall send the proposal to
the commercial department, enclosing the following details:

 Entire job scope.

 Scope of supply from KRS Pharmaceuticals pvt ltd
 Scope of supply from contractor

34
 Job completion period
 Item wise estimation
 Softcopy of detailed job
 List of probable parties
 Required drawing or sketching are to be attached
 Job covered under approved budget
 Validity of the contract mentioned
 The checklist of the above details is to be filled in submitted
along with the proposal.
 Entire job scope.
 Scope of supply of raw materials.
 Scope of supply of contracts
 Job completion period
 Item wise elimination

35
 TRAINING METHODS USED IN THE
ORGANISATION:

Various training methods are used in the KRS Pharmaceuticals pvt

ltd. The training method being implemented at present in KRS
pharmaceuticals pvt ltd is LEARNING AND DEVELOPMENT.

1. LEARNING AND DEVELOPMENT:

 FOCUS FOR LEARNING AND DEVELOPMENT IN
KRS PHARMACEUTICALS PVT LTD:

TECHNOLOGY-

 Data base
 Intelligence
 Network integrated in collaborative
platforms.

PEOPLE:

 working teams
 learning facilities
 culture
 communities of practice

36
PROCESS:

 Strategy
 Decision support
 Customer relationship
 Guidelines
 Methodologies

 PROCESS OF LEARING AND DEVELOPMENT IN

KRS PHARMACEUTICALS PVT LTD:

 Strategy
 Structure
 Innovation
 Current initiatives
 Culture and relations
 Communications
 Achieved levels and inclinations.

 LEARING AND DEVELOPMENT FRAMEWORK

IN KRS PHARMACEUTICALS PVT LTD

The framework is classified as the following chart in KRS

Pharmaceuticals pvt ltd.

37
 Knowledge
management
enablers

Hr
management
skills

Professional
Staff training department

Client TBS
knowledge knowledge

General Govt
knowledge knowledge

Leadership Supportive
Technology

Information
management
system
Knowledge
requirements

38
  LEARNING AND DEVELOPMENT LEVELS IN
KRS PHARMACEUTICALS PVT LTD:

 Meet the basic training needs.

 Operationalize a core learning programmed.
 Make progress towards knowledge management.

 LEVELS OF LEARNING AND DEVELOPMENT IN KRS

PHARMACEUTICALS PVT LTD:

Knowledge
management

Organizational
learning

Training

39
 2. CONTINUOUS LEARNING ENVIRONMENT
(CLE):

This program was launched on 18 th October, 2003 CLE was

an effective platform where in the knowledge and skills are enriched
on a continuous basis. It promotes a sense of belongingness,
creativity, innovation and mutual trust and motivates the individuals
to achieve goals by creating competitive environment at individual
as well as industrial level. There is visible willingness and
enthusiasm all around.

The champions feel responsible for the learners and are

confident of making their trainees get desired knowledge in
whatever manner possible.

Continuous learning environment is a concept, which

believes in development of, by, for the employees.

TARGETS OF CLE:

CLE was targeted to achieve excellence in

 Performance
 Proficiency
 Benchmark in
 Productivity
 Quality

40
  Cost
 Higher profit
 Competitive edge, growth and diversification
 Better image
 Prestige
 Recognition
 Sense of pride

As a result of these unique features of CLE, till 2003, 404

employees at shop floor have been trained through 155 programs
covering almost all ideas identified by the individuals. It yielded
very fruitful results in the year 2005 to 2006 also.

It also deserved a National Award for the best HR Practices.

BENEFITS OF CLE:

 Effective program besides result oriented, inculcating

passion for excellence.
 A platform for excellence communication among all levels
and voluntary participation to improve skills and knowledge.
 Brought more people together, improve team spirit and
increased competency levels.
 Became an effective tool for change management, innovative
approach, competitive spirit and positive attitude.
 Employees became willing to take more responsibilities,
initiatives and develop and become smarter and faster.
 Improved work culture and reduced absenteeism of the
employees.

41
 SCOPE OF HUMAN RESOURCE
MANAGEMENT:

a. Setting up proper management policy for organizational

relationship and maintaining suitable organization.

b. HRM helps for the development and maintenance of

motivation of employee by giving their incentives and
reviewing the manpower management in the organization.

c. HRM helps in developing and growth of the employees by

providing opportunities.

d. Hr department gives importance towards the personnel aspects

and industrial relations like disputes and settlements.

e. Maintaining proper balance between the nature of the job and

the employees in terms of job requirement.

f. By utilizing human capabilities effectively and rewarding their

contribution and also avoiding waste.

g. HRM plays a vital role in the development of the nation.

h. For proper utilization of national, physical, financial resources

efficient manpower is needed.

42
CHAPTER-4

43
 PERFORMANCE APPRAISAL

 PERFORMANCE APPRAISAL
METHODS

44
 PERFORMANCE APPRAISAL

“Performance appraisal is a process by which an employee

strength and weakness are identified to improve the performance on
the present and future jobs”. Performance appraisal is also known as
employee’s appraisal or merit rating. Performance appraisal or the
performance evaluation is the process of assessing systematically the
performance and progress of an employee on the present job and his
potential for higher level jobs in future.

Merit rating is the systematic evaluation of an individual with

respect to his performance on the job and his potential for
development. Performance appraisal is the evaluation of the present
performance and future capabilities of an employee or a group of
employees. It is regarded as the process of estimating and judging
the value, excellence, qualities and status of a person in the
organization.

According to McGregor, performance appraisal has become a

part of managerial strategy; the implicit logic to get people to direct
their efforts towards organizational objectives, management must
tell the employees what to do, judge how will they have done, and
reward or punish them accordingly.

Performance appraisal is the method of evaluating the behavior

of the employee in the work spot, normally including both
qualitative and quantitative aspects of job performance. Performance
is also measured in terms of results. It as the structured formal

45
interaction between a subordinate and a supervisor, that usually
takes the form of a periodic interview, annual or semi-annual, in
which the work performance of the subordinate is examined are
discussed, with a view to identifying weakness and strengths as
well as opportunities for important and skills development.

OBJECTIVES OF THE PERFORMANCE

APPRAISAL
Formal performance appraisal plans are designed to meet three
needs, one for the organizational and two for the individuals.

 They provide systematic judgment to backup salary incentives,

promotions, transfer and demotions and sometimes
terminations.

 They are a means of telling a subordinate how he is doing, and

suggesting needed changes in his behavior, attitude, skills or
job knowledge, they let him know “where he stands” with the
boss.
 They are also being increasingly used as a basis for the
coaching and counseling of the individuals by the superior.

 Data relating to performance assessment of the employees are

stored and used for several purposes.

 To know the strengths and weakness of the employees and

make suggestions for improving them.

 To know the problems faced by the employees in various jobs.

 To know the worth of the employees in relation to job

requirements.
46
 PERFORMANCE PLANNING

 Enable the managers to develop role clarity continuously and

consequently do the right things and avoid the wastage of
time.

 Develop a discipline of systematic planning and review of

one’s own performance. Such panning review forms a basis
for subsequent development efforts.

PERFORMANCE DEVELOPMENT

 Enable the managers to gain more insight into their own

competencies i.e., strengths and weakness in relation to the
jobs.

 Help to identify developmental needs of the appraisal.

 Help in increasing the communication channels both upward

and downward to facilitate continuous development.
 Help in preparing employees for handling future
responsibilities by continuously reinforcing development
techniques.

CULTURE BUILDING

 To be as instrument of self appraisal and motivation.

 To help the employees in internalize the norms, culture and
values of the organization

 To act as an instrument for creating positive, problem solving,

collaborative and healthy culture in the organization.

47
 PERFORMANCE MONITORING AND
CONTROL:

 To be an instrument to ensure that every employees give a

desired level of performance by attaching rewards and
punishments for variation of performance levels.

 To control the behavior of the employees.

SIGNIFICANCE OF PERFORMANCE
APPRAISAL:

Performance appraisal has become a very significant

activity in most of the enterprise. It provides data about past, present
and expected performance of the employees which is helpful in
taking decision on section, training and development, increases in
pay, promotion, transfers, and the like. These days a large amount of
money is spent on performance appraisal by most organizations. The
benefits of performance appraisal are as follows:

 It helps the supervisor to evaluate the performance of his

employees systematically and periodically. It helps him to
assign that work to individuals for which they are best suited.

 Rating helps in guiding and correction of employees. The

supervisor may use the result of rating for the purpose of
constructively guiding the employees in the efficient
performance of work.

48
  The ability of the staff is recognized and can be adequately
rewarded by giving them special increments.

 Performance appraisal can be used as a basis of sound

personnel policy in relation to transfer and promotion. If the
performance of the employee is better than others, he can be
recommended for promotion, but if a person is not doing well
on a job, he may be transferred to some other job.

 Rating can also be used to evaluate the training programmers

weaknesses of employees are revealed by merit rating and the
training programmers can be modified accordingly.

 If the performance rating is done systematically and

scientifically, it will prevent grievances and develop a
confidence amongst the employees because they are convinced
of the impartial basis of evaluation. The records of merit rating
are available in permanent form to protect the management
against the subsequent charges of the discrimination which
might be filed by the trade union leaders.

USES OF PERFORMANCE APPRAISAL:

The appraisal systems do not operate in isolation they

generate the data that can contribute to other appraisal HRM system -
for example to succession planning and manpower planning.

Some of the common uses of performance appraisal include the

following:

49
  Determining appropriate salary increases and bonus for
workers based on performance measure.

 Determining promotions and transfers depending on the

demonstration of employee strengths and weakness.

 Determining training need and evaluation techniques by

identifying areas of weakness.

 Promoting effective communication within organizations

through the interchange of dialog between the supervisors and
subordinate.

 Motivating employees by showing them where they stand and

establishing a data bank on appraisal for rendering assistance
in personal decision.

IMPORTANCE OF PERFORMANCE
APPRAISAL

The main advantages or the importance of the performance are as

follows:

 There is a performance feedback.

 Improves the future performance of the employee.

 Give the employee satisfaction and motivation.

 Helps in employee training and development decisions.

 Helps in validation of selection process.

50
  Promotions to the existing employees.

 Transfers.

 Layoff decisions.

 Compensation decisions

 Career development of the employees.

 Helps in human resource planning.

The importance of the performance appraisal can also is classified as

follows:

 Provides valuable information for HR decisions:

It provides valuable information for taking decisions such

as increasing remuneration, promotions, demotions etc.

 Helps in selection method:

It helps in selection and placement system of the

organization. It is useful in analyzing training and development
needs. These needs can be understood because performance
reveals people required in the organization. A competitive
spirit is created and employees are motivated to improve their
performance. It also helps managers to understand the
employees strengths and weaknesses. It helps in improving the
performance to provide appropriate feedback, counseling to
employees.

51
 IMPROVING PERFORMANCE:

An effective appraisal system can contribute to

competitive advantage by improving employee job
performance in two ways i.e., by directing and by monitoring
that behavior in order to ensure to reach the goals.

 MAKING CORRECT DECISIONS:

Appraisal is an initial input in making decisions on inputs

such as pay, promotion, transfer, training and prohibitionary
period. Right decisions on each of these can contribute to
strength of a firm.

 ENSURING LEGAL COMPLAINTS:

Promotion made on factors other than performance might

land up in legal battle. Companies can minimize costly
performance, litigations by using appraisal system that gives
fair and accurate training.

 MINIMISING JOB DISATISFACTION AND

TURNOVER:
Employees tend to become emotional and frustrated if
they get rating that is not fair. This will lead to dissatisfaction
in job and will in turn increase turnover. Fair appraisal results
in high motivation and job satisfaction. An organization having
satisfied and motivated employees will have an edge over its
competitors.

52
 CONSISTENCY B/W ORGANISATIONAL
STRATEGY AND BEHAVIOUR:
An organization needs a strategy consistent with the
behavior of an employee, if he has to achieve the goals.
Performance appraisal becomes not only a means of knowing
in if the employee behavior is consistent with overall strategy
but also a way of bringing a negative consequence of a
strategy.

53
 Coaching

Management employee
development and training Discipline

Promotion
Counseling

Performance
appraisal

Bonuses

Selection procedure

Salary administration

Annual performance report

54
 FEATURES OF EFFECTIVE
PERFORMANCE APPRAISAL SYSTEMS:

An effective performance appraisal program fulfils the

following requirements.

1. DETERMINATION OF THE PURPOSE:

Before any performance appraisal program is initiated, it is

essential to determine its objectives. The objective of the
performance appraisal may be either to appraise the actual
performance of the individuals on their present jobs or to
determine the potential of the individuals to do higher jobs or
both. Sometimes performance appraisal programmers are
associated with specific objectives, like training and
development, transfer and promotion, increase in pay, etc. it
includes the following:

a) SELECTION AND TRAINING OF

APPRAISER:

Generally, the appraiser or the rate is the immediate

superior of the person to be appraised because he is most
familiar with the person concerned and his job. But there are
certain limitations of appraisal by one person because of
judgmental role of the appraiser. The appraiser may be biased
towards certain traits about which he himself does not know. In
order to avoid subjectivity in appraisal, it is advisable to give
sufficient training to the appraiser. It is also suggested that the
55
 performance of one man should be appraised by two people
independently in order to have objective results.

b) ESTABLISHING STANDARDS OF
PERFORMANCE:

Standards of performance should be set up to measure the

performance of various individual on the job. The standards of
performance should be laid down in clear-cut terms and put in
writing. The subordinates should be made to understand the
standards which are going to be used to measure their
performance. Some of the criteria which are commonly used in
industrial enterprises are:

 Optimum utilization of available resources

 Productivity
 Reduction in cost
 Improvement in profitability
 Realization of enterprise objectives
 Improvement in quality of products and services

2. DETERMINATION OF FREQUENCY OF APPRIASAL:

In fact, performance appraisal is a continuous process for

the supervisor. But in most of the organizations, formal
appraisal programmers are implemented once or twice a year.
The frequency of appraisal will be determined by the
objectives of appraisal and the level of employees to be
appraised.

56
3. DESIGNING OF APPROPRIATE FORMS:

Since the results of the performance appraisal are to be

used for many important decisions such as transfer, promotion,
etc., it is essential to keep in record of performance appraisal.
For this purpose, suitable forms should be prepared for
appraisal of all types of employees such as clerical,
supervisory, operative and managerial.

THE BULDING BLOCKS OF AN

EFFECTIVE PERFORMANCE APRAISAL
PROCESS:

 Recognize the importance of creating a solid foundation for

the implementation of the performance-based appraisal
process.

 Match employees responsibilities with descriptions of

activities related to the performance-based appraisal process.

 Sequence events related to an employee’s performance-based

appraisal.

 Identify the steps necessary to prepare adequately for

performance appraisal conference.

 Recognize the facilitating open discussions that are organized

and respectful of all participants.

 Identify the characteristics of groups that will benefit from

stacking techniques.

57
  Match employee responsibilities with description of activities
related to the performance-based appraisal process.
 Identify strategies that help participants to clarify their ideas
without influencing them.
 Identify techniques that will keep a discussion group focused
on the topic being discussed.

 Identify questioning techniques that ensure group or meeting

participants have an equal voice.

OFFERS OF PERFORMANCE APPRAISAL:

a. THE APPRAISER:

 To understand his performance according to the

appraiser.
 To which area he must improve in to meet the
performance level of the organization.
 The input of training required by the trainee or not.
 It gives him chance of promotion and increase in salary.
 Improvement of the occupational ability.
 Increase in self value feeling.

b. THE APPRAISEE:

 To understand the workmen performance profile of the

department.
 Extra training inputs required by them.
 To understand the type of skill possess by the workforce.

58
c. THE ENTREPRISE:

 To understand the commitment level of the workforce.

 To extra input to be given by the external agencies.
 To expand the business growth of the organization.
 Provide competitive advantage over the other industry.

d. THE SOCIETY:

 Lifelong performing organization.

 High class of society.
 Living index of people increase.
 Provide path for the improvement of other industry.

ADVANTAGES OF PERFORMANCE
APPRAISAL:

 It helps to understand the people performance of the company.

 It helps to note number of perforating people in the

organization.

 It helps for the aspiration level of the employee in the

organization.

 It helps to develop the new parameter of performance of the

employee.

 It gives to the competitive edge over the organizations

practices.

59
 It helps in developing the man power planning of the
organization.

 It helps in maiming the efficiency of organization, high

performance with low manpower.

 Enhancing the capabilities of responding to customer demand.

LIMITATIONS OF PERFORMANCE
APPRAISAL:

 If the factors included in the assessment are irrelevant,

the result of merit rating will not be accurate.

 Different qualities to be rated may not be given proper

weightage in certain cases.

 Some of the factors are highly subjective like initiative

and personality of the employees; so the actual rating
may not be on scientific lines.

 Supervisors often do not have critical ability in assessing

the staff. Sometimes, they are guided by their personal
emotions and likes. So the ratings are likely to be biased.

 Improper implementation may leads to cost to the

company.

 Suffer from problem of reliability and validity .

60
 PERFORMANCE APPRAISAL
TECHNIQUES

TRADITIONAL METHODS:

1) Confidential report
2) Essay method
3) Critical incident method
4) Checklist method
5) Graphic scale method
6) Forced choice method
7) Straight ranking
8) Paired comparison method
9) Team appraisal

MODERN METHODS:

1) BARS( behaviorally anchored rating scale method)

2) 360-degree performance appraisal
3) Balance score card
4) Human resource accounting
5) Assessment centre

61
 TRADITIONAL METHODS

1) CONFIDENTIAL REPORT:

In confidential reports method superior rates the

subordinate highlighting their strengths and weakness. Superior
does not provide feedback to the sub-ordinate about the
performance. This method is strictly confidential and does not
maintain any data base. In this method there is lot of possibility
of bias in rating.

2) ESSAYMETHOD:

In this method rater is asked to express the strong and

weak points of the employee behavior and detailed description
of the employee’s performance on various aspects such as job
knowledge and potential of the employee, employee
understands the company’s policies, objectives etc. employee’s
relation with co-workers and supervisors, employee’s ability,
attitude and perceptions etc.

3) CRITICAL INCIDENT METHOD:

A critical incident means a significant act by employees

exceeding or failing any of the requirements of his job. It
represents an exceptional behavior of an employee t work, as
for instance:

62
  Resisted the implementation of change
 Became upset over work
 Refused to the help a fellow worker
 Suggested an improvement in the work method

Manager keeps a log of the way in which the subordinates handle

certain key areas in the job at different times. This incident is taken
for rating the overall performance of an employee.

One of the advantages of this method is that the evaluation is

based on actual job. The disadvantages are as follows:

 Negative incidences are generally more noticeable rather than

positive incidences.
 If the recording of the performance is not done immediately
then there is a chance for forgetting easily by the supervisor.
 Close supervision is needed for this method.
 By this there may be many complaints during the review
selection

4) CHECK LIST METHOD:

Various statements are prepared in such a manner hat

describes various types of behaviors of an individual on a
particular job. At the time of rating the employees, the supervisor
just recollects and checks all statements. After this weights or
values are attached to the individual traits and rating up to this
level is gathered on the rating sheet.

63
  A series of questions are presented in the format where in
the rate is asked to give his rating on a dichotomous
scale.(yes/no)

 To meet the degree of consistency there is repetition of

some questions, this is only to cross check the rating given
by the superior.

The checklist method consists of the characteristics of the employees

relating to their jobs. There is a disadvantage of having rater bias.
This rating is done using the personality criteria rather than
performance criteria

5) GRAPHIC SCALE METHOD:

Under this method, scales are established for number of

specific factors and qualities. Five degrees are established for a
number of each specific factor and general definition appears at
points along the scale. Generally, the rated is supplied with a
printed form, one for each person to be rated. The selection of
factor to be measured on the graphic rating scale is an important
point under this system.

These are of two types:

 Characteristics, such as initiative and dependability

 Contributions, such as quantity and quality of work
 Rating is given on a scale of varying degrees for various
normal of employee performance. The performance standard
can be from the technical as well as behavior related areas.

64
 6) FORCED CHOICE METHOD:

This method obviously eliminates the room for

subjective judgment on the part of supervisors. Besides this, the
system is easy to understand and administer. Many times, this
categorization is not found in work groups particularly when the
group is comparatively small.

 The rate is forced to choice between a pair of descriptive

statement of sneeringly equal worth positive or negative.

 The scoring key is kept secret from the rafters.

 The community evaluates beforehand the tentative
performance of present employees.

 Based on their evaluation, paired statements are developed to

enable the raters to give their opinions.

 A pair of statements differentiates performance from a non

performance.

 Evaluation is close by comparing the rating given by the

rater and the committee.

 The primary purpose is to avoid the rating bias.

7) RANKING METHOD:

This is the oldest and the simplest method. It can

be applied in small organizations. A person is compared with all the
other employees or persons in the organization in terms of
performance. Based on the performance, employees are ranked.

No. of comparison= n (n-1)/2

65
8) PAIRED COMPARISION METHOD:

In the paired comparisons method, rater identifies the

factors on which employees can be rated. First certain key persons
are identified and all the employees are compared with their key
people on all the factors. Based on the comparisons of the employees
with the key person the employees are ranked.

9) TEAM APPRAISAL:

Team appraisal mainly set to appraise the performance

of the team. In this method first quantified targets are set when
evaluating team performance. The top performance in each team
earns the highest level of rewards. Team appraisal method links team
performance closely to the employees profits and overall financial
health. This method provides clarity in assessing both the team and
its member’s performance.

10) RATING SCALE METHOD:

This is the simplest and the most popular technique for

appraising the employee performance. The typical rating skilled
method consists of several numeric skills each representing a job
relating criteria such as output, attendance, attitude, co-operation etc.
Each scale ranges from excellent to poor. Rating scale offers the
advantage of adaptability, relatively easy use and low cost. The
disadvantage of this method is the rater’s biases are likely to be
influenced during evaluation.

66
11) FORCED DISTRIBUTION METHOD:

This method operates under the assumption that the

employee performance level confirms to a normal statistical
distribution. Generally it is assumed that the forced distribution is a
belt shaped curve. The major weakness of forced distribution is
based on the assumption that the performance level always confirms
to a normal distribution.

12) FIELD REVIEW METHOD:

This is an appraisal from someone outside the raters

own department, usually someone from the corporate office or HR
department. The outsider reviews and holds interviews with the rate
and his/her superior. This method is primarily used for making
promotional decisions at management level. Field review is useful
when comparable information is needed for employee in different
units of location. Two disadvantages of this method are:

 An outsider is not usually familiar with conditions in work

environment which may affect the employment ability or
motivating performance.
 An outsider review does not have opportunity to observe
employee behavior over a period of time and in various
situations

67
 MODERN METHODS

BEHAVIOUR ANCHORED RATING SCALE

METHOD (BARS):

This method helps in measuring and improving the job

performance more accurately. For each performance area, some
standard statements are provided BARS sometimes called behavior
expectations scales are rating scales whose scale points are
determined by statements of effective and ineffective behavior.
While developing such BARS, group discussions are conducted to
identify significant job dimensions that need to be evaluated. BARS
may be of different types for different job dimensions. Normally
BARS are presented vertically with scale points rating from 5-9
because of its behavioral orientation. It is considered as the most
useful techniques of performance appraisal. Moreover, this system
provides opportunity to both appraise and appraiser to interact and
participate in developing standards for each performance area.

This method represents a range of descriptive statements

of behaviors’ varying from the least to the most effective. The rater
must indicate which behavior on each scale tests describes an
employee performance. There are two disadvantages of this method.
They are as follows:

 It is difficult and expensive to develop BARS for each and

every job.
 Several appraisal forms are required to accommodate different
types of jobs in an organization.

68
 MANAGEMENT BY OBJECTIVES (MBO):

“Management by objectives is a process whereby the

superior and sub-ordinate managers of an organization jointly
indentify its common goals, define each individual’s major areas of
responsibilities in terms of the results expected of him, and use these
measures as guides for operating the unit and assessing the
contribution of each of its members”. MBO is a concept given by
PETER DRUCKER in the year 1954 which reflects the management
philosophy which values and utilizes employee contribution. MBO
is a comprehensive management approach which is adopted for the
performance appraisal and also for organization development. MBO
is a performance management tool.

Goal setting approach or MBO is the behavior approach

to subordinate appraisal and it actually called “work planning and
review”. Under this approach an employee is not appraised by his
recognized traits, but by his performance with respect to the agreed
goals and objectives. Thus the essential feature of this approach is
mutual establishment of job goals. There is emphasis on problem
solving rather than critical discussion of the performance of the
subordinates. MBO is a process whereby the superior and
subordinate of the organization jointly identify their common goals.
MBO defines each individual’s major area of responsibility in terms
of results expected from them. It uses these measures for accessing
the contribution of its members. This process is useful for
managerial persons and for employees who are flexible having self
control in job.

69
Characteristics of MBO:

 The establishment of organizational goals.

 The setting of individual objectives in relates to organizational
goals.
 A periodic review of performance as it relates to organizational
goals.
 Effective goal setting and planning by top management.
 Organizational commitment.
 Mutual goal setting.
 Frequent individual performance review.

MBO is, thus a method of mutual goal setting, measuring

progress towards the goals, taking action to assure goal
attainment, feedback, and participations.

THE KEY FEATURES OF MBO:

Superior and subordinate get together and jointly agree upon

the list of the principal duties and areas of responsibilities of
the individual’s job.

The subordinate sets his own short term performance goals and
targets in co-operation with his superior.

They agree upon criteria for measuring and evaluating

performance.

From time to time, as decided upon, the superior and

subordinate get together to evaluate progress towards the
agreed-upon goals. At those meetings, new or modified goals
are set for ensuring period.
70
 The superior plays a supportive role. He tries, on a day-to-day
basis, to help the sub-ordinate achieve the agreed upon goals.
He counsels and coaches.

In the appraisal process, the superior plays less of the role of a

judge and more of role of one who helps the subordinate attain
the organizational goals or targets.

This process focuses upon results accomplished and not upon

personal traits.

MBO has an approach to management is aimed at improving

performance by eliminating or by reducing the following
impediments to it.

 Inappropriate organizations and managerial structure.

 Inefficient control.

 Inadequate communication.

 Vague or meaningless objectives.

 Ill-defined accountabilities and authority.

 Wasted resources-particularly human taent at all levels.

 Low morale and apathy.

71
 FOUR MAIN STEPS IN MBO

 Define the job: Review with the subordinate, his or her ley
responsibilities and duties.

 Define expected results (set objectives): Here

specify immeasurable terms what the person is expected to
achieve.

 Measure the results: Compare actual goals and achieved

with expected results.

 Provide feedback: Hold periodic performance review

meetings with sub-ordinates to discuss and evaluate the latters
progress in achieving expected results.

BENEFITS OF MBO:

 Provides a way for measuring objectively the performance of

sub-ordinate.

 Coordination individual performance with company goals.

 Aids in an effective overall planning system.

 Develops factual data for promotion criteria

 Stimulates self-motivation, self-discipline and self control.

 Fosters increased competence, personal growth and

opportunity for career development.

72
CERTAIN POTENTIAL PROBLEMS OF MBO

 It often lacks the support and commitment of top management.

 Its objectives are often difficult to establish.

 Its implementation can create excessive paper work if it is not

closely monitored.

 It concentrates too much on the short-run at his expense of

long-range planning.

 It may lead to excessive time consuming.

MBO is seen by some as an organizational panacea. It

cannot provide all of the data required for making valid personnel
decisions on compensation, promotion and training and
development.

73
 HUMAN RESOURCE ACCOUTING

This method attaches money estimations in the value of

manpower of an organization. The process is somewhat like
estimating the goodwill values and can be appraised by developing a
procedure to undertake periodic measurement of certain categorized
as key variable or intervening variable.

Key variables are policies and decisions of an

organization, its leadership strategies, skills and behaviors of an
employee etc. Intervening variables are loyalties, attitudes,
motivations, interpersonal relations, communications and decision-
making.

It is not very popular method of performance appraisal.

However, this system is more appropriately used for evaluating the
collective performance of an organization, rather than individual
appraisal of an employee. This method is useful for organizational
development, as it helps in identifying the changed areas more
scientifically than any other method.

74
 ASSESSMENT CENTRE

It is a centre location where managers come together and

participate in job related exercises which are evaluated by trained
observers. It is mostly used to executive hiring. The characteristic
features of assessed in typical assessment centers are as follows:

1) Creativity

2) Mental alertness

3) Communicating ability

4) Self confidence

5) Resistance to stress

6) Energy level

7) Decision making

8) Planning and organizing ability

9) Sensitivity to the feeling of others

75
 360-DEGREE PERFORMANCE APPRAISAL

This appraisal method is now largely in use throughout the

world. It requires performance feedback from all important
stakeholders of the organization, like the rater himself, his superior,
peer, other team members, customers and suppliers. Apart from its
effectiveness in reporting performance, this method ensures TOTAL
EMPLOYEE INVOLVEMENT (TEI) and employee empowerment.

360-degree performance appraisal is also a powerful

developmental tool because where conduct at regular interval
(yearly). It helps to keep a track of he change others perceptions
about the employee.

This technique is being definitely used across the global for

performance appraisal. WIPRO, INFOSYS, RELIANE, INDIA are
the organizations used 360-degree performance appraisal.

A performance management in which employees receive

performance feedback on a variety of dimensions by an assortment
of individuals with whom the person interact, namely, their
colleagues and peers, their own sub ordinates, and internal and
external customers. The 360-degree feedback refers to the practice
of using multi-rater system, upward feedback and full circle
feedback. Thus the feedback comes from all around them, 360
degree.

76
The steps in the 360- degree assessment includes:

 Identify and define the key competencies for organizations

success based on the organizations vision, values and goals.

 Express the key competencies as attitudes against which

participants can be assessed.

 Select the person to be evaluated–peers, customers,

subordinates, and manager.

 Provide feedback to the individual.

 Create an action plan to improve the individual’s performance.

360-DEGREE FEEDBACK

SUPERIOR APPRAISAL:

Superior is the person who is most probably most familiar

with the individual’s performance and in most jobs has had the best
opportunity to observe actual job performance because she or he also
responsible for rewards or punishments decisions. It is not surprising
that feedback from supervisor is more highly related to performance
than that from any other source

PEER APPRAISAL:

In some jobs, such as outside sales the immediate superior

may observe a subordinates actual job performance only rarely and

77
indirectly through written report. In other environment self managed
work teams there is no “supervisor” peer can provide a perspective
on performance that is different from that of immediate supervisor.

Superior
900 900
Name Of
Self The Peer
Appraisee
900 900

Subordinate

SUB-ORDINATE APPRAISAL:

Appraisal by subordinates can be a useful input to the

immediate supervisor’s development and the ratings are of
significantly higher quality when used for that purpose. Subordinate
know firsthand the extent to which the superior actually delegates,
how well he or she communicates, the type of leadership style she or
he is most comfortable with, and to the extent to which he or she
plans and organizes.

78
SELF APPRAISAL:

Self appraisal lends to the more lenient, less variable more

biased and show less agreement with the judgments of others. In
terms of performance effectiveness is highest under two conditions.
When ratings from both self and others are high, or when self ratings
are substantially lower than ratings from others under estimation.
Effectiveness is lower for over all estimators when self ratings are
moderate and subordinate ratings are low.

The 360-degree performance assessment has an advantage

over the traditional manager assessment process in that the
individual receive feedback from multiple relevant sources, not just
one. It helps faster independent partnership and develops team based
organizations. One important factor for the success of 360-degree
performance assessment is to ensure that the right people are
selected to provide the feedback.

Both critics and supporters of individuals should be selected.

Another key factor for its success is avoiding encouragement to
improve. Further, raters should be trained to use the rating properly
to help them make accurate appraisal.

This form of performance evaluation can be very beneficial to

managers to because it typically gives them a much wider range of
performance related feedback than a traditional evaluation. That is
focusing narrowly on objectives performance, such as sales increase
79
or productivity gains, 360-degree often focuses on such as
interpersonal relations and style. The manager is likely to hear some
personal comments on sensitive topics, which may be threatening.
Thus, a 360-degree feedback system must be carefully managed so
that its focus remains on constructive rather than destructive
criticism.

ADVANTAGES OF 360 DEGREE APPRAISALS

 Individuals get a broader perspective that how others perceive

them.

 Increased relevance and relevance of competencies.

 Increased awareness by senior management that they to have

development needs.

 More reliable feedback

 Encourages open feedback that provides new insights.

 Identify key behavior change areas for individual managers.

Departments and the organizations as a whole.

 Supports a climate of continuous improvement.

 Improves organizational climate and manage morale.

80
 DISADVANTAGES OF 360-DEGREE
APPRAISAL:

 People with holding frank or honest feedback.

 People experiencing stress in receiving or giving feedback.

 Lack of action following feedback.

 Overall reliance on technology.

 Too much bureaucracy.

BALANCED SCORE CARD (BSC)

A new approach to strategic management was developed

in the early 1990’s by Dr. Robert Kaplan and David Norton. They
named this system as balanced score card. The BSC approach
provides a clear prescription as to what companies should measure
in order to balance the financial performance.

The BSC is not only is measurement system but also a

management system that enables organizations to clarify their vision
and strategy and translate them into action. It provides feedback
around both the internal business process and external business
process i.e., outcomes in order to continuously improve strategic
performance and results. When fully deployed, the BSC transforms
strategic planning from an academic exercise into center of an
enterprise.

81
The BSC suggests that we view the organization from four
perspectives, and develop metrics, collect data and analyze it related
to each of these perspectives.

The Learning And Growth Perspective

The Business Process Perspective
The Customer Perspective
The Financial Perspective

financal
perspective

customer vsion & internal

perspective strategy business process

learning & growth

perspective

82
 PRSPECTIVES

The balanced score card suggests that we view the

organization from four perspectives, and develop metrics, collect
data and analyze it relative to each of these perspectives:

THE LEARNING AND GROWTH PERSPECTIVE:

This perspective includes employee training and corporate

cultural attitudes related to both individual and corporate self-
improvement. In a knowledge-worker organization, people –the only
repository of knowledge is the main resource in the correct climate
of rapid technological change, it is becoming necessary for
knowledge workers to be in a continuous learning mode. Metrics can
be put into place to guide manages in focusing training funds where
they can help the most. In any case, learning and growth constitute
the essential foundation for success for of any knowledge worker
organization.

Kaplan and Norton emphasize that learning is more than

training; it also includes things like mentors and tutors with in the
organization as well that is of communication among workers that
allows them to readily get help on a problem when it is needed. It
also includes technological tools; what the balding criteria call “high
performance work systems”.

83
THE BUSINESS PROCESS PERSPECTIVE:

This perspective refers to internal business process. Metrics

based on this perspective allow the manager to know how will their
business is running, and whether its products and services conform
to customer requirements. This metrics have to be carefully designed
by those who know this processes most intimately; with unique
missions these are not something that can be developed by outside
consultants.

In addition to the strategic management process, to kinds of business

process are mentioned

1) Mission oriented process

2) Support process

Mission oriented processes are the special functions of

government officers, and many unique problems are encountered in
these process.

Support processes are more respective in nature and hence

easier to measure and benchmark using generic metric.

BSC is a concept helping you to translate strategy into

acion.bsc start from the company vision and strategy from here
critical success factors are defined. Measures are constructed that aid
target setting and performance measurement in areas critical to the
strategies.

84
THE CUSTOMER PERSPECTIVE

Recent management philosophy has shown an increasing

realization of the importance of customer focus and satisfaction in
any business. These are leading indicators: if customers not satisfied,
they will eventually find other suppliers that will need there needs.
Poor performance from these perspectives is as a leading factor of
future decline, even though the current financial picture may look
good.

In developing metric for satisfaction, customer should be

analyzed in terms of kinds of customers and the kinds of processes
for which we are providing a product are services to those customer
groups.

THE FINANCIAL PERSPECTIVE

Kaplan and Norton do not disregard the traditional need

for financial data. Timely and accurate funding data will always be a
priority and managers will do whatever necessary to provide it. In
fact, often there is more than enough handling and processing of
financial data. With the implementation of a corporate database, it is
hoped that more of the processing can be centralized and automated.
But the point is that the current emphasis on financial leads to the
unbalanced situation with regard to other perspective. There is
perhaps a need to include additional financial related data, such risk
assessment and cost benefit data, in this category.

85
HR SCORE CARD KEY BENEFITS

 Formulate hr strategy that is aligned with the overall corporate

strategy.

 Clarify the vision and mission strategy of the organizations.

 Create a consensus and owner ship of the strategy in the

management team.

 Improve communication of the strategy across the enterprise.

 Prioritize hr initiatives by linking activities to business goals.

 Provide real time graphical display of key performance

indicators.

86
CHAPTER-5

87
 Data analysis and
interpretation

88
 PERFORMANCE MANAGEMENT SYSTEM
1. Performance appraisal system helps in motivating the
employment.

Table 1:

sl. no Response No. of percentages

respondents
1 Strongly agree 16 27
2 agree 40 67
3 neutral 4 6
4 disagree 0 0
5 Strongly disagree 0 0
Total 60 100

From this analysis it says that, 94% employees are accepting

that performance appraisal gives motivation to them and rests
of the employees are neutral about it.

100

90

80

70

Column3
60
Column1
50 Series 3

40

30

20
strongly agree agree neutral disagree strongly

89
 2. Transparency in present performance appraisal system
helps is more effective.

Table: 2

Response No. of respondents Percentages

Strongly agree 10 17
Agree 32 53
neutral 10 17
Disagree 4 7
Strongly disagree 4 6
Total 60 100

From the above analysis it says that, 87% employees are

agreeing that their special contribution are through the appraisal
but remaining are not agreeing it.

Percentage:
60

50

40

30 Column4
Column1
20
Column2
10

0
strongly agree agree netural disagree strongly
disagree

90
 3. Performance appraisal system in KRS
PHARMACEUTICALS in effectively designed.

Table: 3

Response No. of respondents percentages

Strongly agree 16 27
agree 30 50
neutral 8 13
disagree 6 10
Strongly disagree 0 0
total 60 100

From the above analysis it is clear that, 80%are accepting it is

an important to their career growth and remaining are feeling
that it is not an important to them.

60

50

40

Series 1
30
Series 2
20 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

91
 4. The performance appraisal is an effectively HR-tool.

Table 4:

Response No. of respondents percentages

Strongly agree 10 17
Agree 30 50
Neutral 10 17
disagree 10 17
Strongly disagree 0 0
Total 60 100

From this above analysis, it is clear that in KRS

PHARMACEUTICALS SERVICES performance appraisal is
effectively designed but it has to improve for some extent.

60

50

40

Column4
30
Column2

20 Column1

10

0
srtongly agree agree neutral disagree strongly
disagree

92
5. Training needs can be identified through the present
performance appraisal system.

Table: 5

Response No of respondents percentages

Strongly agree 12 20
agree 24 40
netural 10 17
Disagree 10 17
Strongly disagree 4 6
total 60 100

From this analysis, 77% employees are saying that PA in

KRS Pharmaceuticals is based on equality. But rest of the
employees are not agreeing it

45

40

35

30

25
Series 1
20 Series 2

15 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

93
6. Performance appraisal system fairly evaluated the
employee’s performance and provides feedback.
Table 6
Response No. of respondents percentages
Strongly agree 16 27
Agree 24 40
Neutral 10 17
disagree 6 10
Strongly disagree 4 6
total 60 100

From this analysis, 84% employees are agreeing that

organization makes a sincere effort of choosing good
employees but 16% are not satisfying.

45

40

35

30

25
Series 1
20 Series 2

15 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

94
7.Are you training and performance are really benefited to
you.

Response No. of respondents percentages

Strongly agree 14 23
agree 24 40
neutral 16 27
Disagree 2 3
Strongly disagree 4 7
total 60 100

From the above analysis,90% employee believe that

management gives proper training to then whenever is
necessary but remaining 10% do not believe

45

40

35

30

25
Series 1
20 Series 2
15 Series 3

10

0
strongly agree agree neutral dis agree strongly
disagree

95
8. Performance plays a key role in the organization.
Table:8

Response No. of respondents percentages

Strongly agree 12 20
agree 24 40
neutral 18 30
disagree 4 7
Strongly disagree 2 3
total 60 100

From the above analysis it says that 90% employee are

satisfied with present methods and remaining 10% are not
satisfying.

45

40

35

30

25
Series 1
20 Series 2
15 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

96
9. There is a need to incorporate better performance appraisal
system.
Table: 9
Response No. of respondents percentages
Strongly agree 16 27
agree 24 40
neutral 12 20
disagree 6 10
Strongly disagree 2 3
total 60 100

From the above analysis,87% employee are feeling that

management is guiding them properly but 13% are not
satisfying.

45

40

35

30

25
Series 1
20 Series 2

15 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

97
10. The present system is sufficient for the competency level
can be determined with the present performance appraisal
system.

Table :10
Response No. of respondents percentages
Strongly agree 38 47
agree 18 30
neutral 14 23
Disagree 0 0
Strongly disagree 0 0
total 60 100

From this analysis it clears that all most all employees

believe, that top management believes the performance can be
developed through continuous training.

50

45

40

35

30
Series 1
25
Series 2
20
Series 3
15

10

0
strongly agree agree neutral disagree strongly dis
agree

98
11. Top management is willing to invest time and effort in
sharpening performance of the employee on continuous.

Table: 11

Response No. of respondents percentages

Strongly agree 12 20
agree 24 40
neutral 18 30
disagree 4 7
Strongly disagree 2 3
Total 60 100

From this above analysis it says that 90% employees are

satisfied with present method and remaining 10% are not
satisfying.

45

40

35

30

25 Series 1
20 Series 2
15 Series 3
10

0
strongly agree agree neutral dis agree strongly
disagree

99
 12. Performance appraisal system enables management to
reward suitably for the good performance.
Table: 12
Response No. of respondents percentages
Strongly agree 16 27
agree 24 40
neutral 10 17
Disagree 9 10
Strongly disagree 4 6
total 30 100

From the above analysis , 84% employee are agreeing that

organization makes a sincere effort of choosing good employee
but 16% are not satisfying.

45

40

35

30

25
Series 1
20 Series 2
15 Series 3

10

0
strongly agree agree neutral disagree strongly
disagree

100
13.Should promotion be based on the rating derived from
perfect.

Table :13

Response No, of respondents percentages

Strongly agree 10 17
agree 30 50
neutral 10 17
Disagree 10 17
Strongly disagree 0 0
Total 60 100

From the above analysis ,it is clear that KRS Pharmaceuticals

appraisal is effectively designed but it has to improve for some
extent.

60

50

40

Series 1
30
Series 2

20 Series 3

10

0
strongly agree neutral dis agree strongly
agree disagree

101
14. The performance of all employee in various grades can be
evaluated effectively with the performance appraisal system.

Table :14

Response No. of respondents percentages

Strongly agree 16 27
agree 40 67
neutral 4 6
disagree 0 0
Strongly disagree 0 0
Total 60 100

From the above analysis its says that, 94% employee are
accepting that performance appraisal gives motivation to them
and rest of the employees are neutral about it.

80

70

60

50
Series 1
40
Series 2
30
Series 3
20

10

0
strongly agree agree neutral disagree strongly
disagree

102
15.All your special contribution get recorded through the
appraisal.

Table :15

Response No.of respondents percentages

Strongly agree 12 20
agree 24 40
neutral 10 17
Dis agree 10 17
Strongly disagree 4 6
Total 60 100

From the above analysis ,77% employees are saying that PA in

SRAVAN shipping is based on the equality . But rests of the
employees are not agreeing it.

45

40

35

30

25
Series 1
20 Series 2
15 Series 3

10

0
strongly agree agree neutral dis agree strongly
disagree

103
CHAPTER-6

104
 FINDINGS
 SUGGESTIONS
 QUESTIONNAIRE
 BIBLIOGRAPHY
 CONCLUTION

105
 FINDINGS

 Greatly, the employees in KRS Pharmaceuticals are

reaching their targets to meet company goals very
efficiently.

 High commitment, involvement of employees is there in

fulfilling their duties and responsibilities.

 Employees are satisfied by the nature of the supervision.

 Management encourages participation of employees in

decision making and in giving ideas.

 Mostly this company relies on external training than an

internal training, where it reduces the time consuming.

 The cooperation among employees is very good when they

sharing their knowledge and information and that gives the
company performance to be high.

 Management believes that those employees are the key for

their success.

106
 SUGGESTIONS

 The gap between pay and performance to be reduced to

some more extent.

 In the organization communications seems to be good but

it has to improve for some extent.

 Make the psychological contract with employee through

relationally than transitionally as it reduces the attrition.

107
 QUESTIONNAIRE

EMP NAME:___________

A) Strongly agree B) agree C) neutral D) disagree

E) strongly disagree

1. Performance appraisal system helps in motivating the employees

[ ]

2. Peformance appraisal system helps in building positive relations

between superior and subordinate. [ ]

3Transparency in present performance appraisal system helps is

more effective. [ ]

4. Performance appraisal system in KRS Pharmaceuticals is

effectively designed [ ]

5. The performance appraisal is an effectively HR-tool

[ ]

6. Training needs can be identified through the present performance

appraisal system. [ ]

7. Performance appraisal system fairly evaluated the employee

performance and feedback. [ ]

8. Are your training and performance programmers are really

benefited to you. [ ]

9. There is a need to incorporate better performance appraisal

system. [ ]

10. The present system is sufficient for the competency level can be
determined with the present performance appraisal system.
[ ]

108
11. Top management is willing to invest time and efforts in
sharpening performance of the employee on continuous.
[ ]

12. Performance plays a key role in the organization. [ ]

13. Are able to subordinate your goals of that organizational goals

[ ]

14. Should promotions be based on rating derived from perfect

[ ]

15. All your special contribution get recorded through the appraisal.
[ ]

109
 BIBLIOGRAPHY

1 Aswathappa, Human resources management

fourth edition, 2008.
2 Gary Dessler, HRM seventh edition 2008.
3 P. Subba Rao, Human Resources Management
second edition.

Websites:
www.google.com
oceanpharmacoat@pharmaceuticals.com
KRS@pharma.com

110
 CONCLUSION

KRS Pharmaceuticals is a fast growing organization

established by a team of dedicated professionals with over decades
of experience in the pharmaceutical industry with specific reference
to the development and manufacture of various APIs.

The company’s forte is the customized development and

manufacture of various Active Pharmaceutical Ingredients (APIs).

Innovation in the field of medicine and pharmaceuticals is an

ongoing process. The objective is to provide cost effective quality
medicines to mitigate the sufferings of mankind. KRS provide
complete solutions for quality products. Innovation of new
molecules is an ongoing process in the Product Development Lab.

Today Ocean Pharmacoat is a one stop destination offering

complete solution for Pharmaceutical pellets be it an enteric coated
or sustained release, immediate or delayed release, Controlled or
even modified release. Besides this, with Ocean Pharmacoat one has
a wide range of products to choose from irrespective of the strength
or dosage forms.

A team of qualified and experienced technical personnel,

well equipped manufacturing facility and quality control,
documentation system conforming to GMP requirements, have been
instrumental in maintaining their premium position in the Pharma
industry.

111