PROJECT REPORT

Project Title
Study of Performance Appraisal process
at
DLF and its Effectiveness

Under guidance of

Faculty Supervisor Agency

Supervisor
Mr. Sudhanshu

Bhushan

Submitted by:
Harsh Kumar

Lingaya’s lalita Devi institute of

Management and sciences

0321921708

2
 CONTENTS

Page
Nos.

Chapter 1: Introduction 1-7

Chapter 2: Objective and Methodology of the Study 8-10

Chapter 3: DLF. - A Profile 11-13

Chapter 4: Performance Appraisal - Theoretical Review 14-16

Chapter 5: Organisation under study 17-22

• Performance Appraisal system in Punj Lloyd

• Performance Appraisal system in Dabur India ltd.

Chapter 6: Performance Appraisal System in DLF. - A 22

Review

Chapter 7: Analysis and Interpretation of Data 23-37

Chapter 8: Conclusion and Suggestions 39-41

Bibliography 42

Annexures 43-45

3
 Chapter 1

Title of the Project:

Study of Performance Appraisal Process at DLF

and Its Effectiveness

INTRODUCTION

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

4
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.

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

5
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.

Modern Appraisal

Performance appraisal may be defined as a structured formal

interaction between a subordinate and supervisor, that usually takes

the form of a periodic interview (annual or semi-annual), in which the

work performance of the subordinate is examined and discussed, with

a view to identifying weaknesses and strengths as well as

opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either

directly or indirectly, to help determine reward outcomes. That is, the

appraisal results are used to identify the better performing employees

who should get the majority of available merit pay increases, bonuses,

and promotions.

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By the same token, appraisal results are used to identify the poorer

performers who may require some form of counseling, or in extreme

cases, demotion, dismissal or decreases in pay. (Organizations need to

be aware of laws in their country that might restrict their capacity to

dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal - the

assignment and justification of rewards and penalties - is a very

uncertain and contentious matter.

Controversy, Controversy

Few issues in management stir up more controversy than performance

appraisal.

There are many reputable sources - researchers, management

commentators, and 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 (see 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.

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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 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.

8
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.

It has also been claimed that appraisees themselves are inclined to

believe that appraisal results should be linked directly to reward

outcomes - and are suspicious and disappointed when told this is not

the case. Rather than feeling relieved, appraisees may suspect that

they are not being told the whole truth, or that the appraisal process is

a sham and waste of time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that

appraisees seem to have greater acceptance of the appraisal process,

and feel more satisfied with it, when the process is directly linked to

9
rewards. Such findings are a serious challenge to those who feel that

appraisal results and reward outcomes must be strictly isolated from

each other.

There is also a group who argues that the evaluation of employees for

reward purposes, and frank communication with them about their

performance, are part of the basic responsibilities of management. The

practice of not discussing reward issues while appraising performance

is, say critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice

of having separate wage and salary reviews, in which merit rises and

bonuses are decided arbitrarily, and often secretly, by supervisors and

managers.

There are basically three purposes to which performance appraisal can

be put. First, it can be used as a basis for reward allocation. Decision

as to who gets salary increase, promotion, and other rewards are

determined by their performance evaluation. Second, these appraisals

can be used for identifying areas where development efforts are

needed. The performance appraisal is a major tool for identifying

deficiencies in individuals. Finally it can be used as a criterion against

which selection devices and development programs are validated. As a

key input into management’s reward and punishment decision,

performance appraisals can motivate or de-motivate employees.

10
Three different approaches exist for doing appraisals. Employees can

be appraised against

1. Absolute standards
2. Relative standards
3. Objectives

11
 Chapter 2

OBJECTIVE AND METHODOLOGY OF THE STUDY

1. Objective of the study

This project aims at studying the system of performance appraisal and

its effectiveness in an organisation. Performance appraisal is the most

significant and indispensable tool for the management as it provide

useful information for decision making in area of promotion and

compensation reviews.

Thus a broad objective of the study includes:

• To know the present system of performance appraisal

• To know the extent of effectiveness of the appraisal system

• To identify and know the area for improvement

• To measure the return on investment of time effort and energy for

the process

• To suggest certain measures for further improvement in the current

system

2. Sample of the study

The population covered for the present study consisted of employee

belonging to supervisory and the level above. For the purpose of this

study, survey covered the employee of DLF. falling under supervisor

and the level above.

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The study covered a sample of 64 employees belonging to supervisory

level and above.

3. Methodology of the project

The project work has been carried out in three stages, a structured

questionnaire with objective and question was communicated tested

and finalise. During the second stage, the questionnaire was

administered to the employees at DLF by individually contacting them.

The work relating to data entry compilation, data analysis and report

writing constituted the third stage. Interview index was also used at

some places to get information on the project subject.

The details of the methodology adopted are presented below:

The Questionnaire

Keeping in view the objective of the study, questionnaire was designed

and tested on few employees. After getting the proper response and

sanction from the concerned department the questionnaire was

finalised. The questionnaire consisted of five sections.

First section of the questionnaire consisted of personal particulars and

the second section covered questions related to promotion policy. The

third section covered the system of performance appraisal in detail.

The fourth section covered system of communication followed in the

13
organisation and the fifth section consisted of one subjective question

to get detailed input to make this system more effective, if any.

Response to Questionnaire

In all 64 questionnaires were given to employees falling in the category

of supervisors and above. Out of which 48 could be collected back duly

completed. The researcher individually contacted the employees to get

response on the questionnaire.

Data entry and analysis

It has been an uphill task to enter the enormous data received through

the questionnaire which consisted nearly 25 questions. Response to

the descriptive questions though very few but was valuable for the

purpose of study. Hence these were further structured in time with the

system adopted for compilation and data analysis.

Limitations

Many employees gave guarded answers to some crucial questions.

Some of them did not fill the questionnaire due to lack of time

Response could not be collected from the total sample selected.

Some of the questionnaire could not be completed due to reasons

other than time factor.

14
The confidentiality of the system created some problem in getting

information.

Chapter 3

ORGANISATION PROFILE

DLF is one of the largest infrastructure company of north India. Ever

since its incorporation, DLF has worked to exemplary high standard of

construction with use of latest state of the technology supported by an

excellent pool of talent, trained and highly skilled work force headed

by dynamic Professional Management staff. DLF Management has kept

pace with latest and sophisticated printing technology being used by

developed countries like Japan, UK, France, Germany, USA etc. with

commitment to Human Resource Development.

DLF undertakes total execution of any construction job that involves

pre-press, colour and digital electronic imaging, printing on sheetfed or

web fed multi-colour-printing machines. Besides, all types of

fabrication and finishing operations are also carried out in an

integrated manner.

15
DLF is a name synonymous with leadership, trust, quality and

reliability. Built on a strong pedigree and established reputation, the

Group combines on impeccable record of performance with innovation

and leadership in the real estate industry.

Down to Earth and many more constructions, which includes shopping

malls. It also contributes on large number to multi-plexes and shown

great enthusiasm in the hospitality sector and have struck a deal

between DLF group and overseas giant Hilton to build across the

country a chain of hotels with an investment estimated up to 10000-

12000 crore and DLF holding 74% in joint venture. Apart from having

developed 21 premier colonies in Delhi, the group also entered in to

SEZs which are meant to provide fiscal incentives to developers and

tenants both.

The company Received the 'Corporate Buildings Award' in March 2005

instituted by the leading construction design magazine 'Indian

Architect and Builders'.

Awarded by Haryana Urban Development Authority (HUDA) for

'Excellence in Horticulture Preservation'.

DLF limited and its subsidiaries is leading professionally Managed

Company emerging as one of the foremost enterprise in real estate

16
development. It has extensive land reserve of 10225 acres in various

regions across India. DLF is the only company in India in the Consumer

validated category from the real estate sector to have been awarded

‘Super brand' ranking.

The DLF Group was founded by Chaudhury Raghuvendra Singh in

1946. DLF developed some of the first residential colonies in Delhi such

as Krishna Nagar, South Extension, Greater Kailash, Kailash Colony and

Hauz Khas. In 1957, with the passage of Delhi Development Act, the

government assumed the control of real estate development activities

in Delhi and the role of private real estate developers was restricted.

As a result DLF began acquiring land at relatively low cost outside the

area controlled by the Delhi Development Authority, particularly in the

district of Gurgaon in the adjacent state of Haryana. . In 1989, DLF

ventured into community shopping centers. In 1991, it ventured into

1st Grade Office space and in 2002, DLF ventured into organized retail

17
 Chapter 4

PERFORMANCE APPRAISAL

Since organisation exist to achieve goals, the degree of success that

individual employees have in reaching their individuals goals is
important in determining organizational effectiveness. The
assessment of how successful employees have been at meeting their
individual goals, therefore, becomes a critical part of HRM. This leads
us to the topic of performance appraisal.

PURPOSE

There are basically three purposes to which performance appraisal can

be put.

 First, it can be used as a basis for reward allocations. Decisions as

to who gets salary increases, promotions, and other rewards are
determined by their performance evaluation.

 Second, these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those
individuals who have specific skill or knowledge deficiencies. The
performance appraisals is a major tool for identifying these
deficiencies.

 Finally the performance appraisal can be used as a criterion against

which selection devices and development programs are validated.
It is one thing to say, for example, that our selection process is
successful in differentiating satisfactory performers from
unsatisfactory performers.

18
 THE APPRAISAL PROCESS

Established performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

If necessary, initiate the corrective action

The appraisal process begins with the establishment of performance

standards. These should have evolved out of job analysis and the job
description discussed under human resource planning. These
performance standards should also be clear and objective enough to
be understood and measured. Too often, these standards are
articulated in some such phrase as "a full day's work" or "a good job".

Communication only takes place when the transference of information

has taken place and has been received and understood by the

19
subordinate. Therefore feedback is necessary from the subordinate to
the manager. Satisfactory feedback censures that the information
communicated by the manager has been received and understood in
the way it was intended.

The third step in the appraisal in the measurement of performance. To

determine what actual performance. To determine what actual
performance is, it is necessary to acquire information about it. We
should be concerned with how we measure and what we measure.

What we measure is probably more critical to the evaluation process

than how we measure, since the selection of the wrong criteria can
result in serious dysfunctional consequences. And what we measure
determines, to a great extent, what people in the organization will
attempt to excel at.

One of the most challenging tasks facing managers is to present an

accurate appraisal to the subordinate and then have the subordinate
accept the appraisal in a constructive manner. Appraising
performance touches on one of the most emotionally charged activities
the assessment of another individual's contribution and ability. The
impression that subordinates receive about their assessment has a
strong impact on their self-esteem and, very important, on their
subsequent performance.

The final step in the appraisal is the initiation of corrective action when
necessary. Corrective action can be of two types. One is immediate
and deals predominantly with symptoms. The other is basic and
delves into causes. Immediate corrective action often described as
"putting out fires," whereas basic corrective action gets to the source
of deviation and seeks to adjust the difference permanently.

20
Immediate action corrects something right now and gets things back
on track.

21
 Chapter 5
PERFORMANCE APPRAISAL PROCESS IN Punj Lloyd

Punj Lloyd has followed two methods, namely, absolute standards

and self appraisal system. Absolute method means that subjects are

not compared with any other person. Their seniors appraise the

subjects. Up to the post of Deputy Manager they appraise the

employees by following both the methods.

Under this method also they follow Critical Incident Appraisal method.

This method focuses the rater’s attention on those critical or key

behaviour that make the difference between doing a job effectively

and doing it ineffectively. Under this method the appraiser writes down

little anecdotes that describe what the employee did was effective or

ineffective. Critical incidents, with their focus on behaviours, judge

performance rather then personalities.

The strength of this method is that it looks at behaviours. Additionally ,

a list of critical incidents on a given employee provides a rich set of

examples from which the employees can be shown which of his or her

behaviours are desirable and which ones call for improvement.

Second method refers to the systematic monitoring and measuring of

performance – ideally, by having the individual review his or her own

performance. Inherent in allowing individuals to control their own

performance is a positive image of human nature.

22
The purpose for the performance appraisal is as follows :-

1. Promotion of the employees.

2. Increment in salary.

3. Any other purpose.

They are using this performance appraisal system in appraising the

people in Civil construction, pipelines, tankages, telecom and

transmission and composite construction.

PERFORMANCE CYCLE
MID APRIL

Target
Setting

Annual
Review

OPEN OPEN

Reporting Officer

Final Review

Reviewing
4 4
Officer
monthly monthly
review review

OPEN

23
 PERFORMANCE APPRAISAL SYSTEM IN DABUR INDIA LIMITED

In Dabur India Limited they have the system of performance appraisal

of their employees. The main objective behind this performance

appraisal system is to evaluate the performance, promote their

employees and to arrange for the various training programmes if they

require for enhancing their skills in their respective areas and in

contribution enhancement.

Employees are evaluated by how well they accomplish a specific set of

objectives that have been determined to be critical in the successful

completion of their job. This approach is frequently referred to as

management by objectives. Management by objectives is a process

that converts organizational objectives into individual objectives. It

can be thought of as consisting of four steps: goal setting, action

planning, self-control, and periodic reviews. In goal setting, the

organization's overall objectives are used as guidelines from which

departmental and individual objectives are set. In action planing, the

means are determined for achieving the ends established in goal

setting. That is, realistic plans are developed to attain the objectives.

Self-control refers to the systematic monitoring and measuring of

performance. Finally, with periodic progress reviews, corrective action

is initiated when behaviour deviates from the standards established in

the goal-setting phase. Dabur uses very constructive performance

24
appraisal process while evaluating its employees. Its evaluation is

based on quantitativewise and objectivewise.

Company set goals to its employee by properly reporting with its

employees and then evaluating them upto what extent it has been

achieved and if there is failure in reaching the target what are the

causes or reasons behind it.

Every evaluator has his or her own value system which acts as a

standard against which appraisals are made. Relative to the true or

actual performance an individual exhibits, some evaluators mark high

and others low. The former is referred to as positive leniency error, and

the latter as negative leniency error. When evaluators are positively

lenient in their appraisal, an individual's performance becomes over-

stated; that is, rated higher than it actually should. Similarly, a

negative leniency error understates performance, giving the individual

a lower appraisal. As such there is no scope of error as far as the

Dabur company is concerned, but sometimes over estimation of target

brings about a description in the evaluating criteria. Thus, though

chances are less, positive leniency errors have been stated to be

committed.

Outcome of Performance Appraisal

As far as Dabur company is concerned, there are four outcomes

possible:

a. Outstanding - If the performance evaluated by the management

turns out to be outstanding. If the employee performs in such a way

25
 as to collect 3 consecutive outstanding performance into his/her

credit, he/she gets promoted.

b. Excellent - If the performance evaluated by the management

turns out to be excellent. If the employee performs in such a way as

to collect 3 consecutive excellent performance into his/her credit,

he/she gets promoted.

c. Good - If the performance evaluated by the management turns

out to be good. The management sends the employee to the

training programme to improve his/her skill to perform better.

d. Below average - If the performance evaluated by the

management turns out to be below average. And, if the employee

collects 3 below average to his/her credit, then he/she is dismissed.

Duration of Appraisal System

The time constraints enables the employee to show or project his/her

capabilities in term of performance as per the duration allowed. In

Dabur India Limited, the performance appraisal system is carried out

annually.

Feedback

The company provides the annual feedback to its employees and thus,

in term bring out the highlights of the self assessment programme.

This enables the better communicaiton between the management and

employees ad thus, helps in promoting the business future.

Response

26
There are mixed responses from the feedback by the employees. It has

helped some of the employees in motivating themselves while those

who felt bad were thoroughly communicated and all the confusion and

failure part were discussed with employees.

27
 Chapter 6

PERFORMANCE APPRAISAL PROCESS IN

DLF
DLF Ltd. follows a system of performance appraisal. The period of

appraisal and methods of appraising is different for different

category/group. The appraisal of trainee is done every quarter from the

date of joining. Organisation follow a separate system of appraisal for

workers and the level Asst. Supervisor and above. Both the category

are appraised twice a year.

Appraisal of Junior Management Staff

In DLF assistant supervisor to senior officer are appraised twice a year

in the month of April and October. The assessment is done following

guidelines and is done on different eleven attributes of knowledge of

work, quality of work, quantity of work, dependability, initiative drive

and resourcefulness, work attitude, conduct, discipline, attendance,

communication, subordinate development. Each attribute is assigned

10 marks making a total of 220 (maximum marks) head of the

department appraise the employee on different attribute. The result

are used for different purpose of promotion, increment etc.

28
 Chapter 7

ANALYSIS AND INTERPRETATION OF DATA

After collecting the data on "Performance Appraisal System of

Supervisory level in DLF. The data was analysed and interpreted. The
various topics covered for analysis and interpretation of data are:

1. Promotions

A promotion may be defined as an upward advancement of an

employee in an organisation to another job, which commands better
pay/wages, better status/prestige and higher opportunities/challenges
and responsibility, a better working environment, hours of work and
facilities etc.

Promoters have a salutary effect on the satisfaction of the promoted

person's need for esteem, belonging and security. They also afford an
opportunity for greater self-actualizing action through more varied and
challenging assignments. The promotion policies differ from an
organisation to another.

The guidelines for departmental promotion in DLF are same for male
and female employees. The period of experience required for filling a
higher post departmentally varies from 3-5 years. 5 years experience
for promotion to managerial staff and 3 years experience for promotion
to Junior Management staff is needed. The other area of promotion
apart from seniority are merit and fitness. Though these guidelines are
not in a written format the supervisor and manager get it at the time of
appraisal from the personnel department.

29
As per the guidelines from the personnel department employees are to
be promoted accordingly. However there is confusion among the
employee as these guidelines are not being explained time to time,
many are not aware of the existing promotion policy in the
organisation.

Respondents were asked whether the promotion is well defined in the

organisation. The responses were are given below:

N=48

Response Number Percentage

Yes 26 54.16

No 8 16.66

Can't say 141 29.16

From the above table, it can be seen that 54% agree that promotion is
well defined in the organisation. However 30% were not able to say it
as there is lack of information about the promotion policy. Every
employee need to be communicated about the existing promotion
policy.

Respondents were asked about the number of promotion received in

last three years. The responses were as given below:

Response Number Percentage

None 14 29.16

One 30 62.5

Two 0 0

Three 2 4.16

Any other 2 4.16

More than 50% received one promotion in the last 3 years

30
Respondent were also asked to suggest any change in the policy. The
responses were as given below:

Response Number Percentage

Merit not recognised 10 20.83

Does not define career plan 8 16.66

Not integrated with bus 0 0

Heterogeneity within policy for 28 58.83

different position

Majority suggested for no change in the policy. It seems they are

satisfied with the current policy.

Appraisal system/factors/traits/assessment

Performance appraisal in general term refers to the process of

evaluating the performance and qualification of the employees in term
of job requirements for purpose such as placement, selection and
promotions, to provide financial rewards and provide other action of
training, counselling etc.

Respondent were asked about the appraisal system in general. The

responses were as given below:

Response Number Percentage

A fair assessment of ability and 14 29.16

performance

An annual ritual 12 25

A management gimmick 2 4.16

A necessary −− 0 0

Something useful for the 20 41.66

employee and the organisation

Any other 0 0

31
Majority responded that the system of performance appraisal is
something useful for the employee and the organisation.

Factors/traits of evaluation

Employee are assessed on different factors/traits belonging to both

performance and non performance area.

In Thomson Press (I) Ltd. Junior Management Staff are assessed on

following 11 attributes:

• Knowledge of work
• quality of work
• quantity of work
• dependability
• initiative drive and resourcefulness
• work attitude
• conduct
• discipline -attendance - communication
• subordinate development
Each attribute is assigned 10 marks making a total of 220 (maximum
marks)

Respondent were asked to rate the factors/traits of evaluation. The

responses were as given below:

Response Number Percentage

Outstanding Nil Nil

Very good 10 20.83

Good 18 37.5

Satisfactory 20 41.66

32
Poor Nil Nil

The factors and traits of evaluation were rated satisfactory which need
to be looked for and bring some change in it.

Aligning goal

Respondent were asked about the present system, does it help in

aligning individual goal with those of the organisation. The responses

were as given below:

Response Number Percentage

Yes 22 45.83

No 6 12.5

Can't say 18 37.5

No response 2 4.16

Here the response from the supervisor were 45.83% for the factor that
it help in aligning their goal with those of organisation.

Who should appraise?

The method of evaluation and who should appraise varies from

organisation to organisation. Sometimes its department head or
appraisal committee and sometimes self appraisal. Many organisation
are following the system where department head or immediate
supervisor appraise the subordinate.

33
Respondent were asked, who should appraise them? The responses
were as given below:

Response Number Percentage

Your immediate supervisor 6 12.5

Department head 22 45.83

Appraisal committee 12 25

Self Appraisal 6 12.5

Satisfied with the present system 2 4.16

Majority response were for the department head to appraise. A quarter

also responded for the appraisal committee to do the appraisal.

Appraiser's Approach

Respondent were asked to rate the appraiser's approach. The response

were as given below:

Response Number Percentage

Outstanding Nil Nil

Very good 8 16.66

Good 26 54.16

Satisfactory 14 29.163

Poor Nil Nil

Majority rated the appraised approach to be good while appraising. No

body rated it to be outstanding and poor.

Monetary benefit/reward

34
Performance appraisal system help in the system of providing

monetary benefit and rewards. This helps in keeping the employee

motivated and meet both the individual and organised goal.

Respondent were asked about the system linkage to monetary benefit

and also frequency of rewards in performing well. The responses were

as given below:

35
Monetary benefit

Response Number Percentage

Yes 28 58.33

No 6 12.5

Can't say 12 25

No response 2 4.16

Here more than 58% responded that the monetary benefit is extended
to them as a result of the outcome of the performance appraisal
system.

Rewards

Respondent were asked about the frequency of reward as an outcome

of the current performance appraisal system. The responses were as
given below.

Response Number Percentage

Rarely 14 29.16

On a few occasion 10 20.83

Sometimes 18 37.5

Often 0 0

Almost always 6 12.5

Here the response were mix with 37.5 percent agreeing that rewards

come to them sometimes as a result of performance. This has to be

looked into and the frequency be increased to keep employee

motivated and meet their goal.

36
Area of Responsibility

Respondent were asked about their area of responsibility. Whether the

organization help them in prioritizing their own area of responsibility.
The response to the above were as given below:

Responses Number Percentage

Yes 22 45.83

No 4 8.33

Can't say 20 41.66

No response 2 4.16

The response were not even 50% which shows some difference in
meeting the goal of prioritizing the area of responsibility. 41% of the
respondent were not able to say anything. This shows that the
management has to look into the above and see what the employee
can do, making them more aware of their responsibility.

Career Progress

Career progress is something which is continuous, with the input from

organisation in term of training, feedback and counselling. In today's
changing scenario this has to be followed in every organisation so that
an individual make progress in the career adding value to himself and
the organisation. Respondent were asked about the current system
helping in their career progress. The responses to the above were as
given below:

Response Number Percentage

To a large extent 12 25

To some extent 28 58.33

Not at all 8 16.66

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Here only 58% response were for the option that it helps in career

progress to some extent while 25% were for the option that it helps to

a large extent. The system of performance appraisal has to incorporate

the element of career progress by highlighting the strength and

weakness of each employee.

Career Development

Career advancement is the most motivating factor when employee

aspire for the advancement of his career and for better opportunities

to use his/her talents. From the organisation's point of view, it is

necessary to develop in manager. Some expectations of opportunities

for the future in order to keep their motivation high. Career planning

means helping the employee plan his career in terms of his capabilities

with the context or organisational needs. Individual, after becoming

aware of some of his/her capabilities and career and development

opportunities chooses to develop himself/herself in a direction that

improves his/her chances of being able to handle new responsibilities.

It is also the responsibility of the employer to help him/her to identify

the career opportunity, make choices and develop his/her career.

Supervisor and above position holder in DLF Ltd. were asked about the
career development plan.

Question asked was as follows:

Based on your ability does it lay career development for you?

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The responses to the above were as given below:

Response Number Percentage

To a large extent 8 16.66

To some extent 22 45.83

Not at all 18 37.5

Here only 46% of the respondent gave response that it lay career
development plan to some extent while 38% gave response that there
is no career development plan at all.

The reason for the above were:

1. Limited promotional avenues

2. Limited exposure towards practical experience

as they are not exposed to any outside/foreign training and no
special privilege is provided to them in this regard.

3. No motivation as employees performing well

are not awarded appropriately

4. Stagnation at certain levels for prolonged

period.

Feedback

Providing feedback play a constructive role. It helps the employee

know his/her weakness and strength. Feedback provides for the area of

improvement.

Respondent were asked about the frequency of feedback based on

their performance. The responses were as given below:

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Response Number Percentage

Rarely 12 25

On a few occasion 20 41.66

Sometimes 12 25

Often 4 8.34

Almost always Nil Nil

41 percent responded that feedback is provided though on a few

occasion. The frequency has to increase both from the individual and
organisation point of view to keep the individual motivated for work in
line with the organisational expectation.

Remedial measure

Based on the performance the remedial measures are taken to do

away with weakness if any and build on the strength and add to the
existing capability

Response on the remedial measure were as given below:

Response Number Percentage

Job rotation 22 45.83

Sent to training programme 20 41.66

Counselled 6 12.5

Any other Nil Nil

None Nil Nil

Here the response were both for job rotation and training programme.
During the course it was felt that more training input is to be provided
to the employee to overcome the weakness and improve upon the
existing capability of the employee.

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Taping the potential

In an organisation human are the capital with their skill, intellect ad

capability. It lies on the organisation's strategy and the manager to tap
the real potential of an employee and take work in that regard which is
good both for individual and the organisation.

Respondent were asked about the response on the same. The

response were as given below:

In your opinion does this system provide for taping the potential of
individual?

Response Number Percentage

To a large extent 12 25

To some extent 32 66.66

Not at all 4 8.33

Majority response were positive but only to some extent. The human
resource department need to assess the real potential of human
capital through the future performance appraisal process and need to
channelise all the potential in right direction with a fixed goal.

Training

Training refers to the teaching/learning activities carried on for the

primary purpose of helping members of an organisation to acquire and
apply the knowledge, skills abilities and attitude needed by that
organisation. It is an act of increasing the knowledge and skill of an
employee for doing a particular job.

Respondent were asked for whether the present system help in

identifying training needs. The response were given as below:

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Response Number Percentage

To large extent 12 25

To some extent 26 54.16

Not at all 10 20.83

The system does help in identifying training needs but only to some
extent. During the course, suggestion for separate section for
identifying training needs came from the supervisory and above level
employee.

Job rotation

Job rotation means systematically moving workers from one job to

another. Job rotation is the method of enhancing skill and providing
opportunity to overcome weakness in any area of work. Respondent
were asked about the frequency of job rotation. The responses were as
given below:

Have you been rotated to other department or within the department?

Response Number Percentage

Yes 22 45.83

No 26 54.00

Majority of the response were 'No' for the job rotation. The employee
need to be put on job rotation on regular basis in order to enhance
their own capability and increase organisations productivity.

Right individual for right job

Respondent were asked about the system help in identifying right

individual for a right job.

In your opinion does this system help the management identify right
individual for a right job to achieve the goal of the organisation?

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The responses were as given below:

Response Number Percentage

To a large extent 14 29.16

To some extent 34 70.83

Not at all Nil

Majority response were that it does help in identifying right individual

for a right job. This means some clarity do exist at the supervisory
level in terms of job.

Counselling

Respondent were asked about the need of counselling and whether the
organisation provide counselling. The responses were as given below:

Do you need counselling?

Response Number Percentage

Yes 32 66.66

No 2 4.16

Can't say 14 29.16

Majority response came for the need of counselling. This proves that
employee need counselling both in work areas and behavioural area.

Respondent were asked about the organisation providing counselling.

The responses were as given below:

Response Number Percentage

Yes 16 33.33

No 24 50

Can't Say 8 16.66

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Majority response were that organisation does not provide counselling.
This brings the need of counselling.

Overall assessment of performance appraisal.

Respondent were asked to rate the performance appraisal. The

response were as given below:

Response Number Percentage

Outstanding Nil Nil

Very good 8 16.66

Good 16 33.33

Satisfactory 24 50

Poor Nil Nil

50% of the respondent rated the system of performance appraisal to

be satisfactory. Nobody rated it to be poor.

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 Chapter 8

CONCLUSIONS & SUGGESTIONS

Conclusion

The analysis and interpretation of data on study of performance

appraisal and its effectiveness in an organisation led to the following
conclusions:

• The promotion rule though defined need to be communicated to

every employee before appraisal process is done and also justify
the promotion as a result of the appraisal. That the promotion policy
followed differs at different position and category. A uniformity has
to be there in the implementation of promotion policy at all levels

• The process of performance appraisal followed in DLF Ltd. at the

supervisory and above level is to say not good but of satisfactory
level. The department head doing the appraisal is OK as far the
supervisor level is concerned.

• The appraisal outcome has to be used frequently for the purpose of

reward on performing well together with the feedback on the
performance. Also when performance goes down employee has to
be given feedback and motivated to do better.

• The organisation at present doesn't lay career development plan. It

is being followed in Punj Lloyd but there also it remains only on
paper and not utilized on grounds.

• In DLF Ltd. feedback is being provided to the employee though on a

few occasion. This is being followed in Omaxe Ltd. in strict terms

45
 where the annual feedback is provided to employees which
highlights the strength and after assessing the performance.

• The policy of assessing the performance being practised half yearly

at DLF Ltd. is good and healthy. This is not so in Dabur India Limited
where the performance appraisal is done annually.

• Presently there is low training input. From the process of

performance appraisal in DLF Ltd. This is not so in Punj Lloyd where
the management get training input for their employee of different
division DLF Ltd. need to stress upon the training need identification
area and incorporate some changes to get the training input after
highlighting the strong and weak area of performance.

• The mechanism of counselling pre-performance and post

performance is not in practice at any organisation in strict term.
During the course of study suggestion came from the employee side
for the need of counselling.

Suggestions

The study undertaken bring some interesting result.

• Training the Appraisee: It is proposed that appraiser be trained for

clear understanding of the system and its objective and also
counselled to be honest, fair, just, unbiased in appraising the
appraisee.

• Factors/traits of evaluation: It is proposed that appraisee evaluated

on above factors/traits be given suitable remark or justification for
being given different quantitative grade.

46
• Greater clarity has to be has to there in terms of job responsibility.
This is possible when the appraisal is done on the basis of the
description.

• Performance feedback: The performance feedback sessions should

be improved which would results in increasing employee motivation
to improve performance. The following could be incorporated.

- Pin point the problem behaviour and make sure the

employee is aware of it

- Make sure the employee understands the consequences of

the problem behaviour. Get employee's commitment to change
and make sure he cares about the change

- Assistance should be provided to improve poor

performance. Make a realistic plan appropriate to the behaviour
and set a time frame for improvement.

- To make sure to review performance time to time

• The other change which has to be incorporated at the supervisor

and the level above are:

- These should be listing down of task undertaken during the

last one year and the result achieved.

- In some areas of performance there should be self

appraisal and more and more counselling so that employee
improve upon weak area and understand what is expected of
him/her at the organization level.

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 - Based on the above an open appraisal system is
suggested.

In an open appraisal the employee would come together to set the

targets, to understand the mutual expectations and support to be
provided by the appraiser to the employee for achieving mutually
accepted goals/targets. Through this process of setting targets the
interpersonal relationship between the appraiser and the employee
would improve.

The open appraisal system reduces the whims and fancies of the
appraiser. It promotes result-orientation as it is based on performance
rather than on personality based appraisal.

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 BIBLIOGRAPHY

• Recent Experience Human Resource Development, editors - T.V.

Rao & D.F. Pereira.

• Human Resource Management, Eighth edition, Gary Dessler.

• Personnel Management, sixth edition, Edwin B. Flippo

• Training & Development, Uday Pareek

• Related Internet Sites

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 ANNEXURES

QUESTIONNAIRE

THIS STUDY IS DESIGNED TO GET OPINION ON TH PRESENT SYSTEM OF

PERFORMANCE APPRAISAL. (PROCESS, EVALUATION, IMPLEMENTATION
AND IT’S FOLLOW UP IN THE ORGANISATION) KINDLY MARK YOUR
APPROPRIATE RESPONSE.

PART A
Name: Age:

Department: Designation:

Qualification Total Exp.:

Exp. In TP:

PART B
1. Is the promotion policy well defined in your organisation?
(A) Yes (B) No (C) can’t say
2. How many times you received promotion? (Last three years)
(A) None (B) One (C) Two (D) Three (E) Any other (Pl. specify)
3. Do you suggest any change in the policy? If so why?
4. Merit not recognized
5. Doesn’t define career plan
6. Not integrated with business
7. Heterogeneity within policy for different position
8. Any other (Pl. specify)

PART C

1. What do you think about the APPRAISAL SYSTEM in general?

A. Affair assessment of ability and performance
B. An annual ritual
C. A management gimmick
D. A necessary evil
E. Something useful for the employee and the organisation
F. Any other (Pl. specify)
2. How do you rate the factor / traits of evaluation?
(A) Outstanding (B) V.good (C) Good (D)Satisfactory (E)Poor

50
 3. Is the assessment an on going process?
(A) Yes (B) No (C) can’t say

4. In which following areas (one more than one) does the present system help you
to understand your ability? (Pl. specify.)
A. Planning
B. Problem solving
C. Ability to motivate
D. Identify training needs
E. Communication
F. Role clarity
G. Any other (Pl. specify)
5. Does this system help you in aligning your goal with those of organisation?
(A) Yes (B) No (C) can’t say
6. In your opinion who should appraise you?
A. Your immediate supervisor
B. Department head
C. Appraisal committee
D. Self-appraisal
E. Satisfied with the present system
7. How do you find the appraiser’s approach in appraisal process?
(A) Outstanding (B) V.good (C) Good (D)Satisfactory (E)Poor
8. Is the system linked to monetary benefit? If yes, does it extend to you
(A) Yes (B) No (C) can’t say
9. Does the present system help in rewards for performing well?
A. Rarely
B. On a few occasion
C. Sometimes
D. Often
E. Almost Always
10. Does it help prioritize your area of responsibility?
(A) Yes (B) No (C) can’t say
11. In your opinion does it helps in career progress?
A. To a large extent
B. To some extent
C. Not at all
12. Does this system provide feedback on your performance?
A. Rarely
B. On a few occasion
C. Sometimes
D. Often
E. Almost Always
13. Based on your ability does it lay career development plan for you?
A. To a large extent
B. To some extent
C. Not at all

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14. What kind of remedial measures are taken?
A. Job rotation
B. Sent to training programme
C. Counselled
D. Any other (Pl. specify.)
E. None

15. In your opinion does this system provide for taping the potential of individual?
A. To a large extent
B. To some extent
C. Not at all

16. In your opinion does it provide for identifying training needs?

A. To a large extent
B. To some extent
C. Not at all

17. Have you been rotated to other department or within the department?
(A) Yes (B) No

18. In your opinion does this systym help the management identify right individual for
a right job to achieve the goal of the organisation?
D. D To a large extent
E. To some extent
F. Not at all
19. Do you need counseling?
(A) Yes (B) No (C) can’t say

20. Does the organisation provide counseling after appraisal?

(A) Yes (B) No (C) can’t say

21. How do you find the overall assessment of PERFORMANCE APPRAISAL?

(A) Outstanding (B) V.good (C) Good (D) Satisfactory (E) Poor

Part D
1. What is the system of communication?
(A) Upward (B) Down ward (C) Both A&B (D) Lateral
Have you understood clearly as to what is expected of you?
(A) Yes (B) No (C) can’t say
Part E

1. In your opinion how can the present appraisal system be made more effective?
(Pl.specify point

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 ACKNOWLEDGEMENT

My sincere thanks to faculty supervisor Mrs. and division supervisor Mr.

Sudhanshu Bhushan under whose able guidance and kind cooperation I
was able to complete the project work titled "Study of Performance
Appraisal System and its Effectiveness in an Organisation".

I am also gratefully acknowledged to help rendered by Mr. Ajay Gauri

Officer HR, DLF Ltd., who was always there to provide guidance
whenever required.

All those employee of DLF Ltd, Executive at Punj Lloyd and Dabur India
Ltd deserve special thanks for their cooperation and help in the
collection of necessary and relevant material for this work.

Also, I do thank and remember my friends for their effort and helping
hand.

Every effort has been made to enhance the quality of work. However, I
owe the sole responsibility of the shortcoming, if any, in the study.

Harsh Kumar

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