PERFORMANCE APPRAISAL SYSTEM

Performance appraisal is a method of evaluating the behavior of employees in the work

spot, normally including both the quantitative and qualitative aspects of job performance. It is the
process of evaluating the performance and qualification of the employees in terms of the
requirements of the job for which he is employed, for purpose of administration including
placement, selection for promotions, providing financial rewards and other actions affecting all
members equally. It is the step where the management finds out how effective it has been at
hiring and placing the employees. “Performance Appraisal” is a process of evaluating an
employee’s performance of a job for purposes in terms of requirements.

FEATURES OF PERFORMANCE APPRIASAL

 Performance appraisal is the systematic description of an employee’s job relevant
strengths and weaknesses.

 The basic purpose is to find out how well the employee is performing the job and
establish a plan of improvement.

 Appraisals are arranged periodically according to a definite plan.

 Performance appraisal is not job evaluation. It refers to how well someone is doing the
assigned job.

 Performance Appraisal is the continuous process in every large scale organization.

COMPONENTS OF APPRAISAL EVALUATION

Performance evaluation can be made for a variety of reasons like counseling, promotion,
research, salary, administration or a combination of these. So it is necessary to begin by stating
very clearly the objectives of the evaluation programs.

‘WHO” WILL APPRAISE

The Appraisal can be accomplished by one or more individuals involving a combination

of the inundate supervisor or Boss and HOD.

“WHAT” FOR APPRAISE

‘What’ of the Performance appraisal means appraising non supervisory employees for
their current performance, and mangers for the future potential.
“WHY” FOR THE APPRAISAL

 Creating and maintaining a satisfactory level of performance of employees in their

present job.

 Highlighting employee needs and opportunities for personal growth and development.

 Aiding in decision making for promotions, transfer, layoffs and discharges and promoting
understanding between the supervisor and the subordinates.

“WHEN” WILL APPRAISE

“When” answers the query about the frequency of appraisal. In Visaka employees are
formally evaluated half yearly and annually.

“HOW” TO APPRAISE

“How” means the company must decide what different method are available and which
of these may be used for performance appraisal. In Visaka Industries the method of appraisal is
BARS.

COMMON RATING ERRORS

Whilst completing the appraisal form, the appraiser is advised exercise caution, as there amy be
several pitfalls which may skew the assessment.

1. Halo Effect

A person outstanding in one area tends to receive outstanding or better than average
ratings in other areas as well, even when such a rating is undeserved.

2. Negative Effect

A low rating in one area is lower than deserved ratings for other accomplishments.

3. Central Tendency

Assigning an average rating for all qualities.

4. Confrontation Avoidance:

Discomfort in giving negative feedback.

5. Initial Performance:

Rating an employee based solely on initial impressions of the performance.

 PERFORMANCE MANAGEMENT SYSTEM
“Performance Management is defined as a strategic and integrated process that delivers
sustained success to organizations by improving employee performance through development of
competencies of individual employees and teams”.

Performance management systems if properly designed and implemented can change the course
of growth and pace of impact of organizations. It’s a process of creating high performance
organization through integration of organizational vision values, goals, strategies and people.

It is a method used to measure and improve the effectiveness of people in work place.

It is an ongoing communication between boss and subordinate in a bid to identify latter’s core
functions, relevant objective /goals, monitor the performance process and give constructive
feedback and also develop the competency based there on.

Performance management involves - enhancing performance of:

Individuals

Teams & Strategic Business Unit

Entire Organization

Importance of Performance Management

 Helps to clarify the mission, vision, strategy and values of the organization.

 Helps in improving various business processes.

 Helps in attracting and retaining talent.

 Facilitates competency mapping, training and development needs.

 Assists management in validating their recruitment and selection processes.

 Helps employees attain their full potential.

Factors Affecting Performance:

1) Personal Factors: The individual’s skill, competence, motivation and commitment.

2) Leadership Factors: The supervisor’s support, encouragement and guidance.

 3) Team Factors: The quality of encouragement, guidance and support provided by team
leaders and members of the team.

4) System Factors: The system of work and facilities provided by the organization.

5) Contextual Factors: Internal and External environmental pressures and changes.

Features of Performance Management

 It is a continuous process: setting goals, observing performance, giving coaching and
counseling, identifying development needs and giving feedback are the continous
activities.

 It is a strategic process: The individual goals are linked to the strategic goals of the
organization.

 It is an integral approach: Links various aspects of HRM

RECRUITMENT AND HUMAN RESOURCE INDUSTRIAL

SELECTION PLANNING RELATIONS

PERFORMANCE
MANAGEMENT

TRAINING AND REWARD MENTORING AND

DEVELOPMENT MANAGEMENT COUNSELING
 PERFORMANCE MANAGEMENT Vs PERFORMANCE APPRAISAL
S.No PERFORMANCE APPRAISAL PERFORMANCE MANAGEMENT

1. Annual Exercise. Continuous process.

2. Emphasis is on ratings and evaluation. Emphasis is on performance planning, analysis,

review, development and improvement.

3. Rewards, recognition may be based on Performance based pay is generally an integral

the ratings. part of the system.

4. KPAs or KRAs are used for bringing KPAs and KRAs are used as planning
in objectivity. mechanism.

5. Ownership is mainly with the HR Ownership is with the line manager.HR

department. facilitates its implementation.

6. Development needs are identified at Development needs are identified in the

the end of the year on the basis of the beginning of the year on the basis of
appraisal . competence levels required to do job.

7. Emphasis is on relative evaluation of Emphasis is on performance improvement of

individuals individual, teams and organization.

THE PERFORMANCE MANAGEMENT SYSTEM IN VISAKA

MODE OF PMS IN VIL:
Self appraisal and immediate boss = reporting supervisor appraisal

FLOWCHART OF PMS:
ACTIVITIES DESCRIPTION RESPONSIBILITY DEADLINE
1)ORG. yearly Focus on financial measures viz Top Management
objective Liquidity,Revenue,Profitability&
2)Strategic planning also Market share,Productivity &
customer orientation,
Diversification & Expansion of
the business
Unit Level Goals Productivity,OTFD,Quality Top Management & 28th Feb 2011
improvement, system Unit Head/HOD’s
development,cost saving incl.
rejection ratio, people
development,safety/Environment
Planning to achieve Systematic outlining of activities Unit Head/HOD’s
 unit’s Priorities to be undertaken to attain the
objectives
Dept level Goals Derived from unit goals / support Unit Head/HOD’s 31st march
required by other departments
Individual Goals Derived from Dept. goals and Employees and IB 31st March
(KRA Setting) focus on self and subordinate
development
Action Plan In PDCA Format-Strategy to Employee 31st March
achieve target
Periodical Review To refer KRA sheet and IB & Employee Half Yearly
Supportive documents

Feedback and Discussion on Contribution and IB During KRA review

Counseling developmental plans
Performance Performance based increment and Top Management & May-June
Reward promotion corporate HR
Career Job Enrichment/Job IB & HOD, July
Advancement Rotation/Career Progression Plan Facilitated by HR
Training & Personal Development Plan IB & HR May
Development

COMPONENTS OF PERFORMANCE MANAGEMENT SYSTEM

I. Performance Planning & Objective Setting

II. Performance Assessment

III. Career Development

IV. Rewards

Purpose of Performance Appraisal

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

 To judge the gap between the actual and the desired performance.

 To help the management in exercising organizational control.

 To diagnose the training and development needs of the future.

 Provide information to assist in the HR decisions like promotions, transfers etc.

 Provide clarity of the expectations and responsibilities of the functions to be performed

by the employees.
  To judge the effectiveness of the other human resource functions of the organization such
as recruitment, selection, training and development.

 To reduce the grievances of the employees.

 Helps to strengthen the relationship and communication between superior – subordinates

and management – employees.

GOAL SETTING:
Goal setting involves establishing specific, measurable and time bound objectives. In business,
goals encourage employees to put in substantial effort in order to meet business objective.

Goal setting influences individual performance in the following way:

1) Goals focus attention towards goal- relevant activities and away from goal-irrelevant
activities.

2) Goals serve as an energizer; higher goals will induce greater effort.

3) Goals influence persistence; higher energy to work around/manage constraints with

regard to resources.

4) Stretch goals, encourages application of cognitive knowledge, innovation, collaboration

and personal commitment in order to accomplish objectives.

Cumulative individual performance, when aligned, impacts the organizational Performance

in a big way.

ORGANIZATIONAL FINANCIAL GOALS:

Liquidity

Profitability

Growth

Factors related to key business purpose & deliverables

Revenue

New product

Market share

Cost effectiveness
 Diversification & Expansion of business

ORGANIZATIONAL NON-FINANCIAL GOALS:

Customer satisfaction

People development

Internal process optimization

Safety and Environment

Critical success factors for business & key deliverables to achieve Non Financial Goals:

1) Customer connect

Feedback mechanism

Response time

Complaint resolution

OTFD (on time full delivery)

Rejection Ratio

Quality

2) People Development

Growth & development of Team

Success planning

Skill Development

3) Internal Process optimization

Inter-departmental Services level agreements

Collaborative goals

Support & adherence to organizational process

 4) Safety and Environment

Initiatives, assuring safety of employees & company’s property

Pollution free environment & arresting /reducing depletion of natural resources

KRAs: KEY RESULT AREAS

Goal, when broken down into deliverables against each critical element is called KRA.

Characteristics:
They do not include routine work.

It always focuses on end result but not activities.

They should be written in specific term.

KRA is measurable and frame in time.

Aligned with organizational goal.

Achievable but challenging.

STEPS FOR SETTING KRA:

1) Identify the objectives under the three critical elements that impact the job.

a) To be done along with your reporting supervisor

b) Identify objectives relevant for the job under each of the three elements

c) Ask the following three questions for each of the identified objectives:

• Performance: what is the desired outcome?

• Process: What will I need to do to achieve it?

• Measurement: How will we measure the success?

Selecting Objectives, they should be:

• Linked to business priorities- must add value to the larger organization purposes

• Linked to results not activities- Outcome driven not activity based.

• Comprehensive – should cover all performance areas of the role.

• Mutually exclusive-each KRA should address a distinct performance area and not
overlap.

• Attainable-Ensure that objectives are stretched and challenging but attainable

• Manageable number- Preferably not more than six to seven KRA for a person.

2) Set measurement standards

An element that allows for specific measurement of performance over a definite period of
time.

All areas of performance need to be expressed in measureable terms related to any of the
below:

• Time

• Quality

• Cost

• Volume

• Percentage improvement

3) Write KRA statement

The KRA statement should be:

S- Specific: clearly specify the scope of job which needs to be done. Not vague or
ambiguous.

M-Measureable: In terms of cost and time, volume, percentage improvement.

A-Attainable: Should be attainable with a stretch

R-realistic: Should be realistically possible within the time frame and resources available

T-Time bound: Exp: Apr 2010- Mar2011

4) Set KRA Weightage

The total weight age of all KRA’s is 100.Based on the significance, effort and time
involved and the overall impact of the deliverable, the weight age for individual KRA
 will be decided jointly by the IB and the individual. Weight age is signed to clarify
related importance of each KRA.

During appraisals the rating for each KRA will be based on performance, contribution
and weight age assigned

• Maximum weight age to KRA is 25%, Minimum weight age to KRA is 10%

• Weightage should be given as 10%,15%,20%,25%

5) Setting action plan

The employees will prepare a documented action plan to how to achieve the target.

Action plan provides the “how “and “when” for the individual and guides him/her in
fulfilling their defined KRA.

KRA online format

Sr. No KRA Title Description Unit of Weight age Annual

measurement(%) Target
1 Absenteeism Reducing % 15% By march
Absenteeism 2011
from 9% to
6%

Example:

Action plan for the above KRA could have the following activities

1) Review last 12 months attendance data of habitual absentees in various departments

to know the trend

2) Data about the disciplinary action,

3) Prepare a flow chart for step by step action i.e, right from counseling through various
levels to amend.

Scope for change of KRA

1) In case any KRA is achieved in the mid of the year, the employee can undertake
another KRA in consultation with the IB.
2) One employee can also be given a new KRA along with other KRAs in the mid of
the year based on the strategic requirement of the department or the organization.

3) In the above cases the weight age can be redistributed among KRAs based on the
magnitude of their contribution to the organization’s objectives.

4) In case of change of existing KRA or inclusion of any new KRA in the mid of the
year, the IB or local HR will approach the corporate “Super User” for changing
the KRA plan of the concerned employee in the system.

PERFORMANCE REVIEW
Objective: To see whether the employee are on the right track viz a viz their
performance goals and to provide adequate resources and support for superior
performance. There are a few environmental factors which influence the
performance of the appraise. The appraise can mention about such factors during
review orally as well as in the review format with a view to get required support
to overcome the hindering factors.

Four facilitating factors:

To identify the factors help employees to reach the level of performance, he/she
achieved in relation to various KRAs and such factors are as follows:

• Individual factors- Hard work, knowledge, past experience, competence.

• IB Factor- Approachability, fast decision, good guidance, delegation,

support.

• Organizational Factors-Flexible policy, staff support, good working

condition, open climate other department support.

• External Factors- Liberalization in govt. policies, cooperation from govt.

official due to good rapport, Poor performance of competitors.

Hindering Factors:

Personal Factors- poor health problem or family problem

IB & Environmental factors- Delay in decision making, lack of guidance,

busy boss, resource problem.
 External Factors- Sudden change in economic, social and political climate,
Delay in supplies.

Developing Factors- The IB is to identify developmental needs for better

performance through creating an empathic atmosphere to share and discuss
subordinates tension and concerns and to encourage him with resource and
other support for better performance.

METHODOLOGY FOR PERFORMANCE ANALYSIS:

Steps to performance analysis

1) Be prepared

• The IB & Subordinates both need to be prepared for the review.

The IB need to fix up the date, timing and place and communicate
the same to subordinate well in advance.

• The subordinate before coming for appraisal meeting, need to do

self appraisal and evaluate own achievement of KRAs in the
prescribed review format in HRMS. The subordinates with
relevant data and documents to justify his achievements

• The subordinate after assigning himself such rating he/she should

list down all factors, help him/ her in accomplishing what ever
he/she has accomplished. Similarly he/she should list out the
factors prevented him or her from doing better performance.

• The subordinate should maintain a note book from the begging of

the year to note the facilitating and hindering factors.

• The subordinate should assess his strength and weakness and also
to identify the areas of improvement so as to discuss with the IB
for suggestion and finalization of his or her development part
during the review process.

2) IB to conduct performance appraisal meeting

• Greet with smiling face

 • Start with positive note (mention about the good contribution and
strength shown during the year)

• Explain normal distribution curve to the appraise. Give chance to

the appraise to speak about his achievements and shortcomings.

• Evaluate each KRA.

• Reflect and mutually agree upon the short falls or success.

• Discuss and agree upon action plan, support and resource required
for improvement and document the same.

• Discuss and agree upon the learning opportunities for upgrading

the skills.

• Give a overall feedback on the performance.

• Give appropriate rating on each KRA

• Express trust and confidence in subordinate and encourage him/her

for overcoming the weakness and bigger contribution.

• Confirm the agreement on all issues discuss with subordinates by

documenting the same and by putting the signatures.

3) IB Should no focus on previous year failures and should not criticize with
insulting words

• Focus on only how to improve performance

• Be specific to the performance related issues.

• Give honest feedback

• Do not focus on previous year failure area to rate the performance

of the current year.

• Do not use discouraging words

4) Get on the record, it is important to document the key points of the

meeting if any one disagree with what was discussed or agreed in the
appraisal, the records can be checked
PMS PART-II

Evaluation of critical behavior attributes

At present VIL, the performance of an employee is being appraised by the concerned IB on

certain set of identified behavioral skills. It is felt that the job holders must have those behavioral
skills, as the same make the job holder more effective in his role for higher contribution.

In abid to make the job holders, enriched with certain skills at various levels, the PMS will
continue to provide the scope for appraisal of identified behavioral skills of employee along with
KRA review.

The specific behavior skills will be identified every year by the IB in consultation with the
concerned employee and in coordination with the head HR at locations for an employee,
matching to his or her responsibilities and nature of job at the beginning of the year i.e.; what
skills are required for the job holder to discharge his new responsibilities in a superior manner.
The identification of soft skills feedback well as competency review will be done by job holder
and subsequently by IB in the competency template, available in the PMS module in HRMS. The
IB will also give feedback about the rating of behavioral skills to the subordinates during the
performance review .The IB and subordinate will discuss and agree upon the areas of
improvement in behavioral skills with action plan for further improvement.

PMS-PART-III

SELF APPRAISAL:
Self assessment –I

At present in VIL, there is an Employee Self Assessment process in operation in a prescribed

format. The objective is to get feedback about employees’ achievements in the last financial year
when he/she needs improvement to upgrade his/her competency and knowledge for higher
contribution in the ensuing g year.

This PMS policy will continue to provide the scope of the self assessment process in KRA
template on achievement of own KRA as well as assessment of a set of competencies, identified
for an employee in the competency template available in the PMS module under HRMS.

The training needs can be identified from the early review template, available in PMS module
under HRMS.

Self Assessment-II

The PMS policy provide an opportunity to the employee to assess his/her own contribution
against each KRA in VIL half yearly and yearly performance review and the same will be
reviewed by the IB who will subsequently give his/her own rating based on employees
achievement in the KRA half yearly or yearly template available in PMS module in HRMS.

APPEAL:

1st level:

• If the appraise is not convinced with the rating of IB, he/she can
approach the reviewing officer to intervene.

• The RO will discuss with the appraise and IB separately initially to

understand the issues and will verify the facts and figures
justifying the level of contribution and rating of the IB
commiserating with quantum of achievement in a specific KRA.
Subsequently the reviewing officer will call both the appraise and
the IB for a collective discussion to resolve the matter. The
decision of the RO will be binding.

2nd level :

• If the appraise is agreed with the decision of the RO, he can

approach the unit head at plant level through unit HR head.
The unit head after going through the relevant data will
take decision and can impress upon the IB and RO for an
amendment of rating, if the unit head feels justified.
Otherwise the rating given by the RO will sustain. The unit
head at branch level will be the final appealing authority
under the PMS to prevail over the IB and RO for redressal
of grievance.

• Where the unit head is the IB, if any such appraise is

aggrieved with the rating of his/her IB, will put forth his
grievance before the vice president-technical in case of AC
division and President-Marketing in case of textile
division.The division of these authority wil be considered
as final and will prevail upon the division of the IB.
 METHODOLOGY
OBJECTIVES OF STUDY:
 To evaluate the functioning of the Performance Management system in this organization.

 To know whether the Performance appraisal system of the organization is able to assess
employee’s performance correctly.

 To understand the pitfalls of Performance appraisal system

 To know whether the employees are getting adequate or useful feedback or not.

 To know whether the performance of the employees are recognized and whether they are
rewarded for their performance or not.

 To understand the KRA setting.

  To understand the effectiveness of performance management over performance appraisal.

METHODOLOGY:-

The total data required for the study has been collected by using primary data and
secondary data. It was made in a systematic manner, as follows.
Primary Data:-
In the due course of the study the primary data was collected through a structured
questionnaire. The questionnaire is one in which all questions and answers are specified. Hence,
there is less scope for the comments made in the own word of the respondents. The questionnaire
is prepared.
Secondary Data:-
The secondary data is collected from various sources available with the organizations like
1 Organizational websites
2 Books & Manuals
3 Organizations literature (Induction Manual)

Sample Size:
The sample size for Performance Appraisal is 15 & Performance Management system is 30.

Sampling Techniques:
Random & cluster sampling techniques are used.

LIMITATIONS:
 The study is conducted with the available data gathered from the organization and
analysis was made accordingly.

 The questionnaires for Performance Appraisal were distributed through E-mail so there
was no personal interaction contrary to the Performance Management questionnaires.

 The responses for Performance Management system was confined to two locations i.e
Nagpur & Vijayawada Factory, where the PMS was completely implemented.
 COMPANY PROFILE

ORGANIZATION PROFILE

Present activities of the company

The Company is a multi products/location establishment, presently engaged in the manufacture

and marketing of Building Products and Synthetic Blended Yarn.

Brief history of the company

The Company was incorporated under the Indian Companies Act, 1956 on 18 th June 1981 as
Visaka Asbestos Cement Products Limited. With effect from 9th August 1990, the name of the
Company was changed to Visaka Industries Limited.

The Company has a Rs. 606.35 crores in 2008-09 and it is a dividend paying Company, engaged
in the business of Building Products and Synthetic Blended Yarn.

Process and Technology

The Company’s Spinning Unit employ’s the latest spinning machines based on the Air Jet
Spinning Technology procured from Murata of Japan and Visaka is the biggest leader of Air Jet
spinning in the world with highest productivity and efficiency. The Company’s three Asbestos
Cement Sheet Manufacturing Units operating above 100%of capacity utilization with ISI
accreditation .These units employ a continuous technology.

Geographical Coverage of Units

UNIT LOCATION
A.C.DIVISION-1 Andhra Pradesh
Patancheru
A.C.DIVISION-2 Tamilnadu
Paramathi
A.C.DIVISION-3 West Bengal
Midnapore

A.C.DIVISION-4 Karnataka
Tumkur

A.C.DIVISION-5 Uttar Pradesh

Raebareli

A.C.DIVISION-6 Andhra Pradesh

Vijayawada
A.C.DIVISION-7 Maharashtra
Pune

Textile Division Maharashtra

Non-Asbestos (V-Boards)
 Building Board Andhra Pradesh
Miriyalaguda

Visaka’s Culture
Our culture is a key strength to our success and we are always known for our culture in the
society. We believe that our people are our strength in building a strong culture and making our
business as well as social mission always successful. That is the reason that we rate our people as
our most valuable assets than money and machine.

The following traits are the key factors to build up a strong culture in Visaka.

Openness

The people are free to express their ideas, opinions, suggestion & feeling to each other
irrespective of the level and position in a very conducive manner and such expression are
heard and it provides an opportunity for individual to explore their talents. The Organization
also handles this expression for discovering new ways and means to achieve new heights in
the business.

Trust, Collaboration & Delegation

We, as members of one family, believe each other. There are no overheads to check if the
people mean what they say. The word, given by the individual or the team is relied on. We
always try to help each other in a bid to ensure that the larger organization goals are
implemented properly. We believe in a culture of synergy in the organization. We put more
emphasis in the feeling of “WE” than “I”.

Family Culture

We live and grow in an environment, where we share our pleasure & sorrow among each
other. We always like to work together. We eat together in one canteen. The Corporate
Executives, during their visit to the plants, like to talk to the people, face to face irrespective
of their levels & positions about their family as well as company’s activities.
Sense of Commitment & Belongingness
 Everybody has a pride to work in Visaka with a religious feeling that “Organisation First”.
Everybody is committed to do what they do with a feeling that he/she is the owner of the
company & is always responsible for his/her deed.

Visaka’s Image:

The company stands for its image in the society. It is the expectation of the Company that its
employees should contribute in such a way, which will boost up the company’s image. As a
result of which both the company along with it’s employees will be known for it’s culture in
the public. Every employee should act as an ambassador of the company in magnifying the
image of the company through his/her attitude, integrity, behavior and character by that the
people in the society would take the name of VISAKA with respect. Always we should see
that the Visaka’s flag flies high in the global arena.

PERFORMANCE APPRAISAL SYSTEM

DATA ANALYSIS & INTERPRETATION

1 Is the Performance Appraisal system participatory?

YES NO
13 2
INTERPRETATION

According to the survey, Eighty seven percent of the respondents agree that the
performance appraisal system is participatory. Thirteen percent of the respondents
are of opinion that appraisal system is not participatory. It depicts that these
thirteen percent respondents do not accept the appraisal procedure and are of the
views that there should be change in the system.

Do you think that the prime goal of the Organization is well

2
communicated to every employee?

YES NO
12 3

INTERPRETATION

Eighty percent of the respondents are aware of the goals and target they have to
achieve whereas twenty percent of the respondents are unknown about the
organizational goals which depicts that either the organizational goals are not well
communicated to these set of respondents or the understanding level of them is
low.

Does an employee know the annual goals of the Organization &

3
his/her Immediate Boss?

YES NO
12 3

INTERPRETATION

Knowledge about the annual goals of the organization and his/ her immediate boss
is essential for any employee in order to contribute to the organizational
development. According to the survey, eighty percent of the respondents know
about the annual goals of the organization whereas twenty percent of the
respondents are not aware about it which means that these twenty percent
respondents are not active and participatory.

Does your current system tell employees at the beginning of the

4 year that what they are expected to perform during the year
instead of at the end of year?

YES NO
11 4

INTERPRETATION

In every organization the employees are well communicated about what they
expected to do during the year at the beginning itself but twenty seven percent of
the respondents deny with this fact which shows that there might be barriers in the
flow of information.

Does your appraisal system have any scope for periodical review
5
of performance of employee?

YES NO
10 5

INTERPRETATION

Thirty three percent of the respondents are of the opinion that there is no scope for
periodical review. This can be attributed to the few departments which are directly
involved in the production activities. They might be busy with the routine schedule
which does not provide them the time to go for periodical review.

Do you think that any employee, not performing well is given feed
6 back by his/her IB to improve in the middle of the year rather than
wait till end of the year?

YES NO
11 4

INTERPRETATION

According to the survey, twenty seven percent of the respondents do not provide
feedback to the low performing employees. This could be due to not carrying out
periodical review or the irresponsibility of the Immediate Boss. It might also be that
the IB’s wait for the final appraisal period due to which they do not guide the low
performers to perform better through their feedback.

Whether the appraisal rating is opened to the employees through a

7 face to face review with IB and subsequently both employee &
Boss make the developmental plan.

YES NO
9 6

INTERPRETATION
As per the survey it is clearly evident that the appraisal rating is not open to the
employees through a face to face review and there are no developmental plans for
the employees. Though sixty percent of the respondents agree with it the remaining
forty percent is an alarming sign.

Do you think that the appraisee should know what exactly the
8 assessment of his boss is so that he/she can mend him/herself &
improve?

YES NO
14 1
INTERPRETATION

The more transparent is the system the more better it is for the organization and
the employees. The employees should be made aware about the assessment of
their IB’s so as to help them improve themselves and perform better in the future.
Ninety three percent of the respondents agree with this fact.

9 Is the present Appraisal system transparent?

YES NO
10 5

INTERPRETATION
As per the survey, sixty seven percent of the respondents say that the Appraisal
system is transparent whereas thirty three percent of them believe that the system
is not transparent because they might feel that there are biases shown during
rating.

1
0 Is the appraisal system integrated to annual increment process?

YES NO
14 1
INTERPRETATION

As per the survey, ninety three percent respondents agree that the appraisal system is integrated
to the annual increment process which means that the employees are paid for their hard work and
are accustomed to it.

Does the appraisal system identify the training needs at the

1
beginning of the year for development of skill to achieve the target
1
set for the year?

YES NO
12 3
INTERPRETATION

Eighty percent of respondents say that the appraisal system identifies the training needs at the
beginning of the year for development of skills to achieve target set for the year, whereas twenty
percent of the respondents are of different opinion.

1
2 Does the IB counsel the employee to overcome the weak areas?

YES NO
14 1
INTERPRETATION

Though it may look unusual, ninety three percent i.e majority of the respondents agree that
Immediate bosses counsel the employee to overcome the weak areas.

Only seven percent are of the different opinion.

1 Do you feel that the employees are happy with the present
3 Performance Appraisal system?

YES NO
10 5
INTERPRETATION

Sixty seven percent of the respondents feel that they are happy with the present Appraisal
system. The remaining thirty three percent are not at all happy with the present system. This
could be due to the thought that the system is not transparent and does not provide scope for
developing.

1 Does Performance Appraisal helps in charting the career graph for

5 your employees within the organizations?

YES NO
11 4
INTERPRETATION

According to the survey, seventy three percent respondents accept that the performance appraisal
system helps in charting the career graph of the employees whereas twenty seven percent do not
agree with it.

1
6 Are the High performing employees identified?

YES NO
12 3
INTERPRETATION

Eighty percent respondents say that the high performing employees are identified whereas
twenty percent are against it which means there must be bias in practice which fails to identify
the actual performers.

PERFORMANCE MANAGEMENT SYSTEM

DATA ANALYSIS AND INTERPRATATION

Whether the organization goals are communicated to you? If yes,

1 do you understand the goal and your responsibility for attaining
these goals?

YES NO
25 4
INTERPRETATION

Eighty six percent of the respondents feel that they understand the goals of the organization and
the responsibilities to attain these goals, where as fourteen percent of the respondents are not still
clear about their responsibilities they have to carry in order to achieve their goals.

2(
a) Are your goals (KRA’s) aligned to the organizational goals?

YES NO
24 5
INTERPRETATION

In order to achieve the targets, the individual goals are to be aligned to the organizational goals.

In the survey we found out that eighty three percent of the respondents feel that the individual
goals are aligned to the organizational goals, while remaining seventeen percent are in
contradiction to the above view. These small percent of the respondents may be of the ground
level that doesn’t have the clarity of the organizational goals.

2(
b)
Are your goals designed in consultation with immediate Boss?

YES NO

29 0
INTERPRETATION

In the previous Appraisal system, around seventy three percent of the respondents felt that their
immediate bosses had clearly stated their goals, but in the Performance Management system the
KRA settings of the employees is done in consultation with their immediate bosses. So it is
obvious that the every respondent would support this statement.

2(
c)
Do you have any action plan as to how to achieve your KRA’s?

YES NO
25 4
INTERPRETATION

Action plans would help the employees to achieve their KRAs but fourteen percent of the
respondents are not prepared with the action plan so as to achieve their KRAs, where as eighty
six percent of the respondents are clear about how they would achieve their KRAs.

3 Do you feel that your Kra’s are reasonable and within the reach?

YES NO
28 1
INTERPRETATION

KRAs to be achieved should be reasonable and match the job profile of the employee. Anything
which is not within their reach can bring pressure on the employee and reduce his capabilities of
doing the work efficiently. Here ninety seven percent of the respondents feel that their KRAs are
within their reach as these are initially prepared by themselves.

Do you feel that the PMS helps in identifying gap in individual's

4
performance?

YES NO
26 3
INTERPRETATION

The most important aspect which is lacking in Performance Appraisal system was gap
identification as it follows BARS technique which does not showcase the contribution made by
the individual, whereas Performance Management System helps in identifying the contribution
of an individual which proportionately helps in identifying the gaps in his/her performance.

5 Do the PMS help in individual development (Skill & Performance)?

YES NO
27 2
INTERPRETATION

It is vital to have parallel development of an organization and individual also. Individual

development helps in motivating them to perform better.

Ninety three percent of the respondents feel that the PMS helps in developing individual skills
and performance through necessary training since PMS helps in identifying gaps in an
individual’s performance, while seven percent are of different view. This might be because these
minor percent perform routine tasks which do not motivate them.

6 Do you think that the present system would reduce biasness?

YES NO
27 2
INTERPRETATION

The main concern in Performance Appraisal System was biasness in the rating. The new system
has got more support in terms of transparency compared to the old one. Ninety three percent of
respondents are of the opinion that the current system would reduce biasness to large extent.

7 Does this system motivate you to contribute more towards

organizational goals?

YES NO
28 1
INTERPRETATION

Ninety seven percent of respondents say they are being motivated to contribute more towards
their organizational goals with the introduction of PMS; this is because the KRAs are prepared
by themselves and in consultation with their immediate bosses. So they are aware of what they
have to perform.

Do you feel that the existing system is effective one or any further
8
improvement is required to improve the system?

YES NO
21 8
INTERPRETATION

Seventy two percent of the respondents feel that the existing system is effective as it is
transparent , where as twenty eight percent feel it is not effective as the ground level employees
requires training to understand PMS more better.

Do you feel the current system is better than earlier Appraisal

9
system in Visaka?

YES NO
28 1

INTERPRETATION

Ninety seven percent of the respondents feel that the current system is better than the earlier
appraisal system, because they feel it is more transparent, focuses on performance improvement
of individuals, teams and organization and ensures fair appraisal.
1
0 Did you face any problems while implementing PMS?

YES NO
9 20
INTERPRETATION

Thirty one percent of the respondents faced problem in implementing PMS as it is on an initial
stage and the ground level employees are not aware about this system. So they could not get
adequate support from them.

FINDINGS
 Recruitment is mostly done through references.

 The ground level employees are not aware of the company’s turnover and the objectives
of the company.

 There is still attachment with the previous system, due to which there is resistance to
change.

 Close watch by HR is required so as to avoid partiality and groupism.

 Performance appraisal deals with behavioral aspects where as Performance management

focuses on targets.

 HR Department has already forecasted the resistance to new system during the awareness
program (views collected through interaction with employees).

 The people readily accept the change system even though there is internal resistance.
 SUGGESTIONS
 Adequate training is required about performance management system at ground level.

 Coaching and mentoring system should be implemented in order to solve the job related
hurdles instantly.

 We suggest you to introduce three grades in the current system instead of four so as to
make the performance bell curve more effective. These three grades could be Excellent,
Good and Poor. The ratio could be 10:80:10 (or) 20:60:20.

 Increment linked rating has to be shared in order to motivate employees to perform better
in future.

 Performance linked incentive should be introduced in order to recognize the high

performers on attainment of goals.
  Vision, Mission & Goals should be designed, so as to direct the employees in a right
direction.

 Focus should be there on Career development plan so as to retain talented employees and
help motivate them to perform better.

 Performance Management audit has to be conducted so as to check the effectiveness of

the system.

 Succession planning needs to be clearly defined in the company policy.

CONCLUSION

It has been a knowledgeable and explorative experience at VISAKA INDUSTRIES where the
study on performance management system has been carried out .it was a great opportunity to
work with some of the big guns of the organization like the vice president HR who had immense
knowledge about the subject and who was an ideal guide in the study. Learning about the past
system at VISAKA INDUSTRIES gave us an idea as to how performance appraisal system
works practically in a production based organization. This experience gave us the much required
insight on how all the departments and their processes are interlinked to each other based on
which the performance management system has been designed. A transition from the present
appraisal system to the much talked about performance management system is highly essential to
VISAKA INDUSTRIES if it wants to improve the overall effectiveness of the organization by
upgrading the performance levels of the individuals.
This study on performance management system has not only been useful but also added an
analytical angle so that we could know and understand the concept practically and also help the
company to understand the need for implementation of the modern performance management
system so as to strive for better results and performance. The performance management system
not only helps in enhancing the performance of an individual but also teams and organization.
This system helps in building a good rapport between the boss and sub-ordinate.

ANNEXURE
PERFORMANCE APPRAISAL FORM
PART - A

VISAKA INDUSTRIES L I M I T E D.

1-8-303/69/3, “Visaka Towers”, S.P. Road, Secunderabad-500 003.

Tel: 040-27813833, 35; Fax: 040-27813837

 PERFORMANCE REVIEW & PERFORMANCE APPRAISAL

Period of Appraisal: 1st April 2010 to 31st March 2011

Appraised by Immediate Boss & Head of the Department

EMPLOYEE INFORMATION

Employee Name Mr. Anjaneyulu Pola Employee Code 10110

Date of Birth 20-Dec-1967 Date of Joining 26-Aug-1992

Location Corporate Office Designation Sr. Accounts Officer

Qualifications PGDIM, B.Com

Previous Experience 5 Years

Visaka’s Experience 18 Years 8 Months

Experience in present 2 Years

position

FACTORS OF ASSESSMENT

Performance Ratings Point per each rating Overall rating

Excellent 10 80 & above

Good 08 60 & above

Average 06 50 & above

Poor 04 Below 50

a) Job Knowledge and Learning IB HOD

1. Demonstrates a basic knowledge of all aspects of job and applies this

 effectively to meet objectives

2. Learnt technology, methods of professional competence for the job

3. Keeps abreast with new technologies

4. Enhanced performances by applying knowledge

Weighted Average

b) Adaptability/Flexibility IB HOD

1. Adjusts workload with ease in the light of changing priorities

2. Works around obstacles to complete the project (in terms and working
hours, work planning etc.)

3. Maintains effectiveness even in the stressful circumstances

4. Adjust behaviour to suit new procedures, systems or responsibilities.

Weighted Average

c) Initiative: IB HOD

1. Completes assignments in the timely manner without constant

supervision

2. Actively seeks solutions to problems before being asked or directed

3. Minimises a potential problems by anticipating and act accordingly

4.Is highly proactive, looks ahead for specific opportunities for contribution

Weighted Average

d) Communication: IB HOD

1. Effective communication skills

2. Listens actively and assesses requirement accurately

3. Has good oral, written and presentation skills

4. Prepares reports as required

5. Communicates clearly and assertively

Weighted Average
e) Organising and Resource utilization IB HOD

1. Ability of organising the things properly and effective utilisation of

resources: tools and equipment, human resources and in terms money:
cost effectiveness.

2. Maximizing the productivity

Weighted Average

f) Decision Making IB HOD

1. Close analysis of the job and relevant facts

2. Evaluate various alternatives

3. A realistic plan of action

Weighted Average

g) Team Work of co-operation IB HOD

1. Spontaneous co-operation whenever required

2. Contributes by sharing knowledge

3. Enhances team performances through personal effectiveness

4. Looks team performances through personal effectiveness

5. Looks beyond the requirement of job and other suggestions for the
improvement of team performance

6. Leadership qualities.

Weighted Average

h) Problem Solving IB HOD

1. Solves problems logically/Manages situations

2. Seeks own knowledge and experience base in trouble shooting

3. Demonstrates creativity in problem solving

Weighted Average

i) Personal Effectiveness IB HOD

1. Displays emotional control and maturity by showing the ability to not

personalise issues in work situation

2. Seeks and reinforces positive feedback and works on shortcomings

3. Applies time management skills by respecting time of others and self

4. Ability to treat specific information as confidential

Weighted Average

j) Organisational commitment & conduct IB HOD

1. Upholds Visaka Image

2. Gives priority to customers/suppliers above personal interests

3. Provides constructive criticism and valuable suggestions.

4. Attitude

5. Punctuality

6. Obedience / Subordination

Weighted Average

OVERALL PERFORMANCE RATING

Recommendation for promotion to the next position and specific comments as achievements and
justification for promotion.
Present Designation: To be Promoted As:

TRAINING & DEVELOPMENT NEEDS

Specify the areas where need to be trained.

1.
2.
3.
4.
5.

Signature of Immediate Boss Signature of HOD Personnel Dept.

Date:

PART - B
SELF ASSESSMENT FORM

Period of Appraisal: 1st April 2010 to 31st March 2011

Name: Designation:

Department:

1. Your specific achievements in the present job in the last 1 year

2. To fulfill the above achievements what way your superiors/colleagues/sub-ordinates helped you?

3. What is the role you are playing in the organization to meet the organizational goals?

4. What is that gives you satisfaction in your job and what additional responsibilities you propose to
shoulder?

5. What are your suggestions on the existing working environment?

6. Write your objectives for the next one year along with the action plan.

7. Specify your strengths and weaknesses.

Strengths: Weaknesses:

8. What type of training programme& support from the company will be helpful to you to improve your
overall performance?

Signature of Employee.

Date:

Note: if required use separate Sheet.

QUESTIONNAIRE
We, Krishna Praveen Puli and Aayushi Jain the students of Gitam University have prepared this
questionnaire as a part of our study on Performance Management System. The data collection is solely for
the project purpose and will be kept confidential and undisclosed to the outsiders. Your kind cooperation
would be mutually beneficial.

NAME OF RESPONDER: DESIGNATION:

NUMBER OF APPRAISALS DONE TILL DATE: NUMBER OF EMPLOYEES

APPRAISED BY YOU:

Questions & Answer

1- Is the Performance Appraisal system participatory?

YE N
S O

2- Do you think that the prime goal of the Organization is well communicated to every
employee?
 YE N
S O

3- Does an employee know the annual goals of the Organization & his/her Immediate Boss?

YE N
S O
4- Does your current system tell employees at the beginning of the year that what they are
expected to perform during the year instead of at the end of year?

YE N
S O

5- Does your appraisal system have any scope for periodical review of performance of
employee?
Y N
ES O

6- Do you think that any employee, not performing well is given feed back by his/her IB to
improve in the middle of the year rather than wait till end of the year?

YE N
S O

7- Whether the appraisal rating is opened to the employees through a face to face review
with IB and subsequently both employee & Boss make the developmental plan.
YE N
S O

8- Do you think that the appraisee should know what exactly the assessment of his boss is so
that he/she can mend him/herself & improve?
YE N
S O

9- Is the present Appraisal system transparent?

YE N
S O

10- Is the appraisal system integrated to annual increment process?

Y N
ES O

11- Does the appraisal system identify the training needs at the beginning of the year for
development of skill to achieve the target set for the year?
YE N
S O

12- Does the IB counsel the employee to overcome the weak areas?
YE N
S O
13- Do you feel that the employees are happy with the present Performance Appraisal
system?

YE
NO
S

14- Does the organization feel the need of competency development of employees for their
superior contribution in productivity & culture development and higher customer
satisfaction?

YE N
S O
15-Does Performance Appraisal helps in charting the career graph for your employees within
the organizations?

YE N
S O
16- Are the High performing employees identified?

YE N
S O

QUESTIONNAIRE ON PERFORMANCE MANAGEMENT SYSTEM

1) Have you been educated by the HR department about the PMS concept and your
responsibility under the new system?
YE N
S O

2) Is there transparency in the current system?

a) Whether the organization goals are communicated to you? If yes, do you understand
the goal and your responsibility for attaining these goals?
YE N
S O

b) Are your goals (KRA’s) aligned to the organizational goals?

YE N
S O

c) Are your goals designed in consultation with immediate Boss?

YE N
S O
 d) Do you have any action plan as to how to achieve your KRA’s?
YE N
S O

3) Are you involved in the KRA setting?

YE N
S O
4) Do you feel that your Kras are reasonable and within the reach?

YE N
S O
5) Do you feel that the PMS helps in identifying gap in individual’s performance?
YE N
S O
6) Do the PMS help in individual development (Skill & Performance)?

YE N
S O

7) Do you think that the present system is free from biasness?

YE N
S O

8) Does this system motivate you to contribute more towards organizational goals?
YE N
S O

9) Do you require further coaching for better understanding of PMS concept and doubts
clarification?
YE N
S O
10) Do you feel that the existing system is effective one or any further improvement is
required to improve the system? If yes, please feel free to give your suggestions.
YE N
S O

11) Do you feel the current system is better than earlier Appraisal system in Visaka? If
yes/No state the reasons.
 YE N
S O

12) Did you face any problems while implementing PMS? If so mention.
YE N
S O

BIBLIOGRAPHY

BOOKS
 Performance Management, A.S KOHLI, TAPOMOY DEB

 Performance Management and Appraisal Systems, T.V. RAO

 Performance Management and Culture, SETHI DIPTI GAGAN

 Booklet on the company’s profile

WEBSITE
 www.citehr.com

 www.visaka.in

 www.wikipedia.com