HRM Project Report

Performance Appraisal System at Dabur India Limited
2011
Project Report: Human Resources

Management
Project Title: Performance Appraisal System at Dabur India
Limited
Submitted by:
Ankita Bhargava 09HR-

005
Ankur Arora 09HR-

006
Megha Latawa 09HR-

011
Dr. Nisheeth Kumar 09HR-

014
Shubham Kapoor 09HR-

023
Mallika Kulkarni 09HR-

032
1|Page
Contents
2011
Contents............................................................................................................. 2
Introduction........................................................................................................ 3
The Appraisal Process.........................................................................................4
Performance Management.................................................................................5
Who Evaluates Performance?.............................................................................6
Dabur India Limited: Organizational Profile........................................................7
Performance Appraisal System in Dabur India Limited.......................................7
Outcome of Performance Appraisal....................................................................8
Duration of Appraisal System.............................................................................9
Feedback............................................................................................................ 9
Response............................................................................................................ 9
Sample of the study..........................................................................................10
Methodology of the project...............................................................................10
The Questionnaire.........................................................................................10
Response to Questionnaire............................................................................10
Data entry and analysis.................................................................................11
Limitations.....................................................................................................11
Research Findings............................................................................................11
1. Promotions....................................................................................................11
Aligning goal.....................................................................................................13
Career Progress................................................................................................13
Feedback.......................................................................................................... 15
Promotion Policy and Performance Appraisal System.......................................16
Conclusion........................................................................................................ 16
Suggestions...................................................................................................... 17
Open Appraisal System.....................................................................................18
Annexure.......................................................................................................... 19
Questionnaire................................................................................................... 19
Bibliography......................................................................................................20
2|Page
Introduction
Performance appraisal may be defined as a structured formal interaction

2011
between a subordinate and supervisor, that usually takes the form of a periodic
interview (annual or 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 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. By the same token,
appraisal results are used to identify the poorer performers who may require
some form of counselling, 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).
In general the appraisal systems serve two main purposes:
1. To improve the work performance of employees by helping them realize

and use their full potential in carrying out their firm’s mission.
2. To provide information to employees and managers for use in work related

decisions.
More specifically appraisals serve the following purposes:
a) Appraisals provide feedback to employees and help the management identify

the areas where development efforts are needed to bridge the gaps thereby
serving as vehicles for personal and career development.
b) It helps management spot individuals who have specific skills so that their
promotions/transfers are in line with organizational requirements.
c) Appraisals serve as a key input for administering a formal organisation reward

and punishment system.
d) The performance system can be used as a criterion against which selection

devices and development programs are validated.
3|Page
There are basically three purposes to which performance appraisal can be put. 2011
• 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 are 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.
The Appraisal Process
1. Objectives of performance appraisal
2. Establish job expectations
3. Design an appraisal programme
4. Appraise performance
5. Performance interview
6. Archive appraisal data
7. Use appraisal data for appropriate purposes
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
4|Page
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 has taken place
and has been received and understood by the subordinate. Therefore feedback is 2011
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 an employees’ 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. Immediate action corrects something right now and gets
things back on track.
Performance Management
Since organizations exits to achieve goals, the degree of success that individual
employees have in reaching their individual goals is important in determining
5|Page
organization effectiveness. Performance system is fundamentally a feedback

process, which requires sustained commitment. The cost of failure to provide
such feedback may result in a loss of key professional employees, the continued
poor performance of employees who are not meeting performance standards 2011
and a loss of commitment by employees, in sum, the myth that the employees
know what they are doing without adequate feedback from management can be
an expensive fantasy.
Who Evaluates Performance?
The most fundamental requirement for any individual who rates performance is
that he or she has an opportunity to observe an employee’s job performance
over a reasonable period of time. The following individuals can possible rate
employee performance:
The immediate supervisor:
Generally appraisal is done by this person. He is probably the most familiar with
the individual's performance and in most jobs has had the best opportunity to
observe actual job performance. Furthermore, the immediate supervisor is
probably best able to relate the individual's performing to department and
organizational objectives. In some jobs such as outside sales, law enforcement
and teaching, the immediate supervisor may observe a subordinate's actual job
performance rarely (and indirectly thru written reports). Here judgment of peers
play important role. However, there is a danger of potential bias.
Subordinates:
Appraisal by subordinates can be useful input to the immediate development.

Subordinates know firsthand the extent to which the supervisor actually
6|Page
delegates, how well he communicates, the type of leadership he has and the
extent to which he or she plans and orgasms.
Self appraisal: 2011
On one hand it improves the rate's motivation and moral, on the other it tends to
be more lenient, less variable and biased. The evidence on the accuracy of self
assessment is fairly complex.
In industry it is seen that feed back/ input is taken from various sources -Peers,
subordinates, superiors etc. Some companies have gone step ahead in taking
feedback from the customers and integrating it into the performance
management process.
Dabur India Limited: Organizational Profile
The story of Dabur goes back to 1884, to a young doctor armed with a degree in
medicine and a burning desire to serve mankind. This young man, Dr. S. K.
Burman, laid the foundations of what is today known as Dabur India Limited.
From those humble beginnings, the company has grown into India's leading
manufacturer of consumer healthcare, personal care and food products.
Performance Appraisal System in Dabur India Limited
The main objective of the performance appraisal system at Dabur India Limited
is to evaluate employee performance, promote their employees and to arrange
for their various training programmes if they require for enhancing their skills in
their respective areas and in contribution enhancement.
7|Page
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 2011
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 planning, 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 appraisal process while evaluating its employees. Its evaluation is
based on quantity and objectivity.
Company set goals to its employee by properly reporting with its employees and
then evaluating them up to 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 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 India Limited is concerned, there are four outcomes possible:
8|Page
a. Outstanding
If the performance evaluated by the management turns out to be outstanding. If

the employee performs in such a way as to collect 3 consecutive outstanding
2011
performance into his or her credit, he or 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 or 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 or
her skill to perform form.
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 or her credit, then he/she
dismissed
Duration of Appraisal System
The time constraints enables the employee to show or project his or 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 better
communication between the management and employees thus, helps in
promoting the business future.
Response
9|Page
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. 2011
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 DABUR INDIA LTD. falling under supervisor and the level above.
The study covered a sample of 30 employees belonging to supervisory level and
above.
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 finalize. During the
second stage, the questionnaire was administered to the employees at Dabur
India Ltd. by 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 finalized.
Response to Questionnaire
In all 30 questionnaires were given to employees falling in the category of

supervisors and above. Out of which 21 could be collected back duly completed.
The researcher individually contacted the employees to get response on the
questionnaire.
10 | P a g e
Data entry and analysis
It has been an uphill task to enter the enormous data received through the
questionnaire which consisted of nearly 10 questions. Hence these were further 2011
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. The confidentiality of the
system created some problem in getting information.
Research Findings
After collecting the data on "Performance Appraisal System" data was Analyzed
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
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
11 | P a g e
promotion to managerial staff and 3 years experience for promotion to Junior

Management staff is needed. The other area of promotion apart from seniority is
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 2011
department. 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 are given below:
Response Number Percentage

Yes 5 26.3%
No 9 50.0%
Can’t say 4 22.2%
From the above table, it can be seen that 26% agree that promotion is well
defined in the organisation. However 50% 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.
12 | P a g e
Aligning goal
2011
Respondent were asked about the present system, does it help in aligning
individual goals with those of the organisation. The responses were as given
below:
Responses Number Percentage

Yes 10 47.6%
No 4 19.0%
Can’t Say 7 33.3%
Here the response from the supervisor was 47% for the factor that it helps in
aligning their goal with those of organisation.
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 him and the organisation. Respondent
were asked about the current system helping in their career progress.
Career advancement is the most motivating factor when employees aspire for
the advancement of his career and for better opportunities to use his/her talents.
13 | P a g e
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, 2011
after becoming aware of some of his or her capabilities and career and
development opportunities, chooses to develop in a direction that improves their
chances of being able to handle new responsibilities. It is also the responsibility
of the employer to help the employee to identify the career opportunity, make
choices and develop their career and provide opportunities for career planning
and succession planning.
Question asked was as follows:
Are the issues like career planning and succession planning a part of company’s
policy? The responses to the above were as given below:

Yes 4 21.0%
No 9 47.3%
Can’t say 6 31.5%
Here only 47% of the respondent gave response that it does not have a career
development plan and a succession plan.
14 | P a g e
Feedback
2011
Providing feedback plays constructive role. It helps the employee know his/her
weakness and strength. Feedback provides for the area of improvement.
Respondents were asked about the frequency of feedback based on their
performance. The responses were as given below

Rarely 5 22.7%
On a few occasions 8 36.3%
Sometimes 6 27.2%
Often 3 13.6%
Almost always 0 0
36 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.
15 | P a g e
Promotion Policy and Performance Appraisal System
Respondents were asked whether the promotion policy is linked with the
performance appraisal system:
2011

Yes 11 55%
No 6 30%
Can’t say 3 15%
Majority responded that that promotion policy is linked with the performance
appraisal system.
Conclusion
16 | P a g e
The analysis and interpretation of data on study of performance appraisal and its
effectiveness in an organization led to the following conclusions:
• The rule about promotion, though defined, needs to be communicated to

2011
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. Uniformity has to be there in the
implementation of promotion policy at all levels
• The process of performance appraisal followed in Dabur India Ltd. at the

supervisory level and above is satisfactory. The employees do not rate it very
high.
• 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 organization at present doesn't focus on career planning and
career suggestion plans.
• In Dabur India Ltd. feedback is being provided to the employee though on a

few occasions when performance appraisal in Dabur India Ltd. is done on an
annual basis.
Suggestions
The study undertaken, brought forth some interesting results.
• Training the Appraiser: 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 appraisal.
• Factors/traits of evaluation: It is proposed that appraisal evaluated on above

factors/traits be given suitable remark or justification for being given different
quantitative grade.
• 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.
17 | P a g e
• In the organization, performance appraisal is done on an annual basis which

should be done Quarterly to make it more effective.
• Consistency is demanded in the promotional policy. It should not change

2011
every year.
• Monetary difference between two grades should not be large; it should be

motivating in nature.
• Performance appraisal system should be made more transparent and

rationale.
• Performance feedback: The performance feedback sessions should be

improved which would results in increasing employee motivation to improve
performance. The following could be incorporated:
o Pin point the problem behaviours and make sure the employee is
aware of it.
o Make sure the employee understands the consequences of the problem

behaviours. Get employee's commitment to change and make sure he
cares about the change.
o Assistance should be provided to improve poor performance. Make a

realistic plan appropriate to the behaviour and set a time frame for
improvement.
o Make sure to review performance time to time.
• Other changes to be incorporated at the supervisor level and above are:
o These should be listing down of task undertaken during the last one
year and the result achieved.
o In some areas of performance there should be self appraisal and more

and more counselling so that employees improve upon weak area and
understand what is expected of him/her at the organization level.
Open Appraisal System
18 | P a g e
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 2011
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.
Annexure
Questionnaire
Personal Information
Q1. Name:
Q2. Designation:
Q3. Department:
Q4. Service in Profession (in years):
Q5. Is the promotional policy well defined in your organization?
a. Yes b. No c. Can't say
Q6. Does the system help you in aligning your goals with those of the
organization?
19 | P a g e
Q7. Are the issues like career planning and succession planning a part of
company's policy?

2011
Q8. Do the employees get the feedback for their performance appraisal?
a. Rarely b. On a few occasions c. Sometimes

d. Often
e. Almost always
Q9. Do you think your promotional policy is linked with the performance
appraisal system?
Q10. How do you rate the overall assessment of performance appraisal?
a. Outstanding b. Very good c. Good d. Satisfactory e.

Poor
Bibliography
Flippo EdwinB., Personnel management, Edition sixth, Tata Mc Graw Hills, 1984,
p225-2302
Gupta, C.B., Human Resource Management, Edition Fifth (Reprint), Sultan Chand
and Sons, New Delhi 2001, p5.3-5.103
Rao, P. Subba, Essentials of Human Resource Management and Industrial

Relations; Edition Second, Himalaya Publishing House, New Delhi 2001, p206-
210
Arthur, J., 1994, Effects of human resource systems on manufacturing

performance and turnover, Academy of Management Journal, Vol. 37, p670–687
20 | P a g e
Bartel, A. P., 2004, Human resource management and organizational

performance: Evidence from retail banking; Industrial and Labour Relations
Review, Vol. 57, p181–203
2011
M.M. Robertson and H. Yueng-Hsiang, 2006, Effect of a workplace design and
training intervention on individual performance, group effectiveness and
collaboration: The role of environmental control; Work, Vol. 27, p3–12
Li-Yun Sun, Samuel Aryee, and Kenneth S. Law, 2007, High performance human
resource practices, citizenship behaviour, and organizational performance: A
relational perspective; Academy of Management Journal, Vol. 50, No. 3, p558–
577
Hunter, Larry W., Thatcher, Sherry M. B, 2007, Feeling the heat: effects of stress,
commitment, and job experience on job performance; Academy of Management
Journal, Aug2007, Vol. 50 Issue 4, p953-968
21 | P a g e

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Performance Appraisal System at Dabur India Limited

Project Report: Human Resources

Ankita Bhargava 09HR-

Ankur Arora 09HR-

Megha Latawa 09HR-

Dr. Nisheeth Kumar 09HR-

Shubham Kapoor 09HR-

Mallika Kulkarni 09HR-

Performance appraisal may be defined as a structured formal interaction

In many organizations appraisal results are used, either directly or indirectly, to

In general the appraisal systems serve two main purposes:

1. To improve the work performance of employees by helping them realize

2. To provide information to employees and managers for use in work related

More specifically appraisals serve the following purposes:

a) Appraisals provide feedback to employees and help the management identify

c) Appraisals serve as a key input for administering a formal organisation reward

d) The performance system can be used as a criterion against which selection

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

• Finally the performance appraisal can be used as a criterion against which

The Appraisal Process

1. Objectives of performance appraisal

2. Establish job expectations

3. Design an appraisal programme

6. Archive appraisal data

7. Use appraisal data for appropriate purposes

The appraisal process begins with the establishment of performance standards.

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

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

organization effectiveness. Performance system is fundamentally a feedback

Who Evaluates Performance?

The immediate supervisor:

Appraisal by subordinates can be useful input to the immediate development.

Self appraisal: 2011

Dabur India Limited: Organizational Profile

Performance Appraisal System in Dabur India Limited

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

Outcome of Performance Appraisal

If the performance evaluated by the management turns out to be outstanding. If

If the performance evaluated by the management turns out to be excellent. If

If the performance evaluated by the management turns out to be good. The

If the performance evaluated by the management turns out to be below average.

Duration of Appraisal System

Sample of the study

Methodology of the project

The details of the methodology adopted are presented below:

In all 30 questionnaires were given to employees falling in the category of

Data entry and analysis

Many employees gave guarded answers to some crucial questions. Some of

A promotion may be defined as an upward advancement of an employee in an

promotion to managerial staff and 3 years experience for promotion to Junior

Response Number Percentage

Responses Number Percentage

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

From the organisation's point of view, it is necessary to develop in manager,

Question asked was as follows:

Response Number Percentage

Response Number Percentage

36 percent responded that feedback is provided though on a few occasion. The

Promotion Policy and Performance Appraisal System

Response Number Percentage

• The rule about promotion, though defined, needs to be communicated to

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

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

The study undertaken, brought forth some interesting results.