Professional Documents
Culture Documents
BY
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ACKNOWLEDGEMENT
I would like to thanks to my Professor, Dr. Geeta Lal and my Superior, Mr. Bhavesh Purohit (Sr. Executive VTC HR, Zydus Cadila) for his invaluable advice and guidance throughout the project.
I would like to thank my family and friends for their guidance and encouragement throughout the project, without which the project would have been impossible.
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SUMMARY
This dissertation seeks to present the appraisal system of the ZYDUS CADILA. Hence, the performance appraisal system of this company was studied. The study also explains how performance appraisal systems have encouraged employee development in the organization considered.
The study explores the importance of performance appraisal in the organization. It explores how organizations have to be organized and systematic in their approach, so that they can extract the exact performance from their employees which can help them, to create a balance between performance and achieving organizational objectives. This paper explains how performance appraisal helps in personnel decisions like promotion, salary increments. It
also helps, how performance appraisal helps in evaluating and assessing the employees on a
common ground and helps to establish training and development program which helps the employee to grow in the organization etc.
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INDEX
Sr. No. Contents Page No.
CHAPTER 1 1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction Meaning & Definition Objective of the Study Performance Appraisal Overview Objective of Performance Appraisal Performance Appraisal and Competitive Advantage Perception of Performance Appraisal in Organization How is Performance Appraisal Conducted? Process of Performance Appraisal 9.1 10. 11. 12. 13. Methods of Appraisal 5 6 7 7 8 9 13 15 16 30 35 36 37 38
Appraise the Performance Performance Interview Guidelines for effective Appraisal Interview Use of Appraisal Data
CHAPTER 2 1. 2. Introduction of Zydus Cadila Healthcare Ltd. Process of Performance Appraisal system in Zydus Cadila Healthcare Ltd. 3. 4. 5. 6. 7.
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39 42
47 48 51 52 53
INTRODUCTION:
The purpose of this dissertation is to explore the performance appraisals in ZYDUS CADILA and its effect on the employees and the organization. This paper, explains how performance evaluation helps in rewarding employees as well as assessing, evaluating and appraising employees performance in the organization and providing them with the necessary training and development. It tries to explain, how it motivates employees when goal setting theory is applied in order to perform better in the organization. The, study basically highlights the impact of performance appraisal on the employees and on the organization. The key purpose of performance management in organizations is that it helps in; measuring the effectiveness of performance in the organization also, it helps in identifying training needs and largely promotes motivation towards work. But, how exactly does performance appraisal help in running the organization? Every organization has a set of objectives and functions and the main task is to accomplish the desired objectives and functions. This can only be achieved, if the employees know their duties well. Employees form an important asset of the company, therefore they should be provided with a proper package, remuneration and good training and development. All these facilities will only help the employee to be, highly motivated towards their work and would help in producing the right output i.e. performance. Performance appraisal is used all over the world. Many organizations use performance appraisal in order to develop a clearer picture of their organization. The performance appraisal process allows an organization to measure and evaluate an individual employees behavior and accomplishments over a specific period of time. In recent years the attention towards performance appraisal has increased rapidly, due to its important potential implications ,relating to fair employment practices and the because of increasing concerns about employee productivity in the organization.
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In simple term, Performance Appraisal is: An objective assessment of an individuals performance against well defined benchmarks. Employee performance includes quantity of output and quality of output.
A formal definition of performance appraisal is: It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.
A more comprehensive definition is: Performance' appraisal is a formal structured system of measuring and evaluating an employees job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee organization and society all benefit.
The other terms used for Performance Appraisal are performance assessment, performance rating, employee assessment, performance Management etc. Job analysis sets out requirements, which are translated into performance standards, which in turn form the basis for performance appraisal. Performance Appraisal is the process by which data about an employees past and current job performance in the organization is collected and reviewed. Assessments suggest a top-down judgment's approval where the manager takes the role of judge who makes decision about the adequacy of employee performance.
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The aim of this study is to understand the process of performance appraisal and other steps that can be incorporated to make the process more effective and efficient. It will assess whether the appraisal process creates a positive response or negative response from employees and assess the subsequent impact on employee attitudes and behaviors. The appraisal process studied is that of ZYDUS CADILA. The appraisal system of this company was designed to give reward and improve employee productivity. The findings, suggests that the performance appraisal system is important among employees and the organization. The study also explains how performance appraisal systems have encouraged employee development in the organization considered.
The most basic purpose of performance appraisal is to provide information to the employees about their job and the amount of effort and behavior expected from them. Performance appraisal (PA) systems aim to help, develop individuals, improve organizational
performance and to develop the basis from which builds a baseline for planning for the future. Generally PA includes the following main purposes: 1. Creation of a shared vision of the organization's objectives, occasionally through a mission statement communicated to all employees. 2. Setting of individual performance targets relating to the operating unit's target within the overall organization. 3. A formal review of progress towards these targets, and/or the identification of training needs. 4. The PA system assessed regularly to evaluate its effectiveness for overall organizational performance.
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Developmental Uses, Administrative Uses/Decisions, Organizational Maintenance/ Objectives, and Documentation Purposes
Table below outlines these and specific uses more clearly:Multiple Purposes of Performance Assessment General Applications
Developmental Uses
Specific Purpose
Identification of individual needs Performance feedback Determining assignments Identification of individual strengths ad development needs transfers and job
Administrative Uses/Decisions
Salary Promotion Retention or termination Recognition of individual performance Lay-offs Identification of poor performers
HR planning Determining organization training needs Evaluation of organizational goal achievement Information for goal identification Evaluation of HR systems Reinforcement of organizational development needs
Documentation
Criteria for validation research Documentation for HR decisions Helping to meet legal requirements
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Improving Performance
Competitive Advantage
Improving Performance
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An effective appraisal system can contribute to competitive advantage by improving employee job performance in two ways-by directing employee behavior towards organizational goals, as was done by the second beekeeper (see opening case), and by monitoring that behavior to ensure that the goals are met.
control cost and thus be recognized and rewarded. If the focus is on rewarding productivity, employees will strive for productivity. The performance appraisal becomes not only a means of knowing if the employees' behavior is consistent with the overall strategic focus, but also a way of bringing to the fore any negative consequence of the strategy- behavior fit For example, a single point productivity focus may include potential negative consequences such as decreased quality and co-operations. Thus, the performance appraisal system is an important organizational mechanism to elicit feedback on the consistency of the strategybehavior link.
From the strategic management point of view, organizations can be grouped into three categories defenders, prospectors and analyzers. Performance appraisal has definite roles in all the three strategies.
Typically, defenders have a narrow and relatively stable product-market domain. Because of this narrow focus, these organizations seldom need to make major adjustments in their technology. Structure or methods of operations. They devote primary attention to improving the efficiency of their existing operations. Because of the emphasis 011building skills within the organization, successful defenders use performance appraisal for identifying training needs. Performance appraisal is usually more behavior oriented.
Organizations with a prospector strategy continuously search for different product and market opportunities. In addition, these organizations regularly experiment with potential responses to new and emerging environmental trends. Prospectors are often the harbingers of change.
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Because of the emphasis on skills identification and acquisition of human resources from external sources, as opposed to skills building with the organization, prospectors often use the performance appraisal as a means of identifying staffing needs. The emphasis is on results. Finally, the focus is on division and corporate performance evaluation as they compare with other companies during the same evaluation period.
Organizations with an analyzer strategy operate in two types of product-.market domains. One domain is stable while the other is changing. In their more innovative areas, managers watch their competitors closely and rapidly adopt the ideas that appear promising. In general, analyzers use cost effective technologies for stable products and project or matrix technologies for new product. Analyzers tend to emphasize both skill building and skill i1cquisilion and employ extensive training programs. Thus, these organizations attempt to identify both training as well as staffing needs. The appraisal systems are considered at the individual, group and divisional levels. Finally, successful analyzers have a tendency to examine current performance with past performance within the organization. Cross-sectional comparisons (comparisons among companies) may also occur.
Whatever the category, a performance appraisal system has strategic importance to a firm in three ways: 1. Feedback mechanism, 2. Consistency between organizational strategy and job behavior, and 3. Consistency between organizational values and job behavior.
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PERCEPTION OF PA IN ORGANIZATION
It revolves if PA gives a positive impact or a negative impact to the employees. It shows whether the employees get motivated to perform better, if they receive a good feedback or do they get de-motivated and loose interest in their job. So far, we have come across the purpose, uses of PA in the organization, but the perception i.e. the understanding of PA is not taken into consideration in most cases which is important for the employee as well as the organization. If the employees don't recognize this, then they would suffer unnecessarily in the organization the reason being that, an employee has a certain level of expectation from his company when he joins it; he expects sum kind of growth from it, also the organization expects a lot from him. But, a negative feedback of performance would largely hamper him mentally and make him loose his interest in his job. There would be change in his attitude, which would be problematic for him as well as the organization. He would be de-motivated to achieve the organizational objectives.
Many employees have a kind of view that, their promotion or salary increments largely depends on their performance. Employees therefore are in a dilemma and consider this situation as 'survival of the fittest' .They know for a fact that, their performance is only taken into consideration at the end of the day, and in order to grow in the company they need to be pro active towards their work. The feedback the employee receives from his superior, may simply describe the level of performance achieved.
Hence, it is important for the managers to conduct the appraisal process properly. Employees can only accept criticism if it is useful and relevant to them. Managers should know how to provide information regarding improvement in performance and how to present criticism as well.
Managers feel that whenever they have to provide a negative feedback, the employee is most likely be dejected and de-motivated. Study in General Electric Company where certain points relating to performance feedback was highlighted. In this study, appraises were appraised by their managers on two occasions over two weeks. The study was carried out by questionnaires, interviews and observation. The first interview included performance and salary and the second performance and improvement. It was observed, that there was a lot
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criticism pointed out by the managers, which lead to defensive behavior of the employee. The conclusions from this study were that- Criticism leads to create a negative impact on the motivation and performance of the employees. Interviews designed to improve performance should not at the same time weigh salary and promotion issues. Participation by the employee in goal setting helps to produce favorable results. After this study, there were many studies which reflect upon employee's performance issues due to negative feedback. The appraisal has to be fair. Employees who believe that the appraisal system is under any kind of bias and misunderstanding between them and the managers are, most likely to be dissatisfied by their work and can also leave their jobs.
The extent to which employees are able to accept feedback will vary to a considerable degree between employees and managers will need to be able to cope with such variations .That is ,they will need to 'know' their people as individuals, and this itself will be a reflection of the development of managers. One possible reason for the widespread dissatisfaction with performance appraisal in organization is that the systems used by organizations do not help them or their employees meet the desired goals.
It has been shown that individuals are motivated to seek feedback (if it is seen as a valuable resource) to reduce uncertainty and to provide information relevant to self evaluations.
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PROCESS
Below figure outlines the performance- appraisal process. Each step in the process is crucial and is arranged logically. The process as shown in below Fig. is somewhat idea1ised. Many organizations make every effort to approximate the ideal process, resulting in first-rate appraisal systems. Unfortunately, many others fail to consider one or more of the steps and, therefore, have less-effective appraisal system.
Objectives of Appraisal
Performance interview
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1. Objectives of Appraisal
Objectives of appraisal as stated above include effecting promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct problems. These objectives are appropriate as long as the approach in appraisal is individual. Appraisal in future, would assume systems orientations. In the systems approach, the objectives of appraisal stretch beyond the traditional ones. In the systems approach, appraisal aims at improving the performance, instead of merely assessing it. Towards this end, an appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance and social processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how work the work system affects an individuals. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how the work systems affect an individuals performance. In order to use a systems approach, managers must learn to appreciate the impact that systems levels factors have on individual performance and subordinates must adjust to lack of competition among individuals. Thus, if a systems approach is going to be successful, the employee must believe that by working towards shared goals, everyone will benefit. Not that the role of the individual is undermined. The individual is responsible for a large percentage of his or her work performance. Employees should not be encouraged to seek organizational reasons for his failures. The identifications of systems obstacles should be used to facilitate development and motivation, not as an excuse to poor performance. The following table displays some of the differences between the traditional approach and the systems-oriented one.
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PERFORMANCE APPRAISAL SYSTEMS Traditional Guiding value Primary roles Attribution to Systems individual Attribution to systems Development, solving Leadership practices Appraisal frequency Degree of formality Reward practices Directional, Occasional High Individual orientation evaluative Facilitative, coaching Frequent Low Group orientation problem
Control, documentation
1. Formals versus informal appraisal: The first step in designing an appraisal program
is to decide whether the appraisal should be formal or informal. Formal appraisal usually
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occurs at specified time periodsonce or twice year. Formal appraisals are most often required by the organizations for the purposes of employee evaluation. Informal performance appraisal can occur whenever the superior feels the need for communication. For example, if the employee has been consistently meeting or executing standards, an informal appraisal may be in order to simply recognize this fact. Discussions can take place anywhere in the organizations, ranging from the managers office to the canteen. But care needs to be taken to ensure that the discussion is held in private. Many organizations encourage a mixture of both formal and informal appraisal. The formal appraisal is most often used as primary evaluation. However, the informal appraisal is very helpful for more performance feedback. Informal appraisal should not take the Group cohesiveness refers to shared feeling among work-team members. There is cooperation and clear understanding to accomplish tasks which are interdependent. Any attempt to assess individual performance shall undermine group cohesiveness and tend to promote individualistic or even competitive orientation. The difficulty in identifying individual contribution is also important to consider. In some cases, interdependent of tasks is so complete that it is difficult to identify who has contributed what. There is no other choice but to view that task as a team effort. But the point to be remembered is that the performance of all employees must be rated. All must become raters.
should be rated, the answer is obviousemployees, is it individual or teams? Specifically the rate may be defined as the individual, work group, division, or organizations. It is also possible to define the rate at multiple levels. For example, under some condition, it may be desirable to appraise performance both at work-group level for merit-pay increases and at the individual level to assess training needs. Two conditions necessitate a group level appraisal group cohesiveness and difficulty in identifying individual performance. Description. Individual should not be expected to begin the job until they understand what is expected out of them.
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Immediate supervisor is the fit candidate to appraise the performance of his or her
subordinate. There are 3 reasons in support of this choice. No one is familiar with the subordinates performance than his or her superior. Another reason is that the superior has the responsibility of managing a particular unit. When the tasks of evaluating a subordinate is given to another person, the superior authority may be undermined seriously. Finally, training and development of subordinate is am portent element in every mangers job. Since appraisal program are often clearly linked to training and development, the immediate superior may be the legal choice to conduct the performance evaluation.
Subordinate can assess the performance of their superiors. The use of this choice may be
useful in assessing an employee ability to communicate, delegate work, allocate resources, disseminate information, resolve intrapersonal conflict, and deal with employees on a fair basis. But the problem with the subordinate evaluation is that supervisors tend to become popular, not by effective leadership, but by mere gimmicks.
Peers are in better position to evaluate certain facts of job performance which the
subordinates or supervisors cannot do. Such facts include contribution skills, reliability and initiative. Closeness of the working relationships and the amount of personal contacts place peers in a better position to make accurate assessments. Unfortunately friendship or animosity may result in distortion of evaluation. Further when reward allocation is based on peer evaluation, series conflicts among co-workers may develop. Finally join together to rate each other high.
Although clients are seldom used for rating employee performance, nothing prevents an
organization from using this source. Clients may be members within the organization who have direct contact with the rate and make use of an output (goods or services) this employee provides. Interest, courtesy, dependability and innovativeness are but a few of the qualities for which clients can offer rating information. Clients, external to the organization can also
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offer similar kinds of information. Where appraisal is made by the superior, peers, subordinates and clients, it is called the 360-degree system of appraisal. In the 360 degree method, besides assessing performance. Other attributes of the assesstalents, behavioral quirks, values, ethical standards, tempers and loyalty are evaluated by the people who are best placed to do it. Many employees use rating committees to evaluate employees. These committees are often composed of the employees immediate supervisor and three or four other supervisors who come in contact with the employee. This choice is welcome when an employee in the course of his or her job performs a variety of tasks in different environment. For e.g. 1supervisor may work with the employee when technical aspects of a job are being performed and another supervisor may deal with the same employee in situations where communications skills are crucial. There are several benefits in using multiple raters. First there may be objectivity in rating as more than rater is involved in the assessment. Furthermore where there are differences in the rater ought ratings they usually stem from the fact that raters at different level in the organization often observe different facets of an employee performance-the appraisal to reflect these differences. The disadvantages of committee rating are that it diminishes the role of the immediate supervisor in the area of training and development.
In self appraisal It is a known fact that people rarely see themselves as others see them.
Then what is the purpose of doing self-assessment? Most employees question the validity of an initiative which might not have any impact on the final outcome of the performance appraisal process. The obvious question is: does self-appraisal actually make a difference?
Disillusionment with the appraisal system is a common phenomenon in many organizations, including the formality of self-appraisal. But experts strongly believe that it is a necessary process. There is certainly a need for self-appraisal as it gives an opportunity to the appraised to document not only the achievements, but also the difficulties encountered while working. It also helps the appraiser understand the gap between the self-assessment of the appraised and the assessment by the appraiser. Further, it serves as a platform for professional counseling and as a feedback mechanism,
Self-appraisal is an important step in making the employee feel involved in the process as the appraise gives his perspective. Moreover, in the area of self-managed work, a good manager
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should be able to identify good potential employees from the quality of goals set and selfevaluated. In zydus cadila, the Intra-based appraisal system actually allows the employee to define various types of KRAs, like people-related, quality-related, project-related, learningrelated and so forth. These are set at the beginning of the appraisal period; during the course of the year, by mutual agreement, changes could be made to the original set of goals defined. So at assessment stage there is a balanced set of goals that get assessed for the employee. The responsibility to set, change the goals rest with the employeewherein the appropriate metrics, measures are provided. A candidates self- appraisal does not lead to a fruitful result unless it is corroborated by his own boss. It is important to know how the self-assessment results in influencing the boss and finally the appraisal results. I think the biggest help it provides is to put one side of data on the table. It provides an alternate picture to the boss. This forces the latter to go back over his notes and come back with conclusive feedback. It also provides an opportunity to the organization to hear the employee and seek his expectations.
Common mistakes
Self-appraisals most often than not turn out to be a list of only the positive qualities in an individual. Most professionals knowingly give themselves higher marks than they deserve, as they assume that their boss is bound to mark them less, and their final appraisal outcome should not suffer as a result. Many believes that the biggest mistake people make while appraising themselves is that they do not drive a correlation between data and informationsharing, There is almost a tendency to use self-appraisal as a self-appraisal (from praise). Most use self-appraisal to push the manager to a corner from a self-rating perspective. Sometimes it goes into self-denial as well. There is a hesitation to rate oneself appropriately because one is not sure how ones peer is rating oneself and hence drive the ratings northwards.
Those appraises try to set-up easy, achievable, low-risk goals, but may have high visibility in terms of achievement with little effort. They need to watch out for such self-assessments made. It is not uncommon for employees to take the appraisal process lightly and put the ball in the managers court to let him/her decide. Other employees either overrate themselves or are
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overly self- critical. He asserts that the right appraisal approach should be objective and unbiased. This would happen if you do not factor the rewards/recognition in self-appraisal process and focus purely on development. A reward/recognition alters the behavior of the person, if it is directly related to an appraisal.
Appraises not clear of objectives: Performance management is a forward looking process and it is often relegated to a post mortem Appraisers not qualified / trained to provide feedback Performance feedback not done faithfully Performance management is seen as an overhead by many managers Performance management should serve as inputs to many managerial actions but today it is seen as a backward integration to rewards apportionment alone
HR more an administrator than a facilitator Done more as a ritualno record keeping and hence recency is a big factor It seldom is data basedit is more perception based
Performance appraisals are subject to a wide variety of inaccurate and biases referred to as rating errors. These errors occur in the raters observations, judgments and information processing and can seriously affect assessment result. The most common rating errors are leniency or severity, central tendency, halo effect, primary and recency effects, perceptual set, performance dimension behavior, spillover effect and status effect.
Leniency or Severity
assessment subjective. Subjective assessments defeat the very purpose of performance appraisal. Ratings are lenient for the following reasons. o The rater may feel that anyone under his or her jurisdictions who is rated unfavorably will reflect poorly on his or her own worthiness.
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o He or she may feel that anyone who could have been rated unfavorably has already been discharged from the organization o He or she may feel that a derogatory rating will be revealed to the rate to the determinant of the relations between the rater and rate. o He or she may rate leniently in order to win promotions for the subordinates and therefore indirectly increase his or her hold over them. o He or she may be projecting o He or she feels it necessary to always approve of others in order to gain approval for him or herself. o He or she may be operating on the premise, whoever associates with me is meritorious therefore, and I am meritorious. o He or she may rate leniently because there exists, in the culture, a response set approve rather than disapprove.
Central tendency This occurs when employees are incorrectly rated near the average or
middle of the scale. The attitude of the rate is to play safe. This safe playing attitude stems from certain doubts and anxieties which the raters have while assessing the ratees. Such doubts and anxieties are: o Do I know the man sufficiently well to be able to give a fair assessment of him? o If I rate him the way I think I should what will be its influence on his relations with me and on his performance in the future? o If I rate him the way I think I should what will be its effect on my relations with the others subordinates? o If I rate him the way I think I should what will be its effect on his relationship within the group or subordinates? o Will I able to be objective in view of pressures from peers, subordinates and trade union? o If I rate him the way I think I should will be accused to being partial? o How will my boss view the appraisal I make and how will that influences the way he appraises the man? o What standards will my peers adopt to appreciate their subordinates? And in view of this am I likely to affect adversely the future of my subordinates?
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Naturally the rates use such expressions as satisfactory and average to describe the performance of the rates. For example the principal of a college while giving character certificates to the outgoing students describe the character of each student as satisfactory. Obviously its become difficult to distinguish between excellent performance and poor performance. In small organization it is common to label all employees as an average. But in large companies errors of this type tend to obviate the value of evaluations. Close to error of central tendency is the problem of range restriction. Range restriction may involve clustering all employees around any point on a scale, often in combination with leniency errors at very top. What is distinctive in the error of central tendency and the error of range restriction is a failure to note real performance differences, either intentionally or due to insufficient attention.
Halo Error -
the evaluation of the entire performance of the individual just as the assessment of the performance of a student in his or her examination being influence by the opening paragraph of every answer. If the introductory paragraph is poorly written the chances of scoring high marks in that answer are diminished however good the subsequent portion of the essay may be. In an organization a halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well as on motivation. Similarly an attractive or popular employee might be given a high overall rating. Rating employees separately can each of a number of performance and encouraging raters to guard against the halo effect are two ways to reduce halo effect.
Rater effect:
or low scores are given only to certain individual or groups based on the raters attitude towards the rate, not on actual outcomes or behavior. Sex, age, race and friendship biases are example of this type of error.
by behavior exhibited by the rate during the early stage of the review period or by outcomes or behavior exhibited by the rate near the end of the review period (recency). For example if
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a salesperson captures an important contract/ sales just before the completion of the appraisal the timing of the incident may inflate his or her standing even though the overall performance of the salesperson may not have been encouraging. Likewise a blunder committed just before the appraisal period may diminish chance of securing a favorable rating even if the performance is good. One way of guarding against such an error is to ask rater to consider the composite performance of the rate and not to be influenced by one incident or own achievement. The rater must also be aware of tendency on the part of the rates to improve odds in their favors or suppress weak points during the rating period.
Perceptual Set: -
previously held beliefs. If the supervisors for example have a belief that employee hailing from 1 particular region is intelligent and hard working his subsequent rating of an employee hailing from that region tends to be favorably high.
instrument follows or closely follow each other and both describe or rotate to a similar quality. The rater rates first dimension accurately and then rates the second dimension similar to the first because of their proximity. If the dimension had been arranged in a significant different order the rating might have been different.
Spillover effect:
unjustifiably influence current ratings. Past ratings, good or bad result for the period although the demonstrated behavior does not deserve the rating good or bad.
Status effect:
esteem, and underrating employees in lower-level-job or jobs held in low esteem. It is not the raters errors alone that are barriers to accurate and valid measurement of employee performance. Barriers lie deep within the genetic and acquired make-up of all people concerned with performance appraisal. A wide variety of emotional, psychological, intellectual and physical factors that at first glance may appear to be separate and irrelevant may combine in any numbers of ways during the appraisal process.
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But training can help improve the appraisal system to the extent of distortion that occurs due to the raters error such as halo, leniency, central tendency and bias. In a typical training, raters are shown a video-tape of jobs being performed and are asked to rate the workers. Ratings made by each participant are then placed on a flip chart and the various charts are explained. For e.g., a trainee is rated on all criteria (such as quantity and quality) about the same, the trainer might explain that halo error had occurred. If, on the other hand, a trainer rated all video-taped workers very high, this might be explained as a leniency error. Typically, the trainer gives the correct rating and then illustrates the rating errors made.
In effect, training of raters must help strengthen the factors that tend to improve accuracy of ratings and weaken those that lower the accuracy of the performance measurement.
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5. Rating scores by raters of one group or organization are summarized and compared with those by other raters. 6. The rater focuses attention on performance-related behaviors over which the rater has better control than in other aspects of evaluation. 7. Higher levels of management are held accountable for reviewing all ratings. 8. The raters own performance ratings are related to the quality of rating given and the performance of units. 9. Performance factors are properly defined.
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The six criteria for assessing performance are: 1. Quality: The degree to which the result or process of carrying out an activity approaches perfection in terms of either conforming to some ideal way of performing the activity, or fulfilling the activitys intended purpose. 2. Quantity: The amount produced, expressed in monetary terms, number of units, or number of completed activity cycles. 3. Timeliness: the degree to which an activity is completed or a result produced, at the earliest time desirable from the standpoints of both co-coordinating with the outputs of others and of maximizing the time available for other activities. 4. Cost Effectiveness: the degree to which the use of the organizations resources (e.g. human, monetary, technological and material) is maximized in the sense of getting the highest gain or reduction in loss from each unit or instance of use of a resource. 5. Need for supervision: the degree to which a job performer can carry out a job function without either having to request supervisory assistance or requiring supervisory intervention to prevent an adverse outcome. 6. Interpersonal impact: the degree to which as performer promotes feeling of self esteem goodwill and co-operation among co-workers and sub-ordinates.
These criteria relate to past performance and behavior of an employee. There is also the need for assessing, as was pointed out earlier, the potential of an employee for future performance, particularly when the employee is tipped for assuming greater responsibilities.
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7. When to evaluate?
How often should an employee be assessed? The general trend is to evaluate once in 3months, or six months, or once in a year. According to a survey conducted in 1997 by Arthur Anderson, 70 percent of the organizations conduct performance appraisal once a year. Newly hired employees are rated more frequently than the older ones. Frequent assessment is better than phased evaluation. Feedback in the latter is delayed and the advantage of timely remedial measures by the employee is lost. Frequent evaluation gives constant feedback to the rate, thus enabling him or her to improve performance if there is any deficiency. The performance of trainees and probationers should be evaluated at the end of respective programs.
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Sr. No
The following table gives us an idea about the Graphic Rating Scale Method
Description of Attributes Exceed the Meets expectation std. the Partially meets Needs the Improvement Not satisfactory
expectation std.
expectation std
Excellent
Average
Below Average
of rules
system, and
3 4
5 6
regularity
9 10
Drive and initiative for results Human Relation (relationship with superior and peer group)
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Management by Objective:
Management by objective (MBO) was introduced by Peter Drucker in 1954 which changed a managers role from being a judge to a helper. Management by objective is an approach where employees are evaluated by how well they accomplish their tasks and objectives which are important to be critical in the successful completion of their job. MBO is a process, which converts organizational objectives into individual objectives. It helps in goal setting, planning, self review and performance review. In goal setting, the organizational objectives are used as guidelines through which the individual objectives are set up. Goals are set up between the managers and the employees, which become the standards against which the employee's results will be evaluated. MBO is used in planning process ie making the action plan for carrying out the assigned goals. It includes identifying the proper activities necessary to accomplish the objectives. Self-control is another important step in MBO, where a systematic monitoring of performance is done by the individuals so that they get a clearer picture of their performance. It is crucial to have very precise and well defined objectives; this will eradicate scenarios whereby the appraisers have to appraise performance based on unclear objectives which in turn will affect motivation. The advantage of MBO lie in its result oriented emphasis. It assists the management for planning and control functions and is considered as a result oriented approach for performance appraisal ,because employees would know exactly what is expected of them and how they will be evaluated and how their evaluation will be based on their success in achieving their goal. MBO clearly defines an employee's goals and objectives to be achieved in the organization. Although management by objectives has many positive features, its limitations need to be understood. The primary issue that needs to be addressed by the organization is the high level of management commitment and time required to reorient the thinking of employees.
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What then is performance? Performance is essentially what an employee does or does not do. Employee performance common to most jobs include the following elements:
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In addition to these, other elements that deserve assessment are job knowledge, leadership abilities, judgment, supervision, versatility and health. Assessment should also include one's potential to perform and not just actual performance.
Performance measurement needs to be based on the benchmarks listed above. These benchmarks vary from job to job. The job of a professor needs to be assessed against parameters that are different to those used to evaluate the performance of a sales representative.
PERFORMANCE INTERVIEW
Performance interview is another step in the appraisal process. Once appraisal has been made of employees, the raters should discuss and review the performance with the rates, so that they will receive feedback about where they stand in the eyes of superior. Feedback is necessary to effect improvement in performance, especially when it is inadequate. Specifically, performance interview has three goals: 1. To change behavior of employees whose performance does not meet organizational requirements or their own personal goals. 2. To maintain the behavior of employees who perform in an acceptable manner and 3. To recognize superior performance behaviors so that they will be continued.
Raters offer feedback to the rates through several methods-tell and sell, tell and listen, problem solving and mixed. In tell and sell, also called directive interview, the interviewer let assesses know how well they are doing and sells them on the merits of setting specific goals for improvement, if needed. The tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicate the rater's perceptions about the rate's strength and weaknesses and let the subordinates respond to these perceptions. In the problem solving or participative interview, an active and open dialogue is established between the superior and the subordinate. Not only
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are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem solving interviews.
Whatever be the approach followed, the emphasis in the interview should be on counseling and development and not on criticism, witch-hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given in Table below will help make the interview successful.
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It may be recollected that the most significant rewards employers offer to employees are: 1. Money to purchase goods and services required not only for current and future survival, but also for the luxuries modern life has to offer. 2. The opportunity to use innate and learned skills and talents in a productive manner that the individual and his or her managers and co-workers recognize as valuable. 3. Opportunities to interact with other people in a favorable working environment. 4. Opportunities to learn, grow, and make full use of their potential. 5. A sense of performance and stability through the continuing existence of the organization and the job. 6. The opportunity to perform work assignments within an environment that not only protects. But promotes physiological, emotional and psychological health.
In one way or another, data and information outputs of a performance-appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information will be useful in the following areas of HRM: 1. Remuneration administration 2. Validation of selection programs 3. Employee training and development programs 4. Promotion, transfer and lay-off decisions 5. Grievance and discipline programs 6. HR planning
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Dedicated to Life...
A mission to create healthier communities Zydus Cadila is dedicated to life In all its dimensions. Our world is shaped by a passion for innovation, commitment to partners and concern for people in an effort to create healthier communities, globally. A vision that unleashes value To be a leading global healthcare provider with a robust product pipeline; Stepping beyond the billion, we shall achieve sales of over $3bn by 2015 and be a researchdriven pharmaceutical company by 2020.
Key Facts:
Zydus Cadila is a global healthcare provider and one of the top five pharma companies in India. The company was founded by Late Mr. Ramanbhai B. Patel in 1952 and went on to become the second largest pharma company in the early 1990s.
In 1995, the group restructured its operations and now operates as Cadila Healthcare Ltd., under the aegis of the Zydus group. The company spearheaded by Mr. Pankaj R. Patel, Chairman and Managing Director has posted revenues of Rs. 5200 crores in FY12. The group had posted a turnover of Rs. 4600 crores in FY 11, making it a billion dollar company.
The group was declared the 'Emerging Company of the Year' by the Economic Times Awards for Corporate Excellence 2010.
The group has proven expertise in manufacturing and marketing different dosage forms such as solid dosage forms, injectables, metered dose inhalers, dry powder inhalers, transdermal patches, suppositories and oncology formulations.
It has wide therapy coverage through three multi-therapy divisions and 16 specialty divisions. The divisions are spearheaded by some of the stalwarts in the field of pharma marketing.
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A dedicated field force of 4000 reaches out to super specialists, specialists, surgeons, physicians and the rural markets. The group has a strong presence in the cardiovascular, gastrointestinal, womens healthcare segments, respiratory, pain management, CNS, anti-infectives, oncology, neurosciences, dermatology and nephrology segments.
The group has several brands that feature amongst the top 300 pharmaceutical brands in India.
The group has a globally compliant manufacturing infrastructure comprising nine state-ofthe-art facilities which support product launches not just in India but also in the regulated markets of U.S., Europe and Latin America.
Four of the groups facilities including the formulation manufacturing plant at Moraiya, and API plants at Ankleshwar and Dabhasa near Vadodara are approved by the USFDA. More than 1000 professionals spearhead the groups research programme. Over 375 scientists are working on new molecular entity research at the Zydus Research Centre. The group has 12 INDs in various stages of clinical trials.
Zydus Cadila is a partner of choice for several global pharma majors such as Abbott, Boehringer Ingelheim, Bayer Pharma, Madaus AG, Nycomed, Hospira to name a few.
Zydus Wellness Ltd., which spearheads the group's presence in the consumer and wellness segment was recently listed amongst Asia's 200 Best Under a Billion companies by Forbes.
One of the most reputed pharma companies globally, Zydus Cadila aims to be a leading global healthcare provider with a robust product pipeline. Stepping beyond the billion, the group aspires to achieve sales of over $3bn by 2015 and be a research-driven pharmaceutical company by 2020.
Core Values
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They follow Three Performance Appraisal Systems in Zydus Cadila. 1. Graphic rating method or scaling: (from Trainees to below Officer)
This is one of the oldest and the most widely used methods of performance appraisal.
Technical
Non Technical
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Zydus Performance Appraisal form Performance Review of Training / Probation Period / Confirm
Name: Emp No.: Dept: Desig: Dt. of Joining: Due Date: This is to inform you that the above employee will be completing his/her Training /Probation period. You are therefore requested to fill up the following details and return the same to the HR Dept. latest by: ____________ to enable us to proceed further. I. Performance Factor : Sr. No Description of Attributes Exceed the expectation std. (Marks out of 10, please tick box) Meets the expectation std. (Marks out of 10, please tick box) 10 10 9 9 8 8 Partially meets the expectation std (Marks out of 10, please tick box) 7 7 6 6 5 5 Needs Improvement (Marks out of 10, please tick box) 4 4 3 3 Not satisfactory (Marks out of 10, please tick box) 2 2 1 1
1 2
Promptness and accurate on job. Knowledge of system, procedures, rules and regulations Ability to learn and Grasp Job knowledge and execution of task Amenable to change/ flexible Adherence to discipline (Punctuality, regularity in attendance) Concerned for morale values such as sincerity, honesty and integrity Potential to grow in present job. Drive and initiative for results Human Relation (relationship with superior and peer group)
3 4 5 6
10 10 10 10
9 9 9 9
8 8 8 8
7 7 7 7
6 6 6 6
5 5 5 5
4 4 4 4
3 3 3 3
2 2 2 2
1 1 1 1
10
8 9 10
10 10 10
9 9 9
8 8 8
7 7 7
6 6 6
5 5 5
4 4 4
3 3 3
2 2 2
1 1 1
11. Total marks obtained out of 100 12. Has he/she performed any outstanding work during the period? If so, please give details. __________________________________________________________________________________________ 13. Qualitative Remarks (if any) __________________________________________________________________________________________ Final Recommendation (Please tick the appropriate) $ Trainee to be regularized on probation. $ Training period to be extended for 3/6 months. $ Probationer to be confirmed. $ Probation period to be extended for 3/6 months.
--------------------- ------------------------- ------------------------ ---------------------------Signature of the Signature of the Signature of the Signature of HR Rep Immediate Superior Div/Department Head SBU/Corp chief
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Process:
The First Step: Employees have to feel the online Performance Management System form which includes quality related, project related and learning related factors and they have to rate themselves. The self rating form is based on KPA (Key Performance Areas) and KPI (Key Performance Indicators / Unit of measure) There is certainly a need for self-appraisal as it gives an opportunity to the appraised to document not only the achievements, but also the difficulties encountered while working. It also helps the appraiser understand the gap between the self-assessment of the appraised and the assessment by the appraiser. Further, it serves as a platform for professional counseling and as a feedback mechanism,
Self Input
2011
Period:
April To December
Emp Grp/Subgroup Appraiser
VT - VTC - Ahmedabad
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Work Contract
BUO-Vaccine
Status
KPA Key KPI - Key Performance Performance Weighting (In %) Indicator/ Unit of Measure Area
Remarks Appraiser
Total
Total
1.
Total
Total
30529 http://zydusconne E
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The Second Step: The appraiser will give his / her rating after self comment and in the additional column he will add up comments regarding overall evaluation based on employees performance. The module is set up in 3 columns. 1st Column is assigned maximum points, 2nd is the self rated points and 3rd column is for the appraiser which has to be the superior or Head of the department. Appraise cant see the ratings but can see the remarks by his head of department so he / she can improve his / her performance accordingly.
In third Step: Based on the above module HR will review by observational method. HR will bifurcate all the employees in 4 categories as per decided bell curve. (Like from each department 10% employees Outstanding, 40% employees Very good, 40% employees Good, and 10% employees Fair)
Sr. No.
1. 2. 3. 4.
Categories
Percentage (%)
In fourth step: HR will send this confidential data to BU Head for his / her Approval. After his / her approval In fifth step each unit send their data to corporate HR. Corporate HR will budgeting on all data (like How much current budget spending on the employee and after appraisal How much budget
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will required, What is the Profit and loose of the last year and what will be in future ) and In final step send it to CMD for Approval. After CMD approval accordingly the increment are given in the salaries, promotion and transfer of the employees at Zydus Cadila.
QUESTIONER FORMAT
PERFORMANCE APPRAISAL SYSTEM IN ZYDUS CADILA Name: _____________ Designation: _____________ Department:_____________
A. Performance appraisal process Q 1) Do think it is necessary to have a Performance appraisal process in the organization? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ Q 2) What are your views about the appraisal system in your organization? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
B. Impact of performance appraisal (Q 1) Please explain how this appraisal process would help you perform better. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (Q 2) How does the appraisal process motivate you to perform better? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
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ANALYSIS OF DATA
The analysis of data was done on the basis of the responses obtained through the interview process. The analysis is done by the respondent's views over the performance appraisal process present in the company. A total of 4 respondents agreed to participate in the research. The interview was designed, taking into consideration the research questions. The interview considered four main aspects, which are as followsA. Performance appraisal process B. Impact of performance appraisal
A. Performance appraisal process. The questions designed under this section were to understand the performance appraisal process in the organization. This would give the researcher, a clearer picture of the organizational PA process by presenting exact views of the interviewees.
Questions under this section: Q 1) Do think it is necessary to have a Performance Appraisal process in the organization? Q 2) What are your views about the appraisal system in your organization?
Responses :
Q 1) Do think it is necessary to have a Performance appraisal process in the organization? (Respondent no. 1) It leads to structured evaluation of employee performance and organization can reward employee based on employee work contribution. (Respondent No. 2) Yes. We have a Performance appraisal process once in a year where my
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manager shares the feedback on the goals defined to achieve by the end of given period. (Respondent no. 3) Yes, it is necessary to conduct a Performance appraisal process. It gives a clearer understanding of our objectives and functions and makes us more competent to achieve our goals and motivation for the same. (Respondent no. 4) Yes. I have gone through a Performance appraisal process about 10 times since 2002. I feel it an essential part of the organization. We, the employees, know our duties well in the organization, we know what is expected from us and our target goals are laid down for the coming period. Q 2) What are your views about the appraisal system in your organization? (Respondent No. 1) The Appraisal System in my organization is well-organized, both from the Performance Capturing viewpoint as well as from the Review and setting up the goals and expectations of an individual. (Respondent No. 2) Looking all the possible methods and theories in zydus self appraisal system is up to the mark It is necessary for an organization to hold training sessions before the appraisal systemfor both the appraiser and the appraise. (Respondent No. 3) Its quite not good compare to other organization. I think HR should follow 360 Degree appraisal system in our organization. (Respondent No. 4) It was my first Performance Appraisal. I am happy with Performance system of my organization I got healthy rewards and useful tips to perform better.
B. Impact of performance appraisal In this part, the questions were designed to see if the employees get motivated by their appraisal process or not. Another question was designed to check on what parameters performance appraisal is useful to perform well in the organization.
Q. 1. Please explain how this appraisal process would help you perform better. Q. 2. How does the appraisal process motivate you to perform better?
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Responses :
Q. 1. Please explain how this appraisal process would help you perform better. (Respondent 1) we can compare our performance with well define goal so accordingly we can planning for further. (Respondent 2) As this process tell me my improvement area along with my strong points, it becomes very easy for me to focus on my improvement area and keep doing the good job I am already doing. (Respondent 3) The Appraisal tells me where I stand in the organization from my performance point of view. It tells me what are my strengths and where I should concentrate more to improve myself. It talks about my improvement plan and also decides my goals and objectives for future. This provides me a roadmap for the future period and I exactly know what steps should be taken by me to excel my performance. (Respondent 4) I can identify my strong area and weak area of the work and what was my committed goal and what I achieve. What efforts I have to do for future endeavors.
Q. 2. How does the appraisal process motivate you to perform better? (Respondent 1) Yes the appraisal process motivates me as it explains me to perform better and improve in areas even though we are exceeding expectations. He brings competitive behavior and gives new targets to achieve every time. It shows me the career path to grow in the organization
(Respondent 2) This appraisal process gives rewards in form of increment and also recognition on Organization level. This motivates me to work towards my improvement area and keep doing the good work that I am already doing.
(Respondent 3) Yes, the Appraisal process definitely motivates me. It tells me where I
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stand and where I should be. It tells me what positives to take from me and what areas I should work upon to improve in those. It motivates me to either continue or enhance my rating by performing better and better for the next assignment/timeframe.
(Respondent 4) (Motivation factor 1. money and 2. job Satisfaction) if we get both things in appraisal we will defiantly give our 100% to the company.
CONCLUSION
Looking all the possible methods and theories zydus self appraisal system is up to the mark. There may be some scope of improvement in the future with change in technology and industry structure but its debatable. For example the peers review shall be considered as a part of appraisal. It is necessary for an organization to hold training sessions before the appraisal systemfor both the appraiser and appraise. Self-appraisal is an important step in making the employee feel involved in the process as appraise gives his perspective. Moreover, in the area of self-managed work, a good manager should be able to identify good potential employees from the quality of goals set and selfevaluated.
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Recommendations .
Organizations work when they have good work force under them. Organizations are developing on a large scale. The job profile and work definitions of employees are changing, therefore performance appraisal in this scenario has to reflect on the capabilities of the employees. Therefore, performance appraisal process has to be comprehensive in its approach. It should help in defining the goals of the company in a more cohesive manner which would be achievable by the employees and beneficial to the organizations and the employees. Performance appraisal gives a platform to compare the employees and would create healthy competition between them. Performance evaluation forms an integral part of an organization. When it is properly implemented in the organization then it would help an organization to obtain productive and competitive employees. The organization used in this research, should adopt 360 degree feedback process also in the appraisal process which would help in gaining 'allround' job evaluation. Therefore, the research was designed to explain how the performance appraisal system of a company could be used effectively and efficiently in the future.
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Bibliography:
Human Resource Management (Text and Cases-Fifth Edition) Author: K Aswathapa http://www,zyduscadila.com http://www.google.com http://www.scribe.com http://www.hrmguide.com
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