PROJECT REPORT

On
“Performance Appraisal of Employees”
At
VELMOLD PLASTIC Pvt. Ltd.

Submitted to
Maharshi Dayanand University Rohtak,
For
Partial Fulfillment of the award degree of

MASTERS OF BUSINESS ADMINISTRATION

(BATCH: 2022-2024)

Submitted to: Submitted by:

Controller of Examination Name: P r i y a P a n d e y
MDU, Rohtak Registration No: 2211051197
Under the Supervision of Roll No:
Ms. Manika Sukhija

INSTITUTE OF MANAGEMENT & TECHNOLOGY

[Approved By AICTE, and affiliated to M.D.U, ROHTAK]
Sector 86, Sai Dham, Marg, Greater Faridabad, Faridabad -121002
 DECLARATION

I Priya Pandey Registration No. 2211051197 Roll No.……….…. Class MBA IV SEM. of the

Institute of Management & Technology, Faridabad hereby declare that the Project Report

entitled, “Performance Appraisal of Employees” At (VELMOLD PLASTIC Pvt. Ltd) is an

original work and the same has not been submitted to any other institute for the award of any other

degree. A seminar presentation of Project Report was made on..........and the suggestions as

approved

by the faculty were duly incorporated.

Presentation Incharge Signature of the Candidate

Ms. Manika Sukhija Priya Pandey

Forwarded by:
Director/Principal of the Institute
 PREFACE

Project Report of our curriculum that gives us knowledge about practical work.

This also helped us to understand the practical aspects of the conceptual studies learnt

by us in the subject of human resource management. The Project Report presented

here is the part of the syllabus of the MBA degree provided by M.D. University,

Rohtak.

Each student pursuing this course is required to submit a particular Project Report on

the topic assigned to him in his course. The essential purpose of this project is to give

an exposure and detailed outlook to the student of the practical concept, which they

already studied research. For the purpose, I was assigned the project for the

“Performance Appraisal of Employees”.

Initially it felt as if classroom study was irrelevant and it is useless in any

concern's working. But gradually it was realized that all the basic fundamental

concepts studies are in one or the other way to the organization but how and what can

be done with fundamentals depends upon the intellect and capability of the individual.

It is just a matter to modify the theory so as to apply it to a given practical

solution.

I sincerely believe that there is no better place than the organization itself to learn

the practical side of the management.

[Priya Pandey]

Institute of Management & Technology

 ACKNOWLEDGEMENT

First of all I express my profound sense of gratitude and sincere thanks to the management of

Velmold Plastic Pvt. Ltd. For offering me this project and training in this organization.

I would like to take this opportunity to thant the Prof (Dr.) Ravi Handa for conscientious guidance

and encouragement to accomplish this assignment.

I gratefully acknowledge to Dr. Meenu Dhembla who has given me the opportunity to learn at deep

level to prepare the report and supported me throughout this project with utmost cooperation and

patience.

I would like to take this opportunity to express my sincere thanks to Manika Sukhija for providing

me helpful environment in complexity this project and for giving me fine opportunity to do this

prject in the esteemed organization.

Further I would also like to thank everyone in Institute of Management & Technology with whom

I have in contact during the preparation of this dissertation and for providing me with this

great opportunity to work on this report and choosing my own topic of interest. I also extend

my sincere thanks to all faculty members for their cooperation and guidance.

Lastly, I express our sincere thanks and deep sense of gratitude to my family members and friends

for giving timely advice in all the ways and in all aspects for doing the Project.

Place: Faridabad Student Name : Priya Pandey

Date: Roll No:

 Table of Contents

Serial No. Topics Page No.

1. Chapter-1 : Introduction 1-33
A. Introduction of topic
B. Significance of the study
C. Review of existing Literature
D. Conceptualization
E. Focus of the study
F. Scope of the study
G. Objective of the study
H. Limitation of the study
I. Chapterization

2. Chapter-2 : Research Methodology 34-41

A. Research Methodology
B. Industry Profile
C. Company Profile
D. Research design
E. Sample size and techniques
F. Data Collection (Primary & secondary)
G. Analysis of the study
H. Identified independent and dependent variable

3. Chapter-3: Micro Analysis 42-52

4. Chapter-4 : Macro Analysis 53-55
5. Chapter-5 : Summary of Observations 56-58
A. Findings of the study
B. Recommendations & Suggestions
C. Conclusion
7. Chapter-6 : Appendices 59-62
A. Questionnaire
B. List of tables
C. List of graphs
 EXECUTIVE SUMMARY

Today, in every organization personnel planning as an activity is necessary. It is an

important part of an organization. Human Resource Planning is a viral ingredient for the
success of the organization in the long run. There are certain ways that are to be followed
by every organization, which ensures that it has right number and kind of people, at the
right place and right time so that organization can achieve its planned objectives.

The objectives of Human Resource Department are Human Resource Planning,

Recruitment and Selection, Training and Development, Career planning, Transfer and
Promotion, Risk Management, Performance Appraisal and so on. Each Objective needs
special attention and proper planning and implementation.

For every organization it is important to have a right person on a right job.

Recruitment and Selection plays a vital role in this situation. Shortage of skills and the use
of new technology are putting considerable pressure on how employers go about Recruiting
and Selecting Staff. It is recommended to carry out a strategic analysis of recruitment and
Selection procedure. Also training need identification is necessary after selection Process.

A formal definition states, “it is the process of finding and attracting capable applicants for
the employment. The process begins when new recruits are sought and ends when their
applicants are selected”.

The need for recruitment may be due to following reasons/situation:

1. Vacancies due to promotions, transfer, retirement, termination, permanent disability,
death and labour turnover.
2. Creation of new vacancies due to the growth, expansion and diversification of business
activities of an enterprise. In addition, new vacancies are possible due to job specification.
Selection is basically picking an applicant from (a pool of candidates) who has the
appropriate qualification and competency to do the job.

The difference between recruitment and selection:-

 Recruitment is identifying and encouraging prospective employees to apply for a job.

 Selection is selecting the right candidate fro the pool of applicants.

1
2
 CHAPTER-1
INTRODUCTION

3
 INTRODUCTION

Recruitment is the process of attracting individuals on a timely basis in

sufficient numbers and within appropriate qualification, to apply for jobs
within an organization. The process of searching prospective employees with
multi-dimensional skills and experience that suits organization strategies in
fundamental to the growth of the organization. This demands more
comprehensive strategic perspective recruitment.

Organizations require the services of large number of personnel, these

personnel occupies the various positions created to the process of
organization. Each position of the organization has certain specific
contributions to achieve the organizational objectives.

The recruitment process of the organization has to be strong enough to attract

and select the potential candidates with right job specification. The
recruitment process begins with human resource planning and concludes with
the selection of required number of candidates, both HR Staff and operating
managers have responsibilities in the process. “Right person for the right job
is the basic principle in recruitment and selection.

Every organization should give attention to the selection of its manpower,

especially their managers. The operative manpower is equally important and
essential for the orderly working of an enterprise. Every business
organization/unit needs manpower for carrying different business activities
smoothly and efficiently and for this recruitment and selection of suitable
candidate is essential. Human resource management in an organization will
not be possible if unsuitable persons are selected and employment in a
business unit, choose each other.

4
 INTRODUCTION OF PERFORMANCE APPRAISAL

INTRODUCTION
People differ in their ability and aptitudes. These differences are natural to a great extent and cannot
be eliminated even by giving the same basic education and training to them. There willbe some
differences in the quality and quantity of work done by different employees even on the same job.

Therefore, it is necessary for management to know these differences so that the employees having
better abilities may be rewarded and the wrong placements of employee maybe rectified through
transfers.

The individual employee may also like to know the level of his performance in comparison to his
fellow employees so that he may improve upon it. Thus there is great need to have suitable
performance appraisal system to measure the relative merit of each employee.

MEANING OF PERFORMANCE APPRAISAL

Management Performance appraisal is a method of evaluating the evaluating the behaviour

of employees Performance appraisal or merit rating is one of the oldest and most universal practices
of in the work spot, Normally including both the quantitative and qualitative aspects of job
performance. Performance appraisal can be an effective instrument for helping people grow and
develop in organizational setting. Through a well organized appraisal system. An employee can
create learning spaces for himself in an organization.

Effectively practiced and development oriented performance appraisal & Review system,
substantially contribute to the organization health. Organization cannot do away with Performance
Appraisal. Some form of assessment of performance on a continuing basis is essential for survival
as well as growth of an organization. If and develop yardsticks to measureit, if you want to
improve performance. The performer has to be able to understand it.

Performance appraisal is a systematic appraisal of the employee’s personality traits and

performance on the job and is designed to determine his contribution and relative worth to the firm.

5
 A formal definition of performance appraisal is that, it is the systematic evolution of the individual
with respect to his or her performance on the job and his or her potential for development.

“Performance appraisal is a formal structured system of measuring and evaluating an

employee’s job, related behaviors and out comes to discover how and why the employee is
presently performing on the job an how the employee can perform effectively in the future
so that the employee, organization and society all benefit.”

Under performance appraisal, we evaluate not only the performance of a worker but also his
potential for development.
DEFINITION:

According to EDWIN FLIPPO, “Recruitment is the process of searching for prospective

employees and stimulating them to apply for jobs in the organization.

PROCESSES:

You will need to review the effectiveness of your procedures for:

 Setting performance targets

 Designing measures of performance relevant to the targets
 Systematically and accurately measuring outcomes
 Assessing the performance of external service providers
 Using results for informed decision-making
 Improving performance.

Research shows that most organizations have the components of performance management in place,
but they are not always used to overall advantage. A possible five-step approach that could help
organizations in improving the performance management of the IS/IT contribution is outlined below,
with suggested techniques.

ADVANTAGES OF PERFORMANCE APPRAISAL:

It is said that performance appraisal is an investment for the company which can be justified by
following advantages:

6
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programs for efficient employees. In this regards, inefficient workers can be dismissed
ordemoted in case.

2. Compensation: Performance Appraisal helps in chalking out compensation packages for

employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programs. It helps to analyses strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programs.

4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity
and importance of the selection procedure. The supervisors come to know the validity and
thereby the strengths and weaknesses of selection procedure. Future changes in selection
methods can be made in this regard.

5. Communication: For an organization, effective communication between employees and

employers is very important. Through performance appraisal, communication can be sought
for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in superiors.
c. It also helps in maintaining cordial and congenial labour management relationship.
d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance

of employees, a person’s efficiency can be determined if the targets are achieved. This very
well motivates a person for better job and helps him to improve his performance in the future.

7
STEPS OF PERFORMANCE APPRAISAL:

Step1: Identify Your Level Of Maturity In Performance Management

 Look at how the organization is performing in all its aspects of performance management - from
direction setting through to review and measurable improvement.
 Do an assessment; this will help to identify your organization’s maturity and the strengths and
weaknesses.
 Establish where you are now as a series of baselines, looking at performance management at
strategic program, tactical and operational levels.
 Bottom-up measures of economy and efficiency are likely to be reasonably strong and have good
management. This may not be so well developed for effectiveness measures
 Innovation, process improvement, customer satisfaction, and contribution to policy objectives.
Most organizations have a good understanding of financial measure; this level of understanding
needs to be developed for other measures.
 Techniques: Assessment; baseline

Step2: Identify Where Performance Management Is Important To Your Organisation

 Is it in setting direction or ensuring the delivery of required benefits or improving the alignment,
performance and contribution of the internal and external resources used by the organization?
 Identify the values for your organization.
 Key values for safety critical operational services are speed and integrity of information. A
different organization might place high value on information flows or on single points of access to
information at a contact/call center.
 Techniques: Value chain analysis; benchmarking with other organizations (which may identify
things you had not thought of)

Step 3: Resolve Any Mismatch Between Step 1 And 2

 Review performance management at each of the four levels - (organization, strategic, program
and tactical). Are there weaknesses in areas that are important to your organization?

8
 Techniques: to become more outward looking and customer-focused, use the well-established
balanced scorecard and EFQM techniques.

 To answer questions about where IT makes a contribution, use Goals, Questions and Metrics
(GQM) to identify and define measures.

Step4: Establish Where You Want To Be And Begin To Build Performance Management
Into Business Processes And Into The Culture

 The aim is to have target, measurement and review processes for those things that the
business considers important such as product, process, service and staff.
 You will have lots of measures which need to be prioritized against your particular
perspective on effectiveness, efficiency and economy and against your values.
 establish benefits management as a norm
 Use databases to collect Techniques performance information and analyze trends
 Include performance management in the business, programme and REPORT lifecycle

Step 5: Feed Information Back Into Performance Improvement

Monitor and take action on:

 We achieve what we set out to do?

 Where are the opportunities to improve?
 What can we do to improve? You are seeking answers to:
 What is achievable?
 What is important for our organization?
 What was achieved?
 Techniques: Process assessment; your own targets, looking at benchmarks from the outside
world.

9
OBJECTIVES OF PERFORMANCE APPRAISAL

A good performance appraisal has following objectives:-

 Generate adequate feedback and guidelines from the reporting officers to the employee.
 Contribution to the growth and development of the employee thru helping in realistic goal
setting.
 Help identifying employees for the porpoise of motivating, training and developing them.
 Generate significant relevant, free and valid information about employees thus good
performance appraisal and review system should primarily focus on employee development.

10
 SIGNIFICANCE OF THE STUDY

Employees are the most significant resource of any business, and performance appraisals reflect the
organization’s commitment in developing this important resource of human capital. Performance
appraisals grant upper management an opportunity to reward excellent performance or reprimand
unsatisfactory performance. This powerful managerial tool should directly reflect the overall
organization’s goals and objectives; the employee assessment should provide useful feedback about
the employee’s contributions or lack of contributions toward these goals.

 The staff performance management system provides a mechanism to monitor.

 Evaluate staff performance.
 Performance objectives are set at the beginning of the performance management cycle.
 Open discussion between the supervisors and the appraises.
 Progress is monitored regularly and feedback from staff and supervisors is collated to help clarify
objectives and output expectation.
 To provide an opportunity to each employee for self-reflection and individual goal-setting, so that
individually planned and monitored development takes place.
 To help employees internalize the culture, norms and values of the organization, thus developing
an identity and commitment throughout the organization.
 To help prepare employees for higher responsibilities in the future by continuously reinforcing
the development of the behavior and qualities required for higher-level positions in the
organization.
 Meet the organization’s legal & social obligations regarding the compensation of its work force.
 Increase organizational & individual effectiveness in long term & short term.
 To create and maintain a satisfactory level of performance.
 To provide information making decision for rewardingly of retrenchment etc.
 To guide the job changes with the help to continuous ranking.
 To contribute to the employee growth and development through training, self and
management development program.

11
 REVIEW OF EXISTING LITERATURE

This chapter will review the literature relevant to the research objectives. It builds a theoretical
foundation upon which the research will be based. It commences with an examination of what
performance will, and why it will measured. The chapter then considers how performance appraisal
fits into the parent discipline of performance management. A literature review covering appraisal
systems and their application follows, and this includes reference to the system in place at Passenger
Focus. The above secondary data will then lead to the building of the conceptual model that will be
tested through the research.

PERFORMANCE APPRAISAL:
Performance appraisal has been one of the most debated management practices for several decades.
It has generated a wide variety of viewpoints. A more comprehensive definition of Performance
Appraisal is –

“Performance Appraisal is a formal structured system of measuring and evaluating employees job
related behaviors and outcomes to discover how and why the employee is presently performing on
a job and how the employee can perform more effectively in the future so that the employee,
organization and society all benefit”

 Performance Appraisal consists of a systematic, face-to-face discussion of an employee’s work

performance, training and development needs, future job goals and job aspirations. It looks
backwards, reviewing the employee’s performance during the period under review and forwards,
helping the employee prepare and set goals for the upcoming review period.

 Performance Management is central to most Human Resource practices. An organization tries to

increase productivity and performance there is an increased emphasis on appraisals. Over recent
years there has also been a significant increase in the number of organizations linking
Performance Appraisal of employees and managers with business plans and departmental goals.

 Managers evaluate things everyday. This may be done unconsciously. Managers also evaluate
employees often also unconsciously. They know whether they are “good worker”, reliable and
conscientious. For a variety of reasons many organizations ask managers to make conscious
formal evaluations of employees too. It may be as part of the organization's normal annual or

12
 biannual Performance Appraisal System, which gives everyone a chance to clarify aims and
objectives, build on strengths and plan to strengthen weakness.

 In addition to these, there has been a trend through development in ‘employment law’ for
Performance Appraisal to be viewed as important documentation for legal protection. This reason
alone is sufficient to emphasize the importance of valid and equitable appraisal management.

 Performance appraisal leads to the identification of the training and development needs of the
employees. It also has close links with other important areas of human resource management,
in particular with selection, motivation, and succession planning. Performance data provides
relevant information required for validating selection methods and also helps in assessing whether
selection methods are bringing high performers into the organization.

 Here the organization must not get trapped into the various pitfalls that come along with
administration of appraisal system. The question that arises here is - how to avoid these pitfalls?
A necessary condition for the effective management of performance appraisal system in any
organization is the need to clarify and communicate to all concerned the objectives that the system
intends to achieve.

 The culture of the organization clearly affects appraisal relationships. The only possible way for
organizations, to minimize the possible conflict among appraisal objectives, is to emphasize on
climate setting that will facilitate achieving the objectives that an appraisal system intends to
achieve.

 Thus what needs to be done is to encourage managerial styles that will lead to openness and
frankness in relationships as a condition for establishing an effective performance appraisal
system. The Indian companies need to realize that the relationship between organization culture
and performance appraisal system is a two way process implying that they can successfully use
their performance appraisal system to bring about cultural change.

 The design of Employee Performance Appraisal and Development Plan thus formed would assist
in evaluating employee performance and identifying their potential and guide in

developing a plan to improve his/her performance as also to prepare him/her for greater
responsibilities in case of promotions and transfers. It should be filled carefully, thoughtfully and
objectively. Before an appraisal is made, the superior should ensure that he/she and the

13
 employee are in agreement concerning responsibilities, for result expected and what constitutes
satisfactory performance. The whole approach is a positive one; its purpose is improvement of
individual’s ability and performance.

 The next fundamental question of importance is, to what extent, links should exist between
performance appraisal pay decisions. The general trend with regard to the Indian organizations
suggests a tilt towards performance appraisal systems being linked to individual rewards and pay.
The advocates of this trend argue that when performance appraisal system is linked to individual
pay and rewards then all parties (appraisers, appraises and reviewers) take performance appraisal
more seriously. Organizations are likely to develop performance – oriented cultures, in which
high performers are seen to receive extra rewards, and lower performers receive lower rewards.

But at the same time the issues that need to be looked into when pay and performance appraisal
are closely linked are:

 The pay issue may overshadow all the other purposes of performance appraisal; there may be
a tendency of employees to withhold negative information about performance, leading to less
than frank appraisal discussions;

 Employees may adapt their behaviors to focus only on receiving good ratings, rather than
genuinely improve their overall performance.

So the question arises what to do?

1. Firstly the organization must realize that pay related performance appraisal is likely to be
effective only where jobs are designed in such a way that allows individual performance to be
measured. Thus in situation characterized by high interaction among jobs in achieving results,
group-related pay systems may be more appropriate. Thus before establishing company policies
on the matter, it may be good idea to read about alternative methods for rewarding good
performance like gain sharing or tying rewards to team performance or the company performance
rather than only to individual performance.

2. Sometimes a combination of reward systems works much better and has fewer nasty side effects
than a single way of rewarding performance. The design of Employee Performance Management
and Development Plan thus formed would assist in evaluating employee

14
 performance and identifying their potential and guide in developing a plan to improve his/her
performance as also to prepare him/her for greater responsibilities in case of promotions and
transfers. It should be filled carefully, thoughtfully and objectively. Before an appraisal is made,
the superior should ensure that he/she and the employee are in agreement concerning
responsibilities, for result expected and what constitutes satisfactory performance. The whole
approach is a positive one its purpose is improvement of individual’s ability and performance.

Why It Is Important?

The Modernizing Government agenda sets challenging new performance objectives for
organizations, from the delivery of high quality services that meet the needs of their customers and
stakeholders, to doing more within the constraints of available resources, through to continuous
improvement in how the organization itself operates. Performance management underpins the
operations and processes within a strategic change program framework. Sound practices and targets,
which are both flexible and reactive to change, are needed to achieve performance improvement.

The effective performance of your organization depends on the contributions of activities at all levels
- from top management policy development through to efficiently run operations.

In response to the pressures and opportunities for improving organizational performance, you need
to understand how to define and measure performance as part of a concerted strategy for relevant,
successful and cost-effective operations.

Critical Factors For Success:

 Focusing on outcomes that meet business objectives, rather than outputs

 Managing performance by cascading down from the top and building bottom-up
 Defining and using measures that evolve over time
 Using a mix of short and long term measures, and selecting measures that link cause and effect
 Measuring effectiveness (doing the right things) and efficiency (doing things right) in parallel

 Relating individuals' reward and remuneration with achievement of outcomes.

15
Who Is Involved?

Business managers are responsible for setting targets and managing performance against those
targets; contract managers monitor service performance from the customer viewpoint; service
providers supply performance information.

PRINCIPLES:

Performance management should be an integrated part of a business lifecycle helping an

organization to mature through evolving and changing performance measures, from their
definition through to monitoring and review in addition, by including the IS/IT component
throughout this lifecycle, rather than just considering it as a 'downstream' cost of provision, there
should be enhanced benefits from an increased and more effective contribution from any
investment made in IS/IT.

You will need to ensure that you have adopted sound practices in commissioning and acquiring IS/IT
services to achieve performance improvement. Performance management identifies opportunities for
maximizing improvements in managing service delivery in the future. Performance management
helps you to make decisions about investment routes, affordability and setting investment
priorities in the face of competing demands for resources.

Managing For Results:

Managing for results requires the organization to focus on the outputs of the processes and activities
undertaken by the organization at varying levels. Together these outputs will contribute to the
achievement of the outcomes desired by the organization and those of the government as a whole.

16
PURPOSE OF PERFORMANCE APPRAISAL:

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

 To reduce the grievances of the employees
 To judge the gap between the actual and the desired performance.
 To help the management in exercising organizational control.
 To diagnose the training and development needs of the future.
 Provide information to assist in the HR decisions like promotions, transfers etc.
 Provide clarity of the expectations and responsibilities of the functions to be performed by the
employees.
 To judge the effectiveness of the other human resource functions of the organization such as
recruitment, selection, training and development.
 Helps to strengthen the relationship and communication between superior – subordinates and
management – employees.
 To facilitate for testing and validating selection tests, interview techniques through compeering
there scores with performance appraisal ranks.
 To facilitate fair and equitable compensation based on performance.
 To help the superiors to have proper understanding about there subordinates.

LEVELS OF PERFORMANCE MANAGEMENT:

1. The effective performance of your organization depends on the contribution of activities at all levels
- from top management policy development through to efficiently run operations. There are three
or four levels of performance management in the model framework below, some organizations
may combine the strategic level with the organization’s priorities level.

2. Organization’s priorities: at the highest level performance management is rooted in the

organization’s long term business strategy. Measures at this level are of impact, resource
utilization and public service improvement.

3. Strategic level performance management: at this level the management concern is from an
"outside in" as well as an internal perspective. Measures are of outcome, such as volume and
value of service take-up, upward trends for inclusion, staff and users' satisfaction.

17
4. Program level performance management: performance management at this level focused on
the desired results of programs of change, to demonstrate what has been accomplished. The
measures used would include those stated in individual business cases. Benefits management
would help to determine if these are achieved.

5. Tactical or operational service level performance management : here the management focus
is concerned with service delivery and outputs, using conventional service level agreement
approaches and related measures of aspects such as volumes and quality.

Although performance measures and indicators may be different at each level, they will need to be.

 Directional - to confirm that you are on track to reach the goals.

 Quantitative - to show what has been achieved and how much more is to be done.
 Worthwhile - adding more value to the business than they cost to collect and use.

WHAT SHOULD BE RATED:

The seven criteria for assessing performance are:

1. Quality: the degree to which the process or result of carrying out an activity approach
perfection.

2. Quantity: the amount produce expressed in monetary terms number of units, or number of
completed activity cycles.

3. Timeliness: the degree to which an activity or an result produced.

4. Cost effectiveness: the degree to which the use of the organizations resources (e.g. human,
monetary, technological, material) is maximized in the séance of waiting the highest gain.

5. Need for supervision: the degree to which a job performer can carry out job function
without supervisory assistance.

6. Interpersonal impact: the degree to which performer promotes feeling of self – esteem,
goodwill and cooperation among co- workers and sub- ordinates.

7. Training: need for training of improving his skills knowledge.

18
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL:

Broadly all the approaches to appraisal can be classified into:-

 Past-oriented:
 Rating scales
 Checklist
 Forced choice method
 Forced distribution
 Critical incident method
 Behaviorally anchored’ scales
 Field review method
 Annual confidential report
 Essay method
 Cost accounting approaches
 Comparative evolution approach
 Ranking method
 Paired – comparison method

 Future – oriented:
 Management by objectives
 Psychological appraisals
 Assessment center

PAST -ORIENTED METHODS:

 Rating scales:
This is the simplest and the most popular technique for employee performance. The typical
rating – scales system consists of several numerical scales, each representing job related
performance criterion such as dependability, initiative output, attendance, attitude, co- operation
and the like. Each scales ranges from excellent to poor. The rater checks the appropriate
performance level on each criterion, and then computes the employees total numerical scores.

19
 Checklist:
In this method, the raters don’t evolutes employee performance, he supplies reports about it and
the personal department does the final rating a series of question are presented concerning and
employee to his behavior. The rater, then, to indicate if the answer to a question about an
employee in positive or negative. Generally, the questions are on yes/no pattern.

 Forced choice method:

In this the rater is given a series of statements about employee. These statements are arranged
in block of two or more, and the rater indicates which statements is most or least disruptive of
the employee.

 Forced Distribution Method:

This method seeks to overcome the problem by compelling the rater to distribute the rates on all
points on the rating scale. The method operates under an assumption that the employee
performance level conforms to a normal statistical distribution. Generally, it is assumed that
employee performance levels conform to a bell-shaped curve.

 Critical incident method:

The, approaches focus on certain critical behaviors of an employee that makes all the difference
between effective and non effective performance of a job. Such incidents are recorded by the
superiors as and when they occur.

 Behaviorally Anchored Rating Scales:

Sometimes this is called behavioral expectation scales, are rating scales whose scale point are
determined by statements of effective and ineffective behaviors. A rater must indicates which
behavior on each scale best describes an employee’s performance.

 Field review method:

This is an appraisal by someone outside the assesses on department usually someone from the
corporate office or H.R department. The outsider review employee records and holds interviews
with the rate and his or her superior. The method is primarily used for make promotional decision
at the managerial level.

20
 Performance Tests & Observations:
With a limited number of jobs, employee assessment may be based upon a test of knowledgeor
skills. The test may be of the paper-and-pencil variety or an actual demonstration of skills. The
test may be reliable & validated to be useful.

 Annual confidential report method:

In this method each employee is rated confidentially by one or more senior officers for his
performance. The report deals with the years work and general opinion of the rater towards the
employee. The main problem with his method is that it is not data based and the appraisal is
done the bases of impression.

 Essay method:
In the essay method, the rater must describe the employee with in a number of broad
categories such as-
a) The rater’s overall impression of the employee’s performance
b) The promotability of the employee
c) The jobs that the employee is now able or qualified to perform
d) The strength and weaknesses of the employee and the training and the development assistant
required the employee.

 Cost Accounting Method:

A relationship is established between the cost included in keeping the employee & the benefit
of the organization derives from him or her. Performance of the employee is then evaluated
based on the established relationship between the cost & the benefit.

 Comparative Evolution Approaches:

These are a collection of a different methods that compare one worker’s performance with
that his / her co-workers. Supervisors usually conduct comparative appraisals. As these

appraisals can results in a ranking from best to worst they are useful on deciding merits-pay
increases promotions and organizational rewards. We can classify it into:-

a) Ranking method:
b) In this, the superior his or her subordinates in the order of there merits starting from the best
to the worst,. This method is subject to the hallo and Recency effects, although ranking by

21
 two or more raters can be averaged to help reduce biases. It advantages include ease of
administration and explanation.
c) Paired – Comparison method :-
Under this method the appraiser compares each employee with every other employee, one at a
time. The number of comparisons may be calculated with the help of formula, which reads thus-:
N (N- 1)/2.

FUTURE - ORIENTED METHODS:

It is not enough if only the past performance is assessed. How an employee can perform in the days
to come is equally important. This can be assessed by focusing on employee potential or setting
future performance goals. The commonly used future oriented techniques are MBO, psychological
appraisals, assessment centers.

1. Management by Objectives (MBO):

The MBO concept, as was conceived by Peter Drucker, reflects a management philosophy, which
values and utilizes employee contributions. Application of MBO in the field of performance
appraisal is a recent thinking. The following are the four steps in which MBO works:

i) The first step is to establish the goals each subordinate is to attain.

ii) The second step involves setting the performance standard for the subordinates in a previously
arranged time period.

iii) In the third step, the actual level of goal attainment is compared with the goals agreed upon.

iv) The final step involves establishing new goals and possibly new strategies for goals not
previously attained.

v) The process is then repeated.

MBO is criticized on the following grounds

i) It is not applicable to all jobs in all organizations.

ii) It is most useful with managerial personnel and employees who have a fairly wide range of
flexibility and self control in their jobs.

iii) Employees may be less likely to establish challenging goals.

22
2. Psychological Appraisals:

When psychologists are used for evaluations, they assess an individual’s future potential and not the
past performance. The appraisal normally consists of in-depth interviews, psychological tests,
discussions with supervisors and a review of other evaluations.

The psychologist then writes an evaluation of the employee’s intellectual, emotional, motivational
and other related characteristics that suggest individual potential and may predict future
performance. The evaluation by the psychologist may be for a specific job opening for which the
person is being considered, or it may be a global assessment of his / her future potential.

This method has the following problems associated with its application:

i) It is slow and costly.

ii) Employees may object.

3. Assessment Centers:

An assessment centre is a central location where mangers may come together to have their
participation in job related exercises evaluated by trained observers. The principal idea is to evaluate
managers over a period of time by observing their behavior across a series of select exercises or
work samples.

The characteristics assessed in a typical assessment centre includes assertiveness, persuasive ability,
communicating ability, planning and organizational ability, self confidence, resistance to stress,
energy level, decision making, sensitivity to the feelings of others, administrative ability, creativity
and mental alertness. A well-conducted assessment centre can and does achieve better forecasts of
future performance and progress than other methods of appraisal. Also, reliability, content validity,
and predictive validity are said to be high in the assessment centers.

The problem with assessment centers is that they are not cost effective in nature and are thus,
suitable mainly for the large organizations.

23
360 DEGREE PERFORMANCE APPRAISAL:

Typical appraisers are: supervisors, peers, subordinates employees themselves users of service and
consultants. Performance appraisal by all these parties is called” 360 DEGREE PERFORMANCE
APPRAISAL”. The systematic collection and feedback of performance data on an individual or
group, derived from a number of the stakeholders in their performance.”

To Explain:

The data collection is systematic, i.e. done in some systematic way via questionnaires or interviews.
This formalizes people judgments coming from the natural interactions they have with each other.
There is both a collection and a feedback process data is gathered and then fed back to the
individual participant in a clear way designed to promote understanding, acceptance and ultimately
changed behavior. The performance of either individual or group can be measured. The process
has recently been applied to groups or teams but can be an effective way of measuring interactions
with in a team or team outputs and quality as perceived by the customer. The source of data is
called the stakeholders in the participant's performance. Stakeholders are people who are both
affected by the individuals or group's performance and deal with them closely enough to be able to
answer the specific questions about the way they interact with the stakeholders.

1. Supervisors: Supervisors include superiors of the employee other superiors having knowledge
about the work of the employee and department head or manager. General practice is that immediate
superiors appraise the performance, hitch in turn reviewed by the departmental head /manager.

2. Peers:-Peer appraisal may be reliable if the work group is stable over a reasonably long period
of time and perform tasks that require integration.

3. Subordinates:-The concept of having superiors rated by subordinates is being used in most

organizations today especially in developed countries. Such a novel method can be useful in
other organizational settings too provided the relationship between superiors and subordinates
are coordinal.

24
4. Self-Appraisal:- In individuals understand the objective they are expected to achieve and the
standard by which they are to be evaluated, they are to a great extend in the best position to appraise
their own performance.

5. Users of Service Customers:- Employee performance in service organization relating

tobehaviors, promptness, speed in doing the job and accuracy, can be better judged by the
customers or users of services.

6. Consultants:- Sometimes consultants may be engaged for appraisal when employees or

employers not trust supervisor and management does not trust the self-appraisal a peer appraisalor
subordinate appraisal.

A Final Observation:

The word 'performances twice in the definition. However, we should be quite clear on the fact
that it refers to the quality of a person's interactive processes or their behavior, rather than the results
they produce.

The 360 – degree appraisal, a relatively new model for reviewing employees’ performance,
incorporates appraisals from supervisors, co-workers, subordinates and even external customers.
360- degree performance appraisal strengthens the relationship between employee and employer.
The advantage of 360-degree systems over traditional systems is that they accumulate more
information about employees’ performance and development areas; this information is used to give
the most beneficial feedback possible. Increased feedback and multi-source feedback results in a
change in management behavior and in an increase in performance. Theoretically, anonymous
feedback is more open and honest then one – on – one feedback. The assumption isthat honest
feedback changes management behavior faster than restricted feedback.

It is also assumed that employees (and customers) that are listened to and involved will produce
more and have higher satisfaction and retention. A basic assumption is that employees have
knowledge of management behaviors that can be provided to management. A further assumptionis
that the “anonymity” provided in 360 process is credible and results in honest feedback. The 360-
degree technique is an appraisal technique that provides a broader perspective about an employee’s
performance. In addition, the technique facilitates greater self-development of the employees. For
one’s development, multi-source feedback is highly useful. It enables an employee to compare
his/her perceptions about self with perception of others. It is a systematic collection of performance
data on an individual or group; derived from a number of stakeholders

25
– superiors, team members, customers, peers and self. By design, the 360-degree appraisal is
effective in identifying and measuring interpersonal skills, customer satisfaction, and team building
skills. This method has recently gained a lot of importance and is used in combination with other
methods of appraisal for achieving the desired outcome of performance appraisal.

TRADITIONAL METHODS OF PERFORMANCE APPRAISAL:

Craig, Beatty and Baird (1986) suggested an eight-stage performance appraisal process:

(i) Establishing standards and measures: The first step is to identify and establish measures which
would differentiate between successful and unsuccessful performances. These measures should be
under the control of the employees being appraised. The methods for assessing performance should
be decided next. Basically, management wants to:

 know the behaviour and personal characteristics of each employee; and

 assess their performance and achievement in the job.
There are various methods available for assessing results, behaviour and personal characteristics
of an employee. These methods can be used according to the particular circumstances and
requirements.

(ii) Communicating job expectations: The second step in the appraisal process is communicating
to employees the measures and standards which will be used in the appraisal process. Such
communication should clarify expectations and create a feeling of involvement.

(iii) Planning: In this stage, the manager plans for the realization of performance expectations,
arranging for the resources to be available which are required for attaining the goals set. This is
an enabling role.

(iv) Monitoring performance: Performance appraisal is a continuous process, involving ongoing

feedback. Even though performance is appraised annually, it has to be managed 'each day, all year
long.' Monitoring is a key part of the performance appraisal process. It should involve providing
assistance as necessary and removing obstacles rather than interfering. The best way to effectively
monitor is to walk around, thus creating continuous contacts, providing first-hand information, and
identifying problems, which can then be solved promptly.

(v) Appraising: This stage involves documenting performance through observing, recalling,
evaluating, written communication, judgment and analysis of data. This is like putting together
appraisal record.

(vi) Feedback: After the formal appraisal stage, a feedback session is desirable. This session should
involve verbal communication, listening, problem solving, negotiating, compromising, conflict
resolution and reaching consensus.

26
(vii) Decision making: On the basis of appraisal and feedback results, various decisions can be
made about giving rewards (e.g., promotion, incentives, etc.) and punishments (e.g., demotion). The
outcome of an appraisal system should also be used for career development.

(viii) Development of performance: The last stage of performance appraisal is 'development of

performance,' or professional development, by providing opportunities for upgrading skills and
professional interactions. This can be done by supporting participation in professional conferences
or by providing opportunities for further study. Such opportunities can also act as incentives or
rewards to employees

KEY ELEMENTS OF PERFORMANCE APPRAISAL SYSTEMS:

1) Performance Improvement:- Performance feedback allows the employee, manager, and

personnel specialists to interview with appropriate action to improve performance.

2) Compensation Adjustments:- Performance evaluations help decision – makers determine who

should receive pay raises. Many firms grants part or all of their pay increase and bonuses based upon
merit, which is determine mostly through performance appraisal.

3) Placement Decisions:- Promotions, transfers, and demotions are usually based on past on
anticipated performance.

4) Training and Development Needs:- Poor performance may indicate the need for retraining.
Likewise, good performance indicates untapped potential that should be developed.

5) Career Planning And Development:- Performance feedback guides career decisions about
specific career paths.

6) Information Inaccuracies:- Poor performance indicate errors in job analysis information’s

human resource plan, or other parts, or the personal management information’s systems. Reliance on
inaccurate information may have led to inappropriate hiring, training, or counseling decisions.

7) Job Decision Errors:- Poor performance may be a system of ill-conceived job designs.
Appraisals help diagnose these others.

27
8) Equal Employment opportunity:- Accurate performance appraisals that actually measure
job- related performance ensure that internal placement decisions are not discriminatory.

9) Feedback to human resource:- Good/bad performance throughout the organization indicate

how well the human resource function is performing.

STAGES OF PERFORMANCE APPRAISAL PROCESS:

Performance Appraisal is a Nine-Step Process:

 At the First stage, performance standards are established based on job description and job
specification. The standard should be clear, objective and incorporate all the factors.

 The Second stage, is to inform these standards to all the employees including appraisers.

 The Third stage is following the instruction given for appraisal measurement of employee
performance by the appraisers through observations interview, records and reports

 The Fourth stage is finding out the influence of various internal and external factors on actual
performance.

 The Fifth stage is comparing performance with that of other employee and previous
performance

 The Sixth stage is comparing the actual performance with the standards and finding out deviations.

 The Seventh stage is communicating, the actual performance of the employee and other
employees doing the same job and discuss with him the reasons for positive or negative
deviations from the preset standards as the case may be.

 The Eighth stage is suggesting necessary changes in standards, job analysis internal and external
environment.

28
 The Ninth stage is follow up performance appraisal report. This stage includes guiding,
counseling coaching and directing the employee or making arrangements for the training and
development of the employee.

29
COMPONENTS OF APPRAISAL EVALUATION:

As we have seen performance evolutions can be made a verity of reasons- counseling, promotion,
research, salary, administration or a combinations of these therefore it is necessary to begin by
stating very clearly the objectives of the evolution program. Having done this, the personal evolution
system should address the questions, who, what, when, where, how? Of performance appraisal

“WHO”

The appraisal can be accomplished by one or more individuals involving a combination of the
immediate supervisor, a higher level manager, a personal manager, the assessor’s peers, the assessee
himself and the assessee’s subordinates.

Usually the immediate supervisor must be interested with the task of rating the assessee because
he his most familiar with his work, and because he is also responsible for recommending or
approving personal action based on the performance appraisal. The staff specialists, i.e. the personal
officer also do appraisal.

They may advise the supervisor while evaluating their subordinates stressing the need for evidence
for making specific appraisal judgments and comparing a particular subordinate’s evolution with
those of others.

The appraisal of an individual may also be done by his peers such appraisal proves effective in
predicting future management success.

This approach has its disadvantage that the individual may rate himself excessively high then it
would be if his superior rated him. Many companies use rating committees to evaluate employees.
These committees consist of supervisors, peers, and subordinates.

“WHAT”

The “what” of the performance appraisal consists in appraising non supervisory employees for their
current performance and managers for potential? It also includes evaluation of human trades.

“WHY”

The “why” of an appraisal is concerned with –

a) Creating and maintaining a satisfactory level of performance of employees in there present jobs.
b) Highlighting employee needs and opportunities for personal growth and development.
c) Promoting understanding between the supervisor and his subordinates.

30
d) Providing a useful criterion for determining the validity of selection and training methods and
techniques and forming concrete measures for attracting individual of higher caliber to the
enterprise.

“WHEN”

The ‘when’ answers the query about the frequency of appraisal? It has been suggested in formal
counseling should occur continuously. The manager should discuss an employee’s work as soon as
possible after he has judged it.

“WHERE”

The where indicates the lo0cation where an employee may be evaluated. It is usually done at the
place of work or office of the supervisor.

“HOW”

Under how the company must decide what different methods are available and which of these may
be used for performance appraisal. Based on the comparative advantages and disadvantages it is
decided which method suit the purpose best.

THE POST APPRAISAL INTERVIEW:

This interview provides the employee the feedback information, and an opportunity to the appraiser
to employee his rating, the trail and behavior he has taken into consideration etc.
Further it helps both the parties to review standards, set new standards based on the reality factors and
helps the appraisal to offer his suggestion, help, guide and coach the employee for his advancement .

Thus, the post appraisal interview is designed to achieve the following the objectives.

 To let employee know where stand

 To help employee do better job by clarifying what is expected of them
 To plan opportunities for development and growth
 To provide an opportunity for employees to express themselves on performance related issue.

Thus, post appraisal interview is most helpful to the employee as well as his superior.

31
PROBLEMS OF PERFORMANCE APPRAISAL:

The major problem in performance appraisal:-

1) Rating Biases:-
The problem subjective measure (is that rating which is not verifiable by others) has the
opportunity for biases include:-

a) Halo effect
b) The error of central tendency
c) The leniency and strictness biases
d) Personal prejudice
e) The Recency effect

 Halo Effect:- It is the tendency of the raters to defend excessively on the rating of one trait or
behavioral consideration in rating all other traits or behavioral consideration. One way of
minimizing the halo effect is appraising the entire employee by one trait before going to rate basis
of another trait.

 The Error Central Tendency:- Some raters fallow play safe policy in-rating-by-rating all the
employee on the middle point of the rating scale and they avoid rating the p[people at both the
extremes of the scale. They fallow play safe policy because of a answerability to management
or lack of knowledge about the job and person he is rating or least interest in his job.

 The leniency and Strictness:- The leniency bias crops when some raters have an tendency to
be liberal in their rating by assigning higher rates consistently such rating do not several any
purpose equally damaging one is assigning consistently low rates.

 Personal Prejudice: - If the rater dislike any employee or any group, he may rate them at the
lower them which may distort the rating purpose affect the career of these employee.

 The Recency Effect:- The raters generally remember the recent actions of the employee at the
time of rating and rate on the basis of this recent action.

1) Favorable or unfavorable rather than on the whole activities.

2) Failure of the superior in conducting performance appraisal and post performance appraisal
interview.

32
3) Most part of the appraisal is based on subjectivity.
4) Less reliability and validity of the performance appraisal technique.
5) Negative ratings affect interpersonal relations system.

CONCEPTUALISATION

Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and improving
the actual performance of an employee and also the future potential of the employee. Its
aim is to measure what an employee does. According to Flippo, a prominent
personality in the field of Human resources, “performance appraisal is the systematic, periodic and
an impartial rating of an employee’s excellence in the matters pertaining to his present job and his
potential for a better job.” Performance appraisal is a systematic way of reviewing and assessing the
performance of an employee during a given period of time and
planning for his future.It is a powerful tool to calibrate, refine
and reward the performance of the employee. It helps to analyze his achievements and evaluate his
contribution towards the achievements of the overall organizational goals.

Various authors propose various steps for performance management. The typical performance
management process includes some or all of the following steps, whether in performance
management of organizations, subsystems, processes, etc. Note that how the steps are carried out can
vary widely, depending on the focus of the performance efforts and who is in charge of carrying it
out. For example, an economist might identify financial results, such as return on investment, profit
rate, etc. An industrial psychologist might identify more human-based results, such as employee
productivity.

33
 FOCUS OF THE STUDY

The researcher intends to study the different approaches of appraisals adopted & employee attitude,
employee satisfaction & industrial morale. It will also analysis the most commonly occurring errors
within performance appraisal methods & to understand the level of effectiveness of 360 degree
appraisal.

1. Management training: When training managers in performance management skills, empha- sise
the importance of identifying and actively developing their team members’ strengths dur- ing
performance discussions, rather than acting as ‘judge and critic’. Gallup have put togethera
useful strengths coaching kitfor helping managers and teams to maximize their individual and
collective talents.
2. Feedback: Provide guidance to all employees on the importance of giving regular positive
feedback and how to correctly balance it with constructive feedback. Research suggests that
the balance of positive praise to constructive feedback should be around 3:1. Additionally, if you
are using a more formal 360feedback exercise (e.g. to support coaching), place greater emphasis
on the areas in which the individual is strong, and how those strengths can be utilised, and
focus less on their weaknesses.
3. Personal Development Plans: Ask your employees to consider how they can further develop and
leverage their existing strengths when planning their personal development needs.
4. Objective setting: When setting objectives, ask employees and their managers to think about
what projects or initiatives the employee could undertake that would play to their strengths.
5. Role design: Encourage managers to think about how responsibilities and tasks can be best
allocated between their team members to utilize their individual strengths.

SCOPE OF THE STUDY

The scope/range of this project report is not too far stretching to the whole of Velmold Plastic Pvt.
Ltd. India rather it only covers the performance appraisal activities for its employees. This project
termed as a reference guide or as a source of information. The project mainly deals with the present
method of performance appraisal conducted at Velmold Plastic Pvt. Ltd. India.

34
 OBJECTIVE OF THE STUDY

The primary objective of the study is to analyze the methods of performance appraisal program
of Velmold Plastic Pvt. Ltd. India

In order to carry out this primary objective, following secondary objectives were framed.

 To assess the performance appraisal program of Velmold Plastic Pvt. Ltd. India

 To identify the method of performance appraisal program of Velmold Plastic Pvt. Ltd. India

 To know the satisfaction level of employees with the method used in Velmold Plastic Pvt. Ltd.
India

 To know the various benchmarks for measuring the performance in Velmold Plastic Pvt. Ltd. India

 To give some suggestions regarding the performance appraisal program

LIMITATIONS OF THE STUDY

With the proper due care, this study will be conducted but it consists of some of its limitations also
which will as follows:

 The study could not be made that comprehensive due to time constraint.
 The study also could not be made that comprehensive due to financial constraint. Due to
non availability of money, it is difficult to deal with people in different organizations.
 Analysis depends upon the respondent view
 The study has been done in a short span of time so all the factors responsible for the
grievances could not be studied.
 Receiving in depth information from employees was not easy due to their biases.
 Primary data collection from executives through filling in questionnaire was
cumbersome and time consuming.
 Small sample size.
 Researcher is relatively new to this particulars field and this limitation is self-explanatory.

35
 CHAPTERIZATION

Chapter-1:- This chapter will contain the information about the introduction of the topic
i.e. "PERFORMANCE APPRAISAL OF EMPLOYEES".

Chapter-2:- This chapter will contain the information about the Research Methodology
and Profile of the organisation.

Chapter-3:- This chapter will contain the information about the Micro Analysis means
Objectives wise analysis.

Chapter-4:- This chapter will contain the information about the Macro analysis
is important as it contain the conclusion of the study also.

Chapter-5:- This chapter will contain the information about the Summary of major
Observation & Recommendations.

36
 CHAPTER-2

RESEARCH
METHODOLOGY

37
 RESEARCH METHODOLOGY

Research refers to a search for knowledge. It is a systematic method of collecting and recording
the facts in the form of numerical data relevant to the formulated problem and arriving at certain
conclusions over the problem based on collected data.

Research methodology is a way to systematically solve the research problem. Research is simply
a search for knowledge. Once can also define research as a scientific & systematic search for
pertinent information on a specific topic. Infact, research is an art of scientific investigation. Some
people consider research as a movement from known to unknown. It is actually a voyageof
discovery.

According to Clifford Woody, research comprises defining and redefining problems, formulating
hypothesis or suggested solutions, collecting, organizing & evaluating data .

Research is defined as human activity based on intellectual application in the investigation of matter.
The primary purpose for applied research is discovering, interpreting, and the development of
methods and systems for the advancement of human knowledge on a wide variety of scientific
matters of our world and the universe.

According to Redman & Mory,” Research refers to systematic efforts to gain new Knowledge.”

Thus, research is an original contribution to the existing stock of knowledge making for its
advancement. The search for knowledge through objective & systematic method of finding solution
to a problem is research. The research should be in a systematic way. The logical reasoning makes
the research more meaningful in the context of decision-making.

38
 RESEARCH DESIGN

Research can be defined as a scientific and systematic search for pertinent information on aspecific
topic. In fact, research is an art of scientific investigation. The purpose of research is to
discover answers to questions through the application of scientific procedures. The main aim
of research is to find out the truth which is hidden. Research methods are used for conduction
of research by the researches. Research methods can be put into the following three groups:

 Methods which are concerned with collection of data

 Methods which are used for establishing relationships between the data and the unknown.

 Methods which are used to evaluate the accuracy of the results obtained.

Research Methodology is way to systematically solve the research problem. It may be understood
as a science of studying how research is done scientifically. Thus, when we talkof research
methodology we not only talk of the research methods but also consider the logic behind the
methods we use in the context of our research study and explain why we are using a particular
method or technique and why we are not using others so that research results are capable of
being evaluated either by the researcher himself or by others.

Methodology includes a philosophically coherent collection of theories, concepts or ideas as they

relate to a particular discipline or field of inquiry. Methodology refers to more than a simple set
of methods rather it refers to the rationale and the philosophical assumptions that underlie a
particular study relative to the scientific method. This is why scholarly literature often includes
a section on the methodology of the researchers.

This section does more than outline the researchers’ methods another key ( though arguably imprecise
) usage for methodology does not refer to research or to the specific analysis techniques. This often
refers to anything and everything that can be encapsulated for a discipline or a series of
processes, activities and tasks. Examples of this are found in software development, project
management and business process fields. This use of the term is typified by the outline who,
what, where, when, and why. In the documentation of the processes that make up the discipline
that is being supported by “this” methodology that is where we would find the "methods" or
processes.

39
The processes themselves are only part of the methodology along with the identification and usage
of the standards, policies, rules, etc. Researcher will be required to prepare a research design i.e.
he will have to state the conceptual structure within which research would be conducted. Research
design helps in collecting of relevant evidence with minimal expenditure of effort, time and
money.

Research purpose may be grouped into four categories

 Exploration
 Description
 Diagnosis
 Experimentation
A flexible research design which provides opportunity for considering many different aspectsof
a problem is considered appropriate if the purpose of the research study is that of exploration.

40
 SAMPLE SIZE & TECHNIQUES

SAMPLING

Sampling may be defined as the selection of some part of an aggregate or totality on the basis
of which a judgment or inference about the aggregate or totality is made. In other words, it is
the process of obtaining information about an entire population by examining only a part of
it. The researcher must decide the way of selecting a sample. Samples can be either probability
samples or non-probability.

SAMPLING UNIT

The sampling unit for this project consists Managers, Supervisors, & amp., customers, Workers
of the company. Primary information has been collected from people who regularly use electronic
equipment.

SAMPLE SIZE

It includes the number of sampling unit selected from the population for investigation. The sample
size must be optimum or adequate. If the sample size is small it may not appropriately represent
the population.

Too large sample would be costly in terms of money & time. The optimum sampling size would
fulfil the requirements of efficiency, representative, reliability, and flexibility. The researcher
selected 100 respondents for this study.

SAMPLING T ECHNIQUE

The sampling procedure consists of:

 Probability or random sampling - It is one in which each and every unit of the population
has an equal chance of being selected into the sample.
 Non-probability or non-random sampling - In this the chance of including an elementary
unit of population in the sample cannot be determined and hence they do not lend themselves
to a statistical treatment and analysis.

The method used for sample technique is Convenient Sampling Method.

41
 DATA COLLECTION

Data are facts, and other relevant materials, such as past and present are considered as bases
for study and analysis. For the study of research, the data requirement can be classified as:

PRIMARY DATA:

The data which is collected by our self directly from original sources, is called primary data
the original source is called primary source for data collection. In this research study the
primary data is collected by the Interview Method

Methods of collecting primary data:

We collect primary data during the course of doing experiments in an experimental research but
in case we do research of the descriptive type and performs surveys, whether sample surveys or
census surveys, then we can obtain primary data either through observation.

Various ways of collecting primary data are:

 Observation method
 Interview method
 Through questionnaires
 Through schedules

 INTERVIEW METHOD: One of the main methods of data collection is conducting interviews.
It takes place as a two-way conversation between the researcher and respondent, whereby
information is gathered by asking topic related questions. In the same way in this research
study I am asking some questions to the ( Manager) about the performance appraisal of
employees. Then the manager of Velmold Plastic Pvt. Ltd. providing the past three years data of
performance appraisal of the company. It involves presentation of oral- verbal stimuli and reply in
terms of oral-verbal responses. It involves the following

42
 Personal interview: This method requires a person known as the interviewer asking questions
generally in a face to face contact to the other person or persons. It may bein the form
of direct personal investigation or it may be indirect oral investigation.

 Direct investigation: The interviewer has to collect the information personally from the sources
concerned.

 Indirect oral examination: It can be conducted under whose the interviewer has to cross
examine other person who are supposed to have knowledge about the problem under
investigation and the information, obtained is recorded, most of the commission and committees
appointed by the government to carry on investigation make use of this method.

SECONDARY DATA:

The secondary data is collected from website, magazine, memorandum, journals, books and
some other relevant sources.
Both primary data and secondary will be used to generate this report. Primary data sources
are scheduled, survey, informal discussion with professionals. Secondary data sources are the
data used previously for the analysis and the results are undertaken for next process. The
researcher has made use of available articles, books, research studies, reports, data and
information from magazines and journals and visit to relevant websites has also been made.
The Prowess data base of Centre for Monitoring Indian Economy has been extensively used
for secondary data of all companies.
Research process is viewed as separate process that includes a set of task, step and specific procedure.
The steps undertaken are logical, objective, systematic, reliable, valid, impersonal and ongoing.

43
 ANALYSIS PATTERN

The term analysis refers to the computation of certain measures along with searching for pattern of
relationship that exists among data group. Analysis is essential for a scientific study and for ensuring
that we have all relevant data for making contemplated comparison. Therefore, I have used
Tabulation, Graphs & charts in my project.

The collect data will be analyze using statistical tools of data analysis like graph, table, pie chart,
bar chart etc.

IDENTIFIED INDEPENDENT AND DEPENDENT VARIABLES

First, we describe the meaning of dependent and independent variables:

Dependent Variable: the variable used to describe or measure the problem under study.

Independent Variable: the variable under study that influence the problem (dependent variable)

is called independent variable.

44
 CHAPTER-3
MICRO-ANALYSIS

45
 DATA ANALYSIS

Q1. Which method of performance appraisal does your company adopts?

S. no. Options No. of Respondents Percentage

1 Rating Scale 10 10

2 Ranking System 30 30

3 Paired Comparison 20 20

4 Graphic Rating 40 40

5 Total 100 100

TABLE-3.1

Methods of Performance Appraisal

35
35
30
25 25
25
% of Respondents

20
15
15
% of Respondents
10
5
0
To give To rate the To increase To develop
incentive overall overall skills to
performance output complete
Opinion

FIGURE-3.1

46
Q2. Are you satisfied with the methods used in the company?

S. no. Options No. of Respondents Percentage

1 Yes 65 65

2 No 25 25

3 Unaware 10 10

4 Total 100 100

TABLE-3.2

Satisfaction with the

35
methods
35

30
25
25
% of Respondents

20
15
15 % of Respondents

10

0
To give incentive To rate the To increase
overall overall output
performance
Opinion

FIGURE-3.2

47
Q3. Why your company is using this method?

S. no. Options No. of Percentage

Respondents
1 To give incentive 35 35

2 To rate the overall 25 25

performance
3 To increase overall output 15 15

4 To develop skills to 25 25
compete
5 Total 100 100

TABLE-3.3

Usage of Performance Appraisal

Methods

35
% of Respondents

40
25 25
15
20

0 % of Respondents

Opinion

FIGURE-3.3

48
Q4: Who are the raters in your company?

S. no. Options No. of Respondents Percentage

1 Managers 60 60

2 Peers 40 40

3 Total 100 100

TABLE-3.4

Raters in
60
Company
60

50 40
% of Respondents

40

30 % of Respondents

20

10

0
Managers Peers
Opinions

FIGURE-3.4

49
Q5. What are the main criteria’s while doing performance appraisal?

S. no. Options No. of Percentage

Respondents
1 Employee work in 15 15
that period

2 Employees past work 35 35

3 Output given by them 50 50

4 Total 100 100

TABLE-3.5

Criteria for Performance Appraisal

50
50
45
40 35
35
% of Respondents

30
25
% of Respondents
20 15
15
10
5
0
Employees work Employees past Output given
in that period work by them
Opinion

FIGURE-3.5

50
Q6. Can you suggest any new method, which can be used for performance
appraisal?

S. no. Options No. of Percentage

Respondents
1 360 Degree Performance 70 70
Appraisal

2 Critical incident method 20 20

3 Rating scales 10 10

4 Total 100 100

TABLE-3.6

New Methods of Performance Appraisal

70
70
60
50
% of respondents

40
30 20
20 % of Respondents
10
10

360 degree Critical Rating scales

performance incidenrt
appraisal method
method
Opinion

FIGURE-3.6

51
Q7. What are the basis of promotion process?

S. no. Options No. of Respondents Percentage

1 Performance 4 4

2 Experience 12 12

3 Both 84 84

4 Total 100 100

TABLE-3.7

Basis of Promotion process

90 84

80

70

60
% of Respondents

50

40 % of Respondents

30

20 12

10 4

0
Performance Experience Both
Opinion

FIGURE-3.7

52
Q8. What are benchmarks for measuring the performance?

S. no. Options No. of Percentage

Respondents

1 Employees work 60 60

2 Time spent in factory 20 20

3 Companies policy and 20 20

returns
4 Total 100 100

TABLE-3.8

Benchmarks for measuring

the performance
60
60

50
% Of Respondents

40

30
20 20
% of Respondents
20

10

0
Employees work Time spent in Companies
factory policy and
returns
Opinion

FIGURE-3.8

53
Q9. Do you get any other kind of benefit after performance appraisal is held?

S. no. Options No. of Respondents Percentage

1 Yes 75 75

2 No 25 25

3 Total 100 100

TABLE-3.9

Benefits Derived

75
80

70

60
% of Respondents

50

40 % of Respondents
25
30

20

10

0
Yes No
Opinion

FIGURE-3.9

54
Q10. Are you satisfied with the companies’ present performance appraisal
program?

S. no. Options No. of Percentage

Respondents

1 Satisfied 70 70

2 Neither Satisfied 10 10
nor dissatisfied

3 Dissatisfied 20 20

4 Total 100 100

TABLE-3.10

Satisfaction level towards

performance
appraisal programme
70
60
50
% of Respondents

40
30 20 % of Respondents
20 10
10
0
Satisfied Neither satisfied Dissatisfied
nor dissatisfied
Opinion

FIGURE-3.10
55
 CHAPTER-4
MACRO-ANALYSIS

56
 INTERPRETATION

1. Which method of performance appraisal does your company adopts?

This study suggested that 10% of the respondents say that the appraisal is done by rating scale,
30% of the respondents say that the appraisal is done by ranking system. 20% of the respondents
say that the appraisal is done by paired comparison and 40% of the respondents say that the
appraisal is done by graphic rating method.

2. Are you satisfied with the methods used in the company?

This study suggested that, it can be say that most of the respondents i.e. 65% are satisfied with
the methods of performance appraisal used in the company. Out of 100 only 25% of the
respondents are not satisfied and 10% are not aware about this.

3. Why your company is using this method?

From above Table 4.4, it can be analyzed that most of the respondents said that the company
is using the Performance Appraisal Methods to give incentive i.e. 35%. 25% of the respondents
said to develop the skills in order to be competitive and to rate overall performance.

1. Who are the raters in your company?

The above table shows that out of 100 respondents 60% of the respondents say that the appraisal
is done by managers. 40% of the respondents say that the appraisal is done by peers

2. What are the main criteria’s while doing performance appraisal?

The above table described that the appraisal of their performance is done on the basis of the
output given by them i.e. 50%. Only 15% respondents agree with the employee work in that
period as the base of criteria while doing appraisal.

57
6. Can you suggest any new method, which can be used for performance appraisal?

The above table shows that that the respondents have given a large number of responses i.e. 70%
to 360- degree performance appraisal as a new method of doing performance appraisal while only
10% of the respondents said rating scales as new method of performance appraisal.

7. What are the basis of promotion process?

Promotion is advancement of an employee to a better job- better in terms of greater responsibility,
more prestige or status, greater skills and especially increased rate of pay or salary.” The survey
showed that 4% employees are of the opinion that promotion process inthe organization is based
on performance, 12% employees say that based on experience and 84% say both.

8. What are benchmarks for measuring the performance?

From the above table it can be depicted that employee’s work were termed as a benchmark by
60% of the respondents and company policy and returns were termed to be the benchmarks for
measuring performance by 20% employees. The preferred benchmark was termed to be time
spent in factory by 20% of the employees.

9. Do you get any other kind of benefit after performance appraisal is held?

The above table shows that more than half of the respondents i.e. 75% are agreed with the
statement that they are getting benefits after the performance appraisal program whereas only
25% of the respondents disagreed with the statement.

10. Are you satisfied with the companies’ present performance appraisal program?

The above Table 4.10 interpreted that a large number of respondents i.e. 70% are satisfied with
the overall Performance Appraisal Program of the company. Only 20% of respondents are not
satisfied with the overall Performance Appraisal Program of company.

58
 CHAPTER-5
SUMMARY OF
OBSERVATION

59
 FINDINGS OF THE STUDY

 Though the employees are free in all respects, there should be more Employee Empowerment.
 Employees should be encouraged to do work creatively and innovate to improve the growth
rate of organizations.
 While posting employee in different departments their personal choices should also be taken
into consideration.
 Executives must be given jobs where they are creative rather than following orders of the boss
and obeying them willingly.
 The career growth of employees should be planned on the long-term basis.
 The (candidates) not considered for promotion, should be informed about their weaknesses so
that they can work on it.
 Separate session on planning the KRA should be taken up and must be discussed and signed
jointly between the appraiser and the appraise.
 Velmold Plastic Pvt. Ltd. should introduce midyear review into the system and must rate
the employee and provide them with necessary training and development.

RECOMMENDATIONS & SUGGESTIONS

The suggestions after the survey can be discussed as follows:

 The Performance Appraisal should be done on half-yearly basis rather than on yearly basis.
 After the Performance Appraisal, the supervisor should personally discuss the strength and
weakness of the managers.
 Every one should feel free to express their opinion openly without any hesitation.
 The employee in the organization should be made aware of the latest method of the
Performance Appraisal like 3600 Appraisal.
 Proper training should be provided to the managers after discussing the weakness of
the manager.
 They should keep changing the raters for the performance appraisal system from time to time
so that they don’t become bias at anytime for any employee.
 The method of the company should be changed periodically so that the employees have mo
chance to complain for the method.

60
 The criteria decided upon which the performance has to be rated should not be fixed it should
be changed from time to time.
 The standards of the rating should be very specific, clear and concise.

CONCLUSION

Performance Appraisal is becoming the most suitable way to assess the suitability of any individual
to his job and the basis to improve training if needed, the basis of promotion and also it is a best
way of salary revision. It also helps the superior to get feedback about themselves, which can be
effectively used in acquiring and sharpening their managerial and behavioral skills.

At last it can thus be concluded that:

 Proper Appraisal system is used in the organization to appraise the worker.

 More than 80% of the members are aware about the Performance Appraisal.
 Some opinion problems are face by the superior and subordinate at the time of
Performance Appraisal.
 Every subordinate perform there work with a great zeal because of motivation Performance
Appraisal.
 Self appraisal technique of Performance Appraisal is very effective in building companies
goodwill.
 Appraisal is followed by employee feedback & counseling is done to enhance
the effectiveness.

61
CHAPTER-6

APPENDICES

62
 QUESTIONNAIRE

Name (in block letters) : --------------------------------

Name of organization : --------------------------------

Job Designation : --------------------------------

Gender : (a) Male (b) Female

How long you have been in this company : --------------------------------

1. What is basic goal behind doing performance appraisal:-

(a) Increase in salary

(b) Increased productivity
(c) Promotion
(d) Feedback

2. Which method of performance appraisal does your company adopts:-

(a) Rating Scale

(b) Ranking System
(c) Paired Comparison
(d) Graphic Rating Method

3. Are you satisfied with the method used?

(a) Yes
(b) No
63
4. Why your company is using this method?

(a) To give incentive

(b) To rate the overall performance
(c) To increase overall output
(d) To develop skills to compete
(e) No reply

5. Who are the raters in your company?

(a) Manager
(b) Peers

3. What are the main criteria’s while doing performance appraisal?

(a) Employee work in that period
(b) Employees past work
(c) Output given by them

7. Can you suggest any new method, which can be used for performance appraisal?

(a) 360- degree performance appraisal

(b) Critical Incident Method
(c) Rating Scales

8. What are benchmarks for measuring the performance?

(a) Employees work

(b) Time spent in factory
(c) Companies policy and returns

9. Do you get any other kind of benefit after performance appraisal is held?

(a) Yes
(b) No

64
10. Are you satisfied with the companies’ present performance appraisal program?

(a) Satisfied
(b) Neither Satisfied nor Dissatisfied
(c) Dissatisfied

Give your suggestion for the performance appraisal system in Velmold Plastic Pvt. Ltd. India.

…………………………………………………………………………………………………..
……………………………………………………………………………………………………

Thanks for your cooperation.

65
66