A Study on Performance Appraisal at Dabur

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PREFACE

The research project provides an opportunity to a student to demonstrate

application of his/her knowledge, skill and competencies required during the

technical session.

It also helps the student to devote his/her skill to analyze the problem to suggest

alternative solutions, to evaluate them and to provide feasible recommendations on

the provided data.

The project is on the topic A Study on Performance Appraisal System

Although I have tried my level best to prepare this report an error free report.

Every effort has been made to offer the most authenticate position with accuracy.

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TABLE OF CONTENTS

Topics Page no.

Introduction 10-18

Objective of the study 18-19

Research methodology 20-23

Collection of data 24-25

Performance appraisal system 26-56

Global trends in performance appraisal system 57-58

Methods of performance appraisal 59-61

Performance appraisal at different levels 62-65

Performance appraisal in Dabur India Ltd 66-67

Findings 68-75

Conclusion 76-77

Limitations 78-79

Bibliography 80-81

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INTRODUCTION TO TOPIC

Its roots in the early 20th century can be traced to Taylor's pioneering Time and

Motion studies. But this is not very helpful, for the same may be said about almost

everything in the field of modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second World War -not

more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale

of things historical, it might well lay claim to being the world's second oldest

profession!

There is, says Dulewicz (1989), "... a basic human tendency to make judgements

about those one is working with, as well as about oneself." Appraisal, it seems, is

both inevitable and universal. In the absence of a carefully structured system of

appraisal, people will tend to judge the work performance of others, including

subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal

problems in the workplace. Without a structured appraisal system, there is little

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chance of ensuring that the judgements made will be lawful, fair, defensible and

accurate.

Performance appraisal systems began as simple methods of income justification.

That is, appraisal was used to decide whether or not the salary or wage of an

individual employee was justified.

The process was firmly linked to material outcomes. If an employee's performance

was found to be less than ideal, a cut in pay would follow. On the other hand, if

their performance was better than the supervisor expected, a pay rise was in order.

Little consideration, if any, was given to the developmental possibilities of

appraisal. If was felt that a cut in pay, or a rise, should provide the only required

impetus for an employee to either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended;

but more often than not, it failed.

For example, early motivational researchers were aware that different people with

roughly equal work abilities could be paid the same amount of money and yet

have quite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important,

yes; but they were not the only element that had an impact on employee

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performance. It was found that other issues, such as morale and self-esteem, could

also have a major influence.

As a result, the traditional emphasis on reward outcomes was progressively

rejected. In the 1950s in the United States, the potential usefulness of appraisal as

tool for motivation and development was gradually recognized. The general model

of performance appraisal, as it is known today, began from that time.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview

(annual or in which the work performance of the subordinate is examined and

discussed, with a view to identifying weaknesses and strengths as well as

opportunities for improvement and skills development.

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

indirectly, to help determine reward outcomes. That is, the appraisal results are

used to identify the better performing employees who should get the majority of

available merit pay increases, bonuses and promotions.

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

who may require some form of counseling, or in extreme cases, demotion,

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dismissal or decreases in pay. (Organizations need to be aware of laws in their

country that might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal -the assignment and

justification of rewards and penalties -is a very uncertain and contentious matter.

Controversy

Few issues in management stir up more controversy than performance appraisal.

There are many reputable sources -researchers, management commentators, and

psychometricians -who have expressed doubts about the validity and reliability of

the performance appraisal process. Some have even suggested that the process is

so inherently flawed that it may be impossible to perfect it (see Derven, 1990, for

example). At the other extreme, there are many strong advocates of performance

appraisal. Some view it as potentially "... the most crucial aspect of organizational

life" (Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse the

use of performance appraisal, there are many different opinions on how and when

to apply it,

There are those, for instance, who believe that performance appraisal has many

important employee development uses, but scorn any attempt to link the process

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to reward outcomes -such as pay rises and promotions. This group believes that

the linkage to reward outcomes reduces or eliminates the developmental value of

appraisals. Rather than an opportunity for constructive review and

encouragement, the reward- linked process is perceived as judgmental, punitive

and harrowing. For example, how many people would gladly admit their work

problems if, at the same time, they knew that their next pay rise or a much-wanted

promotion was riding on an appraisal result? Very likely, in that situation, many

people would deny or downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the person being

appraised. Many appraisers feel uncomfortable with the combined role of judge

and executioner.

Such reluctance is not difficult to understand. Appraisers often know their

appraises well, and are typically in a direct subordinate-supervisor relationship.

They work together on a daily basis and may, at times, mix socially. Suggesting

that a subordinate needs to brush up on certain work skills is one thing; giving an

appraisal result that has the direct effect of negating a promotion is another.

The result can be resentment and serious morale damage, leading to workplace

disruption, soured relationships and productivity declines.

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On the other hand, there is a strong rival argument which claims that performance

appraisal must unequivocally be linked to reward outcomes. The advocates of this

approach say that organizations must have a process by which rewards -which are

not an unlimited resource -may be openly and fairly distributed to those most

deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance

appraisal -whatever its practical flaws -is the only process available to help

achieve fair, decent and consistent reward outcomes. It has also been claimed that

appraisees themselves are inclined to believe that appraisal results should be

linked directly to reward outcomes -and are suspicious and disappointed when told

this is not the case. Rather than feeling relieved; appraises may suspect that they

are not being told the whole truth, or that the appraisal process is a sham and

waste of time.

The Link to Rewards

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

have greater acceptance of the appraisal process, and feel more satisfied with it,

when the process is directly linked to rewards. Such findings are a serious

challenge to those who feel that appraisal results and reward outcomes must be

strictly isolated from each other. There is also a group who argues that the

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evaluation of employees for reward purposes, and frank communication with them

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

practice of not discussing reward issues while appraising performance is, say

critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice of having

separate wage and salary reviews, in which merit rises and bonuses are decided

arbitrarily, and often secretly, by supervisors and managers.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocation. Decision as to who gets salary

increase, promotion, and other rewards are determined by their performance

evaluation. Second, these appraisals can be used for identifying areas where

development efforts are needed. The performance appraisal is a major tool for

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

which selection devices and development programs are validated. As a key input

into management's reward and punishment decision, performance appraisals can

motivate or de-motivate employees.

Three different approaches exist for doing appraisals. Employees can be appraised

against

1. Absolute standards

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2. Relative standards

3. Objectives

PERFORMANCE MANAGEMENT

Since organizations exits to achieve goals, the degree of success that individual employees have

reaching their individual goals is important in determining organization effectiveness.

Performance system is fundamentally, a feed back process, which requires sustained commitme

The cost of failure to provide such feedback may result in a loss of key professional employees, t

continued poor performance of employees who are not meeting performance standards and a loss

commitment by employees, in sum, the myth that the employee knows what. They are doing witho

adequate feedback from management can be an expensive fantasy.

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THE PERFORMANCE MANAGEMENT CYCLE

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OBJECTIVE OF THE STUDY

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OBJECTIVE OF THE STUDY

This project aims at studying the system of performance appraisal and its

effectiveness in an organization. Performance appraisal is the most significant and

indispensable tool for the management as it provide useful information for decision

making in area of promotion and compensation reviews.

Thus broad objectives of the study include:

To study the system of performance appraisal

To know the extent of effectiveness of the appraisal system

To know the importance of performance appraisal

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

DEFINITION OF RESEARCH

A systematic search for knowledge

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Movement from known to unknown.

Research in common refers to search for knowledge. One can also define

research as a Scientific and systematic research for pertinent information on

specific topics.

It is a way to systematically solve the research problem. In it we study various

steps that are generally adopted by a researcher in studying his research problem

along with the logic behind them. It is important for the researcher not only to

understand the research methods and techniques but also the methodology.

RESEARCH OBJECTIVE

The purpose of research is to discover answers to question through the application

of scientific procedure. The main aim of research is to find out the truth which is

hidden and which has not been discovered as yet. Though each research study has

its own specific purpose, we may think of research objectives as falling into a

number of following broad groupings:

1. To gain familiarity with a phenomenon or to achieve new insight into it

(studies with this object in view are termed as exploratory or formulative

research studies).

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2. To portray accurately the characteristics of a particular individual,

situation or a group (studies with this object in view are known as

descriptive research studies)

3. To determine the frequency with which something occurs or with which

it is associated with something else (studies with this object in view are

known as diagnostic research studies)

4. To test a hypothesis of a causal relationship between variables (such

studies are known as hypothesis- testing research studies).

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RESEARCH PROCESS

Formulating research problem

Extensive literature

survey.

Survey.

Developing hypothesis.

Preparing research design

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Steps of

Research

Process


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COLLECTION OF DATA

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COLLECTION OF DATA

There are several ways of collecting the appropriate data, which differ

considerably in context of money costs, time and other resources at the disposal of

the researcher.

Primary data Primary

data is collected for the first time and can be collected either through experiment or

through survey.

Secondary data Secondary

data means data that are already available i.e., they refer to the data, which have

already been collected and analyzed by someone else. When the researcher utilizes

secondary data, then he has to look into various sources from where he can obtain

them. Secondary data may either be published data or unpublished data. Usually

published data are available in,

(a) Books, magazines, and newspaper

(b) Reports and publications of various associations connected with

business and industry, bank stock exchange

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(c) Public record, and statistics, historical documents and other

sources of published information like website of company.

(Data is collected primarily from Secondary sources)

CONCEPT OF PERFORMANCE APPRAISAL

PERFORMANCE APPRAISAL

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Since organization exist to achieve goals, the degree of success that individual

employees have in reaching their individuals goals is important in determining

organizational effectiveness. The assessment of how successful employees have

been at meeting their individual goals, therefore, becomes a critical part of HRM.

This leads us to the topic of performance appraisal.

People differ in their abilities and their aptitudes. There is always some

difference between the quality and quantity of the same work on the same job

being done by two different people. Performance appraisals of Employees arenecessary to understand each employees abilities, competencies and relative

merit and worth for the organization. Performance appraisal rates the employees

in terms of their performance.

Performance appraisals are widely used in the society. The history of

performance appraisal can be dated back to the 20th century and then to the

second world war when the merit rating was used for the first time. An

employer evaluating their employees is a very old concept. Performance

appraisals are an indispensable part of performance measurement.

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Meaning of performance appraisal

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

work spot, normally including both the qualitative and quantitative aspects of job

performance. Performance here refers to the degree of accomplishment of the

tasks that make up an individuals job. It indicates how well an individual is

fulfilling the job demands. Often the term is confused with efforts, which means

energy expanded and used in a wrong direction. Performance is always measured

in terms of results. For example: A student may exert a great deal of efforts while

preparing for the examinations but manages to get a poor grade. In this case the

effort expanded is high but performance is low.

Performance appraisal is the systematic evaluation of the individual with respect

to his performance on the job and his potential for development.

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What is performance appraisal?

Identification: This means determining what areas of work the manager

should be examining when measuring performance that affects

organizational success.

Measurement: Entails making managerial judgments of how good or bad

employee performance was.

Management: Appraisal should be more than a post-mortem examination

of past events, criticizing or praising workers for their performance in the

preceding year. Instead, it must make a future oriented view of what

workers can do to realize their potential.

Characteristics of performance appraisal

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Performance appraisal is a process involving three steps:

a. setting work standards.

b. assessing employees actual performance relative to these

standards. c. offering feed back to the employee so that he

can eliminate deficiencies

Performance appraisal tries to find out how well an employee is on job

and tries to establish a plan for further improvement.

Performance appraisal is carried out periodically, according to a definite

plan. It is not a one shot deal.

Performance appraisal is a future oriented activity showing employees

where things gone wrong, how to set everything in order, and deliver

results using their potential in a proper way.

Performance appraisal is not job evaluation. It refers to how well

someone is doing an assigned job. While job evaluation is how much a

job is worth to the organization.

THE APPRAISAL PROCESS

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Establishing performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

Initiate the corrective action

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Description of the steps involved in performance appraisal

1. Establishing Performance Standard

2. Communicate Performance expectations to employees

3. Measure actual performance

4. Compare actual performance with standards

5. Discussion with the employees and identification development programs to

bridge the gap.

6. Initiate action

The appraisal process begins with the establishment of performance standards.

These should have evolved out of job analysis and the job description discussed

under human resource planning. These performance standards should also be

clear and objective enough to be understood and measured. Too often, these

standards are articulated in some such phrase as "a full day's work" or "a good

job". Communication only takes place when the transference has taken place and

has been received and understood by the subordinate. Therefore feedback is

necessary from the subordinate to the manager. Satisfactory feedback censures

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that the information communicated by the manager has been received and

understood in the way it was intended.

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

what actual performance. To determine what actual performance is, it is necessary

to acquire information about it. We should be concerned with how we measure

and what we measure.

What we measure is probably more critical to the evaluation process than how we

measure, since the selection of the wrong criteria can result in serious

dysfunctional consequences. And what we measure determines, to a great extent,

what people in the organization will attempt to excel at.

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

appraisal to the subordinate and then have the subordinate accept the appraisal in

a constructive manner. Appraising performance touches on one of the most

emotionally charged activities the assessment of another individual's contribution

and ability. The impression that subordinates receive about their assessment has a

strong impact on their self-esteem and, very important, on their subsequent

performance. The final step in the appraisal is the

initiation of corrective action when necessary. Corrective action can, be of two

types. One is immediate and deals predominantly with symptoms. The other is

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basic and delves into causes. Immediate corrective action often described as

"putting out fires," whereas basic corrective action gets to the source of deviation

and seeks to adjust the difference permanently.

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

THE IMPORTANCE OF APPRAISING PERFORMANCE

In general the appraisal systems serve following purposes:

Compensation decisions: It can serve as a basis for pay raises. Managers

need performance appraisal to identify employees who are performing at or

above expected levels.

Promotion decisions: It can serve a useful basis for job change or

promotion. The person doing their best receives the promotion. It helps in

minimizing the feelings of frustration of those who are not promoted.

Training and development programmes: It can serve as a guide for

formulating a suitable training and development program.

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Feed back: Performance appraisal enables the employee to know how well

he is doing on the job

Personal development: Performance appraisal can help to reveal the causes

of good and poor performance.

REQUIREMENTS FOR THE PERFORMANCE MANAGEMENT

SYSTEM.

Reliability The

foremost requirement of a sound system is reliability. In this contact it refers to

consistency of judgment. For any given employee, appraisals made by raters

working independently of one another should agree closely. But raters with

different perspective (e.g. supervisors, peers, subordinates) may see the same

individuals job performance very differently. To provide reliable data, each rater

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must have an adequate opportunity to observe what the employee has done and

the condition under which he or she has done it. By making appraisal system

relevant, sensitive and reliable we assume the resulting judgments are valid as

well.

Acceptability In

practice, acceptability is the most important requirement of all, for it is true that

human resources program must have the support of. those who will use them.

Unfortunately, many organizations do not put much effort into garnering the

front end support and participation of those who will use the appraisal system.

Ultimately it is management's responsibility to define as clearly as possible the

type and level of job behavior desired of employees.

It is important to enlist the active support and cooperation of subordinates by

making explicit what aspects of job performance they will be evaluated on.

Practicality

This implies that appraisal instruments are easy for managers and employees to

understand and to use.

For years, personnel specialists have searched for the 'Perfect; appraisal method as

if it were some kind of miraculous cure for many pitfalls that plague organizations.

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Such a method does not exist. In tomorrows world of work far more emphasis

needs to be placed on process issues. Factors such as timing and frequency are no

less important. In sum performance appraisal is a dialogue involving people and

data. Both technical and human issues are involved. Neither can be

overemphasized at the expense of the other.

PERFORMANCE CAN BE EVALUATED BY

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The most fundamental requirement for any rater is that he or she has an adequate

opportunity to observe the rates job performance over a reasonable period of time.

This suggests several possible raters. Performance can be evaluated by

The supervisor

Peers

Subordinates

Self-appraisal

Supervisor

Generally appraisal is done by this person. He is probably the most familiar with

the individual's performance and in most jobs has had the best opportunity to

observe actual job performance. Further more, the immediate supervisor is

probably best able to relate the individual's performing to department and

organizational objectives.

In some jobs such as outside sales, law enforcement and teaching, the immediate

supervisor may observe a subordinate's actual job performance rarely (and

indirectly thru written reports). Here judgment of peers play important role.

However, there is a danger of potential bias.

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Peers

Peer appraisal may be reliable if the work group is stable over a reasonably long

duration of time and performs task that need interaction. This is mostly used in

military rather in business organizations.

Subordinates Appraisal

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

know first hand the extent to which the supervisor actually delegates, how well he

communicates, the type of leadership he has and the extent to which he or she

plans and orgasms.

Self appraisal On one

hand it improves the rate's motivation and moral, on the other it tends to be more

lenient, less variable and biased. The evidence on the accuracy of self assessment

is fairly complex.

In industry it is seen that feed back/ input is taken from various sources -Peers,

subordinates, superiors etc. Some companies have gone step ahead in taking

feedback from the customers and integrating it into the performance management

process.

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Self appraisal is an important part of the Performance appraisal process where

the employee himself gives the feedback or his views and points regarding his

performance. Usually this is done with the help of a self appraisal form where

the employee rates himself on various parameters, tells about his training

needs, if any, talks about his accomplishments, strengths, weaknesses,

problems faced etc.

TIPS FOR SELF APPRAISAL

Truthful

Always be truthful and honest while telling your accomplishments or failures.

Dont exaggerate your strengths and dont hide your weaknesses. Dont make

personal judgments for anybody.

Its always better to prepare yourself before the self appraisal.

Objectivity

Objectivity is important in self appraisal. Dont exaggerate or downplay

your achievements or failures. Be specific and concise in your statements and

if possible support them with examples or references or evidences with dates.

For example: "I responded to all queries within 48 hours" is better than just

saying "My customer service was good."

Positive attitude
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Preparation for Performance Review

Preparation for Performance Review is done as follows

Theperformance review meeting should not be strictly formal nor should

it be completely informal in nature. Ideally, the review meeting should

be structured, semi formal meeting which needs prior preparation by the

appraiser as well as the employee.

Following are some points that need to be prepared before the review

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meeting ofPerformance appraisal:

Inform the concerned employees the date, time and place for the

review meeting well in advance.

Review and be prepared with each and every employees

o Job description

o Performance standards

o Planned performance goal

o Performance measures collected throughout the time period

o The critical incidents details

o Past appraisals of the employees.

Other things to be remembered

Be ready with all the important dates

Give the employee a copy of the appraisal form

The appraiser needs to completely understand the standards for the employees

at same level to maintain the consistency in the process.

Prepare what to say and how to say it calmly.

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The feedback should be prepared in quantifiable measures where ever

possible.

The appraiser should be familiar with the performance review form and the

details

The employee and the appraiser both should be prepared to discuss and figure

out the future goals and training needs

They should be mentally prepared for constructive feedback

Collect as many evidences to support your point as possible like the monthly,

quarterly progress reports.

PERFORMANCE REVIEW MEETING

Performance Review Meeting

Today, performance review meetings are regarded as

conversation with a purpose. They are considered extremely

important for the development and health of the organization. The

purpose of the performance review meetings is to reach mutually

agreed conclusions about the development of the individual and

his performance and if applicable, any areas for improvement,

including how such improvements are to be achieved.

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The purpose ofperformance and development reviews is to

enable the employees to engage in a dialogue and get the support

of the manager about the individuals performance and

development. They should be more like free- flowing, open

meetings in which views are exchanged so that agreed conclusions

can be reached.

The three key elements of performance review meetings are:

1. Feedback - Providing information on how a person has been doing.

2. Measurement assessing results against agreed targets and standards.

3. Exchange of views - Ensuring that the discussion involves a full, free

and frank exchange of views about what has been achieved, what

needs to be done to achieve more and what employees think about

their work the way they are managed and their aspirations.

Performance appraisalreview is the meeting when the employee can be

motivated to perform better in future or reinforce his desirable behavior.

Review discussion meetings ideally should include the following:

Review of progress on tasks and activities in relation to the

employees performance plan,

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The developmental initiatives taken by the employee himself and

those planned by the management for the employee.

Identification of variances in terms of delays, requisite quality and

shortfall in help planned for the employee, if any

Analyzing the causes of the delay, the problems faced and the

solutions adopted.

Preparation of action steps for solving identified problems and

contingency plans for anticipated problems.

Periodic review meetings become meaningful only when they help pause,

reflect, take stock and strategize in an otherwise active relationship.

How to Complete Performance Appraisal Form

Performance appraisal form provides the basis for theperformance

review, providing the feedback to the employees and the final

rating of the employee. It also facilitates various other HR

decisions and career development plans and decisions of the

employees. Therefore, performance appraisal from should be

filled with utmost care and objectivity.

The Performance appraisal form should be filled by the immediate

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supervisor or manager of the employee in order to ensure that the

appraiser if fully acquainted with the performance, responsibilities,

targets and standards of the employee. All the instructions and

guidelines on the appraisal form should be read and followed

carefully.

Be prepared with all the details of the performance, the standards, job

description and the past appraisals of the employee.

Clear and unambiguous description of the employee performance should be

given in terms of average, above average, good and excellent performance.

The focus should be on the employees behavior throughout the year and not

just his recent performance.

Quantify the ratings, wherever possible, to ensure easy comparability.

Substantiate and support your rating, and attach all the necessary documents

(if required).

Apart from the defined performance objectives and results, discuss the related

issues as well covering all the aspects of the performance.

When filling the appraisal form, be honest and objective.

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Analysis for Improving Performance

Any performance review process is incomplete without the

feedback to the employees. The feedback could be given in the

review discussion. Review discussions are semi formal, scheduled,

periodic interactions usually bimonthly or quarterly between a

manager and his employee. The basic purpose of the review

discussion is to analyze the performance of the employee in the

past to improve the performance of the employee in future.

A review discussion is an opportunity to coach, mentor, learn and

understand. The manager encourages his/her employees to

critically reflect over progress made on the Performance

appraisal plan and to develop creative, yet feasible alternatives for

problem areas.

The manager uses this opportunity to:

Review the performance of the each employee individually.

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Discuss the problems faced by the employees during the course of

action.

The solutions tried, and the degree of success achieved in solving the

problems faced.

Revisit with the employee, his/ her annual plan for the remaining time

period and develop revised action plans, if necessary.

Review discussions reassure the employees that each one of them has structured

opportunities for one to one interaction with the manager once every two or

three months during the year. These opportunities are important as they provide

an important chance for performance monitoring or development mentoring.

The aim of the performance review discussions is to share perceptions, solve the

problem faced during the course of the action, decide on the new goals jointly

and provide a feedbackto the employee for the past performance i.e. to look at

his strengths and weaknesses and also help to chart out a career plan for the

employee.

The focus of these performance review discussions should not bet o judge the

employees past performance; rather it should be to motivate the employee to

improve his future performance and reinforce his good behavior.

Active Performance Appraisal Conversation

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Active Performance Appraisal Conversation

Active conversation plays an important part in theperformance

review meeting. The appraiser should ensure that the meeting has a

two way conversation and that the employee should get a fair chance

to speak. The "manner" of giving the feedbackof the performance of

the employee is very important. The conversation should have an

optimistic and motivating tone.

Some important points that should be taken care of in the active

performance appraisal conversation are:

1. Make it a two-way conversation. An effectiveperformance

appraisalreview requires an interactive discussion with an open agenda.

Try to formulate questions that seek the employees ideas and input. This

will help the employee feel you value his or her opinions. Give the

employee a fair chance to put forward his ideas; let him speak.

2. Be a good listener. Remember to be an active listener and to pick up on

your employees verbal and nonverbal cues. Listen to his ideas and

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problems.

3. Address whats important to the employee. Since job satisfaction is the

most important factor affecting an employees attitude (and therefore his

or her level of performance and value to your company), an effective

review should delve into areas that include issues most important to that

employee.

4. Lead with the positive. Its important to reaffirm the employees

strengths at the beginning of the review. Since job security is the number

one concern of most people, the performance review is a good time to tell

an employee how much you value their contributions to your business.

5. Dont be confrontational. Its important not to criticize the employee in

general terms. The goal is to evaluate job performance and not the person.

A performance review that turns into a gripe session misses the

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opportunity to raise employee morale.

6. Positive reinforcement emphasizing what has been done well so that it

will be done even better in the future and making only constructive

criticisms (i.e. those that point the to way to improvement).

7. Exchange of views - Ensuring that the discussion involves a full, free and

frank exchange of views about what has been achieved, what needs be

done to achieve more and what the appraiser think about their work the

way they are managed and their aspirations.

8. Agreement - jointly coming to an understanding about what has to be

done by both parties to improve performance, knowledge and skills and

overcome any work problems raised during the discussion

Performance Appraisal Feedback

Performance appraisal process is incomplete without the feedback

given to the employee about his appraisal and his performance.

But the way of giving as well as receiving the feedback differs

from person to person and their way of handling and their outlook

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towards the issue.

According to a popular saying:

"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM

FOUNDATION WITH THE BRICKS OTHERS HAVE

THROWN AT HIM."

Therefore, On the part of the person receiving the feedback, the following

points are important to be taken care of:

o The employee should have a positive attitude towards the feedback

process

o He should listen to the suggestions of the appraiser calmly and try to

incorporate them in his plans.

o He should not hesitate to ask for the help of his superiors.

o Should have a co-operative attitude during the feedback meeting.

o Dont judge the appraiser as a person.

o Should take the feedback objectively

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o Should not judge the appraiser as a person on the basis of the

feedback.

On the part of the appraiser or the manager / person giving the feedback, the

following points are to be taken care of:

o The appraiser should make the receiver feel comfortable during the

feedback meeting.

o The appraiser should make it a two way conversation i.e. let the

employee speak.

o Listen to the employee and note his points, suggestions, problems etc.

o The appraiser should not adopt a confrontational approach towards

the meeting. The goal is not to criticize the employee.

o Provide a constructive feedback to the employee i.e. in a way which

will motivate him to perform better.

o Have a positive attitude towards the process

o Try to understand the reasons of his failure.

o Be fair and objective

o Prepare yourself for what to say and how to say.

o Make the appraisal feedback meeting useful and productive for the

organization and the employee.

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PERFORMANCE CONSULTING:

MOVING BEYOND TRAINING

Organizations are growing in size, becoming complex and the

importance of trained and developed workforce is also increasing.

One of the major objectives and benefits of the performance

appraisal is that it helps in identifying the training needs of the

employee and reducing the gap between the actual and the desired

performance of the employees. ButPerformance appraisal also

facilitates the other decisions like:

Compensation and rewards

Performance Feedback

Manpower planning

Performance improvement

Promotions and transfers

HR Documentation

To meet the increasing competition and the challenging organizational goal,

the human resource departments of the organisations throughout the world

are moving away from the traditional and the theoretical training methods.

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Review and feedback of the performance, facilitating performance

improvement

From the above functions and the role of the performance consultants, they

have become valued partners to the top level management of the

organizations in successfully achieving the organizational goals.

Writing Performance Appraisals

Writing performance appraisal involves creating a document

which has the summary of the every employees performance over

a period of time and a snapshot of their observed strengths and

weaknesses, and the raters feedback that can be used for other

purposes.

Writing Performance appraisal depend significantly on the writers

various abilities and a combination of other factors. A rater or a

manager needs :

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An objective rating method to assess an employees

performance, behavior, and skills and knowledge.

All the relevant data related to the employees performance, the

standards, his job description.

To observe and accurately recall the employees behavior

throughout the time period of the appraisal.

Appraisal as Employee Motivation Mechanism

Keeping in mind the growing attrition rates and the employee

dissatisfaction among the employees, the HR professionals are

approaching and using the performance appraisal as a fuel to

motivate employees. The latest trend being followed by

the HR professionals is to use the performance appraisal and

review process as a motivating mechanism. Various surveys

and studies have testified the relationship between

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performance, pay and motivation.

Other than the traditional goal of accessing the performance of

the employees, Performance appraisals and reviews can be

used as a tool to reinforce the desired behaviour and

competent performance of the employees.

One of the most motivating factors for the employees, in the appraisal

processes is to receive a fair an accurate assessment of their performance.

Inaccurate evaluation is one reason because of which most employees dread

going through performance appraisals. An employee always expects his

appraiser to recognize and appreciate his achievements, support him to

overcome the problems and failures.

The discrepancies and the inaccuracies in the performance review can

demotivate the employees, even if there has been an increase in the salary.

Such inaccuracies can kill the innovating and risk taking enthusiasm and spirit

in the employees. Similarly, inaccurate reviews with no hike in compensation

can increase the attrition rate in the organisation, forcing the employees to look

out for other options.

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An employee prefers an accurate performance review with no increase in the

salary over inaccurate performance review with an increase in salary.

Employees, who receive both accuracy and a pay increase during their

performance review, are likely to be the most motivated. Therefore,

performance appraisal (review and its consequence in the form of

compensation adjustments) has the potential of motivating employees and

increasing their job satisfaction.

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Training for appraisers

Every organization conducts performance for assessing the

performance of the employees and the organization. But if not

conducted properly, they can give a false impression about

the performance of the employees and affect the overall57


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Feedback techniques (providing constructive feedback)

How to deal with non-performers and people who refuse to co-

operate

Post review actions

The training can be given by conducting special workshops by professional

HR consultants or qualified and experienced HR professionals ofhuman

resource management. The venue for the purpose can be a suitable

seminar hall, training room, conference hall, boardroom, or at some place

away from the workplace like some hotel etc.

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Also take note of the skills, knowledge and competencies and

behaviors of the employees that help the organization to achieve its

goals.

If possible, collect the feedback about the performance of the

employees through multi-point feedback and self-assessments.

Financial measures like the return on investment, the market share,

the profit generated by the performance of the team should also be

considered.

For an organisation to be an effective organisation and to achieve its goals,

it is very important to monitor or measure its and its employee performance

on a regular basis. Effective monitoring and measuring also includes

providing timely feedback and reviews to employees for their work and

performance according to the pre-determined goals and standards and

solving the problems faced. Timely recognition of the accomplishments also

motivates the employees and help to improve the performance.

Measuring the performance of the employees based only on one or some

factors can provide with inaccurate results and leave a bad impression on

the employees as well as the organization. For example: By measuring only

the activities in employees performance, an organization might rate most of

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its employees as outstanding, even when the organization as a whole might

have failed to meet its goals and objectives. Therefore, a balanced set of

measures (commonly known as balanced scorecard) should be used for

measuring the performance of the employee.

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Global Trends In Performance Appraisal Program

Global Trends In Performance Appraisal Program

Current Global Trends In Performance Appraisal Program

The performance appraisal process has become the heart of

the human resource management system in the organisations.

Performance appraisal defines and measures the performance of

the employees and the organisation as a whole. It is a tool for

accessing the performance of the organisation.

The important issues and points concerning performance

appraisal in the present world are:

The focus of the performance appraisals is turning towards

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career development relying on the dialogues and discussions with

the superiors.

Performance measuring, rating and review systems have

become more detailed, structured and person specific than before.

Performance related pay is being incorporated in the strategies used by

the organisations.

Trend towards a 360-degree feedback system

The problems in the implementation of the performance appraisal

processes are being anticipated and efforts are being made to overcome

them.

In India, the performance appraisal processes are faced with a lot of

obstacles, the most prominent being the lack of quantifiable indicators of

the performance.

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Methods of Performance Appraisal

Methods of Performance Appraisal

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360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees

performance comes from all the sources that come in contact with the

employee on his job. Organizations are increasingly using feedback from

various sources such as peer input, customer feedback, and input from

superiors. Different forms with different formats are being used to obtain

the information regarding the employee performance.

Group appraisal: An employee is appraised by the group of appraisers.

This group consists of the immediate supervisor of the employee, other

supervisors who have close contact with the employees work, manager and

the consultant.

Ranking Method: ranking of the employees in a work group is done

against that of the other employee. The relative position of each employee is

expressed in terms of his numerical rank.

Rank and Yank Strategy: Also known as the "Up or out policy", the rank

and yank strategy refers to the performance appraisal model in which best-

to-worst ranking methods are used to identify and separate the poor

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performers from the good performers. Then the action plans and the

improvement opportunities of the poor performers are discussed and they

are given to improve their performance in a given time period, after which

the appropriate HR decisions are taken. Some of the organizations following

this strategy are Ford, Microsoft and Sun Microsoft.

Management by objectives: MBO requires the management to set specific,

measurable goals with each employee and then periodically discuss the

latters progress towards these goals

Graphic rating scale: A printed form is used to evaluate the performance

of an employee. A variety of traits may be used in these types of rating

devices, the most common being the quantity and quality of work.

Checklistsand weighted checklists: It represents in its simplest form, a set

of objectives or descriptive statements about the employee and his behavior.

Some of the sample questions are :

Is the employee really interested in the task assigned? Yes/No

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Is he respected by his colleagues? Yes/NO

Does he respect his superiors? Yes/No

Performance Appraisal For Employees at Different Levels

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Performance Appraisal For Employees at Different Levels

Performance appraisal is important for employees at all levels

throughout the organization. The parameters, the characteristics

and the standards for evaluation may be different, but the

fundamentals ofperformance appraisal are the same. But as the

level of the employees increases, performance appraisal is more

effectively used as the tools of managing performance.

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Criteria for measuring performance at different levels:

The criteria for measuring performance changes as the levels of the

employees and their roles and responsibilities change.

A few examples for each level are described below:

For top level management

Degree of organizational growth and expansion

Extent of achievement of organizational goals

Contribution towards the society

Profitability and return on capital employed

For middle level managers

Performance of the departments or teams

Co-ordination with other departments

Optimal use of resources

Costs Vs. revenues for a given period of time

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The communication with superiors and subordinates

For front line supervisors

Quantity of actual output against the targets

Quality of output against the targets

Number of accidents in a given period

Rate of employee absenteeism

Two things to be noted and evaluated for the purpose of

appraisals are:

Performance in accomplishing goals, and

Performance as managers

Performance in accomplishing goals

Managers are responsible for the performance of their teams as a whole.

Performance in accomplishing goals would mean to look at the completion

or achievement of the goals set for a team of employees which is being

assigned to or working under a particular manager. The best measuring

criteria fora manager are hi goals, his plans of course of action to achieve

them and the extent of achievement of the goals.

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Performance of managers

Appraising the performance of managers is very important, but at the same

time, it is one of the most difficult tasks in the organization. It is difficult

because most of the managerial work cannot be quantified i.e. it is

qualitative in nature like leading his/her team, guiding

The responsibilities of managers include a series of activities which are

concerned with planning, organizing, directing, leading, motivating and

controlling. Managers can be rated on the above parameters or

characteristics

.

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PERFORMANCE APPRAISAL SYSTEM IN DABUR

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Dabur

Milestones to success

Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to learn and grow

a commanding status in the industry. The Company has gone a long way in popularizing and maki

easily available a whole range of products based on the traditional science of Ayurveda. And it h

set very high standards in developing products and processes that meet stringent quality norms. As

grows even further, Dabur will continue to mark up on major milestones along the way, setting t

road for others to follow.

1884 - Established by Dr. S K Burman at Kolkata

1896 - First production unit established at Garhia

1919 - First R&D unit established

Early 1900s - Production of Ayurvedic medicin

Dabur identifies nature-based Ayurvedic medicines as its area of specialisation. It is the fir

Company to provide health care through scientifically tested and automated production

formulations based on our traditional science.

1930 - Automation and upgradation of Ayurvedic products manufacturing initiated1936 - Dabur (Dr. S K Burman) Pvt. Ltd. Incorporated

1940 - Personal care through Ayurveda Dabur introduces Indian consumers to personal ca

through Ayurveda, with the launch of Dabur Amla Hair Oil. So popular is the product that

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becomes the largest selling hair oil brand in India.

1949 - Launched Dabur Chyawanprash in tin pa

Widening the popularity and usage of traditional Ayurvedic products continues. The ancie

restorative Chyawanprash is launched in packaged form, and becomes the first brand

Chyawanprash in India.

1957 Computerisation of operations initiated

1970 - Entered Oral Care & Digestives segme

Addressing rural markets where homemade oral care is more popular than multinational brand

Dabur introduces Lal Dant Manjan. With this a conveniently packaged herbal toothpowder

made available at affordable costs to the masses.

1972 - Shifts base to Delhi from Calcutta

1978-Launches Hajmola tab

Dabur continues to make innovative products based on traditional formulations that can provi

holistic care in our daily life. An Ayurvedic medicine used as a digestive aid is branded an

launched as the popularHajmola tablet.

1979 - Dabur Research Foundation set up

1979 - Commercial production starts at Sahibabad, the most modern herbal medicines pla

at that time

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1984 - Dabur completes 100 years

1988 - Launches pharmaceutical medicines

1989 - Care with fu

The Ayurvedic digestive formulation is converted into a children's fun product with the launch

Hajmola Candy. In an innovative move, a curative product is converted to a confectionary item f

wider usage.

1994 - Comes out with first public issue

1994 - Enters oncology segment

1994 - Leadership in health ca

Dabur establishes its leadership in health care as one of only two companies worldwide to laun

the anti-cancer drug Intaxel (Paclitaxel). Dabur Research Foundation develops an eco-friend

process to extract the drug from its plant source

1996 - Enters foods business with the launch of Real Fruit Juice

1996-Real blitzkri

Dabur captures the imagination of young Indian consumers with the launch ofReal Fruit Juices

new concept in the Indian foods market. The first local brand of 100% pure natural fruit juices ma

to international standards, Real becomes the fastest growing and largest selling brand in t

country.

1998 - Burman family hands over management of the company to professionals

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2000 - The 1,000 crore ma

Dabur establishes its market leadership status by staging a turnover of Rs.1,000 crores. Across

span of over 100 years, Dabur has grown from a small beginning based on traditional health ca

To a commanding position amongst an august league of large corporate businesses.

2001 Super specialty dru

With the setting up of Dabur Oncology's sterile cytotoxic facility, the Company gains entry into th

highly specialised area of cancer therapy. The state-of-the-art plant and laboratory in the UK ha

approval from the MCA of UK. They follow FDA guidelines for production of drugs specifical

for European and American markets.

2002 - Dabur record sales of Rs 1163.19 crore on a net profit of Rs 64

crore

2003 - Dabur demerges Pharmaceuticals business

Maintaining global standards

As a reflection of its constant efforts at achieving superior quality standards, Dabur became the fir

Ayurvedic products company to get ISO 9002 cetificate

Science for nature

Reinforcing its commitment to nature and its conservation, Dabur Nepal, a subsidiary of Dab

India, has set up fully automated greenhouses in Nepal. This scientific landmark helps to produ

saplings of rare medicinal plants that are under threat of extinction due to ecological degradation.

2005 - Dabur aquires Balsara

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2006 - Dabur announces bonus after 12 years

2006 - Dabur crosses $2 bin market cap, adopts US GAAP.

2007 - Celebrating 10 years of Real

Dabur Foods unveiled the new packaging and design for Real at the completion of 10 years of th

brand. The new refined modern look depicts the natural goodness of the juice from freshly

plucked fruits.

2008 - Foray into organised retail

Dabur India announced its foray into the organised retail business through a wholly-owne

subsidiary, H&B Stores Ltd. Dabur will invest Rs 140 crores by 2010 to establish its presence in

the retail market in India with a chain of stores on the Health & Beauty format.

2008 - Dabur Foods Merged With Dabur India

Dabur India decides to merge its wholly-owned subsidiary Dabur Foods Limited with itself to

extract synergies and unlock operational efficiencies. The integration will also help Dabu

sharpen focus on the high growth business of foods and beverages, and enter newer produc

categories in this space.

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Performance Appraisal system in Dabur

a. Outstanding -If the performance evaluated by the management turns out to

be outstanding. If the employee performs in such a way as to collect 3

consecutive outstanding performance into his/her credit) he / she gets

promoted.

b. Excellent -If the performance evaluated by the management turns out to be

excellent. If the employee performs in such a way as to collect 3 consecutive

excellent performance into his/her credit, he/she gets promoted.

c. Good -If the performance evaluated by the management turns out to be

good. The management sends the employee to the training programme to

improve his/.her skill to perform form.

d. Below average -If the performance evaluated by the management turns out

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to be below average. And, if the employee collects 3 below average to

his/her credit, then he/she dismissed

Duration of Appraisal System

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

in term of performance as per the duration allowed. In Dabur India Limited, the

performance appraisal system is carried out annually.

Feedback

The companies provide the annual feedback to its employees and thus, in term

bring out the highlights of the self assessment programme. This enables the better

communication between the management and employees thus, helps in promoting

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the business future.

FINDINGS

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FINDINGS

360 degree performance appraisal method is used in the study. It is found

more efficientbecause it helps to keep a track of the changes others

perceptions about the employees and the biggest advantage of 360 feedback

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to participants is increased self-awareness.

Performance appraisal is the strength of performance management, which in

turn effects the organizational performance. It helps to identify and

overcome the problems faced by the employees in their work.

Performance appraisal is like a double edged sword for an organisation.

Although it has many benefits for the organisation, various studies have also

revealed that performance appraisals have the equal probability of having a

bad impact on the organizational as well as the employee performance.

Performance appraisal processes can create a sense of insecurity in the working

environment and can become an obstacle in achieving the required changes in the

attitudes and the performance of the employees. The element of bias in the

appraisals can also worsen the situation.

.

Therefore, performance appraisals can affect the organizational performance both

positively and negatively, and should be dealt with care and expert knowledge and

experience.

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CONCLUSIONS

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Conclusions

It is concluded that performance appraisal serve a very important role. Firstly, it

can be used as a basis for reward allocations. Decisions as to salary increases,

promotions, and other rewards are determined by their performance evaluation.

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

efforts are needed. Management needs to spot those individuals who have specific

skill or knowledge deficiencies. The performance appraisal is a major tool for

identifying these deficiencies. Finally, the performance appraisal can be used as a

criterion against which selection devices and development programs are validated.

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Limitations

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Limitations

The performance appraisal improves the work performance and employee

satisfaction, it also demotivates employees leaving a bad impression on the good

employees. Most of the employees do not approve of continuous performance

monitoring and performance appraisals, and also consider it as a burdensome

activity. Performance appraisals and other tools which involve feedbackand target

management should be adapted to the employees individual needs and

characteristics. Otherwise, there is a risk of harming the good employees without

being able to help the less good."

Performance appraisal processes can create a sense of insecurity in the working

environment and can become an obstacle in achieving the required changes in the

attitudes and the performance of the employees. The element of bias in the

appraisals can also worsen the situation.

Therefore, performance appraisals can affect the organizational performance both

positively and negatively, and should be dealt with care and expert knowledge and

experience.

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Bibliography

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BIBLOGRAPHY

1) Flippo Edwin B., Personnel management, Edition sixth, Tata Mc Graw Hills,

1984

2) Gupta, C.B., Human Resource Management, Edition Fifth(Reprint),Sultan

Chand and Sons, New Delhi 2001

3) Rao, P. Subba, Essentials of Human Resource Management and Industrial

Relations; Edition Second, Himalaya Publishing House, New Delhi 2001

4) Rao,V.S. Human Resource Management Edition Second, Excel Books, New

Delhi 2000

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A STUDY ON PERFORMANCE APPRAISAL

A STUDY ON PERFORMANCE APPRAISAL WITH SPECIAL REFERENCE

DABUR.

QUESTIONNAIRE

SECTION ASOCIO DEMOGRAPHIC FACTORS:

1) Name ( optional ):

2)Sex :Male Female

3)Age :Upto 20 years 20 30 years 30 40 years above 40 years

4) Marital status : Married Unmarried

5) Educational qualification :SSLC HSC Diploma UG PG

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6)Department :Production HR R&D Accounts Others

7)Year of service :Upto 2 years 2 -6 years 6 -10 years above 10 years

8) Monthly Income: (in Rs.)Below 10,000 10,000 -15,000 15,000 20,000

above 20,000

SA- STRONGLY AGREE, A AGREE, NN NEITHER AGREE

NOR DISAGREE, DA DISAGREE, SDA STRONGLY DISAGREE

9) Performance appraisal system is needed in organization

10) Satisfied with the existing performance appraisal system.

11) The performance of the organization is assessed by self, superior or consultant.

12) The performance appraisal helps to win co-operation and team work.

13) The performance appraisal is helpful in reducing grievance among the

employees.

14) The performance appraisal is helpful for improving personnel skill.

15) Training programmers are effective for individual and organization

development.

16) The performance ratings were done periodically.

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17) The performance appraisal system helps to identify the strength and weakness

of the employee.

18) The performance rating is helpful for the management to provide employee

counseling.

19) Promotion is purely based on performance appraisal.

20) Management fixes salary through the performance rating.

21) Performance rating helps to fix increment.

22) Transfer, demotion, suspension and dismissal is based on performance

appraisal.

23) The desired target of the organization is achieved through the performance

appraisal.

24) Performance appraisal increases employee motivation.

25) Appraisal system keeps on the major achievement and failure or success

of work.

26) Have a separate committee to review the performance appraisal result.

27) Suggestions if any

Documents

A Study on Performance Appraisal at Dabur