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TABLE OF CONTENT

1

S.N PARTICULARS PAGE.NO

1.

Introduction1.1 Company Profile

1.2 Product and Services

4. Objective of the Study

5. Literature Review

6 Research Methodology

7. Data Analysis and Interpretation

8. Findings

9. Conclusion

10. Bibliography

11. Recommendations

12. Annexure: Questionnaire


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INTRODUCTION

INTRODUCTION

C OMPANY PROFILE

Bank is India's second-largest bank with total assets of about Rs.1, 676.59 bn (US$ 38.5 bn) at March

31, 2012 and profit after tax of Rs. 20.05 bn (US$ 461 mn) for the year ended March 31, 2011 (Rs.

16.37 bn (US$ 376 mn) in fiscal 2010). Bank has a network of about 573 branches and extension

counters and over 2,000 ATMs. Bank offers a wide range of banking products and financial services

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to corporate and retail customers through a variety of delivery channels and through its specialized

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture

capital and asset management. Bank set up its international banking group in fiscal 2002 to cater to

the cross border needs of clients and leverage on its domestic banking strengths to offer products

internationally. Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches

in Singapore and Bahrain and representative offices in the United States, China, United Arab

Emirates, Bangladesh and South Africa.

Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock

Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York

Stock Exchange (NYSE).

Bank has formulated a Code of Business Conduct and Ethics for its directors and employees.

At September 20, 2012, Bank, with free float market capitalization* of about Rs. 400.00 billion

(US$ 9.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges.

Bank was originally promoted in 1994 by Limited, an Indian financial institution, and was its wholly

owned subsidiary. 's shareholding in Bank was reduced to 46% through a public offering of shares in

India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000,

Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and

secondary market sales by to institutional investors in fiscal 2001 and fiscal 2002. was formed in

1955 at the initiative of the World Bank, the Government of India and representatives of Indian

industry. The principal objective was to create a development financial institution for providing

medium-term and long-term project financing to Indian businesses. In the 1990s, transformed its

business from a development financial institution offering only project finance to a diversified

financial services group offering a wide variety of products and services, both directly and through a

number of subsidiaries and affiliates like Bank. In 1999, become the first Indian company and the

first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging

competitive scenario in the Indian banking industry, and the move towards universal banking, the

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managements of and Bank formed the view that the merger of with Bank would be the optimal

strategic alternative for both entities, and would create the optimal legal structure for the group's

universal banking strategy. The merger would enhance value for shareholders through the merged

entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability

to participate in the payments system and provide transaction-banking services. The merger would

enhance value for Bank shareholders through a large capital base and scale of operations, seamless

access to 's strong corporate relationships built up over five decades, entry into new business

segments, higher market share in various business segments, particularly fee-based services, and

access to the vast talent pool of and its subsidiaries. In October 2001, the Boards of Directors of and

Bank approved the merger of and two of its wholly owned retail finance subsidiaries, Personal

Financial Services Limited and Capital Services Limited, with Bank. Shareholders of and BANK

approved the merger in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002,

and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.

Consequent to the merger, the group's financing and banking operations, both wholesale and retail,

have been integrated in a single entity.

*Free float holding excludes all promoter holdings, strategic investments and cross holdings among

public sector entities.

Bank Group

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Board Members

Board Members

Mr. K. V. Kamath, Chairman....................................................

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Mr. Sridhar Iyengar....................................................

Dr. Swati Piramal....................................................

Mr. Homi R. Khusrokhan

....................................................

Mr. Arvind Kumar.................................................

Mr. M.S. Ramachandran..................................................

Dr. Tushaar Shah..................................................

Mr. V. Sridar

Ms. Chandra Kochhar,

Managing Director & CEO.........................................................

Mr. N. S. Kannan,

Executive Director & CFO.........................................................

Mr. K. Ram Kumar,

Executive Director.........................................................

Mr. Rajiv Sabharwal,

Executive Director

Board Committees

Board Committees

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Audit CommitteeBoard Governance, Remuneration &

Nomination Committee

Mr. Sridar Iyengar, Chairman

Mr. Homi Khusrokhan,

Mr. M.S. RamachandranMr. V. Sridar

Mr. Sridar Iyengar, Chairman

Mr. K.V. Kamath

Mr. Homi Khusrokhan

Corporate Social Responsibility Committee Customer Service Committee

Mr. M.S. Ramachandran, Chairman

Mr. Arvind Kumar

Dr. Tushaar Shah

Ms. Chanda Kochhar

Mr.K.V. Kamath, ChairmanMr.M.S. RamachandranMr.V. SridarMs. Chanda Kochhar

Credit Committee Fraud Monitoring Committee

Mr.K.V. Kamath, ChairmanMr. M.S. Ramachandran

Mr. Homi Khusrokhan

Ms. Chanda Kochhar

Mr. V. Sridar, Chairman

Mr. K.V. Kamath

Mr. Homi Khusrokhan

Mr. Arvind Kumar

Ms. Chanda Kochhar

Mr. Rajiv Sabharwal

Information Technology (IT) Strategy CommitteeRisk Committee

Mr. Homi Khusrokhan, ChairmanMr.K.V. KamathMr. Sridar Iyengar

Ms. Chanda Kochhar

Mr.K.V. Kamath, ChairmanMr. Sridar Iyengar

Mr. Arvind Kumar

Mr. V. Sridar

Ms. Chanda Kochhar

Share Transfer & Shareholders'/ Investors' Grievance Committee Committee of Executive Directors

Mr. Homi Khusrokhan, Chairman

Mr. V. Sridar

Mr. N.S. Kannan

Ms. Chanda Kochhar, Chairperson

Mr. N.S. Kannan

Mr. K. Ramkumar

Mr. Rajiv Sabharwal

Product and Services

Deposit

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Bank offers wide variety of Deposit Products to suit your requirements. Coupled with convenience of

networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, Bank brings

banking at your doorstep. Select any of our deposit products and provide your details online and our

representative will contact you for Account Opening.

Bank offers you a power packed Savings Account with a host of convenient features

and banking channels to transact through. So now you can bank at your convenience,

without the stress of waiting in queues.

Fixed Deposits

Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the

Fixed Deposit from Bank.

Recurring Deposits

When expenses are high, you may not have adequate funds to make big investments. But

simply going ahead without saving for the future is not an option for you. Through Bank

Recurring Deposit you can invest small amounts of money every month that ends up

with a large saving on maturity. So you enjoy twin advantages- affordability and higher

earnings.

Loans

Bank offers wide variety of Loans Products to suit your requirements. Coupled with convenience of

networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, Bank brings

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banking at your doorstep. Select any of our loan product and provide your details online and our

representative will contact you for getting loans.

Home Loans

The No. 1 Home Loans Provider in the country, Bank Home Loans offers some

unbeatable benefits to its customers - Doorstep Service, Simplified Documentation and

Guidance throughout the Process. It's really easy!

Car Loans

The NO 1 financier for car loans in the country. Network of more than 1500 channel

partners in over 780 locations. Tie-ups with all leading automobile manufacturers toensure the best deals. Flexible schemes & quick processing. Hassle-free application

process on the click of a mouse.

Commercial Vehicle Loans

Range of services on existing loans & extended products like funding of new vehicles,

refinance on used vehicles, balance transfer on high cost loans, top up on existing loans,

Extend product, working capital loans & other banking products.

Two Wheeler Loans

Avail attractive schemes at competitive interest rates from the No 1 Financier for Two

Wheeler Loans in the country. Finance facility up to 90% of the On Road Cost of the

vehicle, repayable in convenient repayment options and comfortable tenors from 6

months to 36 months. Ride home on your Dream Two Wheeler with our hassle free

finance.

Farm Equipment Loans

Preferred financier for almost all leading tractor manufacturers in the country. Flexible

repayment options in tandem with the farmer's seasonal liquidity. Monthly, Quarterly

and Half-yearly repayment patterns to choose from. Comfortable repayment tenures

from 1 year to 9 years.

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Cards

Bank offers a varied range of cards to suit your requirements. These cards having a wide acceptance,

nationally and internationally, coupled with benefits of channels like Internet and Mobile will enhance

your experience.

Credit Cards

Bank Credit Cards give you the facility of cash, convenience and a range of benefits,

anywhere in the world. These benefits range from life time free cards, Insurance

benefits, global emergency assistance service, discounts, utility payments, travel

discounts and much more.

Debit Cards

The Bank Debit Card is a revolutionary form of cash that allows customers to access

their bank account around the clock, around the world. The Bank Debit Card can be used

for shopping at more than 100,000 merchants in India and 13 million merchants

worldwide.

Travel Card

Presenting Bank Travel Card. The Hassle Free way to Travel the world. Traveling with

US Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security and convenience;

take Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the

convenience of usage of Credit or Debit card.

Investments

At Bank, we care about all your needs. Along with Deposit products and Loan offerings, Bank assists

you to manage your finances by providing various investment options ranging from Bank Tax Saving

Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold. Bank facilitates

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following investment products:

Bank Tax Saving Bonds

Government of India Bonds

Investment in Mutual Funds

Initial Public Offers by Corporate.

Investment in "Pure Gold"

Foreign Exchange Services

Senior Citizens Savings Scheme,

You can invest in above products through any of our branches. For select products Bank also provides

the ease of investing through electronic channels like ATMs and Internet (direct.com)

Demat Services

Bank Demat Services boasts of an ever-growing customer base of over 11.5 lacks account holders. In

our continuous endeavor to offer best of the class services to our customers we offer the following

features:

E-Instructions: You can transfer securities 24 hours a day, 7 days a week through

Internet & Interactive Voice Response (IVR) at a lower cost. Now with "Speak to

transfer", you can also transfer or pledge instructions through our customer care officer.

Consolidation Demat Account: Dematerialize your physical shares in various

holding patterns and consolidate all such scattered holdings into your primary demat

account at reduced cost.

Digitally Signed Statement: Receive your account statement and bill by email.Corporate Benefit Tracking: Track your dividend, interest, bonus through your

account statement.

Mobile Request: Access your demat account by sending SMS to enquire about

Holdings, Transactions, Bill & ISIN details.

Mobile Alerts: Receive SMS alerts for all debits/credits as well as for any request,

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which cannot be processed.

Dedicated customer care executives specially trained at our call centre, to handle all

your queries.

Private Banking

Asset Products

Banking

Credit card and Debit card

Depository Services

Exclusive Phone Banking

Further More...

Asset Products

Enjoy attractive interest rates and the convenience of doorstep service from enquiry to disbursement.

The facility to transfer your existing higher interest rate loan to Bank is also available.

Home loan

Two Wheeler

Personal Loan

Auto Loan

Banking

Fixed Deposits

We offer you competitive interest rates with the added comfort of safety and liquidity. You can also

avail of loans against your Fixed Deposits up to 90% of attractive rates.

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Multicity Cheque Book facility

A payable-at- par chequebook is provided to you free of charge making outstation financial transactions

a signature away.

Debit Cards & Credit Cards

We provide you a free & personalized photo signature international debit card with enhanced cash

withdrawal and point of sales limits.

Exclusive Phone Banking

A call from your registered mobile to our Customer Care Centre would directly connect you to the

phone banking team. No further authentication would be required for your non-financial transactions.

We also provide you with a dedicated toll free number 1-600-22-8181

RISK MANAGEMENT

Risk is an inherent part of Banks business, and effective Risk Compliance & Audit Group is

critical to achieving financial soundness and profitability. Bank has identified Risk

Compliance & Audit Group as one of the core competencies for the next millennium. The

Compliance & Audit Group (RC & AG) at Bank benchmarks itself to international best

practices so as to optimize capital utilization and maximize shareholder value. With well

defined policies and procedures in place, Bank identifies, assesses, monitors and manages the

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principal risks:

Credit risk(the possibility of loss due to changes in the quality of counterparties)

Market Risk(the possibility of loss due to changes in market prices and rates ofsecurities and their levels of volatility)Operational risk(the potential for loss arising from breakdowns in policies and

controls, human error, contracts, systems and facilities)

The ability to implement analytical and statistical models is the true test of a risk methodology.

In addition to three departments within the Risk Compliance & Audit Group handling the above

risks, an Analytics Unit develops quantitative techniques and models for risk measurement.

Market Risk Compliance & Audit Group

Bank is exposed to all categories of Market Risk, viz.,

Interest Rate Risk (risk due to changes in interest rates)

Exchange Rate Risk (risk due to changes in exchange rates)

Equity Risk (risk due to change in equity prices)

Liquidity Risk (risk due to deterioration in market liquidity for tradable instruments)

The Market Risk Compliance & Audit Department evaluates tests and approves

market risk methodologies developed by the Treasury. It also participates in the new

product approval process on a firm-wide basis and evaluates all new products from a

market risk perspective.

Operational Risk Management

Bank, like all large banks, is exposed to many types of operational risks. These

include potential losses caused by events such as breakdown in information,

communication, and transaction processing and settlement systems/ procedures.

The Audit Department, an integral part of the Risk Compliance & Audit Group,

focuses on the operational risks within the organization. In recent times, there has

been a shift in the audit focus from transactions to controls. Some examples of this

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paradigm shift are:

Adherence to internal policies, procedures and documented processes

Risk Based Audit Plan

Widening of Treasury operations audit coverage

Use of Computer Assisted Audit Techniques (CAATs)

Information Systems Audit

Plans to develop/ buy software to capture the workflow of the Audit Department

The Audit Department conceptualized and put into operation a Risk Based Audit

Plan during the year 1998-99. The Risk Based Audit Plan envisages allocation of

audit resources in accordance with the risk constituents of Banks business.

social-initiatives

Bank's social sector initiatives aim to resolve some of the most fundamental developmental problems

facing India today. Our involvement is primarily in terms of non-commercial support to fill knowledge

and practice gaps in specific thematic areas Early Child Health, Elementary Education and Micro

Financial Services.

Www.socialinitiatives.org is an interactive platform that seeks to:

Bring together participants in the development process to widen and deepen the discourse

informing development practice. Interactive features include discussion boards and facilities to

post papers, articles or other resources.

Publish research related to innovations and significant problems within the identified thematic

areas.

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Enable online application for funding

Related Interests

In addition to its core areas of focus, the SIG, in a limited manner, supports some other initiatives:

1.Non-governmental Organization (NGO) Capacity Building

This is supported through the GIVE (Giving Impetus to Voluntary Effort) Foundation and the web site

communities.org.

The web site seeks to provide a variety of services to NGOs listed on the site including facilitating the

receipt of donations online (Give Online), sale of NGO products (Shop Online), volunteering of time

and skills (Volunteer Online) and news (News Online).

2. Modernization of the Indian Financial System

This involves encouraging appropriate research and institution building efforts on a national basis. The

web site, researchcentre.org, is a virtual non-profit research center that acts as a platform to address and

encourage debate, and develop a non-partisan opinion on various issues of concern and interest in

financial economics relating to emerging markets. Bank has supported the development of various

financial institutions such as the National Stock Exchange and the Bombay Stock Exchange. It has also

supported the Institute for Financial Management and Research, Chennai.

Mission Statement

The mission statement of the SIG is "to identify and support initiatives designed to improve the

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capacities of the poorest of the poor to participate in the larger economy". The SIG believes that the

three fundamental capacities any individual should possess to be able to participate in the larger

economy are in the areas of health, education and access to basic financial services. Within these broad

areas, infant health at birth, elementary education and micro financial services define the areas in which

the SIGs work focuses.

Strategy

At a very basic level, the programmes and projects supported by the SIG are required to cater to the

poorest. They should enable them to become active and informed participants in socio-economic

processes as opposed to passive observers. These initiatives must be output oriented, with a focus onproducing measurable outcomes that meet a minimum quality requirement. The initiatives also need to

be cost-effective. This is in recognition of the fact that resources are limited and their efficient use is

imperative if the maximum number is to benefit. Cost-effectiveness also facilitates the adoption of the

initiative in other contexts.

The initiative must be scalable. Scalability implies the ability to draw upon important elements of a

programme and adapt them to suit the needs of a specific situation. It should be possible to do so at a

national level. Even if the programme itself is not directly scale able, it should be possible to take away

significant lessons from it in order to enrich work in other settings.

All supported initiatives should have the potential for both near and long-term impact. Consequentially,

it is important that the impact of these programmes, in the near and long term, be carefully understood

and analyzed in a rigorous manner and not through anecdotes. It is critical to clearly understand how an

initiative is performing in terms of its predetermined goals and in comparison to alternatives. There is

little doubt that a complex of factors, very often beyond the control of the programme/ organization, will

influence the outcome. Yet, serious and regular impact analysis can only make the programme richer

and is essential. The SIG assigns greater value to programmes/ organizations that carefully examine the

short-term and long-term implications of their actions.

In pursuit of its goals in the three focus areas, the SIG tends to support reasonably large-sized initiatives

so that issues such as cost-effectiveness, scalability and impact assessment can be dealt with more

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directly. These initiatives not only have the potential to provide key research inputs to other

programmes, but also tend to have a large impact that benefits the communities they work with. The

approach of the SIG may thus be characterized more broadly as action research, to distinguish it from

pure academic research. However, in its research work and impact assessment, the SIG seeks to adhere

to the highest standards of academic rigour. It often works in partnership with academic institutions such

as Institute of Rural Management Anand, KEM, Massachusetts Institute of Technology, Tata Institute of

Social Sciences, University of California, Berkeley and the University of Southampton.

It is crucial that the programmes supported by SIG be time-bound. This lends clarity to the aim of the

programme and prevents its intent from getting diluted over time.

The SIG works by identifying gaps in knowledge and practice in its focus areas and locating initiatives

that address these gaps in a manner consistent with the SIGs mission. The identification of research

needs is followed by an in-depth analysis of the short-term and long-term implications of various forms

of action. Among other things, this requires taking a comprehensive overview of work already done in

the country and outside. The SIG, thus, seeks to answer certain fundamental questions in its focus areas

through the projects it supports and, thereby, contribute to findings that help the sector. It should be

pointed out that the SIG does not function as a rollout agency.

An important feature of the SIGs strategy is the belief in strengthening or supplementing existing

systems, rather than investing in parallel structures. Another key element of its strategy is the building of

long-term relationships with suitable partners. As part of this effort, the SIG works actively to improve

the efficacy of these partners and ensure sustained impact.

In pursuit of its goals, the SIG seeks to work actively with research agencies, Non-Governmental

Organizations (NGOs), Corporate, Government departments, local stakeholders and international

organizations. It should also be noted that the group believes modern technologies; particularly

Information and Communication Technologies (ICT) can prove to be important facilitators if used

appropriately.

Bank and the Social Sector

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The changed economic climate in India, with a growing emphasis on the market, has hastened the need

for an informed and participatory socio-economic order. As one of the largest players in the economic

landscape of the country, Bank believes that its involvement in the commercial sector must be backedby a simultaneous commitment in the social sector. This is particularly so if any of the larger goals of

economic liberalization in India, and of its players, is to be brought to fruition. Bank seeks to perform

its role in the social sector through a dedicated not-for-profit group, the Social Initiatives Group (SIG).

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O BJECTIVEOf study

O BJECTIVE

Important steps to obtaining useful traditional appraisals include determining the type of data to be

collected as well as who will conduct the appraisal, establishing a rating philosophy, overcoming typical

rating deficiencies, creating a rating instrument, and engaging the employee in making decisions onfuture performance changes.

An effective negotiated performance appraisal helps the employee take additional ownership for both

continuing effective performance and improving weak areas. Employee goals set through performance

appraisals should be difficult but achievable, as goals that are overly ambitious are doomed for failure.

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Some employees tend to boycott their own progress by setting impossible goals to achieve. Finally,

employees want to know what you think of their work. Letting workers know that you have noticed their

efforts goes a long way towards having a more motivated workforce.

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 and which has not been

discovered as yet. Though each research study had its own specific purpose, we may think of research

objectives falling into a number of following broad groupings:

The major objectives of this research are:

1. To find out the techniques used for performance appraisal in Bank.

2. To know the impact of performance appraisal in organization development.

3. To find out the impact of performance appraisal on employees satisfaction.

4. To be familiar about the procedure of performance appraisal in Bank.

5. To know how performance appraisal motivates employees.

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LiteratureReview

Performance Appraisals

A performance appraisal is the process of assessing worker performance in comparison to certain

predetermined organizational standards. Appraisals not only help employees understand how they are

doing but they also help the worker's supervisor along with the organization as a whole. Often,

performance appraisals are linked to pay increases and promotions. But they also provide feedback on

ones performance, help recognize weakness and strengths, and help one to reach the desired goals of the

organization or their own individual goals. For the supervisor, performance appraisals provide

information that is valid for pay increases, promotions, demotion.

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ns, and firings along with feedback for an employee.

Performance appraisals are also used to encourage interaction between workers and supervisors. As one

might think, there are many different kinds of performance appraisals that an organization can decide to

use. The first thing that an organization must decide is whether they want to do what is called an

objective or a subjective performance appraisal.

An objective performance appraisal is when you measure quantifiable aspects of job performance. An

example would be the number of units produced. A subjective performance appraisal is when some

knowledgeable individual rates or critiques your work. Once you decide if an objective or subjective

performance appraisal is good for your organization, you then have to decide what type is right for you.

There are many different ways you can go about deciding and of course many different types to choose

from. The links below point towards sites that can help you find more information about performance

appraisals and some examples of different types of performance appraisals to choose from.

WHAT SHOULD A PERFORMANCE SYSTEM BE?

Correlated with the organization's philosophies and mission

Cover assessment of performance as well as potential for development

Look after the needs of both the individual and the organization

Help create a clean environment

Rewards linked to achievements

Generate information for personnel development and career planning

suggesting appropriate person-task matching

STANDARDS AND INDICATORS OF PERFORMANCE APPRAISAL

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1. Mutual goal

2. Reliable and consistent

3. Accurate and equitable Regular and routine

4. Participatory and open

5. Rewards

6. Timely feedback

7. Impersonal feedback

8. Noticeable feedback

9. Relevance and responsiveness

10. Commitment

HOW CAN THE PERFORMANCE APPRAISAL SYSTEM HELP?

Promote better understanding of an employee's role and clarity about his or her

functions

give a better understanding of personal strengths and weaknesses in relation to

expected roles and functions

Identify development needs of an employee

Establish common ground between the employee and the supervisor

Increase communication

Provide an employee with the opportunity for self-reflection and individual goal

setting

Help an employee internalize the culture, norms and values of the organization. This

helps develop an identity with and commitment to the organization and prepares an

employee for higher-level positions in the hierarchy

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Assist in a variety of personnel decisions

DURING PERFORMANCE APPRAISAL, DISTINGUISH BETWEEN...

Effective human resources management (HRM) is essential for optimally utilizing creativity and

attaining individual as well as organizational goals. Leadership has to ensure proper integration of

various activities and harmonious functioning directed towards organizational goals. High motivation is

essential for ensuring commitment of human resources to the given objectives. The key to motivation

lies in integrating organizational and individual goals. Therefore, a manager has to concentrate on basic

HRM tasks such as planning, development, compensation and Evaluation includes performance

planning, appraisal and counseling. These are critical in effective HRM.

Performance appraisal system: The concept

Performance appraisal is a management tool, which is helpful in motivating and effectively utilizing

human resources. Assessments of human potential are difficult, no matter how well designed and

appropriate the performance planning and appraisal system is.

- Linking rewards with achievements,

- generating information for the growth of the employee as well as of the organization, and

- suggesting appropriate person-task matching and career plans.

Feedback is an important component of performance appraisal. While positive feedback is easily

accepted, negative feedback often meets with resistance unless it is objective, based on a credible

source and given in a skilful manner.

Just like any other process, if performance appraisals aren't working, don't blame the

process, ask yourself whether it is being properly trained, explained, agreed and conducted.

Effective performance appraisals Performance appraisals are essential for the effective management and

evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed

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into business planning. Formal performance appraisals are generally conducted annually for all staff in

the organization. His or her line manager appraises each staff member. (Directors are appraised by the

CEO, who is appraised by the chairman or company owners, depending on the size and structure of the

organization). Annual performance appraisals enable management and monitoring of standards, agreeing

expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals

also establish individual training needs and enable organizational training needs analysis and planning.

Performance appraisals data feeds into organizational annual pay and grading reviews, and coincides

with the business planning for the next trading year. Performance appraisals generally review each

individual's performance against objectives and standards for the trading year, agreed at the previous

appraisal meeting. Performance appraisals are also essential for career and succession planning.

Performance appraisals are important for staff motivation, attitude and behavior development,

communicating organizational aims, and fostering positive relationships between management and staff.

Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a

plan for future development. In short, performance and job appraisals are vital for managing the

performance of people and organizations.

Are performance appraisals truly beneficial?

It is sometimes fashionable in the 'modern age' to dismiss traditional processes such as performance

appraisals as being irrelevant or unhelpful. Be very wary however if considering to remove appraisals

from your own organizational practices. It is likely that the critics of the appraisal process are the people

who can't conduct them very well. It's a common human response to want to jettison something that one

finds difficult. Appraisals - in whatever form, and there are various - have been a mainstay of

management for decades, for good reasons.

Think about everything that performance appraisals can achieve and contribute to when they are

properly managed, for example:

Performance measurement - transparent, short, medium and long term

Clarifying, defining, redefining priorities and objectives

Motivation through agreeing helpful aims and targets

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Motivation though achievement and feedback

Training needs and learning desires - assessment and agreement

Identification of personal strengths and direction - including unused hidden strengths

Career and succession planning - personal and organizational

Team roles clarification and team building

Organizational training needs assessment and analysis

Appraise and manager mutual awareness, understanding and relationship

Resolving confusions and misunderstandings

Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc

Delegation, additional responsibilities, employee growth and development

Counseling and feedback

Manager development - all good managers should be able to conduct appraisals well - it's a

fundamental process

The list goes on.

People have less and less face-to-face time together these days. Performance appraisals offer a way to

protect and manage these valuable face-to-face opportunities. My advice is to hold on to and nurture

these situations, and if you are under pressure to replace performance appraisals with some sort of

(apparently) more efficient and cost effective methods, be very sure that you can safely cover all the

aspects of performance and attitudinal development that a well-run performance appraisals system is

naturally designed to achieve.

There are various ways of conducting performance appraisals, and ideas change over time as to what are

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the most effective appraisals methods and systems. Some people advocate traditional appraisals and

forms; others prefer 360-degree-type appraisals; others suggest using little more than a blank sheet of

paper.

In fact performance appraisals of all types are effective if they are conducted properly, and better still if

the appraisal process is clearly explained to, agreed by, the people involved.

Managers need guidance, training and encouragement in how to conduct appraisals properly. Especially

the detractors and the critics. Help anxious managers (and directors) develop and adapt appraisals

methods that work for them. Be flexible. There are lots of ways to conduct appraisals, and particularly

lots of ways to diffuse apprehension and fear - for managers and appraises alike. Particularly -

encourage people to sit down together and review informally and often - this removes much of the

pressure for managers and appraises at formal appraisals times. Leaving everything to a single make-or-

break discussion once a year is asking for trouble and trepidation.

Look out especially for the warning signs of 'negative cascaded attitudes' towards appraisals. This is

most often found where a senior manager or director hates conducting appraisals, usually because they

are uncomfortable and inexperienced in conducting them. The senior manager/director typically will be

heard to say that appraisals don't work and are a waste of time, which for them becomes a self-fulfilling

prophecy. This attitude and behavior then cascades down to their appraises (all the people in their team)who then not surprisingly also apply the same 'no good - not doing it' negative attitude to their own

appraisals responsibilities (teams). And so it goes. A 'no good - not doing it' attitude in the middle ranks

is almost invariably traceable back to a senior manager or director who holds the same view. As with

anything, where people need help doing the right thing, help them.

All that said, performance appraisals that are administered without training (for those who need it),

without explanation or consultation, and conducted poorly will be counter-productive and is a

waste of everyone's time.

Well-prepared and well-conducted performance appraisals provide unique opportunities to help

appraise and managers improve and develop, and thereby also the organizations for whom they work.

Aside from formal traditional (annual, six-monthly, quarterly, or monthly) performance appraisals, there

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are many different methods of performance evaluation. The use of any of these methods depends on the

purpose of the evaluation, the individual, the assessor, and the environment.

The formal annual performance appraisal is generally the over-riding instrument, which gathers together

and reviews all other performance data for the previous year.

Performance appraisals should be positive experiences. The appraisals process provides the platform for

development and motivation, so organizations should foster a feeling that performance appraisals are

positive opportunities, in order to get the best out of the people and the process. In certain organizations,

performance appraisals are widely regarded as something rather less welcoming ('bollocking sessions' is

not an unusual description), which provides a basis only on which to develop fear and resentment, so

never, never, never use a staff performance appraisal to handle matters of discipline or admonishment,

which should instead be handled via separately arranged meetings.

Objectives of performance appraisal

From the point of view of the organization, performance appraisal serves the purpose of providing

information about human resources and their development; measuring the efficiency with whichhuman resources are being used and improved; providing compensation packages to employees;

and maintaining organizational control.

Performance appraisal should also aim at the mutual goals of the employees and the organization. This

is essential because employees can develop only when the organization's interests are fulfilled. The

organization's main resources are its employees, and their interest cannot be neglected. Mutual goals

simultaneously provide for growth and development of the organization as well as of the human

resources. They increase harmony and enhance effectiveness of human resources in the organization.

Uses of an appraisal system

A properly designed performance appraisal system can:

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Be instrumental in helping employees to better understand their strengths and weaknesses with

respect to their role and functions in the organization;

Help in identifying the developmental needs of employees, given their role and function;

Increase mutuality between employees and their supervisors so that every employee feels

happy to work with their supervisor and thereby contributes their maximum to the

organization;

Act as a mechanism for increasing communication between employees and their supervisors.

In this way, each employee gets to know the expectations of their superior, and each superior

also gets to know the difficulties of their subordinates and can try to solve them. Together,

they can thus better accomplish their tasks;

Provide an opportunity to each employee for self-reflection and individual goal setting, so that

individually planned and monitored development takes place;

Help employees internalize the culture, norms and values of the organization, thus developing

an identity and commitment throughout the organization;

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;

Be instrumental in creating a positive and healthy climate in the organization that drives

employees to give their best while enjoying doing so; and

Assist in a variety of personnel decisions by periodically generating data regarding each

employee.

Characteristics of an appraisal system

Performance appraisal cannot be implemented successfully unless all concerned accepts it. There

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should be a common and clear understanding of the distinction between evaluation and appraisal. As

Patten (1982) argues, evaluation aims at 'objective' measurement, while appraisal includes both

objective and subjective assessment of how well an employee has performed during the period under

review. Thus performance appraisal aims at 'feedback, development and assessment.' The process of

performance appraisal should concentrate on the job of an employee, the environment of the

organization, and the employee him- or herself. These three factors are inter-related and inter-

dependent. Therefore, in order to be effective, the appraisal system should be individualized,

subjective, and qualitative and oriented towards problem solving. It should be based on clearly

specified and measurable standards and indicators of performance. Since what is being appraised is

performance and not personality, personality traits, which are not relevant to job performance, should

be excluded from the appraisal framework.

Some of the important considerations in designing a performance appraisal system are:

Goal the job description and the performance goals should be structured mutually decided and

accepted by both management and employees.

Reliable and consistent Appraisal should include both objective and subjective ratings to

produce reliable and consistent measurement of performance.

Practical and simpleformat the appraisal format should be practical, simple and aim at fulfilling

its basic functions. Long and complicated formats are time consuming, difficult to understand, and do

not elicit much useful information.

Regular and routine while an appraisal system is expected to be formal in a structured manner,

informal contacts and interactions can also be used for providing feedback to employees.

Participatory and open an effective appraisal system should necessarily involve the employee'sparticipation, usually through an appraisal interview with the supervisor, for feedback and future

planning. During this interview, past performance should be discussed frankly and future goals

established. A strategy for accomplishing these goals as well as for improving future performance

should be evolved jointly by the supervisor and the employee being appraised. Such participation

imparts a feeling of involvement and creates a sense of belonging.

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Rewards - both positive and negative - should be part of the performance appraisal system.

Otherwise, the process lacks impact.

Feedback should be timely unless feedback is timely; it loses its utility and may have only

limited influence on performance.

Impersonal feedbackmust be impersonal if it is to have the desired effect. Personal feedback is

usually rejected with contempt, and eventually de-motivates the employee.

Feedback must be noticeable the staff member being appraised must be made aware of the

information used in the appraisal process. An open appraisal process creates credibility.

Relevance and responsiveness- Planning and appraisal of performance and consequent rewards

or punishments should be oriented towards the objectives of the programmer in which the employee

has been assigned a role. For example, if the objectives of a programmer are directed towards a

particular client group, then the appraisal system has to be designed with that orientation.

Commitment Responsibility for the appraisal system should be located at a senior level in the

organization so as to ensure commitment and involvement throughout the management hierarchy.

Types of performance and aptitude assessments

Formal annual performance appraisals

Probationary reviews

Informal one-to-one review discussions

Counseling meetings

Observation on the job

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Skill- or job-related tests

Assignment or task followed by review, including second (temporary job cover or transfer).

Assessment centre, including observed group exercises, tests presentations, etc.

Survey of opinion of others who have dealings with the individual

Psychometric tests and other behavioral assessments

Graphology (handwriting analysis)

None of these methods is mutually exclusive. All of these performance assessment methods can be used

in conjunction with others in the list, depending on situation and organizational policy. Where any of

these processes is used, the manager must keep a written record, and must ensure agreed actions are

followed up. The notes of all review situations can then be referred to at the formal appraisal.

Holding regular informal one-to-one review meetings greatly reduces the pressure and time required for

the annual formal appraisal meeting. Holding informal reviews every month is ideal all staff. There are

several benefits of reviewing frequently and informally:

The manager is better informed and more up-to-date with his or her people's activities (and more in

touch with what lies beyond, e.g., customers, suppliers, competitors, markets, etc)

Difficult issues can be identified, discussed and resolved quickly, before they become more serious.

Help can be given more readily - people rarely ask unless they see a good opportunity to do so - the

regular informal review provides just this.

Assignments, tasks and objectives can be agreed completed and reviewed quickly - leaving actions more

than a few weeks reduces completion rates significantly for all but the most senior and experienced

people.

Objectives, direction, and purpose is more up-to-date - modern organizations demand more flexibility

than a single annual review allows - priorities often change through the year, so people need to be re-

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directed and re-focused.

Training and development actions can be broken down into smaller more digestible chunks, increasing

success rates and motivational effect as a result.

The 'fear factor', often associated by many with formal appraisals, is greatly reduced because people

become more comfortable with the review process.

Relationships and mutual understanding develops more quickly with greater frequency of meetings

between manager and staff member.

Staff members can be better prepared for the formal appraisal, giving better results, and saving

management time.

Much of the review has already been covered throughout the year by the time comes for the formal

appraisal.

Frequent review meetings increase the reliability of notes and performance data, and reduce the chances

of overlooking things at the formal appraisal.

Performance appraisal system:

The process

Performance appraisal involves an evaluation of actual against desired performance. It also helps in

reviewing various factors, which influence performance. Managers should plan performance

development strategies in a structured manner for each employee. In doing so, they should keep the

goals of the organization in mind and aim at optimal utilization of all available resources, including

financial. Performance appraisal is a multistage process in which communication plays an important

role.

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Performance appraisals process

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

(I) Establishing standards and measures

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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 behavior and personal characteristics of each employee; and

assess their performance and achievement in the job.

There are various methods available for assessing results, behavior 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

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communication, judgment and analysis of data. This is like putting together an 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.

(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.

Communication

It is obvious that communication is at the core of an appraisal system. Communication can be either

upward or downward.Downward communication is from upper management levels to lower levels, and

passes on a judgment of how the employees are doing and how they might do even better. As the

information flows downward, it becomes more individualized and detailed. Upward communication is

from lower to higher levels. Through this process, employees communicate their needs, aspirations and

goals. As information flows upward, it has to become brief and precise because of the channels through

which it has to pass.

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Approaches and techniques in performance appraisal

Performance appraisal is a multistage process involving several activities, which can be administered

using a variety of approaches. Some of these approaches are considered below, based on Einstein and

LeMere-Labonte, 1989; and Monga, 1983:

APPROACHES IN PERFORMANCE APPRAISAL

Intuitive

Self-appraisal

Group

Trait

Achievement of results

Behavioral method

Intuitive approach in this approach, a supervisor or manager judges the employee based

on their perception of the employee's behavior.

Self-appraisal approach Employees evaluates their own performance using a common

format.

Group approach the employee is evaluated by a group of persons.

Trait approach this is the conventional approach. The manager or supervisor evaluates

the employee on the basis of observable dimensions of personality, such as integrity,

honesty, dependability, punctuality, etc.

Appraisal based on achieved results in this type of approach, appraisal is based on

concrete, measurable, work achievements judged against fixed targets or goals set

mutually by the subject and the assessor.

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Behavioral method: This method focuses on observed behavior and observable critical

incidents.

Appraisal techniques

TECHNIQUES OF PERFORMANCE APPRAISAL

Easy appraisal method

Graphic rating scales

Field review method

Forced choice rating method

Critical incident appraisal method

Management by objectives

Work standard approach

Ranking methods

- Alteration methods

- Alteration ranking

- Paired comparison

- Person-to-person rating

- Checklist

- Behaviorally anchored rating scales

- Assessment centre

There are several techniques of performance appraisal, each with some strong points as well as

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limitations. Oberg (1972) has summarized some of the commonly used performance appraisal

techniques.

(i) Essay appraisal method

The assessor writes a brief essay providing an assessment of the strengths, weaknesses and potential of

the subject. In order to do so objectively, it is necessary that the assessor knows the subject well and

should have interacted with them. Since the length and contents of the essay vary between assessors,

essay ratings are difficult to compare.

(ii) Graphic rating scale

A graphic scale 'assesses a person on the quality of his or her work (average; above average;

outstanding; or unsatisfactory).' Assessment could also be trait centered and cover observable traits,

such as reliability, adaptability, communication skills, etc. Although graphic scales seem simplistic in

construction, they have application in a wide variety of job responsibilities and are more consistent

and reliable in comparison with essay appraisal. Using it in conjunction with the essay appraisal

technique can enhance the utility of this technique.

(iii) Field review method

Since individual assessors differ in their standards, they inadvertently introduce bias in their ratings.

To overcome this assessor-related bias, essay and graphic rating techniques can be combined in a

systematic review process. In the field review method, 'a member of the HRM staff meets a small

group of assessors from the supervisory units to discuss each rating, systematically identifying areas of

inter-assessor disagreement.' It can then be a mechanism to help each assessor to perceive the

standards uniformly and thus match the other assessors. Although field review assessment is

considered valid and reliable, it is very time consuming.

(iv) Forced-choice rating method Unlike the field review method the forced-

choice rating method does not involve discussion with supervisors. Although this

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technique has several variations, the most common method is to force the assessor to

choose the best and worst fit statements from a group of statements. These statements

are weighted or scored in advance to assess the employee. The scores or weights

assigned to the individual statements are not revealed to the assessor so that she or he

cannot favor any individual. In this way, the assessor bias is largely eliminated and

comparable standards of performance evolved for an objective. However, this

technique is of little value wherever performance appraisal interviews are conducted.

(v) Critical incident appraisal method

In this method, a supervisor describes critical incidents, giving details of both positive and negative

behavior of the employee. These are then discussed with the employee. The discussion focuses on

actual behavior rather than on traits. While this technique is well suited for performance review

interviews, it has the drawback that the supervisor has to note down the critical incidents as and when

they occur. That may be impractical, and may delay feedback to employees. It makes little sense to

wait six months or a year to discuss a misdeed, a mistake or good display of initiative.

(vi) Management by objectives.

The employees are asked to set or help set their own performance goals. This avoids the feeling among

employees that they are being judged by unfairly high standards. This method is currently widely used,

but not always in its true spirit. Even though the employees are consulted, in many cases management

ends up by imposing its standards and objectives. In some cases employees may not like 'self-direction

or authority.' To avoid such problems, the work standard approach is used.

(vii) Work standard approach

In this technique, management establishes the goals openly and sets targets against realistic output

standards. These standards are incorporated into the organizational performance appraisal system.

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Thus each employee has a clear understanding of their duties and knows well what is expected of

them. Performance appraisal and interview comments are related to these duties. This makes the

appraisal process objective and more accurate. However, it is difficult to compare individual ratings

because standards for work may differ from job to job and from employee to employee. Some form of

ranking using pooled judgment can overcome this limitation.

(viii) Ranking methods

Some of the important forms of ranking for performance appraisal are given below, based on Oberg,

1972; and Monga, 1983:

(a)Alteration ranking methodThe individual with the best performance is chosen as the ideal

employee. Other employees are then ranked against this employee in descending order of comparative

performance on a scale of best to worst performance. The alteration ranking method usually involves

rating by more than one assessor. The ranks assigned by each assessor are then averaged and a relative

ranking of each member in the group is determined. While this is a simple method, it is impractical for

large groups. In addition, there may be wide variations in ability between ranks for different positions.

(b)Paired comparisonThe paired comparison method systematizes ranking and enables better

comparison among individuals to be rated. Every individual in the group is compared with all others inthe group. The evaluations received by each person in the group are counted and turned into

percentage scores. The scores provide a fair idea as to how each individual in the group is judged by

the assessor.

(c) Person-to-person rating In the person-to-person rating scales, the names of the actual

individuals known to all the assessors are used as a series of standards. These standards may be

defined as lowest, low, middle, high and highest performers. Individual employees in the group are

then compared with the individuals used as the standards, and rated for a standard where they match

the best. The advantage of this rating scale is that the standards are concrete and are in terms of real

individuals. The disadvantage is that the standards set by different assessors may not be consistent.

Each assessor constructs their own person-to-person scale, which makes comparison of different

ratings difficult.

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(d) Checklist method The assessor is furnished with a checklist of pre-scaled descriptions of

behavior, which are then used to evaluate the personnel being rated (Monga, 1983). The scale values

of the behavior items are unknown to the assessor, who has to check as many items as she or he

believes describe the worker being assessed. A final rating is obtained by averaging the scale values of

the items that have been marked.

(e) Behaviorally anchored rating scales (BARS) This is a relatively new technique. It

consists of sets of behavioral statements describing good or bad performance with respect to important

qualities. These qualities may refer to inter-personal relationships, planning and organizing abilities,

adaptability and reliability. These statements are developed from critical incidents collected both from

the assessor and the subject.

(f) Assessment centreThis technique is used to predict future performance of employees were

they to be promoted. The individual whose potential is to be assessed has to work on individual as well

as group assignments similar to those they would be required to handle were they promoted. The

judgment of observers is pooled, and paired comparison or alteration ranking is sometimes used to

arrive at a final assessment. The final assessment helps in making an order-of-merit ranking for each

employee. It also involves subjective judgment by observers.

A performance appraisal system could be designed based on intuition, self-analysis, personality traits,

behavioral methods and result-based techniques. Different approaches and techniques could be

blended, depending on the goals of performance appraisal in the organization and the type of review.

For example, management by objectives, goal-setting and work standard methods are effective for

objective coaching, counseling and motivational purposes. Critical incident appraisal is best suited

when supervisor's personal assessment and criticism are essential. A carefully developed and validated

forced-choice rating can provide valuable analysis of the individual when considering possible

promotion to supervisory positions. Combined graphic and essay form is simple, effective in

identifying training and development needs, and facilitates other management decisions.

Components of the appraisal format

Key performance areas, self-appraisal, performance analysis, performance ratings and counseling are

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the important components of a performance appraisal system oriented to development of human

resources in an organization. The appraisal format should be designed in consonance with the

objectives of the performance appraisal system, and generate information on a number of important

aspects, including (Rao, 1985):

COMPONENTS OF THE APPRAISAL FORMAT

Identification of key performance areas

Identification of qualities for job performance

Self-appraisal

Analysis

Discussion

Identification of training needs

Action plan and goal settings for the future

Final assessment

Identificationof key performance areasThe first step in an appraisal process is identifying

key performance areas and setting targets for the next appraisal period. This may be done either

through periodic discussions or at the beginning of the year, as in research institutions.

Self-appraisal by the subject At the end of the appraisal period, employees appraise their own

performance against the key performance areas, targets and pre-identified behavior. Information on

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these issues is provided in an appraisal format. The employees also write their self-evaluation reports

and hand them to their supervisors.

Analysis -The supervisor reflects on the performance of the employee, and identifies the factors,

which facilitated or hindered the employee's performance. The manager then calls the employee for a

discussion to better understand his or her performance and provide counseling on further

improvements. During this discussion, appraisal records (such as notes, observations, comments, etc.)

are exchanged. The manager then gives a final rating and recommendations regarding the

developmental needs of the individual. These are shown to the subject and his or her comments are

recorded on the appraisal form. The appraisal form is then transmitted to the personnel department for

the necessary administrative action. The personnel or human resource development department uses

these forms for identifying and allocating training, rewards and other activities.

Identification of training needs the use of a development-oriented performance appraisal

system is based on a good understanding of the concept of human resources development. The need

for developing employee capabilities, the nature of capabilities to be developed, and the conditions

under which these capabilities can be developed have to be appreciated. During the discussion

between the supervisor and the employee, the development needs of the subject are identified and

goals set for the next period.

Identification of qualities The supervisor may also identify the qualities required for current as

well as future tasks, and assess the employee's potential and capabilities to perform jobs at higher

responsibility levels in the organization.

ATTRIBUTES CONSIDERED IN EVALUATING PERFORMANCE

There are many personality traits, which could be considered when evaluating performance, and

methods to facilitate such consideration include scaling methods that differentiate employees on a

series of given traits. The important personality traits fall into two categories: personal qualities and

demonstrated qualities.

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Management problems in evaluating performance

Identification of appraisal criteria

Assessment problems

Policy problems

Some of the important problems faced by managers in evaluating performance are identification of

appraisal criteria, problems in assessment, and policy-related problems.

PERFORMANCE APPRAISAL SYSTEMS

Identification of appraisal criteria

It is usually quite difficult to decide the criteria for evaluating performance, particularly the

performance of those engaged in research activities. Initiative, appearance, tact or organizational skills

of researchers are very difficult to assess. While deciding the performance criteria, it is important to

simultaneously decide how well people should perform. The aim of the appraisal system is to make

informed, accurate and fact-based judgments, although some of these judgments may not be

quantifiable.

Conventionally, the number of contributions accepted for publication in refereed professional journals

has been a useful measure for evaluating the performance of scientists. This is perhaps an appropriate

measure for those who are engaged in basic research. However, publication numbers do not

adequately measure performance of those engaged in adaptive and applied research, which are aimed

at meeting practical and critical needs of users. The performance of such researchers has to be

measured differently, taking due consideration of their success with the user system. On the whole,

qualitative assessment may be more appropriate for researchers because of difficulties in quantitative

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assessment, as research is relatively non-repetitive, requires creativity, usually takes a longish time,

has unpredictable outcomes, and could result in multi-dimensional outputs. Therefore, outputs of

research and researchers should not be measured by one criterion. Instead, performance of a researcher

has to be measured in Toto, as an integral part of the research program.

Assessment problems

It is difficult to observe behavior and interpret it in terms of its causes, effects and desirability. Rating

behavior on an appraisal form is quite difficult. The human element plays a significant role in the

appraisal process and introduces subjectivity and bias. This can be minimized by:

Documenting performance from time to time,

Basing criteria for evaluation on observable behavior,

Training the supervisors; and effectively communicating the expectations

which management has of staff.

Policy problems

The results of the appraisal system should be followed up through a set of well-designed and enforced

policies, and translated into rewards and punishments. Performance of researchers is sometimesdifficult to assess. A research manager has to balance between researchers' creativity and

organizational goals. Researchers do not like others passing judgment on qualitative or quantitative

aspects of their work, yet the need for an effective performance planning and appraisal system in a

research organization is well accepted.

APPRAISAL INTERVIEW

Planning an interview

- Tell and sell

- Tell and listen

- Problem solving

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conducting an interview as planned

Applying good questioning techniques

Listen intelligently and without prejudice while someone less senior

does most of the talking

communicating effectively verbally and non-verbally

Introduction of 360-degree appraisals

360-degree appraisal is the process of systematically gathering data on a persons skills, abilities and

behaviors from variety of sources-the manager, peers, subordinates and even customers and clients. In

360-degree appraisal, his superior, his peers, his subordinates and clients or outsiders with whom he

interacts in the course of his job performance do appraisal of an employee. In 360-degree appraisal,

besides appraising the performance of the assesses, his other attributes such as talents, behavior, values,

and technical considerations are also appraised. How appraisal information is collected from various

sources in 360-degree appraisal is presented below:

Appraisal by Superior. In most of the traditional techniques, the immediate superior does appraisal of an

employee. In 360-degree appraisal, the superior appraises the employee on various dimensions of the job

as may be decided. There are three reasons why the immediate superior must appraise the performance

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of his subordinate.

1) He is more familiar with his subordinates performance.

2) He understands more specifically where his particular subordinate lacks which may be

overcome by training and development.

3) Because of the nature of authority relationship, the superior is responsible for getting the

things done which necessitates appraisal of his subordinates.

However, many biases are likely to emerge in his appraisal. Further, he may not be aware fully about

many behaviors of subordinates, which may be important for appraisal.

Appraisal by peers. Peers of an employee are in a better position to evaluate certain aspects of his

behavior. Since the employee is more closely linked to his peers at the workplace, they may be able to

appraise his contributions to the group efforts, interpersonal effectiveness, communication skills,

reliability, initiative, and etc. However, in such an appraisal, biases are likely to emerge specially if the

appraisal results are used for deciding rewards. Further, appraisal may take the shape of give and take

in which there may be reciprocal appraisal, you rate me good, I will do the same for you.

Appraisal by subordinates. Subordinates can appraise their superior in terms of how he facilitates their

working, delegates authority, allocates work and resources, disseminates information, resolves

interpersonal conflicts and shows fairness to them. However, how objectives this appraisal is depends on

the liberty to which subordinates enjoy n appraising his superior.

Appraisal by clients. The clients who interact with the employee evaluate an employees performance.

These clients may be suppliers of inputs or customers of outputs. These clients may rate the employee in

terms of his providing services to them, his cooperation, courtesy, dependability and innovativeness.

There are two problems, which may emerge in this appraisal.

1. There may be motivational problem in which clients may not be evaluated an employee of

organization as they feel that this is not their responsibility.

2. The objectivity of their evaluation is likely to be affected by how their own interest is served by

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the employee which may not be reflect the true performance of the employee.

Role of HR Department in 360-degree appraisal. The role of HR department in 360-degree appraisal is

that of facilitators. The department consolidate the appraisal inputs, identifies the points of consensus,

and provides feedback to the appraise so as to overcome the weakness as identified in the appraisal. The

presence of facilitators also acts as a buffer, preventing the aoppraisee from attacking those who

provided honest inputs. The department also devices action plans for overcoming those weaknesses.

Evaluation of 360-degree appraisal. The 360-degree appraisal is better as compared to many traditional

techniques because it examines employee from different perspectives. Such an appraisal provides useful

information about him which can used for developing him to overcome his deficiency. The result can

also be compared over the period of time for the same employee to find out whether there has been any

improvement in him. The 360-degree feedback works best if the employee concerned matches the data

gathered with his own self-assessment.

Positive and negative aspects of 360-degree appraisal

Positive aspects

1. Greater self-awareness of managers; reveals strengths and weaknesses.

2. Reduced gap between self-assessment and colleagues assessment.

3. Teamwork thrives through peer group assessment.

4. Fact about organizational culture and ambience are brought to light.

5. Empowerment is facilitated.

6. Inflexible employees are forced to initiate self-image.

Negatives Aspects

1. The system may be utilize to humiliate personnel

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2. Response from colleagues may be biased.

3. Linking rewards to appraisal may turn to be unfair.

4. It ignores performance in terms of reaching goals.

5. The ratee may deny the truth of negative feedback.

360-degree feedback form template example

A typical 360-degree feedback form template would look like this. This template allows a mixture of

key skills comprising one, two, three, four, and up to six elements. The number of elements per key

skill/capability would vary of course, so if necessary adjust the size of the boxes in the first column

accordingly to accommodate more or less elements. See the notes directly above for more explanation

about the purpose of each column and heading, and the feedback scoring method.

SCOPE OF STUDY

In present scenario with the growing complexities of the industrial Society, work is simply a means of

earning a living this appears to Be an over simplification. Work serves many other functions for an

Individual. An individual sense of well being, of doing something Worthwhile, of having some

considerations, may be so compulsive. That man may continue to work even if they are not pressed by

Economic needs.

Performance appraisal provide needful helping for the following:

Status

Job Security

Feelings of Recognition

Feeling of Achievement

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Feeling of Possible Growth

Feeling of Responsibility

Group Feelings

Feeling of Interest in the performance of Job.

Feeling of Increase Status

Performance Effects

Change in rate of output.

Change in Quality of Work

Effects on Interpersonal Relationships

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LITERATURE

REVIEW

Research methodology

Methodology is the study of methods it deals with the philosophical assumption underlying the process

of research.

A method is specific technique for data collection under certain philosophical assumptions.

The practical work that lies between the theoretical framework and practical analysis.

Following are then kinds of methodologies

1. Quantitative methodologies- involves those methodologies, such as closed surveys structured

interviews and sociograms (diagrammatic representations of interactions between individuals), which

enable data (concrete or conceptual) to be collected, measured and compared with a standard.

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A. Survey -A methodology which can use different instruments such as observation, interview or a

written list of questions called a questionnaire. Surveying is the process of conducting a study from

representative samples of specific populations (for example, women in the workforce, Year 9 students,

recent immigrants). If a questionnaire is used, it may be comprised entirely of closed questions,

multiple-response questions, Lickett scale questions (differential sliding scale or rating scale questions)

or open-ended questions, or may be a combination of all question styles. Data recording sheets for

observa

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