Performance Appraisal

A DISSERTATION PROJECT On “STUDY ON PERFORMANCE APPRAISAL SYSTEM AT WAY TO WEALTH” Submitted in partial fulfillment of the requirement for MBA Degree of Bangalore University BY JYOTSNA Register Number 04XQCM6037 Under the guidance of Prof. S. Santhanam M. P. Birla Institute of Management Associate Bharatiya Vidya Bhavan Bangalore-560001 2004-2006 DECLARATION I hereby declare that the report titled “ STUDY ON PERFORMANCE APPRAISAL AT WAY TO WEALTH”is prepared under the guidance of Prof. S. Santhanam in partial fulfillment of MBA degree of Bangalore University, and is my original work.

This project does not form a part of any report submitted for degree or diploma of Bangalore University or any other university. Place: Bangalore Date: JYOTSNA M. P. Birla Institute Of Management 2 PRINCIPAL’S CERTIFICATE This is to certify that Ms JYOTSNA, bearing registration No: 04XQCM6037 has done a project and has prepared a report “STUDY ON PERFORMANCE APRAISAL SYSTEM AT WAY TO WEALTH “under the guidance of Prof. S. Santhanam, M. P. Birla Institute of Management, Bangalore. This has not formed a basis for the award of any degree/diploma for any other university. Place: Bangalore Date: Dr . NAGESH. S.

MALLAVALLI PRINCIPAL MPBIM, Bangalore : M. P. Birla Institute Of Management 3 GUIDE’S CERTIFICATE This is to certify that Ms JYOTSNA, bearing registration No: 04XQCM6037 has done a project and has prepared a report “STUDY ON PERFORMANCE APPRAISAL SYSTEM AT WAY TO WEALTH “under my guidance. This has not formed a basis for the award of any degree/diploma for any other university. Place: Bangalore Date: Prof. S. Santhanam M. P. Birla Institute Of Management 4 ACKNOWLEDGEMENT I would like to take this opportunity to express my sincere gratitude to all those who guided me in the right direction to complete this report.

I would like to thank Dr. Nagesh Malavalli ,principal for his support and also to thank my guide Prof. S. Santhanam, faculty member, for his guidance and support for making this project a success. I would also thank my family and my friends for supporting me during the project. Place: Bangalore Date: (JYOTSNA) M. P. Birla Institute Of Management 5 CONTENTS Sl. No Page No CONTENTS 1 2 3 4 5 6 7 8 9 10 ABSTRACT INTRODUCTION METHODOLOGY STATEMENT OF PROBLEM OBJECTIVES OF THE STUDY LIMITATIONS COMPANY PROFILE DATA ANALYSIS & INTERPRETATION SUMMARY & CONCLUSION BIBLIOGRAPHY 9 10 11 14 16 26 27 32 54 59 M. P.

Birla Institute Of Management 2 LIST OF GRAPHS Sl. No 1 2 3 4 5 6 7 8 Graphs Graph showing whether PA is conducted every year in the company Graph showing whether job increments & promotions are based on PA Graph showing whether PA objectives are clearly defined Graph showing the purpose of PA Graph showing Feedback on Pa is collected Graph showing the Opinion of the present PA system Graph showing whether PA system needs to be improved Graph showing methods that can be suggested for PA Page No 33 34 35 36 38 39 42 43 PA: Performance Appraisal M. P. Birla Institute Of Management 3 LIST OF TABLES Sl. No 1 2 3 4 5 6 7 8 9 10 11

Tables Table showing whether PA is conducted every year in the company Table showing job increments &Promotions are based on PA Table showing whether PA objectives are clearly defined Table showing the purpose of PA Table showing Ranking of methods employed in PA Table showing whether Feedback on PA is collected Table showing the Opinion on present PA system Table showing factors covered in PA Table showing Improvements to be done in PA Table showing whether Pa system needs to be improved Table showing methods that can be suggested for PA Page No 33 34 35 36 37 38 39 40 41 42 43 PA: Performance Appraisal M. P.

Birla Institute Of Management 4 ABSTRACT It is a well-established fact the people differ in their abilities and aptitudes. These differences are natural to a great extent and cannot be eliminated completely by giving them education and training. There will always be some difference in quality and quantity of work done by different employees. Therefore it is necessary for the management to know these differences so that it may develop certain programs in the organization for those employees who posses better potentials so that they may be developed to accept the challenges of higher jobs or wrong placement of employees may be rectified .

The individual employee may also like to know his capability in terms of his performance on his capability in terms of his performance on the job qualitatively and quantitatively in comparison to his fellow employees so that he improve upon it. No firm has a choice as to whether or not it should appraise its personnel and their performance but the choice lies between the systematic and the unsystematic or casual appraisal. The system of appraising the man is not new but the systematic approach of evaluating the man is by any means a new development .

The technique of appraising the man by supervisors or others is widely known as “ Performance Appraisal” . It is also sometimes termed as Personnel Performance Evaluation, Merit Rating. Thus main objective of the project is to study the Performance Appraisal process being practiced in WAY 2 WEALTH and evaluate its effectiveness. This project aimed at finding out effectiveness in terms of familiarity, and satisfaction level of performance appraisal among the employees WAY 2 WEALTH. The project also focuses on finding out how performance appraisal is matching in meeting the company’s goals and objectives.

M. P. Birla Institute Of Management 5 METHODOLOGY The research methodology used in the project is the descriptive approach and it is done among 200 employees . The main sources through which data is collected are 1. Primary data 2. Secondary data The data collected for this research is through primary data collection method. The instrument used for collecting primary data is structured questionnaire filled up by the employees Statistical tools were used to find inferences between the variables and analyzing the results.

The following are the tools used. 1) 2) 3) Kalmograv Smirnov Test Chi – Square test (? 2) Spearman’s Rank Correlation M. P. Birla Institute Of Management 6 M. P. Birla Institute Of Management 7 INTRODUCTION An organization’s goals can be achieved only when people put in their best efforts . How to ascertain whether an employee has shown his or her best performance on a given job?. The answer is Performance Appraisal. Employee assessment is the fundamental job of HRM, but not easy one though.

Thus “Performance Appraisal” is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development . The performance is being measured against such factors as Job Knowledge, quality, initiative, leadership abilities, supervision, co-operation, versatility etc. It is systematic in that it evaluates all performance in the same manner utilizing the same approach so that the ratings obtained to separate personnel are comparable. It is undertaken periodically according to plan .

The essential purpose is the accurate measurement of human performance It attempts to reduce, if not eliminate human bias and prejudice, by means of a system that is subject to impartial review and check. Often such personnel performance appraisal are labeled as ratings where an individual employee, after comparison with another, is rated or ranked as “Excellent, normal or average” and are commonly used for determining an employees eligibility for promotion or transfer and widely being used for the development of the individual.

Any appraisal program will involve time and money . The wise manager should plan up a program with the minimum cost to give maximum benefit . The rationale for using any particular method should be determined by the size ,financial resources ,and philosophy of the organization . M. P. Birla Institute Of Management 8 Appraisal can be made by one or more superiors or subordinates or by the peers . There can also be committee of members from various related departments to appraise an employee.

There may even be a system of self –appraisal in which each employee evaluates his own performance and potential. M. P. Birla Institute Of Management 9 STATEMENT OF THE PROBLEM To evaluate is to assess the worth or value. In social life, we generally evaluate or appraise the behavior of others in relations to our own needs or goals. Appraisals are judgments of the characteristics ,traits and performance of others. On the basis of these judgments, we assess the worth or value of others, and identify what is good and bad.

In industry, performance appraisal is a systematic evaluation of personnel by supervisors or others familiar with their performance because employers are interested in knowing about employee performance. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decisions: selection, training ,promotion ,transfer ,wage and salary administration ,etc . Besides ,they aid personnel research . Performance appraisal thus is a systematic and objective way of judging the relative worth or ability of an employee in performing his task . Performance ppraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance . Differentiating between individuals is easy provided one knows what aspects to take into account. Identifying performance measures is easy if job is clearly defined but difficult if it is broad. At the lower levels of an organization, there are specific jobs and certain tangible and objective standards of performance can be identified. Further up in the hierarchy, jobs become more complex and clear–cut, tangible standards of performance are difficult to specify.

Irrespective of the level by and large, most companies use various parameters for measuring the performance like quality of work, quantity of work, job Knowledge, meeting the job requirements, initiative, team working, communicative etc. And they would be rated in accordingly quarterly, half yearly or annually depending on company’s policies. M. P. Birla Institute Of Management 10 Many companies would have a standard format for appraising the performance. Ironically many of the employees would not know the norms of the appraisal and to the surprise many of them may not be fully familiar with contents of the appraisal form.

This would be great hazel for the company as well as to the employees because if the employee is not aware of what basis he is appraised, he may not put up all his efforts for better improvement which indirectly effects the companies profits by not meeting the companies objectives and targets. Thus this project “ A Study On Effectiveness of Performance System” aims at complete study on performance appraisal system and finding out effectiveness of the system in terms of familiarity and satisfaction level of the employees in WAY 2 WEALTH, Chennai

M. P. Birla Institute Of Management 11 OBJECTIVES OF THE STUDY PRIMARY OBJECTIVES ? To find out the effectiveness of PA system in way-2-wealth ? To Know employee satisfaction on PA system in way-2-wealth ? To suggest the way-2-wealth improve the employee satisfaction on PA system SECONDARY OBJECTIVES ? To find the opinion of employees on various factors involved in PA system ? To find out the openness of personal department in PA ? To find out the scope of critical attributes and other factor coverage of PA system ?

To know post appraisal measures taken b way-2-wealth M. P. Birla Institute Of Management 12 REVIEW OF LITERATURE Once the employee has been selected, trained and motivated, he is then appraised for his performance. Performance appraisal is the step where the management finds out how effective it has been at hiring and placing employees . If any problems are identified steps are taken to communicate with the employee and to remedy them. A “Performance Appraisal” is a process of evaluating an employee’s performance of a job in terms of its requirements.

It is the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotion, providing financial rewards and other actions which require different treatment among the members of a group as distinguished from actions affecting all members equally. _ Heyel Performance Appraisal seeks to provide an adequate feedback to each individual for his or her performance. It purports to serve as a basis for improving or changing behavior toward some more effective working habits .

It also aims aat providing data to managers with which they may judge future job assignments and compensation -Levinson M. P. Birla Institute Of Management 13 Performance Appraisal determines who shall receive merit increases; counsels employees on their improvement ,determines training needs ,determines promo ability, identifies those who should be transferred -Ronald Benjamin PURPOSE OF APPRAISAL It can serve as a basis for job change or promotion ? By identifying the strengths and weakness of an employee it serves as a guide for ? formulating a suitable training and development program It serves as a feedback to the employee ?

It serves as an important incentive to all employees ? The existence of regular appraisal system tends to make the supervisors and ? executives more observant of their subordinates Performance appraisal often provides the rational foundation for payment of ? salaries and bonus M. P. Birla Institute Of Management 14 ESSENTIALS OF GOOD APPRAISAL SYSTEM It must be easily understandable ? An appraisal plan must be integrated into the organization so as to have clear cut ? relationships between the appraisal plan and organization policies relating to performance of the employees.

It must have the support of all line people who administer it ? The system should fit the organizations operations and structure ? The system should be both valid and reliable ? The system should have built in incentives that is a reward should follow satisfactory ? performance The system should periodically evaluated to be sure that it is continuing to meet its ? goals What should be Rated? The seven criteria for assessing performance are: 1. Quality 2. Quantity 3. Timeliness 4. Cost Effectiveness 5. Need for supervision 6. Interpersonal impact 7. Training M. P. Birla Institute Of Management 15

Trends in employee Appraisal ITEM Terminology Purpose FORMER EMPASIS Merit Rating Determine qualifications for wage increase, transfer, promotion, lay- off Application For hourly –paid workers Heavy emphasis on personal traits Techniques Rating scales, Statistical manipulation of data for comparison purpose PRESENT EMPHASIS Performance Appraisal Development of the individual, improved performance on the job, and provide emotional security For technical, professional and managerial employees Factors Related Results, accomplishments, performance Mutual goal–setting, critical incidents, group appraisal, performance standards, less quantitative Post Appraisal Interview Superior communication his rating to employees and tries to sell his evaluation to him; seeks to have employee conform to his view Superior stimulates employee to analyze himself and set own objectives in line with job requirements superior is helper and councilor M. P. Birla Institute Of Management 16 Approaches to Performance Appraisal: 1.

A casual ,unsystematic and haphazard appraisal: This method was commonly used in the past . The basis of this method are seniority or quantitative measures quantity and quality of output for the rank and file personnel 2. The traditional and highly systematic measurement: This measures the employees characteristic and employee contributions or both. It evaluates all the performances in the same manner ,utilizing the same approach so that the ratings obtained of separate personnel are comparable 3. The behavioral approach ,emphasizing mutual goal setting: here emphasizes has been laid upon providing mutual goal setting and appraisal of progress by both the appraiser and the appraise .

This approach is based on the behavioral value of fundamental trust in the goodness ,capability and responsibility of human beings. The Evaluating Process The process of performance appraisal follows a set pattern viz, a man’s performance is periodically appraised by his superiors. Questions are raised . Is his potential the greatest as a manager or as a staff specialist? What are his strengths and weakness? Where can he make his great contribution? Next sometimes in consultation with the man himself, tentative decisions are made on what might be done to advance his development. M. P. Birla Institute Of Management 17 Thus the process would involve following steps ESTABLISH PERFORMANCE STANDARDS COMMUNICATE PERFORMANCE EXPECTATIONS TO EMPLOYEES MEASURE ACTUAL PERFORMANCE

COMPARE ACTUAL PERFORMANCE WITH STANDARDS DISCUSS THE APPRAISAL WITH THE EMPLOYEE IF NECESSARY, INITIATE CORRECTIVE ACTION M. P. Birla Institute Of Management 18 TOOLS/METHODS FOR APPRAISING PERFORMANCE: Several methods and techniques of appraisal are available for the measurement of the performance of the employee . The methods and scales differ for obvious reasons 1. They differ in the sources of traits or qualities to be appraised. 2. The variations may be caused by the degree of precision attempted in an evaluation. 3. They may differ because of the methods used to obtain weightings for various traits. M. P. Birla Institute Of Management 19 Methods of Performance appraisal

Traditional Methods ? Straight Ranking ? Man-to-man Comparison ? Grading ? Force choice Description ? Graphic Rating Scales ? Forced distribution Method ? Check Lists ? Free Form Essay Method ? Critical Incidents ? Group Appraisal ? Field Review Method y Modern Methods Assessment Centres Behaviorally Anchored Rating Scale M. P. Birla Institute Of Management 20 COMPONENTS OF APPRAISAL EVALUATION ? “Who” of the Appraisal ? “What” of Appraisal ? ? ? Common Pitfalls in Appraisal: ? There is often tendency to rate not only the employee but also the job ? Errors are introduced in the appraisal because of a defect or bias in the person conducting the appraisal ?

As Appraisal are in fact opinions ,it is difficult to remove from the subjective element whilst making the judgment ? Performance appraisal do require a lot from the supervisor as they require periodic observation of subordinates performance by them which becomes difficult in case of a first line superior have a large number of subordinates ? There is often a large variations in the standards and ratings because some raters are tough where as others are lenient ? There is often lack of communication where by the employee does not know how he is rated ? Often Superiors are reluctant to give a low rating to ineffective subordinate and gives him an average rating ?

Sometimes communication of the rating of the employee if done properly would be taken as criticism and may even result in his performing more poorly The “Why” of Appraisal The “When” of Appraisal The “where” of Appreciation M. P. Birla Institute Of Management 21 LIMITATIONS OF THE STUDY The researcher has made efforts for an errorless study but the following limitations were occurred ? The survey was restricted to only in Way 2 Wealth and the sample size was 200 ? There may be some changes if the sample size and the geographical segmentation were increased ? Time was a handicap for a detailed study ? A few respondents might have been given biased information, which may affect the reliability of the results ?

Unwillingness and inability of the respondent to provide information M. P. Birla Institute Of Management 22 COMPANY PROFILE Way2Wealth is a premier Investment Consultancy Firm that has been launched with the aim of making investing simpler, more understandable and profitable for the investors. Way2Wealth brings a wide range of product offerings from Fixed Income Securities, Life Insurance and Mutual Funds to Equity and Derivatives (on the National Stock Exchange) for the convenience and benefit of it customers. Way2Wealth has over 40 easily accessible Investment Outlets spread across 20 major towns and cities in the country. Mission Way2Wealth is a premier Investment Consultancy Firm, launched with the ission “to be the pre-eminent destination for personalised financial solutions helping individuals create wealth”. Philosophy We believe that “our knowledge combined with our investors trust and involvement will lead to the growth of wealth and make it an exciting experienc Sivan Securities started in 1984, has a long and illustrious track record of being amongst the premier Financial Intermediaries in the country as well as being an incubator for IT start-up firms. The Venture Capital division came to be known as Global Technology Ventures (GTV has provided venture capital to companies such as Kshema Technologies, MindTree, Ivega etc. ) and the Financial Intermediary Division was spun off as Way2Wealth in the year 2000. M. P.

Birla Institute Of Management 23 Way2Wealth is promoted by Sivan Securities and Global Technology Ventures Ltd. Prudential ICICI AMC provides further strength to Way2Wealth as strategic equity partner. Over the years, Sivan has developed a strong reputation for navigating its investors through all the ups and downs in the market. Way2Wealth has inherited these same values in addition to a base of 75,000 individual customers, over 300 corporate/institutional clients. Other companies in the group include Amalgamated Bean Coffee Trading Company Ltd. (one of the largest Coffee Exporters in India) and Cafe Coffee Day, a chain of youth hangout coffee parlors.

Way2Wealth has very credible management teams, who have well over 100 man-years of experience amongst themselves Way2Wealth Investment outlets are designed to be places where retail investors can come in touch with Investment opportunities in an atmosphere of convenience and comfort. The look and feel of the offices across India project a consistent branch image for the company. The features that enable a unique facility for retailing financial services include among others: ? Most branches are located in the ground floor sporting huge glass frontage promoting easy accessibility and reflecting our attitude of complete transparency. ? The major portion of the branch area dedicated for customer use.

The furniture is in CKD formats to add flexibility in using the branch for Investors purposes. ? ? Connectivity to NSE for trading facilities. TV and other electronic mediums to facilitate real time update and dissemination of information to our customers. ? Each branch comprises of trained and qualified Investment advisors to take care of the needs of the customers. M. P. Birla Institute Of Management 24 The Way2Wealth Research Desk Research is at the core of the advice. It believes that sound investment decisions are made on sound analysis of facts, past performance and credible market information. The research cell focuses on providing data and analysis to help customers make sound investment decisions.

The Research cell is managed by a highly qualified team that is handpicked and trained extensively in the proprietary Way2Wealth Investment Philosophy centered on finding the best investment solutions for our customers. Based in the commercial capital enables the team to have a pulse of the trends allowing dissemination of the most up-to-date and latest information. ? Personalised Investment Solutions: All the customers receive individual attention ? Full choice of Investments: Mutual funds, Life Insurance, Fixed Income Instruments, Equity and Derivatives ? Processing support: take care of all the paper work and provide service at the doorstep. ? Investor eligibility criteria: Customers with a minimum investment amount as low as Rs. 2500 per month can avail of the services.

This unique Way2Wealth concept can be easily experienced through the innovative and customer friendly network of Investment outlets that spans 20 major towns and cities in the country. M. P. Birla Institute Of Management 25 RESEARCH METHODOLOGY The following points are considered in carrying out the research. A. RESEARCH METHODOLOGY: A research design is purely ad simply the framework a plan for a study that guides the collection and analysis of the data. Descriptive Research Here the research is been done on 200 members through a media of questionnaire B. DATA COLLECTION METHOD: The main sources through which data is collected are 1. Primary data 2. Secondary data The data collected for this research is hrough primary data collection method. The instrument used for collecting primary data is questionnaire from the employees. M. P. Birla Institute Of Management 26 E. SAMPLING TECHNIQUE Non – probability (non random ) sampling method is used in this project. F. STATISTICAL TOOLS USED: Statistical tools were used to find inferences between the variables and analyzing the results. The following are the tools used. 1)spearman’s rank Correlation 2) Kalmograv Smirnov Test 3) Chi – Square test (? 2) M. P. Birla Institute Of Management 27 M. P. Birla Institute Of Management 28 DATA ANALYSIS & INTERPRETATION TABLE 1 TABLE SHOWING WHETHER PA IS CONDUCTED EVERY YEAR IN THE COMPANY S.

NO 1 2 YES NO TOTAL OPINION NO OF RESPONDENTS 60 0 60 PERCENTAGE (%) 100 0 100 100 80 60 40 20 0 YES NO INFERENCE: All the respondents feel that PA is conducted every year in the company. M. P. Birla Institute Of Management 29 TABLE 2 TABLE SHOWING WHETHER JOB INCREMENTS AND PROMOTIONS ARE STRICTLY BASED ON PA S. NO 1. 2. YES NO OPINION NO OF RESPONDENTS 41 19 PERCENTAGE (%) 68 32 100 TOTAL 60 70 60 50 40 30 20 10 0 YES NO INFERENCE: Majority of the respondents feel that job increments and promotions are strictly based on PA is 68%and whereas few of them feel that it is not strictly based on PA 32%. M. P. Birla Institute Of Management 30 TABLE 3 TABLE SHOWING WHETHER PA OBJECTIVES ARE CLEARLY INFORMED S. NO 1. 2. 3.

CHOICE CLEARLY INFORMED PARTIALLY INFORMED NOT INFORMED AT ALL TOTAL NO OF RESPONDENTS 22 28 10 60 PERCENTAGE (%) 36 46 18 100 50 40 30 20 10 0 PERCENTAGE CLEARLY INFORMED PARTIALLY INFORMED NOTINFORMED AT ALL INFERENCE: Majority of the respondents feel that PA objectives are partially informed, some of them feel it is clearly informed and whereas few of them feel that it is not informed at all. M. P. Birla Institute Of Management 31 TABLE 4 TABLE SHOWING PURPOSE OF PA S. NO 1 2 3 4 CHOICE SALARY INCREASE PROMOTION TRAINING AND DEVELOPMENT FEEDBACK TOTAL NO OF RESPONDENTS 18 22 14 6 120 PERCENTAGE (%) 30 36 24 10 100 40 35 30 25 20 15 10 5 0 PERCENTAGE SALARY INCREASE PROMOTION TRAINING AND DEVELOPMENT FEEDBACK

INFERENCE: Majority of the respondents feel that purpose of PA is for promotion, some of them feel it is for salary increase and whereas few of them feel it is for training and development. M. P. Birla Institute Of Management 32 TABLE 5 RANKING OF METHODS EMPLOYED IN PA NO OF RESPONDENTS FACTORS 1 GRADING RANKING METHOD CHECKLIST METHOD FORCED CHOICE METHOD 15 22 13 11 2 18 17 16 10 3 12 16 20 13 4 15 6 11 26 INFERENCE: From the table it is seen that the ranking of methods employed in PA is give below: FACTORS GRADING RANKING METHOD CHECKLIST METHOD FORCED CHOICE METHOD RANK II I III IV M. P. Birla Institute Of Management 33 TABLE 6 TABLE SHOWING WHETHER FEEDBACK ON PA IS COLLECTED S. NO 1. 2. YES NO OPINION NO OF RESPONDENTS 25 35 60 PERCENTAGE (%) 42 58 100 TOTAL 60 50 40 30 20 10 0 PERCENTAGE YES NO

INFERENCE: 58% of the respondent feel that feedback on PA is not collected ad whereas some of them feel that feedback on PA is collected. M. P. Birla Institute Of Management 34 TABLE 7 TABLE SHOWING OPINION ON PRESENT PA SYSTEM IN THE COMPANY S. NO 1. 2. 3. 4. OPTIONS VERY GOOD GOOD AVERAGE POOR TOTAL NO OF RESPONDENTS 6 24 18 12 60 PERCENTAGE (%) 10 40 30 20 100 40 35 30 25 20 15 10 5 0 PERCENTAGE VERY GOOD GOOD AVERAGE POOR INFERENCE: Majority of the respondents opinion regarding present PA system in the company is good, some of the respondents opinion is average and whereas few of the respondents opinion is poor. M. P. Birla Institute Of Management 35 TABLE 8

TABLE SHOWING OPINION ON THE FOLLOWING FACTORS COVERED IN PA FACTORS Job knowledge Quality of work Quantity of work Ability of work Hard work Manner & obedience VERY GOOD 6 7 6 7 10 10 GOOD 21 29 14 24 26 24 AVERAGE 22 13 18 16 12 14 POOR 9 6 12 8 7 9 VERY POOR 2 5 10 5 5 3 INFERENCE: Majority of the respondent’s opinion regarding the factors covered in PA is good, some of them feel it is average and whereas few of them feel it is poor. M. P. Birla Institute Of Management 36 TABLE 9 TABLE SHOWING IMPROVEMENTS TO BE MADE IN PA FACTORS Strongly agree 12 9 10 5 6 7 11 Neither Agree Agree nor disagree 27 25 24 22 20 24 25 11 14 8 14 18 13 14 6 7 11 13 11 11 6 Disagree Strongly disagree 4 5 7 6 6 5 4

Confidentiality Critical attributes Role related attributes Post appraisal actions Introducing bars in PA Feedback on PA White paper on PA & after PA INFERENCE: Majority of the respondents agree that improvements has to be made in PA, some of them neither agree nor disagree ad whereas few of them disagree that improvements has to be made in PA M. P. Birla Institute Of Management 37 TABLE 10 TABLE SHOWING WHETHER PRESENT PA SYSTEM IS TO BE IMPROVED S. NO 1. 2. 3. 4. 5. OPTIONS STRONGLY AGREE AGREE NEITHER AGREE NOR DISAGREE DISAGREE STRONGLY DISAGREE TOTAL NO OF RESPONDENTS 11 20 15 9 5 60 PERCENTAGE (%) 18 34 24 16 8 100 35 30 25 20 18 15 10 5 0 PERCENTAGE 34 24 16 8 STRONGLY AGREE AGREE NEITHER AGREE NOR DISAGREE DISAGREE STRONGLY DISAGREE

INFERENCE: Majority of the respondents agree that present PA system is to improved, some of them neither agree nor disagree ad whereas few of them disagree. M. P. Birla Institute Of Management 38 TABLE 11 TABLE SHOWING METHODS THAT CAN BE SUGGESTED FOR PA S. NO 1. 2. 3. 4. 5. OPTIONS ESSAY METHOD FIELD REVIEW METHOD BARS APPRAISAL BY RESULTS 360 DEGREE APPRAISAL TOTAL NO OF RESPONDENTS 9 8 11 14 18 60 PERCENTAGE (%) 16 12 18 24 30 100 30 25 20 15 10 5 0 PERCENTAGE ESSAY METHOD FIELD REVIEW METHOD ARS APPRAISAL BY RESLTS 360 DEGREE APPRAISAL INFERENCE: Majority of the respondents suggest 360 degree appraisal for PA, some of them suggest appraisal by result and whereas few of them suggest essay method. M. P.

Birla Institute Of Management 39 TOOLS USED FOR ANALYSIS KALMOGROV SMIRNOV TEST The Kalmogrov Smirnov Test (KS – Test) tries to determine if two data sets significantly. The KS – test has the advantage of making no assumption about the distribution of data. (Technically speaking it is nonparametric and distribution free). It is a goodness of fit used to examine the distribution function of the random variable (X). Test statistics T = = Sup | F (x) – S (x) | Supremum of the absolute value of the difference between F (x) and S (X) H0 is rejected if T exceeds the 1 – a quantile (W1 – a) of the Kalmogrov Smirnov’s Statistic. M. P. Birla Institute Of Management 40

TO FIND OUT THE DISTRIBUTION OF RESPONDENT’S RATING PATTERN ABOUT “WHETHER PRESENT PA SYSTEM IS TO BE IMPROVED” H0: H1: Response Pattern obtained is uniformly distributed Response Pattern is not uniformly distributed Null Hypothesis S (x) 1/5 2/5 3/5 4/5 5/5 Opinion F (x) Cumulative Percentage 0. 18 0. 52 0. 76 0. 92 1 Cumulative Percentage 0. 2 0. 4 0. 6 0. 8 1 Difference F(x) – S(x) -0. 02 0. 12 0. 16 0. 12 – STRONGLY AGREE AGREE NEITHER DISAGREE STRONGLY DISAGREE 0. 18 0. 34 0. 24 0. 16 0. 08 TEST OF UNIFORM DISTRIBUTION Calculated Value is: T (F (x) – S (x)) Tabulated Value is = 0. 16 T (tab) = 1. 22 / ? n When n = 5, T (tab) = 0. 5456 for 5 % significance level. Calculated value is less than tabulated value. H0 is accepted. INFERENCE: Response pattern obtained is uniformly distributed. M. P. Birla Institute Of Management 41 PAIRED ‘T’ TEST

TO IDENTIFY THE COMPARISON BETWEEN THE STATEMENTS THAT ARE GIVEN FOR OPINION ON THE FOLLOWING FACTORS COVERED IN PA Ho: Job Knowledge is very good than Quality of Work H1: Quality of work is very good than Job Knowledge VERY GOOD JOB KNOWLEDGE QUALITY OF WORK 16 24 GOOD 12 96 AVERAGE 80 44 POOR 24 20 VERY POOR 8 16 N=5 X1 16 72 80 24 8 Y1 24 96 44 20 16 D1 -8 -24 36 4 -8 d=0 d1 – d -8 -24 36 4 -8 (d1 – d)2 64 576 1296 16 64 2016 d = 1Od N = 0 where N = 5 M. P. Birla Institute Of Management 42 S2 = 1 O (d1 – d) 2 (n – 1) = S T = = 10. 13 3. 19 d S/ vn = Degree of freedom 0 = n-1 =4 Table Value = 2. 132 Calculated Value is less than Tabulated Value, Ho is accepted INFERENCE: Job Knowledge is very good than Quality of Work M. P. Birla Institute Of Management 43 SPEARMAN’S RANK CORRELATION The rank correlation co – efficient is a measure of correlation that exists between two sets or ranks.

Spearman’s Rank Correlation Co – efficient is calculated as follows: r = 1 – 6 O di2 n (n2 – 1) where n is number of packed observation d is the difference between one paired observation. The value of Spearman’s Rank Correlation will always lie between –1 and +1. If the coefficient is HO the ranks given by two sets of judges show perfect positive correlation. If it is –1, the ranks given by two sets of judges have a perfect negative correlation between them. NULL HYPOTHESIS HO: There is no correlation between the ranking of Checklist Method and Ranking Method among respondents i. e. , µr = 0 H1: There is correlation between the ranking of Checklist Method and Ranking Method among respondent’s i. e. , µr > 0 M. P.

Birla Institute Of Management 44 RAN S. NO K (X) RANK (Y) RANK DIFFERNCE (RANK X – RANK Y) DIFFERENCE SQUARE di2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 3 4 2 1 2 1 2 2 1 4 2 2 2 2 2 3 2 1 4 3 3 1 1 2 1 1 2 1 3 1 2 1 1 2 1 1 1 3 3 4 1 1 2 2 1 1 2 2 3 2 2 2 1 -2 1 -1 1 1 -1 3 1 1 -1 -1 2 2 1 -1 2 2 2 -1 -1 -1 4 4 4 1 4 1 1 1 1 1 9 1 1 1 1 4 4 1 1 4 4 4 1 1 1 O di2 =59 M. P. Birla Institute Of Management 45 X = CHECKLIST METHOD Y = RANKING METHOD Spearman’s r = 1 – 6 O di2 n (n2 – 1) = 1 – 6 x 59 25 (252 – 1) = 1 – 0. 0226 = 0. 977 or tabulated or (t), n = 25 at 5% level of significance or calculated or (c) = 1 vn – 1 = 1 v25 – 1 = 0. 20

Upper limit (U1) = µr + or (t) x or (c) = 0 + 0. 3977 x 0. 20 = 0. 08 INFERENCE: Since the ‘r’ value = 0. 977 it lies in the rejection region therefore we reject the null hypothesis at 5% level of significance and we accept the alternate hypothesis. Hence, we conclude that there is positive correlation between the ranking of Checklist Method and Ranking Method among the respondents. M. P. Birla Institute Of Management 46 CHI – SQUARE TEST Chi – Square is an importance non – parametric test and as such no test are necessary in respect of the type of population. We require only the degree of freedom (implicity of course the size of the sample) for using this test.

As a non – parametric test, Chi – square can be used (i) as a test of goodness of fit and (ii) as a test of independence. Since the researcher used test of independence only the details about test of independence is given below. TEST OF INDEPENDENCE o2 test enables us to explain whether or not two attributes are associated. In order that we may apply the chi – square test either as a test to judge the significance of association between attributes, it is necessary that the observed as well as theoretical or expected frequencies must be grouped in the same way and theoretical distribution must be adjusted to give the same total frequency as we find in case of observed distribution.

Karl Pearson developed a test for testing the significance of discrepancy between experimental values and the theoretical values obtained under some theory or hypothesis. This test is known as o2 test of goodness of fit. Karl Pearson proved that the statistic o2 = ? (O – E) 2 / E O – Observed Frequency E – Expected Frequency o2 is used to test whether difference between observed & expected frequencies are frequent. M. P. Birla Institute Of Management 47 To find o2 table value degree of freedom should be calculated. Degree of freedom is calculated using the formula (r – 1)(c – 1). The table value for this degree of freedom is seen using 5% or 1% of significant level. If o2 table value is greater than o2 calculated value, Null Hypothesis is accepted or Null Hypothesis is rejected.

To determine whether there is significant difference between gender & whether PA is inherently unfair Ho: There is no significant difference between gender & whether PA is inherently unfair H1: There is significant difference between gender & whether PA is inherently unfair GENDER CHOICE MALE FEMALE TOTAL NO OF RESPONDENTS YES 28 20 48 NO 104 48 152 TOTAL 132 68 200 Expected Frequencies are: (48 * 132) / 200 = 31. 68 (152 * 132) / 200 = 100. 32 (48* 68) / 200 = 16. 32 (152 * 68) / 200 = 51. 61 M. P. Birla Institute Of Management 48 CALCULATION OF O2: Observed Frequency (O) 28 104 20 148 Expected Frequency (E) 31. 68 100. 32 16. 32 51. 68 (O – E) 2 13. 54 18. 66 18. 66 13. 54 (O – E) 2 / E 0. 427 0. 168 1. 14 0. 261 2. 01 Calculated o2 = ? O – E)2 / E O – Observed Frequency E – Expected Frequency = 2. 01 Calculated o2 = 2. 01 Degree of Freedom = (4 – 1)(2 – 1) = 3 d. o. f at 5 % level of significance Therefore, Tabulated o2 = 7. 815 Since Calculated o2 < Tabulated o2 Therefore, we accept the hypothesis. i. e. , There is no significant difference between gender & whether PA is inherently unfair M. P. Birla Institute Of Management 49 M. P. Birla Institute Of Management 50 FINDINGS OF THE STUDY. ? All the respondents feel that PA is conducted every year in the company. ? Majority of the respondents feel that job increments and promotions are strictly based on PA and whereas few of them feel that it is not strictly based on PA. Majority of the respondents feel that PA objectives are partially informed, some of them feel it is clearly informed and whereas few of them feel that it is not informed at all. ? Majority of the respondents feel that purpose of PA is for promotion, some of them feel it is for salary increase and whereas few of them feel it is for training and development. ? From the table it is seen that the ranking of methods employed in PA is give below: FACTORS GRADING RANKING METHOD CHECKLIST METHOD FORCED CHOICE METHOD RANK II I III IV ? 58% of the respondent feel that feedback on PA is not collected and whereas some of them feel that feedback on PA is collected. Majority of the respondents opinion regarding present PA system in the company is good, some of the respondents opinion is average and whereas few of the respondents opinion is poor. ? Majority of the respondents opinion regarding the factors covered in PA is good, some of them feel it is average and whereas few of them feel it is poor. ? Majority of the respondents agree that improvements has to be made in PA, some of them neither agree nor disagree ad whereas few of them disagree that improvements has to be made in PA. M. P. Birla Institute Of Management 51 ? Majority % of the respondents prefers PA by the HR department, some of them prefer by third party and whereas few of them prefer through top level management. Majority of the respondents agree that present PA system is to improved, some of them neither agree nor disagree ad whereas few of them disagree. ? Majority of the respondents suggest 360 degree appraisal for PA, some of them suggest appraisal by result and whereas few of them suggest essay method. M. P. Birla Institute Of Management 52 SUGGESTIONS The top management should take up periodic programs to explain the objectives and the related issues to the executives and queries should be thoroughly cleared It is necessary to improve the performance analysis and review system in following areas ? There should be clear definition of rewards basing performance ?

PA’S should have direct bearing in promotions ? PA should be incident specific & productivity linked & not as per personal linking. ? Self-appraisal discussion with the assessing officer & then the officer recording his appraisal will be ideal. Awareness is less in catering department ? Employees to work hard to achieve & a panel of officers with which interaction happens during the course of your job should be appraising officer ? Every year a appraisal letter should be given to employee because that can make a employee to show great affection to their job ascertained ? Subordinate & peers also should have a role in individual’s assessment ?

Before or during PA, the reporting officer may discuss with the employee about his plus or minus points in order to educate & improved the employee’s performance in future ? Most of the assessment is based on personal interaction with evaluating officer ? Instead of giving overall rating in the paper good workers should be appreciated by the way of given extra perks or increment ? The decision obtained at performance analysis should be implemented. M. P. Birla Institute Of Management 53 CONCLUSION The effectiveness of a system is to be determined by the people in it, the system cannot become effective automatically. Simply by basing upon few assumptions about the people involved in it.

The same is the case with the executive appraisal system of Way 2 Wealth a considerable number of them have come under Halo effect and stereotyping Objectives of the appraisal system are not clear to most of the employees and behavioral dimensions are not clearly understood Unsatisfactory opinion in respect of existing system and self-assessment Wide gap between formal appraisal system and self-assessment Training needs are not met by the organisation inspite of doing serious exercise in identifying them There is lot of paper work in this system of appraisal by which the appraisal is time consuming The analysis has shown that most of the executives are in favour of a better appraisal system, which is more transparent and has provisions for unbiased assessment of performance M. P. Birla Institute Of Management 54 M. P. Birla Institute Of Management 55 BIBLIOGRAPHY

PERSONNEL MANAGEMENT STATISTICAL METHODS MANAGING HUMAN RESOURCES HUMAN RESORCE MANAGEMENT – C. B. MAMORLA, S. V. GANKAR S. P. GUPTHA BOHLANDER ASHWATHAPPA M. P. Birla Institute Of Management 56 QUESTIONNAIRE 1. Gender : Male ? Female ? 2. Employee Category: 3. Age Group: 4. Experience: 5. Is every year PA is conducted by the company? Yes ? No ? 6. Job increments and promotions are strictly based on PA? Yes ? No ? 7. PA objectives are Clearly informed Partially informed Not informed at all 8. Is PA inherently unfair M. P. Birla Institute Of Management 57 ? ? ? Yes ? No ? 9. PA serves the purpose of Salary increase Promotion Training and development Feedback ? ? ? ? 10.

What methods are employed in PA Grading Ranking method Checklist method Forced choice method ? ? ? ? 11. PA forms/procedures are Management oriented Employee oriented M. P. Birla Institute Of Management ? ? 58 12. After PA, Feedback on PA is collected Yes ? No ? 13. The opinion on present PA system in the company? Very good Good Average Poor ? ? ? ? 14. Your opinion on the following factors covered in PA? FACTORS Job knowledge Quality of work Quantity of work Ability of work Hard work Manner & obedience VERY GOOD GOOD AVERAGE POOR VERY POOR M. P. Birla Institute Of Management 59 15. What is to be improved in PA? Strongly agree Neither Agree Agree nor disagree Disagree Strongly disagree FACTORS

Appraisal by result Confidentiality Critical attributes Role related attributes Post appraisal actions Feedback on PA 16. Among the following which one do you prefer? PA by the HR department PA by the third party PA by top level management Assessment center ? ? ? ? M. P. Birla Institute Of Management 60 17. Is the present PA system is to be improved? Strongly Agree Agree Neither agree nor disagree Disagree Strongly disagree ? ? ? ? ? 18. What method you can suggest for PA? Essay method Field review method BARS Appraisal by results 360 degree appraisal ? ? ? ? ? M. P. Birla Institute Of Management 61 M. P. Birla Institute Of Management 62 M. P. Birla Institute Of Management 63

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