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Title: Performance Appraisal Significance in the Software Industries in India

Author:

Dr. Kiran Kumar Thoti, B.E, MBA, PhD,


Sr. Asst. Professor,
Sree Vidyanikethan Institute of Management,
Sree Sainath Nagar, Tirupati- 517102,
Andhra Pradesh,
Ph: +91-9686261185, 9642176451, Email: kirankumar3561@gmail.com
ABSTRACT

Human Resource Management is a management function that helps managers to Recruit, Select,
Train and Develop members for an organization. Performance appraisal may be understood as
the assessment of an individuals performance being measured against such factors as job
knowledge, quality and quantity of output, initiative, leadership abilities, supervision,
dependability, co-operation, judgment, versatility, health and the like. The Performance Appraisal
System needs to be very transparent and helpful both to the employees and to the organization.
The need is to get a feedback from appraisers and appraises, working in the organization, about
the current state of the PAS. Only after analyzing the current state of PAS, the human resource
managers can go to the next step of improvements in PAS. A survey is therefore required. The
type of research chosen is quantitative in nature. The research is undertaken to ascertain the
views/opinions of the employees working with the company and to suggest appropriate
modifications about the existing PAS. Structured questionnaire has been prepared and discussed
personally with the respondents. The sample size will be restricted to 100 respondents chosen by
applying stratified random method. The methods adopted for the performance appraisal were
360-degree appraisal, check list, rating scale, management by objective etc. that are commonly
found among the information technology companies in Bangalore. The employees want their
appraiser to give the feedback to them.
Keywords: Performance Appraisal, Appraisal system, Human resources, Human policies,
Software Industries

INTRODUCTION:
An organizations 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 one of the fundamental jobs of HRM,
but not an easy one though. Appraising the performance of individuals, groups and organizations
is a common practice of all societies. While in some instances these appraisal processes are
structured and formally sanctioned, in other instances they are an informal and integral part of
daily activities. In social interactions, performance is conducted in a systematic and planned
manner to achieve widespread popularity in recent years. In simple terms, performance appraisal
may be understood as the assessment of an individuals performance being measured against
such factors as job knowledge, quality and quantity of output, initiative, leadership abilities,
Supervision, dependability, cooperation, judgment, versatility, health and the like. Assessment
should not be confined to past performance alone. Potentials of the employee for future
performance must also be assessed.
Meaning of performance appraisal:
Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and
improving the actual performance of the employee and also the future potential of the employee.
Its aim is to measure what an employee does.
Definition of performance appraisal:
According to Edwin. B. Flippo performance appraisal is the systematic, periodic and an
impartial rating of an employees excellence in the matter pertaining to his present job and his
potential for a better job. Performance appraisal is the systematic way of reviewing and
assessing the performance of an employee during a given period of time and planning for his
future.
The other terms used for performance appraisal are:
Performance rating
Employee assessment
Employee performance review
Personnel appraisal
Performance evaluation

Employee evaluation
Merit rating.
In a formal sense, employee assessment is as old as mankind.
Features of performance appraisal:
i.

Performance appraisal is the systematic description of an employees job relevant


strengths and weaknesses.

ii.

The basic purpose is to find out how well the employees are performing the job and
establish a plan of improvement.

iii.

Appraisals are arranged periodically according to a definite plan.

iv.

Performance appraisal is not job evaluation. It refers to how well someone is doing the
assigned job. Job evaluation determined how much a job is worth to the organization and
therefore, what range of pay should be assigned to the job.

v.

Performance appraisal is a continuous process in every large scale organization.

Objectives of performance Appraisal:

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

To judge the gap between the desired and the actual performance.

To help the management in exercising organizational control.

Help to strengthen the relationship and communication between superiors, subordinate


and management employees.

To diagnose the strengths and weakness of the individuals so as to identify the training
and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed


by the employees.

To judge the effectiveness of the other human resource functions of the organization such
as recruitment, selection, training and development.

To reduce the grievances of the employees.

Provide information to assist in the hr decisions like promotions, transfers etc.

Provide clarity of the expectations and responsibilities of the functions to be performed


by the employees.

Need for performance appraisal:


Provide information about the performance ranks basing on which decision regarding
salary fixation, confirmation, promotion, transfer and demotion are taken based on
performance in India Rayon.
Provide feedback information about the level of achievement and behavior of
subordinates. This information helps about the level of achievement and behavior of
subordinates. This information helps to review the performance of the subordinate,
rectifying performance deficiencies and to set new standards of work, if necessary.
Provide information which helps to counsel the subordinate.
Provide information to diagnose deficiency in employees regarding skill, knowledge.
Performance appraisals determine training and developmental needs.
To prevent grievances and in disciplinary activities.
PROCESS OF PERFORMANCE APPRAISAL

Essentials or prerequisite of performance appraisal:


The essentials of an effective performance system are as follows:
Documentation: Means continuous noting and documenting the performance. It also
helps the evaluators to give a proof and basis of their ratings.
Practical and simple format: The appraisal format should be simple, clear, fair and
objective. Long and complicated formats are time consuming, difficult to understand, and
do not elicit much useful information.
Evaluation technique: An appropriate evaluation technique should be selected; the
appraisal system should be performance based and uniform. The criteria for evaluation
should be based on observable and measurable characteristics of the behavior of the
employees.
Communication: Communication is an indispensable part of the performance appraisal
process. The desired behavior or expected results should be communicated to the
employees as well as the evaluators. Communication also plays an important role in the
review or feedback meeting. Open communication system motivates the employees to
actively participate in the appraisal process.
Feedback: The purpose of feedback should be developmental rather than judgmental to
maintains its utility, timely feedback should be provided to the employees and the manner
of giving feedback should be such that it should have a motivating effect on the
employees future performance.
Personal bias: Interpersonal relationships can influence the evaluation and the decisions
in the performance appraisal process. Therefore, the evaluators should be trained to carry
out the processes of appraisals without personal bias and effectively.
Standards\goals: The goals set should be clear, easy to understand, achievable,
motivating, time bound and measurable.
Challenges of Performance Appraisal
In order to make a performance appraisal system effective and successful, an organization comes
across various challenges and problems. The main challenges involved in the performance
appraisal process are:
1. Determining the Evaluation Criteria

Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be carefully selected.
For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms.
2. Create a Rating Instrument
The purpose of the performance appraisal process is to judge the performance of the employees
rather than the employee. The focus of the system should be on the development of the
employees of the organization.
3. Lack of Competence
Top management should choose the raters or the evaluators carefully. They should have the
required expertise and the knowledge to decide the criteria accurately. They should have the
experience and the necessary training to carry out the appraisal process objectively.
4. Errors in Rating and Evaluation
Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the
evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater
should exercise objectivity and fairness in evaluating and rating the performance of the
employees.
Problems of performance appraisal:
The problem with subjective measure is the rating which is not verifiable by others and has the
opportunity for bias. The rate biases include (a) Halo effect (b) The error of central tendency (c)
The leniency or strictness (d) Personal prejudice (e) The recent performance effect.
Halo effect:
It is the tendency of raters to depend excessively on the rating of one trait or behavioral
consideration in rating all others traits or behavioral consideration. One way of
minimizing the halo effect is appraising all the employees by one rate before going to rate
on the basis of another trait.
The error of central tendency:
Some raters follow play safe policy in rating by rating all the employees around the
middle point of rating scale and they avoid rating the people at both the extremes of the
scale. They follow play safe policy because of answerability to management or lack of
knowledge about the job and person he is rating or least interest in his job.
The leniency or strictness:

The leniency bias crops when some raters have a tendency to be liberal in their rating by
assigning higher rates consistently. Such ratings do not serve any purpose. Equally
damaging one is assigning consistently low rates.
Personal prejudice:
If the rater dislikes any employee or any group, he may rate them at the lower end, which
may distort the rating purpose and affect the career of these employees.
The recent performance effect:
The raters generally remember the recent actions of the employees at the time of rating
and rate on the basis of these recent actions favorable or unfavorable than on the whole
activities.
The other factors are considered as problems are:
Failure of the superiors in conducting performance appraisal and post performance
appraisal interview.
Most part of the appraisal is based on subjectivity.
Negative ratings effects interpersonal relations and industrial relations system.
Influence of external factors and uncontrollable internal factors.
Feedback and post performance interview must have a setback on production.
Management emphasis on punishment rather than development of an employee
performance appraisal.
Some ratings particularly about the potential appraisal are purely based on guess work.
Absence of inter-rater reliability.
The situation was unpleasant in feedback interview
Methods and techniques used for performance appraisal:
The various methods and techniques used for performance appraisal can be categorized as the
following traditional and modern methods.
Traditional Methods of Performance Appraisal:
1. Essay Appraisal Method
This traditional form of appraisal, also known as Free Form method involves a description of
the performance of an employee by his superior. This method requires the manager to write an
essay describing each employees performance during the rating period. This is emphases

evaluation of overall performance, based on strength\weaknesses of employees performance


rather than specific job dimension.

Performance appraisal

Traditional method
Essay method.
Straight ranking method.
Paired comparison method.
Critical incident method.
Field review method.
Checklist method.
Graphic rating scale.
Forced distribution method.

Modern method
Management by objective.
360 degree appraisal.
Assessment center.
Behavioral anchored rating scale.
Human resource accounting.

2. Straight Ranking Method


This is one of the oldest and simplest techniques of performance appraisal. In this method, the
appraiser ranks the employees from the best to the poorest on the basis of their overall
performance. It is quite useful for a comparative evaluation.
3. Paired Comparison
A better technique of comparison than the straight ranking method, this method compares each
employee with all others in the group, one at a time. After all the comparisons on the basis of the
overall comparisons, the employees are given the final rankings.
4. Critical Incidents Methods
In this method of performance appraisal, the evaluator rates the employee on the basis of critical
events and how the employee behaved during those incidents. It includes both negative and
positive points. The drawback of this method is that the supervisor has to note down the critical
incidents and the employee behavior as and when they occur.

5. Field Review
In this method, a senior member of the HR department or a training officer discusses and
interviews the supervisors to evaluate and rate their respective subordinates. A major drawback
of this method is that it is a very time consuming method. But this method helps to reduce the
superiors personal bias.
6. Checklist Method
The rate is given a checklist of the descriptions of the behavior of the employees on job. The
checklist contains a list of statements on the basis of which the rater describes the on the job
performance of the employees.
A) Simple checklist method.
B) Weighted checklist method.
C) Forced choice method.
7. Graphic Rating Scale
In this method, an employees quality and quantity of work is assessed in a graphic scale
indicating different degrees of a particular trait. The factors taken into consideration include both
the personal characteristics and characteristics related to the on-the-job performance of the
employees. For example a trait like Job Knowledge may be judged on the range of average,
above average, outstanding or unsatisfactory.
8. Forced Distribution
To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the
employees in some fixed categories of ratings like on a normal distribution curve. The rater
chooses the appropriate fit for the categories on his own discretion.
9. Confidential Report:
Assessing the employee performance confidentially in a traditional method of performance
appraisal; under this method, the superior appraise the performance of his subordinates based on
his observations, the judgment and intuitions. The superior keeps his judgment and report
confidentially in performance. The superior writes the reports about his subordinates strengths,
weakness, intelligence, attitude to work ,sincerity, commitment, punctuality, attendance, conduct,
character ,friendliness etc. most of the public sector organizations follow the same method.
10. Group Appraisal: Under this method, an employee is appraised by a group of appraisers.
This group consists of immediate supervisors of the employee to other supervisors who have

close contact with the employees work, manager or head of the department and consultant. The
head of the department or management may be the chairman of the group and the immediate
supervisor may act as the coordinator for the group activities. The group uses any one or multiple
techniques; this method is widely used for the purpose of promotion, demotion and retrenchment
appraisal.
Modern Methods of Performance Appraisal:
1. Behaviorally Anchored Rating Scales
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the
graphic rating scale and critical incidents method. It consists of predetermined critical areas of
job performance or sets of behavioral statements describing important job performance qualities
as good or bad (for e.g. the qualities like inter-personal relationships, adaptability and reliability,
job knowledge etc). These statements are developed from critical incidents. In this method, an
employees actual job behavior is judged against the desired behavior by recording and
comparing the behavior with BARS. Developing and practicing BARS requires expert
knowledge.
2. Human Resource Accounting Method
Human resources are valuable assets for every organization. Human resource accounting method
tries to find the relative worth of these assets in the terms of money. In this method the
Performance appraisal of the employees is judged in terms of cost and contribution of the
employees. The cost of employees include all the expenses incurred on them like their
compensation, recruitment and selection costs, induction and training costs etc whereas their
contribution includes the total value added (in monetary terms). The difference between the cost
and the contribution will be the performance of the employees. Ideally, the contribution of the
employees should be greater than the cost incurred on them.
3. 360 Degree Feedbacks:
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal
where the feedback about the employees performance comes from all the sources that come in
contact with the employee on his job. 360 degree respondents for an employee can be his/her
peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors anyone who comes into contact with the employee and can provide valuable insights and
information or feedback regarding the on-the-job performance of the employee.

360 degree appraisal has four integral components:


1. Self appraisal
2. Superiors appraisal
3. Subordinates appraisal
4. Peer appraisal
4. Management by Objectives
The concept of Management by Objectives (MBO) was first given by Peter Drucker in 1954. It
can be defined as a process whereby the employees and the superiors come together to identify
common goals, the employees set their goals to be achieved, the standards to be taken as the
criteria for measurement of their performance and contribution and deciding the course of action
to be followed. The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the comparison of the
employees actual performance with the standards set. Ideally, when employees themselves have
been involved with the goal setting and the choosing the course of action to be followed by them,
they are more likely to fulfill their responsibilities.
5. Assessment Centers:
Assessment centre refers to a method to objectively observe and assess the people in action by
experts or HR professionals with the help of various assessment tools and instruments.
Assessment centers simulate the employees on-the-job environment and facilitate the
assessment of their on-the-job performance. An assessment centre for Performance appraisal of
an employee typically includes:
Social/Informal Events An assessment centre has a group of participants and also a few
assessors which gives a chance to the employees to socialize with a variety of people and also to
share information and know more about the organization.
Information Sessions Information sessions are also a part of the assessment centers. They
provide information to the employees about the organization, their roles and responsibilities, the
activities and the procedures etc.
Assignments- assignments in assessment centers include various tests and exercises which are
specially designed to assess the competencies and the potential of the employees. These include
various interviews, psychometric tests, management games etc. All these assignments are
focused at the target job.

Industry Profile: Over the last decade, India has developed into a major and credible
information technology (IT) outsourcing centre. In India, the software boom started somewhere
in the late 1990s. Most of the Indian software companies at that moment offered only limited
software services such as the banking and the engineering software.
Information Technology (IT), a knowledge-based industry, has the tremendous potential of
becoming an engine of accelerated economic growth, productivity improvement for all sectors of
the economy and means of efficient governance.
The IT software and service industry has been categorized into three broad sectors:
o Software Product and Technology Services,
o IT Services, and
o IT Enabled Services.
It enhances access to information, protects consumers, provides access to government services,
makes skill formation and training more effective, improves delivery health services, and
promotes transparency. It provides tremendous employment potential and linkages between
government and the people both at the rural and urban level. Investment in knowledge based
industries will determine the level of the countrys dominant position in the world economy in
the next two decades.
The IT sector is one of the fastest growing segments of Indian industry, growing from Rs. 13,200
crore in 1992-93 to Rs. 80,884 crore in 2008-09. Sixty per cent (Rs. 48,134 crore in 2008-09) is
accounted for by software and the remaining 40 per cent (Rs. 32,750 crore) by hardware. IT is an
area where the country has a competitive edge and can establish global dominance.
Advancements in IT have a profound impact on the economy and the quality of human life. The
ITES sector in India has emerged as a key engine of growth for the Indian IT industry and the
technology-led services industry. This sector has grown from Rs. 2,400 crore in 1999-2000 to Rs.
4,100 crore in 2008-2009, providing employment to 70,000 people. The major users of IT
services are the government, financial services and banking, manufacturing and retail and
distribution. New areas likely to emerge are communication, healthcare and utilities, as these will
increasingly be deregulated. However, IT services essentially require high-quality manpower,
state of the art skills, world-class telecom and IT-knowledge based environment.
Statement of the problem: This project aims to study the performance appraisal system (by
considering certain important dimensions) followed in organizations today. The study aims to

highlight the significance of such performance appraisal system in the corporate context. Thus
the study tries to establish the link between performance appraisal system and organizational
effectiveness.
Objectives of the study
To study performance appraisal system in the corporate context
To highlight the significance of performance appraisal system in the corporate context
and establish the link between performance appraisal system and organizational
effectiveness.
Need of the study:

Provide information about the performance ranks based on which decision regarding
salary fixation, confirmation, promotion, transfer and demotion are taken based on
performance appraisal in the corporate context.

Provide feedback information about the level of achievement and behavior of


subordinates in the corporate context.

To provide information which helps to counsel the subordinate

To prevent grievances and in disciplinary activities in the corporate context.

Scope of the study:

To provide employees with a better understanding of their role and responsibilities in the
corporate context.

To increase confidence through recognizing strengths and also identifying training needs
to minimize weaknesses in the corporate context.

To improve working relationships and communication between supervisors and


subordinates.

To increase commitment to organizational goals and to develop employees into future


supervisors in the corporate context.

To assist in personnel decisions such as promotions or allocating rewards.

Limitations of the study:


The study is constrained only to performance appraisal system
The study is limited to the Bangalore city only.

Analysis of primary data is done on the assumption that the answers given by the
respondents are true and correct.
Time and Resource constraints.
Type of Research:
Descriptive research: This research is the most commonly used and the basic reason for
carrying out descriptive research is to identify the cause of something that is happening.
The research is primarily quantitative in nature. The study is based on data collected through
structured questionnaire from the respondents and interviews conducted with the respondents.
Sampling Technique/method:
The research technique used is Random Sampling method.
Sampling unit:
Hewlett Packard, Sonata software ltd, & Capgemini companies has been selected as the sampling
unit.
Data collection:
Data is the fact of an event. Data is the base for every research work. The data is mainly
classified into two groups.
1) Primary data: These data are gathered for our research purpose. This is first hand
information, for this purpose a structured type of questionnaire was designed and administered.
2) Secondary data: Books, journals, websites etc., have been consulted for obtaining related
information, and also for crosschecking of primary data.
Tools and techniques of data collection:
a. To get the response, the questionnaire method was used.
b. The questionnaire used in this study was a structured one.
c. Here the questions were arranged in a specific order and were logically interconnected
for the research study
d. The advantage of the structured questionnaire lies in the reduction of bias.
e. Questionnaire containing of both open-ended questions and close-ended questions.
Contact method: Personnel interview
The respondents were contacted personally interviewed them and collected their views, opinions
and suggestions given by them.
Sample Size:

The respondents used for survey and for certain conclusion, we used 100 respondents who are
working in the companies.
Sample procedure: The study required probability method since the sample was chosen at
random. Hence the study was dealt with simple random tool.
Plan of analysis:
Calculations have been done for interpretation such as percentage, averages etc. This report has
been covered with various tables; graphs and charts obtained from sources such as questionnaires
and personal interview etc. The data collected through the questionnaire are organized, processed
and tabulated in order to create graph and charts to make the project understandable.
DATA ANALYSIS:
The response towards the awareness of the performance appraisal system.

Yes
No

97

From the above graph it can be interpreted that the employees are well aware of the performance
appraisal system followed in the company.
Response towards the level of satisfaction
10%

10%

Fully satisfied
Partially satisfied
Not satisfied at all

80%

This shows that the present performance appraisal system is satisfactory to some extent. Further
improvement in the system can be made in order to attain full satisfaction of the
employees/executives of the company
Response towards awareness about different traits
18%

YES
NO

82%

From the above graph it can be interpreted that the managements effectively inform the appraise
about the traits contained in the appraisal formats.
Knowledge 5%
about reporting officers
Yes
No
95%

From the above graph it can be interpreted that the employees are aware of their Reporting
officers.
Response towards frequency of performance appraisal
50

46

40

32

30

22

20
10
0
I Year

6 months

3 months

From the above graph it can be interpreted that the many employees prefer annual performance
appraisal system.
Response towards application of performance appraisal
16%

28%

31%
6%

19%

Promotions

Salary

Retention/Termination

Recognition of individual
performance

Identification of Poor
performers

From the above table out of 100 respondents 58% of the employees agreed that performance
appraisal system helps in promotions, and for 39 of the employees agreed that it helps in salary,
for 12% of the employees agreed that it helps in retention, and for 63% of the employees agreed
that it helps in Recognition of individual performance, and for 32% of the employees agreed that
it helps in identification of poor performers. From the above graph it can be interpreted that the
Performance appraisal influences promotions and also aids in recognition of individual
performances.
Response towards the appraiser in the organisation
60
40
20
0

47

28

11

14

From the above table out of 100 respondents 47% of the respondents are rated by peers. While
28% of the employees are appraised by subordinates and 11% of the respondents by clients and
11% of the respondents are appraised by self. From the above graph it can be interpreted that
most of the employees are rated by peers and rest of the employees is rated by subordinates,
client and few people are rated by self.

Response towards the appraisal system followed in the company


40
30

30
20

20

20

20
10

10
0
1

04

From the above table out of 100 respondents 20% of the employees are agreed that Graphic
rating scale is one of the method used by the company for doing evaluation and other 20% of the
employees preferred 360 degree performance feedback and other 30% of the employees rated
BARS and other 10% of the employees agreed MBO and only 10% of the employees preferred
other methods of evaluation. From the above graph it can be interpreted that the MBO and
BARS are preferred techniques of evaluation
Responses towards sufficiency of help and guidence provided by reporting/reviewing officers
6% 1%

Highly sufficient
38%

sufficient
Insufficient
Highly Insufficient

55%

From the above table out of 100 respondents 38% of the employees are in the opinion that help
and guidance provided to them by their reporting/reviewing officers is Highly sufficient, and
for 55% it is sufficient, and for 6% of the employees it is insufficient and for only one employee
it is highly insufficient. From the above graph it can be interpreted that the Help and guidance
provided to employees by their reporting/reviewing Officers is sufficient.

Relationship between PA and pay


11%

6%

Highly Co-related
Co-related
Not related

42%

Dont know
41%

From the above table out of 100 respondents 42% of the employees are in the opinion that the
close relationship between their

performance appraisal rating and corresponding monetary

reward is highly co-related.and for 41% it is co-related, for 11% of the employees it is not
related and for 6% of the employees are dont know about that. From the above graph it can be
interpreted that there is a high close relation between performance appraisal and corresponding
monetary reward.
Response towards degree of mutual undestanding
50

46

39

40
30
20

11

10

0
Very high

Quite high

Quite low

Very low

From the above table out of 100 respondents 26% of the employees agreed that the degree of
Mutual Understanding in their work relationships with their supervisor is very high and for 39%
employees it is quite high and for 11% of the respondents agreed that it is quite low and for only
4% of the employees it is very low. From the above graph it can be interpreted that the degree of
mutual understanding in work relationships with the employees superior is very high.
FINDINGS
1. From the study it is found that 97% employees are aware of the performance appraisal
system followed in the company.
2. It is found from the study that 80% of the employees are partially satisfied with the PAS
followed in the organization.

3.

From the study it is found that 87% of the employees are satisfied with the SelfAppraisal process being followed in the company.

4. It is found from the study that 82% of the employees are aware of the different traits or
attributes according to which they are rated.
5. From the study it is found that 95% of the respondents are know about their reporting
officers.
6. It is found from the study that 65% of the respondents agreed that the present appraisal
system should be reviewed.
7. From the study it is found that the many employees prefer annual performance appraisal
system.
8. It is found from the study that 63% of the employees agree that performance appraisal
system helps in Recognition of individual performance.
9. From the study it is found that 47% of the employees are rated by peers.
10. It is found from the study that 30% of the employees are agreed that BARS is one of the
method used by the company for doing evaluation.
RECOMMENDATIONS
1) The performance appraisal should begin by concentrating on what employees have done
well.
2) The Reporting officer must focus on employees key effectiveness areas where he should
show results.
3) The Reporting/Reviewing officer must establish objectives in terms of an employees
performance (Both short term and Long-term), which in a way will affect the total
organizational plan.
4) The reporting officer and the reviewing officers can hold discussions with the employees
and help the employee set up objectives and goals relating to employees performance.
5) The HR manager should give continuous feedback reviews to the employees about their
performance. These feedbacks can be in the form of discussion of the performance,
performance counseling etc.
6) It is desirable to link the performance appraisal systems with employees reward and
recognition programs and the impact of PAS should be gauged on these programs.
CONCLUSIONS

From the study, it can be concluded that if, the organization implements new performance
appraisal system it may enhance employees effectiveness. It may help in identifying his or her
strength and weakness and information the employees as to what performance is expected from
them, would go a long way in making one stand his/her role clearly, and is expected to be more
effective on his job. Performance appraisal system in the corporate context today seems to be
highly satisfactory .Most of the employees is satisfied with the existing system. Performance
appraisal system is found to be highly significant in the corporate context. The researcher is able
to establish link between Performance appraisal system and organizational effectiveness.
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