Submitted by
(Tvishi Sharma)
PRN:07108016411
of
Ansal Institute of Technology
Gurgaon
Guided by Prof. Ms. Shikha Khandelwal
1
Tilak Maharashtra University, Pune
(Deemed Under Section 3 of UGC Act 1956 Vide Notification
No. F.9-19/85-U3 dated 24th April 1987 By the Government of
India.)
Vidyapeeth Bhavan, Gultekdi, Pune-411037.
CERTIFICATE
2
Head of Department Examiner Examiner
Internal External
Date:
Place: University Seal
Certificate of Internal Guide
Signature of guide
Date: Name:
Place: Designation:
Institute:
3
4
Certificate
TO WHOMSOEVER IT MAY CONCERN
Mr./Ms.
Designation
Signature
5
ACKNOWLEDGMENT
I would like to take this opportunity to acknowledge the support and cooperation of all
those who enabled the successful completion of this project.
I deem it a great privilege to thank all those people who helped me to complete this
project work. I express my sincere thanks to the management of the Ansal Institute of
Technology, Gurgaon and our respected Head of the department Mr. R.K. Yadav for
giving me this opportunity to under take the project work.
I am deeply obliged to my project guide Ms. Shikha Khandelwal with out whose
guidance and encouragement at all levels; the study wouldn’t have been completed.
I would like to extend my sincere gratitude towards Mr. Aditya Sheel (Regional HR
manager) and Ms. Akanksha Katyal( of Micromax), under whose guidance I undertook
this project, for extending the advice and direction that is required to carry on a study of
this nature, and for helping me with the intricate details of the project every step of the
way.
I would like to thank all the employees who spared their precious time to answer all my
queries and helped me to complete this project.
Finally I would like to thank all the respective people of the company who helped me in
the completion of my project by giving me valuable insights on the Performance
Management System of their company.
Tvishi Sharma
6
INDEX
Chapter7: Findings
Chapter8: Limitations
Appendix
• Questionnaires
• Bibliography
7
BIBLIOGRAPHY
WEBSITES REFERRED
WWW.WIKIPEDIA.ORG
WWW.DATTNERCONSULTING.COM
WWW.PERFORMANCE-APPRAISAL.COM
WWW.MICROMAXINFO.COM
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QUESTIONAIRE
Q2. Which one of the following must be incorporated in the appraisal form for sure?
a. Development needs.
b. Job interest of the employee.
c. Infrastructural needs of the employee.
d. Problems faced by the employee.
Q3. Performance appraisal must take into consideration the following employee view
point:
a. Employee.
b. Employee + Supervisor.
c. Employee + Supervisor + HOD.
d. HOD.
e. Supervisor + HOD.
a. 1-3
b. 1-5
c. 1-7
d. 1-10
Q5. Biased ness in Performance Appraisal can be removed with the help of the following
employee’s view:
a. Employee
b. Supervisor
c. Director
9
Q6. Telephonic or face to face interaction with the employee is essential for appropriate
and exact appraisal:
a. yes
b. No
a. Electronic
b. Hardcopy
Q8. Please rate the following competencies in order of importance, with 1 being the most
important:
a. Yes
b. No
Q10. Please rate these additional competencies for supervisors in order of importance,
with 1 being the most important:
10
1. Coaches/counsels, evaluates staff.
2. Identifies areas for & supports employee development opportunities.
3. Encourages teamwork and group achievement.
4. Leads change/ achieves support for objectives.
5. Enables and empowers staff; provides appropriate opportunities for growth.
6. Strives to achieve diverse staff at all levels.
7. Understands diversity issues and creates supportive environment for diverse
employees.
a. Quarterly
b. Half yearly
c. Yearly
a. Yes
b. No
a. Yes
b. No
a. Yes
b. No
11
Chapter 1
General Introduction (Industrial Background)
12
Communications in India
A lot of water has flowed under the bridge from the time that mobiles were unheard of in
India to the present where they have become almost ubiquitous. Beginning from those
days, Indian subscribers paid around Rs. 16.40 for a mobile to mobile call and around Rs
32.80 for a mobile to a land-line call. Today, as per recent statistics, customers pay far
lesser for calls and occasional text messages that add up to around Rs 300 a month and
upwards.
Now that mobiles have moved into the affordable bracket, there is a great demand for
additional mobile services such as mobiles, email, stock market quotes, and astrology
services, just to name a few.
A recent survey pointed to the fact that for most customers, mobile phones have become
an extension of their personality. Many go a step ahead to say that mobile phones define
their individuality as well. In such a scenario, it is worthwhile to compare the growth of
the mobile phone industry vis-a-vis the computer industry in India. According to recent
statistics, there are nearly 300 million mobile phone subscribers as compared to just
around 30 million PC's in the country. Additionally, around 8 million subscribers are
signing up every month for mobile services alone.
For most individuals, mobile phones are becoming a single point of contact for the world
surrounding them covering a wide range of utilities like emailing, entertainment, and
banking.
More and more people are looking out for more than just talk time on their mobiles. All
this is generating a lot of enthusiasm for mobile companies. A number of serious players
in this industry are looking at a range of such value added services, which have the
capability to boost their bottom line.
Not only are Indians enthralled, but they started spending a considerable amount on these
services too. This figure amounted to around $250 million last year. This figure is
expected to reach $1.7 billion by the year 2010. This is a boon in disguise for Indian
cellular operators who are seriously looking forward to enhance their revenues.
Currently, nearly 80% of the revenues come from services like ring tones and SMS. This
makes India the second largest mobile market on earth.
The young mobile savvy generation currently feels less privileged in nearly every sector.
And that's precisely what is fuelling the growth in mobile services across the country. As
the market expands but fulfilling the needs of mobile users by providing them attractive
services, mobile phones are becoming a new vehicle for reaching out to the mobile
generation.
13
Major players in the industry
Nokia BenQ
Samsung Fly
LG HTC
Motorola Haier
Apple INQ
Blackberry Intex
Karbonn Panasonic
Lemon Lava
Olive Huawei
About Micromax
Micromax is a New Delhi; India based Telecom Company with 23 domestic offices in all
the telecom circles of India and international offices in Hong Kong, USA and now in
Dubai. Besides India, Micromax devices are sold in Nepal, Bangladesh, Middle East,
Africa and parts of Latin America.
Micromax has always been proud of being a one-point solution for their customers by
providing for Design, Development, Manufacturing, Marketing, distribution and after-
sales-support of all Micromax devices under the flagship of Micromax.
Micromax has a lot of “firsts” to its credit on their mystic product portfolio and was the
first to introduce:
• 30 days battery backup- Mobile Phones
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• Dual SIM/Dual Standby- Mobile Phones
• Network changing capability using gravitational force- Mobile Phones
• Aspirational Qwerty- mobile Phones
• Operator Branded 3G- Mobile Phones
• OMH, CDMA – Mobile Phones
• And many more
With a 360 degree advertising and marketing strategy sketched out, the company has an
optimistic outlook for the telecom consumer space. Currently present in more than 40,000
stores across the country, the company plans to have an aggressive market incursion to
reach out to its customers through 70,000 operational stores in the coming year.
15
Chapter 2
Introduction to Problem
16
Title of the project:
Performance Management System
Performance Management is a whole work system that begins when a job is defined as
needed. It ends when an employee leaves your organization.
According to this definition, performance management involves creating work
environment for employees’ success rather than setting a tight control system as many
managers would believe.
Managing Performance is a year round process. An iterative process of observation and
communication to support, retain and develop employees for organizational success.
• it’s not just an annual performance appraisal
• it’s not imposing targets/goals on an employee by his supervisor
• it’s not only evaluating individual job performance
Statement of problem
Performance appraisal is a process of assessing, summarizing and developing the work
performance of an employee. In order to be effective and constructive, the performance
manager should make every effort to obtain as much objective information about the
employee's performance as possible. Low performance can push the organization back in
today’s tough competition scenario. The project is aimed at analyzing the performance
appraisal in companies.
What is it about:
• Goal Setting
• Coaching
• Rewarding
• Disciplinary Action
• Performance Appraisal
• Documenting performance
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Here we are looking at the pre-performance management system and the post-
performance management system:
Pre-performance management steps:
• Designing of the forms: The forms that are to be filled are designed according
to the company’s requirement.
• KRAs: Laying out the Key Result Areas for each department where the results
are required for company’s development.
• Generic competencies: Thr generic competencies are layed out on the basis of
the requirements of the company. The competencies are same for every
department.
• Filling the forms: The forms are to br filled by the HODs of each department
and then the director.
• Analysis: Analysis is made according to the information provided by the
heads and the loopholes or the problem areas are identified(if any).
• Increments: The employee’s are provided an increment according to their
contribution to the company.
Post-performance management:
The purpose of the performance system is fulfilled and the comparison of the results is
made.
Purpose of study:
• The purpose is to study the Performance Management System at Micromax
Informatics Ltd.
• To learn about the process of Performance Management System.
• To know the effective method of Performance Management System.
Objective of study:
1. The objective of study is to understand the performance management system and its
importance and recommend the solution for the problem area occurring in the process.
2. To examine why an appraisal system is important.
3. To find the expectation of appraiser and appraisee.
4. To determine the satisfaction level of the appraisee.
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5. To reveal the various loopholes in the appraisal system if any.
6. To find the consequences of an inappropriately conducted appraisal system.
Scope of study:
• The study was done to know the various methods of Performance Management
System.
• The study’s emphasis is on the Performance Management System of Micromax
Informatics Ltd.
• The study aims at understanding various issues involved in Performance Management
System.
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Chapter 3
Profile of the company
20
Company profile
Inventing surprises
Vision
Our Vision is to develop innovative technologies and efficient processes that incubate
newer markets, enliven customer aspirations and continue to make Micromax a trusted
market leader.
Mission
With a futuristic vision and an exhaustive R&D at its helm, Micromax has successfully
generated innovative technologies that revolutionize the telecom consumer space.
Micromax is on a mission to successfully overcome the technological barriers and keep
powering “life enhancing solutions”.
Philosophy
Enthused with passion for innovation, Micromax has constantly strived to bring about the
much needed change in telecom products so as to fulfill the customer aspirations. At
Micromax, the mornings begin with a simple business philosophy; to use our talent and
technology to create superior products and services that contribute to a better and
satisfied global society.
People
Human Resource @ Micromax is the most treasured asset that makes Micromax stand
apart in the industry. People come from myriad backgrounds and spheres and work in
their individual work styles. This hybrid culture binds together to form a uniform work
ethos @ Micromax.
Values
The Micromax ideology stems from its rooted belief in ‘Innovation’ and delivering
nothing “short of the best”. At Micromax, a rigorous code of conduct and core values
form the basis of every decision made.
• Excellence
Passion at Micromax ensures an unfaltering commitment to deliver only the best
products and services to the customer.
• Integrity
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Operational efficiency is achieved by standing committed to the core ethics which
ensure work is always guided by a moral compass that entrusts fairness, respect
for all stakeholders and complete transparency in our everyday life.
The Advent
With young enthusiasts as its anchor, Micromax Informatics Limited has created a niche
for itself in the telecommunication industry. Micromax ventured into the
telecommunication industry with end-to-end solution of Fixed Wireless Devices and
Wireless Data cards. The devices were supplied to all parts of India and were supported
on the network of the GSM operators of India. Within a year of its operation, Micromax
provided for technical support of the installed base of devices across 150+ cities of India,
a no-mean achievement which made the customers trust and love the brand.
In the year 2008, after delivering upon the technology of fixed wireless, powering desired
products, the company forayed into one of the most predominant genres of
telecommunication – Mobile handsets. Since then Micromax has received commendable
response for its unique and interesting handsets. With groundbreaking mobile solutions
and technology, Micromax is completely primed to bring about a paradigm shift in the
perception of personal mobile devices. Micromax has successfully launched mobile
phones that meet the needs of a broad segment of customers. The range varies from entry
level handsets to high-end sophisticated mobile phones and the commercials starts from
being as low as Rs.1,100/- to as high as Rs. 14,000/-.
From its Inception, till date the company has firmly stood by its principle that; like
change, innovation too is constant and much required for human evolution.
22
Chapters: 4
Theoretical perspective
23
Performance Management System
What is performance management system?
Many writers and consultants are using the term “performance management” as a
substitution for the traditional appraisal system. I encourage you to think of the term in
this broader work system context. A performance management system includes the
following actions.
• Design effective compensation and recognition systems that reward people for
their contributions.
• Assist with exit interviews to understand WHY valued employees leave the
organization.
The concept of Performance Appraisal dates back to the First World War and was then
called “Merit Rating Programme”. Over a period of time, this concept has been through
an ocean of change. The areas of evaluation have also changed.
Once an employee has been selected, trained and embarked on his duties, it is time for
performance appraisal. What is performance appraisal? Why do companies need to take
up this task?
24
According to Carl Heyel, author/editor on management, philosopher and teacher, “it is
the process of evaluating the performance and qualifications of the employees in terms of
job requirements, for administrative purposes such as placement, selection and
promotion, to provide financial rewards and other actions which require differential
treatment among the members of a group as distinguished from actions affecting all
members equally”.
The history of performance appraisal is quite brief. Its roots in the early 20th century can
be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for
the same may be said about almost everything in the field of modern human resources
management.
Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things
historical, it might well lay claim to being the world's second oldest profession!
There is, says Dulewicz (1989), "... a basic human tendency to make judgments about
those one is working with, as well as about oneself." Appraisal, it seems, is both
inevitable and universal. In the absence of a carefully structured system of appraisal,
people will tend to judge the work performance of others, including subordinates,
naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational, ethical and legal
problems in the workplace. Without a structured appraisal system, there is little chance of
ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is,
appraisal was used to decide whether or not the salary or wage of an individual employee
was justified.
The process was firmly linked to material outcomes. If an employee's performance was
found to be less than ideal, a cut in pay would follow. On the other hand, if their
performance was better than the supervisor expected, a pay rise was in order.
Sometimes this basic system succeeded in getting the results that were intended; but more
often than not, it failed.
25
For example, early motivational researchers were aware that different people with
roughly equal work abilities could be paid the same amount of money and yet have quite
different levels of motivation and performance.
These observations were confirmed in empirical studies. Pay rates were important, yes;
but they were not the only element that had an impact on employee performance. It was
found that other issues, such as morale and self-esteem, could also have a major
influence.
Modern approach
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are used to
identify the better performing employees who should get the majority of available merit
pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers who may
require some form of counseling, or in extreme cases, demotion, dismissal or decreases in
pay. (Organizations need to be aware of laws in their country that might restrict their
capacity to dismiss employees or decrease pay.)
Controversy, Controversy
26
At the other extreme, there are many strong advocates of performance appraisal. Some
view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).
Between these two extremes lie various schools of belief. While all endorse the use of
performance appraisal, there are many different opinions on how and when to apply it.
There are those, for instance, who believe that performance appraisal has many important
employee development uses, but scorn any attempt to link the process to reward
outcomes - such as pay rises and promotions.
This group believes that the linkage to reward outcomes reduces or eliminates the
developmental value of appraisals. Rather than an opportunity for constructive review
and encouragement, the reward-linked process is perceived as judgmental, punitive and
harrowing.
For example, how many people would gladly admit their work problems if, at the same
time, they knew that their next pay rise or a much-wanted promotion was riding on an
appraisal result? Very likely, in that situation, many people would deny or downplay their
weaknesses.
Nor is the desire to distort or deny the truth confined to the person being appraised. Many
appraisers feel uncomfortable with the combined role of judge and executioner.
Such reluctance is not difficult to understand. Appraisers often know their appraisees
well, and are typically in a direct subordinate-supervisor relationship. They work together
on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to
brush up on certain work skills is one thing; giving an appraisal result that has the direct
effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument which claims that performance
appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process by which
rewards - which are not an unlimited resource - may be openly and fairly distributed to
those most deserving on the basis of merit, effort and results.
It has also been claimed that appraisees themselves are inclined to believe that appraisal
results should be linked directly to reward outcomes - and are suspicious and
27
disappointed when told this is not the case. Rather than feeling relieved, appraisees may
suspect that they are not being told the whole truth, or that the appraisal process is a sham
and waste of time.
There is also a group who argues that the evaluation of employees for reward purposes,
and frank communication with them about their performance, are part of the basic
responsibilities of management. The practice of not discussing reward issues while
appraising performance is, say critics, based on inconsistent and muddled ideas of
motivation.
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4. The parameters of performance are a combination of technical expertise and
behavioural attributes. The latter scores a high degree of relevance with
regard to potential appraisal.
→ The head of the key represents the uniqueness of the employee. No two
employees are alike.
→ The ring represents the management’s requirement -the job content.
→ The shaft represents the communication between the employee and the
company, the transmission of the task and the response from the performer.
Change:
1. A few decades ago, the employee used to be appraised by his department
head. The department head used to communicate his feedback and comments
only to the immediate superior of the employee. Thus the feedback was kept
confidential in nature. As time passed by, the immediate superior started
appraising his subordinate’s performance and sending his confidential report
to the department head. These were the periods when the employee was not
included in his appraisal process. The decisions used to be taken by his
superiors relating to his pay hike, promotion etc. Thus the system was non-
transparent.
2. The current process of performance appraisal is much more open and gives
some scope for self-appraisal by the employee. The self-appraisal is followed
by a joint discussion with superior and then a decision is taken by the
department head on his promotion, pay hike etc. The feedback relating to his
performance is directly given to the employee. Thus performance appraisal
process has gone through the phase of non-transparency to transparency.
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3. In this transparency phase, a performance appraisal can be defined as a
structured formal interaction between a subordinate and supervisor, that
usually takes the form of a periodic interview (annual or bi-annual), in which
the work performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as opportunities for
improvement and skills development.
Performance Appraisal assesses how well people have been doing their jobs and what
they must do to be better in their jobs. It deals with the content of the job and what they
are expected to achieve in each aspect of their work. Following are the foundations in
Performance Appraisal process:
I. Job Profile:
Job description concentrates more on the definition of tasks the jobholder has to
accomplish. It includes details of reporting relationship and normally covers the
overall purpose of the job. It indicates how an individual’s job will contribute to
the achievement of objectives of a team or a department and, ultimately the
mission of the organization.
30
II. Objectives:
An objective describes something, which has to be accomplished. Objectives
define what organizations, functions, departments, teams and individuals are
expected to achieve.
1. Transfer
3. Promotion
5. Personal Research
III. Competencies:
Competencies refer to the behavioral dimensions of a role. It is the behavior
required of people to carry out their work satisfactorily. Competencies are what
people bring to a job in the form of different types and levels of behavior. They
govern the process aspects of job performance.
IV. Values:
Increasingly, organizations are setting out the core values that they think should
govern the behavior of all their employees. Value statements may be prepared
31
which define core values in areas such as care for customers, concern for people,
competitiveness, excellence, growth, innovation.
The process of getting to know the people who work for the organization involves three
essential steps viz. training, evaluation and review.
I. Training:
Successful training is the implementation of a system in which everyone in the
workplace is geared towards improvement. It involves a hands on approach in
which the employee is encouraged to evaluate himself or herself under the
guidance of the appraiser.
How it works?
First, the appraiser includes the employee in the appraisal process. When an
employee knows that his or her opinion of other workers is taken into account, he
or she also realizes that everyone else’s opinion matters just as much. This not
only empowers the employee and improves relations in the workplace, but it
encourages higher productivity as well. This interactive approach is made
complete with the leadership of the appraiser. Carefully administering praise
coupled with constructive criticism keeps the workforce on its toes.
II. Evaluation:
The best methods for employee evaluation are based on results and
behavior.While conducting performance appraisal based on employees’
characteristic traits is quite common, the results are often subjective and
unsatisfactory. A results-based approach to performance appraisal is by far the
cleanest, most objective method of tackling the complex task of evaluation. It uses
a rating system to measure productivity within a given timescale. If an employee
makes a certain number of sales in a certain week, he or she can be rated by sheer
worth as well as ranked against other employees. The study of behavior is closely
tied to productivity. The pace of work, willingness to put in overtime and ability to
work with others all contribute to overall productivity.
III. Review:
The review process should, again, employ the techniques of interactivity. Before
sitting down together, the appraiser should give the employee a chance to review
himself or herself. This not only empowers the employee, but also saves a lot of
time and possible contention during the actual discussion. Initially the appraiser
should walk the employee through the process. The successful supervisor starts
out with an overview of why the review session is needed. Then the supervisor
takes the employee down a point-by-point list of every aspect of the job. In each
case, the employee should be given a chance to describe his or her achievements
and shortcomings. The supervisor should always supplement this with added
32
insight. While praising and applying criticism, the supervisor maintains authority
throughout the review and indeed, the entire appraisal process.
I. Objectives:
Data relating to Performance Appraisal of employees are recorded, stored and
used for several purposes like:
• Let the employees know where they stand in so far as their performance is
concerned and to assist them with constructive criticism and guidance for the
purpose of their development.
• Assessment of skills within an organization.
• Set targets for future performance.
• Effect promotions based on competence and performance.
• Strengthen relationship between superior and subordinate.
• Assess the training and development needs of employees.
• Identify the strengths and weaknesses of employees.
• Decide upon a pay raise (increments).
• Improve communication as it not only provides a system for dialogue
between the superior and the subordinate, but also improves understanding of
personal goals and concerns. This can also have the effect of increasing the
trust between the appraiser and appraisee.
• Determine whether human resource programs such, as selection, training and
transfers have been effective or not.
II. Benefits:
The following are the benefits of a successful appraisal system:
33
• Identification of ideas for improvement.
• Creation and maintenance of a culture of continuous improvement.
• Communication to people that they are valued.
2. For the appraiser:
• Opportunity to develop an overview of individual jobs.
• Opportunity to identify strengths and weaknesses of appraisees.
• Increased job satisfaction.
• Opportunity to link team and individual objectives with department &
organizational objectives.
• Opportunity to clarify expectations that the manager has from teams and
individuals.
• Opportunity to re-prioritize targets
• Means of forming a more productive relationship with staff based on mutual trust
and understanding.
• Due to all above Increased sense of personal value
In line with the objectives of Performance Appraisal, to reap it’s benefits, this system has
to be effective failing which it may mar the very purpose of performance appraisal.
When it comes to performance appraisal, managers and employees agree about one thing:
They hate going through them. Employees, managers and HR experts agree that fear,
guilt, responsibility and resentment are the real reasons why most employees dread the
appraisal process. Besides some think that it is a ritual that is mandatory to follow.
34
3. increasing real employee diversity
I. Good appraisals start with information from multiple sources, and they evaluate
employees at all levels from top to bottom.
II. This system requires both the appraisee and appraiser to jointly assess the
employee’s ability to complete the duties and achieve the goals set forth in the
previous appraisal.
III. HR professionals should consider the following steps and make the appraisal
process simple yet effective:
• The performance Appraisal form should reflect the strategic objectives of the
company. Many organizations use a form that contains several sections.
• The results and impact section should address accomplishments related to job
responsibilities, goals and projects. It is a review of past performance.
• A skills and abilities section should discuss the ways those results were
accomplished. By listing the core competencies for each job classification –
and for the entire organization – this section can address the kinds of behavior
that are critical for success.
IV. Appraisal results, either directly or indirectly, determine reward outcomes. The
better performing employees may get the majority of available merit pay
increases, bonuses and promotions, while the poorer performers may require some
form of counseling or in extreme cases no increases in pay. The assignment and
justification of rewards and penalties through performance appraisal is a very
uncertain and controversial matter and conveys both satisfaction as well as
dissatisfaction with an employee’s job performance. Whatever is the case,
organizations should foster a feeling that performance appraisals are positive
opportunities that provide for overall development of the employee, in order to get
the best out of the people and the process. Hence performance appraisals should be
positive experiences and it should never be used to handle matters of discipline.
35
∙ Helps the individual know “How he/she is doing” compared to what his/her
manager expects.
∙ Encourages comparison on individual objectives to identify overlapping or
omitted objectives.
∙ Helps in salary review, and self-development.
The recent trend from a focus on traits or behavior to a results-oriented approach has
seen the emergence of objectives setting as a key issue. However, managers should
attempt to agree objectives with their staff rather than setting them themselves for
the forthcoming period during appraisal discussion. These objectives or targets
should comply with the mnemonic SMART i.e. Specific, Measurable, Achievable,
Realistic and Time-bound.
36
SMART Performance Goals Criteria Checklist
Achievable
A realistic expectation, given ∙ Are resources, authority level, and requisite
time and resources skills in place?
∙ Does it require a stretch of effort?
Realistic
There is a clear tie to goals of ∙ Will it matter when it is done?
the department, division etc. ∙ Does the objective support relevant goals?
∙ Does it deal with a key aspect of the job?
Time Bound
There is a time limit or ∙ When are the goals to be completed?
deadline by which the ∙ Is there a timetable for milestones or
objective must be achieved checkpoints?
and there may be a time frame
to track phases of completion
in an action plan.
37
∙ It must be better than the current average or typical performance. Short-term
goals are negotiated. Usually employees and lower level managers
recommend and develop short-term goals subject to approval by
management.
3.The Minimum or Standard goal:
The minimum or standard goal is the cut-off point for signaling the existence of
or potential for a performance problem. Like short-term goals, minimum
standards are set for a limited period but for longer duration – perhaps one to
two years. Minimums/standards are negotiated like short-term goals and must
conform to the following criteria:
∙ They must be less than or equal to current average/typical performance; and
∙ They cannot be worse than the worst performance for any previous period.
38
2. Joint Accountability:
Management must recognize that most results are achieved through the
corporate efforts of two or more people. Therefore, the management style must
encourage maximum individual contribution in co-operation with others.
Performance, Pay and Development
The outcome of the appraisal is either in the form of reward by way of increase in pay,
additional bonus or incentive and/or promotion, or by way of not effecting any increase
in pay, denying promotion etc. This gives emergence to the concept of Performance
Related Pay (PRP).
4. Flexibility:
PRP arrangements should allow for some flexibility in the criteria for reward
and the method of payment.
5. Teamwork:
39
Poor PRP schemes can produce a lot of single-minded individuals. The
importance of teamwork should be recognized in structuring the scheme and
in defining critical success factors and performance indicators. Individuals
should be aware that achieving their targets at the expense of others is not
considered competent performance.
6. Avoiding Short-termism:
To avoid the danger of PRP focusing attention on short-term results at the
expense of more important longer-term objectives, long-term as well as short-
term goals should be set wherever appropriate and short-term objectives
should be discussed in their overall context.
40
• If no, what are the alternatives? There are many: Consider
performance-related team pay, organization-wide profit sharing or
profit-related pay plans, gain sharing, the use of incentive or bonus
schemes, concentrating more on the motivational aspects of
Performance Management, job re-design to increase motivation,
performance-related training more intensive management
coaching and training to improve leadership abilities, process re-
engineering to improve organizational performance and
productivity.
41
• Should PRP reviews be separated in time from performance
reviews conducted as part of the Performance Management
process?
• What rating, pay increase and budget guidelines are going to be
issued to managers implementing PRP in their departments?
• Should performance matrices be used? If so, how should they be
constructed?
• How PRP will be monitored and its effectiveness be evaluated?
• How the cost of PRP would be controlled?
• What is the program for developing and introducing PRP?
Evaluate
• Have clear objectives been established for the scheme the progress
towards which can be measured and evaluated?
• How to carry out a continuing monitoring and evaluation process?
• Who is responsible for evaluation and taking any corrective action
that may be required?
• What points should be covered?
42
• How do managers regard PRP? Do they, for example, believe that it is
operating fairly?
• To what extent have rewards been linked to key and measurable areas of
performance? Are rewards meeting people’s expectations?
• Do Performance Management processes provide adequate support for PRP?
• Do the organization want to retain PRP in its present form? If not, what are
the alternatives?
Finally, all research has confirmed that employees regard positively the
concept of PRP but deny quite strongly that it acts as a motivator for them in
practice, and are mostly critical of the resulting procedural and distributive
justice. It can be concluded that employees may work harder, in a more
focused way and get better results through a PRP system which is under
printed by a robust performance management scheme but employees may do
this through a mixture of necessity and fear, rather than a genuine desire to do
so.
43
• identifying performance problems or obstacles
• encouraging appraisee to generate alternatives for dealing with various problems
Of the three approaches discussed above, the problem solving approach is the best
approach. The below comparison justifies how:
The Tell and Sell The Tell and The Problem Solving Approach
Approach Listen Approach
Requires considerable Requires skills on Encourages appraisee to review his
skill to get people to the part of own performance and identify
accept criticism appraiser in problem areas thus motivating
listening appraisee
Is more of a one-way Better than the `tell Appraiser does not impose his
communication and sell approach’ decision but discusses problems with
process, indicating since it involves appraisee
44
authoritarianism appraisee
Such approach may Appraiser does not This also requires skills but is the
not motivate the play a very active most effective method of counseling
appraisee or even role where both appraiser and appraisee
may turn counter- enjoy confidence of each other and
productive work together in the direction of
finding out solutions.
IV. Counseling is an art and requires skills, which are difficult to acquire in the
normal course of work. It is, therefore, suggested that appraisers should be provided
with special training by experts in counseling skills.
45
• The appraiser should listen attentively without interruption with patience.
• Appraiser should be supportive and objective on performance evaluation of the
employee.
• Appraiser should discuss the training and development needs with the appraisee.
• Finally, the meeting should conclude wherein the appraisee leaves with a feeling
of empowerment.
Before understanding the process of appraisal, the following terms are revised:
▪ Appraisal period is the length of time during which an employee’s job performance
is observed in order to make a formal report of it.
Designing an appraisal program poses several questions, which need answers. They are:
46
2. Who are the appraisers?
Appraisers can be immediate superiors, specialists from the human resource
department, subordinates, peers, committees, clients, self-appraisals or a
combination thereof.
3. What should be evaluated?
One of the steps in designing an appraisal program is to determine the evaluation
criteria. It is obvious that the criteria should be related to the job. The criteria for
assessing performance can be:
a. Quality & Quantity
b. Timeliness
c. Cost Effectiveness
d. Need for supervision
e. Interpersonal impact
f. Innovation & Creativity
g. Problem Analysis
h. Customer orientation
i. Market Orientation
j. Entrepreneurial Drive
k. Negotiation skills etc.
This is not an exhaustive list, but several other parameters too can be added
depending on job requirements and organizational needs.
4. When to appraise/rate?
The most frequent rating schedules are semi-annual and annual. New employees
are rated more frequently than older ones. Some practices call for ratings:
∙ Annually as per company practice
∙ After first 6 months of employment
∙ Upon promotion or within 3 months after promotion
∙ When the job occupied has been reevaluated upward
∙ Upon special request, as when the employee’s salary is below the average pay
47
i. Hostility from the appraiser:
The appraiser reacts indifferently to the appraising system because he
believes that it is a waste of time. At times they feel that the scheme has
nothing to do with their own needs and it exists to feed the personnel
database.
ii. Hostility from the appraisee:
Hostility from the people at the receiving end arises because they feel
Performance Appraisal is simply another method in the hands of the
managers to exercise their command and control prerogatives. They feel
that the data collected will be utilized as evidence against them. In
some cases appraisees even have a feeling that the outcome of the
performance evaluation is predetermined by the management or their
superiors and the process is completed only as a formality, due to which
appraisees lack interest in the entire appraisal process.
b. Halo Error:
Under this type of error, one marked characteristic or latest achievement or
failure of the appraisee (either favourable or unfavourable) may be allowed to
dominate the appraisal for the entire year.
c. Logical Error:
This is a dangerous pitfall for the inexperienced appraiser. He is very often
inclined to arrive at similar assessments in respect of qualities that seem
logically related.
d. Constant Error:
When two appraisers rate an appraisee their ratings may be different. One
may show consistent leniency by giving him high scores, the other my
consistently rate him by giving low scores.
e. Central Tendency:
It is also called as “Average Ratings”. Here, the appraiser tends to avoid
giving frank views to the question asked or the appraiser is in doubt or he has
inadequate information or he simply wants to play safe and don’t displease
anyone.
f. Mirror-Image Error or Projection Error:
This error arises when an appraiser expects his own qualities, skills, and
values in an appraisee. The appraiser may falsely believe that if the appraisee
is good he has to be like him (appraiser) because the appraiser considers
himself as the standard.
g. Contrast Error:
This error occurs in the sequencing of ratings. If superior performers are rated
first, average performers are rated down, if poorer performers come first, the
average performers will be rated more highly.
48
h. Biases of position, Sex, Race, Religion & Nationality:
There is a tendency to rate the occupant at a higher position more favorably
than the person in a lower position. Similarly rating can be biased based on
sex, religion and nationality too.
i. Lack of Skill in conducting Appraisal discussion:
Conducting Performance Appraisal discussions require certain skills and
training.
6. How to solve the appraiser’s problems?
The best way to overcome the problem is to give training to the appraiser. Training
can help improve the appraisal system to the extent that distortion occurring due to
appraiser errors such as halo, leniency, central tendency and bias are minimized.
49
nature. While other newer methods are transparent in nature. Each of the method
has it’s own format of appraisal form.
50
Methods
7. Field review
The most popular methods used in the performance appraisal process include the
following:
• Management by objectives
• 360-degree appraisal
• Behavioral observation scale
• Behaviorally anchored rating scales
Trait-based systems, which rely on factors such as integrity and conscientiousness, are
also commonly used by businesses. The scientific literature on the subject provides
evidence that assessing employees on factors such as these should be avoided. The
reasons for this are two-fold:
1) Because trait-based systems are by definition based on personality traits, they make it
difficult for a manager to provide feedback that can cause positive change in employee
performance. This is caused by the fact that personality dimensions are for the most part
51
static, and while an employee can change a specific behavior they cannot change their
personality. For example, a person who lacks integrity may stop lying to a manager
because they have been caught, but they still have low integrity and are likely to lie again
when the threat of being caught is gone.
2) Trait-based systems, because they are vague, are more easily influenced by office
politics, causing them to be less reliable as a source of information on an employee's true
performance. The vagueness of these instruments allows managers to fill them out based
on who they want to/feel should get a raise, rather than basing scores on specific
behaviors employees should/should not be engaging in. These systems are also more
likely to leave a company open to discrimination claims because a manager can make
biased decisions without having to back them up with specific behavioral information.
Management by Objectives
The term "management by objectives" was first popularized by Peter Drucker in his 1954
book 'The Practice of Management'.
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
52
employee’s actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and choosing the course of action to
be followed by them, they are more likely to fulfill their responsibilities.
Objectives can be set in all domains of activities (production, marketing, services, sales,
R&D, human resources, finance, information systems etc.).
Some objectives are collective, for a whole department or the whole company, others can
be individualized.
Practice
53
Limitations
There are several limitations to the assumptive base underlying the impact of managing
by objectives, including:
3. Companies evaluated their employees by comparing them with the "ideal" employee.
Trait appraisal only looks at what employees should be, not at what they should do.
When this approach is not properly set, agreed and managed by organizations, in self-
centered thinking employees, it may trigger an unethical behavior of distorting the system
of results and financial figures to falsely achieve targets that were set in a short-term,
narrow, bottom-line fashion.How corporate culture impacts unethical distortion of
financial numbers: managing by Objectives and Results could be counterproductive and
contribute to a climate that may lead to distortion of the system, manipulation of
accounting figures, and, ultimately, unethical behavior|publisher .
The use of MBO needs to be carefully aligned with the culture of the organization. While
MBO is not as fashionable as it was before the 'empowerment' fad, it still has its place in
management today. The key difference is that rather than 'set' objectives from a cascade
process, objectives are discussed and agreed, based upon a more strategic picture being
available to employees. Engagement of employees in the objective setting process is seen
as a strategic advantage by many.
A saying around MBO -- "What gets measured gets done", ‘Why measure performance?
Different purposes require different measures’, Public Administration Review, Italic
text-- is perhaps the most famous aphorism of performance measurement; therefore, to
avoid potential problems SMART and SMARTER objectives need to be agreed upon in
the true sense rather than set.
54
360 degree appraisal
History
The German Military first began gathering feedback from multiple sources in order to
evaluate performance during World War II (Fleenor & Prince, 1997). Also during this
time period, others explored the use of multi-rater feedback via the concept of T-groups.
One of the earliest recorded uses of surveys to gather information about employees
occurred in the 1950s at Esso Research and Engineering Company (Bracken, Dalton,
Jako, McCauley, & Pollman, 1997). From there, the idea of 360-degree feedback gained
momentum, and by the 1990s most human resources and organization development
professionals understood the concept. The problem was that collecting and collating the
feedback demanded a paper-based effort including either complex manual calculations or
lengthy delays. The first led to despair on the part of practitioners; the second to a gradual
erosion of commitment by recipients.
Multi-rater feedback use steadily increased in popularity, due largely to the use of the
Internet in conducting web-based surveys (Atkins & Wood, 2002). Today, studies
suggest that over one-third of U.S. companies use some type of multi-source feedback
(Bracken, Timmereck, & Church, 2001a). Others claim that this estimate is closer to 90%
of all Fortune 500 firms (Edwards & Ewen, 1996). In recent years, Internet-based
services have become the norm, with a growing menu of useful features (e.g., multi
languages, comparative reporting, and aggregate reporting) (Bracken, Summers, &
Fleenor, 1998).
Accuracy
A study on the patterns of rater accuracy shows that length of time that a rater has known
the person being rated has the most significant effect on the accuracy of a 360-degree
review. The study shows that subjects in the group “known for one to three years” are the
most accurate, followed by “known for less than one year,” followed by “known for three
to five years” and the least accurate being “known for more than five years.” The study
concludes that the most accurate ratings come from knowing the person long enough to
get past first impressions, but not so long as to begin to generalize favorably (Eichinger,
2004).
55
It has been suggested that multi-rater assessments often generate conflicting opinions,
and that there may be no way to determine whose feedback is accurate (Vinson, 1996).
Studies have also indicated that self-ratings are generally significantly higher than the
ratings of others (Lublin, 1994; Yammarino & Atwater, 1993; Nowack, 1992).
Results
Several studies (Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither,
1999) indicate that the use of 360-degree feedback helps people improve performance. In
a 5-year Walker and Smither (1999) study, no improvement in overall ratings was found
between the 1st and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd
and 4th years. A study by Reilly et al. (1996) found that performance increased between
the 1st and 2nd administrations, and sustained this improvement 2 years later. Additional
studies show that 360 feedback may be predictive of future performance (Maylett &
Riboldi, 2007).
Some authors maintain that 360 processes are much too complex to make blanket
generalizations about their effectiveness (Bracken, Timmreck, Fleenor, & Summers,
2001b; Smither, London, & Reilly, 2005). Smither et al. (2005) suggest, "We therefore
think that it is time for researchers and practitioners to ask, 'Under what conditions and
for whom is multisource feedback likely to be beneficial?' (rather than asking 'Does
multisource feedback work?') (p. 60)." Their meta-analysis of 24 longitudinal studies
looks at individual and organizational moderators that point to many potential
determinants of behavior change, including positive feedback orientation, positive
reactions to feedback, goal setting, and taking action.
Bracken et al. (2001b) and Bracken and Timmreck (2001) focus on process features that
are likely to also have major effects in creating behavior change and offer best practices
in those areas. Some of these factors have been researched and been shown to have
significant impact. Greguras and Robie (1998) document how the number of raters used
in each rater category (direct report, peer, manager) affects the reliability of the feedback,
with direct reports being the least reliable and therefore requiring more participation.
Multiple pieces of research (Bracken & Paul, 1993; Kaiser & Kaplan, 2006; Caputo &
Roch, 2009; English, Rose, & McClellan, 2009) have demonstrated that the response
scale can have a major effect on the results, and some response scales are indeed better
than others. Goldsmith and Underhill (2001) report the powerful influence of the
participant behavior of following up with raters to discuss their results. Other potentially
powerful moderators of behavior change include how raters are selected, manager
approval, instrument quality (reliability and validity), rater training and orientation,
participant training, manager (supervisor) training, coaching, integration with HR
systems, and accountability (Bracken et al., 2001b).
Others indicate that the use of multi-rater assessment may not improve company
performance. A 2001 Watson Wyatt study found that 360-degree feedback was
associated with a 10.6 percent decrease in market value. Others claim that "there is no
data showing that [360-degree feedback] actually improves productivity, increases
56
retention, decreases grievances, or is superior to forced ranking and standard performance
appraisal systems. It sounds good, but there is no proof it works." (Pfau & Kay, 2002)
Similarly, Seifert, Yukl, and McDonald (2003) state that there is little evidence that the
multi-rater process results in change.
Instructions: The use of the Behavior Observation Scale will assist with the assessment
and rating of pain. Behavioral observations for the non-verbal are used for the resident
with a severe cognitive impairment. Non-communicative residents who are unable to
understand the rating scale and/or express the presence of pain need to be assessed for
pain and treated accordingly. Make the following observations, indicating if the
behaviors are “N” normal or “U” unusual for that resident. Describe how it is unusual.
Assign one point for each unusual behavior. Total the points and determine the pain level
Using the scale below. Observe the resident for 3 to 5 minutes for behaviors seen. Total
unusual behaviors observed.
Example
Date
Time
Noisy
breathing
Frightened
facial
expressions
Activity
Negative
vocalization
Tense body
language
How is it
usual?
Total points
Conclusion:
Mild,
Moderate,
Severe
57
Initials
Total Points:
1-2 = Mild Distress
3-4 = Moderate Distress
4-5 = Severe Distress
Behaviorally Anchored Rating Scales (BARS) are scales used to report performance.
'BARS are normally presented vertically with scale points ranging from five to nine.'It
is an appraisal method that aims to combine the benefits of narratives, critical incident
incidents, and quantified ratings by anchoring a quantified scale with specific narrative
examples of good or poor performance.
BARS Behaviorally Anchored Rating scales is a method that combines elements of the
traditional rating scales and critical incidents methods. In order to construct BARS seven
steps are followed as mentioned below
1. Examples of effective and ineffective behavior related to job are collected from
people with knowledge of job.
2. These behaviors are converted in to performance dimensions.
3. A group of participants will be asked to reclassify the incidents. At this stage the
incidents for which there is not 75% agreement are discarded as being too
subjective.
4. Then the above mentioned incidents are rated from one to nine on a scale.
5. Finally about six to seven incidents for each performance dimensions- all meeting
retranslation and standard deviation criteria will be used as BARS.
This is by far the best method used for a performance appraisal method.
58
59
Chapter: 5
Research Methodology
1
Data collection methods and sources:
The data has been collected from a primary source and secondary sources
Primary Source:
In primary data collection, you collect the data yourself using methods such as interviews
and questionnaires. The key point here is that the data you collect is unique to you and
your research and, until you publish, no one else has access to it.
There are many methods of collecting primary data and the main methods include:
• questionnaires
• interviews
• observation
• case-studies
• diaries
• critical incidents
• Portfolios.
Secondary source:
All methods of data collection can supply quantitative data (numbers, statistics or
financial) or qualitative data (usually words or text). Quantitative data may often be
presented in tabular or graphical form. Secondary data is data that has already been
collected by someone else for a different purpose to yours. For example, this could mean
using:
• data collected by a hotel on its customers through its guest history system
• Government statistics.
Both the primary data collection as well as secondary method were used:
2
• Primary sources: survey and interview directly from the company.
• Secondary sources: books and internet.
Sampling plan
A sampling plan is a report that describes how you are going to measure water quality. A
good sampling plan will help ensure that your measurements answer the right questions,
and communicates to other people what you are trying to accomplish. Most sampling
plans include the following report sections:
• 1. Project Goals
• 2. Parameters to be Measured
• 3. Sampling Areas
• 4. Sampling Timing and Frequency
• 5. Methods
3
Chapter: 6
4
Purpose of performance management system
45%
c
40%
35%
a
30%
25%
b Series1
20%
15%
d
10%
5%
0%
a b c d
Interpretation: The blue colored bars represent the different purposes for performance
appraisal.The most preferred option is c. giving a platform to the employee to mention
his/her achievements. The least preferred option is d. All of them.
5
A must for the appraisal form
a. Development needs
b. Job interest of the employee
c. Infrastructure needs of the employee
d. Problems faced by the employee
90%
a
80%
70%
60% a
50% b
40% c
30% d
b
20%
c d
10%
0%
a b c d
Interpretation: The purple bars represent the important factor for the
performance appraisal form. The most apt option according to majority of
people is a. Development needs.
6
Consideration taken while performance appraisal
a. Employee
b. Employee + Supervisor
c. Employee + Supervisor + HOD
d. HOD
e. Supervisor + HOD
c
70%
60%
50%
40%
a
30% b
e c
20%
b d d
10%
e
a
0%
a b c d e
7
The Rating Scale for the appraisal method
a. 1-3
b. 1-5
c. 1-15
d. 1-10
d
80%
70%
60%
50% a
b
40%
c
30%
b d
20%
10%
a c
0%
a b c d
Interpretation: The most accurate would be option d. 1-10 for rating scale.
8
Removal of biasedness can be removed with the help of:
a. Employee
b. Supervisor
c. Director
Employee
Employee
Supervisor
Director
Director
Supervisor
Interpretation: The pie-chart shows that the most preferred option is c. Director.
9
Is telephonic or face to face conversation essential for appropriate and
exact appraisal?
a. Yes
b. No
No
Yes
No
Yes
Interpretation : Most people said Yes telephonic or face to face conversation is essential
for the appraisal process.
10
Appropriate format of the appraisal form
a. Electronic
b. Hardcopy
Electronic
Electronic
Hardcopy
Hardcopy
Interpretation: Majority of people say that b. hardcopy is most appropriate and some
people say that both are appropriate options.
11
Rating of competencies according to their importance
16 , 15
, 14
14 , 13
, 12
12 , 11
, 10
10 ,9
,8
8 ,7 ,7 2
,6
6 ,5
,4
4 ,3
2 ,1
12
Should there be any additional competencies for
supervisor’s?
a. Yes
b. No
No
Yes
No
Yes
13
Rating of additional competencies for supervisor in order of
importance:
8
7
7
6
5
5
4
4 6
3
3
2
2
1
1
0
The additional competencies have been rated according to their importance on the basis
of the majority of votes given by the people.
14
How regularly should the performance appraisal be done?
a. Quarterly
b. Half yearly
c. Yearly
Yearly
Quarterly
Half yearly
Yearly
Half yearly Quarterly
15
Should there be a feedback given to the employee regarding the
appraisal?
a. Yes
b. No
No, 0%
Yes
No
Yes, 100%
Interpretation: All said that the feedback should be given to the employee because there is
no use of the process if the results are revealed to the employees.
16
Should the ratings be shared with the employees?
a. Yes
b. No
No
Yes
No
Yes
Interpretation: about 70% of people voted for yes and 30% voted for no.
17
Should self evaluation be the part of the performance appraisal?
a. Yes
b. No
No
Yes
No
Yes
Interpretation: 90% of people said that yes self evaluation should be the part of
performance appraisal and 10% said no.
18
Chapter: 7
Findings
19
Findings on the basis of the study
The data collected and analyzed and general observation has proven that Micromax has
done remarkable job in its Human resource development.
20
Chapter: 8
Limitations
21
The following are the limitations of the study:
• The study was completed with in short span of time that was available.
• All this study is limited to India Yamaha Motors Pvt. Ltd., Faridabad only.
• The report also suffers from the limitations of exhaustiveness as far as the
information is concerned.
• As the project is prepared for academic purpose only, it suffers from the limitations of
time and money, due to which analytical study into all the strategies adopted by the
organization was not possible.
• There is no proper data base management which can ensure to have data analysis and
not even help in maintaining a proper report.
• Sample was small in size because of time limit within which report was to be
submitted.
• There are chances of personal bias.
22
Chapter: 9
Conclusion and Recommendations
23
Conclusion:
After globalization telecom sector has grown like anything. The company ranks 2nd in the
Indian market and it has achieved this stature in a very short time period. The company’s
principal activity is to manufacture cell phones. Other products of the company include
fixed wireless devices and wireless data cards. The group comprises of 25 offices
throughout the country. The company has also introduced its products in international
markets like Bangladesh and Dubai
Apart from business it has contributed a lot for the society by as its customer social
responsibility.
Recommendation:
24
25