A PROJECT REPORT ON

PERFORMANCE APPRAISAL
Submitted in Partial Fulfillment of the requirement for the
research

BACHELOR OF INDUSTRIAL AND ORGANIZATIONAL

PSYCHOLOGY

Benita Dhungana
BSW 3rd year
Himalaya college
 UNIT:1
INTRODUCTION
Performance refers the result of effort and abilities of an
individual for the accomplishment of assigned tasks in the
work setting. Appraisal means evaluation. Performance
appraisal s the scientific evaluation Of employee
performance for the purpose of career development and
motivating them in the job setting.
The major psychology object of performance
appraisal is motivation. A performance appraisal is a
systematic, general and periodic process that assesses an
individual employee's job performance and productivity
in relation to certain pre-established criteria and
organizational objectives. Other aspects of individual
employees are considered as well, such as organizational
citizenship behavior, accomplishments, potential for
future improvement, strengths and weaknesses, etc.
Performance Appraisal is the systematic
evaluation of the performance of employees and to
understand the abilities of a person for further growth
and development. Performance appraisal is generally
done in systematic ways which are as follows:
  The supervisors measure the pay of employees and
compare it with targets and plans.
 The supervisor analyses the factors behind work
performances of employees.
 The employers are in position to guide the
employees for a better performance

Main body
Performance Appraisal is defined as a systematic
process, in which the personality and performance of an
employee is assessed by the supervisor or manager,
against predefined standards, such as knowledge of the
job, quality and quantity of output, leadership abilities,
attitude towards work, attendance, cooperation,
judgment, versatility, health, initiative and so forth.
It is also known as performance rating, performance
evaluation, employee assessment, performance review,
rating, etc.
Performance Appraisal is carried out to identify the
abilities and competencies of an employee for future
growth and development. It is aimed at ascertaining the
worth of the employee to the organization, in which
he/she works.
The science of performance appraisal is directed toward
two fundamental goals: to create a measure that
accurately assesses the level of an individual's job
performance and to create an evaluation system that will
advance one or more operational functions in an
organization. Although all performance appraisal systems
encompass both goals, they are reflected differently in
two major research orientations, one that grows out of the
measurement tradition, the other from human resources
management and other fields that focus on the
organizational purposes of performance appraisal.
Within the measurement tradition, emanating
from psychometrics and testing, researchers have
worked and continue to work on the premise that
accurate measurement is a precondition for
understanding and accurate evaluation. Psychologists
have striven to develop definitive measures of job
performance, on the theory that accurate job analysis
and measurement instruments would provide both
employer and employee with a better understanding of
what is expected and a knowledge of whether the
employee's performance has been effective. By and
large, researchers in measurement have made the
assumption that if the tools and procedures are accurate
(e.g., valid and reliable), then the functional goals of
organizations using tests or performance appraisals will
be met. Much has been learned, but as this summary of
the field makes explicit, there is still a long way to go.
In a somewhat different vein, scholars in the more applied
fields—human resources management ,organizational
sociology, and more recently applied psychology, have
focused their efforts on usability and acceptability of
performance appraisal tools and procedures. They
have concerned themselves less with questions of
validity and reliability than with the workability of the
performance appraisal system within the organization,
its ability to communicate organizational standards to
employees, to reward good performers, and to identify
employees who require training and other
development activities. For example, the scholarship
in the management literature looks at the use of
performance appraisal systems to reinforce
organizational and employee belief systems. The
implicit assumption of many applied researchers is
that if the tools and procedures are acceptable and
useful, they are also likely to be sufficiently accurate
from a measurement standpoint.
From a historical perspective, until the last decade
research on performance appraisal was largely
dominated by the measurement tradition.
Performance appraisals were viewed in much the
same way as tests; that is to say, they were evaluated
against criteria of validity, reliability, and freedom
from bias. The emphasis throughout was on reducing
rating errors, which was assumed to improve the
accuracy of measurement. The research addressed
two issues almost exclusively—the nature and quality
of the scales to be used to assess performance and
rater training. The question of which performance
dimensions to evaluate tended to be taken as a given.
 Objectives of Performance
Appraisal
1)To maintain records in order to determine
compensation packages, wage structure,
salaries raises, etc.
2)To identify the strengths and weaknesses of
employees to place right men on right job.
3)To provide a feedback to employees regarding
their performance and related status.
4)To promote the employees, on the basis of
performance and competence.
5)To identify the requirement for training and
development of employees.
 UNIT:2
LITERATURE RE-VIEW
A literature review reveals that
supervisors’ positive affective regard for subordinates
is associated frequently with higher performance
appraisal (PA) ratings, and with other findings such as
greater halo, reduced accuracy, a better interpersonal
relationship, and a disinclination to punish poor
performance. However, the interpretability of the
empirical literature is weakened by a number of
conceptual and methodological problems. Moreover,
most investigators have simply assumed that the
effects of liking constitute sources of bias in PAs, and
the causal nature of the observed relationships needed
to be clarified. Based on the review, nine causal
hypotheses constituting a model of 10 latent constructs
with 17 paths are presented. Each direct effect is
characterized as representing either a relevant
influence, a source of bias, or as biased/valid
contingent on the particular indicator or circumstances.
Suggestions are made for integrating the model with a
developmental approach, and implications are drawn
for employment test validation and the investigation of
test bias.

Performance appraisal is known as an important tool

of personnel management since it reflectsan
evaluative judgment of the traits, characteristics as
 well as work performance of the employees on their
jobs. Therefore the importance of employee
performance appraisal within an organization is of
vital importance from the point of view of employees-
both subordinates and supervisors. Employee can
earn more income and better employment
privilegesby…better performance measured by some
appraisal plan. These appraisal plans serve as a basis
forcounseling employees about their strength and
weaknesses for improving their productive efficiency
and for better superior employee relations by
developing material confidence. Appraisal plans are
also of great importance in the area of training,
development, compensation, handling grievances
and disciplinary cases. In words of McGregor:
Performance appraisal plans are designed
to meet three needs, one of the organization and
other of the individual, namely
To provide systematic judgment to back up salary
increase, transfer, demotion ortermination.
They are means of telling subordinates that how he is
doing, and Suggestion needed change in his behavior,
attitude skills or job knowledge.
 They are used as a base for coaching and counseling the
individual by the superior.
I chose this topic for the project work because the
performance appraisal system of BHEL hasdrastically
evolved in recent years, therefore to evaluate the basic
entries criteria of employee‘s performance in the
company. It is necessary to know the actual conditions
and the employee satisfaction in the industry. More over
it is learnt that is the first public sector undertaking that
has gone for electronic method of performance
measurement through the E-MAP (Moving ahead through
performance)But before going any further it is important
to know the importance of the performance appraisal
system, which is as under: Performance Appraisals is used
by many organisations due to the following Reasons:-
1)Administrative- Performance Appraisal commonly
serve as the administrative tool by providing employers
with the rationale for making many personnel decisions.
2)Employee Development Performance Appraisal for
employee‘s development
purpose provides feedback on employees performance.
Appraisal data can also be used for employee
development purpose in helping to identify specific
training need for individuals.
3) Programme Assessment- Programme Assessment
requires the collection and storage ofPerformance
Appraisal data for number of uses. The records can show
how effective recruitment, selection and placement have
been supplying a qualified workforce.
4)To create and maintain a satisfactory level of
performance.
5)To bring about better operational and business needs6
6)To facilitate fair and equitable compensation based on
performance
7)To help the superiors to have a proper understanding
about their subordinates
8)To provide information useful for manpower planning
by identifying the employees with the potential for
advancement.
9)To facilitate for testing and validating selection tests,
interview techniques through comparing their scores with
performance appraisal ranks.
Apart from these, the biggest advantage is to
motivate the workforce,
keeping in mind thegrowing attrition rates and the employee
dissatisfaction among the employees; the HRprofessionals are
approaching and using the performance appraisal as a fuel to
motivateemployees. The latest trend being followed by the
HR professionals is to use theperformance appraisal and
review process as a motivating mechanism.
One of the most motivating factors for the employees, in
the Performance appraisal processes is to receive a fair an
accurate assessment of their performance. Inaccurate
evaluation is one
reason because of which most employees dread going th
rough performance appraisals. An employeealways
expects his appraiser to recognize and appreciate his
achievements, support him toovercome the problems and
failures.
 UNIT:3
CONCLUSION
In a competitive environment like the present one should be
well prepared, plan the act according to well laid out strategy
and adapt to the requirement and demands of the situation of
develop competencies like job related skills and knowledge so
that they contribute to their fullest to the organizational
efficiency and be able to cope with the pressure changing
environment. Suggestion SUGGESTION
Based on the study the following suggestions are being made
to strengthen the presence PAS in ONGC for improving the
performance efficacy of its human resources which are vital
elements for achieving the objectives and targets in the
competitive and dynamic environment.
Performance Appraisal format needs up gradation and should
identify the development needs of the employees. It should be
made both evaluative and development oriented in nature.
Counseling should be taken seriously by appraisee and
appraiser and it should be done more frequently to attain the
development goal of PAR system. Globalization and
liberalization in India is al comparatively recent phenomenon so
most of the industries are not well equipped to face the
challenges of changing environment and building a
competitiveedge. Specific training programmes are to be
designed and development for inculcating such skills in the
employees.
*Training programmes on organization development should be
organized at all levels and specific thrust on productively
improvement and cost techniques shall be placed in training
progremmes. There should be a consistent policy regarding the
training and the need should be considered seriously as per the
recommendation in the PAR form.
* Periodic organizational diagnoses survey need to be carried
out to asses the organization health and to suggest remedial
measures in case of any observed organization pathology.
* Accountability and fixing of responsibility is one area in ONGC
that is week and needs special consideration. Single point
responsibility and accountability need be defined and fixed
unambiguously.
* Develop a cultural system where things do not move on the
basis of bureaucratic definitions or boundaries but on
operational priorities for improving the productivity of ONGC. .