1.1.

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human resource management is the function within an organisation that focuses on recruitment
of, management of, and providing direction for the people who work in the organisation.

Human resource management is the organisational function that deals with issues related to
people such as compensation, hiring, performance management, organisation development,
safety, wellness, benefits, employee motivation, communication, administration, and training.

Human resource management is the strategic and coherent approach to the management of the
organisation’s most valued assets – the people working in the organisation who individually
and collectively contribute to the achievement of the objectives of the business. The terms
“human resource management” and “human resource” have largely replaced the term
“personnel management” as a description of the processes involved in managing people in
organisations. In simple words, HRM means employing people, developing their capacities,
utilising, maintaining and compensating their services in time with the job and organisational
requirement.

Following are the various functions of Human Resource Management that are essential for the
effective functioning of the organization:

1. Recruitment -The process of recruitment begins after manpower requirements are

determined in terms of quality through job analysis and quantity through forecasting and
planning

2. Selection - The selection is the process of ascertaining whether or not candidates possess
the requisite qualifications, training and experience required

3. Induction - Induction is the technique by which a new employee is rehabilitated into the
changed surroundings and introduced to the practices, policies and purposes of the
organization.

4. Performance Appraisal – It implies systematic evaluation of employees with respect to their

performance on the job and their potential for development.

5. Training & Development – It is the process of improving the knowledge, skills, aptitudes
and values of employees so that they can perform the present and future jobs more effectively.

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1.2. INTRODUCTION TO PERFORMANCE APPRAISAL

Performance appraisal is the process of assessing the performance and progress of an employee
or a group of employees on a given job and his potential for future development. It consists of
all formal procedures used in working organisations to evaluate personalities, contributions
and potentials of employees. According to Flippo, “performance is the systematic, periodic and
an impartial rating of an employee’s excellence in matters pertaining to his present job and his
potentials for a better job” .it is the process of obtaining, analysing and recording information
about the relative worth of an employee. Performance appraisal focuses on the performance
and future potential of the employee. Its aim is not simply to decide salary increments but to
develop a rational basis for personnel decisions.

Performance appraisal is a formal system of review and evaluation of individual or team

task performance. While evaluation of team performance is critical when teams exist in an
organisation, the focus of performance appraisal in most firms remains on the individual
employees. Regardless of the emphasis, an effective appraisal evaluates accomplishments and
initiates plans for development, goals and objectives.

THE MAIN CBHARACTERISTICS OF PERFORMANCE APPRAISAL ARE AS

FOLLOWS

1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an employee in terms

of his job.

3. It is scientific and objective study. Formal procedures are used in the study.

4. It is an ongoing and continuous process wherein the evaluations are arranged

periodically according to a definite plan.

5. The main purpose of Performance Appraisal is to secure information necessary for

making objective and correct decision an employee.

1.3. PROCESS OF PERFORMANCE APPRAISAL

Establishing performance standards – The appraisal process begins with setting up of

criteria to be used for appraising the performance of employees. The criteria are specified with

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the help of job analysis which reveals the contents of a job. This criteria should be clear,
objective and in writing. It should be discussed with the supervisors to ensure that all the
relevant factors have been included. If work performance cannot be measured, the personal
characteristics which contribute to employee performance must be determined. These
characteristics include work quality, honesty, and reliability. Cooperation and teamwork, job
knowledge initiative, leadership, safety consciousness, attendance, learning ability,
adaptability, judgement, sense of responsibility, health and physical condition, etc. these
standards should be indicated on the appraisal form. Appraisal form should be carefully
designed and printed.

In addition, who is to do the appraisal and how frequently appraisal is to be done should
also be decided. In fact, performance standardswill depend upon the objectives of the appraisal
i. e, to appraise actual performance on the present job or to judge potential for higher jobs.
Communicating the Standards – the performance standard specified in the first step are
communicated and explained to the employees so that they come to know what is expected of
them. The standard should be conveyed to the evaluator. The reaction of employees to the
standard should be obtained. If necessary the standard may be revised or modified in the light
of feedback obtained from the employees and evaluator.

Measuring Performance – once the performance standard are specified and accepted, the
next step is the measurement of actual performance. This requires choosing the right technique
of measurement, identifying the internal and external factors influencing performance and
collecting the information on results achieved. Personal observations, written reports and face
to face contacts are the means of collecting data on performance. The performance of different
employees should be so measured that it is comparable. What is measured is more important
than how it is measured.

Comparing the actual with the standards – actual performance is compared with the
predetermined performance standards. Such comparison will reveal the deviations which may
be positive or negative. Positive deviation occurs when the actual performance exceeds the
standards. On the other hand, excess of standard performance over the actual performance
represents negative deviations.

Discussing the appraisal – the result of the appraisal are communicated to and discussed
with the employees. Along with the deviation the result behind them are also analysed and
discussed. Such discussion will enable the employee to know his weakness and strengths.
Therefore, he will be motivated to improve himself. The impression the subordinate received
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about his performance has an impact on his subsequent performance. The impact may be
positive or negative depending how the appraisal feedback is presented and discussed with the
employee.

Taking Corrective Action – through mutual discussions with employees, the steps required
to improve performance are identified and initiated. Training, coaching, counselling, etc are
examples of corrective actions that help to improve performance.

1.4 METHODS OF PERFORMANCE APPRAISAL

Performance appraisal is broadly classified into two categories; traditional and modern
methods.

Each method of performance appraisal has its strengths and weaknesses may be suitable for
one organisation and non-suitable for another one. As such, there is no single appraisal
method accepted and used by all organisations to measure their employees’ performance.

All the methods of appraisal devised so far have been classified differently by different authors.
While DeCenzo and Robibins’ have classified appraisal methods into three categories:
absolute methods, relative methods and objective methods. Aswathappa has classified these
into two categories past – oriented and future – oriented.

Michael R Carrell et. Al. have classified all appraisal methods into as many as six categories:
rating scale, comparative methods, critical incidents, essay, MBO and combination methods.
Rock and Levis’ have classified the methods into two broad categories: narrow interpretation
and broad interpretation. Beatty and Schneider have categorised various methods of
appraisal into four groups: comparative methods absolute methods, goal setting, and direct
indices.

Amore widely used classification of appraisal methods into categories, viz., traditional methods
and modern methods, is given by Strauss and Sayles”. While traditional methods lay
emphasis on the rating of the individual’s personality traits, such as initiative, dependability,
drive creativity, integrity, intelligence, leadership potential, etc.; the modern methods tends
to be more objective and worthwhile. The various methods included in each of the two
categories are listed b in table 1. 1

Table. 1.1: methods of performance appraisal

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 Traditional methods Modern methods

1. Management by objective (MBO)

1. Ranking method
2. Behaviorally anchored rating scale
2. Paired comparison
3. Assessment centers
3. Grading
4. 360 – degree appraisal
4. Forced distribution method
5. Cost accounting method
5. Forced choice method
6. Checklist method
7. Critical incident method
8. Graphic scale method
9. Essay method
10. Field review method
11. Confidential method

TRADITIONAL METHODS:

Ranking method: It is the oldest and simplest formal systematic method of performance
appraisal in which employee is compared with all others for the purpose of placing order of
worth. The employees are ranked from the highest to the lowest or from the best to the worst.
In doing this the employee who is highest on the characteristics being measured and also the
one who is lowest, are indicated. Then, the next highest and the next lowest between next
highest and lowest until all the employees to be rated have been ranked. Thus, if there are ten
employees to be appraised, there will be ten ranks from 1 to 10.

Limitations of ranking method

 It does not tell that how much better or worse one is than another.
 The task of ranking individuals is difficult when a large number of employees are
rated.
 It is very difficult to compare one individual with others having varying behavioural
traits.

Paired comparison:In this method, each employee is compared with other employees on one
- on - one basis, usually based on one trait only. The rater is provided with a bunch of slips
each coining pair of names; the rater puts a tick mark against the employee whom he

5
considers the better of the two. The number of times this employee is compared as better with
others determines his or her final ranking.

The number of possible pairs for a given number of employees is ascertained by the
following formula:

N (n-1)/2

Where N = the total number of employees to be evaluated.

Grading method: in this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees: outstanding,
satisfactory and unsatisfactory. There can be more than three grades. Employee performance
is compared with grade definitions. The employee is then, allocated to the grade that best
describes his or her performance.

One of the major drawbacks of this method is that the rater may rate most of the employees
on the higher side of their performance.

Forced distribution method: This method was evolved by Tiffen to eliminate the central
tendency of rating most of the employees at a higher end of the scale. The method assumes
that employees’ performance level confirms to a normal statistical distributioni.e.,
10,20,40,20 and 10 percent. This is useful for rating a large number of employees’ job
performance and promo ability. It tends to eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising the performance of
employees in organisations. It suffer from the drawback that improve similarly, no single
grade would rise in a ratings.

Forced – choice method: The force choice method is developed by J. P. Guilford. It contains
a series of groups of statements, and rater rates how effectively a statement describes each
individual being evaluated. Common method of forced - choice method contains two
statements, both positive and negative.

Advantages

 Gives good and clear instructions to subordinates.

 Can be dependent upon to complete any job assigned

Limitations

 Makes promises beyond his limit to keep these.

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  Inclines to favour some employees.

Each statements carries a score or weight, which is not made known to the rater. The human
resource section does rating for all sets of statements- both positive and negative. The final
rating in this manner makes the method more objective. The only problem associated with
this method is that the actual constructing of several evaluative statements also called
‘forced-choice scales’, takes a lot of time and effort.

Check -list method:the basic purpose of utilizing check-list method is to ease the evaluation
burden upon the rater. In this method, a series of statements, i. e., question with their answers
in ‘yes’ or ‘no’ are prepared by the HR department. The check-list is, then, presented to the
rater to tick appropriate answers relevant to the appraisee. Each question carries a weight-age
in relationship to their importance.

When the check-list is completed, it is sent to the HR department to prepare the final scores
for all appraises based on all questions. While preparing questions an attempt is made to
determine the degree of consistency of the rater by asking the same question twice but in a
different manner.

Advantages

 It is difficult to assemble, analyse and weight a number of statements about employee

characteristics and contributions.
 From a cost stand point also, this method may be inefficient particularly if there are a
number of job categories in the organisation, because a check-list of questions must
be prepared for each category of job.
 It is time consuming and costly.

Critical incidents method: in this method, the rater focuses his or her attention on those key
or critical behaviour that make the difference between performing a job in a noteworthy
manner (effectively or ineffectively).

There are three steps involved in appraising employees using this method.

1. First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents is

prepared.
2. Second, a group of experts the assigns weightage or score to these incidents, depending
upon their degree of desirability to perform a job.

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 3. Third, finally a chreck-list indicating incidents that describe workers as “good” or
“bad” is constructed.

Then, the check-list is given to the rater for evaluating the workers.

The basic idea behind this rating is to appraise the workers who can perform their jobs
effectively in critical situations. This is so because most people work alike in normal
situation. The strength of critical incident method is that it focuses on behaviours and, thus,
judge’s performance rather than personalities.

Graphic rating scale method: the graphic rating scale is one of the most popular and
simplest techniques for appraising performance. It is also known as linear rating scale. In this
method, the printed appraisal form is used to appraise each employee.

The form lists traits (such as quality and reliability) and a range of job performance
characteristics (from unsatisfactory to outstanding) for each trait. The rating is done on the
basis of points on the continuum. The common practice is to follow five points scale.

The rater rates each appraise bt checking the score that best describes his her performance for
each trait all assigned values for the traits are then totalled.

This method is good for measuring various job behaviours of an employee. However, it is
subjected to rater’s bias while rating employees behaviour at job. Occurrence of ambiguity in
design-mg the graphic scale results in bias in appraising employees’ performance.

Essay method: it is the simplest method among various appraisal methods available. In this
method, the rater writes a narrative description on an employee’s strengths, weaknesses, past
performance, potentials and suggestions for improvement. Its positive point is that it is simple
in use. It does not require complex formats and extensive or specific training to complete it.

Moreover, because the essays are descriptive, the method provides only qualitative
information about the employee. In the absence of quantitative data, the evaluation suffers
from subjectivity problem. Nonetheless, the essay method is a good start and is beneficial
also if used in conjunction with other appraisal methods.

Field review method: when there is a reason to suspect rater’s biasedness or his or her rating
appears to be quite higher than others, these are neutralised with the help of a review process.
The review process is usually conducted by the personnel officer in the HR department.

The review process involves the following activities:

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 1. Identify areas of inter-rater disagreement
2. Help the group arrive at a consensus.
3. Ensure that each rater conceives of the standard similarity.

However, the process is a time consuming one. The supervisors generally resent what they
consider the staff interference. Hence, the method is not widely used.

Confidential report: This is a traditional form of appraisal used in most government

organisations. A confidential report is a report prepared by employee’s immediate superior. It
covers the strengths and weakness, main achievements and failure, personality and behaviour
of the employee. It is descriptive appraisal used for promotions and transfers of employees.
But it involves a lot of subjectivity because appraisal is based on impressions rather than on
data. No feedback is provided to the employee being appraised and, therefore, its credibility is
very low. The method focuses on evaluating rather than developing the employees. The
employee who is apprised never knows his weakness and the opportunities available for
overcoming them. In recent years a negative confidential report is required to be communicated
to the employee. If the employee disagrees, a noting to that effect has to be made on the report.
This has been made necessary by trade union and courts.

MODERN METHODS:

Management by objectives (MBO): most of the traditional methods of performance appraisal

are subject to antagonistic judgements of the raters. It was overcome to overcome this problem;
Peter F. Drucker propounded a new concept, namely, management by objective in 1954.

The concept of MBO as conceived by Drucker, can be described as a “process whereby the
superior and subordinate managers of an organisation jointly identify its common goals, define
each individual’s major areas of responsibility in terms of results expected of him and use these
measures as guides for operating the unit and assessing the contribution of each members”.

In other words, stripped to its essentials, MBO requires the manager to goals with each
employee and then periodically discuss his or her progress toward these goals.

In fact, MBO is not only a method of performance evaluation. It is viewed by the practicing
managers and pedagogues as a philosophy of managerial practice because this is a method by
which managers and subordinates plan, organise, communicate, control and debate.

An MBO programme consists of four main steps:

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  Goal setting: In goal – setting, goals are set which each individuals has to attain. The
superior and the subordinates jointly establishes these goals. The goals refer to the
desired outcome to be achieved by each individual employee.
 Performance standards: In performance standards, the standards are set for the
employees as per the previously arranged time period. When the employees start
performing their jobs, they come to know what is to be done, what has been done, and
what remains to be done.
 Comparison: in the third step the actual level of goals attained are compared with the
goals agreed upon. This enables the evaluator to find out the reasons variation between
the actual and standard performance of the employees. Such a comparison helps devise
training needs for increasing employees’ performance it can also explore the conditions
having their bearing on employees’ performancebut over which the employees have no
control.
 Periodic review: in this step,corrective measure is initiated when the actual performance
deviates from the standards established in the first step goal-setting stage. Consistent
with the MBO philosophy periodic progress reviews are conducted in a constructive
rather than punitive manner.

The purpose of conducting reviews is not to degrade the performer but to aid in his or her future
performance. From a motivational point of view, this would be representative of MgGregor’s
theories.

Limitations

 Setting un-measurable objectives: one of the problem MBO suffers from is unclear and
un-measurable objectives set for attainment. An objective such as “will do a better job
of training” is useless as it is un-measurable. Instead, “well have four subordinates
promoted during the year” ia a clear and measurable objective.
 Time-consuming: the activities involved in an MBO programme such as setting goals,
measuring progress, and providing feedback can take a great deal of time.
 Tug of war: setting objective with the subordinates sometimes turns into tug of war in
the sense that the manager pushes for higher quotas and the subordinates push for lower
ones. As such, so set are likely to be unrealistic.
 Lack of trust: MBO is likely to be ineffective in an environment where management
has little trust in its employees. Or say, management makes decisions autocratically and
relies heavily on external controls.

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Behaviourally anchored rating scales (BARS): the problem of judgmental performance
evaluation inherent in the traditional methods of performance evaluation led to some
organisations to go for objective evaluation by developing a technique known as
“behaviourally anchored rating scales(BARS)”around 1960s. BARS are descriptions of various
degrees of behaviour with regard to a specific performance dimension.
It combines the benefits of narratives, critical incidents, and quantified ratings by anchoring a
quantified scale with specific behavioural examples of good or poor performance. The
proponents of BARS claim that it offers better and more equitable appraisals than do the others
techniques of performance appraisals.
Developing BARS typically involves five steps:
Generating critical incidents: critical incidents are those which are essential for performance of
the job effectively persons who are knowledgeable of the job in question are asked to describe
specific critical incidents of effective and ineffective performance. These critical incidents may
be describedin a few short sentences or phrases using the terminology.
Developing performance dimensions: the critical incidents are then clustered into a smaller set
of performance dimensions, usually five to ten. Each cluster, or say, dimension is then defined.
Reallocating incidents: various critical incidents are reallocated dimensions by anther group of
people who also know the job in question. Various critical incidents so reallocated to original
dimensions are clustered into various categories, with each a cluster showing similar critical
incidents. Those critical incidents are retained which meet 50 to 80% of agreement with the
cluster.
Scaling incidents: The same second group as in step 3 rates the behaviour described in each
incident in terms of effectiveness on the appropriate dimension by using seven to nine points
scale. Then, average effectiveness ratings for each incident are determined to decide which
incidents will be included in the final anchored scales.
Developing final BARS instrument: A subset of the incidents is used as a behavioural anchor
for the final performance dimensions. Finally, a BARS instrument with vertical scales is drawn
to be used for performance appraisal.
Advantages
 Accurate gauge
 Clearer standards
 Better feedback
 Consistency in evaluation
Limitations

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  The research on BARS indicates that it too suffers from distortions inherent in most
rating scales.
 Research on BARS does not support the high promise regarding scale independence,
BARS may outperform conventional rating techniques, it is clear that they are not a
panacea for obtaining high interrater reliability.

Assessment centres:the introduction of the concept of assessment centres as a method of

performance method stressed back in 1930s in the germany used to appraise its army officers.
The concept usually spread to the US and UK in 1940s and to the Britain in 1960s.

The concept, then, traversed from the army to the next arena during 1960s. the concept of
assessment is, ofcourse, of a recent origin in india. In india, Crompton greaves, eicher,
Hindustan lever and modi Xerox had adopted this technique of performance evaluation.

In business field, assessment are mainly for evaluating executive or supervisory potential. By
definition, an assessment centre is a central location where managers come together to
participate in well design humiliated exercises. They ase assessed by the senior managers
supplemented by the psychologists ant the HR specialists for two to three days.

Assessee is asked to participate in in-basket exercises, workgroups, simulations, and role

playing which are essential for successful performance of actual job. Having recorded the
assessee’s behaviour the raters meet to discuss their pooled information and observations and,
based on it, they give their assessment about their assessee.

Advantages

 Accurate evaluations
 Minimum biasness
 Right selection
 Promotion

Limitations

 Costly and time consuming

 Causes suffocation to the solid performer
 Discourages to the poor performance
 Breeds unhealthy competition among the assessee and bears adverse effects on those
not selected for assessment.

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360 degree appraisal: This method was first developed and formally used by general electric
company in 1992. Then, it travelled to other countries including India. In India, companies like
reliance industries, Wipro Corporation, Infosys technologists, thermax,Thomas cook etc., have
been using this method for appraising the performance of their employees. This feedback based
method is generally used for ascertaining training and development requirements, rather than
for pay increases.

Under 360-degree appraisal, performance information such as employee’s skills, abilities and
behaviours, is collected “all around” an employee, i.e., from his or her supervisors,
subordinates, peers and even customers and clients.

In 360-degree feedback performance appraisal being based on feedback “all aroud”, an

employee is likely to be more correct and realistic. Nonetheless, like other traditional methods,
this method is also subject to suffer from the subjectivity on the part of the appraiser.

Cost accounting method: this method evaluates an employee’s performance from the
monetary benefits the employee yields to his or her organisation. This is ascertained by the
establishing a relationship between the costs involved in retaining the employee, and the
benefits an organisation derives from him or her.

Factors considering while evaluating an employee’s performance under this method;

1. Unit wise average value of production or service.

2. Quality of product produced or service rendered.
3. Overhead cost incurred
4. Accidents, damages, errors, spoilage, wastage caused through unusual wear and tear.
5. Human relationship with others.
6. Cost of the time supervisor spent in appraising the employee.

1.5. Benefits of Performance Appraisals

1. Every employees’ individual performance influences how all team or even the firm
is doing.
2. Performance appraisal clarifies the employees’ role and status in the organisation.
Some workers like to know where they stand regarding their job performance and
want to see what else they can do for the company
3. Self development is the most important benefit for the employee. Performance
appraisal allows to provide positive feedback as well as identifying areas for

13
 improvement. An employee can discuss and even create a developmental plan with
the manager so he can improve his skills.
4. It motivates employees if supported by a good merit – based compensation system.
Best performers get better pay and benefits packages. Similarly, those employees that
lag behind get penalized.
5. It improves a structured process for an employee to approach the management for
discussions, identify problems, clarify expectations and plan for the future. It lets both
manager and employee set up long and short term goals.
6. Performance appraisal system also helps the management in deciding about
promotions, transfer and rewards of the employee.
7. It is easy to identify the underperformers and decide whether the organisation want
to keep the employee hoping for improvement or sometimes have to let them go.

1.6. Rating Errors in Performance Appraisals

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -

Leniency or severity: - Leniency or severity on the part of the rater makes the assessment
subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings
are lenient for the following reasons:

a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavourably will reflect poorly on his or her own worthiness.

b) He/She may feel that a derogatory rating will be revealed to the rate to detriment
the relations between the rater and the ratee.

c) He/She may rate leniently in order to win promotions for the subordinates and
therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average or
middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems
from certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's performance
influences the evaluation of the entire performance of the individual. The halo error occurs

14
when an employee who works late constantly might be rated high on productivity and quality
of output as well ax on motivation. Similarly, an attractive or popular personality might be
given a high overall rating. Rating employees separately on each of the performance measures
and encouraging raters to guard against the halo effect are the two ways to reduce the halo
effect.

Rater effect: -This includes favouritism, stereotyping, and hostility. Extensively high or low
score are given only to certain individuals or groups based on the rater's attitude towards them
and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of
this type of error.

Primacy and Regency effects: - The rater's rating is heavily influenced either by behaviour
exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes,
or behaviour exhibited by the ratee near the end of the review period (regency). For example,
if a salesperson captures an important contract/sale just before the completion of the appraisal,
the timing of the incident may inflate his or her standing, even though the overall performance
of the sales person may not have been encouraging. One way of guarding against such an error
is to ask the rater to consider the composite performance of the rate and not to be influenced
by one incident or an achievement.

Performance dimension order: - Two or more dimensions on a performance instrument

follow each other and both describe or rotate to a similar quality. The rater rates the first
dimensions accurately and then rates the second dimension to the first because of the proximity.
If the dimensions had been arranged in a significantly different order, the ratings might have
been different.

Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably
influence current ratings. Past ratings, good or bad, result in similar rating for current period
although the demonstrated behaviourdoes not deserve the rating, good or bad.

1.7.ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager

Ø Provide feedback to the reviewer / HOD on the employees’ behavioural

traits indicated in the PMS Policy Manual

Ø Ensures that employee is aware of the normalization / performance

appraisal process

15
 Ø Address employee concerns / queries on performance rating, in consultation
with the reviewer

b) Reviewer (Reporting Manager’s Reporting Manager)

Ø Discuss with the reporting managers on the behavioural traits of all the
employees for whom he / she is the reviewer

Ø Where required, independently assess employees for the said behavioural

traits; such assessments might require collecting data directly from other
relevant employees

c) HOD (In some cases, a reviewer may not be a HOD)

Ø Presents the proposed Performance Rating for every employee of his / her
function to the Normalization committee.

Ø HOD also plays the role of a normalization committee member

Ø Owns the performance rating of every employee in the department

d) HR Head

Ø Secretary to the normalization committee

Ø Assists HOD’s / Reporting Managers in communicating the performance

rating of all the employees

e) Normalization Committee

Ø Decides on the final bell curve for each function in the respective Business
Unit / Circle
Ø Reviews the performance ratings proposed by the HOD’s, specifically on
the upward / downward shift in ratings, to ensure an unbiased relative
ranking of employees on overall performance, and thus finalize the
performance rating of each employee

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 CHAPTER - 2
COMPANY PROFILE

POWER GRID CORPORATION OF INDIA:

The POWERGRID CORPORATION
India(POWERGRID),(NSE:POWERGRID,BSE:532898)is an Indian state-owned Electric
Utilities Company Head-quartered in GURGAON,India.POWERGRID transmit about 50% of
the total power generated in India on its transmission Network. Its former subsidiary Company,
Power System Operation Corporation Limited(POSOCO) handles power Management for

17
POWERGRID.POWERGRID also operates a telecom business under the name POWERTEL
shri I S JHA, and alumnus of National Institute of Technology, Jamshedpur serves as the
chairman and managing director of the company.

POWERGRID corporation of India Limited (POWERGRID) was incorporated on October 23,

1989 under the companies Act, 1956 with an authorized share capital of Rs.5000Crore
(subsequently enhanced to Rs.10, 000crore in Financial Year (FY)(2007-2008)as a public
limited company, wholly owned by the Government of India.
Its original name was the ‘National power Transmission Corporation Limited’, and it was
charged with the planning, executing, owning, operating and maintaining high voltage
transmission systems in the country. On 8 November 1990, the National Power transmission
corporation received its certificate for commencement of Business. Their name was
subsequently changed to power Grid Corporation of India Limited, which took effect on
October 23, 1992.
POWERGRID started functioning on management basis with effect from August,1991 and
subsequently it took over transmission assets from
NTPC,NHPC,NEEPCO,NLC,NPC,THDC,SJVNL etc.in a phased manner and it commenced
commercial operation in 1992-93.In addition to this, it also took over the operation of existing
Regional Load Despatch Canters (RLDCs)from Central Electricity Authority(CEA),in a
phased manner from 1994 to 1996,which have been upgraded and modernization with State of
the art Unified Load Despatch and Communication (ULDC) schemes. Consequently, National
Load Despatch Centre (NLDC) was established in 2009 for overall coordination at National
level.
According to its mandate, the Corporation, apart from providing transmission system for
evaluation of central sector power, is also responsible for Establishment and Operation of
Regional and National Power Grids to facilitate transfer of power within and across the Regions
with Reliability, Security and Economy on sound commercial principles. Based on its
performance POWERGRID was recognized as a mini- ratna Category-I Public Sector
undertaking in October 1998 and conferred the status of “Navratna” by the Government of
India in May 2008.POWERGRID,as the central Transmission Utility of the country, is playing
a major role in Indian Power Sector is also providing Open Access on its inter-State
transmission system.
POWERGRID operates throughout India. Its transmission network consists of roughly 141,920
circuit kilometres and 224 EHVAC and HVDC substations, which provide total transformation
capacity of 295,980 MVA.POWERGRID’s interregional capacity is 63,650MW.Examples of
POWERGRID-owned stations include the Vizag back-to-back HVDC converter station, the
Chandrapur back -to-back HVDC converter station, the India Sri Lanka HVDC Inter -
connection, and the Talcher-kolar HVDC system.
POWERGRID is listed on both the BSE and the NSE, as of 30 September 2010; there were
792,096 equity shareholders holders in POWERGRID. Initially, POWERGRID managed
transmission assets owned by NTPC, NHPC Limited (“NHPC”) and north-Eastern electric
Power Corporation Limited. In January 1993, the Power Transmission Systems Act transferred

18
ownership of the three power companies to POWERGRID. All employees of the three
companies subsequently became POWERGRID employees.

POWERTEL:
POWERGRID's telecom company, POWERTEL, operates a network of 47,735 Kilometres and
points of presence in 688 locations across India.

BUSINESS:
POWERGRID operates throughout India. Its transmission network consists of roughly 141,920
circuit kilometres and 224EHVAC and HVDC substations, which provide total transformation
capacity of 295,980 MVA. POW
ERGRID's interregional capacity is 63,650 MW. Examples of POWERGRID-owned stations
include the Vizag back-to-back HVDC converter station, the Chandrapur back-to- back HVDC
converter station, the India Sri Lanka HVDC Interconnection, and the Talcher–Kolar HVDC
system. POWERGRID is listed on both the BSE and the NSE. As of 30 September 2010, there
were 792,096 equity shareholders holders in POWERGRID. Initially, POWERGRID managed
transmission assets owned by NTPC, NHPC Limited ("NHPC") and North-Eastern Electric
Power Corporation Limited. In January 1993, the Power Transmission Systems Act transferred
ownership of the three power companies to POWERGRID. All employees of the three
companies subsequently became POWERGRID employees.

KEY STATISTICS (as on December 31, 2017)

TRANSMISSION CONSULTANCY TELECOM

 145,400ckm  Transmission related  Owns and

Transmission Lines consultancy to more operates=43,450 km of
 230 Sub- Stations than 150 domestic Telecom Network
 >99% System clients  Points of presence in
Availability  Global footprints in 20 662 locations
 323,215 MVA countries catering more  Intra city network in
Transformation than 25 clients. 105 cities across India
capacity  Backbone Telecom
Network Availability
>99.5%

*All- India inter- regional capacity = 78,050 MW

Central Transmission Utility
 Undertakes transmission of electricity through Inter- State Transmission System
(ISTS)

19
  Discharges all functions of planning co- ordination relating to ISTS with all
concerned authorities
 Ensures development of an efficient ,co-ordinated and economical system of inter-
state transmission lines for smooth flow of electricity from generating stations to
the load centres
 Provides non- discriminatory open access to its transmission system for use by and
licensee or generating company

Listed Company Diversification

 57.90%  In-house expertise in

holding by transmission sector
Govt. of consultancy (both
India and domestic
balance &international) .
42.10% by  Telecommunications
public. business using
 Dividend existing transmission
paying since assets.
1993  Investment in energy
efficiency.
 Investment in Smart
Grid.

VISION:
World Class, Integrated, Global Transmission Company with Dominant Leadership in
Emerging Power Markets Ensuring Reliability, Safety and Economy.

20
MISSION:
We will become a Global Transmission Company with Dominant Leadership in Emerging
Power Markets with World Class Capabilities by:
1. World Class: Setting superior standards in capital project management and operations for
the industry and ourselves.
2. Global: Leveraging capabilities to consistently generate maximum value for all stakeholders
in India and in emerging and growing economies.
3. Inspiring, nurturing and empowering the next generation of professionals.
4. Achieving continuous improvements through innovation and state of the art technology.
5. Committing to highest standards in health, safety, security and environment.
OBJECTIVES OF THE COMPANY:
The Corporation has set following objectives in line with its mission and its status as Central
Transmission Utility to:
 Undertake transmission of electric power through Inter-State Transmission System.
 Discharge all functions of planning and coordination relating to Inter-State
Transmission System with-
 State Transmission Utilities
 Central Government
 Generating Companies
 Regional Power Committees
 Authority
 Licensees
 Any other person notified by the Central Government in this behalf.
 To ensure development of an efficient, coordinated and economical system of inter-
state transmission lines for smooth flow of electricity from generating stations to the
load canters.
 Efficient operation and Maintenance of Transmission Systems.
Restoring power in quickest possible time in the event of any natural disasters like
super-cyclone, flood etc. through deployment of Emergency Restoration Systems
 Provide consultancy services at national and international levels in transmission sector
based on in-house expertise developed by the organization
Participate in long distance Trunk Telecommunication business ventures.
Ensure principles of Reliability, Security and Economy matched with the rising/ desirable
expectation of a cleaner, safer, healthier environment of people, both affected and benefited by
its activity

21
 CHAPTER - 3
PERFORMANCE APPRAISAL
STRUCTURE IN THE ORGANISATION

3.1.ANNUAL PERFORMANCE ASSESSMENT FOR SUPERVISORS AND

WORKMEN

22
Objectives
 The Annual Assessment System for Supervisory and Workmen Categories seeks to
meet the following objectives.
 Promotion: To form an important basis for promotion along with seniority.
 Training and Development : To understand the gaps in knowledge and skills with
reference to the present assignment of an employee and with reference to his future
developed and fill the same by planned guidance and training.
Coverage
There will be different formats for assessment as per the following broad categories :
 Supervisors
 Secretarial & Office Personnel
 Skilled Workmen
 Unskilled Workmen
Assessment
1. The assessment will be annual and will cover performance during the calendar year.
2. The annual assessment form provides for evaluation on certain attributes and abilities
on a five-point scale, viz., ‘Outstanding, ‘Very Good’, ‘Good’, ‘satisfactory’ and ‘Not
satisfactory’. Periodic performance records and critical incidents maintained by
persons reporting, with respect to each employee, will form the basis which will aid in
filling the annual assessment. This, it is hoped, will contribute towards making the
appraisal objective.
3. The assessment form also provides for an overall evaluation on a five-point scale.
Keeping in view the relative priorities/ratings on each attribute on the five-point scale,
the overall assessment may be arrived upon.
4. In addition to the above, the annual assessment form provides for identification of
training needs and rotational assignment to fill the gaps in knowledge and skills.
Who Appraises
1. The annual assessment for each supervisor/workman will be done by the person to
whom he reports. However, the minimum level of the reporting person will not be
less than a supervisor for assessment of a workman, and executive for assessment of
a supervisor.
2. The annual report will further be reviewed by the officer to whom the reporting
person in turn reports. The minimum level of reviewing authority both in case of
supervisors & workman will be that of an executive.
The multi-level evaluation, it is believed will provide checks and ensures greater
objectivity
3. The report will further be seen and signed by the Sectional Head in case he is not the
reviewing officer, and countersigned by the Head of the Department who may enter
remarks, if any. The Head of the Department referred herein before should be at least
a Chief Manager in case of Supervisory, Secretarial and Office Personnel.
4. In the event of the “Overall Assessment” being rated ‘Not-satisfactory’, a written
communication will be issued to the concerned employee by the H.O.D.

23
 The communication will be accompanied with specific facts and figures substantiating
the adverse remarks.
In case of representation by the concerned employee, the same will be examined by
the H.O.D. who will record his final decision along with reasons.
The final decision will be communicated to the employee with regard to :
The earlier assessment being retained
Or
After due consideration the earlier remarks are expunged and the same being noted in
the annual assessment from.
5. If an employee has worked with more than one reporting person for 3 months or
more, he will be assessed by all the concerned reporting persons.
6. As in the case of executives, an important outcome of the follow up of annual
assessment will be counselling, counselling in case of ‘Not-satisfactory performers’
will be done by the Heads of the Department.
7. System of Maintenance. Time Schedule & Follow up of Annual Assessment Forms
is annexed.

3.2. SYSTEM OF MAINTENANCE, TIME SCHEDULE AND

FOLLOW-UP OF ANNUAL ASSESSMENT REPORTS
1. Executive in-charge of the HR Establishment at the units will ensure that the blank
assessment forms are sent to HODs by 1st November who will pass down the forms
to the Reporting Persons by 20th December.
2. The Reporting Persons will complete the report by 5th January and hand it over to the
reviewing officers, who on reviewing the forms by 12th January will send it to
Sectional Head by 15th January (in case he is not the reviewing officer) for signature,
and further to H.O.D. for countersigning and remarks, if any. Overall evaluation will
be completed by 22nd January.
3. On the basis of the time schedule, each concerned level will follow up with the
concerned person in the next lower levels to see that the reports are completed as per
schedule. All the reports after being countersigned by HOD will be sent to the
Human Resource Department by 31st January.
Follow up of Assessment Reports
1. The Human Resource Department at Units will ensure that the reports have
been signed by the reporting persons and in each case reviewed by the
reviewing officer and countersigned by the respective HOD. Cases of
omission will be sent to the concerned per- sons for necessary action.
2. The Human Resource Department will also check that in case of ‘Not-
satisfactory re- port’, the adverse comments have been communicated to the
concerned employee and the copy of the comments supported by facts has
been received along with the report. If not, the report will be sent back for
necessary action.
3. The Head of the Department will see if there is any apparent pattern - too
liberal or too conservative grading given by certain reporting persons. If it is
so, he will, after making the necessary analysis, discuss the same with the
concerned person.

24
 4. The Human Resource Department will also make a detailed analysis of the
training needs and rotational assignments, if any, as given in the assessment
forms and draw an implementation plan for the year.

3.3. ANNUAL PERFORMANCE ASSESSMENT FOR

EXECUTIVES

25
 1. The Performance Appraisal System in operation for the executives of the Company,
as modified from time to time, will generally provide the basis for determination of
merit, efficiency, potential and suitability of Executives and Managers for positions of
higher responsibility in the appropriate higher grade.
2. In POWERGRID our endeavour is that the Appraisal System is used as an instrument
for improving the work culture. The focus is on the developmental and not
judgemental aspects and the company is utilising the appraisal system as an
instrument for :-
i. Performance planning, analysis and review;
ii. Generating a healthy problem-solving dialogue between the Reporting Officer and
the Appraisee about work-related problems;
iii. For improving communication and performance counselling;
iv. For improving levels of motivation through goal clarity.
Objectives of Performance Appraisal
 To integrate company and individual goals through a process of performance
assessment linked to achievements and organizational objectives.
 To enhance awareness of targets/tasks and the responsibility of executives at all
levels and to ensure fulfilment of organizational objectives.
 To facilitate the organizational objective of assessment of performance and potential.
 To distinguish between differing levels of performance on relative basis and to
identify executives with potential to grow in the organization.
 To spell out the development actions to be taken to improve the performance of the
officers.
Appraisal Year & Coverage
The appraisal year will be the financial year from 1st April to 31st March for executives in
the level of E6 and above and calendar year from 1st January to 31st December for
executives in the level of E5 and below.
1. The Appraisal Reports are required to be filled in, in respect of all the executives who
have served for a period of at least three months in the Appraisal Year.
2. If an executive has served in more than one Region/Deptt./Unit or with more than
one Reporting Officer for a period of at least three months in the Appraisal Year,
separate reports have to be sent from each Region/Deptt./Unit.
3. Where more than 6 months of the appraisal year have elapsed at the time of
consideration of an executive’s promotion, a Special Performance Report for the part
year will be obtained and taken into consideration along with the Reports of the
previous years. Once the special report is followed and replaced by the usual annual
report, the special report will no longer be taken into consideration.
4. Performance Appraisal Reports for any period of less than 6 months in an appraisal
year will not be taken into consideration for the purpose of promotion. However,
where two or more reports are written in any appraisal year by reason of an executive
being posted under different reporting/countersigning officers, a single rating for the
year will be determined by the Corporate Promotion Committee.
5. Where the case of an executive comes up for consideration for promotion before he
completes the prescribed eligibility period on account of a seniority weightage

26
 granted to him as a part of the terms of his initial appointment, the rating given in the
first appraisal report in POWERGRID, if for a period of 6 months or more, will be
deemed to be the appraisal rating of the earlier years reports which are to be taken
into consideration in accordance with this policy statement.
6. The Appraisal System will be on a five-point scale, that is Outstanding, Very Good,
Good, Average, and Not Satisfactory, as defined in the Appraisal Formats. The final
overall evaluation by the “Moderation Committee” will be taken into consideration
for the pur- pose of aggregation and marks will be allotted to various ratings as
follows :
Rating For promotion upto E4 For promotion from E4 to
E5 & above
Outstanding 8 10
Very good 6 8
Good 4 6
Average 2 4
Not satisfactory 0 0

Target Setting and Feedback

1. Review on periodic basis of performance norms and targets for each individual is
imperative and the HODs may have developed their own alternatives with respect to
maintaining such data. The tasks/targets/performance norms set for each individual
will cover both innovative and routine aspects of the job. In assessing the achievement
of the targets/tasks/norms, cognizance should be taken of the external constraints and
special efforts that have been made to overcome these constraints.
2. As development of subordinates is one of the important objectives of our performance
appraisal system, the reporting officer must discuss employee’s performance with
him. Some suggestions with regard to what should be the content or subject matter of
the discussions with the appraisee are as follows :-
 The content of what has been written in the self appraisal (part-I).
 Difficulties and constraints in meeting the targets as also the contribution made by
the appraisee, both tangible and intangible.
 Strengths and weaknesses of the employee.
 Extent of achievement, reasons for shortfall and measures to avoid likely short- falls
in future in target achievement.
 Where the rating on performance and executive abilities is either 0 or 2, the same
should be discussed.
 Potential for undertaking jobs in other functions i.e. possibilities for job rotation
could be discussed.

Procedure
1. Each executive is expected to write Part-I (Self Appraisal) and forward the proforma
to his Reporting Officer.

27
 2. Reporting: - The Reporting Officer will complete the report in the light of the
periodic records/data of the individual’s targets and hand it over to the Reviewing
Officer.
3. Review/Counter-signature
The reviewing Officer after recording his review will send the Appraisal Report to other
officers in the channel of reporting till the report reaches the final Countersigning Au- thority
viz. General Manager/Executive Director of the respective Region who will then countersign
the report in case of agreement and also record his assessment wherever it differs from those
of the Reporting/Reviewing Officers.
4. Final Countersigning Authority
The final countersigning authority is as under :
Level of Appraisee Countersigning Authority
E1 to E4 1. Concerned GM
2. In case Reporting Officer is GM, then concerned ED.
E5 1. Concerned ED or Director
2. In case Reporting Officer is ED/Director, then the next higher level viz. Director/CMD
5. Wherever the overall assessment is ‘outstanding’ or ‘not satisfactory’ the
Reporting/Re- viewing Officer is required to substantiate the same with supporting
facts.
6. Sufficient care should be taken to arrive at the overall rating on the basis of the
ratings given on individual attributes of work performance and executive
effectiveness factors.
7. Procedure for Personnel & Finance Heads
The assessment of the performance appraisal reports of Heads of the two key func- tional
disciplines viz. Human - Resource (including Training), Finance & Accounts at the Regions
will be written/reviewed by the ED/GM and countersigned by the concerned Functional
Director/ED at the CC. The same will apply in case of HR, F&A executives posted in the
Sub-station in whose case the reports will be reviewed by Heads of HR/ F&A of the Region
also.
Adverse Reports
1. In the event of the overall assessment being ‘Not Satisfactory’, a communication will
be issued to the concerned executive after the report has been countersigned by the
concerned authority. For this, the final countersigning authority will send back the
report to the Reviewing Officer for issuing the necessary communication to the
concerned executive. The communication will be issued by the Reviewing Officer
along with details including facts and figures.
2. Comments, if any, of the appraisee will be asked on the adverse report. The adverse
report along with the comments of the appraisee will be examined by the final
counter- signing authority who will record his final decision along with reasons.
Wherever CMD is the Reporting Officer or Reviewing Officer, his decision regarding

28
 expunction/retention of the adverse comments after due examination of the
explanation submitted by the appraisee will be final.
3. The final decision will be communicated by the Reviewing Officer to the appraisee.
Normal Distribution Pattern of Appraisal Ratings
1. In appraisal of any population, the normal distribution pattern invariably holds good,
may be with minor variations. Keeping this in view, while completing the appraisal
re- ports, it should be ensured that :
Outstanding 15 – 20%
Very good 35 – 40%
Good 40 – 45%
Average 15 – 20%
Not satisfactory 0 – 5%

2. The above mentioned distribution pattern is not confined to the population falling in
the zone of consideration for promotion alone but is applicable for the total
population.
General
Where the overall assessment is being changed at higher levels, the authorities may keep the
Reporting Officer(s)/Reviewing Officer(s) informed of such changes.
Schedule
The AARs in respect of Executive whose appraisal year is calendar year will have to be
completed as per the following schedule :
Part-I To be filled by the Appraisee 05th January
Part-II To be filled by the Reporting Officer 12 January
Part-III To be filled by the Reviewing Officer 15th January
Overall Evaluation 22nd January
All reports to reach HOP, Region 25th January
All reports to reach HRM Deptt. CC 31st January
It is the responsibility of the HOP of the region to obtain the previous AARs of the
employees from their erstwhile organisations.

29
 CHAPTER 4
LITERATURE REVIEW

ALFORD AND BEATTY says, “It is the evaluation or appraisal of the relative worth to company of a
man’s service on the job”.

30
FLIPPER says, “Performance appraisal is a systematic, periodic, and so far as humanly
possible and impartial rating of employee’s excellence of pertaining to his potentialities for a
better job”.
Performance appraisal has been defined in many ways. The simplest ways to understand the
meaning of performance appraisal is as follows:“a regular and continuous evaluation of the
quality, quantity and styles of the performance along the assessment of the factors influencing
the performance and behaviour of an individual”
Pettijohn, Pettijohn and Taylor (2000)36 in their article titled “An Exploratory Analysis of
Salesperson Perceptions of the Criteria Used in Performance Appraisals: Job Satisfaction and
Organizational Commitment” state that in some sales organizations the performance appraisal
is treated as a bureaucratic exercise required by some "higher-up" executive. As such, sales
managers may essentially conduct appraisals in an arbitrary and perfunctory manner. This
behaviour could be the result of the manager's perception that conducting performance
appraisals requires considerable amounts of time and effort, which provides few rewards, but
adds considerably to the manager's level of conflict and stress
Fletcher (2001)37 in his article titled, “Performance appraisal and management: The
developing research agenda” expresses that performance appraisal has widened as a concept
and as a set of practices and in the form of performance management has become part of a
more strategic approach to integrating HR activities and business policies. As a result of this,
the research on the subject has moved beyond the limited confines of measurement issues and
accuracy of performance ratings and has begun to focus more of social and motivational aspects
of appraisal. This article identifies and discusses a number of themes and trends that together
make up the developing research agenda for this field. It breaks these down in terms of the
nature of appraisal and the context in which it operates.
Shibata (2002)39 in her article titled “Wage and Performance Appraisal Systems in Flux: A
Japan-United States Comparison”, states that unionized Japanese and American firms made
changes in their wage and performance appraisal systems during the 1990s that were inspired
by features of each others' traditional employment systems. Although Japanese firms made
greater changes in the wage-setting process compared to American firms, outcomes in Japan
changed little. Even with these changes, the wage and performance appraisal systems in the
two countries retain distinctive characteristics. In the American firms' "segregation" between
white- and blue-collar employees and high- and low-performers remains a feature of wage and
performance appraisal systems; the Japanese system maintained its characteristic "integrated"
form, but underwent moderate modifications.
Brown and Heywood (2005)40 in their article titled “Performance Appraisal Systems:
Determinants and Change” used establishment data from the Australian Workplace Industrial
Relations Survey to estimate the determinants of performance appraisal systems. The results
indicate that performance appraisal is associated with workers having shorter expected tenure
and greater influence over productivity. These results reflect those circumstances in which the
net benefits of performance appraisal are likely to be the greatest. The results also show that
complementary human resource management practices, such as formal training and incentive
pay, are associated with an increased likelihood of performance appraisal, but that union
density is associated with a reduced likelihood of performance appraisal.

31
Jawahar (2006)41 in his article titled, “Correlates of satisfaction with performance appraisal
feedback” states that the relative lack of research on employees’ reactions to performance
appraisal feedback is the primary impetus for this study which advances this important, but
neglected, research area by investigating potential predictors and consequences of satisfaction
with appraisal feedback. Survey responses from 112 employees were matched with their
performance ratings from two different appraisal periods to test specific hypotheses. Results
indicate that satisfaction with rater and previous performance ratings influence employees’
satisfaction with appraisal feedback. Satisfaction with appraisal feedback was positively
related to job satisfaction and organizational commitment and negatively related to turnover
intentions. Supervisory status moderated the relationship between satisfaction with appraisal
feedback and subsequent performance such that the relationship existed only for supervisory
employees who, in addition to receiving feedback about their own performance, also provided
feedback to their subordinates. Implications of results for researchers and practitioners are
discussed.
Doleh and Weir (2007)45 in their article titled “Dimensions of performance appraisal systems
in Jordanian private and public organizations” explore the attitudes of human resource
managers working in the Jordanian private and public organizations towards the functions of
their performance appraisal systems, and to the ways in which performance appraisal systems
are implemented. A self-completion questionnaire was the main data collection method used
in this study. Data were collected from a randomly selected sample of 74 organizations (38
private and 36 public organizations) that have a separate and formal HR department. The study
contributes empirical information about human resource management in a relatively under-
researched region. Major research findings of this empirical study include that performance
appraisal systems had a moderate impact on the four functions of performance appraisal
systems. These functions were grouped as: (1) between-individuals comparisons; (2) within-
individuals comparisons; (3) systems maintenance; and (4) documentation. The results of the
study revealed that private organizations’ performance appraisal hadsignificantly greater
impact than their counterparts in the public sector on promotion, retention/termination, lay-
offs, identifying individual training needs, transfers and assignments. This study also indicated
that appraisals were conducted once a year, and the appraisee managers were primarily
responsible for conducting performance appraisals. The study concludes within a set of
recommendations for improved practice. Chief among these recommendations is that
performance appraisal systems in the Jordanian context need to better serve the four functions
of performance appraisals discussed in this paper and the need to include other than the
appraisee’s manager in the appraisal process.
Herdlein, Kukemelkb and Turk (2008)55 in their article titled “A survey of academic officers
regarding performance appraisal in Estonian and American universities” state that higher
education in the Baltic Republic of Estonia is experiencing rapid change as the country adjusts
to a market economy in the post-Soviet era and adheres to principles established through the
Bologna Process. Research in the area of performance appraisal, and the most effective
approaches to motivate academic staff, is a key factor influencing change in a rapidly
developing society. Using qualitative research, a survey was submitted to academic officers in
11 Estonian and four western New York (USA) colleges and universities. A total of 29
individuals completed surveys in Estonia (a response rate of 69 per cent). A convenience
sample of eight academic administrators returned instruments in western New York, giving a

32
response rate of 100 per cent. The results of the survey indicated that appraisal systems within
American higher education are similar and based on a long tradition of connecting appraisal to
the guidelines governing permanent appointment (tenure). Appraisal within Estonian
universities is still rather basic and unified systems do not yet exist, as individual institutions
employ a variety of procedures. The study was intended to accelerate the process of
performance appraisal in Estonia and Eastern Europe.
Bollen and Whaley (2009)59 in their article titled “Hedge Fund Risk Dynamics: Implications
for Performance Appraisal” state that accurate appraisal of hedge fund performance must
recognize the freedom with which managers shift asset classes, strategies, and leverage in
response to changing market conditions and arbitrage opportunities. The standard measure of
performance is the abnormal return defined by a hedge fund’s exposure to risk factors. If
exposures are assumed constant when, in fact, they vary through time, estimated abnormal
returns may be incorrect. They employed an optimal change point regression that allows risk
exposures to shift, and illustrate the impact on performance appraisal using a sample of live
and dead funds during the period from January 1994 through December 2005.
Vasset (2010)63 in his article titled “Employees' perceptions of justice in performance
appraisals” states that of all the tasks undertaken by human resource managers, performance
appraisals (PAs) are one of the most unpopular among employees (Meyer 1991, Murphy and
Cleveland 1995, Holbrook 2002, Jackman and Strober 2003). As PA guides and plans show
(Fletcher 2004, Catalyst One 2010), PAs can be implemented in similar ways in organisations
throughout Europe and developed countries elsewhere. But, if employees perceive PA
processes as unfair, they may reject the usefulness and validity of the information they receive
and so may not be motivated to change behaviour. This article concerns perceptions of
organizational justice and explains the results of a study of perceived fairness in PAs among
nurses and auxiliary nurses in Norway's municipal health service.
Ravichandran, Venkataraman and Banumathy (2011)64 state that the state of Tamil Nadu
with 37 operational sugar mills is a significant sugar-producing state of the country,
contributing roughly 9-10 per cent to the national sugar production. The sugar industry has
absorbed about 5 lakh rural people in the state. This paper studied the performance appraisal
system followed in a cooperative sugar mill with a sample size of 75 labourers. The study has
found that the sugar mill had adopted a good appraisal system and takes the appraisal at the
time of probation period and further during the career promotion. The study has also found that
there is a gap between the actual and desired performance. Hence, it was suggested to conduct
annual performance appraisal to improve the efficiency of the employees and provide training
on dependability, communication skill and skill development to improve the employee’s
management quality.

33
 CHAPTER 5
RESEARCH & SURVEY

5.1. STATEMENT OF THE PROBLEM

34
Much of literature dealing with human resource management and its issues recognize the
importance of performance appraisal system which occurs in the organisation. All
organisations face the problem of directing the energies of their staff to the task of achieving
business goals and objectives. In doing so, organisation needs to devise means to influence and
channel the behaviours’ of their employees so as to optimize their contributions. Performance
appraisals constitute one of the major management tools employed in this process.
The continuous evolution of organisation towards the changes creates a great impact in the life
of the business still, the business leaders are relying on the capacity of the people and their
performance towards their jobs and roles in the organisations. Whether a profitable or non-
profitable organisation, the people has been essential resources in the organisation. Various
strategies had been effectively used for the employee according to their different needs and
areas that needs to sustain.
However there is a little attention given in enhancing the employee performance appraisal
system. The present study was undertaken to clarify certain questions related to the care phase
of performance appraisal through regular assessment of progress towards goals focuses the
attention and efforts of an employee or team.
5.2. SCOPE OF THE STUDY
1. This study provide appraisal feedback to employees and thereby serve as a vehicles
for personal and career development and allow the management to take effective
decision against drawbacks of the well-being of the employee’s development.
2. To improve employee work performance by helping them realise and used their full
potential in carrying out their firm’s mission..
3. This study helps to know the levels of importance of appraisal system.
4. It considers both the job performance as well as personal qualities of an employee.
5.3. OBJECTIVE OF THE STUDY
 To study the need and importance of “Performance appraisal” in POWERGRID.
 To study the performance appraisal implementation in POWERGRID.
 To study the effectiveness of performance appraisal system in POWETGRID.
 To determine the satisfaction levels of employees towards appraise.
5.4. RESEARCH METHODOLOGY
Research methodology is the process of systematic investigation of any management problem
it deals with research design, data collection method, sampling plan, sampling method.
‘Research’ means a scientific and systematic search for pertinent information on a specific
topic. Research is a careful investigation or inquiry especially through search for new facts in
any branch of knowledge. Research comprises defining and redefining problems, formulating
hypothesis or suggested solution; collecting, organising and evaluating data, making
deductions and reaching conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis.
‘Methodology’ is defined as “the study of methods by which we gain knowledge, it deals with
cognitive processes imposed on research to the problem arising from the nature of its subject
matter”

5.5. RESEARCH DESIGN

35
The research design refers to the overall strategy that integrates the different components of
the study in a coherent and logical way thereby ensures effective address of the research
problem. It constitutes the blueprint for the collection, measurement, and the analysis of data.
The type of research design used for the study of report is exploratory research design.
5.6. SAMPLE DESIGN AND SELECTION
Convenience sampling has been used for this report because of time limitation and man power
constraints. Respondents in the sample are included in it merely on account of being available
on the spot where the survey was in progress.
Selection of the sample was the executives of POWERGRID.
OPERATIONAL AREA OF THE STUDY
The study was carried out within the campus of the POWERGRID.
5.7. DATA COLLECTION
In this study both types of data collection method are used:
i) Primary data collection: under this type of data collection the information are
collected by making questionnaire and direct interviewing the executives of
POWERGRID.
ii) Secondary data collection: under this type of data collection the information is
collected from journals, books magazines, record maintain by HR department &
company websites.
SAMPLE SIZE
The sample size of the study were 66 executives of which 11 are females and 55 are males
executives and only 50 of the respondents were filled the questionnaire.
RESEARCH INSTRUMENT
Structured questionnaire: a questionnaire is a research instrument consisting of a series of
questions and other prompts for the purpose of gathering information from respondents.
5.8. LIMITATION OF THE STUDY
i) This study is only limited to POWERGRID, Shillong.
ii) There may be bias on the part of employees while answering to the questions.

36
 CHAPTER 6
DATA
ANALYSIS&INTERPRETATION

1. Performance appraisal is needed in organisation.

Table No. 1; A profile of employees’ opinion on the needs of performance

appraisal.
STRONGL AGRE NEUTRA DISAGRE STRONGL
OPINION
Y AGREE E L E Y
DISAGREE

37
 33 17
NO.OF
RESPONDENT
S
SOURCES: compiled from questionnaire

Chart no. 5.1: A profile of employees’ opinion on the needs of performance

appraisal in organisation.

ANALYSIS: From the above table and figure, it has been found that maximum of the
executives’ i. e. 66% strongly agreed that performance appraisal system is needed in
organisation and 34% executives agreed towards the same statement.
INTERPRETATION: From the above analysis it can be interpret that performance appraisal
is needed in organisation.

2. The performance of the organisation is wholly depends on the

performance of the employees.

Table no. 5.2; A profile of employees’ opinion on the dependency of

organisation’s performance on employees’ performance.

38
 OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL
Y AGREE E L E Y
DISAGREE

NO.OF 21 22 4 3
RESPONDENT
S

SOURCES: compiled from questionnaire

Chart no.5.2: a profile of employees’ opinion on the dependency of organisation’s

performance on employees’ performance

ANALYSIS: from the above table and figure, it has been found that 44% employees agreed
and 42% strongly agreed that the performance of the employees is wholly depend the
performance of the employees in which 8% are neutral and 6% of the employees disagreed the
statement.
INTERPRETATION: From the above analysis it can be interpret that the performance of the
organisation is wholly depend on the performance of the employees.

3. The performance rating is done periodically.

Table no.5.3: a profile of employees’ opinion on the statement.

39
 OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL
Y AGREE E L E Y
DISAGREE

NO.OF 11 28 9 2
RESPONDENT
S

Chart no. 5.3: a profile of employees’ opinion on the statement.

ANALYSIS: From the above table and chart, it has been found that majority of
the employees i.e.56% agreed that the performance appraisal is done periodically
and also 22% strongly agreed the statement in which 18% are neutral and 4%
employees disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret the
performance appraisal is done periodically in the organisation.

40
 4. Performance appraisal helps people set and achieve meaningful goals.
Table no.5.4: a profile of employees’ opinion on the statement “performance
appraisal helps to set and achieve meaningful goals’.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO.OF 12 31 7
RESPONDENT
S

Chart no.5.4: a profile of employees’ opinion on the statement “performance

appraisal helps to set and achieve meaningful goals”.

ANALYSIS: From the above table and chart, it is found that majority i.e. 58%
of the employees felt that performance appraisal helps to set and achieve
meaningful goals and also 14% employees strongly agreed the statement of
which 18% are neutral and 10% of the employees disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that
performance appraisal helps to set and achieve meaningful goals.

5. The performance appraisal helps to win cooperation and teamwork.

41
Table no.5.5:a profile of employees’ opinion on the statement “performance
appraisal helps to win cooperation and teamwork”

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO.OF 7 29 9 5
RESPONDENT
S

Chart no.5.5: a profile of employees’ opinion on the statement “performance

appraisal helps to win cooperation and teamwork”

ANALYSIS: From the above table and chart, it has been found that majority i.e.
58% of the employees felt that performance appraisal helps to win cooperation
and teamwork and also 14% employees felt that of which 18% of the employees
are neutral to the statement whereas 10% of the employees disagreed the same
statement.
INTERPRETATION: From the above analysis it can be interpreted that
performance appraisal does not helps to win cooperation and teamwork in respect
of certain group of employees in the organisation

42
 6. Performance appraisal improves motivation and job satisfaction.

Table no. 5.6: a profile of employees’ opinion on the statement “performance

appraisal improves motivation and job satisfaction”.

OPINION STRONGL AGRE NEUTRA STRONGL DISAGRE

Y AGREE E L Y E
DISAGREE

NO.OF 7 34 7 2
RESPONDENT
S

Chart no. 5.6: a profile of employees’ opinion on the statement “performance

appraisal improves motivation and job satisfaction”.

ANALYSIS: from the above table and figure, it is found that majority i.e. 68%
employees and 14% employees felt that performance appraisal improves
motivation and job satisfaction in which 14% are neutral to the statement whereas
4% disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that
performance appraisal improves motivation and job satisfaction in the
organisation.

43
 7. Performance appraisal system of the company helps in identifying the
training needs of employees.

Table no. 5.7: a profile of employees’ opinion on the statement “performance

appraisal system of the company helps in identifying the training needs of
employees”

OPINION STRONGL AGRE NEUTRA STRONGL DISAGRE

Y AGREE E L Y E
DISAGREE

NO.OF 12 23 10 5
RESPONDENT
S

Chart no.5.7: a profile of employees’ opinion on the statement “performance

appraisal system of the company helps in identifying the training needs of
employees”.

ANALYSIS: from the above table and figure, it is found that majority i.e.
46% employees agreed that performance appraisal system of the company
helps in identifying the training needs of the employees and also 24% strongly
agreed the statement in which 20% are neutral whereas 10% employees
disagreed the statement.

44
 INTERPRETATION: From the above analysis it can be interpret that
performance appraisal system of the company does not helps in identifying
the training needs of all the employees.

8. The performance appraisal is helpful for improving personal skill’

Table no.5.8: a profile of employees’ opinion on the statement “performance

appraisal is helpful for improving personal skill”.

OPINION STRONGL AGRE NEUTRA STRONGL DISAGRE

Y AGREE E L Y E
DISAGREE

NO.OF 12 26 7 5
RESPONDENT
S

Chart no.5.8: a profile of employees’ opinion on the statement “performance

appraisal is helpful for improving personal skill”.

ANALYSIS: From the above table and figure, it is found that majority i.e.
52% of the employees agreed that performance appraisal is helpful for
improving personal skill and also 24% strongly agreed the statement in which
14% employees are neutral to the statement whereas 10% employees
disagreed to the statement.
45
 INTERPRETATION: From the above analysis it can be interpreted that
performance appraisal system is helpful for improving personal skill in respect
of all employees in the organisation.

9. The performance appraisal helps to identify the strength and

weakness of the employees.

Table no. 5.9: a profile of employees’ opinion on the statement “performance

appraisal helps to identify the strength and weakness of the employees”.

OPINION STRONGL AGRE NEUTRA STRONGL DISAGRE

Y AGREE E L Y E
DISAGREE

NO. OF 9 25 11 5
RESPONDENT
S

Chart no.5.9: a profile of employees’ opinion on the statement “performance

appraisal helps to identify the strength and weakness of the employees”.

ANALYSIS: From the above table and figure, it is found that 50% of the employees agreed
that performance appraisal helps to identify the strength and weakness of the employees and

46
also 18% employees strongly agreed the statement in which 22% employees are neutral to the
statement whereas 10% disagreed the statement.
INTERPRETATION: From the above analysis it can be interpreted that performance
appraisal helps to identify the strength and weakness of the all employees in the organisation.

10. Final appraisal rating received is always up to the employees’ expectation.

Table no.5.10: a profile of employees’ opinion on the statement “final appraisal rating is always
up to the employees’ expectation”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO.OF 23 17 8 2
RESPONDENT
S

Chart no.5.10: a profile of employees’ opinion on the statement “final appraisal rating is always
up to employees’ expectation”.

ANALYSIS: from the above table and figure, it is found that 46% of the employees’ felt that
final appraisal rating is up to their expectation and also 4% employees strongly agreed to the

47
statement in which 34% employees are neutral to the statement whereas 16% employees
disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that final appraisal
rating is not always up to employees’ expectation.

11. Appraisal rating is an indicator of major achievement and failure or success of work.

Table no.5.11: a profile of employees’ opinion on the statement “appraisal rating is an indicator
of major achievement and failure or success of work”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO. OF 5 25 13 6 1
RESPONDENT
S

Chart no.5.11: a profile employees’ opinion on the statement “appraisal rating is an indicator
of major achievement and failure or success of work”.

48
ANALYSIS: from the above table and figure, it is found that 50% of the employees agreed
that appraisal is an indicator of major achievement and failure or success of work and also
10%employees strongly agreed the statement in which 26% employees are neutral to the
statement whereas 12% employees disagreed and 2% strongly disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that appraisal rating is
an indicator of major achievement and failure or success of work in the organisation..

12.The performance appraisal system is helpful for the management to

provide counselling.

Table no.5.12: a profile of employees’ opinion on the statement “performance appraisal is

helpful for the management to provide counselling”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO. OF 3 29 16 1 1
RESPONDENT
S

Chart no.5.12: a profile of employees’ opinion on the statement “performance appraisal is

helpful for the management to provide counselling”.

49
ANALYSIS: From the above table and figure, it has been found that majority i.e. 58% of the
employees agreed that performance appraisal is helpful for the management to provide
counselling and also 6%employees strongly agreed to the statement of which 32% employees
are neutral to the statement whereas 2% employees disagreed and also 2% strongly disagreed
the statement.
INTERPRETATION: From the above analysis it can be interpret that performance
appraisal is helpful for the management to provide counselling.

13.Performance rating helps to fixed incentives.

Table no.5.13: a profile of employees’ opinion on the statement “performance rating helps to
fixed incentives”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO.OF 12 27 8 3
RESPONDENT
S

Chart no.5.13: a profile of employees’ opinion on the statement “performance rating helps to
fixed incentives”.

50
ANALYSIS: From the above table and figure, it has been found that majority i.e. 54%
employees agreed that performance appraisal helps to fixed incentives and also 24% employees
strongly agreed the statement in which 16% employees are neutral to the statement whereas
6% of the employees disagreed the statement.
INTERPRETATION: From the above analysis it can be interpreted that performance
appraisal helps to fix incentives.

14.Promotion is purely based on performance appraisal

Table no.5.14: a profile of employees’ opinion on the statement “promotion is purely based on
performance”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO. OF 9 17 19 3 2
RESPONDENT
S

Chart no.5.14: a profile of employees’ opinion on the statement “promotion is purely based on
performance appraisal”.

51
ANALYSIS: from the above table and figure, it has been found that majority of the
employees i.e. 38% employees are neutral to the statement that is promotion is purely based on
performance appraisal and 34% agreed to the statement and also 18% employees strongly
agrees that promotion is purely based on performance appraisal whereas 6% employees
disagree and 4% strongly disagree the statement.
INTERPRETATION: From the above analysis it can be interpret that promotion is not
purely based on performance appraisal in the organisation.

15.Transfer, demotion, suspension and dismissal are based on

performance appraisal.

Table no.5.15: a profile of employees’ opinion on the statement “transfer, demotion,

suspension and dismissal are based on performance appraisal”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO. OF 4 8 23 13 2
RESPONDENT
S

52
Chart no.5.15: a profile of employees’ opinion on the statement “transfer, demotion,
suspension and dismissal are based on performance appraisal”.

ANALYSIS: From the above table and figure, it has been found that majority of the
employees i.e. 46% are neutral to the statement that transfer, demotion, suspension and
dismissal are based on performance appraisal in which 16% employees agreed and 8% strongly
agreed the statement whereas 26% disagreed and 4% strongly disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that transfer, demotion,
suspension and dismissal are not based on performance appraisal in the organisation.

16.Performance appraisal helps to provide an atmosphere where all are

encouraged to share one another burden.

Table no.5.16: a profile of employees’ opinion on the statement “performance appraisal

helps to provide an atmosphere where all are encouraged to share one another burden”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO. OF 1 22 19 5 3
RESPONDENT
S

53
Chart no.5.16: a profile of employees’ opinion on the statement “performance appraisal
helps to provide an atmosphere where all are encouraged to share one another burden”.

ANALYSIS: From the above table and figure, it has found that majority i.e. 44% of the
employees felt that performance appraisal helps to provide an atmosphere where all are
encouraged to share one another burden and also 2% of the employees strongly agreed the
statement in which 38% of the employees are neutral to the statement whereas 10% disagreed
and 2% strongly disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that performance
appraisal helps to provide an atmosphere where all are encouraged to share one another’s
burden in the organisation.

17.Performance appraisal gives constructive criticism in a friendly and

positive manner.

Table no.5.17: a profile of employees’ opinion on the statement “performance appraisal

gives constructive criticism in a friendly and positive manner”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

54
 NO. OF 1 20 21 5 3
RESPONDENT
S

Chart no.5.17: a profile of employees’ opinion on the statement “performance appraisal

gives constructive criticism in a friendly and positive manner”.

ANALYSIS: From the above table and figure, it has been found that 42% of the employees
are neutral to the statement that performance appraisal gives constructive criticism in a friendly
and positive manner in which 40% agreed and 2% strongly agreed to the statement whereas
10% disagreed and 6% strongly disagreed to the statement.
INTERPRETATION: From the above analysis it can be interpret that performance does
not gives constructive criticism in a friendly and positive manner in the organisation.

18.Proper feedback is received after the performance appraisal.

Table no.5.18: a profile of employees’ opinion on the statement “proper feedback is

received after the performance appraisal”.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

55
 NO.OF 2 21 16 7 4
RESPONDENT
S

Chart no.5.18: a profile of employees’ opinion on the statement “proper feedback is

received after the performance appraisal”.

ANALYSIS: From the above table and figure, it is found that majority i.e. 42% of the
employees agreed that proper feedback is received after the performance appraisal and also 4%
strongly agreed the statement in which 32% of the employees are neutral to the statement
whereas 14% disagreed and 8% strongly disagreed to the statement.
INTERPRETATION: From the above analysis it can be interpret that proper feedback is
not received after performance appraisal.

19.Performance appraisal system is transparent to all the employees.

Table no.5.19: a profile of employees’ opinion on the statement “performance appraisal is

transparent to all the employees”.

56
 OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL
Y AGREE E L E Y
DISAGREE

NO.OF 6 16 18 5 5
RESPONDENT
S

Chart no.5.19: a profile of employees’ opinion on the statement “performance appraisal is

transparent to all the employees”.

ANALYSIS: From the above table and figure, it has been found that 38% of the employees
are neutral to the statement that performance appraisal is transparent to all the employees
however 33% agreed and 13% strongly agreed the statement whereas 10% disagreed and 6%
strongly disagreed the statement.
INTERPRETATION: From the above analysis it can be interpret that performance
appraisal is not transparent to all the employees.

20.Satisfied with the existing performance appraisal system.

57
Table no.5.20: a profile of employees’ opinion on the satisfaction of employees towards the
existing performance appraisal system.

OPINION STRONGL AGRE NEUTRA DISAGRE STRONGL

Y AGREE E L E Y
DISAGREE

NO.OF 3 28 11 5 3
RESPONDENT
S

Chart no.5.20: a profile of employees’ opinion on the satisfaction of employees towards the
existing performance appraisal system.

ANALYSIS: From the above table and figure, it has been found that majority i.e. 56% of
the employees felt satisfied with the existing performance appraisal system and also 6%
employees have a strong satisfaction level towards the existing performance appraisal system
in which 22% are neutral whereas 10% does not satisfied and 6% have a strong negative impact
towards the existing performance appraisal system.
INTERPRETATION: From the above analysis it can be interpret that most of the
employees are satisfied with the existing performance appraisal system of the organisation.

58
 CHAPTER 7
FINDINGS
SUGGESTIONS
CONCLUSION

59
 FINDINGS
 All the employees imminently agreed that performance appraisal system is needed in
the organisation.
 Performance appraisal helps people set and achieve meaningful goals in the
organisation.
 Performance appraisal improves motivation and job satisfaction, also is helpful for
improving personnel skill in the organisation..
 Performance appraisal helps to identify strength and weakness of the employees in the
organisation.
 According to opinion of the employees final appraisal rating received is not always up
to the employees’ expectation.
 According to the opinion of the employees the performance appraisal system is not
helpful for the management to provide employee counselling.
 Promotion, transfer, demotion, suspension and dismissal are not purely based on
performance appraisal in the organisation.
 Performance appraisal helps to provide an atmosphere where all are encouraged to
share one another burden in the organisation.
 Performance appraisal does not gives constructive criticism in a friendly and positive
manner to all the employees in the organisation.
 Proper feedback is not received by all the employees after the performance appraisal
in the organisation.
 Performance appraisal system is not transparent to all the employees in the
organisation.
 More than half of the employees are satisfied with the existing performance appraisal
system of the organisation.

60
 Suggestions

 HR department or organisation has to educate all managers and employees about the
significance and benefits of performance counselling.
 Organisation must have in place and sound method of measuring performance of the
employees. It must be transparent and easily understandable to each employee.
 Positive change should be in the attitude and perception of employees and management
towards performance appraisal system.
 Appraisal assessment and feedback system must be transparent and introduced
throughout the organisation.
 During the appraisal period organisation must provide a good communication between
the top management and business goals to staff so that the desired target of the
organisation can be achieved through performance appraisal.
 The performance appraisal should be assist effectively to the employees as it recognizes
the competence and potential of an individual.
 Employees’ appraisal should be fairly done according to the companies policy so that
it will assist the performance of the employees.

61
 CONCLUSION

Human resources are the vital source of every organisation. Every employee in an organisation
increases the productivity and goodwill of every company. An employee, being an individual
is treated as assets in the organisation. So, the organisation should mainly emphasis
performance appraisal techniques and its development program. Both the appraiser and
appraise should the realize the principle and used the tool of appraisal system in a constructive
way for the prosperity of an organisation.
The performance appraisal technique prevailing is fair. Most of the employees are satisfied
with the existing performance appraisal system. As many new appraisal techniques are
emerged, the organisation can implement which would be more effective. The welfare measure
of the organisation is at par with the company policies and has brought a great sense of
involvement in work among the employees of the organisation. If the suggested measures are
taken into consideration it will help to increase the effectiveness of performance appraisal
system

62
Bibliography:
 Human Resource Management- by Dr. C.B. Gupta.
 Kothari, C. R. (2004) Research Methodology, New Delhi, New Age International Pvt.
Ltd, second Revised Edition.
 POWERGRID booklet.
 www.powergridindia.com
 www.stressmanagementreview.com

63
 QUESTIONNAIRE
Respected Sir/madam,
I have been assigned to do a project work on “Performance appraisal system in POWERGRID”. I will
be grateful if you could spare some of your valuable time in filling up this questionnaire and help me
in conducting the project study. I assure you that the information provided by you will remain
confidential and will solely be used for academic purpose.

Sincerely,

Yanglem Sharankumari Devi

SOCIO – DEMOGRAPHIC FACTORS:

NAME:

SEX: Female Male

AGE:

20 – 30 years 30 – 40 years above 40 years

MARITAL STATUS:

Married unmarried

DEPARTMENT:

HR ACCOUNTS OTHERS

YEAR OF SERVICE:

Up to 2 years 2 – 6 years 6 – 10 years above 10 years

Monthly income: (in Rs)

Below 30000 30000 - 50000 50000-900000 above 90000

64
STATEMENTS STRO AGRE NEUT DISAG STRO
NGLY E RAL REE NGL
AGRE Y
E DISA
GREE

1. Performance appraisal system is needed in

organisation.
2. The performance of the organisation is
wholly depend on the performance of the
employees.
3. The performance rating is done periodically.
4. Performance appraisal helps people set and
achieve meaningful goals.
5. The performance appraisal helps to win
cooperation and teamwork.
6. Performance appraisal improves motivation
and job satisfaction.
7. Performance appraisal system of the
company helps in identifying the training
needs of employees.
8. The performance appraisal is helpful for
improving personnel skill.
9. The performance appraisal helps to identify
the strength and weakness of the employee.
10. Final appraisal rating received is always up
to the employees’ expectation.
11. Appraisal rating is an indicator of major
achievement and failure or success of work.
12. The performance appraisal system is helpful
for the management to provide employee
counseling.
13. Performance ratings help to fix incentives.
14. Promotion is purely based on performance
appraisal.
15. Transfer, demotion, suspension, and
dismissal are based on performance
appraisal.
16. Performance appraisal helps to provide an
atmosphere where all are encouraged to
share one another burden.
17. Performance appraisal gives constructive
criticism in a friendly and positive manner.
18. Proper feedback is received after the
performance appraisal.
19. Performance appraisal system is transparent
to all the employees.
20. Satisfied with the existing performance
appraisal system.

65
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67
68
69
70
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