CHAPTER 1: INTRODUCTION TO TOPIC

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 INTRODUCTION

The present business of the world is full of complexities and dynamism to overcome all
complexities (like heterogeneous skill, awareness towards right) is the major task for any
business organization. With the rapid changes taking place in technology-especially in
information technology, all HR personnel have the need to cope with expectations to perform
any time, anywhere.

They have to constantly upgrade their skills and retain themselves in order to keep abreast with
technological changes; the age of “knowledge employee” has arrived. Each employee now wants
his role to be wholesome and meaningful with job satisfaction being a primary consideration for
performance.

A major HR challenges is to retain highly volatile knowledge employees who has a heightened
sense of security, self belief & a corresponding ability for job mobility. If he is not satisfied with
his work he will move on. Employees Retention has therefore become a major challenge
especially with the looming specter of better salaries and compensation packager being offered
by Multinationals.

Management of human resource in ICICI is a very big exercise and comprises wide range of
activities i.e. Employee relation etc. & its ultimate goal is Human Resource Development of the
organization

Organizations are like a social system. They combine Technology and Human beings together
and the later being most important because unlike machines, people are more responsive. They
feel, think and act. Given a proper environment of oneness and avenues for development, they
can take an organization to glorious heights.

Performance appraisal helps to recongnise the weaker skills of the employees and thus training
can be provided accordingly.

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Objectives of Performance Appraisal System:

1. To create and maintain a satisfactory level of performance.

2. To contribute to the employee growth and development through training, self and
management development programmes. Tata Power aims at employee development
through performance appraisal.
3. To help the superiors to have a proper understanding about their subordinates
4. to guide the job changes with the help to continuous ranking
5. To facilitate fair and equitable compensation based on performance.
6. To facilitate for testing and validating selection tests, interview techniques through
comparing their scores with performance appraisal ranks.

INTRODUCTION OF PERFORMANCE APPRAISAL

In an informal sense, performance appraisal is as old as mankind itself. In a formal sense,

performance appraisal of an individual began in the we dynasty (A.D 261 – 265) in China.
Where an imperial rater appraised the performance members of the official family. In 1883 the
New York city Civil Services in the USA introduced a formal appraisal program shortly before
World War I. The US Army adopted the Man to Man rating system for evaluating Military
Personnel. This early appraisal was called Merit rating. In early 50’s, attention shifted to the
performance appraisal of technical professional and Managerial Personnel.

Since then, the Philosophy of performance Appraisal has undergone tremendous changes.
Different expert have used different terms to describe this concept. The common terms used,
include Merit rating, behavioral assessment, employee evaluation personnel review, staff
assessment, progress report and performance appraisal.

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 PERFORMANCE APPRAISAL

Performance Appraisal is one tool available to successfully manage performance management

process.

Performance appraisal may be defined as “The process by which an employee’s

contribution to the organization during a specified period is assessed.”
Performance appraisal is an important strategic management tool.

Performance Appraisal = Performance + Appraisal

Performance defined as:-

 Altitudes and traits
 Achievement of goals and outcomes
 Behaviors

Appraisal defined as:-

 Measurement of facts figures and Means.
 Analysis of verifiable components of a given job.

PURPOSE OF PERFORMANCE APPRAISAL

Purpose of Performance Appraisal

Evaluation Development

1) Evaluation:-
 Accurately measures performance
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  Establishes performance standards that are clearly related to the organizations mission
and objectives.

 Develops employee where necessary or take corrective action where appropriate.

 Provide continuous feedback to employee about their performance.

2) Development:-
 Assist the training and continued personal development of an employee.

 Employee are more motivated committed and competent to achieve their work roles and
organizational goal.

METHODS OF
PERFORMANCE APPRAISAL
I

TRADITIONAL MODERN
METHOD METHOD

1.Stright Ranking Method

1.Assessment Cente
2.Man To Man Comparison Method 2.Appraisal By Result or
3.Grading method by Objective.
4.Graphic Rating Method 3.Human Asset Accounting
5.Forced Choice Description Method. method.
6.Forced Distribution Method. 4.Behaviourly Anchored
C 7.Check List. rating Scales.
8.Free From Essay Method.
9.Critical Incident.
10.Group Appraisal.
11.Field Review Method.

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 USE OF PERFORMANCE APPRAISAL

Performance Compensation Informational

Improvement Adjustment Inaccuracies

Use of
Performance
Appraisal

Staffing Process Career Planning Placement

Deficiencies and Development Decisions

1. Performance Improvement :-
Performance appraisal helps in improving the performance of employee through work
planning, skill identification and potential development motivation, learning and
development activities are fulfill in employee’s performance.

2. Compensation Adjustment :-
When employees give superior performance are rewarded through increase in their
compensation to motivate them to further excel in their job. Performance appraisal most
popular differentiates compensation of employee for performance reason.

3. Information in accuracies
Performance appraisal provides opportunity to employees and their managers to share
information ideas, requirements, expectations and feedback to remove any
misunderstanding between the manager and the employee.

4. Placement division :-
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 Performance appraisal is a technique for making decision on employee placements like
promotion, demotion, transfer, relocation, reassignment etc.

5. Career Planning and Development :-

Performance appraisal give the original data and information about the current
performance level and development needs of employees. By this process we identified
the career planning and developmental need.

6. Staffing Process Deficiencies :-

By performance appraisal, we identifying the performance and potentialities for future
development of employees. So the accuracy and reliability of recruitment and selection process
can be judge. So the appraisal is test of reliability and validity of selection process and
appropriate adjustment can accordingly be undertaken

ADVANTAGES OF PERFORMANCE APPRAISAL

ADVANTAGE

Individual Team Organization

Level Level Level

Individual Level :-
 Recognition of past effort

 Development requirement can be uncovered

Team Level :-
 Alignment of effort with objective.

 Motivation of team members

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Organization :-
 Development of human resources.

 Achievement of key objective.

 Best and focused utilization of human resources.

FACTORS AFFECTING PERFORMANCE APPRAISAL

Motivating Reinforcement

Factors Affecting
Performance
Appraisal

Organization Behavior Modification

Motivation :-
Motivation are the forces that energize direct and sustain a person efforts.
Motivated people with adequate ability and understanding of the job, will be more
productive.
Reinforcement :-
Behavior followed by positive nature probably will be repeated. Reinforce led to positive
consequences that motivate behavior.
Organization Behavior Modification :-
Reinforcement in organizational setting can be used by people’s behavior and improves
performance by systematically managing work area.
BENEFITS OF PERFORMANCE APPRAISAL

Benefits to
Benefits of Organization

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 Performance
Appraisal Benefits to
Employees

Benefits to Organization :- may be

Documentation of performance appraisal and feedback needed for legal defense.
 Appraisal provides a rational basic for constructing a bonus or merit system.

 Appraisal dimensions and standards can help to implement strategic goals and clarify
performance expectations.

Benefits to employee :-
 Performance appraisal is as important for good performers as for weak employee.

 Performance feedback is needed and desired for brining about improvement in

performance.

 Assessment and recognition of performance levels can motivate employee to improve

their performance

PERFORMANCE APPRAISAL RULES IN ICICI, DEHRADUN

1. TITLE:

PERFORMANCE APPRAISAL aims at creating alignment of your goals with those of

the company and enables you to effectively manage performance – for yourself and your
team.

Performance Appraisal Report is an Index of an Employee/Executive's works

performance over a given period of time. It is crucial for his/her Career Growth as it
indicates the Strengths, Weaknesses (if any), Training needs, Nature of job being
performed, problems faced in work situation.

2. OBJECTIVES:

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 The objectives of the Performance Appraisal System are:
2.1 To set Norms and Targets of Work Performance, as well as, to monitor the Work
Progress of Employees.
2.2 To facilitate placement of Employees in accordance with their suitability for
different types of Assignments,
2.3 To provide an Objective basis for determination of Merit, Efficiency and
Suitability for the purpose of promotion.
2.4 To identify areas requiring exposure for Training/Development.

3. EVALUATION:
The Performance Appraisal System seeks to evaluate:
3.1 The Work Performance of an Employee on the present job in relation to the
expected levels of performance, both qualitative and quantitative.
3.2 The extent of development achieved by the employee during the period under
review.
3.3 Evaluation of behavioral Attributes Attitudes and Abilities.

3.4 Evaluation of potentials for assuming higher responsibility.

4. COVERAGE:
4.1 The appraisal shall cover:
i) Performance during the period from 1s1 April to 31st March of every year.
ii) All regular employees of the company. There shall, however, be 5 different
Formats for:
a. Class III and IV
b. E-0
c. E-1 to E-3
d. E-4 to E-6
e. E-7 and above (PESB Format)

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 4.2 The appraisal form PAR/ACR will have to be filled in respect of age such
employees who have served for a period of at least 4 months in the organization
during the relevant year.

DEFINITIONS:
5.1 Executive: An executive is a person employed under the authority of ICICI in
any of the Executive grades but shall not include a Trainee (Technical or Non-
Technical). This would not include Directors or any of the other person appointed
by the President of India, for any of the offices in ICICI or its subsidiaries and
associated offices.
5.2 Appraisal Year: The appraisal period is 12 months of financial year between 1 st
April of a year to 31st March of succeeding year.

5.3 Appraisee:
a) An appraise is an executive who has worked under the direct control and
supervision of another executive for a minimum period of 4 months within the
time span of 1s1 April - 31s1 March (12 months) in an Appraisal year;
b) Seconded Appraise is an executive who belongs to a Professional
Group but works under the direct control of different group.

5.4 Appraisers:
i.) There are two levels of appraisers. The First Appraiser, also called Reporting
Authority, means an executive under whose direct control and supervision the
Appraise operates. In case of seconded appraise, immediate functional senior
executive (who may be equal in status to the 18t Appraiser) could be the Joint
Appraiser with the Reporting Authority, and he would only record, whether or not
agrees with the observations of the first Appraiser.
ii.) The second Appraiser also called Reviewing Authority means a senior executive
who oversees the activities of the Appraise and who offers professional advice to,
or controls, the first Appraiser. Normally, the assessment of performance of an
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 Appraise is considered in detail by these two Appraisers and they should briefly
explain the rationale for the grade Specific observation must be recorded for very
high or low grading in comments column.

iii.) Co-Reviewing Officer:

Senior Officer (E-5 and E-6) located in the Projects take professional guidance from their
professional seniors posted in the Regional Office but the overall control of
Project activities is vested in the Project Head, who has to review the PARs before
their transmission. ED/RD/Head of Institute may like to associate the Functional
Head of the office before he records final observation and also assigns a grade. In
such cases the ED/RD may like to secure comments only (no grades) of the
professional Group Head.

6. PROCEDURE:
6.1 PAR/ACR in respect of an employee is required to be assessed/written by levels
indicated below:-
a. By the Reporting Officer under whom employee is working,
b. By the Reviewing Officer
6.2 Class III/IV& E-0 employees:
The reporting officer for writing PAR of an employee of Class III/IV and E-0
level category will be the executive under whose control the employee is working.
The Reviewing officer will be of one grade above the grade of Reporting Officer.
The PARs in respect of Class III and IV employees duly reviewed/accepted is
maintained at Region/Institutes/Headquarters Group-wise in the concerned
establishment section/ PAR Sections.
6.3 The PAR in respect of E-0 to E-6 level executives are being maintained in PAR
Department at Headquarters of R&P Division. As regards, E-7 and above all such
reports which are received from Regions/Institutes/Headquarters are maintained at
Chairman-cum-Managing Director's office.
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 6.4 The Reporting officer will be the officer to whom the executive reports for his day
to day work. Review of the PAR will be done by the executives to whom the
Reporting officer is responsible for his functions. Accepting authority will be the
executive higher than the Reviewing officer at different stages depending upon
the nature of the grades, as per delegation of Powers in PAR Rules.
6.5
a. The Performance Appraisal Reports of Executives of E-6 level i.e.
Deputy General Manager and above will be submitted to concerned Functional
Director for final review and acceptance.
b. The Performance Appraisal Reports of Executives of E-5 level i.e. CM and
equivalent will be reviewed by the RD/ED/Nominee of the Director concerned.
c. The Performance Appraisal Reports of executives up to E-4 level i.e. Manager
and equivalent would be reviewed by the Functional Head/GM/GGM not less
than E-7.

7. ADVERSE REMARK:
7.1 In the event of the overall assessment being not satisfactory, or
Carrying some adverse remark, a communication will need to be issued to the
concerned employee after the report has been accepted by the concerned
authority.
7.2 The adverse remark will be conveyed to the concerned employee by the Personnel
Department. The grading of Fair and Poor are considered as adverse and as per
the rule these are required to be communicated to the concerned employee. In
case an employee has been assessed poor or fair against a specific attribute, even
this also needs to be communicated to the employees so that he gets a feed back
for improvement.
7.3 Any employee who may be aggrieved by the adverse remarks in the ACR/PAR as
communicated to them and who desire to prefer an appeal against the same will
be required to follow the following procedure:
a. An employee aggrieved by the adverse remarks may make an appeal within 90
days of receipt of the adverse communication.
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 b. The appeal made by the employee shall contain briefly his contention along with
documentary evidence, if any in support of the same and shall be routed through
proper channel. A copy of the appeal made may be submitted to the Personnel
Department.

8. REGROUPING OF PROFESSIONAL DISCIPLINES:

i. At present there are 42 operating professional disciplines and in some disciplines
there are no senior executives. For purposes of appraisal, the 42 disciplines have
been grouped under 14 heads. (Annexure 1}. The second appraiser would belong
to any of the proposed 14 discipline groups. The basis for determining Appraisers
for different positions held by an executive is indicated in the attached Annexure
VII. Director (HR)/ Regional Director, would determine the Appraisers in the case
of executive positions which are not covered in the Annexure VII.
ii. At the beginning of the year and subsequent period the Appraise
should be informed by PAR Officer about the identity of the first and second
Appraisers.

9. ACCEPTING AUTHORITY:
i. A very senior officer who is designated under the Rules (refer to
Annexure VII) to re-look at the performance of the Appraise, and review the observations of the
first and second Appraisers. He would finally determine and evaluate the performance of the
Appraise. In case of disparity between his assessment and that of the first and second Appraisers,
he has to record the basis of his revised assessment. He is expected to record specifically his
comments in cases of overall performance grading A+ or D, and low score for personality traits
by either of the earlier two Appraisers.

10. APPELLATE AUTHORITY:

Project General Managers, Group General Managers, Executive Directors/ Regional
Directors, Directors and Chairman-cum-Managing Director, would be Appellate
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 Authorities to take decisions on representations of different levels of appraise executives,
as laid down in the Annexure - VIII. They would also take final decision on the
evaluation of performance of the appraise in special cases, thrown-up for re-consideration
by Director (Personnel).

11. PERFORMANCE APPRAISAL REPORTS (PAR) OFFICER:

The PAR activities are a part of personnel function, but the PAR system is essentially
based on support of various departments. This demands that a senior officer not less than
E4 of the personnel department is designated as PAR Officer, who will have
responsibility to respond quickly to the enquiry. Each Regional Office/Institute will have
a PAR Officer. PAR Officer will report directly to Head of P&A in Regional Offices, who
has the over all responsibility of development of human resources. In respect of offices in
ICICI in Dehradun, Corporate PAR Officer will function under G.M.( Recruitment and
Promotion).

12. APPRAISAL YEAR FOR PROBATIONARY PERIOD:

The Appraisal year will apply in cases of all Regular executives of ICICI
Special Forms and relevant instructions already exist for assessment of performance
during the probationary period mentioned above, and these would continue to be
operative in the future. It is essential that the process of assessing-performance for
completion of the probation period commences immediately after the end of the
prescribed time, and decision of the appropriate authority is communicated to the
concerned executive within six weeks. This will ensure that further appraisal of the
executive as Regular employee is not delayed.

13. APPRAISAL FOR PART-PERIOD:

i) The minimum period of 4 months of linkage between the Appraise and
Appraisers (Reporting Authority, Reviewing Authority and Accepting Authority) may be
disturbed due to transfers etc., in some cases. The guiding principle for ensuring fair
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 assessment in the event of loss of linkage (minimum 4 months) in such cases would be as
under:
 A minimum of 4 months interaction period must subsist between the Appraise and the
first Appraiser, In case this is not so, the second Appraiser would make his comments on
the performance of the Appraise. In case he had the opportunity of overseeing activities
of the executive for a minimum of 4 months during the Appraisal period in consultation
with the existing new Reporting Authority, i.e., first Appraiser.
 In case there is less than 4 months interaction between the Appraise and the second
Appraiser, the necessity of having second Appraiser would be waived, and the final
assessment will be made by the Accepting Authority on the basis of the report (formal or
informal) of either first or second level Appraiser or both,
ii) In case of an Appraiser’s transfer when he has worked for less than 4 months period with
the Reporting Authority, the erstwhile Reporting

Authority will forward Part-Period report about the Appraiser’s performance to the appropriate
Authority (in this case the new Reporting Authority). This report will be attached to the PAR
formal when the appraisal procedure is initiated for the executive for current year. The new
Reporting Authority/ Reviewing Authority may consider the Part-report for assessing the
Appraiser’s performance for the total year, and refer to this in his assessment.
iii) The Reviewing Authority would also be subjected to the limitation of 4
Month’s period of inter-action between the Appraise and him (Appraiser). In case this
condition is not satisfied the concerned Accepting Authority will finally record his
assessment in consultation with the first and or second Appraiser who have known the
Appraise while assigning final grade to the appraise.

14. APPRAISAL IN SPECIAL CASES:

i) In case an executive who has worked in a number of positions of short
Duration during 12 month period, the assessment will be made by the Reviewing
Authority/Accepting Authority currently associated with the Appraise. In case none of the
above mentioned employees has the benefit of assessing the performance for the

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 prescribed minimum period of 4 months, this may be duly recorded, and the Accepting
Authority should complete the PAR.
ii) Employee on Study Leave:
The Reporting Officer/PAR officer is to initiate action to secure a Report from the Head of
Institute where the appraise has been placed for advanced learning / training without waiting for
the appraise to fill the personal details etc. The Appraiser would prepare summary report about
his performance on the basis of the report received from the Institutional Head.
In the event of the non-compliance on the part of the Institution to send a report, appraise
be advised to send a report of his studies to the appraiser through the Institutional Head.
iii) Employee on Long Leave:
In case an appraise is on medical leave (for 4 months or more), the Reporting Officer in
this case would record the nature of medical problem/ reasons for long medical leave.
The medical report, if available, be attached with the PAR.
iv) Employees on Suspension for alleged misconduct:
The Reporting Officer will initiate action without waiting for the Appraise to fill in
personal data etc. He will record his observations about the Appraise which may not deal
with his performance as an employee but make reference of his conduct, during the
period of suspension, if so desired.
v) Erring Appraise:
In case where an Appraise deliberately does not fill in the personal data or record job
parameters / achievements within the prescribed time limit, this deliberate delinquency,
may be recorded by the Reporting Officer. The Appraiser would initiate action on other
aspects of performance appraisal as per Rules.

15. SUPERANNUATING/SEPARATING EXECUTIVE:

i. PAR System will be initiated by the Reporting Authority in respect of an
executive (appraise) who superannuates from service. He has to ensure that this process is
completed before the appraise superannuates.
ii. In case the superannuating executive (E3 and above) is the first Appraiser, he must record
his views on the performance of the executives reporting to him, if he has supervised the
appraises for a period not less than 4 months.
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iii. In case the superannuating executive is a Reviewing/Accepting Authority (E4 and above)
he should record his views on the performance of executives he oversees. He would
forward it, in a sealed cover to PAR Officer, who will attach it with the main PAR format
at the end of the Appraisal year. The new incumbent senior executive (Reviewing/
Accepting Authority) will record his views on the performance of the appraise after
taking into consideration the recorded views, if any, of the superannuated executive.
iv. A superannuated executive ceases to be a ICICI executive, and he is not to be
approached for recording his views on performance of any employee, after being relieved
from office.
v. The rules 14(i) to 14(iv) apply to persons who cease to be in ICICI
employment on resignation, separation, repatriation to parent Department.

16. ACTION FOR LAPSES BY THE RETIRING

EXECUTIVE:
i. A superannuating executive has to initiate action for recording his observations in respect
of performance of executives who are under his direct control. In the event of any
disregard of the above mentioned Rules by the superannuating executive, the personnel
department may withhold issues of 'No Dues' certificate to the retiring executive.
ii. Notwithstanding a lapse of non-completion of PAR as Reporting/Reviewing/Accepting
Authority, by a retired/separated executive, the new incumbent will complete the
requisite PAR exercise, in consultation with the concerned executives to avoid any
hardship to the appraise.

17. ROLE AND RESPONSIBILITIES OF THE REPORTING AUTHORITY:

The overall performance classification in grades is to be determined by examining both
(a) Performance (b) Personality of the appraise. The parameters of this task are listed in
Part II of the PAR format in Blocks, A, B, C, D, E and F.
In evaluating performance (Block A) due consideration is to be given to the bench marks
indicated therein and one numerical block only is to be ticked.
In respect of personality traits, in blocks B,C,D,E, and F only one numerical block is to
be ticked after considering the bench marks indicated therein.
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 The Reporting Authority must offer explanation for his assessment for the special
features while ticking the numerical blocks (A to F).
The grade classifications with explanations are indicated in Rule - 21 & 22.

i) The performance and the grade / marks assigned to an Appraise by the

Reporting Officer (1st Appraiser) may be shown to the Appraise by the Reporting Officer
at an informal meeting. To begin with, this system be adopted in respect of Executives of
E-5 level and above. To be reviewed after two years.

18. SPECIAL COMMENTS BY REVIEWING AUTHORITY:

After the detailed analysis of performance/personality traits by the Reporting Officer, the
Reviewing Authority is required to offer special comments (No numerical values) in
respect of a few special items like integrity, professional potential for growth and the like.
Specific areas/functions for potential growth be mentioned.

PROFESSIONAL POTENTIAL:
Appraisers are to indicate the need for up gradation of specific skills, and behavior,
personality modifications of the Appraise. Suggestions for job rotation, or specialization
for professional/ managerial development may be indicated.
The Reviewing Authority will take into consideration the scores achieved by the appraise
in Part II of the format and after giving due consideration to the aspects mentioned above,
he would assign an overall grade and also record a pen picture about the appraise.
19. OVERALL ASSESSMENT BY ACCEPTING
AUTHORITY:
The accepting authority will minutely examine the observations made by the first
appraiser and the Reviewing Authority, and also the self appraisal of the appraise, and
after taking due consideration of all the aspects, determine overall grade and also
comment on the total performance.
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 There should be specific observation about any adverse comments which need to be
communicated to the appraise. He could also mention personality traits on which appraise
needs to be counseled/ advised for further improvement of his performance and which is
not to be considered as an adverse entry.

20. ASSESSMENT SYSTEM:

The two PAR formats for executives belonging to Junior (E1 to E3) and Middle (E4 to E6),
reflect both performance and managerial competency components. These have been assigned
Block numerical values, merely to help in arriving at the final assessment and grading of
individuals. The numerical scores are notional only.
The Appraisers have to use their judgment in the context of the numerical scores, and the total
job situation for deciding the grade of performance.

i. Executive on Deputation:
Whenever an ICICI Executive goes out on deputation to another Organization, or vice-
versa, it should normally be insisted that the ICICI PAR Formats are used. In case the
concerned outside Organization does not comply with the directives, the Reporting
Officer will record his views on ICICI format alongside the report received from the
Organization where the ICICI executive has been deputed.

ii. Performance Appraisal on Tenure Basis:

A separate form to be designed for such employees for continuance or otherwise for
completion/extension of tenure.

21. THE GRADING SYSTEM:

The Block numerical values have been assigned to assist the 1st Appraiser in making an
overall assessment. The overall total score for determining a grade is merely a guide and
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 the final grade may be at variance with the total score. The second Appraiser i.e. the
Reviewing Authority and the Accepting Authority, have to take an overall view, both of
the performance and the personality of the appraise, while determining the 'FINAL
GRADING'. The Accepting Authority will arrive at the Final Grading by judiciously
weighing the assessment of Reviewing Authority, who may belong to functional
discipline of the Appraise along with the detailed assessment of the Reporting Authority.
The overall rating in grades in respect of appraisals would be as under:
A+ - Exceptional {rare occasions)
A - Top Performer
B - Very Good
C - Adequate
D - In Adequate
The final grade given by the Accepting Authority after detailed and due consideration to
the rating by the 1st and 2nd Appraisers, will be the DECISIVE GRADE of the Appraise
executive. In case this final rating is different from those of the 1 sl and 2nd appraiser,
adequate justification MUST be mentioned by the Accepting Authority. There must be
adequate explanation by the 1st and 2nd appraisers and the Accepting Authority for any
grade assigned to the appraise. In the absence of adequate explanation the report will be
considered incomplete and returned back to the appraisers for conforming to the
directives contained in the instructions.

22. THE GRADES

i. The performance categories are defined as follows:

EXCEPTIONAL (A+)
This is a person whose job performance and personality attributes are clearly remarkable.
This person meets or exceeds Company's highest standards and achieves extraordinary
results in extraordinary circumstances. A rare individual who achieves this once in a
while.

TOP PERFORMER (A)

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 This is some one whose job performance is noteworthy and he makes valuable
contribution to the organization. He does not have any negative personality attributes. He
is one of the top performers.

VERY GOOD (B)

This is an individual whose performance consistently meets company's expectations. This
is a person who is unquestionably above average.

ADEQUATE (C)
This is a person whose overall performance meets basic requirements of the job and the
basic targets.

IN-ADEQUATE (D)
This is an individual who needs to improve his or her performance and has not achieved
results in spite of guidance and counseling by appraisers. This aspect must be specially
stated in the comments/remarks column of the PAR format by the appraisers.

23. PEN PICTURE

In addition to assigning the Grade, the Appraisers must depict in precise language the
dimensions of appraiser’s total performance which justifies the grade and mention his
personal attributes.

24. MONITORING OF PARs:

Progress of movement and compliance to the rules of the PARs through different stages
would be the objective of Monitoring System. The monitoring report will:-
Ensure that the PAR exercise is done on time.
Report on propriety of objectivity
Locate cases of Appraiser's bias of being excessively liberal or rigorous in judgment.
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 In respect of Executives between E-1 to E-3, the exercise will be conducted by the Head
of Personnel Department in the Regional Offices.
In respect of executives belonging to E-4 to E-6, monitoring will be conducted by
General Manager(HRG), ICICI.
Monitoring exercise must be completed by 15Ifl June every year. Regional Heads/G.M.
(P&A)/ GM(HRG) will send monitoring reports to GM(R&P) for information.

25. MODERATION:
This means re-evaluation of the PAR of an Appraise and the grade awarded by the Accepting
Authority to correct any aberrations.

i. REGIONAL OFFICE - The Head of the Personnel Department at the Region i.e. G.M.(P&A)
will review the PARs of the executives up to E-3 level, and advise the Regional Director for
moderation if required on the basis of analysis of reports. The Regional Director in consultation
with the functional head (which has to be recorded in the PAR) will have Authority to moderate
PARs as under-All PARs which are graded A+ and D Cases referred by General Manager(P&A)
of the Regions, on the basis of monitoring.

ii. INSTITUTES - The Institutional heads will moderate PARs of executives up to E-3 level in
the same manner as Regional Director.

iii. ICICI HEADQUARTERS, DELHI - General Manager (HRG) will conduct an analysis of
the PAR Reports for all E-4 to E-6 level executives including Regions and Institutions and
approaches Director(HR) for correcting aberrations. Director(HR), on the basis of detailed
analysis, may moderate the final grade of individual PARs in consultation with Head of the
functional group which has to be duly recorded.

iv. EXECUTIVE COMMITTEE OF THE BOARD: - The Executive Committee of the Board
of Directors may moderate the final grade awarded to an executive belonging to E7 to E9.
[28]
The task of moderation by the above mentioned three levels, must be completed by 15th of July.

26. GUIDELINES FOR MODERATION:

A. DESIGNATED AUTHORITY:
It is considered difficult to design a moderation system through an empowered
Committee for final grade assigned to an Appraise executive by the Accepting Authority
because of a large variety of specialized cadres. In view of this, a Designated Authority
has been determined, instead of a Committee which will be required to seek
advice/guidance from Head of Professional Groups for each case, to be duly recorded, in
the PAR format itself. The Designated Authorities would be:
a. Regional Director - For Executives E-3 level in the Projects and the Regional
Offices.
b. Heads of Institutes - For Executives up to E-3 level working in the Institutes.
c. G.M.{R&P) - For Executives in ICICI Delhi Office (up to E-3 level).
d. Director(HR) - For E-4 to E-6 level executives in Projects, Regional Offices,
Institutes, ICICI offices , Delhi.
e. Chairman & Managing Director, ICICI - for E7 and above Executives.

B. NORMS
The Designated Authority for moderation has special responsibility to ensure that by and
large, the final grading of PARs of executives (E4 to E6) of various disciplines conform
to the broad pattern indicated below:-
Percentage of the total number of executives in the Business Group to be placed in
different grades (E-4 to E6 only) are indicated below:-
1. Exceptional (A+) 5% : 10%
2. Top Performer 20%
3. Very Good (B) 50% 70% - 85%
4. Adequate( C ) 20%
5. Inadequate (D) not more than 5%

[29]
N.B. The above percentage norms will be achieved over a period of three years i.e. there would
be gradual reduction each year for executives graded A+ (particularly those in grades E4 and
above, which at present is very high).
The Moderation authority will be assisted by the PAR monitoring system in data analysis
in achieving the above percentage distribution of PARs for a particular year.
During the initial years, say up to 1998, the moderation exercise may not conform to the
above percentages, for each Business Group, but it would be desirable to achieve overall
norms for the total strength.

27. COMMUNICATION OF LETTERS OF

APPRECIATION:
Letters of appreciation of performance may be communicated by the Chairman and
Managing Director/Director/Regional Director/Head of INSTITUTE at their discretion to
an executive who makes special contribution to the Organization. Copies of letters of
Appreciation and also details of Awards secured by the Appraise should be mentioned by
him while recording Self Appraisal.

28. DEFINITION OF ADVERSE ENTRY:

Adverse entry will be determined by the Accepting Authority only, within the area with
Red Border Line in the PAR form and will be communicated by the concerned Head of
P&A as per Time Schedule. It will mean (a) Award of grade of inadequate i.e. 'D' or (B)
any other specified factors, which militate against better performance. These aspects may
also be communicated to the concerned Executives by the Head of P&A concerned.
Any suggestion by way of counseling only on which Appraise may be required to make
special efforts to improve his performance/personality, is not to be considered as adverse.
This aspect need not be communicated to the Appraise unless there is a specific Adverse
Entry as suggested in Rule 22. However, the suggested improvement by the appraiser
could be taken by the Counseling Group to verbally communicate the observation of the
Appraisers, if considered desirable.
[30]
29. COMMUNICATION OF ADVERSE ENTRIES TO THE APPRAISEE:
i. Communication of Adverse Entry indicating 'Inadequate' for overall grading be issued to
the appraise if this is the final verdict of the Accepting and Moderation Authority. The
communication must be issued under the signature of concerned Head of Personnel of the
Region/Headquarters within 15 days of the receipt of PAR for the year ended 31st March.
ii. The Appraise may appeal against the adverse entry to the nominated
Appellate Authority within a month of the receipt of the communication. The appeal will
be disposed off within 30 days by the Appropriate Appellate Authority. The initial
examination of the representation will be done by the Reviewing Authority (not by the
reporting authority). In case the aggrieved executive's appeal is not disposed off by the
appropriate authority within 60 days the adverse entry will be deemed to be in 'abeyance'.
Director(HR) will hold an enquiry to ascertain the reasons for the inordinate delay on the
part of ICICI officials in dealing with employee's representation.
iii. The Appraisee has the option to suggest a change of place of posting, if he so desires to
enable him to perform better, but the final decision in this regard will be left with the
management.
iv. Expunging of adverse entries:
In cases where the competent authority on the basis of representation of an executive
against communication of 'Adverse Entries' expunges the observations / comments of the
Accepting Authority, the competent authority will have the option of assigning higher
grade (one stage above only). This higher grade, is not to be communicated to the
concerned executive while informing him of the disposal of his representation. However,
the justification may be recorded by the competent authority in case of up gradation.

30. COUNSELING SYSTEM:

It is proposed to adopt Counseling System for executives up to the level of E-5 at
Regional Offices, Institutes, Headquarters at Delhi. The counseling procedure will be as
under:-
[31]
 THE GROUP OF COUNSELLORS WILL COMPRISE:
Regional Director/Head of the Institution or his representative not below the rank of E-7
Head of the Personnel Division An outside Management expert selected by Director (HR)

COUNSELLING GROUP FOR EXECUTIVES FOR LEVEL E6 AND ABOVE:

Director(HR) will be the Chairman of this Group for executives of E-6 level and above
and will co-opt one of the concerned Functional Directors and an outside Management
Expert as member. It will operate in the same manner as suggested above for Regional
Offices.
The Counseling Group for executives belonging to E-7 and above grades will be
constituted by Chairman and Managing Director (who will also be the Chairman of the
Group) and it will function in the manner suggested above. Director(HR) and an outside
management expert will be members.
The Counseling Group will not review the final grading of the appraise, assigned to him
by Accepting/Moderation Authority.

31. BUSINESS OF THE COUNSELLING GROUP:

i. The Groups will consider the following cases:
a. An executive who has been finally graded 'Adequate' during the last two years in
succession.
b. An executive who has been finally graded Inadequate' during the year.
c. An executive for whom Counseling has been suggested by the Accepting Authority, and
may not belong to categories (a) and (b) above.
ii. The Counselors during the interview of the executives belonging to (a) and (b) categories,
will ascertain the reasons (specially situational), system constraints and the behavioral
dimensions of the executives.
[32]
iii. In case of category (c) executives, efforts will be made to develop awareness for
correcting personality traits.
The Counseling Group will send a report on each case to Director (HR) for information.

32. CUSTODY OF PARs

i. At present all Executive PARs are kept at ICICI.
ii. PAR Officer at Regional Director's Office and ICICI Headquarters, should normally have
all the fully complete PARs for the year ending 31s1 March, with them by 31st July.
The PAR Officer will inform the concerned appraise about the non-receipt of the PAR by
1st September, after he has obtained information from the Monitoring Authorities about
the status and whereabouts of PARs, which are not available in his office as indicated in
(ii) above.

iii. PAR Officers at Regional Offices, ICICI, Delhi will be required to respond to the enquiry
of an appraise executive about non-availability of PAR for a particular year with the designated
office within two weeks of such an enquiry.

33. APPLICATION OF RULES IN SUBSIDIARIES:

The ICICI PAR Rules will in principle be relevant for the subsidiary organizations. The
status of appraisers may be specifically determined by the Chief Executive of the
subsidiary organizations.

[33]
CHAPTER 2: COMPANY PROFILE

ICICI BANK COMPANY LIMITED

ICICI GROUP
[34]
In 1955, The Industrial Credit and Investment Corporation of India Limited (ICICI)

incorporated at the initiative of the World Bank, the Government of India and

representatives of Indian industry, with the objective of creating a development financial

institution for providing medium-term and long-term project financing to Indian

businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides

funding from the World Bank and other multi-lateral agencies, ICICI was also among the

first Indian companies to raise funds from international markets

OVERVIEW OF ICICI BANK

ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$

82 billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year

ended September 30, 2008. The Bank has a network of about 1,400 branches and 4,530

ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its specialised subsidiaries and affiliates in the areas of

investment banking, life and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches

in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai

International Finance Centre and representative offices in United Arab Emirates, China,

South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has

established branches in Belgium and Germany.

[35]
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

[36]
CHAPTER 3: RESEARCH OBJECTIVES AND METHODOLGY

RESEARCH METHODOLOGY

In order to carry out the proposed study data are too calculated and analysis is accordingly. there
are two main sources of data collection i.e. primary data and secondary data.
[37]
Primary data :- it mean collection of the information for the first time. In order to collect
such type of information QUESTIONNAIRES were constructed and information was collected
from the respondents.

Secondary Data :- In order to carry out my project successfully I have relied on the Secondary
data already available. Secondary data includes :-

 Annual reports of ICICI

 Website of ICICI i.e. www.icicibank.com
 Monthly publications of ICICI i.e. corporate finance report.
 Many publication available of ICICI.

RESEARCH DESIGN
Research design in the conceptual structure with in which research is conducted, its constitute
the blue print for the collection measurement and analysis of data for the preparation of effective
research.

 Sample size :- The simple size of 50 employee working in the service sector

 Sample procedure:- Simple random sampling is used as a means to collect

data from the target population.

 Data collection instrument :- The study is based upon the analysis and interpretation of
questionnaire and schedule prepared to gather information relevant to the awareness.
The survey instrument included 16 open ended question in the beginning of the questionnaire
the demographic data and information about the number of years employee are working in
ICICI is collected.
[38]
Research Method :-
 Literature survey
 Retrieving in house information (data collection )
 Feed back from various department .
 Interaction with personal associate.
 Interpretation

[39]
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION ,
FINDINGS AND RECOMMENDATIONS

DATA ANALYSIS AND INTERPRETATION

[40]
Analysis and Interpretation, as explained earlier, is done for each question separately. This is
followed by Analysis and Interpretation, parameter wise i.e. according to parameters that are
specified in the structure of questionnaire.

Note: The recommendations/ Suggestions for improvement have been made against those
questions /measuring attributes that are less than 60%

Q1. THE OBJECTIVES OF PRESENT APPRAISAL SYSTEM ARE CLEAR TO ME.

(EMPLOYEES):

No. of Responses :
Agree = 70%
Disagree = 30%

Findings:
Almost 70% of the respondents agree that the objectives of the present Appraisal System are
clear to them.

Q2. THE PRESENT PERFORMANCE APPRAISAL SYSTEM IS HELPFUL

FOR INDIVIDUAL DEVELOPMENT.

[41]
 No. of Responses:
Agree = 56%
Disagree = 44%
Findings:
Only 56% of the respondents agree that the present Performance System helps to identify
the area of individual development. Where as almost 44% do not agree with this
statement.

Recommendations:
Since almost 41% of the employees are dissatisfied with the present Appraisal System in
terms of helping the individual to identify the area of individual development, this
implies that the scheme is unable to serve the purpose of identification of the areas of
individual development.

Q3. THE PRESENT APPRAISAL SYSTEM IS ABLE TO MOTIVATE THE

EMPLOYEES.
No. of Responses:
Agree = 42%
Disagree = 58%

[42]
 Findings:
Only 42% of the respondents agree that the present Appraisal System is able to motivate
the employees and 58% disagree with this statement.

Recommendations:
For promoting an individual some extra motivational policies should be introduced.
Weightage should be given to PAR rating.

Q4. THE PARAMETERS OF PRESENT APPRAISAL SYSTEMS ARE SUFFICIENT

FOR APPRAISING THE EMPLOYEE.

No. of responses:
Agree = 44%
Disagree = 56%

Findings:
Only 44% of respondents agree that the parameters of present Appraisal System are
sufficient for appraising the employee.

[43]
 Recommendations:
As high percentage (almost 56%) of employees are dissatisfied with the given job
parameters for appraising an employee, so some more tangible parameters may be
required to be incorporated in the performance appraisal system to make it more
objective.

Q5. COUNSELING IS HELPFUL IN IMPROVING THE PERFORMANCE.

No. of responses:
Agree = 90%
Disagree = 10%

Findings:
Almost 90% of the respondents agree that counseling is helpful in improving the
performance.

[44]
Q6. THE PRESENT APPRAISAL SYSTEM IS ABLE TO IDENTIFY THE
STRENGTH AND WEAKNESS OF AN INDIVIDUAL.

No. of responses;
Agree = 54%
Disagree = 46%

Findings: Only 54% of the respondents agree that the present Appraisal System helps in
knowing the strength and weakness of an individual, and 46% of the respondents disagree with
this statement.

Recommendations:
Some space should be provided in the appraisal form where the employee can express his
strength and weakness in separate columns, or some discussion can be held between the
superior and subordinates. This will help the superior to recommend suitable training/
exposure to over come the weakness of his subordinate.

[45]
Q7. YOUR ORGANISATION GIVES YOU NON-MONETORY INCENTIVES ALSO
TO MOTIVATE YOU.

No. of responses :
Strongly agree = 13
Agree = 35
Slightly agree = -
Disagree = 02
Strongly disagree = -

Findings:
Only 96% of respondents agree that the company gives them non-monetary incentives to
motivate them, and 4% disagree on this aspect.

Q8. THE CONFLICTS RELATED TO PERFORMANCE APPRAISAL

SYSTEM IS RESOLVED PROMPTLY AND FAIRLY.

No. of responses:
Strongly agree = -
Agree = 15

[46]
 Slightly agree = 30
Disagree = 03
Strongly disagree = 02

Findings:
Only 30% of respondents agree that the conflicts related to Performance Appraisal
System are resolved promptly and fairly and on the contrary 70% of the respondents feels
that the conflicts related to Performance Appraisal System are not resolved promptly and
fairly.

Recommendations:
Certain procedure must be designed to remove the conflicts related to Performance
Appraisal. Appellate Authority should take the action regarding conflicts carefully, after
in depth study of the related matter

Q9. THE PRESENT APPRAISAL SYSTEM OF ICICI IS SATISFACTORY AS A

WHOLE.

No. of responses:
Strongly agree = -
Agree = 10
Slightly agree = 35
Disagree = 05
Strongly disagree = -

[47]
Findings: Only 20% of the respondents agree that the overall present Appraisal System of ICICI
is satisfactory. On the contrary 80% of the respondents feels that the overall present appraisal
system of ICICI is not satisfactory.

Recommendations:
A large number of employees are dissatisfied with the present Appraisal System of ICICI,
which is quite a serious problem, and it has to be meticulously tackled. A complete
review of the system is required. Measures, should be taken to remove the loopholes of
the system.

Q10. APPRAISAL SYSTEM IS THE BEST WAY TO INCREASE JOB

SATISFACTION AND JOB PERFORMANCE.

No . of responses :
Strongly agree = 08
Agree = 16
Slightly agree = 15
Disagree = 8
Strongly disagree = 3

[48]
Findings:
Only 48% of respondents agree that Appraisal System is the best way to increase job satisfaction
and job performance and 52% of the respondents are disagree with this statement.

Recommendations:
Job parameters should be made slightly challenging so that the individual derives professional
satisfaction out of it. Further the individual such as job rotation/job enrichment/job training
identifies the areas of development, etc are fulfilled.

Q11. WORKING ENVIRONMENT OF ICICI IS HELPFUL TO INDIVIDUAL

DEVELOPMENT.

No. of responses :
Strongly agree = 05
Agree = 15
Slightly agree = 20
Disagree = 10
Strongly disagree = -

Findings :
Only 40% of the respondents agree that the working environment of ICICI is helpful to
individual development and 60% of the respondents are disagree.

[49]
Q12. PERFORMANCE APPRAISAL PROCEDURE ALLOWS APPRAISER TO
EXPRESS HIS DEVELOPMENTAL NEEDS

No. of responses :
Strongly agree = 06
Agree = 24
Slightly agree = 12
Disagree = 08
Strongly disagree = -

[50]
 Findings:
Only 60% of the respondents agree by present Performance System allows Appraise to
express his developmental needs, so soon space should be provided to the Appraise in the
appraisal form so that they can express his developmental needs.

Q13. PERFORMANCE POLICY SHOULD BE CLEAR AND TRANCEPARENT.

No. of responses:
Strongly agree = 28
Agree = 10
Slightly agree = 12
Disagree = -
Strongly disagree = -

Findings:
About 76% employees are agreeing to that the Performance Appraisal System should be
clear and transparent.

[51]
Q14. PERFORMANCE APPRAISAL POLICY SHOULD BE EVALUATED AFTER
A.FIXED DURATION.

No. of responses :
Strongly agree = 30
Agree = 10
Slightly agree = 10
Disagree = -
Strongly disagree = -

Findings:
About 80% of the respondents agree that the Performance Appraisal policy should be
evaluated after a fixed duration.

[52]
Q15. EMPLOYEES SHOULD HAVE THE RIGHT TO KNOW ABOUT HIS PERFORMANCE

APPRAISAL REPORT AND DECISION OVER THEIR PERFORMANCE WITH DETAILED

REASONS.

No. of responses:
Strongly agree = 25
Agree = 15
Slightly agree = 08
Disagree = 02
Strongly disagree = -

Findings:
About 80% respondents agreed with the fact that employees should have the right about
his PAR Report.

[53]
Q16. TRANSPARENCY IN PERFORMANCE APPRAISAL CAN DEVELOP THE
LOYALTY IN EMPLOYEES.

No. of responses:
Strongly agree = 12
Agree = 20
Slightly agree = 10
Disagree = 8
Strongly disagree = -

Findings:
About 64% of the respondents agree that PAR system can create loyalty in employees.

[54]
CHAPTER 5: CONCLUSION

CONCLUSION

[55]
 The basic lacuna in the scheme observed by us is due to the fact that job parameters are
not explicitly laid sown in the beginning of the year or through mutual consent between the
appraiser and the appraise, which has been the central consideration in the existing scheme.

Also the present scheme is not at all transparent, which is unable to motivate the
employee, as he is unaware of his ACR grading. For this, a mechanism should be introduced in
the system to make the individual aware of his ACR grading of the precious year, to provide him
an opportunity for the future improvement and development.

Also counseling should be made effective by involving the individual to suggest

measures for solving his problems and developmental needs. Counseling should be held
regularly at fix intervals for the employees having been awarded adequate and inadequate
grading.

The performance appraisal system at ICICI has certain loopholes which need to be
eliminated for the efficient and effective working of the employees and also for the better
overall growth of the organization on the whole

[56]
 ANNEXURE:
(a) Questionnaire

(b) Bibliography

[57]
 QUESTIONNAIRE
PERFORMANCE APPRAISAL SYSTEM
Your personal details: -

NAME:

DESIGNATION:

NO OF WORKING YEARS IN ICICI:

SI. Questions Strongly Agree Slightly Disagree Strongly

No. agree agree disagree

1. The objectives of the

present appraisal system
are clear to me.

2. The present appraisal

system is helpful for
individual development.

3. The present appraisal

system is able to
motivate the employees.

4. The parameters of
present appraisal system
are sufficient for
appraising the employee.

5. Counseling is helpful in
improving the
performance.

SI. "Questions Strongly Agree Slightly Disagree Strongly

No. agree agree disagree

6. Present appraisal system

is able to identify the
strength and weaknesses
of an individual.

[58]
7. Your organization gives
you non-monetary
incentives also to
motivate you.

8. The conflicts related to

performance appraisal
arc resolved promptly
and fairly.

9. The present appraisal

system of ICICI is
satisfactory as a whole.

10. The appraisal system is

always the best way to
increase job satisfaction
and job performance.

11. Working environment of

ICICI is .helpful to
individual development.

12 Performance Appraisal
procedure allows
Appraiser to express his
developmental needs.

SI. "Questions Strongly Agree Slightly Disagree Strongly

No. agree agree disagree

13. Performance appraisal

policy should be clear
and transparent.

14. Performance policy

should be evaluated after
a fixed duration.

[59]
15. Employees should have
the right to know about
his performance
appraisal report and
decision over them with
detail reasons.

16. Transparence in
performance appraisal
system can develop the
loyalty in employees.

Your overall feedback: -

1. What is the limitation of present performance appraisal system of ICICI?

2 What improvement according to you should be incorporated in the system?

SCORE SHEET

A. Enter your responses, below after reversing (*) marked ones.

Original response 0 1 2 3 4
Reversed responses 4 3 2 1 0

Item Response Item Response Item Response

*1. ..... 2. ..... *3. .....

*4. ..... *5. ..... *6. .....
*7. ..... 8. ..... 9. .....
*10. ..... *11. ...... *12. .....
13. ..... 14. ..... *15. .....

Total ….. ….. …..

Self-disclosure Openness to Perceptiveness
Feedback

[60]
 BIBLIOGRAPHY

For the Project Report Study of Efficiency of Performance Appraisal program in ICICI, I have
consulted the following books and website

Books:-
- HR Manual
- Aswatthappa ‘HRM’ 2007

Report :-
ICICI Annual Reports

Website:-
www.icicibank.com
www.performane-appraisal.com
www.wikipedia.com

[61]