INDEX

1) Executive Summary
2) Methods Of Performance Appraisal
3) Concept
4) Company Profile
5) Introduction
6) Benefits
7) Characteristics
8) Performance Appraisal For Employee Point Of View
9) Advantage & Disadvantage
10) Drawback
11) Role In Business
12) Current Scenario
13) Future Prospects
14) Conclusion
15) Bibliography

1
 EXECUTIVE SUMMARY

Human resource management , in the séance of getting things done through people , is an
essential part of every manager’s responsibility,’but many organization find it
advantageous to specialist division to provide an expert service dedicated to ensuring
that the human resource fumction is performed efficiently.

“People are our most valuable asset” is a cliché , which no member of any senior
management team would disagree with. Yet , the reality for many organization is that
their people remain undervalued, under trained and underutilized.

The market place for talented, skilled people is competitive and expensive. Taking on
new staffcan be disruptive to existing employees. Also , it takes time to develop ‘cultural
awaereness’, product/ process/ organization knowledge and experience for new staff
members.

Functions of Human Resource Management

Following are the varios functions of H.R.M. that are essential for the effective
functioning of the organization:

1. Recruitment

2. Selection

3. Induction

4. Performance appraisal

5. Training & development

What is “Performance appraisal”?

A performance appraisal (PA), also referred to as a performance review, performance

evaluation, (career) development discussion, or employee appraisal is a method by which
the job performance of an employee is documented and evaluated. Performance

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appraisals are a part of career development and consist of regular reviews of employee
performance within organizations.

A performance appraisal is a systematic general and periodic process that assesses an

individual employee's job performance and productivity in relation to certain pre-
established criteria and organizational objectives. Other aspects of individual employees
are considered as well, such as organizational citizenship behavior, accomplishments,
potential for future improvement, strengths and weaknesses, etc

Performance Appraisal is the systematic evaluation of the performance of employees and

to understand the abilities of a person for further growth and development. Performance
appraisal is generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and
plans.

2. The supervisor analyses the factors behind work performances of employees.

3. The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage

structure, salaries raises, etc.

2. To identify the strengths and weaknesses of employees to place right men on

right job.

3. To maintain and assess the potential present in a person for further growth and
development.

4. To provide a feedback to employees regarding their performance and related

status.

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 5. To provide a feedback to employees regarding their performance and related
status.

6. It serves as a basis for influencing working habits of the employees.

STEPS INVOLVED IN PROCESS OF PERFORMANCE APPRAISAL

The six steps involved in process of performance appraisal are as follows: 1. Establish
Performance Standards 2. Communicate Performance Expectation to Employee 3.
Measure Actual Performance 4. Compare Actual Performance with Standards 5. Discuss
the Appraisal with the Employee 6. Initiate Corrective Actions.

1. Establish Performance Standards:

The appraisal process begins with the establishment of performance standards. The
managers must determine what outputs, accomplishments and skills will be evaluated.
These standards should have evolved out of job analysis and job descriptions.

These performance standards should also be clear and objective to be understood and
measured. Standards should not be expressed in an articulated or vague manner such as
“a good job” or “a full day’s work” as these vague phrases tells nothing.

2. Communicate Performance Expectations to Employees:

Once the performance standards are established, this need to be communicated to the
respective employees so that they come to know what is expected of them. Past
experience indicates that not communicating standards to the employees compounds the
appraisal problem.

Here, it must be noted that mere transference of information (relating to performance

standards, for example) from the manager to the employees is not communication It
becomes communication only when the transference of information has taken place and
has been received and understood by the employees’.

The feedback from the employees on the standards communicated to them must be
obtained. If required, the standards may be modified or revised in the light of feedback

4
obtained from the employees. It is important to note that communication is a two-way
street.

3. Measure Actual Performance:

This is the third step involved in the appraisal process. In this stage, the actual
performance of the employee is measured on the basis of information available from
various sources such as personal observation, statistical reports, oral reports, and written
reports.

Needless to mention, the evaluator’s feelings should not influence the performance
measurement of the employee. Measurement must be objective based on facts and
findings. This is because what we measure is more critical and important to the
evaluation process than how we measure.

4. Compare Actual Performance with Standards:

In this stage, the actual performance is compared with the predetermined standards. Such
a comparison may reveal the deviation between standard performance and actual
performance and will enable the evaluator to proceed to the fifth step in the process, i.e.,
the discussion of the appraisal with the concerned employees.

5. Discuss the Appraisal with the Employee:

The fifth step in the appraisal process is to communicate to and discuss with the
employees the results of the appraisal. This is, in fact, one of the most challenging tasks
the manager’s face to present an accurate appraisal to the employees and then make them
accept the appraisal in a constructive manner.

A discussion on appraisal enables employees to know their strengths and weaknesses.

This has, in turn, impact on their future performance. Yes, the impact may be positive or
negative depending upon how the appraisal is presented and discussed with the
employees.

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6. Initiate Corrective Action:

The final step in the appraisal process is the initiation of corrective action when it is
necessary. The areas needing improvement are identified and then, the measures to
correct or improve the performance are identified and initiated.

6
METHODS OF PERFORMANCE APPRAISAL
Man to man comparison

Man-to-Man Comparison, a performance evaluation criteria was used first by US Army

during World War-1. In this method, certain personality factors such as leadership,
initiative, dependability, and soon, arc selected for purposes of analysis. A scale is
developed for each factor. Instead of comparing a man It) another, personnel are
compared to key men, one factor at a time. Thus, a scale of men is created for each
selected factor. This system of measurement is utilised today in job evaluation being
known as the 'factor comparison' system. Though, it is highly useful in measuring job, it
has very limited use in measuring people.

Graphic Rating Scale

Graphic Rating Scale is a type of performance appraisal method. In this method traits or
behaviours that are important for effective performance are listed out and each employee
is rated against these traits. The rating helps employers to quantify the behaviours
displayed by its employees.

Forced Choice Appraisal

It is a method of performance appraisal in which the rater has to make a forced choice
between the available characteristics, about the employees. It is in the form of a survey
questionnaire. In this method, different categories of performances are set; the proportion
in each category need not be symmetrical. 

Many companies use this method of appraisal as it is considered to be a less biased way
of appraising an employee. The supervisor doesn’t have much of control over deciding
whether the performance of an employee is good or bad.

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Appraisal by results-
 Management by Objectives (MBO)
 MBO is used to measure the performance of the managers.
 Here the following process is used :-
 The superior and subordinate managers jointly fix common objectives.
 The superior and subordinate managers jointly make plans for achieving the
objectives.
 The subordinate manager implements the plans.
 Then the actual performance of the subordinate manager is compared with the
objectives and the deviations are found out.
 Necessary Corrective Action is taken or the plans are modified.
 MBO is a very good method of performance appraisal because the subordinates
are involved in their appraisal.

2. Assessment Centres

This method is mostly used for selecting employees and managers. However, now-a-
days this method is used for performance appraisal. It is used to decide which manager to
promote to a higher level. The ratees are given many psychological tests, management
games, oral presentations and other exercises. They are asked questions and they are
judged by the raters.

3. Behavioral Anchored Rating Scales (BARS)

BARS method is a variation of simple graphic scale method. Here, the behaviour or
attitude of the employee towards his job is rated. Some employees have a positive
attitude towards their job. They continuously try to upgrade (improve) their knowledge
and skills. However, some employees have a negative attitude towards their job. They do
not try to upgrade and update their knowledge and skills So, the employees can be
divided into two groups based on their behaviour towards their job.

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4. Role Analysis

The role analysis method involves two parties, viz., the focal role and the role set
members. The focal role is the ratee. That is, he is a manager whose performance is
appraised. The role set members are the raters. That is, they are the managers who come
in close contact with the focal role while he is doing his job. The role set members will
judge the performance of the focal role. As per their judgements, the focal role will make
changes in his performan

5. Human Resource Accounting (HRA)

Human Resource Accounting HRA measures the cost and contribution of human
resources in the organisation. The cost includes the cost of recruitment, selection,
induction, training, salaries and other facilities, etc. Contribution is the money value of
the service of the employees. This service is measured by labour productivity. If the
contribution is more than the cost, then the employee performance is positive and vice-
versa.

6. Psychological Appraisal Method

Psychological appraisal is done to find out the conceptual skills, human skills, technical
skills, etc. of the employee. It is done by different methods, such as in-depth interviews,
psychological tests, consultations and discussions with the employees, superiors,
subordinates and others, who are working with the employee.

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CONCEPT OF PERFORMANCE
APPRAISAL

Performance appraisal is the process of obtaining, analyzing and recording information

about the relative worth of an employee. The focus of the performance appraisal
is measuring and improving the actual performance of a employee and also the
future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources,

“performance appraisal is the systematic, periodic and an impartial rating of an
employee’s excellence in the matters pertaining to his present job and his potential for a
better job.” Performance appraisal is a systematic way of reviewing and assessing the
performance of an employee during a given period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the
achievements of the overall organizational goals.

Know Challenges in Performance Appraisal

By focusing the attention on performance, performance appraisal goes to the heart of

personnel management and reflects the management’s interest in the progress of the
employees.

Objectives of Performance appraisal:

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

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

 To help the management in exercising organizational control.

 Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

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

 To provide feedback to the employees regarding their past performance.

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

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

performed by the employees.

 To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development. To reduce
the grievances of the employees.

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 COMPANY PROFIL
Company Overview

Big Bazaar Pvt., Ltd operates a hypermarket that offers fashion and general
merchandise such as home furnishings, utensils, crockery, cutlery, sports goods,
electronics, toys, footwear, men's and women's apparel, accessories such as sunglasses,
watches, and handbags, luggage, fruits, vegetables, and stationary products. The
company sells its products through its retail stores located nationwide. Big Bazaar Pvt.,
Ltd was founded in 2001 and is based in Mumbai, India. The company operates as a
subsidiary of Future Retail Limited.

Future Group
Type Private
Industry retailing, insurance, logistics,media
Founder Kishore Biyani (CEO)
Headquarter Mumbai, Maharashtra, India
s
Products Integrated foods and otherFMCGs
Services Supermarkets, hypermarkets, discount stores, insurance, logistics, media
Net income ₹200.6018 billion(US$3.0 billion) as of March 2013 [1]
Number of 35,000[2]
employees
Divisions Future Retail Ltd.(BSE: 523574,NSE: FRL), Future Lifestyle Fashion
Ltd., Future Consumer Enterprise Ltd., Future Innoversity Ltd., Future
Supply Chains Ltd., Future Brands Ltd., Future Capital Holdings Ltd.
Website www.futuregroup.in
www.futurebazaar.com

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FUTURE GROUP
Future Group is an Indian private conglomerate, headquartered in Mumbai. The
company is known for having a significant prominence in Indian retail and fashion
sectors, with popular supermarket chains like Big Bazaar and Food Bazaar, lifestyle
stores like Brand Factory, Central etc. and also for having notable presence in integrated
foods and FMCG manufacturing sectors. Future Retail (initially Pantaloons Retail India
Ltd (PRIL)) and Future Lifestyle Fashions, two operating companies of Future Group,
are among the top retail companies listed in BSE with respect to assets,[3] and
in NSE with respect to market capitalization.[4]

On May 2012, Future Group announced 50.1% stake sale of its fashion
chain Pantaloons to Aditya Birla Group in order to reduce its debt of around ₹80
billion (US$1.2 billion).[5][6] To do so, Pantaloons fashion segment was demerged from
Pantaloons Retail India Ltd; the latter was then merged to another subsidiary—Future
Value Retail Ltd—and rechristened Future Retail Ltd

Similar Private Companies By Industry

Company Name Region

Aadhaar Wholesale Trading and Distribution Limited Asia

Ace Seafood Bazaar Pvt. Ltd. Asia

Allfresh Supply Management Private Limited Asia

AMRIT Agro Industries Ltd. Asia

AmrutDhara Water Services Private Ltd Asia

13
14
 INTRODUCTION
The history of performance appraisal is quite brief. Its roots in the early 20th century can
be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful,
for the same may be said about almost everything in the field of modern human
resources management. 
As a distinct and formal management procedure used in the evaluation of work
performance, appraisal really dates from the time of the Second World War - not more
than 60 years ago. 
Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of
things historical, it might well lay claim to being the world's second oldest profession! 
There is, says Dulewicz (1989), "... a basic human tendency to make judgements about
those one is working with, as well as about oneself." Appraisal, it seems, is both
inevitable and universal. In the absence of a carefully structured system of appraisal,
people will tend to judge the work performance of others, including subordinates,
naturally, informally and arbitrarily. 
The human inclination to judge can create serious motivational, ethical and legal
problems in the workplace. Without a structured appraisal system, there is little chance
of ensuring that the judgements made will be lawful, fair, defensible and accurate. 
Performance appraisal systems began as simple methods of income justification. That is,
appraisal was used to decide whether or not the salary or wage of an individual employee
was justified. 
The process was firmly linked to material outcomes. If an employee's performance was
found to be less than ideal, a cut in pay would follow. On the other hand, if their
performance was better than the supervisor expected, a pay rise was in order. 
Little consideration, if any, was given to the developmental possibilities of appraisal. If
was felt that a cut in pay, or a rise, should provide the only required impetus for an
employee to either improve or continue to perform well. 
Sometimes this basic system succeeded in getting the results that were intended; but
more often than not, it failed. 
For example, early motivational researchers were aware that different people with
roughly equal work abilities could be paid the same amount of money and yet have quite
different levels of motivation and performance.

15
These observations were confirmed in empirical studies. Pay rates were important, yes;
but they were not the only element that had an impact on employee performance. It was
found that other issues, such as morale and self-esteem, could also have a major iAs a
result, the traditional emphasis on reward outcomes was progressively rejected. In the
1950s in the United States, the potential usefulness of appraisal as tool for motivation
and development was gradually recognized. The general model of performance
appraisal, as it is known today, began from that time. Performance Appraisal is the
process of identifying, measuring and developing human performance in organizations
and tries to:
Give feedback to employees to improve subsequent performance.

 Identify employee training needs.

 Document criteria used to allocate organizational rewards.

 Form a basis for personnel decisions-salary (merit) increases, disciplinary

actions, etc.

 Provide the opportunity for organizational diagnosis and development

 Facilitate communication between employee and administrator.

 Clearly understand their roles in the organization

 Perform effectively in the role against well define objectives

 Develop their skills, knowledge and capabilities both to their and the
organization’s advantage

 Seek and achieve a growth of their career in the organization

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 BAENFIT OF PERFORMANCE
APPRIASAL
What are the Benefits of Performance Appraisals ? 
 Elevated Employee Satisfaction and Retention
 Stronger Planning for Employee Training and Career Development
 Improved Strategic Recruiting 
 Simplified, Clarified Manager/Employee Expectations and Communication
 Predictable, Targeted Employment/Management Development Goals
 Raised Employee Motivation Using Team-Centric Organizational Support
 Enhanced Documentation and Standardization
 Upgraded Management Performance and Development

The performance appraisal is an essential part of the human resources department's

contribution to an organization. An effective appraisal may not only eliminate behavior
and work-quality problems, it can motivate an employee to contribute more. Often, a
company will ask its employees to perform "360-degree feedback" that assesses peers
and subordinates as well as supervisors and management. Regardless, the opportunity to
receive -- and give -- constructive criticism shouldn't be ignored.

Improving Communication

All too often, employees and managers don't get along and can't understand why.
Problems that stem from a lack of communication can sometimes be resolved with a
performance appraisal. If the appraisal is used as an opportunity to describe the criteria
on which performance is judged -- using meaningful and relevant examples -- then the
employee will walk away from the meeting with a better understanding of how to best
perform his job. For example, "John, when I say you need to be more customer-focused,
what I really want is to see you greet the customers with a smile when they enter the
store, and ask how you can help."

Providing a Career Path

The performance appraisal is the perfect opportunity to address long-term goals that may
not be on the everyday to-do list. Not only does this provide the employee with an

17
opportunity to be of greater use to an organization, the employee feels pleased and
valued. Lighting the way toward a successful career path inspires loyalty and stability
and can improve the bottom line, especially when the employee's first concern is the
health of the business, and subsequently, her career.

Encouraging Good Work and Improvement

Celebrating a job well-done is the easy part of the performance appraisal. Noting areas of
improvement is not so easy. Nevertheless, no one is perfect, and the performance
appraisal is an ideal time to diplomatically highlight areas that need improvement. Even
the most valuable employee could benefit from additional training, while those who are
on the cusp of dismissal need the heads-up. Be specific by providing examples and
clearly explain what needs to occur to turn things around. Showing an employee that you
care enough about them by taking the time to work with them may make even the most
hardened employee feel better.

Improving Decision-Making Ability

When a company has detailed information on employee performance, business decisions

become easier. Filling open positions with existing staff strengthens the organization and
promotes loyalty. Knowing which employees display what strengths improves the speed
with which projects can be assigned. Appraisals also provide a framework when making
decisions about compensation -- and layoffs. If the organization becomes the unfortunate
party to a lawsuit, the performance appraisal can refute or support claims. As a result, the
effective use of performance appraisals helps an organization operate efficiently and with
focus

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 CHARACTERISTICS
Appraisal system to be effective should possess the following characteristics:

1. Clear Objectives:

The objectives of performance appraisal should be clear, specific, timely and open. The
appraisal system should be fair and beneficial to both the individual employee and the
organization should be linked with other subsystems of personnel management.

2. Reliable and Valid:

Appraisal system should provide consistent, reliable and valid information and date.
Appraisals should measure what they are supposed to measure. For example, if the
objective of appraisal is to show potential of an employee for promotion, it should supply
the date relating to potentialities of the employee.

3. Standardisation:

The appraisal form, procedures and rules should be standardised. There should be well-
defined performance criteria and standards. Employees should be made fully aware of
these standards as appraisal decisions affect all employees of the group.

4. Training:

Evaluators should be given training in procedures and principles of appraisal. They

should be provided with knowledge and skills in designing appraisals, conducting post
appraisal interviews and correcting rating errors.

5. Fob Relatedness:

The appraisal system should focus attention on job-related behaviour and performance. It
should provide information on job related activities and areas.

6. Mutual Trust:

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Before introducing the appraisal system, a climate of mutual trust, cooperation and
confidence should be created in the organisation. Under the system, the employees
should be treated in a supportive manner.

7. Feedback and Participation:

The ratings should be communicated to both the employees and the raters. The appraisal
system should be open and participative. The employees should get information on their
performance. The system should involve employees in the goal setting process.

8. Help Focus:

Appraisal should not judegemental. It should not be purely control- oriented. The
evaluator should also play the role of coach and counsellor. He should- help people reach
their full potential. The overall purpose of appraisals should be developmental.

9. Recognition of Differences:

Organisation differs in terms of work, size, resources, needs and environment. Hence, the
appraisal system must be designed to meet the needs of particular organisation. It should
be specific and tailor - made for the particular company.

10. Post Appraisal Interview:

An appraisal system is only as effective as the manager is iii communications. Hence, an

interview with the employee should be arranged after appraising his performance. It will
help to know the difficulties of work and training needs of employees. In interview,
problem solving approach should be adopted and counseling should be provided for
improving performance.

20
 PERFORMANCE APPRAISAL FROM
EMPLOYEE POINT OF VIEW
"A performance appraisal is meant to help employees realise their strengths and
shortcomings and receive a compensation accordingly."

Facts [+]

A recent survey of more than 2,000 full-time employees by Adecco Staffing of

North America found that less than half of workers say managers take performance
reviews seriously, and even fewer say they receive constructive feedback.

How often should appraisals take place?

Performance appraisal in any organisation will be done at a specific period, like

annually or half yearly or quarterly or maybe regularly. It all depends upon the nature or
size of the organisation, and sometimes necessity of the managers decide the period of
performance appraisal of their employees. Most of organisations are insisting employee
appraisal should be a continuous process and should not be limited to a formal review
once a year. The frequency of formal appraisals will depend on the nature of the
organization and on the objectives of the system. For example, in a high technology
organisation objectives may be changing quickly so that formal appraisals may need to
be carried out more than once a year. In an environment which is less subject to change,
annual appraisals may be sufficient. Most employees receive a formal appraisal annually,
although more frequent appraisals are often needed for new employees, for longer
serving staff who have moved to new posts or for those who are below acceptable
performance standards.

Annual performance appraisal system of its employees. Instead company

management has introduced regular feedback method for reviewing regular performance
of its employees rather than waiting till year ending for performance review. Company
managers feel regular feedback will improve the performance of employees as they come
to know their regular performance, further managers are considering these regular
feedback in the matter of salary hikes and promotions.

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Mid-year appraisals good for staff motivation

Appraisals may no longer exist as once-a-year phenomena. A growing number of

companies are opting for mid-year - and even quarterly - reviews. The main argument in
favour of this trend is that it may not be wise for a company to wait as long as one year
to assess employee performances.

Whether it is to reward employees for something they did two quarters back or
bringing them back on the path of growth, in case they have strayed, companies have
realized the earlier they do so, the better. Organizations like Deutsche Bank and Akzo
Nobel India have been following mid-term performance reviews for a few years now,
while the list of other companies following this model appears to be growing. Nivea
India is among those which have recently adopted the practice. mid-term reviews more
robust. The move is aimed at making managers and employees more accountable. Bank
is currently conducting a communication and education exercise to train and convey to
all our employees about the new performance system.At Deutsche Bank, performance
standards are being made more objective so that they are easy to understand and
implement.

"The HR team conducts workshops with managers before the mid-year and year-
end cycle based on the performance and development dialogue process. The mid-year
review is not about ratings but is geared at reviewing and providing guidance to the
employees. The year-end process, on the other hand, focuses more on self assessment
and involves feedback by both primary and secondary reviewer.

HCL Technologies is looking at a unique experiment this year - whether

appraisals could be based on feedback from peers and subordinates and if the same
practice could be extended to rewards and recognitions as well. The company is looking
at piloting this experiment with a small group. The company, however, didn't elaborate
on details as the process is in early stages.

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 ADVANTAGE AND DISADVANTAGE

Advantages of performance appraisals:

 They provide a document of employee performance over a specific period of

time.
 They provide a structure where a manager can meet and discuss performance
with an employee.
 They allow a manager the opportunity to provide the employee with feedback
about their performance and discuss how well the employee goals were
accomplished.
 They provide a structured process for an employee to clarify expectations and
discuss issues with their manager.
 They provide a structure for thinking through and planning the upcoming year
and developing employee goals.
 They can motivate employees if supported by a good merit increase and
compensation system.

Disadvantages of performance appraisals:

 If not done right, they can create a negative experience.

 Performance appraisals are very time consuming and can be overwhelming to
managers with many employees.
 They are based on human assessment and are subject to rater errors and biases.
 Can be a waste of time if not done appropriately.
 They can create a very stressful environment for everyone involved.

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 DRAWBACKS OF PERFORMANCE
APPRAISAL
Businesses use performance appraisals as tools to determine how effectively employees
achieve goals, grow in job scope and communicate with others. Managers can choose
from a variety of appraisal schemes and, when used properly, these can prove very
effective in gauging employee performance. Despite this, performance appraisal systems
are not without problems and drawbacks. Evaluators must use these tools properly and
fairly to avoid the pitfalls and possible push-back from employees.

Limited Perspective

Traditional performance review tools involve only the manager’s view of his
subordinate’s performance. If the manager supervises several direct reports and also
reports to his own supervisor, he probably has a limited amount of time to actually
observe his employee in action and see how he overcomes problems and roadblocks to
achieving objectives as well as how effectively he communicates with others. Many
companies overcome this drawback by employing peer review-based appraisal tools that
take into account the employee’s working relationship with customers, coworkers,
vendors, direct reports and supervisors. By collecting the views of these other frequent
employee contacts, the scope of the evaluation widens allowing for more objective
assessment of performance.

Erosion of Motivation

Companies that use performance appraisals as the sole tool when doling out pay
increases run the risk of added conflict between supervisors and subordinates, and
eroding employee motivation to improve. The conflict arises because subordinates want
the largest pay increase possible, but managers often have limited funds for these
increases. The manager wants the subordinate to improve the weak areas of his
performance. Improvement requires the manager and employee work together, but when
pay is tied to performance appraisals, employees often focus on their strong behaviors
rather than trying to improve their weak points. This can lead to intense arguments over

24
the appraisal and allotted pay increases, eroding employee motivation and the manager-
subordinate relationship.

Time Consuming

Many appraisal tools that offer the most objective view of an employee’s performance
are also the most time consuming. One of the most popular peer-review models, the 360-
degree feedback appraisal model, requires training of evaluators and careful crafting of
customized survey questions. The evaluation process itself can take up two or more
weeks at a time, depending on the size of the company.

Subject to Appraiser Bias

Managers bring their own biases and subjective notions to the appraisal process. Bias can
also skew the results of the more objective peer review-based appraisal schemes, causing
employees to lose faith in the system and not to see them as credible measures of
performance. Employees must see these systems as fair and just for the process to work
properly.

25
 QUOTES
1. “In business, the idea of measuring what you are doing, picking the
measurements that count like customer satisfaction and performance… you thrive
on that.”

– Bill Gates

2. “Trust gives you the permission to give people direction, get everyone aligned,
and give them the energy to go get the job done. Trust enables you to execute with
excellence and produce extraordinary results. As you execute with excellence and
deliver on your commitments, trust becomes easier to inspire, creating a flywheel
of performance.”

– Douglas Conant

3. “When you’re a manager, you work for your company. When you’re a leader,
your company works for you.”

– Stan Slap

4. “To win in the marketplace you must first win in the workplace.”

– Doug Conant

5. “There are only three measurements that tell you nearly everything you need to
know about your organization’s overall performance: employee engagement,
customer satisfaction, and cash flow. It goes without saying that no company, small
or large, can win over the long run without energized employees who believe in the
mission and understand how to achieve it.”

– Jack Welch

6. “Employees engage with employers and brands when they’re treated as humans
worthy of respect.”

– Meghan M. Biro

7. “Always treat your employees exactly as you want them to treat your best
customers.”

– Stephen R. Covey

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8. “Research indicates that workers have three prime needs: Interesting work,
recognition for doing a good job, and being let in on things that are going on in the
company.”

– Zig Ziglar

9. “Appreciate everything your associates do for the business. Nothing else can
quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re
absolutely free and worth a fortune.”

– Sam Walton

10. “I consider my ability to arouse enthusiasm among men the greatest asset I
possess. The way to develop the best that is in a man is by appreciation and
encouragement.”

– Charles Schwab

11. ”I have yet to find a man, however exalted his station, who did not do better work
and put forth greater effort under a spirit of approval than under a spirit of
criticism.”

– Charles Schwab

12. ”There is something that is much more scarce, something rarer than ability. It is
the ability to recognise ability.”

– Robert Half

13. “Given the right circumstances, from no more than dreams, determination, and
the liberty to try, quite ordinary people consistently do extraordinary things.”

– Dee Hock

14. “If my future were determined just by my performance on a standardized test, I

wouldn’t be here. I guarantee you that.”

– Michelle Obama

15. “It is no use saying “we are doing our best.” You have to succeed in doing what
is necessary.” – Winston Churchill

16. “Your performance depends on your people. Select the best, train them and back
them. When errors occur, give sharper guidance. If errors persist or if the fit feels

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 wrong, help them move on. The country cannot afford amateur hour in the White
House.”

– Donald Rumsfeld

17. “To handle yourself, use your head. To handle others, use your heart.”

– Eleanor Roosevelt

18. “Being in power is like being a lady. If you have to tell people you are, you
aren’t.”

– Margaret Thatcher

19. “Leadership is the ability to get people to do what they don’t want to do and like
it.”

– Harry Truman

20. “The greatest leader is not necessarily the one who does the greatest things. He is
the one that gets the people to do the greatest things.”

– Ronald Reagan

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 ROLE IN BUSINESS
Why do organizations do performance appraisals?

There are many varying opinions on the subject of performance appraisals and why they
are done.  Some organizations do performance appraisals because they feel obligated to
do them – because everyone else does.

Some organizations do performance appraisals to make sure they have a piece of paper
in the employee’s file – in case they ever need to do corrective action.

But successful organizations understand the importance of incorporating performance

appraisals into their performance management process and strategy.

How Performance Appraisal is Helpful for Business

Improvement

Function
Performance appraisals help supervisors and employees to identify strengths and
weaknesses of employee performance. They offer an opportunity for supervisors and
employees to discuss the employee’s goals for himself, the supervisor’s goals for the
larger department or organization and ways that the employee and the supervisor can
work together by further developing skills and strengths necessary to reach these goals.

Significance
The best performance appraisals create a link between individual employee expectations
and how the employee’s work contributes to the larger organization’s success. They
clarify expectations that the supervisor has for the employee and help the employee
prioritize his duties. Ideally, performance appraisals open the lines of communication
between supervisors and employees.

Benefits
Performance appraisals benefit the company as well as individual employees. They
increase rapport between management and employees, increase job satisfaction and
improve employees’ sense of loyalty toward the company. Performance appraisals assist

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the employee in seeing how her role in the organization contributes to the company’s
overall success, thus increasing employee morale. All of these lead to higher productivity
among employees, which improves organizational productivity.

Considerations
Performance appraisals should not be used as substitutes for consistent, open
communication. According to Carter McNamara of Authenticity Consulting LLC,
“Nothing should be surprising to the employee during the appraisal meeting. Any
performance issues should have been addressed as soon as those issues occurred.” After
a performance appraisal, make sure to check in with the employee consistently to discuss
his progress toward the goals set during the meeting. This will help keep employees
motivated.

Expert Insight
McNamara recommends starting the performance appraisal meeting by making it clear
that the goal of the appraisal is to exchange ideas and work together to come up with an
action plan for meeting the employee’s and the organization’s goals. He suggests
allowing the employee to offer input first, responding with your own input and then
discussing any areas of disagreement. “Attempt to avoid defensiveness … Discuss
behaviors, not personalities,” says McNamara. He also recommends trying to end the
meeting on a positive note.

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 CURRENT SCENARIO
Today’s working climate demands a great deal of commitment and effort from
employees, who in turn naturally expect a great deal more from their employers.
Performance appraisalis designed to maximize effectiveness by bringing participation to
more individual level in that it provides a forum for consultation about standards of
work, potential, aspirations and concerns. It is an opportunity for employees to have
significantly greater influence upon the quality of their working lives. In these times of
emphasis on “quality”, there is a natural equation: better quality goods and services from
employees who enjoy better quality “goods and services” from their employers.
Performance appraisal must be seen as an intrinsic part consuming addition to them. It is
about improving performance and ultimate effectiveness. Performance appraisal is a
systematic means of ensuring that managers and their staff meet regularly to discuss post
and present performance issues and to agree what future is appropriate on both sides.
This meeting should be based on clear and mutual understanding of the job in question
and the standards and outcomes, which are a part of it. In normal circumstances,
employees
IMPORTANCE OF PERFORMANCE APPRAISAL IN CURRENT SCENARIO
Managing employees performance is an integral part of the work that all managers and
rating officials perform throughout the year. It is as important as managing financial and
other resources of the organisation because employees performance has a positive or
negative impact on the growth of the organisation as well as effect the proper utilisation
of other resources of the organisation. So to know about the performance of the
employees  a better way is to adopt performance appraisal system i.e. widely accepted in
organisations now a day
For launching or applying performance appraisal in the organisation the first step is to
identify organisation goals and explains them to the employees along with individual
goal, the time period by which goals must be achieved and ways or methods by which
their performance is going to be evaluated. It will  bring transparency between employer
and employee regarding the usage of performance appraisal system in the organisation.
Employees  must be ensured that good performance will bring some reward for them and
in other cases, ways will be explained to improve the performance to achieve the desired
level.

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Importance Of Performance Appraisal Are :-
1. Performance Feedback
Most employees are very interested in knowing how well they are doing at present and
how they can do better in a future. They want this information to improve their
performance in order to get promotions and merit pay. Proper performance feedback can
improve the employee's future performance. It also gives him satisfaction and
motivation.
2. Employee Training and Development Decisions
Performance Appraisal information is used to find out whether an employee requires
additional training and development. Deficiencies in performance may be due to
inadequate knowledge or skills. For e.g. A professor may improve his efficiency by
attending workshops or seminars about his subject. Performance appraisal helps a
manager to find out whether he needs additional training for improving his current job
performance. Similarly, if the performance appraisal results show that he can perform
well in a higher position, then he is given training for the higher level position.
3. Validation of Selection Process
Performance appraisal is a means of validating both internal (promotions and transfers)
and external (hiring new employees from outside) sources. Organisations spend a lot of
time and money for recruiting and selecting employees. Various tools used in the
selection process are application blanks, interviews, psychological tests, etc. These tools
are used to predict (guess) the candidate's performance on the job. A proper performance
appraisal finds out the validity of the various selection tools and so the company can
follow suitable steps for selecting employees in future.
4. Promotions
Performance appraisal is a way of finding out which employee should be given a
promotion. Past appraisals, together with other background data, will enable
management to select proper persons for promotion.

5. Transfers

Performance appraisal is also useful for taking transfer decisions. Transfers often involve
changes in job responsibilities, and it is important to find out the employees who can
take these responsibilities. Such identification of employees who can be transferred is
possible through the performance appraisal.

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6. Layoff Decisions

Performance appraisal is a good way of taking layoff decisions. Employees may be

asked to lay off, if the need arises. The weakest performers are the first to be laid off. If
there is no performance appraisal, then there are chances that the best men in the
department may be laid off.

7. Compensation Decisions

Performance appraisal can be used to compensate the employees by increasing their pay
and other incentives. This is truer in the case of managerial jobs and also in the case of
employees in non-unionized organisations. The better performances are rewarded with
merit pay.

8. Human Resource Planning (HRP)

The appraisal process helps in human resource planning (HRP). Accurate and current
appraisal data regarding certain employees helps the management in talking decisions for
future employment. Without the knowledge of who is capable of being promoted,
demoted, transferred, laid off or terminated, management cannot make employment
plans for the future.

9. Career Development

Performance appraisal also enables managers to coach and counsel employees in their
career development.

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 FUTURE PROSPECTS

 The Future of Performance Management

Performance is changing rapidly. In 2015, more big name organizations scrapped
traditional performance appraisals and restructured how their performance management
processes. In 2016, it’s expected that significant changes will continue to occur.

Amongst the performance management trailblazers were Microsoft, Adobe, Cigna and

Accenture. These organizations dropped formal rankings and introduced on-going
feedback facilities and informal check-in meetings.

All four of the companies reported positive outcomes, leading the way for other
companies to embrace change.

After calculating that performance management was consuming two million hours each
year across their organization, Deloitte joined the ranks of change makers. More
unexpectedly, 2015 also saw General Electric finally put their infamous “rank and yank”
system to bed.

But performance management is by no means a solved issue.

While an increasing number of companies are recognizing the need for changes in their
approach to performance management, just this month Yahoo were caught red-
handed using their performance management as way of justifying firing groups of
employees.

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 CONCLUSION
After having analyzed the data, it was observed that practically there was no appraisal in
the organization. To be an effective tool, it has to be on the continuous basis. This is the
thing that has been mentioned time and again in the report, as, in the absence of
continuity, it becomes a redundant exercise. Before actually deciding drafting what
should be the kind of appraisal the following things should be taken care of:

1.    The very concept of performance appraisal should be marketed throughout the

organization. Unless this is done, people would not accept it, be it how important to
the organization.

2.    To market such a concept, it should not start at bottom, instead it should be started
by the initiative of the top management. This would help in percolating down the
concept to the advantage of all, which includes the top management as well as
those below them. This means that the top management has to take a welcoming
and positive approach towards the change that is intended to be brought.

3.    Further, at the time of confirmation also, the appraisal form should not lead to
duplication of any information. Instead, detailed appraisal of the employee’s work
must be done – which must incorporates both the work related as well as the other
personal attributes that are important for work performance.

4.    It should be noted that the appraisal form for each job position should be different as
each job has different knowledge and skill requirements. There should not be a
common appraisal form for every job position in the organization.

5.    The job and role expected from the employees should be decided well in advance
and that too with the consensus with them.

6.    A neutral panel of people should do the appraisal and to avoid subjectivity to a
marked extent, objective methods should be employed having quantifiable data.

7.    The time period for conducting the appraisal should be revised, so that the exercise
becomes a continuous phenomenon.

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Finally, performance appraisals are only as good as the performance management system
it operates within.  Organizations that only do performance appraisals for the sake of
doing them are wasting their time.

But organizations that incorporate performance appraisals into a comprehensive

performance management system and use them to implement business goals have an
advantage for accomplishing their goals and ultimately their strategic plan.

If you are interested in learning more about performance appraisals, you might find this
book: Performance Appraisal Source Book: A Collection of Practical Samples helpful.

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 BIBLIOGRAPY
 www.bigbazar.com

 en.wikipedia.org/wiki/big-bazer

 shop.bigbazarfranchisee.com

 www.futurebazaar.com

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