A

Project Synopsis
On
A Study on Performance Appraisal
At
VEROSE NETWORK, DILSUKHNAGAR

Submitted by
Susarla Alekhya

(HT NO:117520672083)

Department of Business Management

Sarojini Naidu Vanita Maha Vidyalaya
(Affiliated to Osmania University)
Exhibition Grounds, Nampally
Hyderabad-500001
(2020-2022)
 DECLARATION
I, SUSARLA ALEKHYA, hereby declare that this project synopsis titled “A Study on
Performance Appraisal” in “Verose Network” submitted by me to the Department of
Business Management, Osmania University, is a bonafied work undertaken by me and it is not
submitted to any other University or Institution for the award of any
Degree/Diploma/Certificate or published any time before.

SUSARLA ALEKHYA Signature of the student

Roll No: 117520672083 Date:

Place: Hyderabad
 CERTIFICATE
This is to certify that Ms. SUSARLA ALEKHYA (H.T.NO: 1175-20-672-083), D/o MR.
SVS NARASIMHAM is a bonafide student of Sarojini Naidu Vanita Vidyalaya, Exhibition
Grounds, Nampally, Hyderabad – 500 001 for the academic year 2020-2022. She as submitted
the project synopsis titled “A Study on Performance Appraisal” undertaken at “Verose
Network”.

GUIDE DIRECTOR
 INDEX

SI.NO Particulars Page no

1. Introduction 1

2. Objectives of the Study 4

3. Need of the Study 5

4. Scope of the Study 6

5. Research Methodology 7

6. Limitations of the Study 8

7. Review of Literature 9

8. Chapter Plan 12

9. References 13
 INTRODUCTION
Performance 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 raise. Should provide the only required impetus for an employee to either
improve or continue to perform v, ell sometimes this basic system succeeded in getting the
results that were intended; but more often than not, it failed.

Performance appraisal is a process of summarizing, assessing and developing the work

performance of an employee. In order to be effective and constructive, the performance
manager should make every effort to obtain as much objective information about the
employee’s performance as possible.

In many organizations – but not all – appraisal results are used, either directly or indirectly, to
help determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses,
and promotions. The present study is done at the organisation in Hyderabad. Company name
is one of the leading educational institution located in Hyderabad.

Companies use performance appraisals to determine which employees have contributed the
most to the company’s growth, review progress, and reward high-achieving workers. While
there are many different kinds of performance reviews, the most common is a top-down review
in which a manager reviews his or her direct report.

High performance standards should be set when people want to perform at high level.
Employees need to know exactly what they expect from them, and what makes a high
performance. Nowadays, all organizatons face a competitive, unstable, and turbulent
environment, therefore, managers focus on creating competitive advantage through
organizational development of employees. Employee performance evaluation is one of the
most efficient methods to create, inspire and analyze workers in modern times. The
performance assessment framework utilized within company for evaluating their employees’s

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working ability of workers and support employee therapy. Various meanings have been
provided for performance evaluation, such as performance evaluation is a mechanism within
the overall performance management framework that can be defined by their supervisors as the
systematic assessment and ranking of individuals, and is defined as the evaluation of the results
of an individual’s work to achieve objective personnel decisions.

Performance appraisal is a widely dicussed concept in the field of performance management.

The management accorded to performance appraisal systems in part arises from the nature of
the current business environment, which is marked by the need to achieve organisational goals
as well as remain relevant in intensely competitive markets through superior employee
performance (Chen and Eldridge, 2012). Within this context, various studies suggest that
organisatons can however control how employee perform their jobs. In addition, performance
management, research shows that a significant number of employees tend to have the desire to
perform their jobs well as part of their individual goals as well as demonstration of loyalty
towards the organisation (Wright & Cheung, 2007). Arguably, the key to ensuring that
employees perform well lies in the ability to provide them with the right working environment.
Such an environment generally includes fair treatment, offering of support, effective
communication and collaboration. According to maley (2013) these are the very qualities that
are created by an effective performance appraisal system. While focusing on performance
appraisal as amotivational tool, studies in this field strongly suggest that performance appraisal
systems can be used to enhance motivation (Chen & Eldridge, 2010; Appelbaum et al., 2011).

Despite the above shortcomings in approaches to performance appraisal, extant literature on

performance management still indicates that performance appraisal when undertaken in the
right manner can contribute significantly to employee motivation (Tuytens & devos, 2012).
When undertaken in the absence of clear goals, performance appraisal can however have
serious ramifications in terms of employee dissatisfaction and consequently a reduction in
productivity and organisational commitment (Maley, 2013). On the positive side, it has been
argued that perfoemnace appraisal provides an important avenue to recognise employee’s work
efforts. Recognition in this case has for long been considered as a key employee incentive. Its
importance is underscored by Samarakone (2010) who indicates that human beings ina number
of instances prefer negative recognition as opposed to no recognition at all.

Performance management is the process of creating a work environment or setting in which

people are enabled to perform to the best of their abilities. Performance management is a whole

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work system that begins when a job is defined as needed. It ends when employee leaves your
organization. Many writers and consultants are using the term “performance management” as
a substitution for the traditional appraisal system context. A performance management system
includes the following actions.

Develop clear job descriptions.

1. Select appropriate people with an appropriate selection process.

2. Negotiate requirements and accomplishment-based performance standards,
outcomes, and measures.
3. Provide effective orientation, education, and training.
4. Provide on-going coaching and feedback.
5. Conduct quarterly performance development discussions.

Factors that are considered as problems in performance appraisal are

1. Failure of the superiors in conducting performance appraisal and

postperformance appraisal interview.
2. Most part of the appraisal is based on subjectivity.
3. Less reliability and validity of the performance appraisal techniques.
4. Negative ratings affect interpersonal relations and industrial relations system.
5. Influence of external environmental factors and uncontrollable internal factors.
6. Feedback and post appraisal interview may have a setback on production.
7. Management emphasizes on punishment rather than development of an employee
in performance appraisal.

Some ratings particularly about the potential appraisal are purely based on guess work.

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OBJECTIVES OF THE STUDY
1. To study performance appraisal system
2. To study and understand performance appraisal mechanism in operation.
3. To evaluate the effectiveness and satisfaction level of the employees towards
performance appraisal system of the organisation.
4. To study the effectiveness of the implementation of performance appraisal.

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NEED FOR THE STUDY
There have been many researches undertaken upon by many academicians and researches in
the field of Human Resource Management. Many studies are also done on the topic of
Performance Appraisal. The present study on the Performance Management is an attempt to
learn about the practices relating to the same in the Verose Network located at Dilsukhnagar.
With this study, the researcher and the organisation both will have an idea about the
Performance Appraisal practical issues or problems and also the employee’s satisfaction
regarding the same.

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SCOPE OF THE STUDY
The present study will be conducted at Verose Network located at Dilsukhnagar, Telangana
State only. The study attempts to understand and examine the level of awareness among the
employees about the performance appraisal system adopted in the organization and steps
involved in the appraisal system. The study focuses on how effective is the performance
appraisal system by taking into account various factors that affect the effectiveness.

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RESEARCH DESIGN:
The present study involves both exploratory and descriptive in nature.

SAMPLE DESIGN:
Sampling Method: Simple random sampling is adopted in the present study.

Sample size: The sample size includes 50 employees who are working in the “VEROSE
NETWORK”.

SOURCES OF DATA COLLECTION

Primary data: The study is based mainly on primary data. Primary data was collected
through questionnaire to the employees of the organisation.

Secondary data: The study sources of the data include data from magazines, internet, books
and various marketing journals.

DATA ANALYSIS AND INTERPRETATION:

The instrument used in this study is structured questionnaire. The data thus collected will be
coded, tabulated, analysed and systemized in the form of tables, pie charts and diagrams. The
data collected is analysed further by calculating simple percentages. Accordingly, findings will
be summarized and recommendations will be made to the organization.

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LIMITATIONS OF THE STUDY
1. The sample size is limited to 50.
2. The study is done in Hyderabad city only.
3. The time period for the project is 45 days.
4. The opinions and preferences of the respondents may change over a
Period of time.

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 REVIEW OF LITERATURE
Performance appraisal allows organizations to inform their employees about their rates of
growth, their competencies, and their potentials. It enables employees to be intentional in
creating their individual developmental goals to help in personal growth. There is little
disagreement that if performance appraisal is done well, it serves a very useful role in
reconciling the needs of the individual and the needs of the organizations (Cleveland, Landy,
& Zedeck, 1983; Conry & Kemper, 1993; Grote, 1996). If used well, performance appraisal is
an Influential tool that organizations have to organize and coordinate the power of every
employee of the organization towards the achievements of its strategic goals (Grote, 2002;
Lewis, 1996). It can focus each employee’s mind on the organization’s mission, vision, and
core values. However, if performance appraisal is not done. Grote suggests the process can
become the object of jokes and the target of ridicule. Literature Review Performance evaluation
methods are the systems and processes through which appraisal is carried out in an
organization. The methods include determining the types of data collection and evaluated in
the appraisal, the forms and frequencies of communication take place between supervisors and
their employees, and the various types of evaluation tools used to measure performance. It is
important to understand the evaluation methods used because they can influence the usefulness
of the appraisal system in an organization and the perceived or actual benefits gained from its
use. Performance evaluation methods have been described by multiple authors in various ways.
Landy and Farr (1983) define a method in which the performance appraisal data is organized
into two groups: judgemental or subjective measures and non-judgemental or objective
measures. Although judgemental measures are more broadly used, objective performance
measurements (e.g production rates, time to complete a task, and scrap rates) have been helpful
measures of performance for routine, manual jobs since the 1940s (Rothe, 1946). Other non-
judgemental indices that do not assess performance directly but provide information on the
general health of the organization, including absenteeism, turnover, and accidents, have also
been researched (Campbell, Ford, Rumsey, Pulakos, Borman & Felker 1990). Objective
measures do have their unique problems, however. The special issue on contemporary issues
in Business Studies Centre for promoting Ideas, USA 30 For example, absentee measures are
not applicable to many jobs, are often inaccurate, are caused by a variety of reasons depending
on the meaning of absence, differ in the duration of observation, and do not show a relationship
with each other (Murphy & Cleveland, 1995). Using turnover as a standard is complicated
because it is Hard to differentiate between voluntary and compulsory turnover. Grievances are

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not typically obtainable for non-union employees. Accidents could be caused by the people or
by their environments. The rate of promotion or salary increases are not good standards because
the rate could be controlled by a quota set by the organization and salary modifications could
be influenced by the economic well-being of the organization rather than employee
performance. These problems challenge the validity of the measures (Murphy & Cleveland,
1995). Landy & Farr (1983) also identified several problems with objective measures and
potential reasons why judgemental measures have been instead used instead by psychologists
for evaluating managerial behaviour. First, objective measures tend to have low reliability. For
example, factors external to the individual, such as the organization’s sick leave policies, may
influence the reliability of absence measures or the period of inspection may not be constant
across measures. Another reason is that objective measures may be obtainable for only a partial
number of jobs. For example, it does not make sense to collect information on tardiness or
absences from sales representatives or development employees who may not work a fixed
number of hours per day or per week. A final inadequacy of objective performance measures
in the changing nature of skilled and semi-skilled work. When employees who operate
machines are replaced by employees who just tend to a machine, the output of the job can
become more reliant on the machine functioning correctly and its related downtime, rather than
upon the ability and output of the machine operator. The changing nature of work implies that
subjective measurements may continue to be more popular and useful compared to objective
measures (Murphy & Cleveland, 1995). The use of management by objectives (MBO) to define
and measure job performance is often used with managerial and executive performance. There
is a particular importance placed on the contribution of the employee to the organization’s goals
and results (Drucker, 1954). There are several elements common to MBO programs. First,
MBO includes involvement in goal-setting. The supervisor and the subordinate work together
to define the goals and performance measurements for the subordinate. They decide what needs
to be achieved and how the achievements will be measured. Secondly, MBO entails objective
feedback regarding advancement towards accomplishing the goals. In MBO system,
performance is likely to be defined in terms of measurable outcomes. However, the setting
goals, targets, and objectives is very subjective, involving Negotiation between the manager
and the employee (Murphy & Cleveland, 1995). If a high performing employee fails to achieve
his or her goals, it is not unusual for the manager to renegotiate objectives so that the manager
can be sure that the capable performer will obtain outcomes that are seen as good performance.
Two of the disadvantages of a MBO system include a significant amount of paperwork,
particularly in the beginning stages of a new system, and the concern that MBO tries to make

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unclear responsibilities and goals exact and compels employees to measure objectives that are
not measurable (Berman, 1980). In other method for describing evaluation procedures, Sims
and Foxley (1980) provide four classifications used in higher education, by college student
affairs professionals: comparative methods, absolute standards, management by objectives, and
direct indexes. Comparative methods include: (a) rank-ordering all employees from lowest to
highest in effectiveness; (b) alternately choosing the most effective and then the least effective
employee, moving their names to separate lists and repeating the process until all names have
been removed from the initial list; (c) comparing each employee to every other employee and
determining a final ranking based on how many times the employee was ranked above the other
employees; and (d) a forced distribution where a certain percentage of employees are classified
as top performers, perhaps a second group in the next tier, and then another group assigned to
the lowest performing group. Absolute standards methods have several variations including
critical incidents, weighted checklists, forced choice, conventional rating, and behaviourally
anchored rating scales. Critical incidents identifying the significant requirements of a job and
the supervisor is asked to rate each employee on each category. Weighted checklists involve
compiling a list of employee goals was completed. Forced choice requires the supervisor to
choose the most descriptive statements for each employee using a list of items that differentiate
between successful and unsuccessful completion and between desirable and undesirable
employee traits. Conventional rating involves rating employee traits on a form using such
categories as excellent, average, poor. International Journal of Business and Social Science
Vol. 2 No. 17 www.ijbssnet.com 31 behaviourally anchored rating scales are a quantitative
version of the critical incident method that uses scales anchored in descriptions of actual
position behaviour and specific levels of performance. The above examples of evaluation
methods most often used by various Organizations. They fall along a continuum between
subjective and objective methods and between unstructured and structured methods. Rating
scale format the rating scale format deserves additional explanation because most of the
research on performance appraisal is about the design of appraisal scales.

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 CHAPTER PLAN

Chapter-1

Introduction

1. Objectives of the study

2. Need for the study

3. Scope of the study

4. Research Methodology

5. Limitations of the study

Chapter-2 Review of literature

Chapter-3 Company profile

Chapter-4 Data Analysis and Interpretation

Chapter-5

1. Finding

2. Suggestions

3. Conclusion

Appendix

1. References

2. Questionnaire

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 REFERENCES
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management: One agency’s experience. Public personnel Management, 31(2), 131.
4. Conry, T., & Kemper, J. (1993). Performance evaluations: Bridging the gap between
today’s goals and tomorrow’s reality. CUPA Journal ,44(3), 29-33.
5. Davis, J.S. (2001). Approaches to performance appraisal in student affairs. College
Student Affairs Journal, 21(1), 92.
6. DeJong, J. (1992). Making sense of church-related higher education. New Directions
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10. Kreitner, R. (1998). Management (7th ed.). Boston: Houghton Mifflin. Landy, F.J., &
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