A Study On Performance Appraisal System
A Study On Performance Appraisal System
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
judgments 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.
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 influence.
As 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.
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working
life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one
discussion of important work issues that might not otherwise be addressed.
Almost universally, where performance appraisal is conducted properly, both supervisors and
subordinates have reported the experience as beneficial and positive.
Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and
correct existing problems, and to encourage better future performance. Thus the performance of
the whole organization is enhanced.
For many employees, an "official" appraisal interview may be the only time they get to have
exclusive, uninterrupted access to their supervisor. Said one employee of a large organization
after his first formal performance appraisal, "In twenty years of work, that's the first time anyone
has ever bothered to sit down and tell me how I'm doing."
The value of this intense and purposeful interaction between a supervisors and subordinate
should not be underestimated.
Motivation and satisfaction
Performance appraisal can have a profound effect on levels of employee motivation and
satisfaction - for better as well as for worse.
Performance appraisal provides employees with recognition for their work efforts. The power of
social recognition as an incentive has been long noted. In fact, there is evidence that human
beings will even prefer negative recognition in preference to no recognition at all.
If nothing else, the existence of an appraisal program indicates to an employee that the
organization is genuinely interested in their individual performance and development. This alone
can have a positive influence on the individual's sense of worth, commitment and belonging.
The strength and prevalence of this natural human desire for individual recognition should not be
overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if
more attention were paid to it. Regular performance appraisal, at least, is a good start.
During the discussion of an employee's work performance, the presence or absence of work
skills can become very obvious - even to those who habitually reject the idea of training for
them!
Performance appraisal can make the need for training more pressing and relevant by linking it
clearly to performance outcomes and future career aspirations.
From the point of view of the organization as a whole, consolidated appraisal data can form a
picture of the overall demand for training. This data may be analyzed by variables such as sex,
department, etc. In this respect, performance appraisal can provide a regular and efficient
training needs audit for the entire organization.
Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies.
By following the yearly data related to new hires (and given sufficient numbers on which to base
the analysis) it is possible to assess whether the general quality of the workforce is improving,
staying steady, or declining.
Employee Evaluation
Though often understated or even denied, evaluation is a legitimate and major objective of
performance appraisal.
But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and
developmental priorities appear to frequently clash. Yet at its most basic level, performance
appraisal is the process of examining and evaluating the performance of an individual.
Though organizations have a clear right - some would say a duty - to conduct such evaluations of
performance, many still recoil from the idea. To them, the explicit process of judgement can be
dehumanizing and demoralizing and a source of anxiety and distress to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and development at
the same time; it must be one or the other.
But there may be an acceptable middle ground, where the need to evaluate employees
objectively, and the need to encourage and develop them, can be balanced.
ABOUT HUMAN RESOURCE MANAGEMENT
The concept of human resource management has grown through an evolutionary process in
India. The various stages of development have greatly contributed to this process of evolution
what all began to put an end to exploitation in the “sweated industries”. The exploitation of labor
took on such an inhuman form and character that the state had to intervene by putting in
legislative measures to protect the people who were the victims of this naked exploitation. The
concept of 'welfarism' which formed the bedrock of management of human resources owed to
these legislative measures. Taking a cue from the state many progressive minded employers
thought of this aspect of employee’s welfare. They started changing in their attitudes by
introducing a series of social welfare measures in the form of better amenities and facilities for
the employees. This kind of altruistic thoughts led to kind of paternalism in Indian managers.
Sir Jamshedji Tata described his employees as his children. The creation of position like 'Welfare
Officer' and their appointments under the Factories Act and other legislative measures led to the
emergence and growth of a profession. The developments in the middle of the last century
necessitated substantial work connected with the establishment which fell outside the realm of
welfare officers but the specialized nature of the work required personnel who could
professionally handle recruitment, manpower training, planning, discipline and other roles which
called for professional expertise. This was the second phase during which many organizations
recruited professional personnel managers to take care of the responsibilities of the areas
mentioned afore.. There were organizations which blended two roles of the personal officer with
welfare officer together.
This phase also witnessed a steady increase in the number of legislation in the sphere of
industrial relations in relation to settlement of disputes and conducting the affairs of the
organization in consonance with the letter and spirit of the Standing Orders. This development
led to the appointment of professionals who could deal with industrial relations representing the
conflict management concerns of the organization as well as meeting the requirements of the
new industrial relations machinery. Many forward-looking companies established industrial
relations and welfare department besides the personnel department under one umbrella. It was
only in the seventies and later decades that more behavioral and technological changes were
considered necessary in management of human resources. The erstwhile personnel and welfare
functions were broadened to cover areas like behavioral and motivational techniques,
performance appraisal systems, management by objectives as well as incentive schemes to
improve the performance of the employees. In a dramatic development during this period,
management became aware of work culture and work values.
COMPANY PROFILE
Ever since the inception of our firm in 2006, we have taken strides to establish ourselves as a
major software counselor and developer in our area. Our office is equipped with latest computer
systems and different software on development front. Our esteemed clientele include individuals,
business and distribution establishments & professionals like Chartered Accountants, Doctors
and Lawyers. Our clients in corporate sector include service corporations and manufacturing
concerns.
VISION
At GREEN INFOSPACE, our mission is to create quality software solutions and support
services that foster innovation, creativity, and productivity for enterprises of all sizes. We strive
to lead in the innovation, development and manufacture of the most advanced information
technologies - our goal is translating these technologies into value for our customers by helping
them use and apply them for improving service to their customers, enhancing their competitive
position in the marketplace and increasing their profitability. We are single minded in our
commitment to this mission and this will remain our singular focus.
innovation, and quality are at the crux of its being. Where this is our passion, our obsession
resides in how we serve our customers. Building relationships based on trust, respect and mutual
understanding. Obtaining an intimate understanding of our clients' specific needs, creating a
shared vision and guiding our clients through the process of transforming that vision into reality
QUALITY POLICY
We, at GREEN INFOSPACE, are Committed to delight our Customers by maintaining International
Standards in our solutions and services and delivering them right first time. This we will achieve through
continual improvement of processes, world class technology adoptions and skill updation of our
employees
To identify the strength and weakness of employee to place right men on right job.
To maintain and assess the potential present in a person for further growth and
development.
To provide feedback to employees regarding their performance and related status.
To review and retain the promotional and other training programmers.
This study provide appraisal feedback to employees and thereby serve as vehicles for personal
and career development and allow the management to take effective decision against drawbacks
for the well being of the employee’s development.
To improve employee work performance by helping them realize and use their full
potential in carrying out their firms‟ mission.
The main aim of the study is to find out the effectiveness of performance appraisal &
development programme conducted at “Wipro Infrastructure Engineering”.
This study helps to know the level of importance of appraisal system.
The payroll and compensation decision, training and development needs, promotion,
demotions transfer including job analysis and providing superior support, assistance and
counseling.
It considers both the job performance as well as the personal qualities of an employee.
This study is only limited to Wipro infrastructure engineering pvt ltd in SIPCOT branch
alone.
Some of the respondents were afraid to give true information in some cases.
There may be bias on the part of employees while answering to the questions.
The sample size of the study is limited to 150 not the entire employees of the
organization.
RESEARCH METHODOLOGY
RESEARCH DESIGN:
The study is to measure effectiveness of the training program through performance appraisal
system provided by the employees. Descriptive research is also called statistical research .the
main goal of this type of research is to describe the data and characteristics about what is being
studied. The idea behind this type of research is to study frequencies, averages and other
statistical calculations. Although this research is highly accurate, it does not gather the causes
behind situation. Descriptive research is mainly done when a research is mainly done when a
research wants to gain a better understanding of a topic. Descriptive research answer the
questions who, what, where, when and how.
Magazine
Books
Journals
Records maintained by HR department
Company websites.
SAMPLING DESIGN:
STRATIFIED RANDOM SAMPLING:
A random sample of specified size is drawn from each stratum of a population. Stratified
sampling is a method of sampling from a population, when sub-population varies considerably; it
is advantageous to sample each sub population (stratum) independently. Stratification is the
process of grouping members of the populations into relatively homogenous subgroups before
sampling.
SAMPLE SIZE:
Due to time and resource constraint the sample size is taken as 50 for the survey.
RESEARCH INSTRUMENT:
QUESTIONNAIRE:
A questionnaire is a research instrument consisting of a series of questions and other prompts for
the purpose of gathering information from respondents. Although they are often designed for
statistical analysis of the responses.
RESEARCH PLAN:
Data source: Primary Data & Secondary Data
Research approach: Survey
Research Instrument: Questionnaire
Method of contact: personal
Sample size: 50 respondents
LITERATURE REVIEW
The amount of research regarding the topic “Performance Appraisal” is so vast. The topic is
literally not new; it is as old as the formation of the organizations. Before the early 1980’s,
majority of theoretical studies emphasized on revamping the rating system within the
organization. The actions were a great thing to reduce the chaotic of employee’s performance
appraisal (Feldman, 1981). With the passage of the time the methods and rating system among
the employees got enhanced and received an immense appreciation and attentions of the
managers.
Behavioral Observation Scale (BOS) is one of the best techniques utilized by the managers to
arte the employees. The dilemma was on the peak in the 1960s and 1970s. In the same period
couple of new innovated rating scales were introduced, which was Behaviorally Anchored
Rating Scale (BARS) and the Mixed Standard Scale (MSS). The innovations were dominant one
which condensed the errors and improved the observation skills from the performance appraisal
practice. According to the research of Arvey and Murphy (1998), there were hundreds of
thousands of researches had been taken place between the periods of 1950 to 1980, which merely
focused on the different types of rating scales. Landy and Farr (1980) reviewed and researched
the methods of performance appraisal in totally a different manner, in which they understand the
rater and process in an organizational context. Other Performance appraisal reports include the
rater characteristics in their report like race, gender and likeability.
After the year 1980 the biasness among the performance appraisal system occurred outrageously
and appraisal had been granted on the favoritism or race and gender basis rather examined the
knowledge, skills and style of the work of the employee. The accuracy criteria among the
performance appraisal system clutched its grip in the start of the 1980s, where the researches
were emphasized on common psychometric biases which include the diversified rating errors
like leniency, central tendency and halo, which were termed as rating errors in the appraisal
method. It has been observed that the bias free appraisals were inevitably true or more precisely
we can say more accurate, but the concept was totally refused by the research of Hulin in 1982.
According to them the biasfree appraisals were not necessarily accurate (Murphy & Balzer,
1989).
Researches which had been done in the year 1980 were found the most dominating one which
contributed the appraisal system in a great deal. The researches of the1980 also helped out to
clarify some presumed assumptions regarding the performance appraisal, just like the work of
Murphy (1982). Research has included the measure of employee attitudes towards the system of
performance appraisal and its acceptance (Roberts, 1990). Bernardian and Beatty (1984),
suggested in their research that behavioral and attitudinal kinds of measure ultimately prove to be
better anticipator as compared with the traditional psychometric variables, which we have
declared earlier as well, like leniency, halo and discriminability. A Performance Appraisal
system is totally ineffective in practice due to the dearth of approval from the end users (Roberts,
1990).
According to a number of researchers, the enhanced and upgraded performance appraisal
procedure and method will enhance the satisfaction level of the employees and definitely will
improve the process of goal setting within the organization.
DATA ANALYSIS AND INTERPRETATION
1.
TABLE: 1
Responds Percentage
What is performance appraisal in your opinion?
Evaluation of Employees 15 30%
Promotion of Employees 5 10%
Job Satisfaction of Employees 10 20%
Motivation 20 40%
CHART: 1
25
20
15
Responds
10 Percentage
Column1
0
Evaluation of
Employees Promotion of
Employees Job Satisfaction
of Employees Motivation
Interpretation
It has been found that about 15 employees opinion evaluation of employees as 30% and about 5
employees opinion Promotion of Employees as 10% and about 10 employees opinion Job
Satisfaction of Employees as20% and the remaining 20 as motivation as 40%.
TABLE: 2
Merit 20 40%
Grading 20 40%
Other 10 20%
CHART: 2
20
18
16
14
12
10 Responds
8 Column1
Personage
6
4
2
0
Merit
Grading
Other
Interpretation
It has been found that about 20 employees goes with Merit as 40% and about 20 employees
goes with Grading as 40% and about 10 employees goes with Other as 20% and the remaining
10 as motivation as 20%.
TABLE: 3
Yes 25 50%
No 25 50%
CHART: 3
25
20
15
Responds
Personage
10
Column1
0
Yes
No
Interpretation
It has been found that about 25 employees goes with Yes as 50% and about 25 employees goes
with No as 50% for receive any increment in your salary after performance Appraisal.
TABLE: 4
Yes 35 70%
No 15 30%
CHART: 4
35
30
25
20
Responds
15
Percentage
10
0
Yes
No
Interpretation
It has been found that about 35 employees goes with Yes as 70% and about 15 employees goes
with No as 30% for performance Appraisal help to provide an atmosphere where all are
encouraged to share one another burden.
TABLE: 5
Do you think performance appraisal helps people set and Responds Personage
achieve meaningful goals?
Yes 30 60%
No 20 40%
CHART: 5
30
25
20
Responds
15 Percentage
10
0
Yes No
INTERPRETATION:
Performance appraisal helps people set and achieve meaningful goals more than says ‘ yes’ for
the percentage is 60% and 40% of workers says ‘ no’.
TABLE: 6
Yes 35 70%
No 15 30%
CHART: 6
35
30
25
20 Responds
Percentage
15
10
0
Yes No
INTERPRETATION:
performance appraisal give constructive criticism in a friendly and positive manner more than
says ‘ yes’ for the percentage is 70% and 30% of workers says ‘ no’.
TABLE: 7
Yes 25 50%
No 25 50%
CHART:
25.5
25.4
25.3
25.2
Percentage
25.1 Responds
25
24.9
24.8
24.7
Yes No
INTERPRETATION:
Performance of employees improve after process of performance appraisal more than says ‘ yes’
for the percentage is 50% and 50% of workers says ‘ no’.
TABLE: 8
Yes 25 50%
No 25 50%
CHART: 8
25
20
15
Responds
Percentage
10
5
Percentage
0
Yes Responds
No
INTERPRETATION:
No 25 50%
CHART: 9
25
20
15
Responds
Percentage
10
0
Yes No
INTERPRETATION:
The top level management partial in Performance Appraisal more than says ‘ yes’
for the percentage is 50% and 50% of workers says ‘ no’.
TABLE: 10
Yes 30 60%
No 20 40%
CHART: 10
30
25
20 Responds
Percentage
15
10
Percentage
5
Responds
0
Yes No
INTERPRETATION:
TABLE: 11
CHART: 11
18
16
14
12
10
8
6 Percentage
4 Responds
2
0
es m re n
oye ste ltu atio
pl Sy Cu v
m t al oti
E en n M
of tm tio
n ui za
tio ecr ni
te
n R ga
Re Or
Interpretation
It has been found that about 10employees opinion Retention of Employees as 20%
and about 15 employees opinion Recruitment System as 30% and about 15
employees opinion Organizational Culture as30% and the remaining 10 as
motivation as 20%.
TABLE: 12
After performance appraisal improvement in your Responds Percentage
performance.
10-20 20 40%
20-30 20 40%
30- above 10 20%
CHART: 12
20
18
16
14
12
10
Responds
8 Percentage
6
4
2
0 Percentage
20-Oct
Responds
20-30
30- above
INTERPRETATION:
It has been found that about 10-20 employee’s opinion that is 20 employees
response as 40% and about 20-30 employee’s opinion that is 20 employees
response as 40% and about 30 and above employees response as 20%.
FINDINGS
CONCLUSION
Human resources are the vital source of every organization. Every employee in an organization
increases the productivity and goodwill of every company. An employee, being an individual is
treated as assets in the organization. So the organization should mainly emphasis performance
appraisal techniques and its development program. Both the appraiser and appraise should
realize the principle and use the tool of appraisal system in a constructive way for the prosperity
of the organization. The performance appraisal technique prevailing in the organization is fair.
Employees are satisfied with the present performance appraisal system that is a traditional one.
As many new appraisal techniques are emerged, the organization can implement modern
technique which would be more effective. The welfare measure of organization is at par with the
company policies and has brought a great sense of involvement in work among the employees of
the organization. If the suggested measures are taken into consideration it will help to increase
the effectiveness of performance appraisal system.
Effectiveness of Performance Appraisal can be evaluated using the following questionnaire:
Q3. Do you receive any increment in your salary after performance Appraisal.
a. Yes
b. No
Q4. Do you think that performance Appraisal help to provide an atmosphere where all are encouraged to share one
another burden.
a. Yes
b. No
Q5. Do you think performance appraisal helps people set and achieve meaningful goals.
a. Yes
b. No
Q6. Do you think performance appraisal give constructive criticism in a friendly and positive manner.
a. Yes
b. No
Q7. Do you think that performance of employees improve after process of performance appraisal ?
a. Yes
b. No
Q8. Do you think performance appraisal improves motivation and job Satisfaction.
a. Yes
b. No
Q9. Is the top level management partial in Performance Appraisal
a. Yes
b. No
Q11. In your opinion Performance Appraisal system of your organization is related to which of the following ?
a. Retention of Employees
b. Recruitment System
c. Organizational Culture
d. Motivation
Below mentioned sample HR questionnaire tries to find the employee satisfaction on performance
management system in company.
1. Are you satisfied with the present performance appraisal system (E-map)?
______________________________________________________________
______________________________________________________________
______________________________________________________________
12. Suggestion as an appraisee
______________________________________________________________
______________________________________________________________
13. Suggestion as an appraiser
______________________________________________________________
______________________________________________________________
Name : _______________________________
Designation : __________________________