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PROJECT REPORT

Project Title

PERFORMANCE APPRAISAL
SYSTEM
&
ITS EFFECTIVENESS IN AN
ORGANIZATION
REPORT SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE
POST GRADUATE DIPLOMA IN MANAGEMENT
(APPROVED BY AICTE)
(2007-2009)

SUBMITTED TO SUBMITTED BY

Mahendra Asati
INJ BUSINESS SCHOOL
GREATER NOIDA
CERTIFICATE

This is to certify that__________________ , _______________ Prasad is a


bonafied student of two year regular course of PGDM(post graduation diploma
in management) in our institute.

The project titled "Study of Performance appraisal in an organization and


it's effectiveness " is her original work.

The student bears a good moral character.

Faculty (HR Department)


ACKNOWLEDGEMENT

My sincere thanks to faculty supervisor __________________ and agency


supervisor _____________________ under whose able guidance and kind
cooperation I was able to complete the project work titled "Study of
Performance Appraisal System and its Effectiveness in an Organisation" .

All those employees of Dabur India Ltd deserve special thanks for their
cooperation and help in the collection of necessary and relevant material for
this work.

Also, I do thank and remember my friends for their effort and helping hand.

Every effort has been made to enhance the quality of work. However, I owe the
sole responsibility of the shortcoming, if any, in the study.

_______________________
CONTENTS

Page Nos.

Chapter 1: Introduction
Chapter 2: Objective and Methodology of the Study
Chapter 3: Oraganisation Profile
Chapter 4: Performance Appraisal- Theoretical Review
Chapter 5: Performance Appraisal System in
Dabur India Ltd.
Chapter 6: Analysis and Interpretation of Data
Chapter 7: Conclusion and Suggestions

ANNEXURES
CHAPTER 1
INTRODUCTION
CHAPTER 1
TITLE OF THE PROJECT:

Study of Performance Appraisal System and Its


Effectiveness in an Organization

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 judgments

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.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction

between a subordinate and supervisor, that usually takes the form of a periodic

interview (annual or in which the work performance of the subordinate is

examined and discussed, with a view to identifying weaknesses and strengths

as well as opportunities for improvement and skills development.

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.

By the same token, appraisal results are used to identify the poorer performers

who may require some form of counseling, or in extreme cases, demotion,

dismissal or decreases in pay. (Organizations need to be aware of laws in their

country that might restrict their capacity to dismiss employees or decrease

pay.)
Whether this is an appropriate use of performance appraisal -the assignment

and justification of rewards and penalties -is a very uncertain and contentious

matter.

Controversy, Controversy

Few issues in management stir up more controversy than performance

appraisal.

There are many reputable sources -researchers, management commentators,

psychometricians -who have expressed doubts about the validity and

reliability of the performance appraisal process. Some have even suggested

that the process is so inherently flawed that it may be impossible to perfect it

(see Derven, 1990, for example). At the other extreme, there are many strong

advocates of performance appraisal. Some view it as potentially "... the most

crucial aspect of organizational life" (Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse

the use of performance appraisal, there are many different opinions on how

and when to apply it,

There are those, for instance, who believe that performance appraisal has

many important employee development uses, but scorn any attempt to link the

process to reward outcomes -such as pay rises and promotions. This group

believes that the linkage to reward outcomes reduces or eliminates the

developmental value of appraisals. Rather than an opportunity for

constructive review and encouragement, the reward- linked process is


perceived as judgmental, punitive and harrowing. For example, how many

people would gladly admit their work problems if, at the same time, they

knew that their next pay rise or a much-wanted promotion was riding on an

appraisal result? Very likely, in that situation, many people would deny or

downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the person being

appraised. Many appraisers feel uncomfortable with the combined role of

judge and executioner.

Such reluctance is not difficult to understand. Appraisers often know their

appraises well, and are typically in a direct subordinate-supervisor

relationship. They work together on a daily basis and may, at times, mix

socially. Suggesting that a subordinate needs to brush up on certain work

skills is one thing; giving an appraisal result that has the direct effect of

negating a promotion is another.

The result can be resentment and serious morale damage, leading to

workplace disruption, soured relationships and productivity declines.

On the other hand, there is a strong rival argument which claims that

performance appraisal must unequivocally be linked to reward outcomes. The

advocates of this approach say that organizations must have a process by

which rewards -which are not an unlimited resource -may be openly and fairly

distributed to those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations. Performance

appraisal -whatever its practical flaws -is the only process available to help

achieve fair, decent and consistent reward outcomes. It has also been claimed

that appraises themselves are inclined to believe that appraisal results should

be linked directly to reward outcomes -and are suspicious and disappointed

when told this is not the case. Rather than feeling relieved; appraises may

suspect that they are not being told the whole truth, or that the appraisal

process is a sham and waste of time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that appraises seem

to have greater acceptance of the appraisal process, and feel more satisfied

with it, when the process is directly linked to rewards. Such findings are a

serious challenge to those who feel that appraisal results and reward outcomes

must be strictly isolated from each other. There is also a group who argues that

the evaluation of employees for reward purposes, and frank communication

with them about their performance, are part of the basic responsibilities of

management. The practice of not discussing reward issues while appraising

performance is, say critics, based on inconsistent and muddled ideas of

motivation.

In many organizations, this inconsistency is aggravated by the practice of

having separate wage and salary reviews, in which merit rises and bonuses are

decided arbitrarily, and often secretly, by supervisors and managers.


There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocation. Decision as to who gets

salary increase, promotion, and other rewards are determined by their

performance evaluation. Second, these appraisals can be used for identifying

areas where development efforts are needed. The performance appraisal is a

major tool for identifying deficiencies in individuals. Finally it can be used as

a criterion against which selection devices and development programs are

validated. As a key input into management's reward and punishment decision,

performance appraisals can motivate or de-motivate employees.

Three different approaches exist for doing appraisals. Employees can be

appraised against

1. Absolute standards

2. Relative standards

3. Objectives
PERFORMANCE MANAGEMENT

Since organizations exits to achieve goals, the degree of success that individual

employees have in reaching their individual goals is important in determining

organization effectiveness.

Performance system is fundamentally, a feed back process, which require

sustained commitment. The cost of failure to provide such feedback may result

in a loss of key professional employees, the continued poor performance of

employees who are not meeting performance standards and a loss of

commitment by employees, in sum, the myth that the employee know what.

they are doing without adequate feedback from management can be an

expensive fantasy.

THE APPRAISAL PROCESS

1. Establishing Performance Standard

2. Communicate Performance expectations to employees

3. Measure actual performance

4. Compare actual performance with standards

5. Discussion with the employees and identification development programs

to bridge the gap.

6. Initiate action
THE PURPOSE OF APPRAISING PERFORMANCE

In general the appraisal systems serve a two fold purpose

1. To improve the work performance of employees by helping them

realize and use their full potential in carrying out their firms mission.

2. To provide information to employees and managers for use in making ,

work related decisions.

More specifically appraisals serve the following purposes.

a) Appraisals provide feedback to employees and help the. "' management

identify the areas where development efforts are "' needed to bridge the

gaps thereby serving as vehicles for personal " and career development.

b) It helps management spot individuals who have specific skills so that

their promotions/transfer are in line with organizational requirements.

c) Appraisal serve as a key input for administering a formal organisation

reward and punishment system.

d) The performance system can be used as a criterion against which

selection devices and development programs are validated.


REQUIREMENT OF THE PERFORMANCE MANAGEMENT

SYSTEM.

Reliability: The foremost requirement of a sound system is reliability. In this

contact it refers to consistency of judgment. For any given employee,

appraisals made by raters working independently of one another should agree

closely. But raters with different perspective (e.g. supervisors, peers,

subordinates) may see the same individuals job performance very differently.

To provide reliable data, each rater must have an adequate opportunity to

observe what the employee has done and the condition under which he or she

has done it. By making appraisal system relevant, sensitive and reliable we

assume the resulting judgment are valid as well.

Acceptability: In practice, acceptability is the most important requirement of

all, for it is true that human resources program must have the support of.

those who will use them. Unfortunately, many organizations do not put much

effort into garnering the front end support and participation of those who will

use the appraisal system. Ultimately it is management's responsibility to

define as clearly as possible the type and level of job behaviour desired of

employees.

It is important to enlist the active support and cooperation of subordinates by

making explicit what aspects of job performance they will be evaluated on.
Practicality: This implies that appraisal instruments are easy for managers and

employees to understand and to use.

For years, personnel specialists have searched for the 'Perfect; appraisal

method as if it were some kind of miraculous cure for many pitfalls that

plague organizations. Such a method does not exist. In tomorrow’s world of

work far more emphasis needs to be placed on process issues. Factors such as

timing and frequency are no less important. In sum performance appraisal is

a dialogue involving people and data. Both technical and human issues are

involved. Neither can be overemphasized at the expense of the other.

WHO SHOULD EVALUATE PERFORMANCE?

The most fundamental requirement for any rater is that he or she has an .

adequate opportunity to observe the rates job performance over a reasonable

period of time. This suggest several possible raters.

The immediate supervisor: Generally appraisal is done by this person. He is

probably the most familiar with the individual's performance and in most jobs

has had the best opportunity to observe actual job performance. Further more,

the immediate supervisor is probably best able to relate the individual's

performing to department and organizational objectives.

In some jobs such as outside sales, law enforcement and teaching, the

immediate supervisor may observe a subordinate's actual job performance


rarely (and indirectly thru written reports). Here judgment of peers play

important role. However, there is a danger of potential bias.

Subordinates: Appraisal by subordinates can be useful input to the immediate

development. Subordinates know first hand the extent to which the supervisor

actually delegates, how well he communicates, the type of leadership he has

and the extent to which he or she plans and orgasms.

Self appraisal: On one hand it improves the rate's motivation and moral, on the

other it tends to be more lenient, less variable and biased. The evidence on the

accuracy of self assessment is fairly complex.

In industry it is seen that feed back/ input is taken from various sources -Peers,

subordinates, superiors etc. Some companies have gone step ahead in taking

feedback from the customers and integrating it into the performance

management process.
APPROACHES TO PERFORMANCE MANAGEMENT

The traditional approach: The one dimensional model

The Job Define what results Performance contact


have to e achieved

Define a set of key


objectives against the
accountabilities

Accountabilities i.e,
output

Review performance
against the key
objectives

In this model job expectations are defined in terms of what results have to be

achieved. This model doesn't have a long term focus and can't be used for

employee development and career path planning,


A satisfactory performance implies doing a job effectively and efficiently, with

a minimum degree of employee -created disruptions. Employees are

performing well when they are productive. Yet productivity itself implies both

concern for effectiveness and efficiency. Effectiveness refers to goal

accomplishment. Efficiency evaluates the ratio of inputs consumed to outputs

achieved. The greater the output for a given input, the more efficient the

employees. Similarly, if output is a given, consumed to get that output results in

greater efficiency.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocations. Decisions as to who gets

salary increases, promotions, and other rewards are determined by their

performance evaluation. Second, these appraisals can be used for identifying

areas where development efforts are needed. Management needs to spot those

individuals who have specific skill or knowledge deficiencies. The performance

appraisal is a major tool for identifying these deficiencies. Finally, the

performance appraisal can be used as a criterion against which selection

devices and development programs are validated.


Chapter 2
OBJECTIVE
&
METHODOLOGY
Chapter 2

OBJECTIVE & METHODOLOGY

1. Objective of the study

This project aims at studying the system of performance appraisal and its

effectiveness in an organization. Performance appraisal is the most significant

and indispensable tool for the management as it provide useful information for

decision making in area of promotion and compensation reviews.

Thus broad objectives of the study includes:

• To know the present system of performance appraisal

• To know the extent of effectiveness of the appraisal system

• To identify and know the area for improvement system

2. Sample of the study

The population covered for the present study consisted of employee belonging

to supervisory and the level above. For the purpose of this study, survey

covered the employee of DABUR INDIA LTD. falling under supervisor and

the level above.

The study covered a sample of 100 employee belonging to supervisory level

and above.
3. Methodology of the project

The project work has been carried out in three stages, a structured

questionnaire with objective and question was communicated tested and

finalize. During the second stage, the questionnaire was administered to the

employees at Dabur India Ltd. by contacting them. The work relating to data

entry compilation, data analysis and report writing constituted the third stage.

Interview index was also used at some places to get information on the project

subject.

The details of the methodology adopted are presented below:

The Questionnaire

Keeping in view the objective of the study, questionnaire was designed and

tested on few employees. After getting the proper response and sanction from

the concerned department the questionnaire was finalized.

Response to Questionnaire

In all 96 questionnaire were given to employees falling in the category of

supervisors and above. Out of which 48 could be collected back duly

completed. The researcher individually contacted the employees to get

response on the questionnaire.

Data entry and analysis

It has been an uphill task to enter the enormous data received through the

questionnaire which consisted nearly 20 questions. Response to the descriptive


questions though very few but was valuable for the purpose of study. Hence

these were further structured in time with the system adopted for compilation

and data analysis.

Limitations

Many employees gave guarded answers to some crucial questions.

Some of them did not fill the questionnaire due to lack of time

Response could not be collected from the total sample selected.

Some of the questionnaire could not be completed due to reasons other than

time factor.

The confidentiality of the system created some problem in getting information.


Chapter 3

ORGANISATION PROFILE
Chapter 3
ORGANISATION PROFILE
.

History

The story of Dabur goes back to 1884, to a young doctor armed with a

degree in medicine and a burning desire to serve mankind. This young man,

Dr. S. K. Burman, laid the foundations of what is today known as Dabur

India Limited. From those humble beginnings, the company has grown into

India's leading manufacturer of consumer healthcare, personal care and food

products. This phenomenal progress has seen many milestones, some of

which are mentioned below:

• 1884 -Dr. S K Burman lays the foundation of what is today known as

Dabur India Limited. Starting from a small shop in Calcutta, he

began a direct mailing system to send his medicines to even the

smallest of villages in Bengal. The brand name Dabur is derived

from the words 'Da' for Daktar or doctor and 'bur' from Burman.

• 1896 -As the demand for Dabur products grows Dr. Burman feels the

need for mass production of some of his medicines. He sets up a

small manufacturing plant at Garhia near Calcutta.

• Early 1900s -The next generation of Burmans take a conscious

decision to enter the Ayurvedic medicines market, as they believe

that it is only through Ayurveda that the healthcare needs of poor


Indians can be met.

• 1919 -The search for processes to suit mass production of Ayurvedic

medicines without compromising on basic Ayurvedic principles leads

to the setting up of the first Research & Development laboratory at

Dabur. This initiates a painstaking study of Ayurvedic medicines as

mentioned in age-old scriptures, their manufacturing processes and

how to utilize modern equipment to manufacture these medicines

without reducing the efficacy of these drugs.

• 19208 -A manufacturing facility for Ayurvedic Medicines is set up at

Narendrapur and Daburgram. Dabur expands its distribution network

to Bihar and the northeast.

• 1936 -Dabur India (Dr. S K Burman) Pvt. Ltd. is incorporated.

• 1940 -Dabur diversifies into personal care products with the launch

of its Dabur Amla Hair Oil. This perfumed heavy hair oil catches the

imagination of the common man and film stars alike and becomes

the largest hair oil brand in India.

• 1949 -Dabur Chyawanprash is launched in a tin pack and becomes

the first branded Chyawanprash of India.

• 1956 -Dabur buys its first computer. Accounts and stock keeping are

one of first operations to be computerized.

• 1970 -Dabur expands its personal care portfolio by adding oral care
products. Dabur Lal Dant Manjan is launched and captures the

Indian rural market.

• 1972 -Dabur shifts base to Delhi from Calcutta. Starts production

from a hired manufacturing facility at Faridabad.

• 1978 -Dabur launches the Hajmola tablet. This is the first time that a

classical Ayurvedic medicine is branded -from Shudhabardhak bati to

Hajmola tablet.

• 1979 -The Dabur Research Foundation (DRF), an independent

company, is set up to spearhead Dabur's multi-faceted research.

• 1979 Commercial production starts at Sahibabad. This is one of the

largest and most modern production facilities for Ayurvedic

medicines in India at this time.

• 1984 -The Dabur brand turns 100 but is young ~enough to

experiment with new offerings in the market.

• 1986 -Dabur becomes a public limited company through reverse

merger with Vidogum Limited, and is re-christened Dabur India

Limited.

• 1989 -Hajmola Candy is launched and captures the imagination of

children and establishes a large market share.

• 1992 -Dabur enters into a joint venture with Agrolimen of Spain for
manufacturing and marketing confectionery items such as bubble

gums in India.

• 1993 -Dabur sets up the oncology formulation plant at Baddi,

Himachal Pradesh.

• 1994 -Dabur India Limited comes out with its first public issue. The

Rs.10 share is issued at a premium of Rs.85 per share. The issue is

oversubscribed 21 times.

• 1994 -Dabur reorganizes its business with sales and marketing

operations being divided into 3 separate divisions.

• 1994 -Dabur enters the oncology (anti-cancer) market with the

launch of Intaxel (Paclitaxel). Dabur becomes only the second

company in the world to launch this product. The Dabur Research

Foundation develops the unique eco-friendly process of extracting

the drug from the leaves of the Asian Yew tree.

• 1995 -Dabur enters into a joint venture with Osem of Israel for food

and Bongrain of France for cheese and other dairy products.

• 1996 -Dabur launches Real Fruit Juice which heralds the company's

entry into the processed foods market.

• 1997 -The Foods division is created, comprising of Real Fruit Juice

and Hommade cooking pastes to form the core of this division's

product portfolio.
• 1997 -Project STARS (Strive To Achieve Record Successes) is

initiated by the company to achieve accelerated growth in the coming

years. The scope of this project is strategic, structural and operational

changes to enable efficiencies and improve growth rates.

• 1998 -The Burman family hands over the reins of the company to

professionals. Mr. Ninu Khanna joins Dabur as the Chief Executive

Officer. ..

• 1999-2000 -Dabur achieves the Rs.IOOO crore turnover mark

What is that life worth which cannot bring comfort to others", these words

of Dr. S K Burman have inspired generations of Dabur. Keeping r" these

golden words in mind, Sandesh or the Sustainable Development Society

was set up to carry out welfare activities aimed at improving the

A quality of life of the rural people in its area of operation. This society is

given complete financial and managerial support by Dabur India Limited.


PRODUCTS AND SERVICES

A vast array of products touching the lives of almost every individual, from an

infant to a grand old man, from poor to rich; that's how the Dabur's range of

health personal care and food products could be best explained. Today Dabur

trust has traveled beyond the boundaries of India and is available in more than

50 countries worldwide. These value for money products have made Dabur a

household name Healthcare is one of the biggest and oldest divisions of Dabur

with a wide range of OTC healthcare products. It comprises of:

Ayurvedic Health Tonics

Chyawanprash

The leader in the chyawanprash market in India, Dabur Chyawanprash is

one of the most well known Ayurvedic products in India and abroad. An

effective herbal immune modulator, Dabur Chyawanprash has the essential

goodness 'of amla and over 50 other herbs. Dabur has conducted several

clinical trials on this product, which confirm its efficacy as a unique product

that strengthens the body from within.

Digestives

Hajmola Tablets

Hajmola Tablets are the first classical Ayurvedic products to be branded and

positioned as fun-filled product with medicinal properties. It finds mention

in Ayurvedic scriptures as Kshudhavardhak Bati, and was branded as


Hajmola, a name derived from Hajma which means digestion in Urdu. It is

available in regular and tamarind flavour.

Hajmola Candy

To cash in on the brand equity enjoyed by Hajmola, Dabur launched Hajmola

Candy in 1989. Since then, the company has added Mango and tamarind

flavors besides the regular one.

Pudin Hara

One of the oldest products in Dabur portfolio, Pudin Hara is available in liquid

as well as capsule form. It has a special combination of mint oils and cures

gastric problems without any side effects.

The company has added effervescent powder with goodness of Mint for gas

and acidity and named it Pudin Hara G.

Hingoli

Asafoetida or Hing is mentioned in Ayurveda as an effective aid in digestion,

and is used a lot in Indian cooking. Dabur's Hingoli has all the goodness of

asafoetida and other herbs.


Childcare Products

Dabur Lal Tail

The largest baby massage oil in India, it has the goodness of herbs which helps

in strengthening the bones of infants.

Dabur Janma Ghutti

This Ayurvedic preparation helps in strengthening the digestive system of new

borns.

Women Care Products

Efarelle Comfort

A herbal medicine in self gel capsule form to help overcome abdominal pain

during PMS. A combination of natural oils, this formulation gives immediate

relief from pain without any side effects.

The largest division in terms of sales, the Family Products Division of Dabur

has in its portfolio hair care and skin care products, oral care and select foods

like honey.

Hair & Skin Care

Dabur is the leader in hair care products in India, and has covered almost all the

categories of hair oils.


Dabur Amla Hair Oil -As a brand has made its mark beyond India and is a

leading hair oil brand in Middle East and Africa. A perfumed heavy hair oil, it

is Dabur's largest brand.

Dabur Special Hair Oil -It is light hair oil that combines the natural hair care

properties of lemon and hibiscus.

Vatika -The fastest growing hair oil brand of India, Vatika has single handedly

created an altogether new category of herbal enriched natural oils. The Vatika

range also includes an herbal shampoo, which has made its mark in the very

first year of its launch in the competitive shampoo market of India.

The company has recently launched Vatika Anti -Dandruff Shampoo having

herbal ingredients to fight the problem of Dandruff

Gulabari -Rose water derived from best of Indian roses makes the skin supple

and glowing.

Oral Care

Dabur Lal Dant Manjan -It is the second largest tooth powder brand of India

and the largest in coloured tooth power category. This herbal tooth powder

is very popular in rural parts of India.

Binaca Toothbrushes -After having acquired this dormant brand a few years

back, Dabur launched toothbrushes under this umbrella. There are plans to

launch other oral care products under the Binaca brand.


Dabur Honey

When repositioned in 1993, it totally changed the perception of Indian

consumer. Honey, which was mainly used for its medicinal properties in

India, is today competing for space on breakfast table.

Ayurvedic Specialties is a range of over 350 Ayurvedic Medicines -both.

classical Ayurvedic drugs and proprietary Ayurvedic medicines - developed by

Dabur's own research and development. Dabur has products for all the 16~

categories as defined in the Ayurveda. Some of the leading products in this

category are:

Asav Arishtas -These are medicated decoctions with a self-generated alcohol

content. Dabur has a range of over 30 Asav Arishtas. Some of the well-known

ones include Dashmularishta, Drakshasava, Lohasava, Parthadyarishta and

Ashokarishta.

Chumas -These are finely ground medicinal powders used to treat a variety of

ailments ranging from digestive problems to cough and fever.

Ras Rasayans -Preparations containing mineral drugs as main ingredients are

called Ras Rasayans. Dabur has a range of more than 50 Ras Rasayans which

are used by Ayurvedic practitioners in the cure of host of ailments.

Medicated Oils -The oils boiled alongwith certain prescribed drugs are known

as medicated oils. These oils retain the curative properties of herbs and is used

for inunction and massage. Launched over two years back, the Dabur Foods
range include juices under the brand name Real and cooking pastes under the

brand name Hommade. To give a better focus this division has been carved out

as a subsidiary company of Dabur India Limited. Subsidiarie.

Dabur Foods Limited -Dabur Foods Limited, a 100% subsidiary of Dabur India

Limited, is spearheading Dabur's foray into food processing industry. The

company, set up in April 1999, is marketing a range of fruit juices under the

brand name Real, Hommade Cooking Paste and Sauces and Lemoneez lemon

juice.

Dabur was the first company in India to introduce fruit juices in packaged form

without any artificial additive. Real is today the market leader in this category

with more than 50% market share. Hommade cooking paste is the oply national

brand in this category. Lemoneez is the only product in its category available in

unique drop and trickle pack and uniquelPharmaceuticals

Branded Pharmaceuticals -It includes a range of natural ethical products like

New Livfit, Honitus, Ulgel etc. and a range of contrast media and

gynecological.

Oncology -This wide and formidable range includes brands such as Intaxel,

Docetaxel and Topotecan, all of which were manufactured for the first time in

India by Dabur. Little wonder then, that Dabur is the undisputed market leader

in this category in India and has plans to establish itself as a generic oncology

player in select global markets.


Bulk Drugs and Chemicals -This range consists primarily of bulks in the

oncology category.

Joint Ventures

Dabon International Limited -Dabur has also collaborated with Bongrain

of France for the manufacture and marketing pf specialty cheese and other

dairy products. This joint venture company has already made its presence felt

in the Indian cheese market through the launch of processed cheese under the

brand name LeBon, and a specialty cheese under the brand name Delicieux.

Subsidiaries

Dabur has six subsidiary units, which come under the umbrella of the Dabur

India organization. These are:

Dabur Foods Limited -Dabur Foods Limited, a 100% subsidiary of Dabur

India Limited, is spearheading Dabur's foray into food processing industry.

The company, set up in April 1999, is marketing a range of fruit juices under

the brand name Real, Hommade Cooking Paste and Sauces and Lemoneez

lemon juice. Dabur was the first company in India to introduce fruit juices in

packaged form without any artificial additive. Real is today the market leader

in this category with more than 50% market share. Hommade cooking paste

is the only national brand in this category. Lemoneez is the only product in its

category available in unique drop and trickle pack and uniquely shaped
tabletop pack.

Dabur Nepal Private Limited -Dabur Nepal was the first manufacturing

base overseas for Dabur group. The company is today the leading exporter of

Nepal and the third largest and most modern manufacturing base for Dabur.

Dabur Nepal is today involved in promoting cultivation of herbs and

apiculture activities in Nepal. The company has set up state of the art

greenhouse at Banepa for developing saplings for 20 medicinal plants. Dabur

Nepal has also set up an Apiculture centre for promoting bee-keeping activity

in Nepal and developing queen bees and bee colonies for exports.

Dabur Egypt Limited -Dabur Egypt is groups gateway to Africa. This

manufacturing base set up a couple of years back to c~ater to the demands of

Middle East and African market is producing Hair Care, Skin Care Products

and Foods.

Dabur Oncology PIc. -Set up recently in UK, this subsidiary of Dabur India

Limited will be manufacturing anti-cancer formulations for European market.

The company is in the process of setting up manufacturing base near London

and is expected to start operation from year 2001.

Dabur Finance Limited

Dabur has an illustrious Board of Directors who are committed to take the

company onto newer levels of human endeavour in the service of mankind.


Chapter 4
PERFORMANCE
APPRAISAL
Chapter 4

PERFORMANCE APPRAISAL

Since organisation exist to achieve goals, the degree of success that individual

employees have in reaching their individuals goals is important in

determining organizational effectiveness. The assessment of how successful

employees have been at meeting their individual goals, therefore, becomes a

critical part of HRM. This leads us to the topic of performance appraisal.

PURPOSE

There are basically three purposes to which performance appraisal can be put.

• First, it can be used as a basis for reward allocations. Decisions as to

who gets salary jncreases, promotions, and other rewards are

determined by their performance evaluation.

• Second, these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those

individuals who have specific skill or knowledge deficiencies. The

performance appraisals is a major tool for identifying these

deficiencies.

• Finally the performance appraisal can be used as a criterion against

which selection devices and development programs are validated. It is


one thing to say, for example, that our selection process is successful in

differentiating satisfactory performers from unsatisfactory performers.

THE APPRAISAL PROCESS

Established performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

If necessary, initiate the corrective action

The appraisal process begins with the establishment of performance

standards. These should have evolved out of job analysis and the job

description discussed under human resource planning. These performance

standards should also be clear and objective enough to be understood and

measured. Too often, these standards are articulated in some such phrase as "a
full day's work" or "a good job". Communication only takes place when the

transference has taken place and has been received and understood by the

subordinate. Therefore feedback is necessary from the subordinate to the

manager. Satisfactory feedback censures that the information communicated

by the manager has been received and understood in the way it was intended.

The third step in the appraisal in the measurement of performance. To

determine what actual performance. To determine what actual performance is,

it is necessary to acquire information about it. We should be concerned with

how we measure and what we measure.

What we measure is probably more critical to the evaluation process than how

we measure, since the selection of the wrong criteria can result in serious

dysfunctional consequences. And what we measure determines, to a great

extent, what people in the organization will attempt to excel at.

One of the most challenging tasks facing managers is to present an . accurate

appraisal to the subordinate and then have the subordinate accept the appraisal

in a constructive manner. Appraising performance touches on one of the most

emotionally charged activities the assessment of another individual's

contribution and ability. The impression that subordinates receive about their

assessment has a strong impact on their self-esteem and, very important, on

their subsequent performance.


The final step in the appraisal is the initiation of corrective action when

necessary. Corrective action can, be of two types. One is immediate and deals

predominantly with symptoms. The other is basic and delves into causes.

Immediate corrective action often described as "putting out fires," whereas

basic corrective action gets to the source of deviation and seeks to adjust the

difference permanently.

Immediate action corrects something right now and gets things back on track.
Chapter 5
PERFORMANCE
APPRAISAL SYSTEM IN
DABUR INDIA LIMITED
Chapter 5

PERFORMANCE APPRAISAL SYSTEM IN DABUR


INDIA LIMITED

In Dabur India Limited they have the system of performance appraisal of

their employees. The main objective of this performance appraisal system is

to evaluate the performance, promote their employees and to arrange for

their various training programmes if they require for enhancing their skills in

their respective areas and in contribution enhancement..

Employees are evaluated by how well they accomplish a specific set of

objectives that have been determined to be critical in the successful

completion of their job. This approach is frequently referred to as .

management by objectives. Management by objectives is a process that

converts organization~l objectives into individual objectives. It can be

thought of as consisting of four steps: goal setting, action planning, self-

control, and periodic reviews. In goal setting, the organization's overall

objectives are used as guidelines from which departmental and individual

objectives are set. In action planing, the means are determined for achieving

the ends established in goal setting. That is, realistic plans are developed to

attain the objectives. Self-control refers to the systematic monitoring and

measuring of performance. Finally, with periodic progress reviews,

corrective action is initiated when behaviour deviates from the standards

established in the goal-setting phase. Dabur uses very constructive


performance appraisal process while evaluating its employees. Its evaluation

is based on quantitativewise and objectivewise.

Company set goals to its employee by properly reporting with its employees

and then evaluating them upto what extent it has been achieved and if there is

failure in reaching the target what are the causes or reasons behind it.

Every evaluator has his or her own value system which acts as a standard

against which appraisals are made. Relative to the true or actual performance

an individual exhibits, some evaluator~ mark high and others low. The former

is referred to as positive leniency error and the latter as negative leniency

error. When evaluators are positively lenient in their appraisal, an individual's

performance becomes over- stated; that is, rated higher than it actually should.

Similarly, a negative leniency error understates performance, giving the

individual a lower appraisal. As such there is no scope of error as far as the

Dabur company is concerned, but sometimes over estimation of target brings

about a description in the evaluating criteria. Thus, though chances are less,

positive leniency errors have been stated to be committed.

Outcome of Performance Appraisal

As far as Dabur company is concerned, there are four outcomes possible:

a. Outstanding -If the performance evaluated by the management turns

out to be outstanding. If the employee performs in such a way as to

collect 3 consecutive outstanding performance into his/her credit) he /

she gets promoted.


b. Excellent -If the performance evaluated by the management turns out to

be excellent. If the employee performs in such a way as to collect 3

consecutive excellent performance into his/her credit, he/she gets

promoted.

c. Good -If the performance evaluated by the management turns out to be

good. The management sends the employee to the training programme

to improve his/.her skill to perform form.

d. Below average -If the performance evaluated by the management turns

out to be below average. And, if the employee collects 3 below average

to his/her credit, then he/she dismissed

Duration of Appraisal System

The time constraints enables the employee to show or project his/her

capabilities in term of performance as per the duration allowed. In Dabur India

Limited, the performance appraisal system is carried out annually.

Feedback

The company provides the annual feedback to its employees and thus, in term

bring out the highlights of the self assessment programme. This enables the

better communicaiton between the management and employees ad thus, helps

in promoting the business future.


Response

There are mixed responses from the feedback by the employees. It has helped

some of the employees in motivating themselves while those who felt bad

were thoroughly communicated and all the confusion and failure part were

discussed with employees.


Chapter 6
ANALYSIS AND
INTERPRETATION OF
DATA
Chapter 6
ANALYSIS AND INTERPRETATION OF DATA

After collecting the data on "Performance Appraisal System" data was

Analyzed and interpreted. The various topics covered for analysis and

interpretation of data are: )

1. Promotions

A promotion may be defined as an upward advancement of an employee in an

organisation to another job, which commands better pay/wages, better status /

prestige and higher opportunities / challenges and responsibility, a better

working environment, hours of work and facilities etc.

Promoters have a salutary effect on the satisfaction of the promoted person's

need for esteem, belonging and security. They also afford an opportunity for

greater self-actualizing action through more varied and challenging

assignments. The promotion policies differ from an organisation to another.

The guidelines for departmental promotion in are same for male and female

employees. The period of experience required for filling a higher post

departmentally varies from 3-5 years. 5 years experience for promotion to

managerial staff and 3 years experience for promotion to Junior Management

staff is needed. The other area of promotion apart from seniority are merit and

fitness. Though these guidelines are not in a written format the supervisor and

manager get it at the time of appraisal from the personnel department.


As per the guidelines from the personnel department employees are to be

promoted accordingly. However there is confusion among the employee as

these guidelines are not being explained time to time, many are not aware of

the existing promotion policy in the organisation.

Respondents were asked whether the promotion is well defined in the

organisation. The responses are given below:

N=96

Response Number Percentage

Yes 16 16.66

No 52 54.16

Can't say 28 29.16

From the above table, it can be seen that 30% agree that promotion is well

defined in the organisation. However 54% were not able to say it as there is

lack of information about the promotion policy. Every employee need to be

communicated about the existing promotion policy.

60 52
50
40
28
30 Series1
20 16

10
0
Yes No Can't Say
Respondent were also asked to suggest any change in the policy. The responses

were as given below:

Response Number Percentage

Merit not recognized 20 20.83

Does not define career plan 26 16.66

Not integrated with business 0 0

Heterogeneity within policy for 56 58.83


different position

Majority suggested for no change in the policy. It seems they are satisfied with

the current policy.


Aligning goal

Respondent were asked about the present system, does it help in aligning

individual goal with those of the organisation. The responses were as given

below:

Response Number Percentage

Yes 44 45.83

No 12 12.5

Can't say 36 37.5

No response 4 4.16

Here the response from the supervisor were 45.83% for the factor that it help

in aligning their goal with those of organisation.

44
45
40 36
35
30
25
20 Series1
15 12
10
4
5
0
Yes No Can't Say No
response
Career Progress

Career progress is something which is continuous, with the input from

organisation in term of training, feedback and counselling. In today's

changing scenario this has to be followed in every organisation so that an

individual make progress in the career adding value to himself and the

organisation. Respondent were asked about the current system helping in their

career progress.

Career advancement is the most motivating factor when employee aspire for

the advancement of his career and for better opportunities to use his/her

talents. From the organisation's point of view, it is necessary to develop in

manager. Some expectations of opportunities for the future in order to keep

their motivation high. Career planning means helping the employee plan his

career in terms of his capabilities with the context or organisational needs.

Individual, after becoming aware of some of his/her capabilities and career and

development opportunities chooses to develop himself/herself in a direction

that improves his/her chances of being able to handle new responsibilities. It is

also the responsibility of the employer to help him/her to identify the career

opportunity, make choices and develop his/her career and provide

opportunities for career planning and succession planning


Question asked was as follows:

Are the issues like career planning and succession planning a part of

company’s policy

The responses to the above were as given below:

Response Number Percentage

Yes 16 16.66

No 44 45.83

Cant say 36 37.5

Here only 46% of the respondent gave response that it does not while 38%

gave response that there is no career development plan at all.

50 44
40 36

30
Series1
20 16

10

0
Yes No Can't Say
Feedback

Providing feedback playa constructive role. It helps the employee know

his/her weakness and strength. Feedback provides for the area of

improvement.

Respondent were asked about the frequency of feedback based on their

performance. The responses were as given below:

Response Number Percentage

Rarely 24 25

On a few occasion 40 41.66

Sometimes 24 25

Often 8 8.34

Almost always Nil Nil

41 percent responded that feedback is provided though on a few occasion. The

frequency has to increase both from the individual and organisation point of

view to keep the individual motivated for work in line with the organisational

expectation.
40
35
30
25
20
15
10
5
0
Rarely On a few Sometimes Often Almost
occasion always

Remedial measure

Based on the performance the remedial measures are taken to do away with

weakness if any and build on the strength and add to the existing capability
Response on the remedial measure were as given below:

Response Number Percentage

Job rotation 44 45.83

Sent to training programmed 40 41.66

Counseled 12 12.5

Any other Nil Nil

None Nil Nil

Here the response were both for job rotation and training programme. During

the course it was felt that more training input is to be provided to the employee

to overcome the weakness and improve upon the existing capability of the

employee.

45
40
35
30
25
20
15
10
5
0
J ob rotation Sent to CounselledAny other None
training
program
PROMOTION POLICY AND PERFORMANCE APPRAISAL

APPRAISAL SYSEM

Respondent were asked whether the promotion policy is linked with the

performance appraisal system

The responses were as given below:

Response Number Percentage

Yes 54 56.25

No 28 29.15

Cant say 14 14.58

Majority response were that promotion policy is linked with the performance

appraisal system.

60 54
50
40
28
30 Series1
20 14
10
0
Yes No Can't Say
SWOT ANALYSIS

1. Strength -Dabur India Limited is the first Indian major company which

came up with the idea of Ayurvedic concept in various family and health

care products. mostly whatever ingredients it uses in its product are

extracted from nature as it has very less synthetic chemical constituents

used in its product and so it does not has any threat of side effect. As it has

its product in major areas viz. family, health care and in food division it can

easily has larger share of market. By this performance appraisal system act

as motivating factor for its employees to a great extent by increasing their

efficiency and skills. For example, if we see Dabur Lal Dunt Manjan, it is

India's number one tooth powder doing very well in rural as well as in urban

market.

2. Weakness -The main weakness of the company is that the company is

taking the performance appraisal in objective wise, while evaluating a

particular employee performance, on objective wise, the employee does not

get enough opportunity to express completely and freely the valid reasons

of his/her failure to the organization. Weakness is also highlighted when

Dabur India Limited do this performance appraisal procedure annually.

3. Opportunity -With the help of this performance appraisal system the

employee always get feedback from the company. He / she can realize
easily his/her level of efficiency. By this performance appraisal system the

employee gets enormous opportunity to enhance their skills by special

training and various other managements programme.

4. Threats -While evaluating an employees performance the performance

appraisal system there is always a chance of fear that those employees who

are unable to achieve their target can take it as a huge set back for them and

in the log term it tends to decrease their efficiency level how good the

employee is and thus it effect the over all performance of the organization.
Chapter 7
CONCLUSIONS &
SUGGESTIONS
Chapter 7
CONCLUSIONS & SUGGESTIONS

Conclusion

The analysis and interpretation of data on study of performance appraisal and

its effectiveness in an organization led to the following conclusions:

• The promotion rule though defined need to be communicated to every

employee before appraisal process is done and also justify the promotion as

a result of the appraisal. That the promotion policy followed differs at

different position and category. A uniformity has to be there in the

implementation of promotion policy at all levels

• The process of performance appraisal followed in Dabur India Ltd. at the

supervisory and above level IS to say not good but of satisfactory level.

The employees do not rate it very good

• The appraisal outcome has to be used frequently for the purpose of reward

on performing well together with the feedback on the performance. Also

when performance goes down employee has to be given feedback and

motivated to do better.

• The organization at present doesn't lay career planning and career

suggestion plans.

• In Dabur India Ltd. feedback is being provided to the employee though on

a few occasion.
• Performance appraisal in Dabur India Ltd is done on an annual basis.

• More emphasis on training and job rotation as remedial measures.

• The mechanism of counseling pre-performance and post performance is not

in practice at the organization in strict term. During. the course of study

suggestion came from the employee side for the need of counseling.

Suggestions

The study undertaken bring some interesting result.

• Training the Appraiser: It is proposed that appraiser be trained for clear

understanding of the system and its objective and also counseled to be

honest, fair, just, unbiased in appraising the appraisal.

• Factors/traits of evaluation: It is proposed that appraisal evaluated on above

factors/traits be given suitable remark or justification for being given

different quantitative grade.

• Greater clarity has to be has to there in terms of job responsibility. This is

possible when the appraisal is done on the basis of the description.

• In the organization, performance appraisal is done on an annual basis

which should be done Quarterly to make it more effective.

• Consistency is demanded in the promotional policy. It should not change

every year.

• Monetary difference between two grades should not be large, it should be

motivating in nature.

• Performance appraisal system should be made more transparent and


rationale.

• Performance feedback: The performance feedback sessions should be

improved which would results in increasing employee motivation to

improve performance. The following could be incorporated.

• Pin point the problem behaviors and make sure the employee is aware

of it

• Make sure the employee understands the consequences of the problem

behaviors. Get employee's commitment to change and make sure he

cares about the change

• Assistance should be provided to improve poor performance. Make a

realistic plan appropriate to the behaviour and set a time frame for

improvement.

• To make sure to review performance time to time

• The other change which has to be incorporated at the supervisor and the

level above are:

• These should be listing down of task undertaken during the last one

year and the result achieved.

• In some areas of performance there should be self appraisal and more

and more counseling so that employee improve upon weak area and

understand what is expected of him/her at the organization level.

• Based on the above an open appraisal system is suggested.


In an open appraisal the employee would come together to set the targets, to

understand the mutual expectations and support to be provided by the

appraiser to the employee for achieving mutually accepted goals/targets.

Through this process of setting targets the interpersonal relationship between

the appraiser and the employee would improve.

The open appraisal system reduces the whims and fancies of the appraiser. It

promotes result-orientation as it is based on performance rather than on

personality based appraisal.


Annexure
a) Questionnaire
b) Bibliography
QUESTIONNAIRE
TO STUDY PERFORMANCE APPRAISAL SYSTEM

Q.1. Is the promotional policy well defined in your organization?


a. Yes b. No c. can't say

Q.2. Do you know the objectives of the Performance appraisal system. If yes kindly
specify.

Q.3. How often the performance appraisal form is filled or Performance Appraisal is
done.
a. fortnightly. b. monthly c. six-monthly. d. annually
e. not fixed.

Q.4. On what basis is the performance appraisal done.


a. merit cum seniority b. seniority cum merit. c. merit only
d. seniority only. e. any other. Pl. specify

Q.5 Who appraises you?


a. appraisal committee. b. your immediate supervisor
c. self-appraisal d. 360 degree appraisal.
e. any other please specify

Q.6. What methods are being used for performance appraisal


a. forced choice distribution method. b. essay method
c. ranking method. d. critical incident method
e. any other, kindly specify

Q.7. In your opinion does it identify the training needs?


a. to a large extent b. to some extent c. cant say d. not at all

Q.8. Is the promotional policy linked with the performance appraisal system
a. yes b. no c. can't say
Q.9. Are the issues like career planning and succession planning a part of company's
policy
a. yes b. no c. can't say.

Q.I0 Does the system help you in aligning your goals with those of the organization.

a. yes b. no c. can't say

Q.11. What role does top management play in the performance appraisal. kindly
comment.

Q.12. Are you a part of the appraisal committee


a. yes b. no

Q 13 . Do the employees get the feedback of performance appraisal


a. yes, every time. b. often, but not always.
c. only when required
d. rarely e. never

Q.14 Does the organization provide counseling after the appraisal.


a. always b. often c. rarely d. never. e. can't say.

Q.15. Who does the counseling


a. trained professionals b. untrained counselors. c. can't say

Q.16. What kind of remedial measures are taken.


a. job rotation b. sent to training programmes c. counseled
d. any other, kindly specify

Q.17. How do you rate the overall assessment of performance appraisal

a. Outstanding b. Very good c. Good d. Satisfactory


e. Poor
Q.18. What do you feel are the positives in the perfomance appraisal system in
your organization, Kindly mention

Q.19 What do you feel are the shortcomings of the performance appraisal system
being followed in your organization, Kindly mention

Q.20. For how long have you been working in this organisation

Q.21. Suggestion towards improving the performance appraisal system in your


organisation
BIBLOGRAPHY

1) Flippo EdwinB., Personnel management, Edition sixth, Tata Mc Graw Hills,


1984, p.g. 225-230

2) Gupta, C.B., Human Resource Management, Edition Fifth(Reprint),Sultan


Chand and Sons, New Delhi 2001, P.G. 5.3-5.10

3) Rao, P. Subba,Essentials of Human Resource Management and Industrial


Relations;Edition Second, Himalaya Publishing House, New Delhi 2001,
p.g.206-210

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