INTRODUCTION OF HRM

Human Resource Management (HRM) is a relatively new

approach to

managing people in any organization. People are considered the key resource in this
approach. it is concerned with

the people dimension in management of an

organization. Since an organization is a body of people, their acquisition,

development of

skills, motivation for higher levels of attainments, as well as

ensuring maintenance of their level of commitment are all

significant activities. These activities fall in the domain of HRM. Human Resource
Management is a process, which consists of four main activities, namely, acquisition,
development, motivation, as well as maintenance of human resources

DEFINITION OF HUMAN RESOURCE MANAGEMENT

1. Coleman has defined Human Resource management as the process of
determining manpower requirements and the means for meeting those
requirements in order to carry out the integrated plan of the organization.
2. Human resource Management is a double-edged weapon. If used properly, it
leads to the maximum utilization of human resources, reduces excessive labor
turnover and high absenteeism; improves productivity and aids in achieving
the objectives of an organization. Faultily used, it leads to disruption in the
flow of work, lower production, less job satisfaction, high cost of production
and constant headaches for the management personnel.

NATURE AND SCOPE OF HUMAN RESOURCE MANAGEMENT

The emergence of human resource management can be attributed to the writings of
the human religionists who attached great significance to the human factor.

Lawrence Apply remarked, Management is personnel administration. This

view is partially true as management is concerned with the efficient and effective use
of both human as well as non-human resources. Thus human resource management is
only a part of the management process. At the same time, it must be recognized that
human resource management is inherent in the process of management. This function
is performed by all the managers
Basic to all Functional Areas: Human Resource Management permeates all the
functional area of management such as production management, financial
management, and marketing management. That is every manager from top to bottom,
working in any department has to perform the personnel functions
Continuous Process: Human Resource Management is not a one shot function. It
must be performed continuously if the organizational objectives are to be achieved
smoothly

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

According to Scott, Clothier and Spiegel, The objectives of Human Resource
Management are:
(i) To ensure effective utilization of human resources, all other organizational
resources will be efficiently utilized by the human resources.
(ii) To establish and maintain an adequate organizational structure of relationship
among all the members of an organization by dividing of organization tasks into
functions, positions and jobs, and by defining clearly the responsibility,
accountability, authority for each job and its relation with other jobs in the
organization.
(iii) To generate maximum development of human resources within the organization
by offering opportunities for advancement to employees through training and
education.
(iv) To ensure respect for human beings by providing various services and welfare
facilities to the personnel.
(v) To ensure reconciliation of individual/group goals with those of the organization in
such a manner that the personnel feel a sense of commitment and loyalty towards it.

1.5 ROLE AND IMPORTANCE OF HUMAN RESOURCE

MANAGEMENT

Human Resource Management has a place of great importance. According to

Peter F. Drucker, The proper or improper use of the different factors of production
depends on the wishes of the human resources. Hence, besides other resources human
resources need more development. Human resources can increase cooperation but it
needs proper and efficient management to guide it.
Importance of personnel management is in reality the importance of labor
functions of personnel department which are indispensable to the management
activity itself. Because of the following reasons human resource management holds a
place of importance.
1. It helps management in the preparation adoption and continuing evolution of
personnel programmers and policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development
and appreciates the human assets.
4. It prepares workers according to the changing needs of industry and environment

1.6 Performance Appraisal Definition

Performance appraisal is directed toward two fundamental goals: to create a measure
that accurately assesses the level of an individual's job performance and to create an
evaluation system that will advance one or more operational functions in an
organization. Although all performance appraisal systems encompass both goals, they
are reflected differently in two major research orientations, one that grows out of the
measurement tradition, the other from human resources management and other fields
that focus on the organizational purposes of performance appraisal.

1.7 Objectives of Performance Appraisal

The main objective of performance appraisals is to measure and improve the
performance of employees and increase their future potential and value to the
company.
1. Providing Feedback. Providing feedback is the most common rustication for

an organization to have a performance appraisal system.

2. Encouraging Performance Improvement. How can anyone improve if he

doesnt know how hes doing right now? A good performance appraisal points
out areas where individuals need to improve their performance.
and Measuring Goals. Goal setting has consistently been

3. Setting

demonstrated as a management process that generates superior performance.

The performance appraisal process is commonly used to make sure that every
member of the organization sets and achieves effective goals.

1.8 Needs of Performance Appraisal.

(1) Provide information about the performance ranks basing on which decision
regarding salary fixation, confirmation, promotion, transfer and demotion
are taken.
(2) Provide feedback information about the level of achievement and behavior
of subordinate. This information helps to review the performance of the
subordinate, rectifying performance deficiencies and to set new standards
of work, if necessary.
(3) Provide information which helps to counsel the subordinate.
(4) Provide information to diagnose deficiency in employee regarding skill,
knowledge, determine training and development needs and to prescribe the
means for employee growth provides information for correcting placement.
(5) To prevent grievances and in disciplinary activities. Advertisements

1.9 NATURE AND SCOPE

Nature and scope of any performance appraisal should include the following:
provide employees with a better understanding of their role and responsibilities;
increase confidence through recognizing strengths while identifying training needs to
improve weaknesses; improve working relationships and communication between
supervisors and subordinates; increase commitment to organizational goals; develop
employees into future supervisors; assist in personnel decisions such as promotions or

allocating rewards; and allow time for self-reflection, self-appraisal and personal goal
setting.

1.10 IMPORTANCE OF PERFORMANCE APPRAISAL

1. Performance appraisal helps supervisors to assess the work
performance of their subordinates.
2.Performance

appraisal

helps

to

assess

the

training

and development needs of employees.

3. Performance appraisal provides grounds for employees to correct their
mistakes, and it also provides proper guidance and criticism for
employee's development.
4. Performance appraisal provides reward for better performance.
5. Performance appraisal helps to improve the communication system of
the organization

1.11 Advantages of performance appraisals:

They provide a document of employee performance over a specific period of
time.
They provide a structure where a manager can meet and discuss performance
with an employee.

 They allow a manager the opportunity to provide the employee with feedback
about their performance and discuss how well theemployee goals were
accomplished.
They provide a structured process for an employee to clarify expectations and
discuss issues with their manager.

OBJECTIVES OF THE STUDY:

To identify the actual performance of the employees and performance

standards used in performance appraisal program (opinion, satisfaction,
benefit, outcome, etc.).
To create and maintain a satisfactory level of performance.
To identify the awareness level of performance appraisal technique among the
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.

SCOPE OF THE STUDY:

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 employees 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 programmed
conducted at Wipro Infrastructure Engineering.

NEED OF THE STUDY:

To ensure organizational effectiveness through correcting the employee for
standard and improved
Performance and suggesting the changes in employee behavior.
It provides information about the performance ranks.
To provide information this helps to counsel the subordinates.
To facilitate fair and equitable compensation based on performance

LIMITATION OF THE STUDY:

This study is only limited to HDFC Bank pvt ltd.
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 some extent not the entire
employees of the organization.

COMPANY PROFILE
2.1 COMPANY INTRODUCTION
HDFC Bank Limited

"We understand your world"

Type

Public

Traded as

BSE: 500180
NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Constituent

Industry

Banking, Financial services

Founded

August 1994

Headquarters

Mumbai, Maharashtra India

Key people

Aditya Puri (MD)[1]

Website

HDFCBank.com

2.1 OVERVIEW OF HDFC COMPANY

HDFC Bank Limited is an Indian banking and financial services company
headquartered in Mumbai, Maharashtra. It is the fifth largest bank in India by assets,
incorporated in 1994. It is the largest private sector bank in India by market
capitalization as of 24 February 2014. As on Jan 2 2014, the market cap value of
HDFC was around US$26.88 billion, as compared to Credit Suisse Group with
US$47.63 billion. The bank was promoted by the Housing Development Finance
Corporation, a premier housing finance company (set up in 1977) of India According
to the Brand Trust Report 2014, HDFC was ranked 32nd among India's most trusted
brands.
As of 31 March 2013, the bank had assets of INR 4.08 trillion. For the fiscal year
2012-13, the bank has reported net profit of INR 69 billion, up 31% from the previous
fiscal year. Its customer base stood at 28.7 million customers on 31 March 2013

The Housing Development Finance Corporation Limited (HDFC) was

amongst the first to receive an in principle approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector, as part of RBIs liberalization of the
Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the
name of HDFC Bank Limited, with its registered office in Mumbai, India. HDFC
Bank commenced operations as a Scheduled Commercial Bank in January 1995.

2.2 ACHIEVEMENTS OF HDFC BANK

In the banking sector, HDFC Bank has one of the lowest cost of funds in India
and disciplined growth strategy. It maintains a healthy asset quality and seeks to
consistently match revenues with growth and profits. The banks business momentum
remained brisk and competitive in both its retail and wholesale customer franchises.
As at 31st March 2008, the Banks distribution network was well spread with
761branches and 1977 ATMs in 327 cities as against 684 branches and 1605 ATMs in
320 cities as at 31st March 2007. Portfolio quality as of March 2008 remained worthy
of emulation with net non-performing assets at 0.4% well below the industry
average.
In July 2007, the bank made a public offeringof 6,594,504 American
Depositary Shares (ADS).The net proceeds from this issue was Rs. 2393.9 crore
(US$ 598.50 million).The Banks Capital Adequacy Ratio (CAR) was 13.6% against
the regulatory minimum of 9%. Tier I CAR was at 10.3% as against 8.6% as at 31st
March 2007 (Source: internal data).

2.3 AWARDS AND REWARDS OF THE COMPANY

Outlook Money award 2013

Best Bank in Large Banks Category

IBA Innovation Awards

Most Innovative Use of Technology

Asia Money 2013

MACCIA Awards 2013

Best Domestic Bank in India

Mr. Aditya Puri: Best Executive in India

Best in Financial Services: Bank Category

Skoch Financial Inclusion Awards 2013 Organization of the Year

Guinness World Record

For The Annual Blood Donation Drive

Best Online Bank

Best Use of Business Intelligence
IBA Banking Technology Awards
2011

Best Customer Relationship Initiative

Best Risk Management & Security
Initiative
Best Use of Mobility Technology in
Banking

2.4 MISSION AND VISION OF HDFC BANK

MISSION

Our mission is to be "a World Class Indian Bank", benchmarking ourselves

against international standards and best practices in terms of product offerings,
technology, service levels, risk management and audit & compliance.
Increase our market share in Indias expanding banking and financial services
industry by following a disciplined growth strategy focusing on quality and
not on quantity and delivering high quality customer service.
Continue to develop products and services that reduce our cost of funds
Focus on high earnings growth with low volatility

VISION
To be customer driven best managed enterprise that enjoys market leadership
in providing housing related finance.

Our vision and values that we observe at work

1.
Excellence
2.

People Engagement

3.

Integrity

4.

Customer Centricity

5.

Collaboration

THEORETICAL STRAM WORK

3.1DEFINITION OF PERFORMANCE APPRAISAL

A performance appraisal needs to be a series of constructive, developmental

discussions, between line managers and their reports. They should focus on helping
people to realize their potential. To be effective, appraisals need to be a series of
conversations that culminate in the performance appraisal review. Its much more
effective (and easier) to appraise performance by regular meetings to discuss progress
and provide support, rather than to wait for a single, annual appraisal meeting.

3.2THEORIES OF PERFORMANCE APPRAISAL

Performance management is a concept in the field of human resource
management. Performance management is a continuous process of identifying,
measuring and developing the performance of individuals and aligning performance
with the strategic goals of the organization (Aguinis, 2009). Performance
management is many times mistaken as performance appraisal but the latter is just a
part of the former.

1. Setting of objectives.
2. Measuring the performance.
3. Feedback of performance results.
4. Reward system based on performance outcomes
5. And amendments to objectives and activities (Mabey et al, 1999).

3.3 TECHNIQUES OF PERFORMANCE APPRAISAL SYSTEM

The six steps in performing evaluations
1.Establish performance standards for each position and criteria for
evaluation
In setting objectives to be followed by the employee to be evaluated, the following
Principles are to be met.

Specific.
Measurable
Achievable (occasionally agreed between the line manager &employee
Result orientate in a company.
Times framed (with a set date for competition)

3.4 METHODS OF PERFORMANCE APPRAISAL

There are two types traditional methods and modern methods

TRADITIONAL METHODS:
Individual evaluation methods:
Individual evaluation methods are those techniques when the
standards of performance are defined individually, without references to other
person.
GRAPHIC RATING SCALE:
Is the oldest & still most used method of evaluation? In case the case the rate
is presented with A set of traits & is asked to rate the Employee on each it.
There are certain advantages in using methods

3.5 360 DEGREES APPRAISAL:

Nowadays various tools are available for evaluating employee
performance. Some organizations have even taken to 360 degree
evaluation techniques.
Till such time managing human resources gives way to Human
Resource Management in banks, performance management
systems including 360 degree evaluation techniques shall remain a
distant dream.
If only banks are to tweak the performance appraisal systems they
have to make it a more meaningful one thereby contributing to the
development of the individual and the organisation as a whole, they
will be taking a giant step forward.

 It is in this context that one should look at revamping the

performance appraisal systems in public sector banks.
As a first step of course, one should be clear as to what purposes it
should serve.
In general a performance appraisal system should serve as a tool
for work- performance judgemental and provide a basis for reward
allocation (none at present in public sector banks), promotions,
transfers, lay-offs etc.
It should help the organisations to identify high potential
employees

developmental,

fostering

work

improvement,

identifying training and development opportunities and develop

ways to overcome obstacles and barriers.
It should help the organisations to identify high potential
employees

developmental,

fostering

work

improvement,

identifying training and development opportunities and develop

ways to overcome obstacles and barriers.
It should provide for a two-way communication between the
employee and the supervisor and help diagnose strengths and
weaknesses thereby enabling a development plan for improving job
performance.

3.6 ADVANTAGES OF PERFORMANCE APPRAISAL:

Performance appraisal system can be put to several uses converting

the entire spectrum of human resource function in the organization. The
uses which performance appraisal serves are:
To take decision on termination.
Diagnosing individual and organizational problem.
To identify individuals with high potential.
Systematic efforts to tone up performance results, corrective
actions and appropriate feedback.
Input for an array of professional decision such as placement,
promotion, transfer, and reward.

DATA ANALYSIS AND INTERPRETATION

1. Are you aware about the organization performance appraisal system?

a) YES
b) NO

OPINION

NO. OF
RESPONDENTS

PERCENTAGE

YES

50

100

NO

TOTAL

50

100

INTERPRETATION: From the above it is evident that 100% of the employees feel
that performance appraisal is quit essential for any organization.

2.Do0 you think that performance appraisal is essential?

a) YES

b)

NO

OPINION

NO.OF
RESPONDENTS

PERCENTAGE

YES

48

96

NO

TOTAL

50

100

INTERPRETATION: From the above data it is evident that 96% of the respondents
feel that performance appraisal is very essential in the organization; where as 45
employees feel it is not essential in organization.

3. Does appraisal system of your organization facilities career growth & learning?

a) YES

b) NO

OPINION

NO.OF
RESPONDENT

PERCENTAGE

YES

42

84

NO

16

TOTAL

50

100

INTERPRETATION: From the above data it shows that 84% of employees feel that
organization facilitate growth & learning due to performance appraisal, where as 16%
of employees feel that organization does not provides growth & learning of
employees.

4. Performance appraisal system really assesses the quality of an employee.

Do you agree?
a)

YES

b)

NO

OPINION

NO.OF
RESPONDENTS

PERCENTAGE

YES

46

92

NO

TOTAL

50

100

INTERPRETATION: From the above data it is evident that 92% of the employees
feel that the performance appraisal system really assesses the quality of an employee,
where as 85 feel that it does not assesses the quality of an employee.

5. Periodicity of performance appraisal should be on

a) Quarterly basis

b) Half-yearly basis

c) Annual basis

INTERPRETATION: From the above data it is evident that 60%of the

employees feel that performance appraisal should be done on annual basis &
24% of the employees feel should be in done on half yearly basis 165 of the
employees feel should be done in quarterly basis

QUESTIONNAIRE FOR A STUDY ON PERFORMANCE

APPRAISAL SYSTEM:
1.

Do you think that Performance Appraisal is essential?

a) Yes

b)

No

2. Performance Appraisal System really assesses the quality of an employee. Do you

agree?
a) Yes

b)

No

3. Periodicity of Performance Appraisal should be on

a) Quarterly

b)

Half-yearly basis

c) Annual basis
4. The present Performance Appraisal of your organization
Distinguishes the performer & non performers?
a) Strongly agree

b) Agree

c)

d)

Disagree

strongly disagree

5. The Periodical Performance Appraisal of employee is required for

Maintaining efficiency of individual & organization?
a)

Yes

b)

No

FINDINGS AND SUGGESTIONS

It has been found that most of the employees think that the performance
appraisal is essential and they think it is used as a tool to improve
performance, to determine organization needs, and to basis for pay increase,
promotions, and transfer.
The appraisal system facilitates growth & learning of employees and it is used
to distinguish performers.
The existing appraisal system helps the management to identify potentiality of
employees as well as useful for maintaining efficiency of the individual &
organization.
The performance appraisal supports to experiment with new ideas as basis for
promotion.
The short coming of employees should be informed to them after performance
appraisal.
Promotion should be based on performance rather than seniority or any
other factors.
Performance appraisal should be appraised by granting awards/ merit
certificate.
New performance appraisal techniques such as 360 degree performance
appraisal system should be used.
The performance appraisal should not be assessed by biased mind and
personal grudge.
Feedback should not be given to the employees more frequently.

CONCLUSION
It Was Found That Indian Banks Are Not Sound As Far As Their Financial
Health Is Concerned. This Is Because All The Sample Indian Commercial Banks Were
Rated 3 On The Camel Scale. Even The State Bank Of India And The IciciBank, The
Largest Bank In The Public Sector And The Private Sector Respectively, Were Also
Rated 3. However, The New Generation Private Sector Banks Like The Axis Bank,
Hdfc Bank, Icici Bank And Kotak Mahindra Bank Each Had Elevated Themselves To
A Rating Of Above 3 At Least In One Financial Year (Over The Seven Year Period Of
Study) But Were Not Successful In Retaining This Position And Eventually Reverted
To A Rating Of 3 In The Very Next Financial Year Itself. On The Other Hand
Amongst The Public Sector Banks, Idbi Bank In The Very First Year Of Its
Transformation As A Bank Showed A Positive Sign With A Rating Of Above 3 (It 180
Was In Between 2 And 3) In The Fy 2004-05. However, Similar To The Other Private
Sector Banks, This Public Sector Banks Camel Rating Had Also Degraded To 3 In
Subsequent Years.
However, in order to have a strong financial system that would be capable of
supporting the countrys economic growth, we need more banks to move higher up
the CAMEL scale. Although the composite score on the positioning scale of the
sample banks were somewhat satisfactory, with all the banks having a score of above
3.5, but the CAMEL rating of 3 of all the sample banks is a matter of concern. Banks
with a rating of 3 do exhibit some degree of supervisory concern. This is because,
such banks fall under fair category and have weaknesses, which if left unmonitored,
may result in failure of banks or even led to degradation to 181 group 4 or 5.
Therefore, Indian commercial banks do need some degree of monitoring so that they
do not fail.

BIBLIOGRAPHY
Essential of HRM and Industrial Relations- P. Subba Rao.
Robert Bascal Performance Management to help Companies, Improve
their Performance Management Systems.
CH. Paramananda, Article on Performance Management.

WEBSITES:
WWW.HDFC.COM
HTTP://WWW.MONEYCONTROL.COM/
WWW.HDFC.NET
WWW.HR-GUIDE.COM