Perfornance Apprisal (Pom)

PROJECT REPORT ON PERFORMANCE APPRISAL
Aug. 25
PROJEC August 25
2009
T
REPOR
T
Perfor
mance
Apprais
STEEL AUTHORITY OF al
INDIA System
Sub :- Principles Of
Management of SAIL
Employ
ees
GREAT EASTERN MANAGEMENT B-SCHOOL ,BANGALORE

PROJECT REPORT ON PERFORMANCE 200
APPRISAL 9
ACKNOWLEDGMENT
Aug. 25
I express thanks and gratitude to Miss.LAKSHMI, GREAT
EASTERN MANAGEMENT B-SCHOOL, Bangalore for her
encouraging support and guidance in carrying out the project.
I would like to express gratitude and
indebtedness to Miss.LAKSHMI Faculty member, for her valuable
advice and guidance without which this project would not have
seen the light of the day.
I thank Mr. SUNDAR, Project guide, SAIL for
providing us with an excellent project and guiding me in
completing our project successfully. I would like to thank all the
staff members of SAIL for their kind co-operation. I would like
to thank my parents for being supportive all the time, and I am
very much obliged to them.
GREAT EASTERN MANAGENENT B-SCHOOL 2

APPRISAL 9
Aug. 25
Prepared By:-
Santhosh kumar GK
Reg no :( CC0058BK42AG23AAB)
Principles of Management
Great Eastern management B-school
Bangalore
EXECUTIVE SUMMARY

APPRISAL 9
Aug. 25 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.
In many organizations - but not all - appraisal results are

used, either directly or directly, 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.)
The purpose of this study has been to determine whether

the performance appraisal was used for employee development
and whether the appraisal was emphasized as an important part
of the performance appraisal process. Also whether the
performance appraisal helps in increasing company’s profitability.

APPRISAL 9
Our study suggested that the performance appraisal has

helped in increasing the profitability of SAIL which was clearly
Aug. 25
shown by their performance on BSE Sensex. Certain loop holes
has been determined and suggestions were made.
INTRODUCTION
Almost every organization in one way or another goes

through a periodic ritual, formally or informally, known as
performance appraisal. Performance appraisal has been called
many things. The formal performance appraisal has been called a
APPRISAL 9
tool of management, a control process, an activity and a critical

element in human resources allocation. Uses for performance
Aug. 25
appraisal have included equal employment opportunity
considerations, promotions, transfer and salary increases.
Primarily performance appraisal has been considered an overall
system for controlling an organization. Performance appraisal has
also been called an audit function of an organization regarding
the performance of individuals, groups and entire divisions.
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 semi-
annual), 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.
Almost every organization in one way or another goes

through a periodic ritual, formally or informally, known as
performance appraisal. Performance appraisal has been called
many things. The formal performance appraisal has been called a
tool of management, a control process, an activity and a critical
element in human resources allocation. Uses for performance
appraisal have included equal employment opportunity
considerations, promotions, transfer and salary increases.
Primarily performance appraisal has been considered an overall
system for controlling an organization. Performance appraisal has
also been called an audit function of an organization regarding
the performance of individuals, groups and entire divisions.

APPRISAL 9
Aug. 25
Objectives of performance appraisal
Employees would like to know from a performance appraisal system:
 concrete and tangible particulars about their work; and

 Assessment of their performance.
This would include how they:
o did;
o could do better in future;
o could obtain a larger share of rewards; and

APPRISAL 9
o Could achieve their life goals through their position.
Therefore an employee would desire that the appraisal system should

Aug. 25
aim at:
o their personal development;
o their work satisfaction; and
o Their involvement in the organization.
From the point of view of the organization, performance appraisal

serves the purpose of:
o providing information about human resources and their

development;
o · measuring the efficiency with which human resources are

being used and improved ;
o providing compensation packages to employees; and
o Maintaining organizational control.
Performance appraisal should also aim at the mutual goals of the

employees and the organization. This is essential because employees can
develop only when the organization’s interests are fulfilled. The
organization’s main resources are its employees, and their interest cannot be
neglected. Mutual goals simultaneously provide for growth and development
of the organization as well as of the human resources. They increase
harmony and enhance effectiveness of human resources in the organization.

APPRISAL 9
Aug. 25
SCOPE OF PERFORMANCE APPRAISAL
 To be instrumental in helping employees to better understand To help

each employee understand more about their role and become clear
about their functions;
 Their strengths and weaknesses with respect to their role and

functions in the organization;
 To help in identifying the developmental needs of employees, given

their role and function;

APPRISAL 9
 To increase mutuality between employees and their supervisors so

that every employee feels happy to work with their supervisor and
Aug. 25
thereby contributes their maximum to the organization;
 To act as a mechanism for increasing communication between

employees and their supervisors. In this way, each employee gets to
know the expectations of their superior, and each superior also gets
to know the difficulties of their subordinates and can try to solve
them. Together, they can thus better accomplish their tasks;
To provide an opportunity to
each employee for self-
reflection and individual goal-
setting, so that individually
planned and monitored
development takes place;
 To help employees internalize the culture, norms and values of the

organization, thus developing an identity and commitment throughout
the organization;

APPRISAL 9
Aug. 25  To help prepare employees for higher responsibilities in the future by

continuously reinforcing the development of the behavior and qualities
required for higher-level positions in the organization;
 To be instrumental in creating a positive and healthy climate in the

organization that drives employees to give their best while enjoying
doing so; and
 To assist in a variety of personnel decisions by periodically generating

data regarding each employee.

APPRISAL 9
Aug. 25
ERRORS OCCURRED
IN
PERFORMANCE APPRAISAL
One of the biggest problems with performance appraisal is the fact that
most people are not accurate raters of others’ performance. When an
employee’s performance rating does not reflect their true or actual
performance, we say a rater error has occurred. The most common rater
errors are:-
 Halo / Horn Effect
 Central Tendency
 Recency
 Leniency
 Bias

APPRISAL 9
Aug. 25
ERROR DEFINITION EXAMPLE
Inappropriate generalizations Manoj’s outstanding writing

from one aspect of an ability caused his supervisor
individual’s to rate him highly in
Halo/horns
unrelated areas where his
effect performance to all areas of
performance was actually
that
mediocre.
person’s performance
The inclination to rate people Because Rahul had a concern

in the middle scale even when that he would not be able to
their deal with confrontation
Central during an appraisal session,
performance clearly warrants
tendency he rated
a
all of his employees as
substantially higher or lower
rating “Meets Expectations.”
Recency The tendency of minor events Sudha kept no records of

effect that have happened recently
Critical incidents. When she
to have more influence on the
rating than major events of began writing the appraisals
many months ago for her employees she
APPRISAL 9
discovered that she could
Aug. 25
only recall examples of
either positive or negative
performance for
The last two months.
The tendency to attribute Reema , attributes the

performance failings to successes of her work group
factors to the quality of her
Attribution leadership and the failings

under the control of the
bias individual To their bad attitudes and
inherent laziness.
and performance successes to
external causes

APPRISAL 9
Aug. 25
METHODOLOGY
Basically there are two types of performance appraisal done on the basis of
post of the SAIL’s employee. They are:
1. Executive performance appraisal system
2. Non-executive performance appraisal system
EXECUTIVE PERFORMANCE APPRAISAL SYSTEM

APPRISAL 9
Aug. 25
This system is for performance appraisal for executives of the level E-0 to
E-4. The various steps involved are:
A) Self Appraisal Performance Review & Planning
I. Appraisees write his view over the actual achievement for the Key
performance area / Task and Target assigned to him for the year.
II. Comments on fulfillment of KPA / Task and Target are written by

the Reporting Officer, taking account of time frame also.
III. Special Jobs other than tasks given and normal routine work are
written by appraise.
B) Performance Review Discussion
I. Both appraise and reporting officer sit together.
II. Comment over Strengths and weaknesses and areas for development
are written which is undersigned by both.
III. Appraise can help the reporting officer by giving examples which
shows his strength or weakness. He also tells what training he wants
to undergo.
C) Performance Assessment
APPRISAL 9
Aug. 25 I. Ratings between 1 to5 are given to the appraise by the Reporting
Officer and Reviewing Officer individually on the basis of
Performance Factors and Potential Factors.
Performance Factors: Quantity of output
Quality of output
Cost control
Job Knowledge and Skill
Team spirit and Lateral
Coordination
Discipline
Development & Quality of assessing subordinates
Special Relevant factor
Potential Factors: Communication
Initiative
Commitment and sense of Responsibility
Problem Analysis and Decision making
Planning and Organizing

APPRISAL 9
Management of Human resources
Aug. 25
II. Different weight age are given to each factor
III. Final scores are calculated by multiplying rating and weight age
.By adding these Total Factor Score is calculated.
IV. Comments on Overall Performance and Potential are written by

both Reporting and Reviewing Officers individually.
D) Suggestions for Job Rotation and Job Enrichment
I. Both reporting and reviewing officers write their suggestions

whether the appraise should be transferred to other department.
Either a good employee is transferred so that he can acquire
knowledge of all the departments, or a worst performing employee is
transferred so as to improve his performance.
II. In some exceptional case Head of department give his comments on

overall performance & potential of the employee.
E) Final Assessment
I. Total Factor Score by both Reporting and reviewing officers is

written and average is calculated.

APPRISAL 9
II. Final Grading between O / A / B / C is given.
Aug. 25 III. If Final Grade is C, indicate whether to promote or not to promote

the appraise.
IV. If not to promote give reasons.
V. Meeting with non-promotable appraise.
NON-EXECUTIVE PERFORMANCE APPRAISAL SYSTEM
I. Rating are given by both Reporting and Reviewing officers on the basis of
performance of the appraise depending upon factors:

APPRISAL 9
Performance on the Job
Aug. 25 Job Knowledge & skill
Multi-skill Utilization
Conduct & behavior
Punctuality & availability on job
Innovativeness
Cost & Quality Consciousness
Initiative & Capacity to assume higher

responsibility
Housekeeping & safety consciousness
II. Weightage are given to various factors.
III. Scores out of 100 are calculated by multiplying rating with weight age.
IV. O / A / B / C / C- Grades are given according to scores and attendance of

the appraise.
V. If grade is C- , then appraise is interviewed by the Head of Department.

APPRISAL 9
Aug. 25
METHODS OF PEFORMANCE APPRAISAL

APPRISAL 9
Aug. 25
Once the employees has been selected, trained and motivated, he is then
apprised for his performance. Performance appraisal is the step where
the management finds out how effective it has been hiring and placing
employees. If any problem is identified, steps are taken to communicate
with the employees and to remedy them. So “so a performance appraisal
is a process of evaluating an employee’s performance of a job in terms of
its requirement “
Several methods and techniques of appraisal are available for

measurement of the performance of the employee. The methods and
APPRISAL 9
scales differ for obvious reason. First they differ in sources of traits
and qualities to be apprised. The quality may differ because of
Aug. 25
difference in job requirements. Second they differ because of different
kinds of workers who are being rated .third the variation may be caused
by the degree of precision attempted in an evaluation. Finally they differ
because of the method used to obtain weighting for various traits.
The performance appraisal method is divided into three categories these

are
Trait-based method
Behavioral method
Comparative method
Result oriented method
The part concerned with me is the comparative methods
There are so many methods which are include in comparative method but
the most important and most popular are
Straight ranking method
Grading method
Graphing rating method
Forced choice description method
Forced distribution methods
Check list method
Critical incident method

APPRISAL 9
Free from easy method
Aug. 25
Straight ranking method
It is the oldest and simplest method of performance appraisal, by which

the man and his performance are considered as an entity by the rater. No
attempted is to made to fractionalize the rate; the whole man compared
with the whole man; that is the ranking of a man in a work group is done
against that of another. The relative position of each man is tasted in
terms of his numerical rank.
Limitation-
This is the simplest method of separating the most efficient from the
least efficient and relatively easy to develop and use. But the greatest
limitation of his method is the
In practice it is very difficult to compare a single individual with human

beings having various behavior traits
The method only tell us how a man stands in relation to the others in the
group but does not indicate how much better or worse he is than another
It is difficult task when large number of person are rated
It does not eliminate snap judgment.
Grading method-
Under this system, the rater consider certain feature and marks them
accordingly to the scale, train categories of worth are first established

APPRISAL 9
and carefully defined. The selected feature may be analytical ability,

cooperativeness, dependability, self-expression, job knowledge,
Aug. 25
leadership, etc they may be
A-out standing B-very good C-average D-fair E-poor
These are used in the selection of candidates by the public service

commission
Limitation- in this method we can’t get the actual performance of the

employee. for example if consider that those employee who got 50 to 60
point is in average then the who got 50 point may be de motivated and
who got 51 point may be happy with that appraisal .
Graphic Rating Method
This is the most commonly used method of performance appraisal. Under

it a printed form one for each person to be rated. The factors which are
including in this method are employee characteristics and employee
contribution. In employee characteristics are included are leadership,
attitude, enthusiasm, locality creative ability, analytical ability, co-
ordination. In the employee contribution are include the quantity and
quality of work, the responsibility assumed, specific goal achieved,
regularity of attendance. These traits then evaluated on continuous scale
where in the rather place a mark somewhere along a continuum
Limitation-
However this method also not free from limitation
The rating is generally subjective often the rating cluster on the high
side when this method is used
Another severe limitation is that it assume that each characteristics is

equally important for all jobs

APPRISAL 9
Aug. 25 Trait:
Ranking. –
The term ranking has been used to describe an alternative method of

performance appraisal where the supervisor has been asked to order his or
her employees in terms of performance from highest to lowest.
Forced choice description method
it attempts to correct a rater tendency to give consistently high or low

rating to all the employees under this method the rating elements are
several sets of pair phrases or adjective relating to job proficiency and
personal qualification the following statement are illustrative of the type
of statement that are used
Organize the work well
Lacks the ability to make people feel at ease
Has a cool even temperament
Is punctual and careful
Is a hard worker and co-operative
Limitation-
Trained technicians are required prepare sets of series for each

occupational group

APPRISAL 9
Most of the raters become irritated with the test because they are not
being trusted
Aug. 25
The result of evaluation don’t prove useful for training purposes because
the rate is ignorant of how he is evaluating the individual
Forced distribution method
This system is used to eliminate or minimize rater’s bias so that all the
personnel may not be placed at the higher end or lower end of the scale.
It requires the rater to apprise an employee according to a
predetermined distribution scale under this system it is performance and
promo ability. For this purpose a five point performance scale is used
without any descriptive statement. Employees are placed between the
two extreme good or bad job performances. For ex 10% given to
outstanding, 20% given to good and 40% given to satisfactory.
Limitation-
This method use in wage administration leads to low morale and low
productive
Paired Comparison. –
The term used to describe an appraisal method for ranking employees.

First, the names of the employees to be evaluated have been placed on
separate sheets in a pre-determined order, so that each person has been
APPRISAL 9
compared with all other employees to be evaluated. The evaluator then

checks the person he or she felt had been the better of the two on the
Aug. 25
criterion for each comparison. Typically the criterion has been the
employees over all ability to do the present job. The number of times a
person has been preferred is tallied, and the tally developed is an index of
the number of preferences compared to the number being evaluated.
Graphic Rating Scale. –
The term used to define the oldest and most widely used performance
appraisal method. The evaluators are given a graph and asked to rate the
employees on each of the characteristics. The number of characteristics can
vary from one to one hundred. The rating can be a matrix of boxes for the
evaluator to check off or a bar graph where the evaluator checked off a
location relative to the evaluators rating.
Behavioral Anchored Rating Scales. –
The term used to describe a performance rating that focused on specific

behaviors or sets as indicators of effective or ineffective performance,
rather than on broadly stated adjectives such as "average, above average, or
below average". Other variations were:
Behavioral observation scales
Behavioral expectations scales

APPRISAL 9
Numerically anchored rating scales
Aug. 25
Checklist method
Under this method the rater does not evaluate employee performance; he
supplies report about it and the final rating is done by personnel
department. A series of question are presented concerning an employee
to his behavior. The rater then checks to indicate if the answer to a
question about an employee is positive or negative. The value of each
question may be weighed equally or certain question may be weighed more
heavily then others.
Example-
Is the employee really interested in job? Yes/no
Is he regular on his job? Yes/no
Is his equipment maintained in order? Yes/no
Does he ever make mistake? Yes/no
Does he follow instruction properly? Yes/no
Limitation-
This method suffers from bias on the part of the rater because he can
distinguish positive or negative question
Process can be expensive and time consuming
Separate checklist must be developed

APPRISAL 9
Aug. 25
Free essay method:
Under this method the supervisor makes a free form, open ended
appraisal of an employee in his own words and put down its impression
about the employee. He takes note of these factors
Relation with fellow supervisor
General organization and planning ability
Job knowledge and potential
Employee characteristics and attitude
Production, quality, and cost control
Physical condition and
Development needs
Limitation-
It contains a subjective evaluation of the reported behavior of an

individual may affect such employment decision as promotion, lay-off.
Etc.

APPRISAL 9
Some appraisal may not write a descriptive report
Aug. 25 The appraisal may be loaded with flowery language about the quality of
rate than the actual evaluation
Critical incident method
The essence of this system is that it attempts to measure workers

performance in terms of certain events and episode that occur in the
performance rates job. These events are known as critical incident
method. The supervisor keeps a written record of the event that can
easily recalled and used at the time of performance appraisal
Limitation
Negative incident are generally more noticeable than positive ones
The supervisor may be put off and easily forgotten
Very close supervision may be required and it may not be like by the
employee
Management by Objectives. –

APPRISAL 9
The management by objectives performance appraisal method has the

supervisor and employee get together to set objectives in quantifiable
Aug. 25
terms. The appraisal method has worked to eliminate communication
problems by the establishment of regular meetings, emphasizing results, and
by being an ongoing process where new objectives have been established and
old objectives had been modified as necessary in light of changed conditions.
DATA ANALYSIS

APPRISAL 9
Aug. 25

APPRISAL 9
Aug. 25

APPRISAL 9
Aug. 25
 SAIL wins 'India's Employers of Choice Award-2007' in the
Public Sector
 SAIL's Q4 net profit Rs.1902 crore – up 72%
 President Kalam presents prestigious Corporate Social
Responsibility award to SAIL
 SAIL has been a pioneer in promulgating a firm policy
 on safety in the workplace.
 SAIL has been an active participant in the National RCH
programme across all since 1995. All SAIL hospitals have
participated in the National RCH program.

APPRISAL 9
 In all SAIL Plants, Mahila Samities have been formed since
Aug. 25 inception. The members of the Samities are spouses of the
employees. Spouses of MDs, EDs etc are also a member of
Mahila Samities . A lot of work is being done for the
society by these Samities.
o All these facts shows that SAIL is constantly
increasing and becoming famous in public sector .This
implies employees are working efficiently which is
possible when employees are happy with company’s
performance appraisal system.
OBSERVATIONS

APPRISAL 9
In the present performance appraisal system of SAIL we found
the following loop holes:

Aug. 25
If the appraise has good terms with the reviewing officer and
does not have a smooth relationship with the reporting officer,
in such case the reporting officer is sometimes forced by the
reviewing officer to give better score to the appraise.
RECOMMENDATIONS
• The reporting officer should keep the performance data of
each subordinate.

APPRISAL 9
• The reporting officer should give monthly feedback to the
Aug. 25 subordinates regarding their performances and thereby giving
suggestions to improve.
BIBLIOGRAPHY
Websites :- www.sailindia.co.in
www.wikipedia.org

APPRISAL 9
www.performance-appraisal.com/intro.htm
Aug. 25
www.telecollege.dcccd.edu/contents/evaluate.
htm
Books :-
i. Personnel – Human Resource Mgmt
By David A Decenzo
ii. Human Resource Mgmt
By Gary Dessler
CERTIFICATE
This is to certify that by Mr. SANTHOSH KUMAR GK
bearing roll no: (CC0058BK42AG23AAB) a Bonfide

APPRISAL 9
student of MBA, Ist Trimester, GREAT EASTERN

Aug. 25
MANAGEMENT B-SCHOOL, BANGALORE has
successfully completed his project work titled
“PERFORMANCE APPRISAL” in partial fulfillment
For of the requirement for the award of the MBA
Degree of GEMS, Principles of Management under the
guidance of Miss.LAKSHMI faculty member
GREAT EASTERN MANAGEMENT B- SCHOOL,
BANGALORE

Perfornance Apprisal (Pom)

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PROJECT REPORT ON PERFORMANCE APPRISAL

GREAT EASTERN MANAGEMENT B-SCHOOL ,BANGALORE

I express thanks and gratitude to Miss.LAKSHMI, GREAT

EASTERN MANAGEMENT B-SCHOOL, Bangalore for her

encouraging support and guidance in carrying out the project.

I would like to express gratitude and

indebtedness to Miss.LAKSHMI Faculty member, for her valuable

seen the light of the day.

I thank Mr. SUNDAR, Project guide, SAIL for

providing us with an excellent project and guiding me in

completing our project successfully. I would like to thank all the

staff members of SAIL for their kind co-operation. I would like

to thank my parents for being supportive all the time, and I am

very much obliged to them.

GREAT EASTERN MANAGENENT B-SCHOOL 2

Great Eastern management B-school

GREAT EASTERN MANAGENENT B-SCHOOL 3

Aug. 25 The history of performance appraisal is quite brief. Its

In many organizations - but not all - appraisal results are

By the same token, appraisal results are used to identify

The purpose of this study has been to determine whether

GREAT EASTERN MANAGENENT B-SCHOOL 4

Our study suggested that the performance appraisal has

Almost every organization in one way or another goes

tool of management, a control process, an activity and a critical

Performance appraisal may be defined as a structured

Almost every organization in one way or another goes

GREAT EASTERN MANAGENENT B-SCHOOL 6

Objectives of performance appraisal

Employees would like to know from a performance appraisal system:

 concrete and tangible particulars about their work; and

This would include how they:

o could do better in future;

o could obtain a larger share of rewards; and

o Could achieve their life goals through their position.

Therefore an employee would desire that the appraisal system should

o their personal development;

o their work satisfaction; and

o Their involvement in the organization.

From the point of view of the organization, performance appraisal

o providing information about human resources and their

o · measuring the efficiency with which human resources are

Performance appraisal should also aim at the mutual goals of the

GREAT EASTERN MANAGENENT B-SCHOOL 8

SCOPE OF PERFORMANCE APPRAISAL

 To be instrumental in helping employees to better understand To help

 Their strengths and weaknesses with respect to their role and

 To help in identifying the developmental needs of employees, given

GREAT EASTERN MANAGENENT B-SCHOOL 9

 To increase mutuality between employees and their supervisors so

 To act as a mechanism for increasing communication between

 To help employees internalize the culture, norms and values of the

GREAT EASTERN MANAGENENT B-SCHOOL 10

Aug. 25  To help prepare employees for higher responsibilities in the future by

 To be instrumental in creating a positive and healthy climate in the

 To assist in a variety of personnel decisions by periodically generating

GREAT EASTERN MANAGENENT B-SCHOOL 11

 Halo / Horn Effect

GREAT EASTERN MANAGENENT B-SCHOOL 12

ERROR DEFINITION EXAMPLE

Inappropriate generalizations Manoj’s outstanding writing

The inclination to rate people Because Rahul had a concern