Project Report On
Project Report On
System
PROJECT REPORT
on
Performance Appraisal System
Submitted in the partial fulfillment for the award of the degree of
Master of Business Administration
CERTIFICATE
This is to certify that this Project Report entitled ‘Evaluation of Performance
Appraisal System’ is the result of research work carried out by Mr. __________
under the guidance and supervision of Professor _______________________.
Signature
PROJECT REPORT ON PERFORMANCE APPRAISAL SYSTEM AT BSNL
INTRODUCTION TOWARDS PERFORMANCE APPRAISAL SYSTEM
Human Resource (or personnel) management, in the sense of getting things done
through people, is an essential part of every manager’s responsibility, but many
organizations find it advantageous to establish a specialist division to provide an
expert service dedicated to ensuring that the human resource function is performed
efficiently.
“People are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet, the reality for many organizations are
that their people remain under valued, under trained and under utilized.
Performance Appraisal is the process of assessing the performance and progress of an employee or
a group of employees on a given job and his / their potential for future development. It consists of
all formal procedures used in the working organizations to evaluate personalities, contributions and
potentials of employees.
PREFACE
Managing human resources in today’s dynamic environment is becoming more and more complex as
well as important. Recognition of people as a valuable resource in the organization has led to increases
trends in employee maintenance, job security, etc
My research project deals with “Performance Appraisal as carried out at Bhart
Sanchar Nigam Ltd. (BSNLK)”. In this report, I have studied &evaluated the
performance appraisal process as it is carried out in the company.
The first section of my report deals with a detailed company profile. It includes the
company’s history: its activities and operations, organizational structure, etc. this
section attempts to give detailed information about the company and the nature of
it’s functioning.
The second section deals with performance appraisal. In this section, I have given a
brief conceptual explanation to performance appraisal. It contains the definition,
process and significance of performance appraisal.
In the third section of my report, I have conducted a research study to evaluate the
process of performance appraisal at Bharat Sanchar Nigam Ltd.; this section also
contains my findings, conclusions, suggestions and feedback.
The forth and final section of this report consists of extra information that I related
to the main contents of the report. These annexure include some graphs and
diagrams relating to the company, graphs relating to the research study and
important documents upon which the project is based.
RATIONALE OF THE STUDY
Performance Appraisal is the important aspect in the organization to evaluate the
employees performance. It helps in understanding the employees work culture,
involvement, and satisfaction. It helps the organization in deciding employees
promotion, transfer, incentives, pay increase.
Human Resource (or personnel) management, in the sense of getting things done
through people, is an essential part of every manager’s responsibility, but many
organizations find it advantageous to establish a specialist division to provide an
expert service dedicated to ensuring that the human resource function is performed
efficiently.
“People are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet, the reality for many organizations are
that their people remain under valued, under trained and under utilized.
The market place for talented, skilled people is competitive and expensive. Taking on
new staff can be disruptive to existing employees. Also, it takes time to develop
‘cultural awareness’, product / process / organization knowledge and experience for
new staff members.
Many firms have expanded the idea of upward feedback into what the call 360-
degree feedback. The feedback is generally used for training and development,
rather than for pay increases.
Most 360 Degree Feedback system contains several common features. Appropriate
parties – peers, supervisors, subordinates and customers, for instance – complete
survey, questionnaires on an individual. 360 degree feedback is also known as the
multi-rater feedback, whereby ratings are not given just by the next manager up in
the organizational hierarchy, but also by peers and subordinates. Appropriates
customer ratings are also included, along with the element of self appraisal. Once
gathered in, the assessment from the various quarters are compared with one
another and the results communicated to the manager concerned .
Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to "play God."
Advantages
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the
employee meets or exceeds the set objectives, then he or she has demonstrated an
acceptable level of job performance. Employees are judged according to real
outcomes, and not on their potential for success, or on someone's subjective opinion
of their abilities.
The guiding principle of the MBO approach is that direct results can be observed easily. The MBO
method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that
go to make up employee performance.
MBO advocates claim that the performance of employees cannot be broken up into
so many constituent parts, but to put all the parts together and the performance
may be directly observed and measured.
Disadvantages
This approach can lead to unrealistic expectations about what can and cannot be
reasonably accomplished. Supervisors and subordinates must have very good "reality
checking" skills to use MBO appraisal methods. They will need these skills during the
initial stage of objective setting, and for the purposes of self-auditing and self-
monitoring.
Variable objectives may cause employee confusion. It is also possible that fluid
objectives may be distorted to disguise or justify failures in performance.
Leniency or severity: - Leniency or severity on the part of the rater makes the
assessment subjective. Subjective assessment defeats the very purpose of
performance appraisal. Ratings are lenient for the following reasons:
a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavorably will reflect poorly on his or her own worthiness.
b) He/She may feel that a derogatory rating will be revealed to the rate to
detriment the relations between the rater and the ratee.
Central tendency: - This occurs when employees are incorrectly rated near the
average or middle of the scale. The attitude of the rater is to play safe. This safe
playing attitude stems from certain doubts and anxieties, which the raters have been
assessing the rates.
Halo error: - A halo error takes place when one aspect of an individual's performance
influences the evaluation of the entire performance of the individual. The halo error
occurs when an employee who works late constantly might be rated high on
productivity and quality of output as well ax on motivation. Similarly, an attractive or
popular personality might be given a high overall rating. Rating employees separately
on each of the performance measures and encouraging raters to guard against the
halo effect are the two ways to reduce the halo effect.
Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or
low score are given only to certain individuals or groups based on the rater's attitude
towards them and not on actual outcomes or behaviors; sex, age, race and friendship
biases are examples of this type of error.
Primacy and Regency effects: - The rater's rating is heavily influenced either by
behavior exhibited by the ratee during his early stage of the review period (primacy)
or by the outcomes, or behavior exhibited by the ratee near the end of the review
period (regency). For example, if a salesperson captures an important contract/sale
just before the completion of the appraisal, the timing of the incident may inflate his
or her standing, even though the overall performance of the sales person may not
have been encouraging. One way of guarding against such an error is to ask the rater
to consider the composite performance of the rate and not to be influenced by one
incident or an achievement.
a) Reporting Manager
“People are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet, the reality for many organizations are
that their people remain under valued, under trained and under utilized.
Following are the various functions of Human Resource Management that are essential for the
effective functioning of the organization:
1. Recruitment
2. Selection
3. Induction
4. Performance Appraisal
5. Training & Development
OBJECTIVES OF THE STUDY
To carry out the study of BSNL, we framed the following objectives
RESEARCH METHODOLOGY
RESEARCH DESIGN:
Research Design refers to "framework or plan for a study that guides the collection
and analysis of data". A typical research design of a company basically tries to
resolve the following issues:
e) Developing Questionnaires
Explorative studies are undertaken with a view to know more about the problem.
These studies help in a proper definition of the problem, and development of specific
hypothesis is to be tested later by more conclusive research designs. Its basic
purpose is to identify factors underlying a problem and to determine which one of
them need to be further researched by using rigorous conclusive research designs.
Conclusive Research Studies are more formal in nature and are conducted with a
view to eliciting more precise information for purpose of making marketing
decisions.
a) Descriptive or
b) Experimental
Thus, it was mix of both the tools of Research Design that is, Explorative as well as
Conclusive.
SAMPLING PLAN:
DATA COLLECTION:
Data Sources:
1. Bar graphs
2. Pie Diagrams
3. Doughnuts
Options Response
Yes 84
No 16
Awareness of technique of Performance Appraisal being followed at BSNL
among Employees
Options Response
Yes 72
No 28
Number of Employees being appraised during their service period
Options Response
Yes 68
No 32
Fully Satisfied 2
Satisfied 24
Can’t Say 44
Dissatisfied 30
Options Response (in %)
Continuous 92
Never 0
Can’t Say 6
If continuous appraisal – what should be the gap between two appraisal period
Options Response (in %)
Quarterly 20
Half Yearly 44
Yearly 36
Motivated Indifferent Demotivated
+ Feedback
38 12 -
- Feedback
12 10 28
Neutral 24 21 5
Options Response ( in % )
Superior 24
Peer 0
Subordinate 0
Self Appraisal 8
Consultant 4
Superior + Peer 16
.Does appraisal help in polishing skills and performance area?
Options Response ( in % )
Yes 74
No 10
Somewhat 16
If the process of appraisal does not lead to the improvement of the skills and
proficiency of the employees, the very purpose of appraisal becomes illogical.
In the survey conducted it was observed that nearly 74 % of the respondents
agree that Performance Appraisal does leads to polishing the skills of the
employees. Nearly 10 % of the respondents view that it does not serve this
purpose and around 16 % were not able to respond as to whether it serve any
such purposes or not.
Does personal bias creeps-in while appraising an employee
Options Response ( in % )
Yes 82
No 18
In the process of appraising, both the parties are human being, that is, the one
who is being apprised and the other who is appraising. Thus, there bound to be
subjectivity involved, be it an objective way of appraising.
Thus, when asked from among the sample size of 50 respondents, as huge as 82 % respondended
that personal bias do creep in while appraising an individual. Hence, it is inevitable to say that
personal likings do not come in the process of appraisal. It is the extent to which the appraiser
manages it so that it does not become very partial and bias.
If given a chance, would employees like to review the current appraisal
technique?
Options Response ( in % )
Yes 72
No 4
Can’t Say 24
0%
20%
58%
4%
6%
Rating Scale
Paired Comparison
Critical Incident
MBO
Assessment Centre
360 Degree
Options Response ( in % )
Ranking Method 12
Paired Comparison 0
Critical Incidents 20
MBO 58
Assessment Centre 4
360 degree 6
Options Response ( in % )
Yes 96
No 4
LIMITATIONS OF THE STUDY
A few limitations and constraints came in way of conducting the present study, under which the
researcher had to work are as follows:
Ø Although all attempts were made to make this an objective study, biases on the part of
respondents might have resulted in some subjectivity.
Ø Though, no effort was spared to make the study most accurate and useful, the “sample Size”
selected for the same may not be the true representative of the Company, resulting in biased
results.
Ø This being the maiden experience of the researcher of conducting study such as this, the
possibility of better results, using deeper statistical techniques in analyzing and interpreting
data may not be ruled out.
SUGGESTIONS AND CONCLUSION
After having analyzed the data, it was observed that practically there was no
appraisal in the organization. To be an effective tool, it has to be on the continuous
basis. This is the thing that has been mentioned time and again in the report, as, in
the absence of continuity, it becomes a redundant exercise. Before actually deciding
drafting what should be the kind of appraisal the following things should be taken
care of:
1. The very concept of performance appraisal should be marketed throughout the
organization. Unless this is done, people would not accept it, be it how important
to the organization.
2. To market such a concept, it should not start at bottom, instead it should be
started by the initiative of the top management. This would help in percolating
down the concept to the advantage of all, which includes the top management as
well as those below them. This means that the top management has to take a
welcoming and positive approach towards the change that is intended to be
brought.
3. Further, at the time of confirmation also, the appraisal form should not lead to
duplication of any information. Instead, detailed appraisal of the employee’s
work must be done – which must incorporates both the work related as well as
the other personal attributes that are important for work performance.
4. It should be noted that the appraisal form for each job position should be different
as each job has different knowledge and skill requirements. There should not be a
common appraisal form for every job position in the organization.
5. The job and role expected from the employees should be decided well in advance
and that too with the consensus with them.
6. A neutral panel of people should do the appraisal and to avoid subjectivity to a
marked extent, objective methods should be employed having quantifiable data.
7. The time period for conducting the appraisal should be revised, so that the
exercise becomes a continuous phenomenon.
8. Transparency into the system should be ensured through the discussion about the
employee’s performance with the employee concerned and trying to find out the
grey areas so that training can be implemented to improve on that.
Ideally in the present day scenario, appraisal should be done, taking the views of
all the concerned parties who have some bearing on the employee. But, since a
change in the system is required, it cannot be a drastic one. It ought to be gradual
and a change in the mindset of both the employees and the head is required.
a) Fully Satisfied b) Satisfied
c) Can’t Say d) Dissatisfied
6. Should the appraisal process be:
a) Once during the service period b) Continuous
c) Never d) Can’t Say
7. What in your opinion should be the time period of conducting continuous
Appraisal?
a) Quarterly b) Half Yearly c) Yearly
Any specific reason………………………………
8. Does Performance Appraisal helps in improving the productivity of the
employees?
Motivated Indifferent Demotivated
+ Feedback
- Feedback
Neutral
9. Who in your opinion should appraise the employee?
a) Superior b) Peer
c) Subordinates d) Self Appraisal
e) Consultant f) All of the above
10. Does the appraisal system helps in polishing the skills or performance area?
a) Yes b) No c) Somewhat
11. Do you think personal bias creeps in while appraising an individual?
a) Yes b) No
12. If given a chance or an opportunity would you like that the current appraisal
procedure should be reviewed?
a) Yes b) No c) Can’t Say
13. What according to you should be the appropriate method for conducting
performance appraisal?
a) Rating the employee on number of traits along with the range of
performance for each by the supervisor.
b) For every trait, each subordinate is paired with and compared to every other
Subordinate.