A Dissertation Report

on
“A Study on Performance Appraisal”
At
Thermax Limited
By
Mayuri Mohan Darekar
Under the Guidance of
Ms. Misba Kadri
Submitted to

“Savitribai Phule Pune University”

In Partial fulfilment of requirement for the award of the
Degree of Masters of Business Administration in Human Resource
Development
(MBA-HRD)

Poona Institute of Management Sciences and Entrepreneurship

Puna College Campas, Modi Khana, Modi Khana, Pune, Maharashtra
411001
[Batch: 2023-2025]

1
 INDEX

Sr. No Title Page No

1 Introduction 3-5

2 Company Profile 6-8

3 Theoretical Background 9-11

4 Research Methodology 12-15

5 Analysis (Graphs and Tables) 16-27

6 Findings 28-31

7 Suggestions 32-34

8 Conclusion 35-36

2
Introduction

3
 Introduction

The performance appraisal is the process of obtaining, analysing and recording

information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of
the employee. Its aim is to measure what an employee does.
Performance appraisals are regular reviews of employee performance within
the organizations. Generally, the aims of a performance appraisals are too:
• Give feedback on performance to employees.
• Identify employee training needs.
• Document criteria used to allocate organizational rewards.
• Form a basis for personnel decisions salary increase, promotions,
disciplinary actions.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administration.
It is a powerful tool to calibrate refine and reward the performance of the
employee. It helps to analyse his achievements and evaluate his contribution
towards the achievements of the overall organizational goals. By focusing the
attention on performance. performance appraisal goes to the heart of personnel
management and reflects the management’s interest in the progress of the
employees.
People differ in their abilities and their aptitudes. There is always some
difference between the quality and quantity of the same work on the same job
being done by two different people. Therefore, performance management and
performance appraisal are necessary to understand each employee’s abilities,
competencies and relative merit and worth to the organization.
The study on performance appraisal of employee was carried out at “Thermax
Limited”. The main aim of the study was to explore the method which is followed
and effectiveness of the employees.

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The primary data required for the study were collected through structured
questionnaire, personal interviews and informal talks. The second data was
from the company manuals and the website of the company. The data were
analysed and the findings were arrived at the basis of which suggestions are
made.
Relevance & Scope of the Study
The study covers of Thermax Limited. A survey was conducted for information
about the performance appraisal system that was used in the company. The
study focuses on type, effectiveness and employee attitude of the appraisal
system to help management plan future development and growth.
Objectives of the Study
➢ Identification of the technique of performance appraisal in Devon foods.
➢ Employee attitude towards the present appraisal system. To identify the
effectiveness of performance appraisal system for employees.
➢ Identifying performance appraisal leading to the discovery of unfound
talents amongst the employees.
➢ To provide suggestions and recommendations to improve the performance
appraisal effectiveness.

5
2- Company Profile

6
 Company Profile

Thermax Group is an INR 8,090 Cr. (1006.14 Million US$) company

headquartered in Pune, India. Its business portfolio includes products for
heating, cooling, water and waste management, and specialty chemicals. The
company also designs, builds and commissions large boilers for steam and
power generation, turnkey power plants, industrial and municipal wastewater
treatment plants, waste heat recovery systems and air pollution control
projects.

The systems, products and services developed by Thermax help industry

achieve better resource productivity and improve bottom lines, while
maintaining a cleaner environment. Even as we convert costs to profits, we help
to protect the environment in our own limited ways. A win-win for industry and
the society at large.
We operate globally through 29 international offices and 14 manufacturing
facilities – 10 of which are in India and 4 overseas.
Our presence spans 88 countries and supports customers through an extensive
sales & service network spread over Asia, South East Asia, Middle East, Africa,
Europe and the Americas.
The group consists of 7 wholly owned domestic subsidiaries and 21 wholly
owned overseas subsidiaries.
The products and services we offer must be developed, sold and serviced
through the eyes of the customer and measured by their voices. If we are
obsessed with the quality of our products and services and our customer,
growth and profit are bound to follow. We are convinced that all businesses need
to focus on growth and profit else; they cannot exist. However, we also realise
that if business is run solely on growth and profit, it will die, since there is no
purpose for its existence.

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Heritage:
Aeons ago, man discovered the might of fire and the power of steam, which
produced mechanical movement and rewrote the history of human civilisation.
Thermax came into being by harnessing the power of steam, produced by
boilers. Thus, the business was born in 1966. It was also the year A. S. Bhathena
collaborated with a Belgian company, Wanson, to commence business operation
as Wanson India Ltd., manufacturing small boilers at a unit in Dadar, Mumbai.
The company was renamed Thermax Limited in 1980.
Under the astute stewardship of our Late Chairman R. D. Aga, Thermax moved
into a bigger orbit, leading to its present status. The journey from Vaporax and
Thermopac – products from the early years, to the current stable of products;
from bagging our first export order to establishing a presence in the overseas
markets, has been an arduous one.
The cornerstones to building up the current-day organisation were a focus on
quality, meeting demands of customers and adhering to internationally
accepted standards.

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3- Theoretical Background

9
 Theoretical Background

If we're discussing theoretical backgrounds for a study on performance

appraisal within the context of Thermax Limited or any similar organization,
several relevant theories and frameworks can be considered. Here are a few:

1. Goal Setting Theory:

This theory, proposed by Locke and Latham, suggests that specific and
challenging goals lead to higher performance when accompanied by
appropriate feedback and acceptance by employees. In the context of
performance appraisal at Thermax Limited, understanding how goal setting
influences employee motivation and performance can be crucial.
2. Social Cognitive Theory:
Bandura's theory emphasizes the role of observational learning, self-efficacy,
and self-regulation in shaping behaviour. Within the context of performance
appraisal, this theory can help explore how employees' beliefs about their
capabilities (self-efficacy) and the behaviours they observe in others influence
their performance and response to feedback.
3. Expectancy Theory:
Proposed by Vroom, expectancy theory posits that individuals are motivated to
act in a certain way if they believe their efforts will lead to a desired outcome
and if they perceive the outcome as valuable. Understanding employees'
expectations regarding the relationship between their performance and
rewards or recognition can inform the design and implementation of
performance appraisal systems at Thermax Limited.
4. Feedback Theory:
Feedback plays a crucial role in performance appraisal processes. Feedback
theory emphasizes the importance of timely, specific, and constructive feedback
in facilitating learning and performance improvement. Within Thermax
Limited, understanding how feedback is given, received, and acted upon can be
informed by this theoretical framework.

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5. Justice Theory:
Equity theory, proposed by Adams, and organizational justice theory examine
employees' perceptions of fairness in the workplace. This includes distributive
justice (fairness of outcomes), procedural justice (fairness of the process), and
interactional justice (fairness of interpersonal treatment). Exploring
employees' perceptions of fairness in the performance appraisal process can
help identify areas for improvement and enhance overall satisfaction and
engagement.
6. Attribution Theory:
Attribution theory explores how individuals interpret and attribute causality
for events, including performance outcomes. Understanding how employees
attribute their performance appraisal ratings (e.g., to their own efforts, external
factors, or bias) can provide insights into their reactions and subsequent
behaviour.

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4-Resarch Methodology

12
 Research Methodology

Research methodology is a collective term of structured process of conducting

research. There are many different methodologies used in various types of
research and the term is usually considered include research design, data
gathering and data analysis. research methodology seeks to inform. why a
research study has been undertaken, how the research problem has been
defined, in what way and why the hypothesis has been formulated, what data
have been collected and what particular technique of analysing data has been
used and a host of similar other questions are usually answered when we talk
of research methodology concerning a research problem or study.
Research methodology is a way of explaining how a researcher intends to carry
out their details
a researcher's approach to the research to ensure reliable, valid results that
address Their aims and objectives. "Research Methodology comprises of
defining and redefining problems, collecting, organizing, and evaluating data,
making deductions and researching to conclusions.
Methods of data collection:
➢ Primary Data
➢ Secondary Data

Primary Data:
An instrument is used to collect the required information from the employees
and also interact with the employees personally.
Primary data helps us in making observations of employee’s behaviours, talk
gestures which helped me in the identifying any the attitude of employees
towards the training program and the effectiveness of the training program in
the organization.

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Secondary Data:
It was collected from the website of the company, the company personnel,
certain reports from the HR department. The research also took the help of
books and journals.
The most appropriate research design for the study is the descriptive research
design.gn for the study is the descriptive research design.
Research Design:
Research design is purely and simply the fame work plan for a study that guides
the collection and analysis of a data. In this study for researcher has adopted
descriptive research design.
Descriptive Research Design:
It includes surveys and fact finding enquires of different kinds.it simply
describes something such as a demographic of employees. It deals with
description of the state of offers as it is and the researcher have no influence on
the respondents.
Sampling:
It is the process of selecting representative subset of a total population for
obtaining data for the study of the whole population the subset is known as
sample. The sample size is selected for the study is 45 employees. The
techniques of sampling unit in this study are convenience sampling and the total
strength of the organization is 100 employees.
Sampling techniques:
Simple random sampling
Statistical tool used:
A simple percentage analysis.
For calculation of the simple percentage the following formula used.
Percentage of the respondents-No. of respondents / Total respondents*
Total Strength-100, Sample Size-45

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Questionnaire:
The questionnaire is prepared in such a way that is correct the comprehensive
objectives of the study. open end, multiple choice of questionnaire adopted in
this research.
Data Collection:
Data collection is one of the most important aspects of research of any project
accurate data is very important and necessary. The information collected
through research methodology must be accurate and relevant.

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5- Analysis (Graphs and Tables)

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1) In your opinion performance Appraisal is?
A) Evaluation of Employees
B) Promotion of Employees
C) Job Satisfaction of Employees
D) Motivation

Particular No. of Employees Percentage

Evaluation of employees 15 33%

Promotion of employees 20 44%

Job satisfaction of employees 7 16%

Motivation 3 7%

20

15

33% 44% 16% 3 7%

EVALUATION OF EMPLOYEES PROMOTION OF EMPLOYEES JOB SATISFACTION OF MOTIVATION

EMPLOYEES

No. of employees Percentage

17
Interpretation-
Maximum number of employees thinks performance appraisals merely to do
with their promotion. 33% of the evaluation of employees said is performance
appraisal in my opinion. And 44% of the promotion of employees is said is to
the performance appraisal in my opinion. 16% of job satisfaction of employees
and 7% motivation is said to the performance appraisal in my opinion.

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2) Which method of performance appraisal is implemented in the
organization?
a) Merit b) Grading c) Training & Development D) Other

Particular No. of employees Percentage

Merit 15 33%

Grading 10 28%

Training & Development 07 10%

Other 13 29%

No. of Employees

29% Merit
33%
Grading
Training & Development
Other
16%
22%

Interpretation:
from the data collected as shown in the above diagram,33% employees are
Merit performance appraisal is implemented in the organization 28%
employees Grading, Training & Development 10% and 29% employees were
Other performance appraisal is implemented in the organization.

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3) Do you think that performance appraisal helps to provide an
atmosphere where all are Encouraged to share one another burden.
a) Yes b) No

Particular No. of employees Percentage

Yes 25 75%

No 20 25%

No. of Employees

44% Yes
56% No

Interpretation:
Maximum number of employees think that performance appraisal helps to
provide an Atmosphere where all are encouraged to share one another burden.

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4) Do you think performance appraisal helps people set and achieve
meaningful goals?
a) Yes b) No

Particular No. of Employees Percentage

Yes 25 75%

No 20 25%

No. of Employees

44% Yes
56% No

Interpretation:
25% of employees thinks that performance appraisal helps people set and
achieve meaningful goals.

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5) Do you think performance appraisal give constructive criticism in a
friendly and Positive manner?
a) Yes b) No

Particular No. of Employees Percentage

Yes 30 67%

No 15 33%

No. of Employees

33%
Yes
No
67%

Interpretation:
67% of employees give constructive criticism in a friendly and positive manner.

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6) Do you think that performance of employees improves after process of
performance Appraisal?
a) yes b) No

Particular No. of Employees Percentage

Yes 25 56%

No 20 44%

No. of Employees

44% Yes
56% No

Interpretation:
56% of employees improve after process of performance appraisal.

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7) Do you think performance appraisal improves motivation and job
satisfaction?
a) yes b) No

Particular No. of Employees Percentage

Yes 35 78%

No 10 22%

No. of Employees

22%

Yes
No

78%

Interpretation:
Maximum no. of employees is not satisfied with their motivational levels.

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8) Top level management partial in performance appraisal at Thermax
Limited?
a) yes b) No

Particular No. of Employees Percentage

Yes 25 56%

No 20 44%

No. of Employees

44% Yes
56% No

Interpretation-
Around 56% of employees thinks their top-level management is partial in
performance Appraisal.

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9) Do you think performance appraisal helps to change behaviour of
employees?
a) yes b) No

Particular No. of Employees Percentage

Yes 15 33%

No 30 67%

No. of Employees
Particular
No. of employees

33%
Yes
No
67%

Interpretation-
More than 67% employees are disagreed with 3 rounds of interview. According
to them its take too much time for acquisition.

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10) In your opinion performance appraisal system of your organization is
related to which of are following?
a) Retention of employees b) Recruitment system c) organizational
culture d) Motivation

Particular No. of Employees Percentage

Retention of employees 10 22%

Recruitment system 10 22%

Organizational culture 10 22%

Motivation 15 34%

No. of Employees

22%
34% Retention of employees
Recruitment system
Organizational culture
22% Motivation

22%

Interpretation:
34% of the employees have their opinion of performance appraisal system of
organization is related to motivation.

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6-Findings

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 Findings
As of my last update, I don't have access to specific studies or findings conducted
by Thermax Limited on performance appraisal. However, I can outline some
hypothetical findings based on common trends and challenges observed in
performance appraisal systems across organizations. Here are some potential
findings that Thermax Limited might encounter in a study on performance
appraisal:
➢ Performance Ratings Distribution:
The analysis reveals that performance ratings at Thermax Limited are skewed
towards the higher end of the scale, with a significant proportion of employees
receiving above-average ratings. This could suggest leniency or inflation in the
appraisal process.
➢ Departmental Disparities:
There are noticeable differences in performance ratings across departments,
with some departments consistently receiving higher ratings than others.
Further investigation might be warranted to understand the factors
contributing to these disparities, such as variations in job demands, leadership
styles, or resource allocation.
➢ Time Trends:
Analysis of performance ratings over multiple appraisal cycles shows
fluctuations in employee performance over time. Certain periods may exhibit a
higher concentration of top performers, while others show a more dispersed
distribution of ratings. Identifying the drivers of these temporal variations could
inform efforts to maintain consistency and fairness in the appraisal process.
➢ Correlation with Employee Tenure:
There is a positive correlation between employee tenure and performance
ratings, indicating that longer-tenured employees tend to receive higher ratings
on average. This finding raises questions about potential biases in the appraisal
process favouring seniority over actual performance, which could impact
morale and retention among newer employees.

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➢ Feedback Quality:
Qualitative analysis of feedback provided by employees and managers
highlights recurring themes related to communication, goal alignment, and
developmental opportunities. While positive feedback is prevalent, there are
also concerns about the clarity and specificity of performance expectations, as
well as the consistency of feedback delivery across the organization.
➢ Managerial Influence:
Supervisors play a significant role in shaping employee performance ratings, as
evidenced by the correlation between supervisor ratings and overall
performance scores. However, there is variability in the effectiveness of
different managers in providing fair and constructive feedback, suggesting
potential opportunities for training and development in performance
management practices.
➢ Employee Engagement Impact:
Employees who perceive the performance appraisal process as fair and
transparent tend to report higher levels of job satisfaction and engagement.
Conversely, dissatisfaction with the appraisal process is associated with
decreased motivation and increased turnover intentions. This underscores the
importance of ensuring procedural fairness and communication in performance
management practices.
These findings are hypothetical and based on common patterns observed in
performance appraisal research. Actual findings in a study conducted by
Thermax Limited would depend on the specific context, methodology, and data
analysed.
Thermax emphasizes performance management: Their annual report
https://www.thermaxglobal.com/digital-annual-reports-2021-22/human-
capital.html mentions a focus on a "Performance Management System" with
elements like goal-setting, feedback conversations, and "CLOCC behaviours"
(Customer, Lead, Own, Create, Collaborate). This suggests a move towards a
more dynamic and development-oriented approach to performance.

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Focus on continuous improvement: Thermax highlights their commitment to
"reinventing ourselves continually" https://www.thermaxglobal.com/digital-
annual-reports-2021-22/human-capital.html. This suggests they likely
regularly assess and improve their HR practices, including performance
appraisal methods.
➢ Here are some next steps to find more information:
Contact Thermax HR: You could try contacting Thermax's HR department
directly to inquire about any studies they've conducted on performance
appraisal.
Look for industry reports: Search for industry reports or publications related to
performance management practices in Indian companies. Thermax might be
featured as a case study.
Thermax's collaboration with IMERT: An IMERT (Institute of Management
Education Research and Training) report
https://mmimert.edu.in/index.php/research-publication/research fdp/world-
of-work/2-uncategorised/194-world-of-work-at-thermax mentions studying
Thermax's performance management system cycle. While it doesn't directly
focus on appraisals, it might offer clues about their approach.

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7. Suggestions

32
 Suggestions

Define Clear Objectives: Clearly outline the objectives of the study. Determine
what aspects of the performance appraisal system the study aims to evaluate or
improve, such as fairness, effectiveness, or alignment with organizational goals.
➢ Engage Stakeholders:
Involve key stakeholders, including employees, managers, HR professionals, and
senior leadership, in the design and implementation of the study. Their input
can provide valuable insights into the strengths and weaknesses of the current
appraisal system.
➢ Review Existing Practices:
Conduct a comprehensive review of the current performance appraisal process,
including documentation, rating criteria, feedback mechanisms, and
performance management software/tools used. Identify any areas of
inconsistency, bias, or inefficiency that need to be addressed.
➢ Select Appropriate Metrics:
Choose relevant performance metrics and indicators to assess the effectiveness
of the performance appraisal system. These may include employee satisfaction
scores, turnover rates, performance improvement trends, and alignment with
organizational objectives.
➢ Collect Quality Data:
Ensure that data collection methods are robust and reliable. Use a combination
of quantitative data (e.g., performance ratings, numerical scores) and
qualitative data (e.g., employee feedback, open-ended survey responses) to
provide a comprehensive understanding of the appraisal process.
➢ Consider Multiple Perspectives:
Consider the perspectives of both appraisers (e.g., managers) and appraisees
(e.g., employees) when evaluating the performance appraisal system. Compare
perceptions and experiences across different organizational levels and
departments to identify common patterns or discrepancies.

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➢ Implement Feedback Mechanisms:
Establish mechanisms for collecting feedback on the performance appraisal
process in real-time or at regular intervals. This could include anonymous
surveys, focus groups, or one-on-one interviews to gather candid input from
participants.
➢ Benchmark Against Best Practices:
Compare Thermax Limited's performance appraisal practices against industry
benchmarks and best practices. Identify leading organizations or research
studies that have implemented effective appraisal systems and consider
adopting relevant strategies or recommendations.
➢ Pilot Test Changes:
Before making significant changes to the performance appraisal system,
consider piloting proposed modifications on a small scale or in specific
departments. This allows for testing the effectiveness of new approaches and
gathering feedback before full implementation.
➢ Continuous Improvement:
Treat the study on performance appraisal as an ongoing process rather than a
one-time event. Continuously monitor and evaluate the effectiveness of
appraisal practices, solicit feedback from stakeholders, and make iterative
improvements based on findings and lessons learned.

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8-Conclusion

35
 Conclusion

Human resource management has been enormously important in the Its

business portfolio includes products for heating, cooling, water and waste
management, and specialty chemicals. industry, when dealing with the people,
the basic requirement for the enterprise is to have good internal relationship
between management and employees. Favourable human resource
management ensures business growth and staff training is the most effective
way to the develop employees in order to have good HRM.
This study helps to understand the performance appraisal system practiced in
the Thermax Limited. Majority of the employees are benefited by this system
and the procedure followed and they are enjoying the various benefits from this
system.
Performance Appraisal System helps is employees career growth it supports
them to take their consideration to the management and to get more benefits
and also for their more effective performance.
Our hypothesis suggests that effective appraisal process correlates with a
higher level of satisfaction and employee engagement. Engaged employees are
those who are willing to invest additional efforts towards enhancing market
position of their company and contribute to better financial results. This is their
direct contribution to the company.
Engaged employees are not only motivated to work but they also know exactly
what to do and how to do it more effectively because they know the strategy and
company objectives and share them. All this could possibly mean that the more
engaged to the company people are, the better financial results are likely to be
achieved.
This correlation has been confirmed by many surveys conducted by consulting
companies.
Eventually we can conclude that raising and maintaining employee's
engagement lies in the hands of an organization and requires a balanced blend
of time, efforts, commitment and investment.

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