Indian Institute of Planning and Management

A PROJECT REPORT

ON
Performance Appraisal

For

IN PARTIAL FULLFILLMENT

OF

MBA

Sahil Sareen
Fall 11-13/ FA1
11 June 2012 – 17th August 2012
th

Student Id – D1113FWIIPMPGPA10046(DEL-3-DA-1075)
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 ACKNOWLEDGEMENT

A summer project is a golden opportunity for learning and self development. I

consider myself very luck y and honored to have so many wonderful people lead me
through in completion of this project.

Grateful thanks to my industry guide Mr. Alok Kumar, HR Executive, who

in spite of being extraordinarily busy with his duties, took time out to hear, guide and
keep me on the correct path. I don’t know where I would have been without him.

I owe an enormous intellectual debt towards both my guides who have

augmented my knowledge in the field of Human Resource Management. They have
helped me learn about the processes, giving me valuable insights into the performance
appraisal system. My increased spectrum of knowledge in this field is the result of their
constant supervision and direction that has helped me absorb relevant and high quality
information.

I am obliged to Mr. Rakshit Kumar and Ms. Gurpreet Dhillon for sharing their
knowledge and being so cooperative during the internship.

I would also like to thank all the respondents without whose co-operation
my project would have never been possible.

Sahil Sareen

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 ABSTRACT

“In the struggle for survival, the fittest win out at the expense of their rivals because
they succeed in adapting themselves best to their environment” - Charles Darwin. This
rule is applicable for any “person”, be it a business entity or an individual. The
companies to prove their competency in the highly competitive market, has to come up
with innovative ways of resource management. With employees being a strong
determinant of the company’s
performance, various performance appraisal techniques are introduced into the system
to analyze the individuals’ share to the company’s objectives.

This study seeks to present the effectiveness of the appraisal system in HCL Infosystems.
Hence, the performance appraisal system of this company was studied. The study also
explains how performance appraisal systems have encouraged employee development in
the organization considered. The study explores the importance of performance appraisal
in the organization. It explores how organizations have to be organized and systematic
in their
approach, so that they can extract the exact performance from their employees which
can help them, to create a balance between performance and achieving organizational
objectives. The study addressed (a) the understanding of performance management, (b) the
management attitude towards performance management, (c) staff development, (d) the
mentoring system, (e) the performance appraisal method used, (f) evaluation and
assessment of the employees and (g) promotion, salary increments etc. on the basis of
Performance Appraisal.

Findings: The main findings were that: (a) staff has a negative attitude towards the
performance appraisal system, (c) staff does not trust the system, (d)management is the
only group that is positive about the system, (e) there are no staff development
strategies and no staff development, (f) ineffective mentoring system, (g) no mentor and
mentee relationship, and (h) the performance appraisal method raised concerns in terms
of departments not being consistent with the rating scores.

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 TABLE OF CONTENTS

S.N CONTENTS PAGE NO.

O. Letter of offer 1
1.

2. Experience Certificate 2

3. Letter of Appreciation 3

4. Acknowledgement 4

5. Abstract 5

6. Executive Summary 8

7. CHAPTER 1
1.1 Introduction 10
1.2 Objectives of the study. 10
1.3 Significance of the study. 10
1.4 Scope of the study. 11
1.5 Limitations of the study. 11

8. CHAPTER 2
2.1 Review of Literature. 12

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9. CHAPTER 3
3.1 Company Profile 15
3.2 HCL Technologies 15
3.3 HCL Infosystems 15
3.4 History 18
3.5 Mission and Vision 20
3.6 Quality Objectives 21
3.7 People objectives 21
3.8 Management Objectives 21
3.9 Products 21
3.10 Key Executives 22
3.11 HCL Infosystems Division 22
3.12 B2C Divisions 23
3.13 B2C Management Hierarchy 24
3.14 SWOT Analysis. 25

S.N CONTENTS PAGE NO.

O CHAPTER 4
10.
4.1 What is “Performance Appraisal”? 26
4.2 Characteristics 26
4.3 Process 26
4.4 Limitations 27
4.5 Methods of Performance Appraisal 27
4.6 Benefits of Performance Appraisal 29
4.7 Rating Errors in Performance Appraisal 30

11. CHAPTER 5
5.1 Performance Appraisal at HCL In fosystems 32
5.2 9 Grid Matrix 32
5.3 Bell Curve 33
5.4 Roles in the Performance Appraisal Process 36
5.5 Key concepts in Performance Appraisal 37
System

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12. CHAPTER 6
6.1 Research Methodology 38
6.2 Research Design 38
6.3 Sample Design 38
6.4 Sample Size 38
6.5 Population 38
6.6 Sampling Technique 38
6.7 Research Tool and Questionnaire 39
6.8 Pilot Testing 39
6.9 Ensuring Confidentiality 39

13. CHAPTER 7
7.1 Data Analysis 40
7.2 Summary of the Analysis 52
7.3 Suggestions from Emplo yees 53
7.4 Observations and Findings 53
7.5 Conclusion 54
7.6 Recommendations 54

14. Bibliography 56

15. Annexure 1 57

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 EXECUTIVE SUMMARY

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 increase trends in employee maintenance, job security, etc
My research project deals with “Performance Appraisal as carried out at “HCL Infosystems
Ltd.”. In this report, I have studied and 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 and to check its effectiveness at HCL Infosystems Ltd. This section
contains my findings, conclusions, analysis of my questionnaire, suggestions and
recommendations.
The fourth and final section of this report consists of extra information that is related to the
main contents of the report. These annexures include some graphs and diagrams relating to
the company, graphs relating to the research study and important documents upon which the
project is based.

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 CHAPTER 1

1.1 INTRODUCTION

At HCL, the employees are considered as most valuable asset and strength for sustained
growth in the development of the company. It believes in testing continuously the human
resources for employee’s personal growth. Young professional leads the company. It has an
open work environment, which is achievement oriented and is driven by autonomy and
receptive to innovations.

Like any other organization, HCL has also been following a certain performance appraisal
process from its establishment. For smooth business operations and to take advantage of the
full potential of its employees, it is necessary to retain and motivate employees through
appraisals and feedback by their superiors.

1.2 OBJECTIVES OF THE STUDY

Primary Objectives

 To understand the basic features of Performance Appraisal system in HCL Infosystems.

 To check the effectiveness of Performance Appraisal i.e. if it’s activities help the
employee in his performance.

 To take the response of employees towards the Performance Appraisal activities carried
on upon them.

Secondary Objectives

 To understand the work culture of the organization.

 To get an exposure of various other functions of Human Resources in the organization.

1.3 SIGNIFICANCE OF THE STUDY

The nine weeks of summer training at HCL Infosystems Ltd. gave me a complete exposure to
the corporate work life. It was a unique opportunity to explore the realities of India’s
leading companies as a researcher and gather knowledge from its vast repertoire o f
experience. It was great learning experience to know the Performance Appraisal System of
the company and its effectiveness on the employees. The project not only helped me to
enhance my practical knowledge but it also helped me to understand how performance
management work into the organization and how executives assess their own employee into
the organization. The summer project, also made me realize the worth of an HR
manager. I got to know the importance of employee assessment and communication

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and interpersonal skill in getting things done from other. In a nut shell, it was a very
fulfilling and fruitful period of my life as a management student.

1.4 SCOPE OF THE STUDY

The scope of the study is limited to the information supplied by the department heads and the
information collected from the companies formal copies. The information collected is limited
to the academic knowledge during the study of the organization.

1.5 LIMITATIONS OF THE STUDY

 Due to time constraint and hectic schedule of HCL employees, some time I found
difficulty in interaction with employees.
 The research is limited to Noida. Therefore, other branches could not be explored.

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 CHAPTER 2

2.1 REVIEW OF LITERATURE

• Fletcher C, Performance appraisal and management, November 4, 2001: Performance

appraisal has widened as a concept and as a set of practices and in the form of performance
management has become part of a more strategic approach to integrating HR activities
and business policies. As a result of this, the research on the subject has moved beyond the
limited confines of measurement issues and accuracy of performance ratings and has
begun to focus more of social and motivational aspects of appraisal. This area
identifies and discusses a number of themes and trends that together make up the developing
research agenda for this field. It breaks these down in terms of the nature of
appraisal and the context in which it operates. The former is considered in
terms of contemporary thinking on the content of appraisal (contextual performance,
goal orientation and self awareness) and the process of appraisal (appraiser–
appraisee interaction, and multi-source feedback). The discussion of the context of
appraisal concentrates on cultural differences and the impact of new technology.

• Gregory H. Dobbins, Performance Appraisal as Effective Management or Deadly

Management Disease, 1990: Understanding person and system sources of work
variation is fundamental to performance appraisal. Two divergent perspectives on this issue,
the traditional human resource management view and the statistical process control view
(Deming, 1986), are contrasted. Two studies are reported that investigate two specific
questions that arise from a broader view of the appraisal process. Results indicate that
managers and subordinates believe that typical poor performance has different causes
and that actual productivity levels far outweigh person or system sources of performance
variance in appraisal judgments.

• Gregory H. Dobbins, A Contingency Approach to Appraisal Satisfaction, 1990: The

present study explored the moderating effects of organizational variables on the
appraisal characteristic-appraisal satisfaction relationship. Analyses indicated that the
appraisal characteristics of action plans, frequency, and rater training were more
positively related to appraisal satisfaction when subordinates experienced role conflict, were
not closely monitored, and supervisors had a large span of control. The results provide
substantial support for conceptualizing appraisal satisfaction as a contingent function of
both appraisal characteristics and organizational variables. Implications of the findings
for the design of appraisal systems, appraisal effectiveness, and future research are
discussed.

• Taylor Cox, Differential Performance Appraisal Criteria, 1986 : Performance appraisal

ratings of 125 first-level managers were analyzed to investigate the degree to which
the criteria used to evaluate the overall job performance of black managers differs from
that used to evaluate white managers. The performance appraisal form included items
that measured both the social behavior dimen sion and task/goal accomplishment
dimension of job performance. The appraisal ratings of both groups on each

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dimension were correlated with measures of overall job performance and promote ability.
Results indicated that social behavior factors are more highly correlated with the
overall job performance of black ratees than for white ratees. Implications of these
results for both black managers and organizations are discussed.

• David A. Waldman, Predictors of Employee Preferences for Mult-irater and Group-Based

Performance Appraisal, 1997: This study conceptualizes and measures user preferences for
360-degree appraisals and group-level performance management (PM). Users are defined
as either recipients of PM processes or those whose job it is to administer the
process. Aspects of individual users, their work design, and current appraisal context were
used to predict preferences. Two studies were conducted involving data collection in a
large Canadian telecommunications conglomerate and a department of the Canadian
government, respectively. Predictors explained significant amounts of variance in
user preferences, especially those pertaining to group-level PM. Practical implications
are suggested with regard to collecting and using user preferences. In addition, suggestions
for future research are offered concerning the need to examine a broad range of users in
different organizational settings and to measure actual system design features and their
effectiveness.

• Dennis W. Organ, A Restatement of the Satisfaction-Performance Hypothesis,

1988: This article reviews recent evidence in support of Organ’s (1977) argument that
satisfaction more generally correlates with organizational prosocial or citizenship-type
behaviors than with traditional productivity or in-role performance. An attempt is then made
to interpret just what it is in satisfaction measures that provides this correlation, leading to the
suggestion that fairness cognitions comprise the major factor. Implications of this
interpretation for theory, research, and management practice are offered.

• Fletcher C. Performance appraisal and management – the developing

research agenda – Journal of occupational and Organizational Psychology 74(4) November
4, 2001:Performance appraisal has widened as a concept and as a set of practices and
in the form of performance management has become part of a more strategic approach
to integrating HR activities and business policies. As a result of this, the research on the
subject has moved beyond the limited confines of measurement issues and accuracy of
performance ratings and has begun to focus more of social and motivational aspects
of appraisal. This area identifies and discusses a number of themes and trends that
together make up the developing research agenda for this field. It breaks these down
in terms of the nature of appraisal and the context in which it operates. The former
is considered in terms of contemporary thinking on the content of appraisal
(contextual performance, goal orientation and self awareness) and the process
of appraisal (appraiser–appraisee interaction, and multi-source feedback). The
discussion of the context of appraisal concentrates on cultural differences and the
impact of new technology.

• Schultz, H. & Bagraim, J. Organizational Behavior – (2003):Schultz recommends that

no staff member should have more than seven goals, as this could lead to unfocused

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performance. After scrutinizing various performance management processes, three
possible Performance Management Cycles were considered. It was found that the cycle,
as presented by Schultz (2003:77), would best suit the organization being investigated.
For purposes of completeness, the other two Performance Management Cycles have
been attached, as Annexure 2 (Corporate Performance Management Cycle of Infosys)
and Annex ure 3(Cyclical Performance Management Process). The Cycle, as presented
by Schultz (2003:77) and which was decided upon for the organization, is divided into the
following steps:
• Clarify expectations
• Plan to facilitate performance
• Monitor performance
• Provide feedback
• Coach, counsel and support
• Recognize good performance
• Deal with unsatisfactory performance.
These steps follow on, one after the other and are interdependent – the one cannot take
place, before the previous step has been completed. They can also not be done at
random, as this will cause the Performance Management Program to fail. Schultz,
recommends the following Performance Management Cycle.

CLARIFYING
EXPECTATIONS

Recognize Good PLAN TO

Performance FACILITATE
PERFORMANCE

COACH, Monitor
COUNSEL AND Performance
SUPPORT

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 CHAPTER 3

COMPANY PROFILE
HCL is a $5 billion leading Global Technology and IT Enterprise that comprises two
companies listed in India – HCL Technologies & HCL Infosystems. The 3-decade-old
Enterprise, founded in 1976, is one of India's original IT garage start-ups. Its range of
offerings spans Product Engineering, Custom & Package Applications, BPO, IT
Infrastructure Services, IT Hardware, Systems Integration, and distribution of ICT products.
The HCL team comprises over 58,000 professionals of diverse nationalities, who operate
from 19 countries including 360 points of presence in India. HCL has global partnerships
with several leading Fortune 1000 firms, including leading IT and Technology firms.

HCL TECHNOLOGIES
HCL Technologies Limited is a global IT services company headquartered in Noida, India. It
is primarily engaged in providing a range of outsourcing services, business process
outsourcing and infrastructure services. HCL Technologies is fourth largest IT company in
India and is ranked 48 in the global list of IT services providers. It is ranked 1868 in Forbes
Global 2000.

Shiv Nadar Vineet Nayar

Founder - HCL Vice Chairman – HCL Technologies
Chairman – HCL Technologies CEO – HCL Technologies

HCL INFOSYSTEMS

HCL Infosystems Ltd., a listed subsidiary of HCL, is an India-based hardware and systems
integrator with a focus on emerging markets. It began an exciting journey more than three
decades ago with a dream to give India its very own microcomputer. The sheer clarity of
vision and hard work led to a revolution and laid a foundation for the Indian IT industry,
which has today acquired a distinct position amongst major economies in the world. Today
HCL is a USD 6.2 billion global enterprise and Ajai Chowdhry one of the founder members

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has been the key force in driving the growth of HCL and today leads, HCL Infosystems the
flagship company. (Source : http://www.hclinfosystems.in/company_profile.htm)

Ajai Chowdhry Harsh Chitale

Founder - HCL CEO – HCL Infosystems
Chairman - HCL Infosystems

HCL has a presence in 170 cities and 505 points of presence reaching 4000 towns throughout
India and operations in emerging markets including South Asia, Middle East & Africa. It has
a strong distribution network of 93,000 outlets in over 9,000 towns in India. Its
manufacturing facilities are based in Chennai, Pondicherry and Uttarakhand. It is
headquartered at Noida.It had a turnover of Rs. 400.6 crores (USD 85 million) in 1994 which
underwent tremendous growth to become Rs. 10,901 crores (USD$ 2.4 billion) today.
Employing - 7762 people, the company has today emerged not only as the country’s
information-enabling powerhouse but a great place to work with industry accolades and
awards received year after year.(Source: http://www.hclinfosystems.in/company_profile.htm)

HCL Infosystems has a long standing history of being involved ever since the inception of the
IT Industry in the country. When government was seeking collaboration, HCL Infosystems
were one of the first to partner in laying down the IT infrastructure in India from something as
basic as introducing a computer in the remotest part of the country. In a developing country
like ours where we are leapfrogging to match the pace of developed global economies, ICT is
rapidly becoming the core of any intelligent infrastructure and HCL Infosystems has
developed customised & efficient system integration solutions designed to fuel the Indian
growth engine. With relentless efforts to fuel the PC market, HCL Infosystems has been
acting as a catalyst for affordable & economical computing.

The success of HCL can be measured with its presence in number of sectors like healthcare,
financial services, retail, travel, securities, media, and travel among others.

HCL Infosystems is India's premier information enabling company. Leveraging its 3 decades
of expertise in total technology solutions, HCL Infosystems offers value-added services in
key areas such as system integration, networking consultancy and a wide range of support
services.

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HCL Infosystems is among the leading players in all the segments comprising the domestic
IT products, solutions and related services, which include PCs, Servers, Office Automation,
Networking Products, TV and FM Broadcasting solutions, communication solutions, System
Integration, Digital lifestyle Solutions and Peripherals.

HCL Infosystems manufacturing facilities are ISO 9001 - 2000 & ISO 14001 certified and
adhere to stringent quality standards and global processes. It has been consistently rated as
Top player in PC industry by IDC. The Channel Business of HCL Infosystems has an
extensive network of over 3000+ resellers across 800 locations.

Today HCL Infosystems has become one of the leading System Integration Company in the
country, implementing several turnkey Systems and Networking Integration projects
nationwide and across most of the vertical business segments. HCL Infosystems is uniquely
poised today in the market making it the only company with India as its primary focus,
offering state of the art technology solutions to empower a host of Defence, Homeland
Security frameworks, social sectors and government schemes for Nation building. HCL
Infosystems has being powering numerous projects across sectors like Defence, Homeland
Security, Airport & Railways Intelligent Infrastructure, Telecom, Banking, Public
Distribution System, E-governance, Education, NREGA etc. With global expansion and
sharing best practices with the world and in particular developing markets, the company is

today strategically expanding in markets like Middle East, Southeast Asia and Africa. The
company has developed more than 30 IP products to serve different segments of the markets
backed by various hardware and software services.

HCL today has India's largest vertically integrated computer manufacturing facility with over
three decades of electronic manufacturing experience & HCL desktops is the largest selling
brand into the enterprise space. With India’s largest ICT services network that reaches to
every corner of India, HCL’s award winning Support Services makes it the preferred choice
of enterprise and consumers alike. HCL Infosystems has a 100% subsidiary that addresses the
physical security technology system integration market. The subsidiary leverages technology
to build a security framework called ‘Safe State’ that safe guard’s life, infrastructure &
society.

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HISTORY
HCL Infosystems Ltd was founded in 1976. HCL Peripherals, a sub-unit founded in 1983, is
a manufacturer of computer peripherals in India of Display Products, Thin Client solutions,
Information and Interactive Kiosks and Networking products & Solutions. HCL Peripherals
has two Manufacturing facilities, one in Pondicherry (Electronics) and the other in Chennai
(Mechanical). The company has been given ISO:27001 certifications.
HCL ERC(Enterprise Response Center) was started to give support to customers, at
Pondicherry, in 2007.

1976 Hindustan Computers Limited (HCL) is born.

1977 Forms distribution alliance with Toshiba for copiers and notebooks.
1978 HCL successfully ships in-house designed Micro-computer at the same time as
Apple.
1980 HCL introduces bit sliced, 16-bit processor based micro-computer.
1983 Indigenously develops an RDBMS, a Networking OS and a client server

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 architecture, at the same time as global peers.
1986 HCL becomes the largest IT company in India.
1988 HCL introduces fine grained multi-processor Unix 3 years ahead of "Sun" and
"HP".
1990 DataQuest marks HCL No.1 among top ten computer giants.
1991 HCL-Hewlett Packard JV develops multi-processor Unix for HP and heralds
HCL's entry into contract R&D.
1994 Forges distribution alliances with Ericsson Switches and Nokia cellphones.
1997 HCL's R&D spun-off as HCL Technologies - marks advent into software
services.
1999 Initial Public Offering made by HCL Technologies Ltd. Formation of Global
Board of Directors.
2000 Large contracts won from Bankers Trust, KLA Tencor, Cisco, GTech, NEC
among others.
2001 JV with Deutsche Bank. Acquires British Telecom's Apollo Contact Centre in
Belfast, Northern Ireland.
2002 Strong pursuit of nonlinear strategy to widen services portfolio; several JVs and
alliances formed; Software businesses of HCL Infosystems and HCL
technologies merged.
2003 HCL becomes the first company to cross the 100,000 unit milestone in the
Indian Desktop PC market.
2004 HCL Infosystems continues to be the largest manufacturer of PCs in India.
2005 JV with NEC, Japan; HCL sets up first Power PC architecture design centre
outside IBM; HCL Infosystems launches sub Rs.10,000 PC
2006 HCL Infosystems tied up with Apple for iPod distribution.
2007 HCL as an enterprise crosses the $4bn watermark; HCL commences production
in its ISO 14001 and ISO 9001:2000 certified second manufacturing facility in
Rudrapur, Uttaranchal
2008 HCL unveils the future of personal computing unveils the next generation, ultra
portable, sub Rs.14,000/- laptops for the first time in India.
2009 Nokia Corporation announce to set up a joint venture with HCL to sell mobile
value added services directly ton consumers in India.
HCL-BSNL to work on National Broadband Penetration program.
2011 Ajai Chowdary conferred with prestigious Padma Bhushan.
2012 HCL Infosystems bags Rs 2,200 cr Aadhaar contract from UIDAI.

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VISION AND MISSION

A global corporation enriching lives and enabling business

transformation for our customers, with leadership in chosen technologies and markets. Be the
first choice for employees and partners, with commitment to sustainability.

Vision Statement : “Together we create the Enterprises of Tomorrow”

We enable business
transformation and enrichment of lives by delivering sustainable world class technology

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Products, Solutions & Services in our chosen markets thereby creating superior shareholder
value.

Mission Statement : "To provide world-class Information Technology solutions and

services in order to enable our customers to serve their customers better"

QUALITY OBJECTIVE

“We shall deliver defect free products, services and solutions to meet the requirements of our
external and internal customers the first time, every time.”

PEOPLE OBJECTIVES

To help people in HCL Infosystems Ltd. share in the company's successes, which they make
possible; to provide job security based on their performance; to recognize their individual
achievements; and help them gain a sense of satisfaction and accomplishment from their
work.

MANAGEMENT OBJECTIVES

To fuel initiative and foster activity by allowing individuals freedom of action and innovation
in attaining defined objectives.

PRODUCTS

HCL Infosystems portfolio of products covers the entire spectrum of the information
technology needs of its customers. By virtue of the immense diversity of markets and
customers that it address, HCL Infosystems products offerings include everything from high
end enterprise level servers for mission critical applications to multimedia home computers.

Computing Products - HCLI manufactures wide range of computer such as home PCs,
notebooks, business PCs, business workstations and servers.

Storage Solutions - The company manufactures wide range of storage solutions such as
standalone drivers, HBA cards, EMC storage solutions etc catering wide range of consumers.

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Office Imaging and Telecom Solutions - It has partnered with the best in the industry like
Toshiba, Infocus, Duplo, etc to provide imaging solutions like projectors, plasma, visual
presenter and interactive presentation systems. It has partnered with major players for
providing voice, videoconferencing, audio conferencing and broadcast solutions according to
the business needs.

The company develops POS, kiosk and customer service counter products. HCLI offers a
complete range of digital lifestyle products and solutions through its various distribution
channels and vast warehousing and logistics operations.

HCL INFOSYSTEMS DIVISION

HCL – I

B2C EBU OA
(Business to (Enterprise (Office LEARNING
Consumer) Business Automation)
Unit)

B2C
B2C department of HCL deals in 3 further areas – Consumer Computing (Laptops,
Desktops), Mobility Solutions ( Tablets) and DMS i.e Distribution and Marketing Services
where in we play a role of a distributor of products for various big brands.

EBU
We have our own Enterprise Business Unit that sells ‘ME Laptops’ to Corporate, SMBs,
Government and Educational Institutions. For our corporate customers, we offer high-end
ME Laptops that enhance business productivity while reducing total cost of ownership. ME
Laptops offer ease of use and high business productivity backed by 24X7 service support. We
are committed to simplifying IT needs for Government and deliver a price and performance
advantage in our Laptops.

OA
Office Automation deals in products that are required in offices or SMBs (small and medium
business units). For E.g – Printers, Scanners, Projectors etc.

LEARNING
Learning here refers to E-Learning i.e interactive learning through projectors mostly
conducted in educational institutions.

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B2C DIVISIONS

B2C

Consumer Computing
(HCL Laptops, Desktops)

Mobility Solutions
(HCL Tablets – X1, U1)

DMS
(Distribution and Marketing Services)

CONSUMER COMPUTING

Consumer Computing involves all the operations related to HCL Laptops, desktops. In 2008,
it entered in LCD TV market as well. HCL has India’s largest distribution and retail network.
Their main focus is on selling laptops and desktops with proper coordination between various
departments.

MOBILITY SOLUTIONS

Mobility Solutions is a separate department dealing only with Tablets. Currently, there are
four tablets available in the market. This department comprises of HR, Finance, Marketing,
so and so forth. It focuses on selling tablets to consumers and corporates.

DISTRIBUTION AND MARKETING SERVICES

HCL has been associated with 11 brands from years, providing them distribution and
marketing services. Brands which we serve are – Nokia, Kodak, TATA Indicom, Transcend,
Kingston, SanDisk, Apple etc. We have done approx. ` 1700 crore business in past out of
which 90% of share comes from Nokia products. (Source : Company Sales Department)

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 B2C MANAGEMENT HIERARCHY (HR)

Vivek Punekar
(CHRO)

Sandeep Kumar
(DGM)

Priyanka Rakshit Kumar Ekta Tanul

Priyadarshini(SM) (AM) (AM) (DM)

Gurpreet
(SE/Executive) (Executive - CC) (Executive) (Executive)

Alok
(SE/Executive) (Executive- MS) (Executive) (Executive)

(SE/Executive)

(SE/Executive)

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 SWOT ANALYSIS

STRENGTHS

 One of the most important strengths of HCL is that it has a large and very efficient
distribution network.
 There are over 600 touch points across the country.
 Ranked Top 3 Best Employer Survey in IDC-DQ Survey for the Last 4 Consecutive
Years.
 HCL has been in the Indian market for over 30 years which gives it an added advantage.
 HCL has a pool of competencies like hardware, software, training, networking, system
integration, telecom etc.
 Long standing relationship with customers.

WEAKNESS

HCL Infosystems at times competes with certain competitors which are very small
organizations as compared to them. This can be considered as a disadvantage or a weakness
because; HCL being a large organization at times will have to compete with much smaller
organizations in order to get the tenders or offers.

OPPORTUNITIES

 India is large market and the opportunity for the company to grow and expand is always
there.
 HCL Infosystems is now penetrating into international markets which enable it to expand
and cater the needs of the clients abroad.
 Tie ups with various MNC’s enable to extract their core competencies.

THREATS

The threats to HCL are mainly from its competitors. Some of the major companies that
compete with HCL include Wipro, Siemens, Dell etc. Wipro being one of the top IT
companies in India gives a stiff competition to HCL in various sectors. There has been equal
competition from Siemens as well.

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 CHAPTER 4 - INTRODUCTION TO PERFORMANCE APPRAISAL

WHAT IS “PERFORMANCE APPRAISAL”?

Performance Appraisal is defined as 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 working organizations and potential
of employees. According to Flippo, “Performance Appraisal is the systematic, periodic and
an important rating of an employee’s excellence in matters pertaining to his present job and
his potential for a better job.”

CHARACTERISTICS
1. Performance Appraisal is a process.
2. It is the systematic examination of the strengths and weakness of an employee in terms of
his job.
3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are arranged periodically
according to a definite plan.
5. The main purpose of Performance Appraisal is to secure information necessary for
making objective and correct decision an employee.

PROCESS
The process of performance appraisal:
1. Establishing performance standards
2. Communicating the Standards
3. Measuring Performance
4. Comparing the actual with the standards
5. Discussing the appraisal
6. Taking Corrective Action
LIMITATIONS
1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge

26
METHODS OF PERFORMANCE APPRAISAL
The foregoing list of major program pitfalls represents a formidable challenge, even
considering the available battery of appraisal techniques. But attempting to avoid these
pitfalls by doing away with appraisals themselves is like trying to solve the problems of life
by committing suicide. The more logical task is to identify those appraisal practices that are
(a) most likely to achieve a particular objective and (b) least vulnerable to the obstacles
already discussed.
Before relating the specific techniques to the goals of performance appraisal stated at the
outset of the article, I shall briefly review each, taking them more or less in an order of
increasing complexity.
The best-known techniques will be treated most briefly.
 ESSAY APPRAISAL
In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual's strengths, weaknesses, potential, and so on. In most selection situations,
particularly those involving professional, sales, or managerial positions, essay appraisals
from former employers, teachers, or associates carry significant weight.
 GRAPHIC RATING SCALE
This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work
(is he outstanding, above average, average, or unsatisfactory?) and on a variety of other
factors that vary with the job but usually include personal traits like reliability and
cooperation. It may also include specific performance items like oral and written
communication.
 FIELD REVIEW
The field review is one of several techniques for doing this. A member of the personnel or
central administrative staff meets with small groups of raters from each supervisory unit and
goes over each employee's rating with them to (a) identify areas of inter-rater disagreement,
(b) help the group arrive at a consensus, and (c) determine that each rater conceives the
standards similarly. .
 FORCED-CHOICE RATING
Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a
third party.
 MANAGEMENT BY OBJECTIVES
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set - or help set - their own performance
goals. Within the past five or six years, MBO has become something of a fad and is so
familiar to most managers that I will not dwell on it here.

27
 RANKING METHODS
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly
useful. Instead, it is necessary to recognize that comparisons involve an overall subjective
judgment to which a host of additional facts and impressions must somehow be added. There
is no single form or way to do this.
The best approach appears to be a ranking technique involving pooled judgment.
The two most effective methods are alternation ranking and paired comparison ranking.
1. “Alternation ranking”:
Ranking of employees from best to worst on a trait or traits is another method for evaluating
employees. Since it is usually easier to distinguish between the worst and the best employees
than to rank them, an alternation ranking method is most popular. Here subordinates to be
rated are listed and the names of those not well enough to rank are crossed. Then on a form as
shown below, the employee who is highest on the characteristic being measured and the one
who is the lowest are indicated. Then chose the next highest and the next lowest, alternating
between highest and lowest until all the employees to be rated have been ranked.
2. “Paired-comparison ranking”:
This technique is probably just as accurate as alternation ranking and might be more so. But
with large numbers of employees it becomes extremely time consuming and cumbersome.
Both ranking techniques, particularly when combined with multiple rankings (i.e., when two
or more people are asked to make independent rankings of the same work group and their
lists are averaged), are among the best available for generating valid order-of-merit rankings
for salary administration purposes.
 ASSESSMENT CENTERS
So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? In any placement decision and even more so in promotion
decisions, some prediction of future performance is necessary. How can this kind of
prediction be made most validly and most fairly?
 360 DEGREE FEEDBACK
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

28
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.

BENEFITS OF PERFORMANCE APPRAISALS

 Measures an employee’s performance.

 Helps in clarifying, defining, redefining priorities and objectives.
 Motivates the employee through achievement and feedback.
 Facilitates assessment and agreement of training needs.
 Helps in identification of personal strengths and weaknesses.
 Plays an important role in Personal career and succession planning.
 Clarifies team roles and facilitates team building.
 Plays major role in organizational training needs assessment and analysis.
 Improves understanding and relationship between the employee and the reporting
manager and also helps in resolving confusions and misunderstandings.
 Plays an important tool for communicating the organization’s philosophies, values, aims,
strategies, priorities, etc among its employees.
 Helps in counseling and feedback.

29
RATING ERRORS IN PERFORMANCE APPRAISAL
Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -
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.
c) He/She may rate leniently in order to win promotions for the subordinates and therefore,
indirectly increase his/her hold over him.
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.
Performance Dimension Order: - Two or more dimensions on a performance instrument
follow each other and both describe or rotate to a similar quality. The rater rates the first
dimensions accurately and then rates the second dimension to the first because of the
proximity. If the dimensions had been arranged in a significantly different order, the ratings
might have been different.

30
Spillover Effect: - This refers lo allowing past performance appraisal rating lo unjustifiably
influence current ratings. Past ratings, good or bad, result in similar rating for current period
although the demonstrated behavior docs not deserve the rating, good or bad.

31
 CHAPTER 5
5.1 PERFORMANCE APPRAISAL AT HCL INFOSYSTEMS
The method used here for appraising the employees is 180 degree feedback and the
parameters on which they are judged are Behavior and Results. However, there is also an
option of using 360 degree feedback but the increments are done only on the basis of 180.
The process followed is :
Employee fills the appraisal and submits it to the manager

Manager gives rating and submits it to the reviewer

Reviewer gives rating and submits it to the normalization authority

Normalization authority gives it back to the manager

Manager sends it to employee for acknowledgement

After the completion of appraisal process, the process of letter making is carried out in which
increments of employees are done.

5.2 9 GRID MATRIX

Behavior
EE ME BE
High Low

EE
1 2 3
Results ME
4 5 6
BE
7 8 9
Low High

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EE – Exceeds Expectation = 100% and above
ME – Meets Expectation = 80% to 100%
BE – Below Expectation = below 80%

How it works in HCL?

An employee sets his target for the whole year, say from June’11 to June’12 and fills the same
in his goal sheet at the HR Portal of the company. As the business world is dynamic and things
keep changing so do the business objectives. Therefore, this goal sheet is open throughout the
year for any modifications to be made later by the employees. The month of July is the
appraisal period.

Employees are rated by their respective reporting managers and ranked on the above 9 grid
matrix on the basis of the targets achieved by them.

• If the employee fails to achieve 80% of his target, that means he is below expectations of the
organization. The manager develops new talent who can take his place and after a few
warnings he can be asked to leave the company.

• If the employee achieves 80 to 100 % of his target, then he is considered to have met the
expectations of the organization. This will lead the company to give appropriate training to
him and enhance his skills as he has the potential of performing even better. Increments are
also done accordingly.

• If the employee does exceptionally well and achieves beyond 100% of the target then he
seems to have exceeded the expectations and therefore suitably rewarded with promotion,
bonus, recognition so on and so forth.

5.3 BELL CURVE

The Bell Curve model is a forced ranking system of a company’s employees. Forced ranking
has been defined as “a workforce management tool based on the premise that in order
to develop and thrive, a company must identify its best and worst performers, then
nurture the former and rehabilitate and / or discard the latter” – SW learning. It
categorizes people based on their performance, and rewards or penalizes them accordingly.

Bell curve system rates the entire workforce by comparing the performance of those engaged
in similar activity and ranking them on the basis of their performance. The entire workforce is
segregated as the top performers, medium performers and the poor performers. The percentile
varies with the company policy; it could be the top 10%, middle 80% and the bottom
10%.

The employees belonging to the higher grade contribute significantly to the enterprise.
They are showered with rewards like restricted stock options, bonuses, etc so as to
motivate them to continue their excellent services to the business entity. The middle
percentile employees are significant in number and their presence ensures uninterrupted

33
work flow within the organization. They generally have some weakness which is negated
by the training facilities
offered by the company. Similarly training is also provided to enrich their key skills to
utilize in a way profitable to the entity. The bottom ranking consists of those whose
performance needs significant improvement and whose is unsatisfactory. The ranking
acts as a warning system that tells the employee where he stands in relation to his
peers. The employees belonging to the lower strata are at times given the opportunity to
improve their efforts or are
renounced from the system.

The bell curve system of appraisal provides the momentum to the employees to push
them forward, aiming higher. This system also states the criteria that are essential to
drive the organization forward. For instance, it is stated that GE has identified 4E’s as
the measuring standards, namely, high energy level, the ability to energize others
towards the company’s goals, the edge to take crucial yes/no decisions, and the skill to
execute and deliver the promises on time. These standards help the company to
recognize the key talents who contribute to the overall objective of the organization.

The greatest disadvantage of the system is that it is dependent on the supervisors who
judge the capability and contribution of the employee. The supervisor is to keep a day-
to-day physical record of the favorable and unfavorable tasks performed b y the
employee. But as it is a time consuming task, many supervisors record them just before
the submission of the appraisal sheet to the HR leaving ample room for errors and
omissions. This system is also open to the bias and prejudice of the supervisors.
Ranking based on favoritism is a failure.

It is assumed that the bottom performers are replaced every year on account of their
unsatisfactory performance by fresh talents who can add up to the output of the organization.
This is impractical as the replacement is always an ex pensive affair, an d the high
attrition rates can reflect a negative outlook towards the goodwill of the company. The
likelihood of the presence of poor per formers amongst the new additions is another
possibility which can adversely affect the success of this system.

A single system of appraisal has high chances of giving out false reports leading to
dispirited workforce. However the bell curve system backed by other measures of
performance appraisal can be an added advantage.

Benefits of Bell Curve System:

• The workers, who are high performers, are motivated to keep improving themselves with the
incentive of stock options, higher pay etc.
• The majority of the workers, who are classified as average performers, are provided with
opportunities to enhance themselves with various training modules and other tools of
improvement. This increases the company’s competence level as a whole.

34
• The low performers are warned that they need to get their act together and thus, the
productivity of the organization slowly improves
• Accountability, which is the purpose of performance appraisals, is enforced across the
organization by using Bell Curve.

Flaws of Bell Curve System:

• The problem with Bell Curve methodology begins with its application. The distribution
curve can only be applied to an organization with certain number of employees as a threshold.
With small number of employees, the categorization of resources becomes too constrained,
and more often, erroneous.
• Bell Curve method for performance appraisal always creates a doubt about the fairness of the
classification system. Many times employees show increased activity in the time period
approaching appraisals. Hence, the bias towards visible performance as against actual
performance may overshadow fair categorization.
• Distributing incentives based on Bell curve methodology cannot guarantee an increase in the
company’s overall performance. It happens only over a long period of time.
• The Bell Curve system is too rigid a model to be followed, especially in a country like India,
where the work culture is dominated by an emotional approach.
• Often, a manager is forced to classify people in the last gradient of the Bell Curve, but, it
might not reflect the manager’s actual perception about the worker.
• In certain circumstances, a high performer gets slotted as a mid-level performer in order to
normalize the distribution curve, which defeats the purpose of performance appraisals.
• The Bell Curve has a cost to it – attrition. The bottom percent of people may b e there
because of statistical compulsions, rather than the fact that their managers think they deserve
to be there. This ultimately leads to attrition and adds to hiring costs of a company.
• The Bell Curve tries to push everyone into the best worker category, but, the truth remains
that organizations are more often run o n the combined efforts of the so-called ‘average’
workforce.
Application of Bell Curve for performance appraisal must be tweaked to yield better results.
Few tips are:
• Decoupling of lay-offs from the bell curve results.
• Customizing of the bell-curve methodology to suit the organization structure & needs.
• Combining other performance appraisal methods with the Bell Curve approach.

35
 Performance Of Employees
100
90
80
70
Performance %

60
50
40
Performance Of Employees
30
20
10
0
0 2 4 6 8 10 12
No. Of Employees

5.4 ROLES IN THE PERFORMANCE APPRAISAL PROCESS

a) Reporting Manager
Ø Provide feedback to the reviewer / HOD on the employees’ behavioral traits indicated
in the PMS Policy Manual
Ø Ensures that employee is aware of the normalization / performance appraisal process
Ø Address employee concerns / queries on performance rating, in consultation with the
reviewer
b) Reviewer (Reporting Manager’s Reporting Manager)
Ø Discuss with the reporting managers on the behavioral traits of all the employees for
whom he / she is the reviewer
Ø Where required, independently assess employees for the said behavioral traits; such
assessments might require collecting data directly from other relevant employees
c) HOD (In some cases, a reviewer may not be a HOD)
Ø Presents the proposed Performance Rating for every employee of his / her function to
the Normalization committee.
Ø HOD also plays the role of a normalization committee member
Ø Owns the performance rating of every employee in the department
d) HR Head
Ø Secretary to the normalization committee
Ø Assists HOD’s / Reporting Managers in communicating the performance rating of all
the employees

36
e) Normalization Authority
Ø Decides on the final bell curve for each function in the respective Business Unit /
Circle
Ø Reviews the performance ratings proposed by the HOD’s, specifically on the upward /
downward shift in ratings, to ensure an unbiased relative ranking of employees on
overall performance, and thus finalize the performance rating of each employee

5.5 KEY CONCEPTS IN PERFORMANCE APPRAISAL SYSTEM

In order to understand the Performance Appraisal System at HCL, some concepts need to be
explained which play a very important role in using the PMS successfully. They are:
Ø KRA’S (KEY RESULT AREAS): The performance of an employee is largely
dependent on the KRA score achieved by the employee during that particular year.
Thus, it is necessary to answer a few basic questions i.e.
o What are the guidelines for setting the KRA’s for an employee?
o How does an employee write down his KRA’s for a particular financial year?
o KRA’s: The Four Perspectives.
o How is the KRA score calculated for an employee on the basis of the targets
sets and targets achieved?
Ø BEHAVIORAL TRAITS: Some of the qualitative aspects of an employees’
performance combined with the general behavioral traits displayed by the employee
during a year constitutes his behavior traits. An employee is assigned the rating on the
basis of the intensity of the behavior displayed by him. They play a very important
role in the deciding the final performance rating for an employee as is even capable of
shifting the rating one level upwards/downwards.
Ø THE PERFORMANCE RATING PROCESS: The rating process tries to explain
the three different types of rating that an employee can achieve i.e. EE, ME and BE
which refers to Exceeds Expectations, Meets Expectations and Below Expectations
respectively. It also explains the criteria, which is considered for awarding any of
these ratings to the employee.
Ø PROMOTION AND RATING DISRTRIBUTION GUIDELINES: The promotion
and normal distribution guidelines provide the framework within which the
performance appraisal process has to work. It is very important that the HR
department pays due attention to these guidelines while preparing the bell curves for
various functions and the consolidated bell curve for all the functions. These
guidelines also help in deciding upon the promotion cases in a year.

37
 CHAPTER 6

6.1 RESEARCH METHODOLOGY

The Project involves both, Primary and Secondary Research.

Primary Data was collected through questionnaire, which was distributed amongst the
employees of HCL Infosystems.
Secondary Data was taken from the HCL website, Data Quest Journal, HR Reviews
published by ICFAI, websites etc.

6.2 RESEARCH DESIGN

Descriptive research deals with descriptions of phenomena or characteristics associated with

the subject population i.e. who, what, when, where and how of a topic. As objective of the
research is descriptive in form, the research design must be made accordingly:

 Formulating objective of the study.

 Designing the method of the data collection.
 Selecting the sample size.
 Collection of data.
 Analysis of findings.
 Conclusion and interpretations.
 Suggestions and recommendations.
The outcome of this research study will be used as a tool for decision making to know the
effectiveness of performance appraisal on employees at HCL Infosystems.

6.3 SAMPLE DESIGN

A sample examines a portion of the target population and the portion must be carefully
selected to represent that population while census refers to data collection about every unit in
a group or population. The reasons for selecting sample over census because in census time
taken is longer to conduct as compared to a sample survey. And also it creates a response
burden as information needs to be received from every member of the target population. In a
sample survey, only part of the total population is approached for data collection.

6.4 SAMPLE SIZE

The sample size is 100.

6.5 POPULATION

Employees of HCL Infosystems Ltd. , Noida(HO).

6.6 SAMPLING TECHNIQUE

Non Probabilistic – Convenience sampling was used as a tool for selection of a sample group
in the survey. In this technique population is selected based on their availability. Since the

38
population was large and unknown to me, it was difficult for me to select the sample group.
Therefore, I preferred to go for this technique as everyone is appraised in the organization
hence all are aware.

6.7 RESEARCH TOOL AND QUESTIONNAIRE

Questionnaire includes a set of questions, which are relating to the study objective.
Questionnaires are an inexpensive way to gather data, it facilitates in coding data and it leads
to an overall reduction in the cost and time associated with data collection and processing. It
took 10 days in total from the time of collecting information to be considered to the final
drafting of the questionnaire. The formulation of the questionnaire was a very mind-taxing
task, as there were so many questions that had to be included in different parameters to make
it all-inclusive but yet at the same time keeping the number of questions minimum.

Most of the questions included are close ended, as they are quick to answer. This was very
important as the respondents have very little time to spare. Also, at the time of analysis close-
ended answers are always easy to code, interpret and analyze.

It is said that a good questionnaire ends with a comment section that allows the respondent to
record any other issues not covered in the questionnaire. This is one way of allowing the
respondent to express any thoughts, questions or concerns they might have which was not
included in the questionnaire. Therefore a few open-ended questions were included at the
end.

6.8 PILOT TESTING

This is a fundamental step in developing a questionnaire. By conducting a pilot test it ensured

that were no poor wording or ordering of questions; identify errors in the questionnaire layout
and instructions etc. The test included the entire questionnaire.

6.9 ENSURING CONFIDENTIALITY

The confidentiality was maintained at all levels by coding the employee’s identity with a
code given to them. So even if someone opened the file carrying the questionnaire, they
would be able to see the answers but would not be able to identify the individuals. Each
employee was given the initial of his department and a number. Example B2C5 denotes that
employee belongs to B2C department and he was the fifth person of B2C department to
respond to the questionnaire.

39
 CHAPTER 7
7.1 DATA ANALYSIS

Age of employees

(a) Below 20 (b) 21 to 30 (c) 31 to 40 (d) 41 and above

AGE Below 20 21 – 30 31 - 40
41 and above

Sample Size 100 0 70 29

Employees 1

Interpretation :
As 70% of the employees are in the age group of 21 to 30, this shows that
the company is more youth oriented. It prefers young minds than the experienced ones.

Grade/Position of employees

(a) OJT (b) P0 (c) P1 (d) P2 (e) P3 (f) P4 (g) P5 (h) P6 (i) P7 (j) P8

OJT P0 P1 P2 P3 P4 P5 P6 P7 P8

13 4 20 33 14 9 7 0 0 0

40
Interpretation:
The population contains employees of different grades. These grades tells us
the position or level of authority they are working at/with. OJT- P1 are lower level
management, P2-P5 are middle level management and P6-P8 are the top management
people. As there are no higher grade people, this implies that the organization has a small
team of top management.
Question no 1:
Do you understand the meaning of “Performance Appraisal”?

(a) Yes (b) No

QUESTION YES NO

100 80 20

Interpretation:
Almost the respondents said that they understand the meaning of Performance Appraisal
and are aware of this process of evaluating performance.

41
Question no 2:
Are you aware about your performance appraisal or any evaluation done
by your superior?

(a) Yes (b) No

QUESTION YES NO

100 87 13

Interpretation :
13% of the employees responded that they are not aware about performance appraisal
evaluation done by their superiors. Considering this, the company
must take corrective actions as they are lacking somewhere in providing information to the
employees.

42
Question no 3:
Which method is used for performance app raisal in your company?
(a) 360 Degree (b) 180 Degree (c) 720 Degree (d) Don’t know

QUESTION 360 180 720 DON’T

DEGREE DEGREE DEGREE KNOW

100 64 11 0 25

Interpretation :
It was surprising that only 11% of the respondents know the correct method used for
performance appraisal in the organization. More than 50% of the employees said 360 Degree
which is actually an optional method used only for developmental purposes. A better
communication can be expected between employees and their managers to avoid this
situation.

Question no 4:
Is Performance Appraisal helping you to plan your work well?

43
 (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

QUESTION 1 2 3 4 5
100 11 7 23 41 18

( where 1 = Least helping and 5 = Most helping )

Interpretation:
23% of the respondents stood diplomatic choosing 3 o n the scale of 1-5.
Whereas more than 50% of the employees were in favor that performance appraisal is
a helping tool in planning their work well.

Question no 5:
Does the system provide you a chance to communicate the support you
need from your supervisor to perform the job well?

(a) Yes (b) No

QUESTION YES NO

100 77 23

Interpretation :
77% of the respondents said that they do get some help from their respective
supervisors which helps them in performing the job well. Whereas 23% think that they
are not given an y such opportunity. These 23% comprises of people from lower
management, therefore the organization needs to pay more attention towards them.

Question no 6 :
Proper and adequate performance appraisal plays a cru cial role in your

44
 career development.

(a) Agree (b) Disagree (c) Can’t say

QUESTION AGREE DISAGREE CANT SAY

100 95 5 0

Interpretation :
95% of the respondents think that performance appraisal do play an important role in
their career development.

Question no 7 :
Performance Appraisal process helps an organization in :-
Motivating Employees
Retaining Employees
Identifying Training and Development needs
Promotions, Demotions and Transfers

45
(These were the four parameters used in this question and the respondents were asked to rate
these on the scale of 1-4, 1 being highest and 4 being lowest)

MOTIVATING EMPLOYEES
(a) 1 (b) 2 (c) 3 (d) 4

RATING 1 2 3 4 MEAN
100 59 30 5 6 1.58

1 – Very High, 2 – High, 3 – Low, 4 – Very Low

Interpretation:
Employees have rated this factor quite high. They think that Performance
Appraisal helps to a great extent in motivating employees in an organization as the
mean of responses is 1.58 i.e between 1 & 2

RETAINING EMPLOYEES
(a) 1 (b) 2 (c) 3 (d) 4

QUESTION 1 2 3 4 MEAN
100 47 28 17 8 1.86

1 – Very High, 2 – High, 3 – Low, 4 – Very Low

Interpretation:
Employees have given 1.86 rating to Retention of Employees as a result of Performance
Appraisal. As 1.86 is close to 2, this means retention is highly affected by appraisal
process.

IDENTIFYING TRAINING AND DEVELOPMENT NEEDS

(a) 1 (b) 2 (c) 3 (d) 4

QUESTION 1 2 3 4 MEAN
100 32 43 14 11 2.04

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1 – Very High, 2 – High, 3 – Low, 4 – Very Low

Interpretation:
Training and Development needs again is highly affected by the results of Performance
Appraisal. The rating stands at 2.04

PROMOTIONS, DEMOTIONS AND TRANSFERS

(a) 1 (b) 2 (c) 3 (d) 4

QUESTION 1 2 3 4 MEAN
100 40 33 19 8 1

1 – Very High, 2 – High, 3 – Low, 4 – Very Low

Interpretation:
Out of all the parameters, this factor has got the highest and perfect rating of
1.00. Employees think that Performance appraisal helps most in planning promotions,
demotions and transfers.

Question no 8 :
Does the organization provide counseling after appraisal?

(a) Yes (b) No

QUESTION YES NO
100 73 27

Interpretation:
73% said that yes they are provided with counseling after appraisals are done while 27% said
that they are not provided with any such feature. The 27% of the population comprises of
mostly lower management employees, however, there are few P4 and P5 people too.

Question no 9:
How are you given the feedback?

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(a) Written (b) Oral (c) Detailed (d) Summarized (e) Self – Assessed (f) Manager
Assessed

QUESTION WRITTEN ORAL DETAILED SUM SA MA

100 52 26 22 31 19 51

People may select more than one checkbox, so percentages may add up to more than 100%
Interpretation:
Maximum employees answered that the feedback they receive is written and
manager assessed.

Question no. 10:

Are you provided with the opportunity to respond to the feedback of the appraisal?

(a) Yes (b) No

QUESTION YES NO
100 58 42

Interpretation:
42% said that they don’t get the opportunity to respond to their feedback which might be the
reason of their dissatisfaction towards the appraisal. There should be more involvement and
interaction sessions between appraiser and appraisee for smooth appraisals.

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 Question no 11 :

Do you act upon the results of your performance appraisal?

(a) Yes (b) No

QUESTION YES NO
100 89 11

Interpretation :
89% act upon the results of performance appraisal which is a good thing on their part and
for organization as well. However, 11% of the employees have a very casual attitude towards
the results of their appraisals and hence they don’t act on them.

Question no 12:
Are you satisfied with the present Performance Appraisal system?

(a) Yes (b) No

QUESTION YES NO
100 59 41

Interpretation :
41% employees are not at all satisfied with the present appraisal system which the
organization must look into. Again these are the people from OJT, P1 and P2 level.
This implies that the company is not meeting the needs of its lower management employees.

FURTHER QS. TO BE FILLED ONLY BY APPRAISERS

(Note: Sample Size of appraiser’s questionnaire is 40)
Question no 14:
Are employee’s comments & suggestions taken into consideration before the appraisal?

(a) Yes (b) No

QUESTION YES NO
40 30 10

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Interpretation:
75% appraisers said that employees suggestions are taken, whereas 25% said that it is not
which indirectly means that they have never taken any comments or suggestions from their
subordinates before their appraisals.

Question no 15 :
What are the criteria used in your company to evaluate an employee?

(a) Performance (b) Technical Competence (c) Target vs Achievement

(d) Quality of Output (e) Customer Focus (f) Attendance
(g) Key Result Areas (h) 3 Point Scale (i) Behavior and Results (j) All of them

EVALUATION CRITERIA 40 PERCENTAGES

PERFORMANCE 35 88
TECHNICAL 15 38
COMPETENCE
TARGET Vs ach 33 83
QUALITY OF OUTPUT 22 55
CUSTMER FOCUS 12 30
ATTENDANCE 6 15
KRA 17 43
3 POINT SCALE 1 3
BEHAVIOR & RESULTS 28 70
ALL OF THEM 7 18

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Interpretation:
Performance, Target vs. Achievement and Behavior & Results are the main criteria’s of
evaluation.

Question no 16:
Is performance appraisal successful in giving a clear understanding of the
appraisee's job to both appraiser and appraisee?

(a) Yes (b) No (c) Can’t say

QUESTION YES NO CANT SAY

40 27 1 11

Interpretation:
Performance Appraisal clearly explains the appraisee’s job as it tells the
employee what is expected out of them and what he actually performs.

Question no 17 :
Do you give an opportunity to the appraisee to rate his own performance?
(a) Yes (b) No

QUESTION YES NO

40 35 5

Interpretation:
87% of the reporting managers give their subordinates the opportunity of rating their own
performance while 13% don’t. It is a good practice and everyone should get a chance to rate
themselves as this can help the managers to know how they think they have performed.

Question no 18:
Do you share both positive and negative feedback with the employees?
(a) Positive only (b) Negative only (c) Both

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QUESTION POSITIVE NEGATIVE BOTH

40 1 0 39

Interpretation:
98% of the appraisers share both positive and negative feedback with employees which has
come out to be a very positive response and they should keep doing this way.

Question no 19 :
What do you think is the level of effectiveness of Performance Appraisal
on the productivity of employees?

(a) less than 20% (b) 20%-40 % (c) 40%-60% (d) 60%-80% (e) above 80%

QUESTION LESS THAN 20 – 40 40 – 60 60 – 80 Above 80%

20%

40 2 2 8 17 11

% 27 43 20 5 5

Interpretation:
70% of the appraisers said that performance appraisal is more than 60% effective in
productivity of employees. Employees perform well if they are satisfied with their appraisals.

7.2 SUMMARY OF THE ANALYSIS

Sample Size = 100

Out of 100 employees, 13 % of them were not aware of their performance

appraisal evaluation and these people were b elow P3 level.
Surprisingly, 64% of the respondents said that the method used for evaluating
their performance is 360° (which is wrong) whereas 25% didn’t know at all.
59% of the employees are not satisfied with the current appraisal system which is a
serious concern.

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Most managers said that the productivity of employees is affected 60% to 80% by
performance appraisal.

7.3 SUGGESTIONS FROM EMPLOYEES

Quarterly appraisal should be used for some key functions and half yearly for
support function.

Weightage from peers should be increased while appraising.

 360° Feedback method can be adopted so that customer’s feedback can also be
considered in the appraisal.

A proper description should be provided to employee of his/her analysis done.

 Ensure managers spend sufficient time in capturing the year long efforts put in by their
team members.

An employee’s performance should be measured more on his competency and business
outputs rather than measuring his skills on different parameters.

Everybody should not be measured on the same norms. The parameters should be
relevant to an employee’s job profile.

7.4 OBSERVATIONS AND FINDINGS

Maximum unsatisfactory response has come from employees working below P3 level
which means the organization is not paying much attention towards them and focusing more
on higher level employees.

Employees are not much aware of the things happening in the organization. For
instance, they don’t know about the method used for appraising them and some are not even
aware o f any such evaluation done by their superiors.

There is very less involvement of employees in the matters which are actually related to
them, be it performance appraisal or after appraisal discussions.

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7.5 CONCLUSION

The effectiveness of performance management depends on the typ e of system that is being
used. The system must be accepted by all employees for it to be understood in its true sense. In
this study, a broad area of performance management was covered. The performance
management cycle that Schultz recommends is a system that could easily be adopted if the
organization thinks that it is not meeting its goals and needs a change.

•It is important that the process should not be managed by the human reso urce department,
but that all employees play an important role in understanding and adhering to the system to
meet the desired objectives.

• Keeping in mind the business objectives, the company should also take care of the personal
goals of an employee. A satisfied employee will always perform well and achieve his/her
goals which will help the organization to achieve its overall objectives.
For this purpose, Performance Appraisal plays a very important role.

7.7 RECOMMENDATIONS
Its quite impractical to set goals for the whole year as the business world is
dynamic and things keeps changing. So, there should be some sort of flexibility given
to the employees to change/modify their goals at specific intervals of time and some
points can be allocated for the no. of times of variations made by an employee. More
the variations, less will be the points and if variations are less, give him more points
and these points can be included as one factor during evaluation.

People have a very casual attitude in filling up their goal sheet, signing of their
team member’s goal sheet. Managers lack sufficient time to complete appraisal process
of their subordinates and all this work is done on the last day. Due to this, personal
bias may come and proper rating is not done which is a loss on an employees’s part.
The solution of this can be – A particular day and a time slot should be kept for everybody
to complete the appraisals and no other work. For eg – 15 June 11 am to 1 pm
everyone should engage themselves in appraisal work.

 Many employees are unaware of the performance appraisal process of the organization.
This shows their negligence towards their career & awareness. Thus, it can be avoided by
providing enough information to employee with the help of training & development
exercises.

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Here, Recruitments are bound to be done through consultants and extracting profiles via
various job portals. The company should look beyond this and more emphasis should be
laid upon Campus Recruitments from top universities as it is more youth oriented.

A suggestion box can be placed in every division where employees can put their
suggestions or ideas by being anonymous. This will not only help the organization to
develop but also eliminate resistance from employees for changes made in work
culture.

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 BIBLIOGRAPHY

Websites
• http://www.hcl.in/files/HCLI-Q1-FY-09.pdf
• www.hcl.in
• http://performance-management.hr.toolbox.com/groups/strategy
administration/performance -appraisal/bell-curveforced-rating-3468664
•http://www.qualtrics.com/360/180-feedback.html
•http://www.greatleader shipbydan.com/2012/01/performance-and-potential-matrix-
9-box.html
•www.hrmguide.net
•http://www.infosys.com/services/cpm/performance_management_cycle.asp
•http://www.lg-employers.gov.uk/people/performance/framework.html
•http://braindumped.wordpress.com/2010/09/26/bell-curve-appraisals/

Books
• Company’s Manuals
• Ashwathappa K.
Human Resource and Personnel Management.
TATA McGraw Hill,fourth edition. (pg 243 -255)
•VSP Rao.
Human Resource Management
. Excel Books, second edition, 2005 (pg 241, 242)
•Gary Dessler & Biju Varkkey.
Human Resource Management.
Pearson Education,eleventh edition. (pg 341, 342)

Journals
• HR Review by ICFAI
• Asia Pacific Journal of Human R esources Au gust 1, 2007; vol. 45.(Pg132-150)
• Journal of Leadership & Organizational Studies, 1 January 2006; vol. 13. (Pg 14-
28)
• Group & Organization Management, June 1991; vol. 16. (Pg 143-159)
• Journal of Management, September 1990; vol. 16. (Pg 619-632)
• Journal of occupational and Organizational Psychology, 4 November 2001. (Pg
473-487)

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 QUESTIONNAIRE
“Survey on effectiveness of Performance Appraisal in
HCL Infosystems Ltd.”
Greetings!

I am a student of Indian Institute of Planning and Management pursuing MBA. I

am undertaking the following survey on the aforementioned topic as part of my
Summer Internship in HCL.

I'll be glad to get your response by 15th of July 2012. The information provided is
collected solely for the purpose of the said study and high confidentiality will be
maintained in all manner.

Thank you.

* Required

Name* _________________________

Contact No* _________________________

Age*  20 and below

 21 to 30
 31 to 40
 41 and above

Grade*
 OJT  P0  P1  P2  P3  P4  P5  P6  P7  P8

1. Do you understand the meaning of “Performance Appraisal”?

 Yes  No

2. Are you aware about your performance appraisal or any evaluation done by
your superior?
 Yes  No

3. Which method is used for performance appraisal in your company?

 360 Degree Feedback
 180 Degree Feedback
 720 Degree Feedback
 Don’t know

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4. Is Performance Appraisal helping you to plan your work well?
1 2 3 4 5
Least helping      Most helping
5. Does the system provide you a chance to communicate the support you need
from your supervisor to perform the job well?
 Yes  No

6. Proper and adequate performance appraisal plays a crucial role in your career
development.
 Yes  No

7. Performance Appraisal process helps an organization in :

(Rate the options on the scale of 1-4 , 1 being highest and 4 being lowest)

1 2 3 4
Motivating Employees
Retaining Employees
Identifying Training and
Development needs
Promotions, Demotions
and Transfers

8. Does the organization provide counseling after appraisal?

 Yes  No

9. How are you given the feedback?

(Choose any 1 option from 1st row , 1 from 2nd row and 1 from 3rd row)
 Written  Oral
 Detailed  Summarized
 Self-Assessed  Manager Assessed

10. Are you provided with the opportunity to respond to the feedback of the
appraisal?
 Yes  No

11. Do you act upon the results of your performance appraisal?

 Yes  No

12. Are you satisfied with the present Performance Appraisal system?
 Yes  No

13. Any suggestions to improve the appraisal system of the organization.

___________________________________________________________________
___________________________________________________________________

58
 ___________________________________________________________________
___________________________________________________________________

FURTHER QS. TO BE FILLED ONLY BY APPRAISERS

1. Are employee's comments & suggestions taken into consideration before the
appraisal?
 Yes  No

2. What are the criteria used in your company to evaluate an employee?

(Can tick multiple options)
 Performance  Technical Competence
 Customer Focus  Target vs Achievement
 Attendance  Quality of Output
 Key Result Areas  Behavior and Results
 3 Point Scale  All of them

3. Is performance appraisal successful in giving a clear understanding of the

appraisee's job to both appraiser and appraisee?
 Yes  No  Can’t say

4. Do you give an opportunity to the appraisee to rate his own performance?

 Yes  No

5. Do you share both positive and negative feedback with the employees?
 Positive only
 Negative only
 Both

6. What do you think is the level of effectiveness of Performance Appraisal on the

productivity of employees?
 less than 20%
 20% - 40%
 40% - 60%
 60% - 80%
 above 80%

7. Any suggestions to improve the appraisal system of the organization.

____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________

Thank you for your time.

Regards
Sahil Sareen

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