A MINI PROJECT REPORT ON

“A STUDY ON PERFORMANCE APPRAISAL WITH

SPECIAL REFERENCE TO HYUNDAI, GORAKHPUR”

SUBMITTED IN PARTIAL FULLFILLMENT

FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

KIPM-COLLEGE OF MANAGEMENT
(2021 – 2022)

SUBMITTED BY UNDER THE GUIDENCE OF

RICHA RAI Mr. SIDDHARTHA SINGH

(MBA 1st SEMESTER) KIPM-College of Management

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 Affiliated to

DR. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY,

LUCKNOW

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 ACKNOLWLEDGEMENT

We have taken efforts in this project. However, it would not have been possible without the kind
support and help of my faculties and my friends. Mar. Anil Kumar Yadav
We are highly indebted to Mr Siddhartha Singh for their guidance and constant supervision as
well as for providing necessary information regarding the project & also for their support in
completing the project.
We would like to express my special gratitude and thanks to my mentor and all faculties’
members for giving me such attention and time.
Our thanks and appreciations also go to my colleague in developing the project and people who
have willingly helped me out with their abilities.
My humble thanks to all our professors for guiding me during completing my research report &
also to my training mentor. I shall be highly obliged to his act of kindness. He helped me
whenever I approached him.

Richa Rai

MBA, 1st Sem.

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 DECLARATION

I hereby declare that the project entitled an “A STUDY ON PERFORMANCE APPRAISAL

WITH SPECIAL REFERENCE TO HYUNDAI” submitted in the partial fulfillment of the
requirement of the degree of MASTER OF BUSINESS ADMINISTERATION is a genuine
research work under taken by me under the guidance of “Mr. Siddhartha Singh”.
This project has not been submitted earlier for the award of other degree, Diploma, Fellowships
or any other Institute & University.

Date: Richa Rai

Place: Gorakhpur MBA 1st Semester
KIPM –College of management

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 PREFACE

Managing human resources in today’s dynamic environment is becoming more

and more complex as well as important. Recognition of people as a valuable
resource in the organization has led to increases trends in employee
maintenance, job security, etc

My Research project report deals with Performance Appraisal as carried out at

HYUNDAI. In this report, I have studied &evaluated the performance
appraisal process as it is carried out in the bank.

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 its functioning.

The second section deals with performance appraisal. In this section, I have
given a brief conceptual explanation to performance appraisal. It contains the
definition, process and significance of performance appraisal.

In the third section of my report, I have conducted a research study to evaluate

the process of performance appraisal at HYUNDAI.. This section also contains
my findings, conclusions, suggestions and feedback.

The fourth and final section of this report consists of extra information that I
related to the main contents of the report. These annexure include some graphs
and diagrams relating to the company, graphs relating to the research study and
important documents upon which the project is based.

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 TABLE OF CONTENTS

Sr. Contents Page No.

No.
1. INTRODUCTION 3

2. COMPANY PROFILE 35

3. RESEARCH DESIGN 71

4. RESEARCH METHODOLOGY 75

5. FINDINGS AND CONCLUSION 78

6. RECOMMENDATION AND SUGGESTION 84

7. LIMITATION OF STUDY 86

8. BIBLIOGRAPHY 88

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 INTRODUCTION

Human Resource (or personnel) management, in the sense of getting things

done through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division to
provide an expert service dedicated to ensuring that the human resource
function is performed efficiently.

“People are our most valuable asset” is a cliché, which no member of any
senior management team would disagree with. Yet, the reality for many
organizations is that their people remain undervalued, under trained and
underutilized.

Performance Appraisal is the process of assessing the performance and

progress of an employee or a group of employees on a given job and his / their
potential for future development. It consists of all formal procedures used in
the working organizations to evaluate personalities, contributions and
potentials of employees.

On the whole, the project involves research of the different departments and
their working. Research project grooms the students to be creative in the field
of the management. It helps the students to acquire necessary conceptualization
skills needed to transform original ideas in finished practical knowledge.
Actually research projects are in the transition of the student project exposure
to the corporate work, where required to perform well in the career The student
manager can really feel that how the theory matters used in

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 real and practical world .Understanding the matters related to the concerned
field is extremely important to hit the target.

Human Resource (or personnel) management, in the sense of getting things

done through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division to
provide an expert service dedicated to ensuring that the human resource
function is performed efficiently. Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between

a subordinate and supervisor, that usually takes the form of a periodic interview
(annual or semi-annual), in which the work performance of the subordinate is
examined and discussed, with a view to identifying weaknesses and strengths as
well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority of
available merit increases pay, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers
who may require some form of counselling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease pay.)

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 INTRODUCTION TO HUMAN RESOURCE
MANAGEMENT
Human Resource (or personnel) management, in the sense of getting things
done through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division to
provide an expert service dedicated to ensuring that the human resource
function is performed efficiently.

“People are our most valuable asset” is a cliché, which no member of any
senior management team would disagree with. Yet, the reality for many
organizations is that their people remain undervalued, under trained and
underutilized.

The market place for talented, skilled people is competitive and expensive.
Taking on new staff can be disruptive to existing employees. Also, it takes time
to develop ‘cultural awareness’, product / process / organization knowledge and
experience for new staff members.

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Following are the various functions of Human Resource Management that are
essential for the effective functioning of the organization:

1. Recruitment

2. Selection

3. Induction

4. Performance Appraisal

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 5. Training & Development

Recruitment

The process of recruitment begins after manpower requirements are determined

in terms of quality through job analysis and quantity through forecasting and
planning.

Selection

The selection is the process of ascertaining whether or not candidates possess

the requisite qualifications, training and experience required.

Induction

Induction is the technique by which a new employee is rehabilitated into the

changed surroundings and introduced to the practices, policies and purposes of
the organization.

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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.”

Once the employee has been selected, trained and motivated, he is then
appraised for his performance. Performance Appraisal is the step where the
Management finds out how effective it has been at hiring and placing

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employees. If any problems are identified, steps are taken to communicate with
the employee and remedy them.

Performance Appraisal is a process of evaluating an employees performance in

terms of its requirements.

Performance Appraisal can also be defined as the process of evaluating the

performance and qualifications of the employees in terms of the requirements
of the job for which he is employed, for purposes of administration including
placement, selection for promotions, providing financial rewards and other
actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.

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.

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Benefits of appraisal in the organisation

(1) Estimate the overall effectiveness of employees in performing their jobs

(2) Identify strengths and weaknesses in job knowledge and skills,

(3) determine whether a subordinate’s responsibilities can be expanded,

(4) Identify future training and development needs

(5) review progress toward goals and objectives,

(6) Determine readiness for promotion, and

(7) Motivate and guide growth and development.

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ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the
standards which will be used to as the base to compare the actual performance
of the employees. This step requires setting the criteria to judge the
performance of the employees as successful or unsuccessful and the degree of
their contribution to the organizational goals and objectives. The standard set
should be clear, easily understandable and in measurable terms. In case the
performance of the employees cannot be measured, great care should be taken
to describe the standards.

COMMUNICATION THE STANDARDS

Once set, it is the responsibility of the management to communicate the

standards to all the employees of the organization. The employee should be
informed and the standard should be clearly explained to the employees. This
will help them to understand their role and to know that what exactly is
expected from them. The standard should also be communicated to the
appraisers or the evaluators and if required, the standard can also be modified
at this stage itself according to the relevant feedback from the employees or the
evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the
actual performance the employees that what is the work done by the employees
during the specified period of time. It is a continuous process which involves
monitoring the performance throughout the year. This stage requires the careful
selection of the appropriate techniques of the measurement,

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taking care that personal bias does not affect the outcome of the process and
providing assistance rather than interfering in an employee’s work.

HISTORY OF PERFORMANCE APPRAISAL

The history of performance appraisal is quite brief. Its roots in the early 20th
century can be traced to Taylor's pioneering Time and Motion studies. But this
is not very helpful, for the same may be said about almost everything in the
field of modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second World War -
not more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the
scale of things historical, it might well lay claim to being the world's second
oldest profession!

There is, says "... a basic human tendency to make judgment about those one is
working with, as well as about oneself." Appraisal, it seems, is both inevitable
and universal. In the absence of a carefully structured system of appraisal,
people will tend to judge the work performance of others, including
subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and
legal problems in the workplace. Without a structured appraisal system, there is
little chance of ensuring that the judgments made will be lawful, fair,
defensible and accurate.

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Performance appraisal systems began as simple methods of income
justification. That is, appraisal was used to decide whether or not the salary or
wage of an individual employee was justified

The process was firmly linked to material outcomes. If an employee's

performance was found to be less than ideal, a cut in pay would follow. On the
other hand, if their performance was better than the supervisor expected, a pay
rise was in order.

Little consideration, if any, was given to the developmental possibilities of

appraisal. If was felt that a cut in pay, or a rise, should provide the only
required impetus for an employee to either improve or continue to perform
well.

Sometimes this basic system succeeded in getting the results that were
intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people
with roughly equal work abilities could be paid the same amount of money and
yet have quite different levels of motivation and performance. These
observations were confirmed in empirical studies. Pay rates were important,
yes; but they were not the only element that had an impact on employee
performance. It was found that other issues, such as morale and self- esteem,
could also have a major influence the 1950s in the United States, the potential
usefulness of appraisal as tool for motivation and development was gradually
recognized. The general model of performance appraisal, as it is known today,
began from that time

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METHODS OF PERFORMANCE APPRAISAL
TRADITIONAL METHOD:
 Essay appraisal method

 Critical incidents method

 Checklist method

 Graphic rating scale

 Straight ranking method

 Group Order ranking method

 Paired comparison

MODERN METHOD:

 Behaviorally anchored rating scales (BARS)

 MBO (result oriented appraisal method)

 Group appraisal of subordinates

 Peers appraising the colleague

 Subordinates appraising the boss

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 360 degree feedback method

 Assessment centers method

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 TRADITIONAL METHOD

ESSAY APPRAISAL METHOD:

Under this method, the rater is asked to express strong as well as weak points
of the employee’s behavior. This technique is normally used with a
combination of the graphic rating scale because the rater can elaborately
present the scale by substantiating an explanation for his rating. While
preparing the essay on the employee, the rater considers the following: (1) Job
knowledge & potential of the employee; (2) Employee’s understanding of the
company’s programs, objectives, policies etc; (3) The employee’s relations
with the co-workers and superiors; (4) the employees general planning ,
organizing and controlling ability; (5) The attitudes and perceptions of the
employee, in general.

Essay appraisal is a non-quantitative technique. This method is advantageous in

at least one sense, i.e., The essay provides a good deal of information about the
employee and also reveals more about the evaluator. The essay appraisal
method however, suffers from the following limitations:

 It is highly subjective; the supervisor may write a biased essay. The

employees who are sycophants will be evaluated more favorably then
other employees.

 Some evaluators may be poor in writing essays on employee

performance. Others may be superficial in explanation and use flowery
language which may not reflect the actual performance of the employee.
It is very difficult to find effective writers now a days.

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RANKING METHOD

This is a relatively method of performance evaluation. Under this method , the

ranking of an employee in a work group is done against that of another
employee. The relative position of each employee is tested in terms of his
numerical rank. It may also be done by ranking a person of his job
performance against another member of the competitive group. The
quintessence of this method is that employees are ranked according to their
levels of performance. While using this method, the evaluator is asked to rate
employees from highest to lowest on some overall criterion. Though it is
relatively easier to rank the best and the worst employees, it is very difficult to
rank the average employees. Generally, evaluators pick the top and bottom
employees first and then select the next highest and next lowest and move
towards the average employees. The longstanding limitations of this method
are :

 The ‘whole man’ is compared with another ‘whole man’ in this method.
In practice, it is very difficult to compare individuals possessing varied
behavioral traits.
 This method speaks only of the position where an employee stands in
his group. It does not tell anything about how much better or how much
worse an employee is when compared to another employee .
 When a large number of employees are working, ranking of individuals
becomes a difficult issue.
 There is no systematic procedure for ranking individuals in the
organizations. The ranking system does not eliminate the possibility of
snap judgments.

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PAIRED COMPARISION METHOD

Ranking become more reliable and easier under the paired comparison method.
Each worker compared with all other employees in the group; for every trait the
worker is compared with all other employees. For instance, when there are five
employees to be compared, then A’ as performance is compared with that of
B’s and decision is arrived at as to whose is the better or worse. Next, B is also
compared with all other. Since A is already compared with B, this time B is
compared with only C,D and E. By this method when there are five employees,
fifteen decision are made ( comparison ). The number of decisions to be made
can be determined with the help of the formulae n ( n-2 ). Ranking the
employees by the paired comparison method may be illustrated as shown in the
table 10.7.

For several individual trait, paired comparison are made, tabulated and then
rank is assigned to each worker. Through this method seems to be logical, it is
not applicable when a group is large. When the group becomes too large, the
number of comparison to be made may become frighteningly excessive. For
instance, when n=100, comparison to be made are 100 ( 100-2) = 100( 98 ) =
9800

Trait : “Quantity of Work”

As A B C D E
compared
to

A + - + -

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B - + - +

C + - + -

D - + - -

E + - + +

GRAPHIC RATING SCALE:

This is one of the oldest and the most commonly used methods for appraisal
used alongside Essay Appraisal Method. In this method, a printed form is used
for measuring both the quality and the quantity of work done by an employee.
The form has a graphic scale, indicating the various degrees of a particular
trait. The factors taken into consideration are both personal and the professional
ones in nature. It is an easy to understand and easy to use method where rating
is done in a tabular form. But then, this method is also not bias free as the
supervisor may plot the graph depending on the rapport with the employee
rather than objectively marking performance.

CRITICAL INCIDENTS METHOD:

In this traditional method of performance appraisal, the evaluator rates the

employee on the basis of critical events and how the employee reacts in such
events - essentially their behavioural patterns during those incidents. This
includes both the positive and the negative traits of the employee. This method
objectively discusses an employee’s performance during such incidents.
However, this method has drawn a lot of flak as the superior has to make a note
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of critical incidents and the resulting employee behaviour as and when they
happen, which is difficult under the circumstances always. Again, the minor
incidents might get precedence over the major ones as every individual tends to
see things differently. Moreover, it is not very effective as every individual is
different and reacts and performs very differently in similar circumstances.

MODERN METHOD
ASSESSMENT CENTRES -
An assessment centre typically involves the use of methods like
social/informal events, tests and exercises, assignments being given to a group
of employees to assess their competencies to take higher responsibilities in the
future. Generally, employees are given an assignment similar to the job they
would be expected to perform if promoted. The trained evaluators observe and
evaluate employees as they perform the assigned jobs and are evaluated on job
related characteristics.

The major competencies that are judged in assessment centers are

interpersonal skills, intellectual capability, planning and organizing
capabilities, motivation, career orientation etc. assessment centers are also an
effective way to determine the training and development needs of the targeted
employees.

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BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique

which combines the graphic rating scale and critical incidents method. It
consists of predetermined critical areas of job performance or sets of behavioral
statements describing important job performance qualities as good or bad (for
eg. the qualities like inter personal relationships, adaptability and reliability,
job knowledge etc). These statements are developed from critical incidents.

In this method, an employee’s actual job behaviour is judged against the

desired behaviour by recording and comparing the behaviour with BARS.
Developing and practicing BARS requires expert knowledge.

HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of
money. In this method the Performance appraisal of the employees is judged in
terms of cost and contribution of the employees. The cost of employees include
all the expenses incurred on them like their compensation, recruitment and
selection costs, induction and training costs etc whereas their contribution
includes the total value added (in monetary terms). The difference between the
cost and the contribution will be the performance of the employees. Ideally, the
contribution of the employees should be greater than the cost incurred on them.

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THE MBO PROCESS

MBO as a mutual goal setting exercise is most appropriate for technical,

professional, supervisory, and executive personnel. In these positions, there is
generally enough latitude and room for discretion to make it possible for the
person to participate in setting his work goals, tackle new projects, and
discover new ways to solve problems. This method is generally not applied for
lower categories of workers because their jobs are usually too restricted in
scope. There is little discretionary opportunity for them to shape their jobs.

MBO may be viewed as a system of management rather than an appraisal

method. A successful installation of MBO requires written mission statements
that are prepared at the highest levels of top management. Mission statements
provide the coherence in which top-down and bottom-up goal setting appear
sensible and compatible. MBO can be applied successfully to an organisation
that has sufficient autonomy, personnel, budget allocation, and policy integrity.
Managers are expected to perform so that goals are attained by the
organisation. Too often MBO is installed top-down in a dictatorial manner with
a little or no accompanying training. If properly implemented, it serves as a
powerful and useful tool for the success of managerial performance.

MBO is a tool that is inextricably connected with team building so that the
work commitment of team members can be increased and their desire to excel
in performance can be inspired. It is important to have effective team work
among a group of managers or a group of subordinates. The group of
employees or subordinates must be looked upon as a team that needs to be
brought together. Goals should be set by manager-subordinate pairs, and also

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by teams. The basic superior subordinate relationship in an organisation is in
no way undermined in this concept of team goal setting. Lines of responsibility,
authority, and accountability remain clear.

360-DEGREE FEEDBACK

A common performance appraisal method is the 360-degree feedback. In this

scenario, whoever conducts the appraisal, such as a human resources manager,
interviews an employee & supervisor, peers and any direct reports. This
technique allows an appraiser to gain a complete profile of the employee. In
addition to gauging the workers job performance and technical skill set, an
appraiser receives in-depth feedback on the employee behavior. Measuring
areas of subjectivity, such as character and leadership skills, allows an
employer to manage an employee development.

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ERRORS IN PERFORMANCE APPRAISAL

 Leniency or severity error

 Central tendency

 Halo effect/error

 Similarity error

 Contrast error

 Shifting standards

 Influence of recent events

 Tendency to give high rating

 Length of service bias

 Personal bias

HOW TO MINIMISE ERRORS

 Clearly defined performance dimensions and standards

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 Performance appraisal only for providing feedback

 Combination of methods for appraising performance

 Continuous feedback

 Many appraisers rating backed up with examples

 Appraisal of subordinates on the same performance dimensions

 Appraiser with ability to appraise

 Training of appraisers

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CHARACTERSTICS OF AN EFFECTIVE APPRAISAL SYSTEM

 Relevance

 Reliability

 Sensitivity

 Acceptability

 practicability

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Modern Appraisal

Performance appraisal may be defined as a structured formal interaction

between a subordinate and supervisor, that usually takes the form of a periodic

26
interview (annual or semi-annual), in which the work performance of the
subordinate is examined and discussed, with a view to identifying weaknesses
and strengths as well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority
of available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment

and justification of rewards and penalties - is a very uncertain and contentious
matter.

Controversy

Few issues in management stir up more controversy than performance

appraisal.

There are many reputable sources - researchers, management.

Commentators, psychometricians - who have expressed doubts about the

validity and reliability of the performance appraisal process. Some have even
suggested that the process is so inherently flawed that it may be impossible to
perfect it.

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At the other extreme, there are many strong advocates of performance
appraisal. Some view it as potentially "... the most crucial aspect of
organizational life"

Between these two extremes lie various schools of belief. While all endorse the
use of performance appraisal, there are many different opinions on how and
when to apply it. There are those, for instance, who believe that performance
appraisal has many important employee development uses, but scorn any
attempt to link the process to reward outcomes - such as pay rises and
promotions.

This group believes that the linkage to reward outcomes reduces or eliminates
the developmental value of appraisals. Rather than an opportunity for
constructive review and encouragement, the reward-linked process is perceived
as judgmental, punitive and harrowing

For example, how many people would gladly admit their work problems if, at
the same time, they knew that their next pay rise or a much-wanted promotion
was riding on an appraisal result? Very likely, in that situation, many people
would deny or downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the person being
appraised. Many appraisers feel uncomfortable with the combined role of judge
and executioner.

Such reluctance is not difficult to understand. Appraisers often know their

appraises well, and are typically in a direct subordinate-supervisor relationship.

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They work together on a daily basis and may, at times, mix socially. Suggesting
that a subordinate needs to brush up on certain work skills is one thing; giving
an appraisal result that has the direct effect of negating a promotion is another.

The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines. On the other hand,
there is a strong rival argument which claims that performance appraisal must
unequivocally be linked to reward outcomes. The advocates of this approach
say that organizations must have a process by which rewards - which are not an
unlimited resource - may be openly and fairly distributed to those most
deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance

appraisal - whatever its practical flaws - is the only process available to help
achieve fair, decent and consistent reward outcomes.

It has also been claimed that appraisees themselves are inclined to believe that
appraisal results should be linked directly to reward outcomes - and are
suspicious and disappointed when told this is not the case. Rather than feeling
relieved, appraisees may suspect that they are not being told the whole truth, or
that the appraisal process is a sham and waste of time.

The Link to Rewards

Research has reported that appraisees seem to have greater acceptance of the
appraisal process, and feel more satisfied with it, when the process is directly
linked to rewards. Such findings are a serious challenge to those who

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feel that appraisal results and reward outcomes must be strictly isolated from
each other.

There is also a group who argues that the evaluation of employees for reward
purposes, and frank communication with them about their performance, are part
of the basic responsibilities of management. The practice of not discussing
reward issues while appraising performance is, say critics, based on
inconsistent and muddled ideas of motivation

In many organizations, this inconsistency is aggravated by the practice of

having separate wage and salary reviews, in which merit rises and bonuses are
decided arbitrarily, and often secretly, by supervisors and managers

Rating tendencies of Managers in an organization vary from a 'very lenient' rate

to a 'very harsh' rate. The employees reporting to them experience the impact of
these variations. This impact becomes crucial in an environment where
employees are given performance based remuneration/ incentives.
Normalization of scores is intended to introduce greater objectivity in the
Employees Performance Management (EPM) System of an organization.

Rating Patterns of Managers

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It may be observed from the figure above that Manager 'A', compared to
Manager 'B', has the tendency to rate most of his subordinates at 7 to 8 points
on a Performance rating scale of 1 to 10. Manager 'C', on the other hand, is
highly conservative and awards given to the best of his subordinates are in the
range of 5- 6 points. Thus an average performer with Manager 'B' gets equated
with the Best employee reporting to Manager 'C' and with a low average
subordinate of Manager 'A'. The training of Managers A, B & C on the rating
norms may improve this trend marginally during the subsequent years. But
what happens to the evaluations already done by them? How has the company
management looked into this problem which has an impact on promotions,
compensations and career management of all employees? Some outstanding
performers (placed under a harsh rate like Manager 'C') may quit the
organization and some low caliber people (placed under a lenient rate like
Manager 'A') may themselves be the Managers of tomorrow. This vicious cycle
tends to boost the average performers who cling to their jobs and promote
mediocrity in the organization. A performance driven.

What does normalization mean?

Assume there are ten Managers in an organization who are reporting on 10

different executives each and these Managers, in turn, report to three different
Senior Managers, in their respective departments. In this scenario of EPM,
there are 13 different 'Appraisers' who are reporting on 110 employees in the
organization. Amongst these employees, 100 are at the same level (i.e.,
Executives) and 10 are at the level of Managers. Each of the thirteen
Appraisers has a rating style which is different from the others. So the
employees reporting to them have a high degree of variability in their

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performance appraisal scores. The process of balancing this variability is called
'Normalization'.

Normalization Process

The process comprises of the following steps:

Statistical Mean' of organizational rating pattern of all the Managers (i.e.,

Appraisers) at the same level, across various departments, is computed. Let this
Mean be 'M'.

Statistical Mean for each of the Appraisers at the same level (i.e., for all the 10
Managers in the example given above) is computed. Each Manager should have
done the Appraisal for 40 to 50 employees (may be over the last 5 years). Let
this Mean be 'Mi' (I = 1 to 10).

A correction Factor (CF) for each of these Managers (Appraisers) is then

computed = Mi/M. Its value, for example, will be 1.0 if the rating pattern of a
Manager is the same as the statistical Mean.

Performance Score of each individual employee is divided by CF for his/ her

Manager to compute its normalized value. This normalized score is utilized for
all management decisions.

Performance appraisal: Do and don'ts

Appraisals! The times when employees look forward to a raise and a promotion
and the bosses, may be, not quiet so. Most feel that for bosses, this is the time
to remind you again for all the times you failed to deliver!

On a more serious note, appraisals by and large mean reviewing your past
performance (achievements) and providing you feedback for

32
improvements. So, if there's been little or no performance, there'll be little or no
appraisal in your salary and position.

Appraisal cycles vary from organization to organization. Most have six-

monthly or annual reviews. Some also follow the process of a project-end
review along with the usual organization review cycle of six months or a year.
However, the important thing that some of us might discount is that

Past performance:

Go through your past performance and analyze the areas where you excelled.
While it is important not to 'tom-tom' about your achievements, yet, if you don't
accept and mention them straight on, how can others? At the same time, do not
balk at the criticism that might come your way. Be graceful in admitting where
you went wrong and seek guidance from your boss on how to proceed
henceforth.

MEANING:

Performance appraisal is necessary for the effective management and

evaluation of the organization. Appraisal helps develop individuals, improve
organizational performance, and feed into business planning. Formal appraisals
are generally conducted once in a year for all staff in the organization. Each
staff member is appraised by their line manager. directors are appraised by
their CEO,who is appraised the chairman or company owners ,depending upon
the size and structure of the organization.

Annual performance appraisal enables management and monitoring of the

standards, agreeing expectations and objectives, and delegation of the

33
responsibility and tasks, staff performance appraisal also establish individual
training needs and enable organizational training needs analysis and planning.

Performance appraisal also feed into organizational annual pay and reviews
which commonly also coincides with the business planning for the next trading
year.

Performance appraisal generally reviews each individual’s performance against

objectives and standards for the trading year agreed at the previous appraisal
meeting.

Performance appraisal is also essential for career and succession planning for
individuals, crucial jobs and for the organization as a whole. Performance
appraisal are important for staff motivation, attitude and behavior development
,communicating and aligning individuals and organizational aims, and fostering
positive relationship between management and staff.

Performance appraisal provides a formal, recorded, a regular review of an

individual’s performance, and a plan for future development.

Job performance appraisals –in whatever the form they take-are vital for
managing the performance of people and organizations.

Managers and appraisees commonly dislike appraisals and try to avoid them.
To those people the appraisal is daunting and time consuming. The process is
seem as a difficult administrative chore and emotionally challenging. The
annual appraisal is may be the only time since the last year that the two people
have sat down together for a meaningful one-to-one discussion. No wonder
then that appraisals are stressful –which then defeats the whole purpose

There lies the problem and remedy.

34
Appraisals are easier and especially more relaxed, if the boss meets each of the
team members individually and regularly for one-to-one discussion throughout
the year.

Meaningful regular discussions about work, career ,aims, proress, development,

hopes, dreams ,life, the universe, the TV ,common interest, ete, whatever.
makes appraisal so much easier because the people know and trust each other –
which reduces all the stress and the uncertainty.

 Put off the discussion and of course they loom very large .

 So don’t wait for the annual appraisal to sit down and talk.

 The boss or the appraisee can instigate this.

 If you are an employee with a shy boss, then take the lead.

 If you are a boss who rarely sits down and talks with people or whose
people are not to talking with their boss then set about relaxing the
atmosphere and improving relationships, Appraisals (and work)all tend
to be easier when people communicate well and know each other .
 So seat down together and talk as often as you can, and then when the
actual performance appraisals are due everyone will find the whole
process to be far more natural.quick,and easy –and a lot more productive
too.

Performance Feedback

In a performance management system, feedback remains integral to successful

practice. The feedback, however, is a discussion. Both the staff person and his
manager have an equivalent opportunity to bring information to the dialogue.
Feedback is often obtained from peers, direct reporting staff, and

35
customers to enhance mutual understanding of an individual’s contribution and
developmental needs. (This is commonly known as 360 degree feedback.) The
developmental plan establishes the organization’s commitment to help each
person continue to expand his knowledge and skills. This is the foundation
upon which a continuously improving organization builds.

HR Challenges

Leading the adoption and implementation of a performance management

system is a wonderful opportunity for the HR professional. It challenges their
creativity, improves their ability to influence, and allows them to foster real
change in their organization.

Performance management encompasses the most important people issues in

your organization. Performance management includes the entire relationship
you have with the people you employ.

Performance management is the process of creating a work environment or

setting in which people are enabled to perform to the best of their abilities.
Performance management is a whole work system that begins when a job is
defined as needed and expectations are clearly communicated to the employee.
It ends when an employee leaves your organization. Many writers and
consultants are using the term “performance management” as a substitution for
the traditional performance appraisal system. I encourage you to think of the
term in this broader work system context.

36
A Performance Management System includes the following components---

 Develop clear job descriptions.

 Select appropriate people with an appropriate selection process

 Negotiate requirements and accomplishment-based performance

standards, outcomes, and measures.

 Provide effective orientation, education, and training.

 Provide on-going coaching and feedback.

 Conduct quarterly performance development discussions.

 Design effective compensation and recognition systems that reward

people for their contributions.

 Provide promotional/career development opportunities for staff.

 Assist with exit interviews to understand WHY valued employees leave

the organization.

37
38
Performance management system is a principal tool in achieving corporate objectives in
that it links those objectives with employee goals and achievements. It focuses on
improving performance through matching outcomes against individual, departments and
organizational objectives, and to the training and development needs of employees at all
organizational levels. Managers using performance management system effectively are
generally more concerned with performance planning and improvement and
performance assessment.

Performance management system is an accepted management practice operating within

organizations because it can be a valuable process for employees and employers alike.
It provides for both recognition of high performance and early detection of performance
that is not meeting expectations, allowing prompt remedial action to be taken.

Performance management system (PMS) has to evolve from the performance

appraisals. A well designed performance appraisal system tells you the status of the
health of an organization, but it indicates only the symptoms of any ills. It is like a
medical checkup. It tells you what is right or wrong. However, it does not lead you to
the cure of the organizational ills. Performance Management System has to be evolved
for cure and to keep the organization healthy. Most often, we attack the symptoms
rather than attacking the root cause of the problem. A properly designed performance
management system helps us to take action for curing the organizational ills. PMS has
to be designed in such a manner that it leads to achievement of organization's goals

39
and objectives and at the same time it enables people to achieve their full
potential, lead to job enrichment and job satisfaction. Ideally, all the peoples'
functions, goals and objectives should be interlinked in such a manner that it
leads to achievement of desired organizational results.

Performance management is the process of creating a work environment or

setting in which people are enabled to perform to the best of their abilities.
Performance management is a whole work system that begins when a job is
defined as needed. It ends when an employee leaves your organization. Many
writers and consultants are using the term “performance management” as a
substitution for the traditional appraisal system. I encourage you to think of the
term in this broader work system context.

Managers cite performance appraisals or annual reviews as one of their most

disliked tasks. Performance management eliminates the performance appraisal
or annual review as the focus and concentrates on the entire spectrum of
performance management and development issues. Employee performance
development, training, cross-training, the provision of challenging assignments
and regular performance feedback are included in an effective performance
management system.

Definition & Focus:

Performance management is about getting results. It is concerned with getting

the best from people and hiring them to achieve their full potential by enabling
them to recognize their roles and contributing to the goals of the organization.

40
The focus should be on how do we improve the performance of the
organization, how do we get the best out of the people, how do we help them in
achieving their objectives, thereby achieving the organizational objectives.
How do we relate their personal goals with the organizational goals? Is it
possible to chart out a reasonable career path for performers? How do we retain
good people? How to keep the attrition rate as low as possible? How to
improve the performance of average performers? What do we do with poor
performers? Why are they performing poorly? Where are we? Why are we
there? Who is responsible? When and what actions are to be taken? Where do
we want to go? How do we get there?

The above questions need to be addressed and answered and for that
organizational soul searching is necessary.

As a Human Resources or management professional, one of your major goals is

to develop the capacity of your organization and its members to perform; you
want to create a high performance organization. You lead company efforts to
create a workplace in which people can develop their full potential. An
effective performance management system, which line managers lead and own,
guarantees you will achieve your goals.

Performance Management: Both a Process and a System

Performance management is the process of creating a work environment or

setting in which people are enabled to perform to the best of their abilities.
Performance management is a whole work system that begins when a job is
defined as needed. It ends when an employee leaves your organization. Many
writers and consultants are using the term "performance management" as a

41
substitute for the traditional appraisal system. I’d like to think of the term in
this broader work system context.

The goal of performance is to achieve the company mission and vision. Almost
no one performs, for the organization, however, if his or her own mission and
vision are not accomplished as well.

As Fred Nickols, Senior Consultant with the Distance Learning Company, says,
"The blunt truth is that, if they have any work objectives at all, most people set
their own. This is the era of knowledge work and the knowledge worker …"
Many so-called "bosses" (if that term has any utility at all) are in no position to
set work objectives, to monitor their accomplishment, or to supervise their
pursuit.

The work, especially at the task level, is in the hands and the heads of the
workers. To be sure, a manager could formulate goals and objectives having to
do with improvement in work processes and the like, but if these must be left to
the workers to realize, who needs the manager? An even better question is
"Who needs work objectives?

An effective performance management system sets new employees up to

succeed, so they can help your organization succeed. An effective performance
management system provides enough guidance so people understand what is
expected of them. It provides enough flexibility and wiggle room so that
individual creativity and strengths are nurtured. It provides enough control so
that people understand what the organization is trying to accomplish.

42
Nickols summarizes, "Now, in the era of knowledge work and knowledge
workers, where work is information-based and working is a mental activity,
work routines are configured by the workers in response to fluid,

43
changing requirements. The task of management in this new world of work is
to enable and elicit employee contributions of value to the organization.

Benefits of performance management system

At a macro level performance management assists organizations to match

outcomes with COMPANY objectives. It provides a system for improving
ORGANIZATION performance and outcomes, within the COMPANY’s
OBJECTIVES and policy framework, while maintaining good industrial
relations. It generates benefits throughout organizational functions and
processes.

Performance management system recognizes that people are the organization’s

most valuable resource, and that people are the key to an innovative,
professional and service-oriented public service. Performance management
emphasizes the relationship between the management and development of
people and an effective organization, and provides fair and equitable
environment for improving performance.

Performance management SYSTEM reflects the value of people to

organizational performance, including: ---

 performance of individuals/departments Employee skill levels/gaps if

any. Employee position in the development plans.

 Corporate values, goals and ethical standards are clearly reflected in

the performance management system;

 Clear identification of expectations and responsibilities of individuals

44
 Employee allocated responsibility for ensuring improvement and
performance strategies at all levels of the organization.

 Specific expectations and responsibilities of managers, supervisors,

teams and individuals for their role in the process.

 Linking the individual’s contribution to organizational objectives

 Training and development are linked to the achievement of optimal

organizational and individual performance;

 The system is regularly reviewed, with particular attention given to key

elements (e.g. process of reviewing individual performance; provision
of helpful feedback; updating of key accountabilities, criteria and
indicators; and training and development plans);

 Accountability is assigned to senior managers to ensure that

performance, outcomes and training and development activities
(relating to individuals, teams or units) are appropriate.

 Employee work plans contain agreed, clear and measurable

performance criteria which are modified as changes occur in
organization policies, priorities or environment;

 The system enables assessment of the individual’s contribution to the

achievement of corporate goals;

 Transparent links exist between performance assessment and

performance reward.

45
EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM

An effective Performance Management System should be based on:-

 Setting up KRAs(key Result areas) for the Region/Theme/Unit/Department

 Clarity of Individual Roles and Responsibilities

 Laying down Plans and Performance Indicators for each position

 Periodic assessment of performance of the individual against such Plans/

Performance Indicators

 Identifying factors facilitating and hindering achievement of Plans -

development of action plans for overcoming hindering factors and
strengthening facilitating factors

 Periodic review of role incumbents' behavior, which contributes to effective

functioning and working out action plans for developing such behavior.

 Identification of role incumbents' developmental needs and preparing plans for

staff development through training and related activities.

 Implementation and review.

Pre-requisites for Implementing an Effective Performance

Management System

 Strong commitment from top management.

46
 High level of participation of all concerned.

 Clear definitions of what constitutes performance in a given role. This

47
Emanates from the objectives of the department and the organization. This
should also reflect the linkages of role with others.

 Identification of performance parameters and definition of

KeyPerformance Indicators (KPIs). What comprises the performance has
to be Communicated to the individual, so that he/she has an idea about
what the superior’s expectations are.

 Consistency of application.

 Adequate organizational training to be provided to the individual to

Achieve superior performance.

 Strong commitment to regular recognition of good performance.

 Rewards and recognition should be built into the system and need not be
Linked with appraisals alone.

48
Performance Development Planning is relevant for all managers, whatever their
profession, location or nationality. It is designed for those of both high and
moderate potential, for those starting their careers and for those nearing
retirement. By using the Performance Development Planning process well,
managers can help each other to raise performance across Maxx Express &
Logistics.

OBJECTIVES OF PDP

If the employees are truly perceived as the “assets” of the Organization and not
merely as a “resource” to be “deployed” and “used”, then the Employee PDPs
can serve a useful purpose of improving the productivity of this asset by
sharpening and enhancing the capabilities of individual employees and utilizing
their potential for improved performance. In the Organizational matrix the
various jobs are invariably related to and complimentary to one another. It,
therefore, stands to reason that if a properly carried out appraisal exercise is
expected to lead to improved individual performances then it should also result
in an overall improvement in the Organizational performance. Additionally, by
linking the individual objectives to the Organizational objectives and with
proper management of the entire Appraisals Exercise leading to continuous
employee development, it should be possible to bring about a quantum jump in
the Organizational performance.

If properly designed and applied the PDP system can:

 Help each employee to understand with clarity his / her role andfunctions.

 Be instrumental in helping the employee understand his / her own strengths

and weaknesses.

49
 Help in identifying training and development needs of each employee.

 Help increase mutual understanding between the appraiser and the appraisee
leading to healthy and productive work environment.

 Provide an opportunity for the employee for goal setting and self-appraisal
leading to increased work involvement.

 Help the individual to identify him / her with the organization, its objectives
and culture leading to increased sense of belonging and commitment.

 Help identify the potential of employees for future requirements.

 Help the organization to note, recognize and reward achievements.

 Help in the identification and analysis of problems in achieving the

objectives, thus leading to finding solutions.

 Assist in a variety of personnel / personal decisions by generating data for

each employee periodically.

A good appraisal system will have as its basis clearly defined and
communicated Key Result Areas (KRAs) or Key Performance Areas (KPAs)
and will lead to improved Organizational Performance through improved
understanding, role clarity, team work, and leadership and employee
satisfaction.

PDP is about managing and improving performance and not about completing
forms. The forms, however, serve a useful purpose of recording views and
decisions which are then used to manage several processes such as deciding on
rewards, working out development inputs, career moves etc. These records are
only a means and not an end in themselves. It is, however,

50
necessary that these records are created with proper understanding and with
due diligence as the validity and quality of future decisions will depend on the
information contained in these forms.

THE PERFORMANCE DEVELOPMENT PLANNING PROCESS

The Performance Development Planning process has been designed to be

systematic but non-bureaucratic and is fully integrated with Unilever’s career
development and remuneration systems.

The Process follows an annual cycle, beginning and ending with a Performance
Development Planning discussion consisting of four steps:-

• Target setting for the year ahead;

• Building a development plan for skills and competencies;

• Establishing foundations for career planning;

• A review of the previous year’s targets, performance and progress

against development plans.

The Company considers that individual performance and potential appraisal

forms the foundation of the development process, wherein the manager reviews
with the subordinate his / her work and progress, normally against defined
targets and provides help and guidance. This process provides feedback; it
forms a basis for counseling or coaching. It also points to training needs and it
is one major determinant of salary progress.

It is our policy to document such appraisal once a year through written annual
reports and reviews. This annual event serves the purpose of bringing together
of a continuous process of appraisal and counseling throughout the

51
year. The target setting process is a JOINT one. The objective / targets are set
with a joint understanding and agreement by the manager and subordinate. The
targets are drawn from the Key Result Areas of the Department / Unit. They
are linked vertically (i.e., with the objectives of Managers and subordinates)
and horizontally (i.e. with the objectives of peers). The agreed objectives are
documented and both the manager and the subordinate retain a copy of the
objectives. They are signed off by both the manager and subordinate.

INTRODUCTION TO THE COMPRTENCIES SUMMARY

This topic provides a summary of the Reliance Securities framework. It is

designed for use in the Performance Development Planning process and is
intended to complement the ‘Competency Dictionary - With Examples drawn
from the businesses, which contains background to the Unilever competency
model, rationales for each of the eleven competencies and expanded behavioral
descriptions at each Work Level, together with behavioral examples taken from
the businesses. For each competency, two descriptions of the types of behavior
commonly demonstrated at each Work Level are provided. Similarly, cultural
differences may lead people to express the competencies in different way

DAP (DEVLOPMENT ACTION PLAN) LED TRAINING

Sustaining profitable growth for business and long-term value creation for our
shareholders and people requires a total commitment to:

• Exceptional standards of performance;

• working together effectively;

• A willingness to embrace new ideas and learn continuously.

52
To do this we need to develop a high performance organization in which
people develop, grow and thrive, and by working together, deliver outstanding
business performance. Thus, the Performance Development planning process
has been designed.

DAP is a Development Action Plan which is chalked out during the PDP
process in line with identified skill gaps. A specific and realistic DAP can help
the FF bridge skill gaps as well as improve upon his understanding of
concepts.The Field Force Learning Academy provides for up gradation of FF
capabilities with a sharper focus, higher frequency and expanded reach of
learning.

53
 PERFORMANCE APPRAISAL PROCESS FOR
THE EMPLOYEES
OBJECTIVE:

To identify and categorize employees in JM cadre contributing at three

distinct levels based on performance review against last year’s KRAs (key
result area) and assessment of competencies.

PROCESS:

Step 1: Appraiser to gather adequate data on the individual’s performance

against predefined KRAs.

Step 2: Appraiser to schedule a meeting for performance review with the

appraisee. Discussion to take place on a one-to-one basis in an
54
 uninterrupted manner and it is expected that typically such a
meeting would last for 60 to 120 minutes. This discussion would be
based on performance plan documents (KRAs) agreed last year.

Step 3: Appraiser to give feedback to appraisee based on his observations with

emphasis on performance aspects where appraisee can improve.
Appraiser should avoid loaded / judgmental terms that may lead to
emotional setbacks.

Step 4: Towards conclusion, the appraiser should complete the form. This
would form the summary of discussions that took place between
appraisee and appraiser.

Step 5: The performance against KRAs is to be quantified and scored out a

maximum of 70 points. In addition, the appraiser needs to give score
against competencies defined out a maximum of 30 points. Thus each
appraisee will have total score received out a maximum of 100 points.

Step 6: Make out performance plan next year in the KRA format.

IMPORTANT

Since the subject under discussion is highly sensitive, the details of the
discussions should remain confidential between the two.

Step 7: The completed format with total score assigned based on the review
may be forwarded to the reviewer for his concurrence.

Step 8: Reviewer to review appraisals of all JM’s in his / her area to ensure
that a fair process has taken place and no biases have crept into the
assessment.

55
Step 9: Thereafter, the data has to collected at DMC / Department level for
each area. If the strength is less, appropriate aggregation at Divisional
/ Functional level may be done. For example, in R&D center,
aggregation may be done at a Divisional level. All JM’s have to be
ranked from top to bottom on a relative basis to arrive at the final
ratings at this level. Concerned HR Manager would help the DMC /
MANCOM member in finalizing the ratings

Step 10: HR manager would summaries the data for whole of AMG and
present before business head for his concurrence before issuing letters
to individuals.

56
 PERFORMANCE APPRAISAL PROCESS FOR
EMPLOYEES OF MANAGERIAL CADRE
OBJECTIVE:

To identify and categorize employees of managerial cadre, in three distinct

contributory levels based on performance review against last year’s KRAs and
assessment of competencies.

HOW TO FILLAPPRAISAL FORM:

The managerial appraisal form consists of the following sections.

Section A: Review of goals achieved against KRA’s
Section B: Feedback on managerial competencies.
Section C: Development Needs

57
Section A: Review of goals achieved against KRAs

This section consists of 70 points. In this section appraisee is required to fill

details of KRAs, objectives and achievements and assign weightages against
each KRA, agreed in the beginning of the review period. Appraiser is required
to capture his/her observations and score each KRA.

Section B: Feedback on managerial competencies

This section consists of 30 points. In this section appraiser is required to give

feedback on the listed managerial competencies indicating the performance
factor that best describes the appraisee, substantiating it with actual
events/behavior.

Section C: Development needs

In this section the appraiser is required to fill in the strengths/areas of

improvements relevant to appraisee in carrying out his current job or higher
responsibilities.

REVIEW PROCESS:

The review discussion should take place on a one-to-one basis in an

uninterrupted manner and it is expected that typically such a meeting would
last for about 60 to 120 minutes. This discussion would be based on
performance plan documents (KRA’s) agreed last year. Sequence of the
process would be as described below:-

Step 1:Appraiser to gather adequate data on the appraisee’s performance

against predefined KRAs.

58
 Step2: Appraiser to schedule a meeting for performance review with the
appraisee.

Step3: Appraiser to give feedback to appraisee based on his observations with

emphasis on performance aspects where appraisee can improve.
Appraiser should avoid loaded / judgmental terms that may lead to
emotional setbacks.

Step4: Towards conclusion, the appraiser should complete the form. This
would form the summary of discussions that took place between
appraisee and appraiser.

Step5: The performance against KRAs is to be quantified and scored out of a

maximum of 70 points. In addition, the appraiser needs to give score
against competencies defined out a maximum of 30 points. Thus each
appraisee will have a total score received out a maximum of 100 points.

Important

Since the subject under discussion is highly sensitive, the details of the
discussions should remain confidential between the two.

Step6: The completed format with total score assigned based on the review may
be forwarded to the reviewer for his concurrence.

Step7: Reviewer to review appraisals of all manager’s in his/her area to ensure

that a fair process has taken place and no biases have crept into the
assessment.

Step8: Thereafter, the data is to be collected at DMG / Department level for

each area. If the strength is less, appropriate aggregation at Divisional /

59
 Functional level may be done. For example, in R&D center, aggregation
may be done at a divisional level. All managers’ have to be ranked from
top to bottom on a relative basis to arrive at the final ratings at this level
as defined below. Concerned HR manager would help the DGM /
MANCOM member in finalizing the ratings.

Step9: HR would summarize the data for whole of AMG and present before
business head for his concurrence before issuing letters to individuals.

60
 LITERATURE REVIEW

Performance Appraisal in its broadest context, is a managerial process that

links corporate objectives, performance standards and evaluation, to which the
performance review, or performance appraisal, are often applied (Pickett,
2003).

In its broadest sense performance appraisal serves three major purposes within
an organization: administration, development and communication (Butler,
Ferris & Napier, 1991). Administrative functioning can be viewed as staffing,
compensation, promotion, along with the systems of reward and punishment;
whilst development refers to the identification and development potential for
future performance, which is linked to personal development planning. Finally,
communication aims to provide feedback to employees about their
performance and future goals. A more negative view of performance appraisal
is offered by Ekes (1994), who claims that performance appraisal records can
be used as by an organisation to guard against cases of wrongful dismissal.

Three broad areas are identified in the literature as more closely relating to
performance appraisal. Firstly, the development of appraisal instruments to
accurately and objectively measure human performance (Tinier, Joanie’s &
Murphy, 2001). Secondly, a focus on supervisor and employee characteristics
and their potential bias on performance appraisal ratings (Dewberry, 2001). The
third area concentrates on the uses and types of performance appraisal systems
within organizations (Scott & Einstein, 2001).

61
Approaches to performance appraisal range from relatively simple techniques,
such as ranking and traits rating, to the more complex method of behaviourally
anchored scales (Tyson & York, 2000). Techniques also vary with regard to
temporal emphasis, either focusing on the past through rating and ranking, or
using management by objectives to provide a future focus.

Deficiencies in performance appraisal processes and practices have been

highlighted (Mohr man and Mohr man, 1995), which include areas relating to
inappropriate focus, inadequate training, poor communication and subjective
criteria.

OBJECTIVE OF THE STUDY

Seeing the importance of performance in organization, every institute

and organised structure industry are focusing and investing their money in this
direction to enhance the skills of human capital. Human capital is the main
source for any organisation and a big portion of invest envisaged in this area.
The objectives of the study are the following:

1. To identify the techniques of performance appraisal followed by

HYUNDAI., Gorakhpur.

2. Employee attitude towards the present appraisal system.

62
 SCOPE OF THE STUDY

 The scope of my study is to observe the degree of satisfaction levels of the

employer as well as the employees as per my sample size towards the
Appraisal process and Performance Appraisal Techniques adopted by the
company.

 I will also study the deviations if any, towards this effect that I will be
experiencing in my research. Apart from getting an idea of the techniques and
methods in the recruitment procedures.

 I will take a close look at the insight of corporate culture prevailing out there
in the organization. This would not only help me to aquanaut with the
corporate environment but it would also enable me to get a close look at the
various levels authority responsibility relationship prevailing in the
organization.

 Also the stipulated time for the project is insufficient to undergo an exhaustive
study about the topic assigned and moreover the scope of the topic () is wide
enough, so it is difficult to cover all the topic within the stipulated time.

63
 COMPANY PROFILE

Hyundai Motor India Ltd is a wholly owned subsidiary of the Hyundai Motor
Company in India. It is the 2nd largest automobile manufacturer in India.

Hyundai Santro Xing/Atos Prime is made only by Hyundai Motor India Limited.

Hyundai Motor India Limited was formed in 6 May 1996 by the Hyundai Motor
Company of South Korea. When Hyundai Motor Company entered the Indian
Automobile Market in 1996 the Hyundai brand was almost unknown throughout
India. During the entry of Hyundai in 1996, there were only five major automobile
manufacturers in India, i.e. Maruti, Hindustan, Premier, Tata and
Mahindra. Daewoo had entered the Indian automobile market with Cielo just three
years back while Ford, Opel and Honda had entered less than a year back.

For more than a decade till Hyundai arrived, Maruti Suzuki had a near monopoly over
the passenger cars segment because Tata Motors and Mahindra & Mahindra were
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solely utility and commercial vehicle manufacturers, while Hindustan and Premier
both built outdated and uncompetitive products.

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HISTORY

HMIL's first car, the Hyundai Santro was launched in 23 September 1998 and was a
runaway success. Within a few months of its inception HMIL became the second
largest automobile manufacturer and the largest automobile exporter in India.
Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai
Motor Company (HMC), South Korea and is the largest passenger car exporter and
the second largest car manufacturer in India. HMIL presently markets 10 models -
Eon, Santro, i10, Grand i10, Xcent, Elite i20, Verna, Elantra, Sonata and Santa Fe.

HMIL’s manufacturing plant near Chennai claims to have the most advanced
production, quality and testing capabilities in the country. To cater to rising demand,
HMIL commissioned its second plant in February 2008, which produces an additional
300,000 units per annum, raising HMIL’s total production capacity to 600,000 units
per annum.

HMC has set up a research and development facility(Hyundai Motor India

Engineering - HMIE) in the cyber city of Hyderabad.

As HMC’s global export hub for compact cars, HMIL is the first automotive company
in India to achieve the export of 10 lakh cars in just over a decade. HMIL currently
exports cars to more than 120 countries across EU, Africa, Middle East, Latin
America, Asia and Australia. It has been the number one exporter of passenger cars of
the country for the eighth year in a row.

To support its growth and expansion plans, HMIL currently has 388 strong dealer
network and more than 1000 strong service points across India, which will see further
expansion in 2014. In July 2012, Arvind Saxena, the Director of Marketing and Sales
stepped down from the position after serving the company for 7 years.

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Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai
Motor Company (HMC). HMIL is the largest passenger car exporter and the second
largest car manufacturer in India. It currently has ten car models across segments -
Eon, Santro, i10, Grand i10, i20, Xcent, Verna, Elantra, Sonata and Santa Fe.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts

advanced production, quality and testing capabilities. HMIL forms a critical part of
HMC’s global export hub. It currently exports to around 85 countries across Africa,
Middle East, Latin America, Australia and the Asia Pacific. HMIL has been India’s
number one exporter for the last 10 years consecutively. To support its growth and
expansion plans, HMIL currently has 407 dealers and more than 1,085 service points
across India. In its commitment to provide customers with cutting-edge global
technology, HMIL has a modern multi-million dollar R&D facility in Hyderabad. The
R&D center endeavors to be a center of excellence in automobile engineering.

MODELS

Hyundai Eon

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 Hyundai Grand i10

Hyundai Fluidic Verna

Hyundai Santa Fe (Third Generation)

MANUFACTURED LOCALLY

1. Hyundai Eon (Launched 2011)

2. Hyundai Santro Xing (Launched 2003

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 3. Hyundai Next Gen i10 (Launched 2010)

4. Hyundai Grand i10 (Launched 2013)

5. Hyundai Xcent (Launched 2014)

6. Hyundai Elite i20 (Launched 2014)

7. Hyundai Fluidic Verna (Launched 2011)

8. Hyundai Neo Fluidic Elantra (Launched 2010)

IMPORTED

1. Hyundai Sonata (Launched 2012)

2. Hyundai Santa Fe Third Generation (Launched 2014)

DISCONTINUED

HYUNDAI SANTRO (1998–2001)

1. Hyundai Accent GTX (1999–2002)

2. Hyundai New Look Santro (2001–2003)

3. Hyundai Sonata Gold (2001–2005)

4. Hyundai Accent Viva (2002–2004)

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5. Hyundai Accent CRDi (2002–2006)

6. Hyundai Terracan (2003-2007)

7. Hyundai Getz (2004–2007)

8. Hyundai Accent GLS (2004–2005)

9. Hyundai Sonata Embera (2005–2009)

10. Hyundai Accent GLE (2006–2011)

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11. Hyundai Verna (2006–2010)

12. Hyundai Getz Prime (2007–2010)

13. Hyundai i10 (2007-2010)
14. Hyundai Verna Transform (2010-2011)

15. Hyundai Elantra (2004–2010)

16. Hyundai Tucson (2005–2010)

17. Hyundai Sonata Transform (2010–2011)

18. Hyundai Santa Fe Second Generation (2010-2013)

19. Hyundai Accent Executive (2011-2013)

20. Hyundai i20 (2008-2014)
EXPORTS

HMIL currently exports vehicles to more than 110 countries

across Europe, Africa, Middle East, Latin America and Asia. It has been the number
one exporter of passenger cars for the sixth year in a row in India.

SALES PERFORMANCE

India's second largest carmaker Hyundai Motor has recorded 5.7 percent growth in its
domestic sales for the month of April 2017, and delivered 44,758 units to its
customers, informed the company in a press statement. The automaker sold 42,351
units during April 2016.
Hyundai Motor India (HMIL) has exported 11,610 units in April 2017 as against
12,069 units during April 2016, thereby experiencing de-growth of 3.8 percent. Its
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cumulative sales for the month went up by 3.6 percent at 56,368 units.

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Rakesh Srivastava, Director - Sales and Marketing, HMIL said, "Hyundai with
volume of 44,758 units continued its growth momentum on a strong base of last year
driven by tremendous response for the All New Global Stylish Family
Sedan Xcent and continued strong performance of volume driving aspirational
brands Grand i10, Elite i20 and Creta."
Hyundai Motor India currently has ten car models across segments – Eon, Grand i10,
Elite i20, i20 Active, Xcent, Verna, Creta, Elantra, Tucson and Santa Fe. It currently
exports to around 87 countries across Africa, Middle East, Latin America, Australia
and the Asia Pacific.
HMIL currently has 477 dealers and over 1,250 service points across India.

BRAND AMBASSADOR

The carmaker gets Shah Rukh Khan on board as its brand ambassador for the Hyundai
Xcent,the company’s recently launched sub-compact sedan in India. Back in 1998,
SRK shot his first TVC for the Hyundai Santro, and his association with the car brand
has now turned.

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 RESEARCH METHODOLOGY

RESEARCH

The study of research method provides you with the knowledge and
skills you need to solve the problem and meet the challenges of the fast- based
decision. Marketing environment we define Business Research as a systematic
inquiry whose objective is to provide information to solve managerial problem.

It seeks to find explanation to unexplored phenomena to clarify the

doubtful facts and to correct the misconceived facts.

TYPES OF RESEARCH
DESCRIPTIVE RESEARCH
Descriptive study is a fact- finding investigation with adequate
interpretation. It is the simplest type of research. It is more specific than an
explanatory study, as it has focus on particular aspect of the problem studied. It
is designed to get her descriptive information and provide information for
formulating more sophisticated studies. Data are collected by using one or
more appropriate method, observation, interviewing and mail questionnaire

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TARGET GROUP/ POPULATION

As this research is based on Customer perception my Target group is

newsreaders.

AREA OF STUDY

Gorakhpur city

TOOLS FOR DATA COLLECTION

The Various method of Data gathering involves the use of questionnaire as

primary data. These are called tools or instrument of data collection.
or mentoring system in place. It provides on-going coaching and feedback.

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 FINDINGS

 From the secondary data , one can see that HYUNDAI. and Forwarders
has a scientific PMS in place which is not obsolete and is an integrated
approach of achieving outstanding performance.

 There is job clarity and role clarity among employees. They are well
aware of requirements and accomplishment-based performance
standards, outcomes, and measures.

 The KRA’s are well defined and quantified at the initial level only.
Employees know what they’re supposed to do.

 The training needs are also identified through the results of the
appraisals and an action plan is chalked out for them accordingly.
Individual training needs are well aligned with the organizations needs.

 Employees feel that DAP led training identifies the gaps in their
actual performance viz- a- viz their expected performance and also
focuses on filling up these gaps.

 As for the mentoring and coaching program is concerned, there is no

such program present in the organization.

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 CONCLUSION

The study conducted on “HYUNDAI.” aims at highlighting its impact on the

performance levels of the employees.

 Performance management encompasses the most important people issues in

your organization. It is the process of creating a work environment or
setting in which people are enabled to perform to the best of their abilities.
It reflects the value of people to organizational performance, including:---

 Performance of individuals / departments

 Employee skill levels / gaps if any.

 Clear identification of expectations and responsibilities of

individuals.

 The analysis shows that PMS led training improves the quality of work in
the organization. It is connected with variable part of compensation & it is
capable of differentiating between the performers and non performers.
 Through this research, I have found that there is job clarity and role clarity
among employees. They are well aware of requirements and
accomplishment-based performance standards, outcomes, and measures. &
PMS, here is an annual activity and takes place at the end of year (December –
January).

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 RECOMMENDATIONS

 Provide on-going coaching and feedback. People need ongoing,

consistent feedback that addresses both their strengths and the weaken areas of
their performance. Effective feedback focuses more intensely on helping
people build on their strengths. Feedback is a two-way process that encourages
the employee to seek help. Feedback is usually more effective when requested.
Create a work environment in which people feel comfortable asking, "How do
you think I’m doing?"

 Provide the opportunity for broader feedback. Use a 360 degree

performance feedback system that incorporates feedback from the employee's
peers, customers, and people who may report to him.

 Conduct quarterly performance development discussions . If

supervisors are giving employees frequent feedback and coaching, performance
reviews can change from negative, evaluative, one-sided presentations to
positive, planning meetings. Held quarterly, employees always know how they
are performing and their next goals and challenges.

 Challenging Assignments / Projects: The objective behind assigning

challenging tasks or assignments is to enable an individual to enrich / broaden
his or her experience, while working with others or individually. These
assignments also provide an opportunity for employees to network with other
employees, who may be helpful in solving future business problems.

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 SUGGESTIONS

 Job Rotation: The main objective of job rotation is to add to the capabilities
of an individual by:

 Assigning him / her a new role in the same function;

 Assigning him / her new role in a different function.

 Job Enrichment / Enlargement: Job enrichment/ enlargement involves

expanding an employee's responsibilities beyond their normal scope. This
approach is appropriate for employees who are exceeding the performance
expectations of their current position and who will benefit from expanded
responsibilities not involving a job change. An example of job enrichment
would be an assignment as a mentor or coach to a less experienced person.

 Provide more competitive wages to the “low-income” segment of the

company.
 Increase the possibility of employee promotion in the company by
promoting from within rather than hiring from the outside.
 Encourage more frequent communication between managers and their
employees, and implement team-building and communication exercises to
help strengthen the relationship and trust between the two groups.
 Put effort into ensuring that employees are properly credited and receive
recognition for the good work they do in their respective positions.
 Offer more opportunities for job advancement and education, in order to
allow employees to completely master their respective positions.

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 LIMITATIONS OF STUDY

 A few organizations did not publish the exact values for each question
especially in sales turnover and other similar figures.
 The study was conducted in the Gorakhpur area only and confined to
the freight division of the logistics management.
 Certain monetary values were not being filled by organizations.

 Due to organizations security reasons documents like Bills, Warehouse

Bills, etc could not be gained.
 Most of the questionnaire answers were filled over internet email facili
ty therefore contact was through phone and emails.

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 BIBLIOGRAPHY

Following sources have been sought for the preparation of this report:-

 www.humanresources.about.com,

 www.citehr.com

 www.library.puchd.ac.in

 Taylor and Francis online journal

 Performance management and appraisal systems by T.V.Rao

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