Project Report

On
PARFORMANCE APPRASIAL OF
LG

A PROJECT REPORT SUBMITTED IN PARTIAL FULLFILMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
2013-15

UNDER
SUBMITTED BY:

GUIDANCE

OF
SANJANA

JAIN

SHEFALI JOSHI
REG NO. 1308006242

nd

NIMACT
floor kalyani point ubove Bikaner bhagwan
talkies Agra

SIKKIM MANIPAL UNIVERSITY

DIRECTORATE OF DISTANCE EDUCATION 5TH MILE ,Tadong ,Sikkim 737102
INDIA

DECLARATION

I declare that the project titled PERFORMANCE APPRASIAL OF LG is an original

piece of research work carried out by me under the guidance and supervision of Mr.
KAMAL SINGH at LG . The information has been collected from genuine & authentic
success. The work has been submitted in partial fulfillment of Master Business
Administration of Sikkim Manipal University. India is my original work and not
submitted for award of any other degree, diploma, fellolwship, or other similar titles
project.

Place: AGRA
(SHEFALI JOSHI)
Date:
Reg No-1308006242
MBA(H.R) IVth sem

ACKNOWLEDGMENT
I would like to take this opportunity to thank the following people who have directly or
indirectly contributed towards the completion of this dissertation and without their help
this in the present form would have not been possible I am thankful to MR
PRASHANT SAGAR( DIROCTOR)for giving me opportunity to work on such a nice
project as my project. And last but not the least my special thanks to my parents without
their support my MBA course would not have been possible.

SHEFALI JOSHI
Reg No. 1308006242

M.B.A.( HR)4th SEM

PREFACE

Today HRM is an evolving branch of Management. It looks after the HR planning, Job
Design, Job analysis, Training and development compensation system, motivation, safety,
Industry Relatives etc.
Since organization exist to achieve goals, the degree of success that individual employees
have in reaching their individuals goals is important in determining organizational
effectiveness. The assessment of how successful employees have been at meeting their
individual goals, therefore, becomes a critical part of HRM. This lead us to the topic of
performance appraisal.
Among these performance Appraisal are the measure of the effectiveness of hiring the
employees Appraisal are like Balance- sheets- a snapshots of past performance, but they
need to be given the shape of a profit and loss statement a moving picture.

CONTENTS
1. INTRODUCTION
2. LITERATURE SURVEY
3. EXECUTIVE SUMMERY
4. CONCEPT OF PERFORMANCE APPRAISAL
5. OBJECTIVES
6. USES OF PERFORMANCE APPRAISAL
7. CHARACTERSTICS
8. THE PROCESS
9. APPROCHES & TECHNIQUES
10. APPRAISAL TECHNIQUES
11. BENEFITS
12. COMPONENTS
13. ATTRIBUTES CONSIDERED
14. AIM OF STUDY
15. THEORITICAL OVERVIEW
16. CONCLUSION
17. RECOMMENDATION
19. BIBLIOGRAPHY

INTRODUCTION
''Effective human resources management (HRM) is essential for opti mally utilizing
creativity and attaining individual as well as organizational goals. Leadership has to
ensure proper Integration of various activities and harmonious functioning directed
towards organizational goals. High motivation is essential for ensuring commitment of
human resources to the given objectives. The key to motivation lies in integrating
organizational and individual goals. Therefore, a manager has to concentrate on basic
HRM tasks such as planning, development, compensation and evaluation. Evaluation
includes performance planning, appraisal and counseling. These are critical in effective
HRM.

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 Dulewicz (1989), "... a basic human tendency to make judgements 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 judgements made will be lawful, fair, defensible and accurate.
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.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In
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.
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
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, 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 (see Derven, 1990, for
example). At the other extreme, there are many strong advocates of performance
appraisal. Some view it as potentially "... the most crucial aspect of organizational life"
(Lawrie, 1990).
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 appraisees
well, and are typically in a direct subordinate-supervisor relationship. 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
Recent research (Bannister & Balkin, 1990) 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
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.
There are basically three purposes to which performance appraisal can be put. First, it
can be used as a basis for reward allocation. Decision as to who gets salary increase,
promotion, and other rewards are determined by their performance evaluation. Second,
these appraisals can be used for identifying areas where development efforts are needed.
The performance appraisal is a major
tool for identifying deficiencies in individuals. Finally it can be used as a criterion
against which selection devices and development programs are validated. As a key input
into management's reward and punishment decision, performance appraisals can
motivate or de-motivate employees.
Three different approaches exist for doing appraisals. Employees can be appraised
against

1.

Absolute

2.

Relative

3. Objectives

LITERATURE SURVEY
In the late 1950s Founder/Chairman In- Hwoi Koo announced his intention to get
involved in electronics, an area that was virtually nonexistent in Korea at that time. A
special team was formed and led by the General Manager Wook Hayn Yoon. After much
painstaking research and planning by the team, the Goldstar Co. was finally founded on
October 1, 1958.

DEVELOPMENT STAGE (1959-1969)

The plant in Yonji-dong began to emerge as the birthplace of Koreas Electronics
Industry. By June 1959, just ten months after the establishment. Goldstar Co. came out
with the first vacuum tube radio. In March 1960 Goldstar produce Koreas First electric
Fan. In July 1961, it began making the Korean made automatic telephone set. Goldstars
performance experienced and the company was able to set up a large-scale facility for the
producing electric and electronic product in the Tonjgnae-dong district of Pusan in
October 1963. The plant began to turn out the streams of product of surprisingly high
quality, considering the level of technology in Korea at that time. Goldstar extended its
string of domestic production first: an automatic switching system in November 1964,
refrigerator. On April 1965, a black and white TV in August 1966 and washing machine
in February 1969. After the death of

Founder / Chairman Koo at the age of 63

diversification stage came and his legacy became the cornerstone for its future
development.
DIVERSIFICATION STAGE (1970-1988)
Ja Kyung Koo, who has been vice president of Goldstar Co., succeeded his late father
as Group Chairman on January 5, 1970, making a turning point for the group. Chairman
Koo was strongly determined to achieve the highest rate of growth in the groups history.
He established effective business plans for stable, growth. His leadership began on a

positive node as existing business lines were bolstered and new business area was
aggressively pursed.
The 1970s turned out to be an incredible period of growth. The decade started out with
Lucky Chemical Industries Co. going public on February 13, 1970 and before it was over
the group had either established or acquired no fewer than 15 companies. With the
remarkable growth and development of the group, Lucky Chemical Industries Co.,
change its corporate name to Lucky in March 1974, and group came to be known as the
Lucky Group.
In January 1985, LG opened the Anyang Research Complex facility the first by a nongovernment organization in Korea. On going efforts and investment result in LGs
becoming the first in Korea to develop an 8-bit microprocessor, among numerous
research triumphs. Other domestic first included the development of electronics car
phones, fiberglass reinforcement plastic tubs, PVC windows and doors, high pressure
gas circuit breaks, VCR and Video Heads, color Video cameras and digital inverters.
These successes helped spur continued corporate expansion and the name was changed
from Lucky Group to the Lucky Goldstar group. The LG Twin Towers Headquarters
building was completed in Seouls Youido District in October 1987, making it possible
for the many of the affiliates to operate from the same location, thereby boosting
organization effectiveness and efficiency.
In the mid 1980s the group focused on expanding operational scale diversifying business
Lines. The V project, a management vision for the 21st Century as launched in 1987
as a part of strategy aimed at moving up into the worlds leading enterprises.

REVOLUTION STAGE (1989-1994)

In response to the rapidly changing business environment of the mid 1980s a new vision
for the 21st century was established. Chairman Ja Kyong Koo clarified his vision for the
future at the meeting LG CEOs in December 1987 and the V Project began as part of
the program to make that vision a reality. After a year of preparation, Chairman Koos
Management vision for the 21st century was announced on November 22, 1988.
The group level vision was formulated in 1989. As a result, the LG group the first Korean
business conglomerate to initiate a sweeping management reform was poised to embark
on a second Quantum Leap in development by mid-1990. The group continued its
rapid development and globalization drive.
2nd QUANTUM LEAP:
ERA UNDER NEW LEADERSHIP
A new comprehension new corporate identity program was announced on January 1,
1995 that included changing the group name from Lucky Goldstar to LG and adopting a
new logo. In addition, a second management transformation program was launched to
cultivate the LG brand worldwide.
The new name unified the two main business lines of the group chemicals and electronics
under a single brand. Image of the other business lines was strengthened as well to allow
them to compete internationally. The groups business philosophy of creating value for
the customer and treating people with respect was now taking on a concrete form.
Creating value for the customer and treating people with respect was now taking on a
concrete form. Bon Koo was appointed to succeed him as the new group chairman on
February 22, 1995.
On March 27, 1996 he announced Leap 2005, a new vision to enable the group to
achieve a quantum leap forward. Leap 2005 is aimed at providing to a capable response

to the rapidly changing business environment and remaining firmly on course towards
becoming a major world player.

THE DIGITAL ERA (1999 0NWARDS)

LG Electronics meticulously planned to actively promote its image as a company
prepared to assume worldwide technology leadership. The belief of digital technology
became the driving force for the multimedia era of the 21 st century. Thus, came the
corporate identity of DIGITAL ez LG to help promote our leading edge technology.
The basic concept of digital LG came to mean
Digital:

Futuristic digital technology to achieve global Leadership by

2005through new & innovative products.

Easy:

User-friendly cutting edge technologies through one touch

operation.

Customized:

Creating a life style for the customers customized to their

needs

and desires through out state of the art digital concepts.

LGEIL OUR ACHIEVEMENTS

LG Electronics celebrated the 50th year of Indian Independence by
launching Sampoorna Television Series the first ever series to be
named by LG in Hindi.
LG Electronics plans extensive rural market research and introduces
mobile demo vans for rural market and spells its commitment towards the
true India The Rural India.

 LG Electronics launches TFT-LCD TV in India the first and the only

one of its kind in India.
Achieved an impressive Annual Turnover of more than

Rs. 1000

crores in 1999.
LGEIL has been rated as the best LGE Company having excellent EESH
(Environment, Energy, and Safety & Health) policies and procedure A
VISION FOR FUTURE
Vision

To be the best global company

EXECUTIVE SUMMERY

Performance Appraisals

Performance appraisals are essential for the effective management and evaluation of
staff. Appraisals help develop individuals, improve organizational performance, and
feed into business planning. Formal performance appraisals are generally conducted
annually for all staff in the organization. Staff members are appraised by their line
manager. (Directors are appraised by the CEO, who is appraised by the
chairman or company owners, depending on the size and structure of the
organization). Annual performance appraisals enable management and monitoring of
standards, agreeing expectations and objectives, and delegation of responsibilities
and tasks. Staff performance appraisals also establish Individual training needs and
enable organizational training needs analysis and planning. Performance
appraisals data fleeces into organizational annual pay and grading reviews, and
coicides with the business planning for the next trading year. Performance
appraisals generally review each individual's performance against objectives and
standards for the trading year, agreed at the previous appraisal meeting.

Performance appraisals are also essential for career and succession planning.
Performance appraisals are important for staff motivation, attitude and behavior
development,

communicating

organizational

aims,

and

fostering

positive

relationships between management and staff. Performance appraisals provide a

formal, recorded, regular review of an individual's performance, and a plan for
future development. In short, performance and job appraisals are vital for
managing the performance of people and organizations.

There is increasingly need for performance appraisals of directors and

CEO's to include accountabilities relating to corporate responsibility,
represented by various converging concepts including: the 'Triple
Bottom Line' ('profit people planet'); corporate social responsibility (CSR);
Sustainability; corporate integrity and ethics; Fair Trade, etc. The organization
must decide the extent to which these accountabilities are reflected in
job responsibilities, which would then naturally feature accordingly in
performance appraisals.

Are performance appraisals truly beneficial?

It is sometimes fashionable in the 'modern age' to dismiss traditional processes

such as performance appraisals as being irrelevant or unhelpful. Be very wary
however if considering to remove appraisals from your own organizational
practices. It is likely that the critics of the appraisal process are the people who
can't conduct them very well. It's a common human response to want to
jettison something that one finds difficult. Appraisals - in whatever form, and
there are various - have :) been a mainstay of management for decades, for good
-reasons.

Think about everything that performance appraisals can achieve and contribute
to when they are properly managed, for example: Performance measurement transparent, short, medium and long term Clarifying, defining, redefining
priorities and objectives Motivation through agreeing helpful aims and targets
Motivation though achievement and feedback Training needs and learning
desires - assessment and agreement Identification of personal strengths and
direction including unused hidden strengths Career and succession planning personal and organizational Team roles clarification and team building
Organizational training needs assessment and analysis Appraise and manager
mutual awareness, understanding and relationship Resolving confusions and
misunderstandings Reinforcing and cascading organizational philosophies,
values, aims, strategies, priorities, etc Delegation, additional responsibilities,
employee growth and Development Counseling and feedback Manager
development - all good managers should be able to: conduct appraisals well
- it's a fundamental process.

The list goes on:

People have less and less face-to-face time together these days. Performance
appraisals offer a way to protect and manage these valuable face-to-face
opportunities. My advice is to hold on to and nurture these situations, and if you
are under pressure to replace performance appraisals with some sort of
;apparently) more efficient and cost effective methods, be very sure that you can
safely cover all the aspects of performance and attitudinal development that a
well-run performance appraisals system is naturally designed to achieve.

There are various ways of conducting performance appraisals, and ideas change
over time as to what are the most effective
appraisals methods and systems. Some people advocate :-additional
appraisals and forms; others prefer 360-degree-type appraisals; others suggest
using little more than a blank sheet of paper.

In fact performance appraisals of all types are effective if they are

conducted properly, and better still if the appraisal process is clearly
explained to, agreed by, the people involved.

Managers need guidance, training and encouragement in how to conduct

appraisals properly . Especially the detractors and the critics. Help anxious managers
(and directors) develop and adapt appraisals methods that work for them. Be flexible.
There are lots of ways to conduct appraisals, and particularly lots of ways to diffuse
apprehension and fear - for managers and appraises alike. Particularly - encourage people
to sit down together and review informally and often - this removes much of the pressure for
managers and appraises at formal appraisals times. Leaving everything to a single
make-or-break discussion once a year is asking for trouble and trepidation. Look out
especially for the warning signs of 'negative cascaded attitudes' towards appraisals.
This is most often found where a senior manager or director hates conducting appraisals,
usuallybecause they are uncomfortable and inexperienced in conducting them. The
senior manager/director typically will be heard to say that appraisals don't work
and are a waste of time, which for them becomes a self-fulfilling prophecy. This
attitude and behavior then cascades down to their appraises (all the people in their
team) who then not surprisingly also apply the same 'no good - not doing it'
negative attitude to their own appraisals responsibilities (teams). And so it goes. A
'no good - not doing it' attitude in the middle ranks is almost invariably traceable
back to a senior manager or director who holds the same view. As with anything,
where people need help doing the right thing, help them:

All that said, performance appraisals that are administered without training (for

those who need it), without explanation or consultation, and conducted poorly
will be counter-productive and are wastes of everyone's time.
Well-prepared and well-conducted performance appraisals provide a unique
opportunity to help appraises and managers improve and develop, and thereby also
the :) organizations for whom they work. Just like any other process, if performance
appraisals arent working, dont blame the process, ask yourself whether it is being
properly trained, explained, agreed and conducted.

EFFECTIVE PERFORMANCE APPRAISALS :

Aside from formal traditional (annual, six-monthly, quarterly, or monthly)

performance appraisals, there are many different methods of performance
evaluation. The use of any of these methods depends on the purpose of the
evaluation, the individual, the assessor, and the environment.
The formal annual performance appraisal is generally the over-riding instrument,
which gathers together and reviews all other performance data for the previous
year.
Performance appraisals should be positive experiences. The appraisals
process provides the platform for development and motivation, so organizations
should foster a feeling that performance appraisals are positive opportunities, in
order to get the best out of the people and the process. In certain
organizations, performance appraisals are widely regarded as something rather less
welcoming ('bollocking sessions' is not an unusual description), which provides
a basis only on which to develop fear and resentment, so never, never, never
use a staff performance appraisal to handle matters of discipline orAdmonishment,
which should instead be handled via separately arranged meetings.

PERFORMANCE MANAGEMENT

Since organisations exits to achieve goals, the degree of success that individual
employees have in reaching their individual goals is important in determining
organisation effectiveness.
Performance system is fundamentally, a feed back process, which require sustained
commitment. The cost of failure to provide such feedback may result in a loss of key
professional employees, the continued poor performance of employees who are not
meeting performance standards and a loss of commitment by employees, in sum, the
myth that the employee know what. they are doing without adequate feedback from
management can be an expensive fantasy.
THE APPRAISAL PROCESS

1.

Establishing Performance Standard

2.

Communicate Performance expectations to employees

3.

Measure actual performance

4.

Compare actual performance with standards

5.

Discussion with the employees and identification development programs to bridge

the gap.

6.

Initiate action

THE PURPOSE OF APPRAISING PERFORMANCE

In general the appraisal systems serve a two fold purpose

1.

To improve the work performance of employees by helping them realize and use
their full potential in carrying out their firms mission.

2.

To provide information to employees and managers for use in making , work

related decisions.

More specifically appraisals serve the following purposes.

a)

Appraisals provide feedback to employees and help the. "' management identify
the areas where development efforts are "' needed to bridge the gaps thereby
serving as vehicles for personal " and career development.

b)

It helps management spot individuals who have specific skills so that their
promotions/transfer are in line with organizational requirements.

c)

Appraisal serve as a key input for administering a formal organisation reward and
punishment system.

d)

The performance system can be used as a criterion against which selection

devices and development programs are validated.

REQUIREMENT OF THE PERFORMANCE MANAGEMENT SYSTEM.

Reliability: The foremost requirement of a sound system is reliability. In this contact it
refers to consistency of judgement. For any given employee, appraisals made by raters
working independently of one another should agree closely. But raters with different
perspective (e.g. supervisors, peers, subordinates) may see the same individuals job
performance very differently. To provide reliable data, each rater must have an adequate
opportunity to observe what the employee has done and the condition under which he or
she has done it. By making appraisal system relevant, sensitive and reliable we assume
the resulting judgement are valid as well.
Acceptability: In practice, acceptability is the most important requirement of all, for it is
true that human resources program must have the support of. those who will use them.
Unfortunately, many organisations do not put much effort into garnering the front end
support and participation of those who will use the appraisal system. Ultimately it is
management's responsibility to define as clearly as possible the type and level of job
behaviour desired of employees.
It is important to enlist the active support and cooperation of subordinates by making
explicit what aspects of job performance they will be evaluated on.

Practicality: This implies that appraisal instruments are easy for managers and employees
to understand and to use.
For years, personnel specialists have searched for the 'Perfect; appraisal method as if it
were some kind of miraculous cure for many pitfalls that plague organisations. Such a
method does not exist. In tommorrow's world of work far more emphasis needs to be
placed on process issues. Factors such as timing and frequency are no less important. In
sum performance appraisal is a dialogue involving people and data. Both technical and

human issues are involved. Neither can be overemphasized at the expense of the other.
WHO SHOULD EVALUATE PERFORMANCE?
The most fundamental requirement for any rater is that he or she has an . adequate
opportunity to observe the rates job performance over a reasonable period of time. This
suggest several possible raters.
The immediate supervisor: Generally appraisal is done by this person. He is probably
the most familiar with the individual's performance and in most jobs has had the best
opportunity to observe actual job performance. Further more, the immediate supervisor
is probably best able to relate the individual's performings to department and
organisational objectives.
In some jobs such as outside sales, law enforcement and teaching, the immediate
supervisor may observe a subordinate's actual job performance rarely (and indirectly
thru written reports). Here judgement of peers play important role. However, there is a
danger of potential bias.
Subordinates: Appraisal by subordinates can be useful input to the immediate
development. Subordinates know first hand the extent to which the supervisor actually
delegates, how well he communicates, the type of leadership he has and the extent to
which he or she plans and orgamses.
Self appraisal: On one hand it improves the rate's motivation and moral, on the other it
tends to be more lenient, less variable and biased. The evidence on the accuracy of self
assessment is fairly complex.
In industry it is seen that feed back/ input is taken from various sources -Peers,
subordinates, superiors etc. Some companies have gone step ahead in taking feedback
from the customers and integrating it into the performance management process.

APPROACHES TO PERFORMANCE MANAGEMENT

The traditional approach: The one dimensional model

The Job Define what results Performance contacthave to be achieved Define a set of key
objectives against theaccountabilitiesAccountabilities i.e,outputReview performance
against the key objectivesIn this model job expectations are defined in terms of what
results have to be achieved. This model doesn't have a long term focus and can't be used
for employee development and career path planning,
A satisfactory performance implies doing a job effectively and efficiently, with a
minimum degree of employee -created disruptions. Employees are performing well when
they are productive. Yet productivity itself implies both concern for effectiveness and
efficiency. Effectiveness refers to goal accomplishment. Efficiency evaluates the ratio of
inputs consumed to outputs achieved. The greater the output for a given input, the more
efficient the employees. Similarly, if output is a given, consumed to get that output results
in greater efficiency.
There are basically three purposes to which performance appraisal can be put. First, it can
be used as a basis for reward allocations. Decisions as to who gets salary increases,
promotions, and other rewards are determined by their performance evaluation. Second,
these appraisals can be used for identifying areas where development efforts are needed.
Management needs to spot those individuals who have specific skill or knowledge
deficiencies. The performance appraisal is a major tool for identifying these deficiencies.
Finally, the performance appraisal can be used as a criterion against which selection
devices and development programs are validated.

INDIAN CONSUMER FEATURES:

The national council of applied economic research (NCAER), in its household

income survey, defines the middle class as someone with an annual household
income of Rs.2 Lakh (US $4565) to Rs.10 lakh (US $ 22830) , and this is broadly
based on purchase behavior of these households. Key tenets of the report:The number of
households with an annual income upwards of Rs. 1 Crore (US $ 228351) has grown up
by 26% in the period since 1995-96 to almost touch 20000 In 2001-02 and by 20062007
it will go up by more than two and a half times and by the end of the decade it
will cross 140000; assuming an average family size of five, that is 700000
high value customers. In the Rs. 50 lakh to Rs 1 crore bracket, the number of
households is expected to increase from 40,000 in 2001-2002 to over 100000 in
2006-07 and further to 250,000 by the end of the decade.
Those who earn over Rs. 10 lakh (US $ 22830) a year will grow from 0.2 % to 1.7%,
and the middle class will rise from 2.8 to as much as 12.8%.The upper income classes
are rising faster than the lower income ones and the lowest ones (annual household
income below Rs .90, 000 (US $ 2055) are shrinking.No wonder, the spending power
of Indians is touching new heights. According to government figures the
private final consumption expenditure (PFCE) in 2004.has seen the highest growth
rate in 23 years. It has risen by 8.3% during 03-04 in comparison with the previous
year.Spending is always based on needs. The needs hamper of the average Indian has
changed tremendously after the government enforced economic reforms fifteen years
ago. In 1991, 80% of the spending was on eight items. Today the basket comprises
seventeen items. The new additions include mobile handsets,Gifts and consumer
durables, according to a study by KSA Technopak.

PERFORMANCE APPRAISAL SYSTEM:

THE CONCEPT

Performance appraisal is a management tool which is helpful in motivating and

effectively utilizing human resources. Assessment of human potential is difficult, no
matter how well designed and appropriates the performance planning and appraisal
system is.The performance appraisal system should:

be correlated with the organizational mission, philosophies and value system;

cover assessment of performance as well as potential for development;

take care of organizational as well as individual needs; and El help in creating a

clean environment by

linking rewards with achievements,

generating information for the growth of the employee as well as of the organization,
and

suggesting appropriate person-task matching and career plans.

Feedback is an important component of performance appraisal. While positive feedback

is easily accepted, negative feedback often meets with resistance unless it is
objective, based on a credible source and given in a skilful manner.

COMPANY PROFILE
The history of LG Electronics has always been surrounded by the company's desire to
create a happier, better life. LG Electronics was established in 1958 and has since led
the way into the advanced digital era thanks to the technological expertise acquired by
manufacturing many home appliances such as radios and TVs. LG Electronics has
unveiled many new products, applied new technologies in the form of mobile devices
and digital TVs in the 21st century and continues to reinforce its status as a global
company.

LG Electronics 50-year History

Download (PDF)

1958
Founded as GoldStar

1960's
Produces Korea's first radios, TVs, refrigerators, washing machines, and air
conditioners

1995
Renamed LG Electronics Acquires US-based Zenith

1997
World's first CDMA digital mobile handsets supplied to Ameritech and GTE in U.S.
Achieves UL certification in U.S. Develops world's first IC set for DTV

1998 Develops world's first 60-inch plasma TV

1999
Establishes LG Philips LCD, a joint venture with Philips

2000
Launches world's first Internet refrigerator Exports synchronous IMT-2000 to Marconi
Wireless of Italy Significant exports to Verizon Wireless in U.S.

2001
GSM mobile handset Exports to Russia, Italy, and Indonesia Establishes market
leadership in Australian CDMA market Launches world's first Internet washing
machine, air conditioner, and microwave oven

2002
Under LG Holding Company system, separates into LG Electronics and LG
Corporation Full-scale export of GPRS color mobile phones to Europe Establishes
CDMA handset production line and R&D center in China

2003
Enters Northern European and Middle East GSM handset market Achieves monthly
export volume above 2.5 million units (July) Top global CDMA producer

2004
EVSB, the next-generation DTV transmission technology, chosen to be the
U.S./Canada Industry standard by the US ATSC Commercializes world's first 55" allin-one LCD TV Commercializes world's first 71" plasma TV Develops world's first
Satellite- and Terrestrial-DMB handsets

2005
Becomes fourth-largest supplier of the mobile handsets market worldwide Develops
world's first 3G UMTS DMB handset, 3G-based DVB-Hand Media FLO DMB Phone
with time-shift function and DMB notebook computer Establishes LG-Nortel, a
network solution joint venture with Nortel

2006
LG Chocolate, the first model in LG's Black Label series of premium handsets, sells
7.5 million units worldwide Develops the first single-scan 60" HD PDP module and
100-inch LCD TV Establishes strategic partnership with UL Acquires the world's first
IPv6 Gold Ready logo.

2007
Launches the industry's first dual-format, high-definition disc player and drive
Launches 120Hz Full HD LCD TV Demonstrated the world-first MIMO 4G-Enabled
technologies with 3G LTE Won contract for GSMA's 3G campaign

2008
Introduces new global brand identity: "Stylish design and smart technology, in products
that fit our consumer's lives." Posted No.1 spot in US frontloading washers in 5
consecutive quarters Unveiled the world's first Bluetooth headset combined mobile
phone Unveiled the world's first Blu-ray network storage Developed the world's first
LTE mobile modem chip Recorded over 100 million units of LG air conditioners in
accumulated sales

2009
Became second-largest LCD TV provider worldwide Became third-largest supplier of
mobile handsets market worldwide Became Global Partner and Technology Partner of
Formula One

2010
Unveiled the worlds first and fastest dual-core smartphone, LG OPTIMUS 2X
Unveiled the worlds first full LED 3D TV

PERFORMANCE APPRAISAL SYSTEM IN LG INDIA

LIMITED
In LG India Limited they have the system of performance appraisal of their
employees. The main objective of this performance appraisal system is to evaluate the
performance, promote their employees and to arrange for their various training
programmes if they require for enhancing their skills in their respective areas and in
contribution enhancement..
Employees are evaluated by how well they accomplish a specific set of objectives that
have been determined to be critical in the successful completion of their job. This
approach is frequently referred to as . management by objectives. Management by
objectives is a process that converts organization~l objectives into individual
objectives. It can be thought of as consisting of four steps: goal setting, action
planning, self- control, and periodic reviews. In goal setting, the organization's overall
objectives are used as guidelines from which departmental and individual objectives
are set. In action planing, the means are determined for achieving the ends established
in goal setting. That is, realistic plans are developed to attain the objectives. Selfcontrol refers to the systematic monitoring and measuring of performance. Finally,
with periodic progress reviews, corrective action is initiated when behaviour deviates
from the standards established in the goal-setting phase. Dabur uses very constructive
performance appraisal process while evaluating its employees. Its evaluation is based
on quantitativewise and objectivewise.

Company set goals to its employee by properly reporting with its employees and then
evaluating them upto what extent it has been achieved and if there is failure in reaching
the target what are the causes or reasons behind it.
Every evaluator has his or her own value system which acts as a standard against which
appraisals are made. Relative to the true or actual performance an individual exhibits,
some evaluator~ mark high and others low. The former is referred to as positive
leniency error and the latter as negative leniency error. When evaluators are positively
lenient in their appraisal, an individual's performance becomes over- stated; that is,
rated higher than it actually should. Similarly, a negative leniency error understates
performance, giving the individual a lower appraisal. As such there is no scope of error
as far as the Dabur company is concerned, but sometimes over estimation of target
brings
about a description in the evaluating criteria. Thus, though chances are less, positive
leniency errors have been stated to be committed.
Outcome of Performance Appraisal
As far as Dabur company is concerned, there are four outcomes possible:
a.

Outstanding -If the performance evaluated by the management turns out to be

outstanding. If the employee performs in such a way as to collect 3 consecutive
outstanding performance into his/her credit) he / she gets promoted.

b.

Excellent -If the performance evaluated by the management turns out to be

excellent. If the employee performs in such a way as to collect 3 consecutive
excellent performance into his/her credit, he/she gets promoted.

c.

Good -If the performance evaluated by the management turns out to be good. The
management sends the employee to the training programme to improve his/.her
skill to perform form.

d.

Below average -If the performance evaluated by the management turns out to be
below average. And, if the employee collects 3 below average to his/her credit,
then he/she dismissed

Duration of Appraisal System

The time constraints enables the employee to show or project his/her capabilities in term
of performance as per the duration allowed. In Dabur India Limited, the performance
appraisal system is carried out annually.
Feedback
The company provides the annual feedback to its employees and thus, in term bring out
the highlights of the self assessment programme. This enables the better communicaiton
between the management and employees ad thus, helps in promoting the business future.
Response
There are mixed responses from the feedback by the employees. It has helped some of
the employees in motivating themselves while those who felt bad were thoroughly
communicated and all the confusion and failure part were discussed with employees.

HRD DEPARTMENTS IN LG
HIERARCHY AT EXECUTIVE LEVEL
CMO/CHAIRMAN

DIRECTOR

EXECUTIVE DIRECTOR

CHIEF GENERAL MANAGER(CGM)

GENERAL MANAGER(GM)

DEPUTY GENERAL MANAGER(DGM)

SENIOR MANAGER

MANAGER

DEPUTY MANAGER(DM)

PURPOSE
.

In LG since organisation exist to achieve goals, the degree of success that individual
employees have in reaching their individuals goals is important in determining
organizational effectiveness. The assessment of how successful employees have been at
meeting their individual goals, therefore, becomes a critical part of HRM. This leads us
to the topic of performance appraisal.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocations. Decisions as to who gets
salary increases, promotions, and other rewards are determined by their
performance evaluation.

Second, these appraisals can be used for identifying areas where development
efforts are needed. Management needs to spot those individuals who have
specific skill or knowledge deficiencies. The performance appraisals is a major
tool for identifying these deficiencies.

Finally the performance appraisal can be used as a criterion against which

selection devices and development programs are validated.

MMTC

Its purpose must flow from the business and functional plans and address the key result
areas of the job. Purpose must be

Specific: The appraisee must understand them clearly.

Measurable: In term of quality, quantity, cost and time.

Attainable: Targets must have inbuilt stretch but yet be within the capabilities of
the appraisee.

Relevant: to the role and responsibilities with the job and link up with the unit,
business and functional plans.

Time bound: agree to the timeframe within which the objectives must be
achieved, which will also help prioritization.
Remember , purpose must be S.M.A.R.T

So we can see that in LG they follows three purpose for their employees in terms of
salary increment , promotion and also for identifying the area which need any
development efforts .And in MMTC they coined the term S.M.A.R.T for fulfilling their
plans which helps to identifying their quality ,quantity ,cost , roles and responsibility.

In LG its process is as follows -

THE APPRAISAL PROCESS

Established performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

If necessary, initiate the corrective action

And Appraisal Procees in LG

Purpose of the job- The overall rate of the job from organisations point of view;
why the job exists and what contribution it is expected to make.

A statement of the key result areas that flow from the purpose of the jobstatements of the continuing end results and outcomes required of the job,
statements which identify what the job achieves and why.

Having listed the key result areas, it is necessary to clearly state the objectives for
the year. These objectives must flow from the business, functional and unit plans.

For objectives to invoke commitment, they must be agreed between the job holder
and his boss and not set unilaterally.

For objectives to be meaningful, they must be specific, measurable, attainable,

relevant and time bound.

The appraisal process must focus on performance against agreed objectives,

enable the individual to give feedback to the organization his own feelings,
aspirations, difficulties, etc and serve as a forum for dialogue between the
individual and the organization.

The process must focus on performance, not personality; on facts, not perception
and demonstrated behaviour, not hunches.

Performance appraisal process:

Planning for
performance
Goals
Standards
KPAS/KRAS

-Ratings
-Review

Periodic
review/feedback
Observations
Feedback
Support

-Action

Annual performance
evaluation/review
Ratings
Review discussions
Action plans
-

And when we compare their PROCESS than we found that in DABUR first they set the
standard than communicate it to their employees than measure the performance and
compare it to their standard than take the corrective action.
While in MMTC they make plan for their performance than take feedback than finaly
evaluate their annual performance

PERFORMANCE COUNSELING
Definition:
Performance counseling can be defined as the help provided by a manager to his
subordinate in analyzing his performance and other job behaviors in order to increase his
job effectiveness. There are three processes involved in counseling- communication,
influencing and helping.
Objectives:

Helping the counselor to realize his potential as an employee.

Helping him to understand himself- his strengths and his weaknesses.

Helping him to have better understanding of the environment.

Encouraging him to set meaningful goals for further improvements.

Encouraging him to generate alternatives for dealing with various problems.

Providing him an empathic atmosphere for sharing and discussing his tensions,
conflicts, concerns and problems.

Conditions for effective counseling:

General climate of openness and mutuality.

General helpful and empathic attitude of the counselor.

Uninhibited participation of the subordinate.

Joint goal-setting and performance review.

Focus on work behavior.

Solving work related problems.

Counseling process:
A formal counseling process is of three phases-

PHASE I: Rapport building.

a)

Attending.

b)

Listening.

c)

Acceptance.

PHASE II: Exploring.

a)

Problem identification.

b)

Diagnosis.

PHASE III: Action planning.

a)

Searching.

b)

Decision making.

c)

Supporting.

Establishing for dialoguing:

The appraisal interview is also an ideal opportunity for the boss and the job holder
to dialog on his career. Here are some sample questions that can constitute the basis for a
dialog on an individuals careerCurrent assignment:

What do find challenging and exciting about your current assignment?

Do you feel you are being fully utilized in your current assignment?

Goals and aspirations:

What objective have you set for your personal and professional growth?

How do you intend to pursue these?

How can an organization assist in the process?

Career plan:

What responsibilities do you see yourself capable of assuming?

What do you see yourself doing three years from now?

Performance ratings:
Appraisal system requires an overall performance rating Outstanding performance.
Good performance.
Satisfactory performance.
Barely adequate performance.
Poor performance.
An ongoing process:
It is necessary to engage in a formal appraisal process once a year. However we
must guard against the process degenerating into a year-end ritual- something to be got
over with for the sake of the firm. Once objectives are set at the beginning of the year,
any time is a good enough time for the job holder and his boss to engage in a review of
how things are going.
Periodic review and feedback on performance as well as the process of dialoguing
whereby the individual feeds back his overall feelings, difficulties, challenges, etc. spurs
on performance and enables the achievement of results against agreed objectives as well
as reinforces desired behaviors which in turn enhances the competencies of the
business.

OBJECTIVES

OF

PERFORMANCE

APPRAISAL

METHODLOGY

Employees would like to know from a performance appraisal system:

Concrete and tangible particulars about their work; and

Assessment of their performance.

This would include how they:

did;

could do better in future;

could obtain a larger share of rewards; and

could achieve their life goals through their position.

Therefore an employee would desire that the appraisal system should aim at:

Their personal development;

their work satisfaction; and

their involvement in the organization.

&

1. Objective of the study

This project aims at studying the system of performance appraisal and its effectiveness in
an organisation. Performance appraisal is the most significant and indispensable tool for
the management as it provide useful information for decision making in area of
promotion and compensation reviews.
Thus broad objectives of the study includes:

To know the present system of performance appraisal

To know the extent of effectiveness of the appraisal system

To identify and know the area for improvement system

To analyze and apply performance appraisal strategies to improve the

performance of the individual employees.

To know the best performance appraisal strategy of the company.

2. Sample of the study

The population covered for the present study consisted of employee belonging to
supervisory and the level above. For the purpose of this study, survey covered the
employee of DABUR INDIA LTD & MMTC falling under supervisor and the level
above.
The study covered a sample of 25 in mmtc & 15 employee in dabur belonging to

supervisory level and above.

3.

Methodology of the project

The project work has been carried out in three stages, a structured questionnaire with
objective and question was communicated tested and finalise. During the second stage,
the questionnaire was administered to the employees at Dabur India Ltd. by contacting
them. The work relating to data entry compilation, data analysis and report writing
constituted the third stage. Interview index was also used at some places to get
information on the project subject.
The details of the methodology adopted are presented below:
Data entry and analysis
It has been an uphill task to enter the enormous data received through the questionnaire
which consisted nearly 20 questions. Response to the descriptive questions though very
few but was valuable for the purpose of study. Hence these were further structured in
time with the system adopted for compilation and data analysis.

From the point of view of the organization, performance appraisal

serves the purpose of:

providing information about human resources and their development;

measuring the efficiency with which human resources are being used and improved;

Providing compensation packages to employees; and maintaining organizational

control.

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

USES OF AN APPRAISAL SYSTEM:

Properly designed performance appraisal systems can (Rao, 1985):

help each employee understand more about their role and become clear
about their functions;

be instrumental in helping employees to better understand their strengths and

weaknesses with respect to their role and functions in the organization;

help in identifying the developmental needs of employees, given their role

and function;

increase mutuality between employees and their supervisors so that every

employee feels happy to work with their supervisor and thereby contributes
their maximum to the organization act as a mechanism for increasing
communication between employees and their supervisors. In this way, each
employee gets.

to know the expectations of their superior, and each superior also gets to
know the difficulties of their subordinates and can try to solve them. Together,
they can thus better accomplish their tasks;

provide an opportunity to each employee for self-reflection and individual

goal-setting, so that individually planned and monitored development takes place;

help employees internalize the culture, norms and values of the organization,
thus developing an identity and commitment throughout the organization;

help prepare employees for higher responsibilities in the future by continuously

reinforcing the development of the behaviour and qualities required for
higher-level positions in the organization;
o be instrumental in creating a positive and healthy climate in the
organization that drives employees to give their best while enjoying
doing so; and

assist in a variety of personnel decisions by periodically generating

data regarding each employee.

 CHARACTERISTICS OF AN APPRAISAL

SYSTEM

Performance appraisal cannot be implemented successfully unless it is accepted by all

concerned. There should be a common and clear understanding of the distinction
between evaluation and appraisal. As Patten (1982) argues, evaluation aims at 'objective'
measurement, while appraisal includes both objective and subjective assessment of
how well an employee has performed during the period under review. Thus
performance appraisal aims at 'feedback, development and assessment.' The
process of performance appraisal should concentrate on the job of an employee, the
environment of the organization, and the employee him- or herself. These three actors
are inter-related and inter-dependent. Therefore, in order to be effective, the
appraisal system should be individualized, subjective, qualitative and oriented
towards problem-solving. It should be based on clearly specified and measurable
standards and indicators of performance. Since what is being appraised is
performance and not personality, personality traits which are not relevant to job
performance should be excluded from the appraisal framework.

Some of the important considerations in designing a performance appraisal system

are:

Goal the job description and the performance goals should be structured
mutually decided and accepted by both management and employees.

Reliable and consistent Appraisal should include both objective and

subjective ratings to produce reliable and consistent measurement of
performance.

Practical and simple format The appraisal format should be practical,

simple and aim at fulfilling its basic functions. Long and complicated
formats are time consuming, difficult to understand, and do not elicit much
useful information.

Regular and routine While an appraisal system is expected to be formal

in a structured manner, informal contacts and interactions can also
be used for providing feedback to employees.

 Participatory and open An effective appraisal system should necessarily

involve the employee's participation, usually through an appraisal interview with
the supervisor, for feedback and future planning. During this interview, past
performance should be discussed frankly and future goals established. A
strategy for accomplishing these goals as well as for improving future
performance should be evolved jointly by the supervisor and the employee
being appraised. Such participation imparts a feeling of involvement and
creates a sense of belonging.

Rewards: Rewards - both positive and negative - should be part of the

performance appraisal system. Otherwise, the process lacks impact.

Feedback should be timely unless feedback is timely, it loses its utility and

may have only limited influence on performance.

Impersonal feedback: Feedback must be impersonal if it is to have the

desired effect. Personal feedback is usually rejected with contempt,
and eventually de-motivates the employee.

Feedback must be noticeable. The staff member being

appraised must be made aware of the information used in the
appraisal process. An open appraisal process creates credibility.

Relevance

and

responsiveness

Planning

and

appraisal

of

performance and consequent rewards or punishments should be

oriented towards the objectives of the programme in which the
employee has been assigned a role. For example, if the objectives of a
programme are directed towards a particular client group, then the
appraisal system has to be designed with that orientation.

Commitment Responsibility for the appraisal system should be

located at a senior level in the organization so as to ensure
commitment and involvement throughout the management hierarchy.

PERFORMANCE APPRAISAL SYSTEM:

THE PROCESS

Performance appraisal involves an evaluation of actual against desired performance. It

also helps in reviewing various factors which
Managers should

influence

performance.

plan performance development strategies in a structured

manner for each employee. In doing so, they should keep the goals of the
organization in mind and aim at optimal utilization of all available resources,
including financial. Performance appraisal is a multistage process in which
communication plays an important role.

Craig, Beatty and Baird (1986) suggested an eight-stage performance

appraisal process:

(i) Establishing standards and measures

The first step is to identify and establish measures which would differentiate between
successful and unsuccessful performances. These measures should be under the control of
the employees being appraised. The methods for assessing performance should be decided
next. Basically, management wants to:

know the behaviour and personal characteristics of each ! employee; and

assess their performance and achievement in the job.

There are various methods available for assessing results, behaviour and personal
characteristics of an employee. These methods can be used according to the particular
circumstances and requirements.

(ii) Communicating job expectations

The second step in the appraisal process is communicating to employees the

measures and standards which will be used in the appraisal process. Such
communication should clarify expectations and create a feeling of involvement.

( ii i) P la n n in g

In this stage, the manager plans for the realization of performance

expectations, arranging for the resources to be available which are required
for attaining the goals set. This is an enabling role.

(iv) Monitoring perform ance

Performance appraisal is a continuous process, involving ongoing feedback.

Even though performance is appraised annually, it has to be managed
'each day, all year long.' Monitoring is a key part of the performance
appraisal process. It should involve providing assistance as necessary and
removing obstacles rather than interfering. The best way to
effectively monitor is to walk around, thus creating continuous contacts, providing
first-hand information, and identifying problems, which can then be solved promptly.

(v) Ap praising

This stage involves documenting performance through observing, recalling, evaluating,

written communication, judgment and analysis of data. This is like putting together an
appraisal record.

(vi) Feedback

After the formal appraisal stage, a feedback session is desirable. This session should
involve verbal communication, listening, problem solving, negotiating, compromising,
conflict resolution and reaching consensus.

(vii) Decision m aking

On the basis of appraisal and feedback results, various decisions can be made about
giving rewards (e.g., promotion, incentives, etc.) and punishments (e.g., demotion). The
outcome of an appraisal system should also be used for career development.

(viii) Development of performance

The last stage of performance appraisal is 'development of performance,' or

professional development, by providing opportunities for upgrading skills and
professional interactions. This can be done by supporting participation in
professional conferences or by providing opportunities for further study. Such
opportunities can also act as incentives or rewards to employees.

COMMUNICATION

It is obvious that communication is at the core of an appraisal system.

Communication can be either upward or downward. Downward communication is
from upper management levels to lower levels, and passes on a judgment of how the
employees are doing and how they might do even better. As the information flows
downward, it becomes more individualized and detailed. Upward communication
is from lower to higher levels. Through this process, employees communicate
their needs, aspirations and goals. As information flows upward, it has to become
brief and precise because of the channels through which it has to pass.

APPROACHES AND TECHNIQUES IN

PERFORMANCE APPRAISAL

Performance appraisal is a multistage process involving several activities, hich can be

administered using a variety of approaches. Some of these approaches are considered
below, based on Einstein and LeMere-Labonte, 1989; and Monga, 1983:

Intuitive approach

in this approach, a supervisor or manager judges the employee based on their

perception of the employee's behaviour.

Self-appraisal approach

Employees evaluate their own performance using a common format.

Group approach

The employee is evaluated by a group of persons.

Trait app roach

This is the conventional approach. The manager or supervisor evaluates the

employee on the basis of observable dimensions of personality, such as integrity,
honesty, dependability, punctuality, etc.

Appraisal based on achieved results

In this type of approach, appraisal is based on concrete, measurable, work

achievements judged against fixed targets or goals set mutually by the subject and the
assessor.

Behavioral Method

This method focuses on observed behaviour and observable critical incidents.

APPRAISAL TECHNIQUES:

There are several techniques of performance appraisal, each with some strong points as
well as limitations. Oberg (1972) has summarized some of the commonly used
performance appraisal techniques.

(i) Essay appraisal method

The assessor writes a brief essay providing an assessment of the strengths,

weaknesses and potential of the subject. In order to do so objectively, it is
necessary that the assessor knows the subject well and should have interacted with
them. Since the length and contents of the essay vary between assessors, essay
ratings are difficult to compare.

(ii) Graphic rating scale

A graphic scale 'assesses a person on the quality of his or her work (average; above
average; outstanding; or unsatisfactory).'

Assessment could also be trait centred and cover observable traits, such as

reliability, adaptability, communication skills, etc.

Although graphic scales seem simplistic in construction, they have application in a

wide variety of job responsibilities and are more consistent and reliable in
comparison with essay appraisal. The utility of this technique can be
enhanced by using it in conjunction with the essay appraisal technique.

(iii) Field review m ethod

Since individual assessors differ in their standards, they inadvertently introduce

bias in their ratings. To overcome this assessor-related bias, essay and graphic
rating techniques can be combined in a systematic review process. In the field
review method, 'a member of the HRM staff meets a small group of
assessors from the supervisory units to discuss each rating, systematically
identifying areas of inter-assessor disagreement.'

It can then be a

mechanism to help each assessor to perceive the standards uniformly and thus
match

the other assessors. Although field review assessment is considered valid and reliable, it
is very time consuming.

(iv) Forced-choice rating method

Unlike the field review method, the forced-choice rating method does not involve
discussion with supervisors. Although this technique has several variations, the

most common method is to force the assessor to choose the best and worst fit
statements from a group of statements. These statements are weighted or scored in
advance to assess the employee. The scores or weights assigned to the individual
statements are not revealed to the assessor so that she or he cannot favour any
individual. In this way, the assessor bias is largely eliminated and comparable
standards of performance evolved for an objective. However, this technique is of
little value wherever performance appraisal interviews are conducted.

(v) Critical incident appraisal method

In this method, a supervisor describes critical incidents, giving details of both

positive and negative behaviour of the employee. These are then discussed with
the employee. The
discussion focuses on actual behaviour rather than on traits. While this technique is
well suited for performance review interviews, it has the drawback that the supervisor
has to note down the critical incidents as and when they occur. That may be
impractical, and may delay feedback to employees. It makes little sense to
wait six months or a year to discuss a misdeed, a mistake or good display of
initiative.

(vi) Management by objectives

The employees are asked to set or help set their own performance goals. This avoids the
feeling among employees that they are being judged by unfairly high standards. This
method is currently widely used, but not always in its true spirit. Even though
the employees are consulted, in many cases management ends up by imposing

its standards and objectives. In some cases employees may not like 'self-

direction or authority.' To avoid such problems, the work standard approach is used.

(vii) Work standard approach

In this technique, management establishes the goals openly and sets targets against
realistic output standards. These standards are incorporated into the organizational
performance appraisal system. Thus each employee has a clear understanding of their
duties and knows well what is expected of them. Performance appraisal and
interview comments are related to these duties. This makes the appraisal
process objective and more accurate. However, it is difficult to compare individual
ratings because standards for work may differ from job to job and from employee to
employee. This limitation can be overcome by some form of ranking using pooled
judgment.

(viii) R an k in g m eth od s

Some of the important forms of ranking for performance appraisal are given below,
based on Oberg, 1972; and Monga, 1983:

(a) Alteration ranking m ethod

The individual with the best performance is chosen as the ideal employee. Other
employees are then ranked against this employee in descending order of comparative
performance on a scale of best to worst performance. The alteration ranking
method usually involves rating by more than one assessor. The ranks assigned by
each assessor are then averaged and a relative ranking of each member in the
group is determined. While this is a simple method, it is impractical for large groups.
In addition, there may be wide variations in ability between ranks for different positions.

(b) Paired com parison

The paired comparison method systematizes ranking and enables better

comparison among individuals to be rated. Every individual in the group is
compared with all others in the group. The evaluations received by each person in
the group are counted and

turned into percentage scores. The scores provide a fair idea as to how each individual in
the group is judged by the assessor.

(c) Person-to-person rating

In the person-to-person rating scales, the names of the actual individuals known to all
the assessors are used as a series of standards. These standards may be defined as lowest,
low, middle, high and highest performers. Individual employees in the group are then
compared with the individuals used as the standards, and rated for a standard where
they match the best. The advantage of this rating scale is that the standards are concrete
and are in terms of real individuals. The disadvantage is that the standards set by different
assessors may not be consistent. Each assessor constructs their own person-toperson scale which makes comparison of different ratings difficult.

(d) Checklist m ethod

The assessor is furnished with a checklist of pre-scaled descriptions of behaviour,

which are then used to evaluate the
personnel being rated (Monga, 1983). The scale values of the behaviour items are
unknown to the assessor, who has to check as many items as she or he believes
describe the worker being assessed. A final rating is obtained by averaging the scale
values of the items that have been marked.

(e) Behaviourally anchored rating scales (BARS)

This is a relatively new technique. It consists of sets of behaviourial statements

describing good or bad performance with respect to important qualities. These
qualities may refer to inter-personal relationships, planning and organizing abilities,
adaptability and reliability. These statements are developed from critical incidents
collected both from the assessor and the subject.

(f) Assessment centres

this technique is used to predict future performance of employees were they to

be promoted. The individual whose potential is to be assessed has to work on
individual as well as group assignments similar to those they would be required to
handle were they promoted. The judgment of observers is pooled, and paired
comparison or alteration ranking is sometimes used to arrive at a final
assessment. The final assessment helps in making an order-of-merit ranking for each
employee. It also involves subjective judgment by observers.

A performance appraisal system could be designed based on intuition, selfanalysis, personality traits, behaviourial methods and result-based techniques. Different
approaches and techniques could be blended, depending on the goals of
performance appraisal in the organization and the type of review. For example,
management by objectives, goal-setting
and work standard methods are effective for objective coaching, counselling and
motivational purposes. Critical incident appraisal is best suited when supervisor's
personal assessment and criticism are essential. A carefully developed

and validated forced-choice rating can provide valuable analysis of the individual when
considering possible promotion to supervisory positions. Combined graphic and essay
form is simple, effective in identifying training and development needs, and facilitates
other management decisions.

BENEFITS OF PERFORMANCE APPRAISAL:

Employer Perspective:

Despite imperfect measurement techniques, individual differences in performance can

make a difference to company performance.Documentation of performance appraisal
and feedback may be needed for legal defense.Appraisal provides a rational basis for
constructing a bonus or merit system.Appraisal dimensions and standards can help
to implement strategic goals and clarify performance expectations.Providing
individual feedback is part of the performance management process.Despite the
traditional focus on the individual, appraisal criteria can include teamwork and the teams
can be the focus of the appraisal.
EMPLOYEE PERSPECTIVE:
Performance feedback is needed and desired. Improvement in performance requires
assessment. Fairness required that differences in performances levels across workers
bemeasured and have an effect on outcomes. Assessment and recognition of performance
levels can motivate workers to improve their performance.

COMPONENTS OF THE APPRAISAL FORMAT:

Key performance areas, self-appraisal, performance analysis, performance ratings and

counselling are the important components of a performance appraisal system oriented to
development of human resources in an organization. The appraisal format should be
designed in consonance with the objectives of the performance appraisal system,
and generate information on a number of important aspects, including (Rao,
1985):Identification of key perform ance areas:
The first step in an appraisal process is identifying key performance areas and
setting targets for the next appraisal period. This may be done either through periodic
discussions or at the beginning of the year, as in research institutions.

Self-appraisal by the subject:

At the end of the appraisal period, employees appraise their own performance
against the key performance areas, targets and pre-identified behaviour.
Information on these issues is provided in an appraisal format. The employees also
write their self-evaluation reports and hand them to their supervisors.

Analysis:

The supervisor reflects on the performance of the employee, and identifies the factors
which facilitated or hindered the employee's performance. The manager then calls the
employee for a discussion to better understand his or her performance and provide
counselling on further improvements. During this discussion, appraisal records

(such as notes, observations, comments, etc.) are exchanged. The manager then
gives a final rating and recommendations regarding the developmental needs of the
individual. These are shown to the subject and his or her comments are recorded on
the appraisal form. The appraisal form

is then transmitted to the personnel department for the necessary administrative action.
The personnel or human resource development department uses these forms for
identifying and allocating training, rewards and other activities.

Identification of training needs:

The use of a development-oriented performance appraisal system is based on a good

understanding of the concept of human resources development. The need for
developing employee capabilities, the nature of capabilities to be developed, and the
conditions under which these capabilities can be developed have to be appreciated.
During the discussion between the supervisor and the employee, the development
needs of the subject are identified and goals set for the next period.

Identification of qualities:

The supervisor may also identify the qualities required for current as well as future tasks,
and assess the employee'sPotential and capabilities to perform jobs at higher responsibility
levels in the organization.

ATTRIBUTES

CONSIDERED

IN

EVALUATING

PERFORMANCE

There are many personality traits, which could be considered when evaluating
performance, and methods to facilitate such consideration include scaling
methods that differentiate employees on a series of given traits. The important
personality traits fall into two categories: personal qualities and demonstrated
qualities (Table 1).

AIM OF THE STUDY

This project will help me to understand how in the today's dynamic world organizations
with the help of performance appraisal and various HR practices are dealing with the
issues of employees performance, motivation, job stress, job satisfaction, cross cultural
interactions, compensation, team building and many more. How does a company make
sure that all its employee contributes efficiently towards the organization effectiveness.
And if there are any deviations what programs and steps are taken to correct them.
This project will help me to understand the duties and role of the HR personnel
in an organization in terms of appraising employee or measuring their actual
performance, understanding their core competency before, going for our job interviews.
The aim of my study to do this project is as follows:

1) To understand the procedures of measuring the performance.

'

2) To understand the activities of HR in an organization.

3) How management is helped by various HR practices like performance
appraisal, training and development program.
4) How HR mobilizes the organizational machinery.
5) To feel the cohesiveness, collectivity and interaction between HR and Non-HR
personals of an organization.
6) To know various training program for the employees and come to Know their
interest & competency.

THEOROTICAL OVERVIEW

1) Maintaining Organizational Effectiveness through skillstart programme :Skill that

makes a difference
Learners are given the opportunity to work in different roles around CCE (working for
approximately 6-8 weeks in each job role or department) to give them a better
understanding of the culture and operational activity of the organisation. The SkiIIStart
programme is run in partnership with the National Extension College (NEC) and
contains a degree of distance learning and on site mentoring. Completion of
the course awards candidates with the equivalent of 2 A-Levels. Edexcel is the
awarding body.

Since launching their SkillStart programme, CCE Ltd has been awarded with a special
category award at the DFEE National Training Awards and an Edexcel Outstanding
Employer Award. In 2004, the SkillStart programme became the first training scheme
recognised by the LSC as an Approved Employer Scheme (AES) - the
equivalent to other Apprenticeships on the National Framework

EXPERIENCE OF AN EMPLOYEE

Louise Callaghan, East Kilbride. SkiIIStarter 2001-2003 Before she joined the SkillStart
programme, she was at university where she gained a BSc degree in Psychology.There were
three parts of the programme which she thoroughly enjoyeda secondment in the
Human Resources departmentmy assignments, which vastly increased my knowledge of
manufacturing/distributionand the fact that she gained 2 years' work experience within an
organisation whose brand name is recognised world wide. she think that providing all have the
motivation, the combination of the work and study programme is fairly simple. Her experience
within the HR department has been superb. Prior to joining the programme, she was relatively
unsure about what she wanted to do with her career. she was given an HR secondment,
whilst on the Skill Start programme, and this, along with the support that was given,
definitely played a part in helping her get a role as HR assistant after she
completed her two years of learning. She is now employed as HR Officer,
Corporate Services at our company's head office in Uxbridge and am thoroughly
enjoying the experience of working in yet another different role, at junior
management level, within the business. Her intention is to move on and move up, as
far as the career ladder goes - a proper career woman.

Company History:

Based at Leeming Bar near Northallerton, Dalepak has an annual turnover of 33m. The
company is part of the Northern Foods Group PLC which is keen to drive the
implementation of lean manufacturing techniques across all its sites. The
company, which makes a range of burgers and grills, is driven by pressures from
their very demanding customer base (supermarkets) to improve performance and
price.

Case Study Information

Dalepak has had a history of training that has been relatively basic in its approach
with a limited induction process and no real effective evaluation. The decision
was made to review this approach, to look at it in more detail and rewrite
trainingprocedures, reintroduce part time trainers and determine KPIs for
quality, H&S and Production Output. However after making these changes a staff
survey revealed that staff still didn't feel they received effective training. So
further changes were introduced.

These included:
Development of training plans.

Training Records updated.

All trainers worked to same competence.

Employees involved in their own training records.

Six monthly reviews of training.

Developed a full time training department.

However, surveys showed that staff still did not feel the benefits of these changes so
Dalepak introduced level 1 NVQs which 120 staff completed. This was followed by the
development of in-house training assessors and further accredited training courses. These
changes began to have an impact on staff with one major change involving people
development being the introduction of a new line manager role. One of Dalepak's key
objectives was establishing a line manager role that would meet the needs of the
business and help meet KPIs. The new role would have to be fully supported to ensure
its success and that individuals reached their full potential. The new role was
defined in terms of SMART objectives with 10 competences set against these
objectives and those divided into a list of behaviors selected by assessment centers.
Both individual and generic training programmes were developed and the whole
system was implemented through good communication, commitment from all levels of
the business, creative approaches to development and feedback.

Dalepak have now gained a strata of quality line managers that are key to meeting KPIs
and future business needs and ensuring that the staff that they manage are developed to
their full potential. The new system now offers a structured progression route for
individuals, more effective cross functional decision makers, consistent achievement of
KPIs and a respected and valued approach for the selection of internal vacancies.
The changes that Dalepak have made now give a lasting impression of the company's
commitment to training, development and continuous improvement.

CONCLUSION
I have been doing training in LG. It is a Private Sector Organization, here the culture
between the HR and the Non-HR people are more friendly. In case of HEIL, the HR
Department is not been facilitated with much power, as the company is new they are
more focused on recruiting and hiring of employees which is their most
prioritized agenda in OB & HRD activity.
Furthermore, I would like to conclude the following:
1) HR & Non-HR personnel co-operate with each other
2) The Non-HR personnel have moderate satisfaction level regarding OB & HRD
activities in the organizations.
3) the organizations agreed that Organizational Culture lead to Organizational
Effectiveness.
4) There are no such more OB & HRD activities.
The study undertaken bring some interesting result.

Training the Appraisee: It is proposed that appraiser be trained for clear

understanding of the system and its objective and also counselled to be honest, fair,
just, unbiased in appraising the appralsee.

Factors/traits of evaluation: It is proposed that appraisee evaluated on above

factors/traits be given suitable remark or justification for being given different
quantitative grade.

Greater clarity has to be has to there in terms of job responsibility. This is possible

when the appraisal is done on the basis of the description.

In the organization, performance appraisal is done on an annual basis which should

be done Quaterly to make it more effective.

Consistency is demanded in the promotional policy. It should not change every year.

Monetary difference between two grades should not be large, it should be motivating
in nature.

Performance appraisal system should be made more transparent and rationale.

Performance feedback: The performance feedback sessions should be improved

which would results in increasing employee motivation to improve performance. The
following could be incorporated.

Pin point the problem behaviour and make sure the employee is aware of it

Make sure the employee understands the consequences of the problem behaviour.
Get employee's commitment to change and make sure he cares about the change

Assistance should be provided to improve poor performance. Make a realistic

plan appropriate to the behaviour and set a time frame for improvement.

To make sure to review performance time to time

The other change which has to be incorporated at the supervisor and the level above
are:

These should be listing down of task undertaken during the last one year and the
result achieved.

In some areas of performance there should be self appraisal and more and more
counselling so that employee improve upon weak area and understand what is

expected of him/her at the organization level.

RECOMMENDATIONS

I would like to recommend the following to the organization:

1) The organization should start issuing feedback forms to their employees to see
whether latter are satisfied with the OB & HRD activities followed in the organization.

2) Welcome the advises from the lower managerial level of the organization.

3) Increase the co-operation between HR and Non-HR personnel. Though it exists but not
to the ultimate level.

4) It should focus on lower and middle management Training and development also
5) Apart from the existing promotion criteria the company should lay stress on
performance-based promotion
Every research has certain limitations.Though most of them could be avoided,
some of them which inhibited this research are listed as follows.

Sample Size taken was very small. It did not represent the whole sample
universe. For a very highly effective research the sample size has to be
very big. 40 (25 & 15 employees of two companies) chosen for this
research would not represent the whole sample.

Sometimes employees did not respond truly. They might have been in a
hurry or busy with some other work and hence the feedback would have
been given for the sake of giving. Hence data collected cannot be said to
be precise.

In this survey there was a lack of statistical secondary data, which

hindered some of the comparative analysis which would have made this
project more effective.

BIBLIOGRAPHY

1)

Flippo EdwinB., Personnel management, Edition sixth, Tata Mc Graw Hills, 1984,
p.g. 225-230

2)

Gupta, C.B., Human Resource Management, Edition Fifth(Reprint),Sultan Chand

and Sons, New Delhi 2001, P.G. 5.3-5.10

3)

Rao, P. Subba,Essentials of Human Resource Management and Industrial

Relations;Edition Second, Himalaya Publishing House, New Delhi 2001, p.g.206210

WEB SITES SURFED

www.google.com
www.indiatimes.com
www.mmtc.com
www.citehr.com

Appraising and developing managerial performance:

T V Rao
Human Resource Management:
David A. Decenzo
Human Resource Management:
C. B. Gupta
Employees Development and Training:
Robert L. Crai.g
Various Internet Sites:
www.humaresource.com
www.businessballs.com