Documente Academic
Documente Profesional
Documente Cultură
ON
“A Study on Performance
Appraisal System at HDFC BANK
Lucknow”
Towards partial fulfilment of
Master of Business Administration (MBA)
(Affiliated to U. P. Technical University, Lucknow)
Submitted by:
Jaya Rai
Roll no: 1505470023
M.B.A. 3rd Semester
SESSION 2016-2017
DEPARTMENT OF MANAGEMENT
Appraisal System at HDFC BANK Lucknow. The work would not have been
possible to come to the present shape without the able guidance, supervision and
received by my Faculty Guide Ms. Meetu Pandey and other staff members.
I convey my heart full affection to all those people who helped and supported me
(Jaya Rai)
Preface
The Training project program is the integral part of MBA curriculum during the
course of management; the research is expected to use and apply their academic
knowledge and gain a valuable insight into corporate culture with all its
The summer training offers a valuable opportunity to the researcher to meet their
department to study about the various activities done in this department in the
details, as the result of that I came out with the project title “A Study on
In this report I have put my finest efforts to compile the data with utmost
accuracy and hope this report will give complete satisfaction regarding the
(Jaya Rai)
Executive Summary
This project report is a review based on theory as well as the industry outlook of
The report starts with the Introduction and Literature Review of performance
appraisal system that outlines its history, definitions, purposes, types, process,
appraisal system.
various primary and secondary sources have been included in the report which
gives a fair idea of the kind of appraisal system being followed across various
corporate.
Training Certificate ii
Acknowledgement iv
Preface v
4. Limitations 66-67
6. Findings 91-93
9. Conclusion 101-102
Annexure 105-109
Introduction to
the Topic
1
INTRODUCTION TO THE TOPIC
potential
organizations
pertaining to his present job and his potential for a better job.”
"... A basic human tendency to make judgements about those one is working with, as
“Any system of determining how well an individual employee has performed during
In its most basic form, performance appraisal (or review) activities include
documentation) and indicating if standards were met or not. The appraisal usually
2
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
This concept have get the recognition the evaluation of work performance, appraisal
really dates from the time of the Second World War - not more than 60 years ago, as a
distinct and formal management procedure were used in the evaluation of the work
performance.
took only into consideration the material outcome but not the morale, enthusiasm,
attitude ability and self-esteem. In the 1950s in the United States, the potential
Yearly performance reviews are critical. Organizations are hard pressed to find good
reasons why they can't dedicate an hour-long meeting once a year to ensure the
mutual needs of the employee and organization are being met. Performance reviews
help supervisors feel more honest in their relationships with their subordinates and
feel better about themselves in their supervisorial roles. Subordinates are assured clear
understanding of what's expected from them, their own personal strengths and areas
3
for development and a solid sense of their relationship with their supervisor. Avoiding
psychometricians - who have expressed doubts about the validity and reliability of the
performance appraisal process. Some have even suggested that the process is so
It is deemed as the critical tool for banking sector as for the banking sector the
performance indicators are quit different and the overall structure of the banking
sector is bit complex thus to use this concept effectively and efficiently is quit
difficult for this sector.
Thus, through this report the researcher had tried to find the problem emerging and to
provide them suggestion so as for effective working.
4
Techniques of performance Appraisal
1-Rating scale
2-Check list
3-Force distribution
6-Essay method
Characteristics
3. It is scientific and objective study. Formal procedures are used in the study.
5
CONCEPT OF PERFORMANCE APPRAISAL
subordinate and supervisor, that usually takes the form of a periodic interview (annual
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
By the same token, appraisal results are used to identify the poorer performers who
decreases in pay. (Organizations need to be aware of laws in their country that might
Performance appraisals are essential for the effective management and evaluation of
feed into business planning. Formal performance appraisals are generally conducted
annually for all staff in the organization. Each staff member is appraised by his or her
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
6
performance appraisals enable management and monitoring of standards, agreeing
feeds into organizational annual pay and grading reviews, and coincides with the
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
7
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
“People are our most valuable asset” is a cliché, which no member of any
senior management team would disagree with. Yet, the reality for many organizations
are that their people remain 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.
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
8
RECRUITMENT
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.
CHARACTERISTICS
3. It is scientific and objective study. Formal procedures are used in the study.
PROCESS
9
1. Establishing performance standards
3. Measuring Performance
LIMITATIONS
1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge
even considering the available battery of appraisal techniques. But attempting to avoid
these pitfalls by doing away with appraisals themselves is like trying to solve the
problems of life by committing suicide. The more logical task is to identify those
appraisal practices that are (a) most likely to achieve a particular objective and (b)
ESSAY APPRAISAL
In its simplest form, this technique asks the rater to write a paragraph or more
10
situations, particularly those involving professional, sales, or managerial positions,
weight.
This technique may not yield the depth of an essay appraisal, but it is more
consistent and reliable. Typically, a graphic scale assesses a person on the quality and
and on a variety of other factors that vary with the job but usually include personal
traits like reliability and cooperation. It may also include specific performance items
FIELD REVIEW
The field review is one of several techniques for doing this. A member of the
personnel or central administrative staff meets with small groups of raters from each
supervisory unit and goes over each employee's rating with them to (a) identify areas
of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine
FORCED-CHOICE RATING
Like the field review, this technique was developed to reduce bias and
11
MANAGEMENT BY OBJECTIVES
To avoid, or to deal with, the feeling that they are being judged by unfairly
high standards, employees in some organizations are being asked to set - or help set -
their own performance goals. Within the past five or six years, MBO has become
something of a fad and is so familiar to most managers that I will not dwell on it here.
RANKING METHODS
who work for different supervisors, individual statements, ratings, or appraisal forms
The two most effective methods are alternation ranking and paired comparison
ranking.
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1. “Alternation ranking”:
Ranking of employees from best to worst on a trait or traits is another method for
evaluating employees. Since it is usually easier to distinguish between the worst and
the best employees than to rank them, an alternation ranking method is most popular.
Here subordinates to be rated are listed and the names of those not well enough to
rank are crossed. Then on a form as shown below, the employee who is highest on the
characteristic being measured and the one who is the lowest are indicated. Then chose
the next highest and the next lowest, alternating between highest and lowest until all
2. “Paired-comparison ranking”:
more so. But with large numbers of employees it becomes extremely time consuming
and cumbersome.
(i.e., when two or more people are asked to make independent rankings of the same
work group and their lists are averaged), are among the best available for generating
ASSESSMENT CENTERS
So far, we have been talking about assessing past performance. What about the
How can this kind of prediction be made most validly and most fairly?
13
360 DEGREE FEEDBACK
Many firms have expanded the idea of upward feedback into what the call
360-degree feedback. The feedback is generally used for training and development,
Most 360 Degree Feedback system contains several common features. Appropriate
multi-rater feedback, whereby ratings are not given just by the next manager up in the
ratings are also included, along with the element of self appraisal. Once gathered in,
the assessment from the various quarters are compared with one another and the
Another technique that is useful for coaching purposes is, of course, MBO. Like the
results, which can be discussed objectively and constructively, with little or no need
ADVANTAGES
If the employee meets or exceeds the set objectives, then he or she has demonstrated
outcomes, and not on their potential for success, or on someone's subjective opinion
of their abilities.
14
The guiding principle of the MBO approach is that direct results can be observed
easily. The MBO method recognizes the fact that it is difficult to neatly dissect all the
MBO advocates claim that the performance of employees cannot be broken up into so
many constituent parts, but to put all the parts together and the performance may be
DISADVANTAGES
This approach can lead to unrealistic expectations about what can and cannot
"Reality Checking" skills to use MBO appraisal methods. They will need these
skills during the initial stage of objective setting, and for the purposes of self-auditing
and self-monitoring.
15
Plays an important role in Personal career and succession planning.
misunderstandings.
biases referred to as 'rating errors'. These errors can seriously affect assessment
a) The rater may feel that anyone under his or her jurisdiction who is
b) He/She may feel that a derogatory rating will be revealed to the rate to
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c) He/She may rate leniently in order to win promotions for the
CENTRAL TENDENCY: - This occurs when employees are incorrectly rated near
the average or middle of the scale. The attitude of the rater is to play safe. This safe
playing attitude stems from certain doubts and anxieties, which the raters have been
HALO ERROR: - A halo error takes place when one aspect of an individual's
performance influences the evaluation of the entire performance of the individual. The
halo error occurs when an employee who works late constantly might be rated high on
popular personality might be given a high overall rating. Rating employees separately
on each of the performance measures and encouraging raters to guard against the halo
high or low score are given only to certain individuals or groups based on the rater's
attitude towards them and not on actual outcomes or behaviors; sex, age, race and
either by behavior exhibited by the ratee during his early stage of the review period
(primacy) or by the outcomes, or behavior exhibited by the ratee near the end of the
17
contract/sale just before the completion of the appraisal, the timing of the incident
may inflate his or her standing, even though the overall performance of the sales
person may not have been encouraging. One way of guarding against such an error is
to ask the rater to consider the composite performance of the rate and not to be
performance instrument follow each other and both describe or rotate to a similar
quality. The rater rates the first dimensions accurately and then rates the second
dimension to the first because of the proximity. If the dimensions had been arranged
lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar
rating for current period although the demonstrated behavior docs not deserve the
a) REPORTING MANAGER
appraisal process
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Ø Address employee concerns / queries on performance rating, in
Ø Discuss with the reporting managers on the behavioral traits of all the
traits; such assessments might require collecting data directly from other
relevant employees
d) HR HEAD
e) NORMALIZATION COMMITTEE
Ø Decides on the final bell curve for each function in the respective
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Ø Reviews the performance ratings proposed by the HOD‟s,
to be explained which play a very important role in using the PMS successfully. They
are:
largely dependent on the KRA score achieved by the employee during that
What are the guidelines for setting the KRA‟s for an employee?
How does an employee write down his KRA‟s for a particular financial
year?
How is the KRA score calculated for an employee on the basis of the
20
of the behavior displayed by him. They play a very important role in the deciding the
final performance rating for an employee as is even capable of shifting the rating one
level upwards/downwards.
the four different types of rating that an employee can achieve i.e. EC, SC, C and
PC. It also explains the criteria, which is considered for awarding any of these
promotion and normal distribution guidelines provide the framework within which
the performance appraisal process has to work. It is very important that the HR
department pays due attention to these guidelines while preparing the bell curves
for various functions and the consolidated bell curve for all the functions. These
21
PERFORMANCE RATING PROCESS
Achieves a final score greater than or Achieves final score between 100-
equal to 115% 114%
Develops others
22
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
expert service dedicated to ensuring that the human resource function is performed
efficiently.
“People are our most valuable asset” is a cliché, which no member of any
senior management team would disagree with. Yet, the reality for many organizations
are that their people remain under valued, under trained and under utilized.
Following are the various functions of Human Resource Management that are
1. Recruitment
2. Selection
3. Induction
4. Performance Appraisal
the organization to check the progress towards the desired goals and aims.
The latest mantra being followed by organizations across the world being –
"get paid according to what you contribute" – the focus of the organizations is
Performance appraisal helps to rate the performance of the employees and evaluate
23
their contribution towards the organizational goals. If the process of performance
understand their roles and responsibilities and give direction to the individual‟s
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SELF APPRAISAL
Self appraisal is an important part of the Performance appraisal process where the
employee himself gives the feedback or his views and points regarding his
performance. Usually this is done with the help of a self appraisal form where the
employee rates himself on various parameters, tells about his training needs, if any,
DO THE PREPARATION
It‟s always better to prepare yourself before the meeting. Get all the lists in
BE OBJECTIVE
possible support them with examples or references or evidences with dates. For
example: "I responded to all queries within 48 hours" is better than just saying
POSITIVE ATTITUDE
Don‟t hesitate from taking the responsibility of your failures as well as the
25
achievements. Demonstrate enthusiasm to improve in future and take all his
the opportunities you would like have for your development and improvement.
plan the short term and long term for the next year. Try to look for tasks beyond your
Self appraisal should ideally include the accomplishments, the goals achieved,
the failures, and the personal growth (i.e. new skills acquired, preparation for the
future etc.), the obstacles faced during the period, the efforts for removing them, the
suggestions, and the areas of training and development felt by the employee.
employee about his appraisal and his performance. But the way of giving as well as
receiving the feedback differs from person to person and their way of handling and
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"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM FOUNDATION
Therefore, On the part of the person receiving the feedback, the following points are
o The employee should have a positive attitude towards the feedback process
Should not judge the appraiser as a person on the basis of the feedback.
On the part of the appraiser or the manager / person giving the feedback, the
The appraiser should make the receiver feel comfortable during the feedback
meeting.
The appraiser should make it a two – way conversation i.e. let the employee
speak.
Listen to the employee and note his points, suggestions, problems etc.
27
The appraiser should not adopt a confrontational approach towards the meeting.
Make the appraisal feedback meeting useful and productive for the organization and
the employee.
purpose. They are considered extremely important for the development and health of
mutually agreed conclusions about the development of the individual and his
performance and if applicable, any areas for improvement, including how such
employees to engage in a dialogue and get the support of the manager about the
individual‟s performance and development. They should be more like free- flowing,
open meetings in which views are exchanged so that agreed conclusions can be
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3. Exchange of views - Ensuring that the discussion involves a full, free and
frank exchange of views about what has been achieved, what needs to be done
to achieve more and what employees think about their work the way they are
performance plan,
Analyzing the causes of the delay, the problems faced and the solutions
adopted.
Periodic review meetings become meaningful only when they help pause, reflect, take
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How to Complete Performance Appraisal Form
Performance Appraisal form provides the basis for the performance review,
providing the feedback to the employees and the final rating of the employee. It also
facilitates various other HR decisions and career development plans and decisions of
the employees. Therefore, performance appraisal from should be filled with utmost
manager of the employee in order to ensure that the appraiser if fully acquainted with
the performance, responsibilities, targets and standards of the employee. All the
instructions and guidelines on the appraisal form should be read and followed
carefully.
Be prepared with all the details of the performance, the standards, job
The focus should be on the employees‟ behaviour throughout the year and not
Substantiate and support your rating, and attach all the necessary documents
(if required).
30
Apart from the defined performance objectives and results, discuss the related
employees. The feedback could be given in the review discussion. Review discussions
between a manager and his employee. The basic purpose of the review discussion is
to analyze the performance of the employee in the past to improve the performance
The manager encourages his/her employees to critically reflect over progress made on
the Performance appraisal plan and to develop creative, yet feasible alternatives for
Discuss the problems faced by the employees during the course of action.
The solutions tried, and the degree of success achieved in solving the
problems faced.
Revisit with the employee, his/ her annual plan for the remaining time period
Review discussions reassure the employees that each one of them has
structured opportunities for one to one interaction with the manager once every two or
31
three months during the year. These opportunities are important as they provide an
the performance review discussions is to share perceptions, solve the problem faced
during the course of the action, decide on the new goals jointly and provide a
feedback to the employee for the past performance i.e. to look at his strengths and
weaknesses and also help to chart out a career plan for the employee. The focus of
these performance review discussions should not bet o judge the employees‟ past
meeting. The appraiser should ensure that the meeting has a two way
motivating tone.
questions that seek the employee‟s ideas and input. This will help the
employee feel you value his or her opinions. Give the employee a fair
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2. Be a good listener. Remember to be an active listener and to pick up on your
employee‟s verbal and nonverbal cues. Listen to his ideas and problems.
3. Address what‟s important to the employee. Since job satisfaction is the most
should delve into areas that include issues most important to that employee.
4. Lead with the positive. It‟s important to reaffirm the employee‟s strengths at
the beginning of the review. Since job security is the number one concern of
most people, the performance review is a good time to tell an employee how
general terms. The goal is to evaluate job performance and not the person. A
performance review that turns into a gripe session misses the opportunity to
6. Positive reinforcement – emphasizing what has been done well so that it will
be done even better in the future and making only constructive criticisms
7. Exchange of views - Ensuring that the discussion involves a full, free and
frank exchange of views about what has been achieved, what needs to be
done to achieve more and what the appraiser think about their work the way
parties to improve performance, knowledge and skills and overcome any work
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Performance Appraisal Feedback
employee about his appraisal and his performance. But the way of giving as well as
receiving the feedback differs from person to person and their way of handling and
Therefore, On the part of the person receiving the feedback, the following points are
o The employee should have a positive attitude towards the feedback process
o Should not judge the appraiser as a person on the basis of the feedback.
On the part of the appraiser or the manager / person giving the feedback, the
34
o The appraiser should make the receiver feel comfortable during the feedback
meeting.
o The appraiser should make it a two – way conversation i.e. let the employee
speak.
o Listen to the employee and note his points, suggestions, problems etc.
35
Company
Profile
36
Company Profile
HDFC Bank
Type Public
BSE: 500180
NSE: HDFCBANK
Investment Banking
Investment Management
Wealth Management
Products
Private Banking
Corporate Banking
Private Equity
37
Finance and Insurance
Consumer Banking
Mortgages
Credit Cards
Website HDFCBank.com
Mumbai, Maharashtra. It has about 76,286 employees including 12,680 women and
has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is the second largest
private bank in India as measured by assets. It is the largest bank in India by market
capitalization as of February 2016. It was ranked 58th among India‟s most trusted
38
FORMATION OF THE COMPANY
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name of
'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
PROMOTER
HDFC is India's premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the
remain the market leader in mortgages. Its outstanding loan portfolio covers well over
a million dwelling units. HDFC has developed significant expertise in retail mortgage
loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was
39
BUSINESS FOCUS
of banking services for target retail and wholesale customer segments, and to achieve
healthy growth in profitability, consistent with the bank's risk appetite. The bank is
CAPITAL STRUCTURE
As on 31st March, 2009 the authorised share capital of HDFC Bank is Rs. 550 crore.
The paid-up capital as on the said date is Rs. 425,38,41,090/- ( 42,53,84,109 equity
shares of Rs 10/- each). The HDFC Group holds 19.38% of the Bank's equity and
about 17.70 % of the equity is held by the ADS Depository (in respect of the bank's
American Depository Shares (ADS) Issue). 27.69 % of the equity is held by Foreign
Institutional Investors (FIIs) and the Bank has about 5,48,774 shareholders.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are
listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the
40
TIMES BANK AMALGAMATION
(another new private sector bank promoted by Bennett, Coleman & Co./Times Group)
was merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of
India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75
shares of Times Bank. The acquisition added significant value to HDFC Bank in
base, skilled manpower and the opportunity to cross-sell and leverage alternative
delivery channels.
DISTRIBUTION NETWORK
network of over 1229 branches spread over 444 cities across India. All branches are
linked on an online real-time basis. Customers in over 120 locations are also serviced
through Telephone Banking. The Bank's expansion plans take into account the need to
have a presence in all major industrial and commercial centers where its corporate
customers are located as well as the need to build a strong retail customer base for
both deposits and loan products. Being a clearing/settlement bank to various leading
stock exchanges, the Bank has branches in the centers where the NSE/BSE has a
strong and active member base. The Bank also has a network of about over 2526
networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be
41
BOARD OF DIRECTORS
The Composition of the Board of Directors of the Bank is governed by the Companies
Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the
Indian Stock Exchanges where securities issued by the Bank are listed. The Board has
strength of 12 Directors as on March 31, 2008. All Directors other than Mr. Aditya
Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-executive directors.
The Bank has five independent directors and six non-independent directors. The
experience in banking, finance, agriculture, small scale industries and other related
fields.
None of the Directors on the Board is a member of more than 10 Committees and
Chairman of more than 5 Committees across all the companies in which he/she is a
Director. All the Directors have made necessary disclosures regarding Committee
Mr. Jagdish Capoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri, Mr.
Harish Engineer and Mr. Paresh Sukthankar are non-independent Directors on the
Board.
Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan, Mr. C. M. Vasudev
Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Board of
the Bank.
42
The Bank has not entered into any materially significant transactions during the
year, which could have a potential conflict of interest between the Bank and its
promoters, directors, management and/or their relatives, etc. other than the
transactions entered into in the normal course of business. The Senior Management
have made disclosures to the Board confirming that there are no material, financial
and/or commercial transactions between them and the Bank which could have
TECHNOLOGY
technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities to its
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class bank.
The Bank's business is supported by scalable and robust systems which ensure that
The Bank has prioritized its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its market
position, expertise and technology to create a competitive advantage and build market
share.
43
RATING
Credit rating
The Bank has its deposit programs rated by two rating agencies - Credit Analysis &
Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed
Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which
investment risk". CARE has also rated the bank's Certificate of Deposit (CD)
programme "PR 1+" which represents "superior capacity for repayment of short term
promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.)
has assigned the "tAAA ( ind )" rating to the Bank's deposit programme, with the
outlook on the rating as "stable". This rating indicates "highest credit quality" where
The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by
CARE and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and
Upper Tier II Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating
of "CARE AAA" for the subordinated Tier II Bonds while Fitch Ratings India Pvt.
Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as "stable".
CARE has also assigned "CARE AAA [Triple A]" for the Banks Perpetual bond and
Upper Tier II bond issues. CRISIL has assigned the rating "AAAStable" for the
Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the cases
referred to above, the ratings awarded were the highest assigned by the rating agency
44
Corporate governance rating
The bank was one of the first four companies, which subjected itself to a Corporate
Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating
value creation and corporate governance practices" in future. The bank has been
assigned a 'CRISIL GVC Level 1' rating which indicates that the bank's capability
with respect to wealth creation for all its stakeholders while adopting sound corporate
PRODUCT SCOPE
HDFC Bank offers a bunch of products and services to meet the every need of the
people. The company cares for both, individuals as well as corporate and small and
medium enterprises. For individuals, the company has a range accounts, investment,
and pension scheme, different types of loans and cards that assist the customers. The
customers can choose the suitable one from a range of products which will suit their
For organizations the company has a host of customized solutions that range from
Funded services, Non-funded services, Value addition services, Mutual fund etc.
These affordable plans apart from providing long term value to the employees help in
45
The products of the company are categorized into various sections which are as
follows:
Loans.
Cards.
Customer center.
BUSINESS SEGMENTS
HDFC Bank offers a wide range of commercial and transactional banking services
and treasury products to wholesale and retail customers. The bank has three key
business segments:
The Bank's target market ranges from large, blue-chip manufacturing companies in
the Indian corporate to small & mid-sized corporate and agro-based businesses. For
these customers, the Bank provides a wide range of commercial and transactional
services, cash management, etc. The bank is also a leading provider of structured
solutions, which combine cash management services with vendor and distributor
finance for facilitating superior supply chain management for its corporate customers.
Based on its superior product delivery / service levels and strong customer
46
orientation, the Bank has made significant inroads into the banking consortia of a
The objective of the Retail Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-stop window
for all his/her banking requirements. The products are backed by world-class service
and delivered to the customers through the growing branch network, as well as
through alternative delivery channels like ATMs, Phone Banking, Net Banking and
Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank
Plus and the Investment Advisory Services programs have been designed keeping in
mind needs of customers who seek distinct financial solutions, information and advice
on various investment avenues. The Bank also has a wide array of retail loan products
including Auto Loans, Loans against marketable securities, Personal Loans and Loans
for retail customers, providing customers the facility to hold their investments in
electronic form.
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HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card
as well. The Bank launched its credit card business in late 2001. By September 30,
2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The
Bank is also one of the leading players in the "merchant acquiring" business with over
50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant
establishments.
(iii) Treasury
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
risk management information, advice and product structures. These and fine pricing
on various treasury products are provided through the bank's Treasury team. To
comply with statutory reserve requirements, the bank is required to hold 25% of its
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The following tables summarizes the products and services and customer segments
Tractor loan
Education Loan
Gold Loan
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Cards Payment Services Access To Bank
Billpay MobileBanking
Visa Billpay
ATM
InstaPay
Phone Banking
DirectPay
Email Statements
-------------------------------- VisaMoney Transfer
Branch Network
e–Monies Electronic
Forex Services
Funds Transfer
--------------------------------
Online Payment of
Trade Services
RBI Guidelines
Source: http://www.hdfcbank.com/personal/prd_glance.htm
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Table 2: Wholesale banking
Dealer Financing
Vendor Financing
Agricultural
Lending
Source : http://www.hdfcbank.com/wholesale/prd_glance.htm
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Table 3: NRI services
Indians Africa
Others
Quick remit
IndiaLink
Cheque LockBox
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Gold Credit Card
Payment Services
Access To Bank
NetSafe NetBanking
BillPay OneView
InstaPay InstaAlert
DirectPay ATM
Branch Network
Source: http://www.hdfcbank.com/nri/prd_glance.htm
BUSINESS STRATEGY
offerings, technology, service levels, risk management and audit & compliance. The
preferred provider of banking services for target retail and wholesale customer
segments, and to achieve a healthy growth in profitability, consistent with the Bank's
risk appetite. Bank is committed to do this while ensuring the highest levels of ethical
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standards, professional integrity, corporate governance and regulatory compliance.
Continue to develop new product and technology is the main business strategy of the
bank. Maintain good relation with the customers is the main and prime objective of
the bank.
Increase market share in India‟s expanding banking and financial services industry by
following a disciplined growth strategy focusing on quality and not on quantity and
Leverage our technology platform and open scaleable systems to deliver more
Maintain current high standards for asset quality through disciplined credit risk
management.
Develop innovative products and services that attract the targeted customers and
Continue to develop products and services that reduce bank‟s cost of funds.
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RECENT DEVELOPMENT
The Reserve Bank of India had approved the scheme of amalgamation of Centurion
Bank of Punjab Ltd. with HDFC Bank Ltd. with effect from May 23, 2008. All the
branches of Centurion Bank of Punjab will function as branches of HDFC Bank with
effect from May 23, 2008. With RBI‟s approval, all requisite statutory and regulatory
The combined entity would have a nationwide network of 1167 branches; a strong
deposit base of around Rs.1,22,000 crores and net advances of around Rs.89,000
crores. The balance sheet size of the combined entity would be over Rs.1, 63,000
crores.
On March 27, 2008, the shareholders of the Bank accorded their consent to a scheme
The shareholders of the Bank approved the issuance of one equity share of Rs.10/-
each of HDFC Bank Limited for every 29 equity shares of Re. 1/- each held in
Centurion Bank of Punjab Limited. This is subject to receipt of Approvals from the
Reserve Bank of India, stock exchanges and other requisite statutory and regulatory
authorities. The shareholders also accorded their consent to issue equity shares
and/or warrants convertible into equity shares at the rate of Rs.1,530.13 each to
HDFC Limited and/or other promoter group companies on preferential basis, subject
to final regulatory approvals in this regard. The Shareholders of the Bank have also
crores.
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Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's
leading housing finance company, HDFC Bank is one of India's premier banks
providing a wide range of financial products and services to its over 11 million
including a pan-India network of branches, ATMs, phone banking, net banking and
mobile banking. Within a relatively short span of time, the bank has emerged as a
leading player in retail banking, wholesale banking, and treasury operations, its three
principal business segments. The bank's competitive strength clearly lies in the use of
technology and the ability to deliver world-class service with rapid response time.
Over the last 13 years, the bank has successfully gained market share in its target
March 31, 2008, the Bank had a network of 761 branches and 1,977 ATMs in 327
cities. For the year ended March 31, 2008, the Bank reported a net profit of INR
March 31, 2007. As of March 31, 2008 total deposits were INR 1007.69 billion,
(Rs.100,769 crore) up 47.5% over the corresponding year ended March 31, 2007.
Total balance sheet size too grew by 46.0% to INR 1,331.77 billion (133177 crore).
Leading Indian and international Publications have recognized the bank for its
Centurion Bank of Punjab is one of the leading new generation private sector banks in
India. The bank serves individual consumers, small and medium businesses and large
corporations with a full range of financial products and services for investing, lending
and advice on financial planning. The bank offers its customers an array of wealth
management products such as mutual funds, life and general insurance and has
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established a leadership 'position'. The bank is also a strong player in foreign
exchange services, personal loans, mortgages and agricultural loans. Additionally the
bank offers a full suite of NRI banking products to Overseas Indians. On 29th August
2007, Centurion Bank of Punjab merged with Lord Krishna Bank (LKB), post
obtaining all requisite statutory and regulator approvals. This merger has further
strengthened the geographical reach of the Bank in major towns and cities across the
the northern part of the country. Centurion Bank of Punjab now operates on a
strong nationwide franchise of 404 branches and 452 ATMs in 190 locations across
to being listed on the major Indian stock exchanges, the Bank‟s shares are also
Indian Bank". We realized that only a single-minded focus on product quality and
service excellence would help us get there. Today, we are proud to say that we are
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Awards In 2009
Global Finance Award 'Best Trade Finance Bank in India for 2009
Source: http://www.hdfcbank.com/aboutus/awards/default.htm
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Awards In 2008
Awards for Achievement 'Best Bank and Best Cash Management Bank'
2008
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Business Today-Monitor
One of India's "Most Innovative Companies"
Group survey
Global HR Excellence
'Employer Brand of the Year 2007 -2008'
Awards - Asia Pacific HRM
Award - First Runner up, & many more
Congress:
Source: http://www.hdfcbank.com/aboutus/awards/default.htm
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QUALITY POLICY OF HDFC BANK
Security: The bank provides long term financial security to their policy. The bank
Trust: The bank appreciates the trust placed by their policy holders in the bank. Hence,
it will aim to manage their investments very carefully and live up to this trust.
Innovation: Recognizing the different needs of our customers, the bank offers a range
Integrity
Customer centric
Team work
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Research
Methodology
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Research Objectives
To study the existing appraisal system in the organization.
employee‟s performance
To study that there is any opportunities provided for the employees to improve
their performance.
development.
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RESEARCH METHODOLOGY
Research Design
SAMPLING DESIGN
SAMPLE SIZE: A sample of minimum respondents was selected from HDFC Bank,
Lucknow. An effort was made to select respondents evenly. The survey was carried
out on 40 respondents.
SAMPLE UNIT: In this project sampling unit consisted of the employees of HDFC
Bank, Lucknow.
the respondent is extracted. Mainly personal links and employees of HDFC Bank,
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DATA COLLECTION SOURCE: Two methods have been used to collect the
relevant data, which are essential for the study, they are:
questionnaire.
etc…
TOOLS OF PRESENTATION:
collect the data and data will be analyzed with the help of percentage table,
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Limitations
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LIMITATIONS OF STUDY
Time and resource were the major constraints during the execution of the
project.
generalized as a whole.
Some of the respondents were not even ready to spare time with the
researcher.
The human behaviour is dynamic and hence the results may not hold good for
a long time.
The results of the survey are totally dependent on the accuracy and
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Contact for more
Lucknow
Mo no- 9554444951
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