PROJECT WORK

ON

Potential Appraisal in MARUTI

UDYOG LIMITED

Submitted By: Bhawna Tandon

Course: PGDBA
Registration No: 200616772

Symbiosis Centre for Distance Learning

2009-2010
 DECLARATION

This is to declare that I have carried out this project work myself in part fulfillment of the
Post Graduation Diploma in Business Applications (PGDBA) program of SCDL.

The work is original, ha snot been copied from anywhere else and has not been submitted
to any other University/Institute for an award of any degree/diploma.

Date: Signature:
Place: Name:
 Index

1. Acknowledgement

2. Preface

3. Organizational Introduction

4. Objectives

5. Introduction to Potential Appraisal

6. Self Appraisal Form

7. Succession Planning

8. Rating Errors in Potential Appraisal

9. Role of Human Resource Dept

10. Research Methodology

11. Survey Results

12. Limitations

13. Suggestions and conclusions

14. Bibliography
 ACKNOWLEDGEMENT

The goal was fixed, moves were calculated and I moved with full of enthusiasm, vigor
and keen interest. There was a time when it proved to be on up hill task, the goal seeming
beyond my reach. But as work progressed my determination and will power grew
stronger and completion of this work further confined my belief that, “WHERE THERE
IS A WILL THERE IS A WAY”.

It’s a sheer pleasure for me to state with candidly that this entire project is a heartily
attempt to reach maximum accuracy. I therefore take this opportunity top express my
utmost gratitude and indebtness to all who have contributed in some way.

I highly express my sincere thanks to mployees of MARUTI UDYOG LIMITED who

helped me throughout the project. Last but not least I would like to pleasure a word of
appreciation to my family & friends who supported & helped me to make this project a
success.
 PREFACE

Managing human resources in today’s dynamic environment is becoming more and more
complex as well as important. Recognition of people as a valuable resource in the
organization has led to increases trends in employee maintenance, job security, etc

My research project deals with “Potential Appraisal as carried out at MARUTI UDYOG
LIMITED”. In this report, I have studied &evaluated the Potential appraisal process as it
is carried out in the company.

The first section of my report deals with a detailed company profile. It includes the
company’s history: its activities and operations, organizational structure, etc. this section
attempts to give detailed information about the company and the nature of it’s
functioning.

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

In the third section of my report, I have conducted a research study to evaluate the
process of Potential appraisal at MARUTI UDYOG LIMITED.; this section also contains
my findings, conclusions, suggestions and feedback.

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

Year of Establishment February 1981

Vision
"The Leader in the Indian Automobile Industry, Creating Customer Delight
and Shareholder's Wealth; A pride of India."

Industry Automotive - Four Wheelers

Listings & its codes BSE - Code: 532500
NSE - Code: MARUTI
Bloomberg: MUL@IN
Reuters: MRTI.BO
Joint Venture with Suzuki Motor Company, now Suzuki Motor Corporation, of Japan in
October 1982.

Registered & Corporate Office

11th Floor, Jeevan Prakash

25, Kasturba Gandhi Marg
New Delhi - 110001, India
Tel.: +(91)-(11)-23316831 (10 lines)
Fax: +(91)-(11)-23318754, 23713575
Telex: 031-65029 MUL IN
Works Palam Gurgaon Road
Gurgaon -122015
Haryana, India
Tel.: +(91)-(124)-2340341-5, 2341341-5
Website http://www.marutisuzuki.com/

Maruti Suzuki has two state-of-the-art manufacturing facilities in India. The first facility
is at Gurgaon spread over 300 acres and the other facility is at Manesar, spread over 600
acres in North India.
The Gurgaon facility
Maruti Suzuki's facility in Gurgoan houses three fully integrated plants. While the three
plants have a total installed capacity of 350,000 cars per year, several productivity
improvements or shop floor Kaizens over the years have enabled the company to
manufacture nearly 700,000 cars/ annum at the Gurgaon facilities.

The entire facility is equipped with more than 150 robots, out of which 71 have been
developed in-house. More than 50 per cent of our shop floor employees have been trained
in Japan.

Gurgaon facility also houses `K' Engine plant.

he `K' family engine plant has an installed annual capacity of 240,000 engines and was
commissioned in 2008.

Spread over an area of 20,300 m2, the `K' family engine facility is part of the Rs 9,000
crore investment plan drawn by Maruti Suzuki and Suzuki Motor Corporation.

The next generation `K'engine like all Maruti Suzuki earlier technologies is highly fuel
efficient, while offering the best in refinement and Potential.

It will take the engine technology to the next level in India. A-Star is the first car to be
powered by `K' family engine. The forthcoming models will be powered by other `K'
family engines.

The in-line plant layout consisting of Casting, Machining and Assembly processes has
high level of automation, effective material handling and inventory reduction techniques
in place, aimed for high operational efficiency.

The facility employs global manufacturing best practices like cold testing, 100% on line
automated checks to ensure global quality.
The Manesar facility
Our Manesar facility has been made to suit Suzuki Motor Corporation (SMC) and Maruti
Suzuki India Limited's (MSIL) global ambitions.

The plant was inaugurated in February 2007.

At present the plant rolls out World Strategic Models Swift, A-star & SX4 and DZire.
The plant has several in-built systems and mechanisms.

There is a high degree of automation and robotic control in the press shop, weld shop and
paint shop to carry on manufacturing work with acute precision and high quality.

The plant is designed to be flexible: diverse car models can be made here conveniently
owing to automatic tool changers, centralized weld control system and numerical control
machines that ensure high quality.

The plant at Manesar is the company's fourth car assembly plant and started with an
initial capacity of 100,000 cars per year. This will be scaled up to 300,000 cars per year
by October 2008.

Diesel Engine Plant- Suzuki Powertrain India Limited

Suzuki Powertrain India Limited the diesel engine plant at Manesar is SMC's & Maruti's
first and perhaps the only plant designed to produce world class diesel engine and
transmissions for cars.

The plant is under a joint venture company, called Suzuki Powertrain India Limited
(SPIL) in which SMC holds 70 per cent equity the rest is held by MSIL.
This facility has an initial capacity to manufacture 100,000 diesel engines a year. This
will be scaled up to 300,000 engines/annum by 2010.
 OBJECTIVES

The research is about studying the Employee’s potential level in MARUTI UDYOG
LIMITED at Head Office. The objective of this project is to find out the capabilities and
skills of the employee’s and request the management to provide necessary training
required for the present job or for the higher position or responsibility and predicting his
or her future Potential which aid the organization in fitting the right person in the right
job and in improving company’s Potential.

Potential appraisal is an important part of the appraisal process. Appraising employee’s

potential helps to evaluate his/her capability for growth and development to greater
challenges, responsibilities and positions in the organizational hierarchy. Most
organization incorporate potential appraisal in their appraisal processes for identifying
and developing suitable employee base for succession planning.

This appraisal concentrates on the future, based on the Potential of the past and helps in
developing the personal interests of the employees in alignment to the organizational
goals.

An interview was made and the evaluation of the employee’s potential level collected in a
questionnaire through superior appraisal process. This study would help the management
to assess the capabilities of the employees accordingly they can provide training and take
necessary measures to improve their capabilities and skills to fulfill the present and future
requirements and various statistical tools used over the data collected to ascertain the
employee’s potential.
 INTRODUCTION

Potential appraisal is another powerful tool of employee development. Whether managers

realize it or not, they are accustomed to make potential assessments. Every time a
manager recommends or fails to recommend an employee for a promotion, a potential
assessment has, in fact, been made. The process of assessing the managerial potential of
employees deals with the question of whether or not they have the ability to handle
positions in the future which involve considerably more responsibility than what they
have right now. As long as individuals are viewed as being able to handle increased or
different responsibilities, they would be considered to have potential (either latent or
visible).

Potential appraisal may thus be defined as a process of determining an employee’s

strengths and weaknesses with a view to use this as a predictor of his future Potential.
This would help determine the promotabilty of an individual to a higher position and help
chalk out his career plan. The fundamental difference between reviewing Potential and
assessing potential is in the criteria used. In reviewing Potential, the criterion used is what
goals the employee achieved and what skills he or she currently possesses that could be
indicators of his or her ability to assume different or more advanced responsibilities. It is
this that makes potential appraisal a very crucial & critical area.

If an employee without requisite abilities is promoted to a higher position and does not
perform as per expectations, then it becomes impossible to demote him. Thus, he is
unable to perform at the higher level and becomes a ‘passenger’ in the system. It is
rightfully assumed that every individual has potential, low or high. Many organizations
have people whose potential being low; Potential too is not up to the mark. Whilst the
question in our minds hovers around how such people got into the system, the fact
remains that they do not contribute to the organization’s Potential. If appraisal process
implemented well, professional Potential and potential appraisal could take the
organization on a fast development track and faster productivity through people.
The potential appraisal refers to the appraisal i.e. identification of the hidden talents and
skills of a person. The person might or might not be aware of them. Potential appraisal is
a future –oriented appraisal whose main objective is to identify and evaluate the potential
of the employees to assume higher positions and responsibilities in the organizational
hierarchy. Many organizations consider and use potential appraisal as a part of the
Potential appraisal processes.

Potential appraisal is one of the most important requirement for successful business and
human resource policy (Kessler 2003). Rewarding and promoting effective Potential in
organization, as well as identifying ineffective performers for developmental programs or
other personnel actions are essential to effective human resource management (Pulakos
2003).

Project on potential appraisal was done by many, and the research process carried out to
find out the employee’s potential. Sajitha Nair had done a project on potential appraisal
for succession planning in the year 2005. She looked at the competencies required by the
person who will fit in the job role. Then looked at the competencies possessed by the
person and did a gap analysis. She found that everyone excels in all key actions, full
mastery of all competencies.

Many companies, which carry out performance appraisal, also keep records on the
potential of their employees for future promotion opportunities. The task of identifying
potential for promotion cannot be easy for the appraising manager, since competence of a
member of staff to perform well in the current job is not an automatic indicator of
potential for promotion. Very often the first class salesman is promoted to become a
mediocre sales manager, the excellent chief engineer is promoted to become a very poor
engineering director, and the star football player struggles to be a football manager.
Potential can be defined as ‘a latent but unrealized ability’. There are many
people who have the desire and potential to advance through the job they are in,
wanting the opportunity to operate at a higher level of competence in the same
type of work. The potential is the one that the appraiser should be able to identity
and develop because of the knowledge of the job. This requires an in-depth study
of the positions which may become vacant, looking carefully at the specific skills that the
new position may demand and also taking into consideration the more subjective areas
like ‘qualities’ required. These may be areas where the employee has not had a real
opportunity to demonstrate the potential ability and there may be areas with which you,
as the appraisers are not familiar. There are few indicators of potential (Box 1) which
may be considered.

Indicators of Potential
A sense of reality: This is the extent to which a person thinks and acts objectively,
resisting purely emotional pressures but pursuing realistic projects with enthusiasm.

Imagination: The ability to let the mind range over a wide variety of possible causes of
action, going beyond conventional approaches to situations and not being confined to
‘This is the way it is always being done!’

Power of analysis: The capacity to break down, reformulate or transform a complicated

situation into manageable terms.

Breadth of vision: The ability to examine a problem in the context of a much broader
framework of reference; being able to detect, within a specific situation, relationships
with those aspects which could be affecting the situation.

Persuasiveness: The ability to sell ideas to other people and gain a continuing
commitment, particularly when the individual is using personal influence rather than
‘management authority’.

Source: Adopted from Philip, Tom (1983). Making Performance Appraisal Work,
McGraw Hill Ltd., U.K.
Like the Performance Appraisal, potential appraisal is also done by the employees’
supervisor who has had the opportunity to observe the employee for some time. Potential
appraisal may be done either regularly or as and when required. Generally last part of
appraisal deals with potential appraisal, as this is seen in case of Maruti Udyog Ltd.

POTENTIAL APPRAISAL CAN SERVE THE FOLLOWING PURPOSES:

• To advise employees about their overall career development and future prospects
• Help the organization to chalk out succession plans
• Motivate the employees to further develop their skills and competencies.
• To identify the training needs.
 TEHNIQUES OF POTENTIAL APPRAISAL

• Self – appraisals
• Peer appraisals
• Superior appraisals
• MBO
• Psychological and psychometric tests
• Management games like role playing
• Leadership exercises etc.

With the help of the potential appraisal form, the employees/ individuals are judged on
various Potential and behavioral parameters like:
• The Potential areas in which the improvement or development is
indicated.
• The accomplishments and the targets achieved in the current appraisal
period
• Overall rating of the Potential
• What skills, knowledge, competencies and qualities should be developed?
• Has the employee taken any steps for improving his Potential and his
• Career development?
• Recommendations for the training and development of the employee
• Updating knowledge on the latest developments on their job related and
subject areas.
• Rate the employee on the following characteristics or how does the
employee fair on following behavioral characteristics:
o Decision making
o Independent
o Confidence towards the job
o Handling stress and pressure
 o Inter-personal skills, both with superiors and subordinates
o Leadership, motivating and conflict handling

The past Potential of the employee and the potential of performing in future helps to
identify the hidden talents.
 SELF APPRAISAL FORM

Self appraisal is the self evaluation where the employee himself gives the feedback or his
views and points regarding his Potential. The employee himself critically analyses the
Potential, his strengths, weaknesses, accomplishments, problems faced, the training and
development needs (if any) etc. The self appraisal form generally starts with the
employee details like:

• The name of the employee

• Designation
• Date of joining
• Date of last appraisal
• Department
• Reporting officer

The next section is, commonly, designed to gather the information from the employee
regarding his on-the-job Potential and his responsibilities:

• The current responsibilities held by the employee

• Accomplishments
• Goals for the next appraisal period
• Areas for improvement
• Training requirements felt for the present job
• Responsibilities the employee would like to add to his current responsibilities
• Problems faced
• Solutions tried
• Measures taken for personal and professional development
• Best and worst aspects of the job
• Is the superior supportive

The form also includes a section where the employee rates himself on various behavioral
parameters like:

• Communication skills
• Inter-personal skills
• Problem-solving
• Team work
• Adaptability/Flexibility
• Initiative
• Decision Making
• Leadership
• Maturity

The self appraisal form also includes a section where the employee can quote examples
and incidents to support his ratings and answers.

The self appraisal form generally ends with a subjective section asking for suggestions
and the choice of discussing any other topic that the employee feels the need to raise and
discuss.

MARUTI UDYOG chooses Self Appraisal as a primary method to judge an Employee’s

potential.
 APPRAISAL PROCESS

Potential appraisal is an important part of the appraisal process. Appraising an

employee’s potential helps to evaluate his/her capability for growth and development to
greater challenges, responsibilities and positions in the organizational hierarchy.

MARUTI UDYOG incorporates potential appraisal in their appraisal processes for

identifying and developing suitable employee base for succession planning.

This appraisal concentrates on the future, based on the Potential of the past and helps in
developing the personal interests of the employees in alignment to the organizational
goals.

Potential appraisal is another powerful tool of employee development. The fundamental

difference between reviewing Potential and assessing potential is in the criteria used. In
reviewing Potential, the criterion used is what goals the employee achieved and what
skills he or she currently possesses that could be indicators of his or her ability to assume
different or more advanced responsibilities. It is this that makes potential appraisal a very
crucial & critical area. If an employee without requisite abilities is promoted to a higher
position and does not perform as per expectations, then it becomes impossible to demote
him.

Thus, he is unable to perform at the higher level and becomes a ‘passenger’ in the system.
It is rightfully assumed that every individual has potential, low or high. MARUTI
UDYOG (like other organizations) has people whose potential being low; Potential too is
not up to the mark. Whilst the question in our minds hovers around how such people got
into the system, the fact remains that they do not contribute to the organization’s
Potential.
 GAUGING EMPLOYEES POTENTIAL FOR MANAGEMENT
POSITION

The aim of potential assessment is to identify training and development needs, provide
guidance on possible directions in which an individual's career might go, and indicate
who has potential for promotion.

A more comprehensive approach is provided by the use of assessment centers. These

incorporate a range of assessment techniques and typically have the following features:

• The focus of the centre is on behavior.

• Exercises are used to capture and simulate the key dimensions of the job. These include
one to one role plays and group exercises. It is assumed that Potential in these simulations
predicts behavior on the job.
• Interviews and tests will be used in addition to group exercises.
• Potential is measured in several dimensions in terms of the competencies required to
achieve the target level of Potential in a particular job or at a particular level in the
organization.
• Several candidates or participants are assessed together to allow interaction and to make
the experience more open and participative.
• Several assessors or observers are used in order to increase the objectivity of
assessments. Involving senior managers is desirable to ensure that they 'own' the process.
Assessors must be carefully trained.

Assessment centers provide good opportunities for indicating the extent to which
candidates match the culture of the organization. This will be established by observation
of their behavior in different but typical situations, and by the range of the tests and
structured interviews that are part of the proceedings. Assessment centers also give
candidates a better feel for the organization and its values so that they can decide for
themselves whether or not they are likely to fit.
 ASSESMENT CENTERS

Employees are not contended by just having a job. They want growth and individual
development in the organization. An “assessment centre” is a multiple assessment of
several individuals performed simultaneously by a group of trained evaluators using a
variety of group and individual exercises.

Assessment centers are a more elaborate set of performance simulation tests, specifically
designed to evaluate a candidate’s managerial potential. Line executives, supervisors,
and/or trained psychologists evaluate candidates as they go through one to several days of
exercises that simulate real problems that they would confront on the job. Based on a list
of descriptive dimensions that the actual job incumbent has to meet, activities might
include interviews, in-basket problem-solving exercises, leaderless group discussions,
and business decision games. For instance, a candidate might be required to play the role
of a manager who must decide how to respond to ten memos in his/her in-basket within a
two-hour period. Assessment centers have consistently demonstrated results that predict
later job performance in managerial positions.

The American Telephone and Telegraph Company (AT&T) began experiments with
Assessment Centre approach in the 1950’s as a part of a wide programme of management
development. The AT&T Company designated a particular building where the
Assessments were carried out. This building became known as Assessment centre and the
name has stuck as a way of referring to the method. The method became established in
the industry in the USA during the 1960’s and 1970’s and was introduced in UK during
this period.

This method is now regarded as one of the most accurate and valid assessment
procedures and is widely used for selection and development. According to IPMA (The
International Personnel Management Association), an assessment center consists of a
standardized evaluation of behavior based on multiple inputs. They are used to assess the
strengths, weaknesses and potential of employees. The specific objective is to reinforce
strengths, overcome weaknesses and exploit potential of the employees through training
and developmental efforts. Several trained observers and techniques are used. Judgments
about behavior are made, in major part, from specifically developed assessment
simulations. These judgments are pooled in a meeting among the assessors or by a
statistical integration process. In an integration discussion, comprehensive accounts of
behavior, and often ratings of it, are pooled.

The discussion results in evaluations of the performance of the assesses on the

dimensions/ competencies or other variables that the assessment center is designed to
measure. There is a difference between an assessment center and assessment center
methodology. Various features of the assessment center methodology are used in
procedures that do not meet all of the guidelines set forth here, such as when a
psychologist or human resource professional, acting alone, uses a simulation as a part of
the evaluation of an individual. Such personnel assessment procedures are not covered by
these guidelines; each should be judged on its own merits. Procedures that do not
conform to all the guidelines here should not be represented as assessment centers or
imply that they are assessment centers by using the term “assessment center” as part of
the title.
The following are the essential elements for a process to be considered an assessment
center:

a) Job Analysis
A job analysis of relevant behaviors must be conducted to determine the dimensions,
competencies, attributes, and job performance indices important to job success in order to
identify what should be evaluated by the assessment center. The type and extent of the
job analysis depend on the purpose of assessment, the complexity of the job, the
adequacy and appropriateness of prior information about the job, and the similarity of the
new job to jobs that have been studied previously. If past job analyses and research are
used to select dimensions and exercises for a new job, evidence of the comparability or
generalizability of the jobs must be provided. If job does not currently exist, analyses can
be done of actual or projected tasks or roles that will comprise the new job, position, job
level, or job family. Target dimensions can also be identified from an analysis of the
vision, values, strategies, or key objectives of the organization. Competency-modeling
procedures may be used to determine the dimensions/competencies to be assessed by the
assessment center, if such procedures are conducted with the same rigor as traditional job
analysis methods. Rigor in this regard is defined as the involvement of subject matter
experts who are knowledgeable about job requirements, the collection and quantitative
evaluation of essential job elements, and the production of evidence of reliable results.
Any job analysis or competency modeling must result in clearly specified categories of
behavior that can be observed in assessment procedures.

A “competency” may or may not be amenable to behavioral assessment as defined

herein. A competency, as used in various contemporary sources, refers to an
organizational strength, an organizational goal, a valued objective, a construct, or a
grouping of related behaviors or attributes. A competency may be considered a
behavioral dimension for the purposes of assessment in an assessment center if

i) it can be defined precisely

ii) expressed in terms of behaviors observable on the job or in a job family and in
simulation exercises.
iii) a competency also must be shown to be related to success in the target job or
position or job family.

b) Behavioural Classification
Assessment centre requires that Behaviors displayed by participants must be classified
into meaningful and relevant categories such as dimensions, attributes, characteristics,
aptitudes, qualities, skills, abilities, competencies, and knowledge.

c) Assessment Techniques
The techniques used in the assessment center must be designed to provide information for
evaluating the dimensions previously determined by the job analysis. Assessment center
developers should establish a link from behaviors to competencies to exercises/
assessment techniques. This linkage should be documented in a competency-by exercise/
assessment technique matrix.

d) Multiple Assessments
Multiple assessment techniques must be used. These can include tests, interviews,
questionnaires, sociometric devices, and simulations. The assessment techniques are
developed or chosen to elicit a variety of behaviors and information relevant to the
selected competencies/ dimensions. Self-assessment and 360 degree assessment data may
be gathered as assessment information. The assessment techniques will be pretested to
ensure that the techniques provide reliable, objective and relevant behavioral information.
Pre-testing might entail trial administration with participants similar to assessment center
candidates, thorough review by subject matter experts as to the accuracy and
representativeness of behavioral sampling and/or evidence from the use of these
techniques for similar jobs in similar organizations.

e) Simulations
The assessment techniques must include a sufficient number of job related simulations to
allow opportunities to observe the candidate’s behavior related to each competency/
dimension being assessed. At least one—and usually several—job related simulations
must be included in each assessment center. A simulation is an exercise or technique
designed to elicit behaviors related to dimensions of performance on the job requiring the
participants to respond behaviorally to situational stimuli. Examples of simulations
include, but are not limited to, group exercises, in-basket exercises, interaction
(interview) simulations, presentations, and fact-finding exercises. Stimuli may also be
presented through video based or virtual simulations delivered via computer, video, the
Internet, or an intranet. Assessment center designers also should be careful to design
exercises that reliably elicit a large number of competency- related behaviors. In turn, this
should provide assessors with sufficient opportunities to observe competency-related
behavior.

f) Assessors
Multiple assessors must be used to observe and evaluate each assessee. When
selecting a group of assessors, consider characteristics such as diversity of age, sex,
organizational level, and functional work area. Computer technology may be used to
assess in those situations in which it can be shown that a computer program evaluates
behaviors at least as well as a human assessor. The ratio of assessees to assessors is a
function of several variables, including the type of exercises used, the dimensions to be
evaluated, the roles of the assessors, the type of integration carried out, the amount of
assessor training, the experience of the assessors, and the purpose of the assessment
center. A typical ratio of assessees to assessors is two to one. A participant’s current
supervisor should not be involved in the assessment of a direct subordinate when the
resulting data will be used for selection or promotional purposes.

g) Assessor Training
Assessors must receive thorough training and demonstrate performance that meets
requirements prior to participating in an assessment center. The training should focus on
processing of information, drawing conclusions, interview techniques and understanding
behaviour.
h) Recording Behaviour
A systematic procedure must be used by assessors to record specific behavioral
observations accurately at the time of observation. This procedure might include
techniques such as handwritten notes, behavioral observation scales, or behavioral
checklists. Audio and video recordings of behavior may be made and analyzed at a later
date.

i) Reports
Assessors must prepare a report of the observations made during each exercise before the
integration discussion. It is suggested that assessors must prepare the report immediately
after the assessment is over otherwise they are likely to forget the details. Not only this,
these reports must be independently made.

j) Data Integration
The integration of behaviors must be based on a pooling of information from assessors or
through a statistical integration process validated in accordance with professionally
accepted standards. During the integration discussion of each
dimension, assessors should report information derived from the assessment techniques
but should not report information irrelevant to the purpose of the assessment process. The
integration of information may be accomplished by consensus or by some other method
of arriving at a joint decision. Methods of combining assessors’ evaluations of
information must be supported by the reliability of the assessors’ discussions. Computer
technology may also be used to support the data integration process provided the
conditions of this section are met.

Uses of Assessment Centres

Data generated during the process of Assessment can become extremely useful in
identifying employee potential for growth. This data can be used for:
a) Recruitment and Promotion: Where particular positions which need to be filled
exist, both internal and external can be assessed for suitability to those specific posts.

b) Early Identification of Personnel: The underlying rationale here is the need for the
organization to optimise talent as soon as possible. High potential people also need to be
motivated so that they remain with the organization.

c) Diagnosis of Training and Development Needs: It offers a chance to establish

individual training and development needs while providing candidates with a greater
appreciation of their needs.

d) Organizational Planning: Assessment centers can be used to identify area where

widespread skill deficiencies exist within organizations, so that training can be developed
in these areas. Results can also be integrated with human resource planning data to
provide additional information concerning number of people with particular skills needed
to meet future needs.
Assessment Centres and Development Centres

Traditionally an assessment centre consisted of a suite of exercises designed to assess a

set of personal characteristics. It was seen as a rather formal process where the
individuals being assessed had the results fed back to them in the context of a simple
yes/no selection decision. However, recently we have seen a definite shift in thinking
away from this traditional view of an assessment centre to one which stresses the
developmental aspect of assessment. A consequence of this is that today it is very rare to
come across an assessment centre which does not have at least some developmental
aspect to it. Increasingly assessment centres are stressing a collaborative approach which
involves the individual actively participating in the process rather than being a passive
recipient of it. In some cases we can even find assessment centres that are so
developmental in their approach that most of the assessment work done is carried out by
the participants themselves and the major function of the centre is to provide the
participants with feedback that is as much developmental as judgmental in nature.

Assessment centres typically involve the participants completing a range of exercises

which simulate the activities carried out in the target job. Various combinations of these
exercises and sometimes other assessment methods like psychometric testing and
interviews are used to assess particular competencies in individuals. The theory behind
this is that if one wishes to predict future job performance then the best way of doing this
is to get the individual to carry out a set of tasks which accurately sample those required
in the job. The particular competencies used will depend upon the target job but one
should also learn such competencies such as relating to people; resistance to stress;
planning and organising; motivation; adaptability and flexibility; problem solving;
leadership; communication; decision making and initiative. The fact that a set of
exercises is used demonstrates one crucial characteristic of an assessment centre, namely;
that it is behaviour that is being observed and measured. This represents a significant
departure from many traditional selection approaches which rely on the observer or
selector attempting to infer personal characteristics from behaviour based upon subjective
judgment and usually precious little evidence. This approach is rendered unfair and
inaccurate by the subjective whims and biases of the selector and in many cases produces
a selection decision based on a freewheeling social interaction after which a decision was
made as whether the individual’s ‘face fit’ with the organisation.

Differences between Assessment and Development Centres

The type of centre can vary between the traditional assessment centre used purely for
selection to the more modern development centre which involves self-assessment and
whose primary purpose is development. One might ask the question ‘Why group
assessment and development centres together if they have different purposes?’ The
answer to that question is threefold.

a) they both involve assessment and it is only the end use of the information obtained
which is different i.e. one for selection and one for development.

b) it is impossible to draw a line between assessment and development centres because all
centres, be they for assessment or development naturally lie somewhere on a continuum
somewhere between the two extremes.

c) Most assessment centres involve at least some development and most development
centres involve at least some assessment. This means that it is very rare to find a centre
devoted to pure assessment or pure development. It is easier to think about assessment
centres as being equally to do with selection and development because a degree of
assessment goes on in both.

d) Development Centres grew out of a liberalization of thinking about assessment

centres. While assessment centres were once used purely for selection and have evolved
to have a more developmental flavour, the language used to describe them has not.
Another problem with using the assessment – development dichotomy is that at the very
least it causes us to infer that little or no assessment goes in development centres. While
one hears centres being called assessment or development centres assessment goes on in
both and to that extent they are both assessment centres. The end result of this is that it is
not possible to talk about assessment or development centres in any but the most general
terms. A number of differences between assessment and development centres exist are
presented below:

a) Assessment centres have a pass/fail criteria while Development centres do not have a
pass/fail criteria

b) Assessment centres are geared towards filing a job vacancy while Development
centres are geared towards developing the individual

c) Assessment Centres address an immediate organisational need while

Development Centres address a longer term need

d) Assessment Centres have fewer assessors and more participants while

Development Centres have a 1:1 ratio of assessor to participant

e) Assessment Centres involve line managers as assessors while Development

Centres do not have line managers as assessors

f) Assessment Centres have less emphasis placed on self-assessment while

Development Centres have a greater emphasis placed on self-assessment

g) Assessment Centres focus on what the candidate can do now while

Development Centres focus on potential

h) Assessment Centres are geared to meet the needs of the organisation while
Development Centres are geared to meet needs of the individual as well as the
organization.
i) Assessment Centres assign the role of judge to assessors while Development Centres
assign the role of facilitator to assessors.

j) Assessment Centres place emphasis on selection with little or no developmental while

Development Centres place emphasis on developmental feedback and follow up with
little or no selection function.

k) Assessment Centres feedback and follow up while Development Centres give

feedback immediately.

l) Assessment Centres give feedback at a later date while Development Centres involve
the individual having control over the information obtained.

m) Assessment Centres have very little pre-centre briefing while Development

Centres have a substantial pre-centre briefing.

n) Assessment Centres tend to be used with external candidates while development

Centres tend to be used with internal candidates.
Career Planning Process

It is obvious from the foregoing analysis that individuals differ a great deal in term of
their career orientation .The career orientation is influenced by the preference for a
particular career anchor, the life cycle stage, individual difference in values, goals,
priorities, and aspiration. Organization also on the other hand differ in term of career path
and opportunities that they can provide given the reality of their internal and external
environments .The career system available in organizational depend on their growth
potential, goals and priorities. The difference between what the employees look for in
their career progression and what career growth opportunities the organizationis able to
provide, gives rise to situation of potential conflict. If the conflict is allowed to persist,
the employee will experience dissatisfaction and withdraw from being actively engaged
in the productive pursuit .They might even choose the option of leaving the organization.
In either case, the organization is not able to optimally utilize the potential contribution of
its employee towards the achievement of its goal. The possibility of conflict between the
individual-organization objective calls for career planning efforts which can help identify
areas of conflict and initiate such action as necessary to resolve the conflict . Career
planning thus involves matching of rewards and incentives offered by the career path and
career structure with hope and aspiration of employees regarding their own concept of
progression. A general approach to career planning would involve the following steps:

a) Analysis of the characteristic of the reward and incentives offered by the prevailing
career system needs to be done and made know to employee .Many individuals may not
be aware of their own career progression path as such information may be confined to
only select group of managers.

b) Analyse the characteristic of the hopes and aspirations of different categories of

employee including the identification of their career anchor must be done through the
objective assignment. Most organization assume the career aspiration of individual
employee which need not be in tune with the reality .The individual may not have a clear
idea of their short and long term career and life goals , and may not be aware of the
aspiration and career anchor .

c) Mechanism for identifying congruence between individual career aspiration and

organizational career system must develop so as to enable the organization to discuss
cases of mismatch or incongruence. On the basis of analysis, it will be necessary to
compare and identify specific area of match and mismatch for different categories of
employee.

d) Alternative strategies for dealing with mismatch will have to be formulated. Some of
the strategies adopted by several organization include the following:

• Change in the career system by creating new career path, new incentives, new
rewards, by providing challenge through job redesign opportunities for lateral
movement and the like.

• Change in the employees hopes and aspirations by creating new needs, new goals,
new aspiration or by helping the employees to scale down goal and aspiration that
are unrealistic or unattainable for one reason or the other.

Succession Planning
Seek new basis of integration, compromise or other form of mutual change on the part of
employee and organizational through problem solving, negotiation or other devices.

A framework of career planning process aimed at integrating individual and

organizational needs is presented.

e) Reviewing Career Plans a periodic review of career plans is necessary to know

whether the plans are contributing to the effective utilization of human resources by
matching employee objectives to job needs. Review will also indicate to employee in
which direction the organizations is moving, what changes are likely to take place and
what skills are needed to adapt to the changing needs of the organization.
 SUCCESSION PLANNING

Succession planning is an ongoing process that identifies necessary competencies, then

works to assess, develop, and retain a talent pool of employees, in order to ensure a
continuity of leadership for all critical positions. Succession planning is a specific
strategy, which spells out the particular steps to be followed to achieve the mission,
goals, and initiatives identified in workforce planning. It is a plan that managers can
follow, implement, and customize to meet the needs of their organisation, division, and/or
department.

The continued existence of an organization over time require a succession of persons to

fill key position .The purpose of succession planning is to identify and develop people to
replace current incumbents in key position for a variety of reasons. Some of these reasons
are given below:

Superannuation: Employees retiring because they reach a certain age.

Resignation: Employees leaving their current job to join a new job
Promotion: Employees moving upward in the hierarchy of the organization.
Diversification: Employees being redeployed to new activities.
Creation of New Position: Employees getting placed in new positions at the
same level.

Succession can be from within or from outside the organization. Succession by people
from within gives a shared feeling among employee that they can grow as the
organization grows. Therefore organization needs to encourage the growth and
development with its employee. They should look inward to identify potential and make
effort to groom people to higher and varied responsibilities. In some professionally run
large organizations, managers and supervisor in every department are usually asked to
identify three or four best candidate to replace them in their jobs should the need arise.
However, the organization may find it necessary to search for talent from outside in
certain circumstance. For example, when qualified and competent people are not
available internally, when it is planning to launch a major expansion or diversification
programmes requiring new ideas etc.. Complete dependence on internal source may
cause stagnation for the organization. Similarly complete dependence on outside talent
may cause stagnation in the career prospects of the individual within the organization
which may in turn generate a sense of frustration.

Succession planning provides managers and supervisors a step-by-step methodology to

utilize after workforce planning initiatives have identified the critical required job needs
in their organization. Succession planning is pro-active and future focused, and enables
managers and supervisors to assess, evaluate, and develop a talent pool of individuals
who are willing and able to fill positions when needed. It is a tool to meet the necessary
staffing needs of an organization/department, taking not only quantity of available
candidates into consideration, but also focusing on the quality of the candidates, through
addressing competencies and skill gaps.
 RATING ERRORS IN POTENTIAL APPRAISAL

Potential appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most
common rating errors are: -

Leniency or severity: - Leniency or severity on the part of the rater makes the
assessment subjective. Subjective assessment defeats the very purpose of Potential
appraisal. Ratings are lenient for the following reasons:

a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavorably will reflect poorly on his or her own worthiness.

b) He/She may feel that a derogatory rating will be revealed to the rate to
detriment the relations between the rater and the ratee.

c) He/She may rate leniently in order to win promotions for the subordinates
and therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average
or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude
stems from certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's Potential
influences the evaluation of the entire Potential of the individual. The halo error occurs
when an employee who works late constantly might be rated high on productivity and
quality of output as well ax on motivation. Similarly, an attractive or popular personality
might be given a high overall rating. Rating employees separately on each of the
Potential measures and encouraging raters to guard against the halo effect are the two
ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or
low score are given only to certain individuals or groups based on the rater's attitude
towards them and not on actual outcomes or behaviors; sex, age, race and friendship
biases are examples of this type of error.

Primacy and Regency effects: - The rater's rating is heavily influenced either by
behavior exhibited by the ratee during his early stage of the review period (primacy) or
by the outcomes, or behavior exhibited by the ratee near the end of the review period
(regency). For example, if a salesperson captures an important contract/sale just before
the completion of the appraisal, the timing of the incident may inflate his or her standing,
even though the overall Potential 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
Potential of the rate and not to be influenced by one incident or an achievement.

Potential dimension order: - Two or more dimensions on a Potential instrument follow

each other and both describe or rotate to a similar quality. The rater rates the first
dimensions accurately and then rates the second dimension to the first because of the
proximity. If the dimensions had been arranged in a significantly different order, the
ratings might have been different.

Spillover effect: - This refers lo allowing past Potential appraisal rating lo unjustifiably
influence current ratings. Past ratings, good or bad, result in similar rating for current
period although the demonstrated behavior docs not deserve the rating, good or bad.
ROLES in POTENTIAL APPRAISAL PROCESS

a) Reporting Manager

• Provide feedback to the reviewer / HOD on the employees’ behavioral traits

indicated in the PMS Policy Manual

• Ensures that employee is aware of the normalization / Potential appraisal

process

• Address employee concerns / queries on Potential rating, in consultation with

the reviewer

b) Reviewer (Reporting Manager’s Reporting Manager)

• Discuss with the reporting managers on the behavioral traits of all the
employees for whom he / she is the reviewer

• Where required, independently assess employees for the said behavioral traits;
such assessments might require collecting data directly from other relevant
employees

c) HOD (In some cases, a reviewer may not be a HOD)

• Presents the proposed Potential Rating for every employee of his / her
function to the Normalization committee.

• HOD also plays the role of a normalization committee member

• Owns the Potential rating of every employee in the department

d) HR Head

• Secretary to the normalization committee

 • Assists HOD’s / Reporting Managers in communicating the Potential rating of
all the employees

e) Normalization Committee

• Decides on the final bell curve for each function in the respective Business
Unit / Circle

• Reviews the Potential ratings proposed by the HOD’s, specifically on the

upward / downward shift in ratings, to ensure an unbiased relative ranking of
employees on overall Potential, and thus finalize the Potential rating of each
employee
 KEY CONCEPTS

In order to understand the Potential Management System at MARUTI UDYOG

LIMITED, some concepts need to be explained which play a very important role in using
the PMS successfully. They are:

o KRA’S (KEY RESULT AREAS): The Potential of an employee is largely

dependent on the KRA score achieved by the employee during that particular
year. Thus, it is necessary to answer a few basic questions i.e.

o What are the guidelines for setting the KRA’s for an employee?

o How does an employee write down his KRA’s for a particular

financial year?

o KRA’s: The Four Perspectives.

o How is the KRA score calculated for an employee on the basis of the

targets sets and targets achieved?

• BEHAVIORAL TRAITS: Some of the qualitative aspects of an employees’

Potential combined with the general behavioral traits displayed by the
employee during a year constitutes his behavior traits. An employee is
assigned the rating on the basis of the intensity of the behavior displayed by
him. They play a very important role in the deciding the final Potential rating
for an employee as is even capable of shifting the rating one level
upwards/downwards.

• THE POTENTIAL RATING PROCESS: The rating process tries to

explain the four different types of rating that an employee can achieve i.e. EP,
SP, NP and PP. It also explains the criteria, which is considered for awarding
any of these ratings to the employee.
• PROMOTION AND RATING DISRTRIBUTION GUIDELINES: The
promotion and normal distribution guidelines provide the framework within
which the Potential appraisal process has to work. It is very important that the
HR department pays due attention to these guidelines while preparing the bell
curves for various functions and the consolidated bell curve for all the
functions. These guidelines also help in deciding upon the promotion cases in
a year.
 ROLE OF HUMAN RESOURCE DEPT

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

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

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. Potential Appraisal

5. Training & Development

 RESEARCH METHODOLOGY

RESEARCH DESIGN:

Research Design refers to "framework or plan for a study that guides the collection and
analysis of data". A typical research design of a company basically tries to resolve the
following issues:

a) Determining Data Collection Design

b) Determining Data Methods

c) Determining Data Sources

d) Determining Primary Data Collection Methods

e) Developing Questionnaires

f) Determining Sampling Plan

(1) Explorative Research Design:

Explorative studies are undertaken with a view to know more about the problem. These
studies help in a proper definition of the problem, and development of specific hypothesis
is to be tested later by more conclusive research designs. Its basic purpose is to identify
factors underlying a problem and to determine which one of them need to be further
researched by using rigorous conclusive research designs.

(2) Conclusive Research Design:

Conclusive Research Studies are more formal in nature and are conducted with a view to
eliciting more precise information for purpose of making marketing decisions.

These studies can be either:

a) Descriptive or

b) Experimental
Thus, it was mix of both the tools of Research Design that is, Explorative as well as
Conclusive.

SAMPLING PLAN:

Sample Size = 50 Employees

Sample Area = Maruti Udyog HO, Gurgaon,

Duration = Two (2) Months.

DATA COLLECTION:

Data Sources:

(i) Secondary Data through Internet

(ii) Primary Data through Questionnaire

(iii) Contact Method

(iv) Personal Interaction

DATA PRESENTATION AND ANALYSIS:

1. Bar graphs

2. Pie Diagrams

3. Doughnuts
 FINDINGS AND ANALYSIS

Employees Opinion as to the Purpose of Potential Appraisal

Potential standards / yardsticks

Options Response

Yes 84

No 16
Awareness of technique of Potential Appraisal being followed at BSNL among
Employees

Options Response

Yes 72

No 28
Number of Employees being appraised during their service period

Options Response

Yes 68

No 32
Employees’ opinion as to the present appraisal system

Options Responses (in %)

Fully Satisfied 64

Satisfied 24

Can’t Say 2

Dissatisfied 10
 Employee perception as to the frequency of appraisal

Options Response (in %)

Once During The 2

Service Period

Continuous 92

Never 0

Can’t Say 6
If continuous appraisal – what should be the gap between two appraisal period

Options Response (in %)

Quarterly 20

Half Yearly 44

Yearly 36
How Potential Appraisal affects the productivity of the employees

Motivated Indifferent Demotivated

+ Feedback
38 12 -

- Feedback
12 10 28

Neutral 24 21 5
Who should do the appraisal?

Options Response ( in % )

Superior 24

Peer 0

Subordinate 0

Self Appraisal 8

Consultant 4

All of the above 48

Superior + Peer 16
.Does appraisal help in polishing skills and Potential area?

Options Response ( in % )

Yes 74

No 10

Somewhat 16
If the process of appraisal does not lead to the improvement of the skills and
proficiency of the employees, the very purpose of appraisal becomes illogical.
In the survey conducted it was observed that nearly 74 % of the respondents
agree that Potential Appraisal does leads to polishing the skills of the
employees. Nearly 10 % of the respondents view that it does not serve this
purpose and around 16 % were not able to respond as to whether it serve any
such purposes or not.
Does personal bias creeps-in while appraising an employee

Options Response ( in % )

Yes 18

No 82

In the process of appraising, both the parties are human being, that is, the one
who is being apprised and the other who is appraising. Thus, there bound to be
subjectivity involved, be it an objective way of appraising.

Thus, when asked from among the sample size of 50 respondents, as small as
merely 18 % respond ended that personal bias do creep in while appraising an
individual. Hence, it is inevitable to say that personal likings do not come in the
process of appraisal. It is the extent to which the appraiser manages it so that it
does not become very partial and bias.
If given a chance, would employees like to review the current appraisal technique?

Options Response ( in % )

Yes 72

No 4

Can’t Say 24
Appropriate method of conducting the Potential appraisal

12%

0%

20%

58%

4%

6%

Rating Scale

Paired Comparison

Critical Incident

MBO

Assessment Centre

360 Degree
 LIMITATIONS

A few limitations and constraints came in way of conducting the present study, under
which the researcher had to work are as follows:

• Although all attempts were made to make this an objective study, biases
on the part of respondents might have resulted in some subjectivity.

• Though, no effort was spared to make the study most accurate and useful,
the “sample Size” selected for the same may not be the true representative
of the Company, resulting in biased results.

• This being the maiden experience of the researcher of conducting study

such as this, the possibility of better results, using deeper statistical
techniques in analyzing and interpreting data may not be ruled out.
 SUGGESTIONS AND CONCLUSION

After having analyzed the data, it was observed that practically there is a constant
emphasis on Potential appraisal in the organization. To be an effective tool, it has to be
on the continuous basis. This is the thing that has been mentioned time and again in the
report, as, in the absence of continuity, it becomes a redundant exercise. Before actually
deciding drafting what should be the kind of appraisal the following things should be
taken care of:

1. The very concept of Potential appraisal should be marketed throughout the

organization. Unless this is done, people would not accept it, be it how important to
the organization.

2. To market such a concept, it should not start at bottom, instead it should be started
by the initiative of the top management. This would help in percolating down the
concept to the advantage of all, which includes the top management as well as those
below them. This means that the top management has to take a welcoming and
positive approach towards the change that is intended to be brought.

3. Further, at the time of confirmation also, the appraisal form should not lead to
duplication of any information. Instead, detailed appraisal of the employee’s work
must be done – which must incorporates both the work related as well as the other
personal attributes that are important for work Potential.

4. It should be noted that the appraisal form for each job position should be different
as each job has different knowledge and skill requirements. There should not be a
common appraisal form for every job position in the organization.

5. The job and role expected from the employees should be decided well in advance
and that too with the consensus with them.
 6. A neutral panel of people should do the appraisal and to avoid subjectivity to a
marked extent, objective methods should be employed having quantifiable data.

7. The time period for conducting the appraisal should be revised, so that the exercise
becomes a continuous phenomenon.

8. Transparency into the system should be ensured through the discussion about the
employee’s Potential with the employee concerned and trying to find out the grey
areas so that training can be implemented to improve on that.

Ideally in the present day scenario, appraisal should be done, taking the views of all
the concerned parties who have some bearing on the employee. But, since a change
in the system is required, it cannot be a drastic one. It ought to be gradual and a
change in the mindset of both the employees and the head is required.

a) Fully Satisfied b) Satisfied

c) Can’t Say d) Dissatisfied

6. Should the appraisal process be:

a) Once during the service period b) Continuous

c) Never d) Can’t Say

7. What in your opinion should be the time period of conducting continuous

Appraisal?

a) Quarterly b) Half Yearly c) Yearly

Any specific reason………………………………

8. Does Potential Appraisal helps in improving the productivity of the employees?

Motivated Indifferent Demotivated

+ Feedback

- Feedback

Neutral

9. Who in your opinion should appraise the employee?

a) Superior b) Peer

c) Subordinates d) Self Appraisal

e) Consultant f) All of the above

10. Does the appraisal system helps in polishing the skills or Potential area?

a) Yes b) No c) Somewhat

11. Do you think personal bias creeps in while appraising an individual?

a) Yes b) No

12. If given a chance or an opportunity would you like that the current appraisal
procedure should be reviewed?

a) Yes b) No c) Can’t Say

13. What according to you should be the appropriate method for conducting Potential
appraisal?

a) Rating the employee on number of traits along with the range of Potential for
each by the supervisor.
 b) For every trait, each subordinate is paired with and compared to every other
Subordinate.

c) Reviewing employees on the basis of identified specific examples of good

Or poor Potential.

d) Setting specific measurable goals with each employee and periodically

reviewing the progress made.

e) Reviewing Potential through case studies, presentations, role playing, etc. for
future Potential.

f) Receiving feedback from people whose views are considered helpful and
relevant including the appraise himself.

14. Does Potential Appraisal leads to identification of hidden potential of the

employees?

a) Yes b) No

15. Suggestions and views…………………………………...............................

…………………………………………………………

…………………………………………………………

…………………………………………………………

Thank you, Date --/--/--

 BIBLIOGRAPHY

1. www.marutisuzuki.com
2. Google
3. Esnips
4. www.managementparadise.com