A PROJECT REPORT ON PERFORMANCE APPRAISAL AND TRAINING IN LEARLITA ENGINEERING PRIVATE LIMITED.

SUBMITTED BY SHWETA .A. PANWALKAR TYBMS (SEM V) 2011-2012

PROJECT GUIDE MRS.SINDHU PRABHU

VIDYA PRASARAK MANDALS K.G.JOSHI COLLEGE OF ARTS & N. G. BEDEKAR COLLEGE OF COMMERCE CHENDANI BUNDER ROAD THANE 400601 (BACHELOR OF MANAGEMENT STUDIES) UNIVERSITY OF MUMBAI 2011-2012

A PROJECT ON PERFORMANCE APPRAISAL IN LEARLITA ENGINEERING PRIVATE LIMITED.

SUBMITED TO UNIVERSITY OF MUMBAI (2011-2012)

SUBMITTED BY SHWETA .A. PANWALKAR ROLL NO. 113 TYBMS (V SEM)

VIDYA PRASARAK MANDALS K. G. JOSHI BEDEKAR COLLEGE OF ARTS & N. G. BEDEKAR COLLEGE OF COMMERCE CHENDANI BUNDER ROAD THANE 400601 (BACHELOR OF MANAGEMENT STUDIES)

UNIVERSITY OF MUMBAI 2011-2012

VIDYA PRASARAK MANDALS K.G. JOSHI COLLEGE OF ARTS & N. G. BEDEKAR COLLEGE OF COMMERCE CHENDANI BUNDER ROAD, THANE 400601

DECLARATION I SHWETA .A.PANWALKAR STUDYING IN THIRD YEAR BACHELOR OF MANAGEMENT STUDIES (TYBMS) HERE BY DECLARED THAT ALL THE GIVEN INFORMATION IN THE PROJECT IS ORIGINAL TRUE & TO THE BEST OF MY KNOWLEDGE.

(SHWETA. A. PANWALKAR)

ACKNOWLEDGEMENT IT GIVES ME GREAT PLE ASURE TO PREPARE THIS PROJECT ON PERFORMANCE APPRAISAL & TRAINING IN LEARLITA ENGINEERING PVT LTD. AND PRESENT IT TO THE UNIVERSITY OF MUMBAI, UNDER THE GUIDANCE OF MRS. SINDHU PRABHU (PROF OF HUMAN RESOURCE MANAGEMENT). I WOULD LIKE TO THANK HER FOR HER CONSTANT SUPPORT.

I TAKE THIS OPPORTUNITY TO THANK THE MANAGEMENT OF LEARLITA ENGINEERING PVT LTD FOR ALLOWING ME TO UNDERTAKE THE PROJECT IN THIS COMPANY. THIS PROJECT WOULD NOT HAVE COME TO REALITY WITHOUT THE VALUABLE GUIDANCE OF ANTONY SEQUEIRA HR EXECUTIVE OF LEARITA ENGINEERING PVT LTD.I WOULD ALSO LIKE TO THANK ALL THOSE WHO HAVE CO-OPERATED BY GIVING THEIR PRECIOUS TIME DURING THE SURVEY.

THANK YOU, (SHWETA.A.PANWALKAR)

EXECUTIVE SUMMARY ONCE THE EMPLYOEES HAVE BEEN SELECTED, TRAINED AND MOTIVATED THEY ARE THEN APPRAISED FOR THEIR PERFORMANCE. PERFORMANCE APPRAISAL HAS BEEN CONSIDERED AS A MOST SIGNIFICANT AND INSEPARABLE TOOL FOR AN ORGANISATION.THIS IS ALL BECAUSE THE ORGANISATION CONSISTS OF HUMAN BEING AND ANALYSIS OF THEIR PERFORMANCE IS VERY ESSENTAIL BECAUSE THEY ARE THE LIFE BLOOD OF ANY ORGANISATION. IT IS THEIR PERFORMANCE, WHICH HELPS IN THE DEVELOPMENT AND PROSPERITY OF THE ORGANISATION PERFORMANCE APPRAISAL IS USED TO: UNDERSTAND THE DIFFICULTIES OF THEIR EMPLOYEES AND TRY TO REMOVE THESE DIFFICULTIES. KNOW THE STRENGTHS AND WEAKNESSES OF THEIR EMPLOYEES AND HELP REALIZE THESE. HELP THE EMPLOYEES TO ACQUIRE NEW CAPABILITIES. PLAN EFFECTIVE REALIZATION OF TALENTS OF MANAGER.

GENERALLY HR MANAGER SCHEDULES INDIVIDUAL MEETINGS WITH EACH EMPLYOEES TO DISCUSS THE EMPLOYEES PERFORMANCE, COMMUNICATE THE PERFORMANCE AREAS THAT NEED ATTENTION AND JOINTLY ESTABLISHED AREAS TO BE WORKED ON OR GOALS TO ACHIEVED BY THE NEXT SCHEDULED

DISCUSSION.SUCH PERFORMANCE APPRAISAL INTERVIEWS MAY BE SCHEDULED EVERY THREE MONTHS OR ONCE OR TWICE A YEAR.GOALS AND OBJECTIVES THAT ARE AGREED UPON IN EACH MEETING. THE VARIOUS METHODS USED TO RANK THE EMPLOYEES ARE BROADLY CLASSIFIED AS TRADITIONAL AND MODERN METHODS.THESE METHODS HAVE THEIR OWN IMPORTANCE AS PER THE APPRAISAL METHODS FOR APPRAISAL ARE SELECTED ACCORDING TO THE JOB OF THE EMPLOYEES. THERE ARE CERTAIN EXPECTATIONS FROM APPRAISERS WHILE CONDUCTING THE APPRAISAL.THE APPRAISALS THUS CONDUCTED SHOULD BE ETHICAL, FAIR ENOUGH & SHOULD SUIT THE ORGANISATION CULTURE.THESE ARE VARIOUS TECHNIQUES TO BE USED WHILE CONDUCTING THE APPRAISAL.

THE PRACTICAL EXAMPLE OF CONDUCTING PERFORMANCE APPRAISAL STUDIED IN THIS PROJECT IS THE APPRAISAL CONDUCTED IN LEARITA LTD. A BRIEF STUDY OF THE STRATEGIES USED BY THE COMPANY FOR APPRAISING THEIR EMPLOYEES IS GIVEN IN THIS PROJECT. THE COMPANY DIVIDES THE EMPLOYEES INTO THREE GROUPS ACCORDINGLY VARIOUS METHODS ARE IMPLEMENTED TO EVALUATE THEIR PERFORMANCE.THE ANALYSES ARE DONE IN DIFFERENT WAYS FOR DIFFERENT LEVELS OF EMPLOYEES.

WHILE CONDUCTING THE APPRAISALS THERE ARE MANY DIFFICULTIES & MISTAKES COMITTED ON THE PART OF THE APPRAISALS AS WELL AS THE APPRAISEES REASONS FOR THE DIFFICULTIES COULD BE DUE TO THE FLAWS IN THE METHODS, THE APPRAISERS MISTAKES ETC. SOLUTIONS CAN BE ARRIVED AT BY DOING A DEEP STUDY INTO THIS SUBJECT A FEW SOLUTIONS ARE SUGGESTED BUT THEY NEED TO BE ACTUALLY IMPLEMENTED IN ORDER TO MAKE THIS ACTIVITY A PERFECT TOOL FOR EVALUATING THE JOBS OF THE EMPLOYEES.

INDEX
Sr.no. 1] 1.1 1.2 1.3 1.4 CHAPTER NAME HUMAN RESOURCE MANAGEMENT 5 MS OF BUSINESS WORLD HUMAN RESOURCE MANAGEMENT HUMAN RESOURCE DEVELOPMENT OBJECTIVES & FUNCTIONS OF HUMAN RESOUCES DEPARTMENT TRAINING AND DEVELOPMENT NEED FOR TRAINING STEPS IN TRAINING PROGRAMME METHODS/TECHNIQUES OF TRAINING PERFORMANCE APPRAISAL OBJECTIVES OF PERFORMANCE APPRAISAL PROCESS OF PERFORMANCE APPRAISAL ISSUES IN APPRAISAL SYSTEMS ESSENTIALS OF AN EFFECTIVE PERFORMANCE SYSTEMS METHODS/APPROCHES OF PERFORMANCE PG. NO.

2] 2.1 2.2 2.3

3] 3.1

3.2

3.3 3.4

3.5

3.6 3.7

3.8 3.9 4] 4.1 4.2

APPRAISAL PROBLEMS OF APPRAISAL WHY APPRAISAL TECHNIQUES PROVE FAILURE HOW APPRAISAL MAY BE MADE SUCCESSFUL ETHICS OF APPRAISAL LEARLITA PRIVATE ENGINEERING LIMITED COMPANY INFORMATION PERFORMANCE APPRAISAL IN LEARLITA LTD METHODS USED PERSON INTERVIEWED CONCLUSION COMMON MISTAKES & SOLUTIONS CONCLUSION

4.3 4.4 5] 5.1 5.2

CHAPTER 1 1. HUMAN RESOURCES

Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labour economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials "HR".

1.1 5 MS OF BUSINESS WORLD

Managing business organizations has always been a challenge to man since it became scientific. The earliest known accounts of business management in man's existence tended to be crude, brutish and short. Anything, and anyone, found to be an impediment to any growth in entrepreneurship was either pilloried or guillotined off for 'progress' to be made. Then came the industrial revolution. Welcome to machines and goodbye to servitude. Slavery became abolished as people had causes to be more 'humane' in business. Man's overuse had become juxtaposed with gears and belts of machines. Welcome to mass production. Things became manufactured at the touch of a button. Materials were optimally utilised. Time became shorter and physical exertion of force required to create utility became a thing of the past. Since man became victorious in the industrial revolution, every business has been using these five M's: man, materials, machines,

minutes and money; to operate with, or without, success. To create any venture without any one of these M's is simply embarking on a journey to Erehwon. It is sheer entrepreneurial harakiri to even attempt to cut corners. No one should even Contemplate doing that. Failure awaits such business. It will also be disastrous for organizations not to properly and effectively organise the M's for business success. That, in itself is a different kettle of fish. None of the M's is useless no matter the perspective it is viewed from. A meta-analysis of organizations that have survived over time showed that careless regard to any of the five resulted in economic fiascos, with some even affecting global business. When man took time off work to fight two major wars, there was economic downturn as precious time was expended to right perceived wrongs.

MAN
Man, the first of the five M's is the most important. The right personnel for the right position is a sure bet for organizational effectiveness and efficiency. No two ways about that. Thus, lateness and absenteeism, unsafe acts, alcoholism, poor training, incompetence are just some of the attributes of man at work that could upturn the apple cart of business ventures. Human resources determine the workings of the other four basic business resources. People make sure materials, machines, minutes and money are utilised in a productive manner to achieve goals or aims and objectives of organizations and enterprises. Poor employment practices are inimical to the sustenance of such ventures. With the

right man in the right job, a large portion of effective business management will have been achieved. No doubts about that.

MATERIALS
Without materials, human resource is made redundant. Thus every right thinking and right planning organization knows that materials needed for any business or service mist be in place before 'man' can be of use in any business activity. A supply chain department grew out of this thinking and has been a very useful and effective aspect of business management. A group of cement factory workers waiting for supply of limestone may have nothing much to do for as long as the supply does not arrive. Even if it arrives, but in poor quality, the production is certainly doomed for a loss. Quality compromised is business pauperized. Poor quality of materials potentially ruins entrepreneurship. This is an indisputable fact.

MACHINES
The metal contraptions called machines have made man fulfil almost effortlessly various dreams of creating things that make a existence more worthwhile. Machines have replaced man in tilling, planting, and harvesting. Man has been replaced with looms in cotton and fabric processing. Countless other ventures requiring physical exertions of force has been taken over by things fixed with gears, bolts and nuts and conveyor belts. Recently, computers joined in the fray of increasing production and reduction in time spent by man for manufacturing and general production of goods and services. However, without man and

materials, machines will be useless. They need to be operated by man and fed with materials. That again is a doubtless fact.

MINUTES
Time management is one contemporary aspect of business that has been employed in use by effective and successful business ventures to optimize delivery. As earlier noted, lateness and absenteeism of man at work is a large chunk of time off production. Poor time management is as ineffectual as a broken down machine, an indisposed employee or lack of adequate materials for production of goods or services. Various schemes have been used by successful enterprises to ensure proper anfd efficient use of time by man and machine, including timely delivery of materials, to ensure business sustainability. Compromising time is tantamount to a business venture shooting itself in the foot. There are umpteen instances to ascertain this truism.

MONEY
Without money, no venture or enterprise can motivate workers, get quality and sufficient materials, get the right machines and maintain them or even ensure that time is properly managed. Money management, when not properly organized has been the most known factor involved in collapse of enterprises in history. The quantity and quality of money expended in ventures have a direct bearing on the fruitfulness of same over time. Accounts department have been revolutionarized over the years, by man, to ensure maximum operations of surviving business organizations. Where there is not enough money, no good workers, materials, or machines can be employed or purchased or

acquired. In other words, such a venture will be wasting its time existing in the first place.

1.2 HRM
The term human resource spells the total sum of all the components (like skill, creative abilities) possessed by all employees and other persons (like self employed, employees, owners etc.) who contribute their services to attain the organisational objectives and goals. Human resources includes human values, ethos.

DEFINITION OF HUMAN RESOURCE MANAGEMENT

Human Resource Management is concerned with the people who work in the organisation to achieve the objectives of the organisation. It concerns with acquisitions of appropriate human resources, developing their skills and competencies, motivating them for the best performance and ensuring their continued commitment to the organisation to achieve organisational objectives.

1.3 HUMAN RESOURCES DEVELOPEMENT

It is the process of improving, moulding, and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc based on present and future job and organizational requirements.

1.4 OBJECTIVES & FUNCTIONS OF HUMAN RESOURCES DEPARTMENT

HRM OBJECTIVES FUNCTIONS TO BE PERFORMED (1) social (towards society) (2)Benefits (3)Union Management relations (2)Organisational objectives (1)Legal compliance

(1)Human resources planning

(2)Selections Training and Development (3)Employee Relations (4)Employee Evaluation Assessment, Appraisal

(3)Functional objectives

(1)Appraisal (2)Placement

(4)Personal Objectives(towards employees)

(1)Training & Development

(2)Appraisal (3)Assessment /Placement (4)Compensation

The following figure below briefly enunciates the functions of HRM

Mission & objectives of organisation

Strategies , objectives,Policies of HRM

Managerial functions of HRM

Planning

Oraganising

Directing

Controlling

Operative Function

Employement

Human Resource Develpomen

Compensation Rewards

Employee Relation

OPERATIVE FUNCTIONS OF HRM

Employme nt Human resource Development Organisatio nal design Job Design Training & Development Performance Appraisal Job Analysis Human Resource Planning Recruitmen t Selection Management Development Organisation Development Rewards Incentives Grievances Redrassal Discipline Maintenanc e Induction Organisation Change placement Quality of work life Participatio n Quality Circles. Performance Improvement Career Planning Salary & Benefits Administration Job satisfaction Morale Job Evaluation Remuneration Communica tion Motivation Compensation Rewards Employee relations

CHAPTER 2
2. TRAINING AND DEVELOPMENT

INTRODUCTION
Every organisation needs to have well trained and experienced people to perform the activities that have to be done. If the current or potential job occupant can meet this requirement, training is not important. But when this is not the case, it is necessary to raise the skill levels and increase the versatility and adaptability of employees. Inadequate job performance or a decline in productivity or changes resulting out of job redesigning or a technological breakthrough requires some type of training and development efforts. As the jobs become more complex, the importance of employee development also increases. In a rapidly changing society, employee training and development are not only an activity that is desirable but also an activity that an organisation must commit resources to if it is maintain a viable and knowledgeable work force.

DEFINITION
According to Edwin Flippo, training is the act of increasing the knowledge and skills of an employee for doing a particular job.

THREE TERMS: TRAINING, DEVELOPMENT AND EDUCATION

Training is a process of learning a sequence of programmed behaviour. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behaviour. It attempts to improve their performance on the current job or prepare them for an intended job. Development is a related process. It covers not only those activities which improve job performance but also those which bring about growth of the personality; help individuals in the progress towards maturity and actualisation of their potential capacities so that they become not only good employees but better men and women. In organisational terms, it is intended to equip persons to earn promotion and hold greater responsibility. Training a person for a bigger and higher job is development. And this may well include not only imparting specific skills and knowledge but also inculcating certain personality and mental attitudes. In this sense, development is not much different from education. Education is the understanding and intervention of knowledge. It does not provide definitive answers, but rather it develops a logical and rational mind that can determine relationships among pertinent variables and thereby character, and understanding of basic principles and develop the capacities of analysis, synthesis and objectivity. Usually, Education is outside the scope of an organisations functions. It involves a range of skills and expertise which can be provided only by educational institutions. An organisation can and does make use of such institutions in order to support and supplement its internal training and development efforts.

2.1 NEED FOR TRAINING (i) To improve productivity:-purposeful instruction can help
employees increases their level of performance on their present assignment. Increased human performance often directly leads to increased operational productivity and increased company profit. Again, increased performance and productivity, because of training, are most evident on the part of new employees who are not yet fully aware of the most efficient and effective ways of performing their jobs.

(ii)

To improve Quality:-Better informed workers are less likely

to make operational mistakes. Quality increases may be in relationship to a company product or service, or in reference to the intangible organisational employment atmosphere.

(iii) To Help a company fulfil personnel needs:-organisations

that have a good internal education programme will have to make less drastic manpower changes and adjustments in the event of sudden personnel alternations. when the need arises, organisational vacancies can more easily be staffed from internal sources if a company initiates and maintains an adequate instructional programme for both its non- supervisory and managerial employees.

(iv) To improve Organisational climate:-An endless chain of

positive reactions results from a well- planned training programme. Production and product quality may improve; financial incentives may then be increased, internal promotions become stressed less supervisory pressure ensure and base pay rate increases results. Increased morale may be due to many factors, but one of the most

important of these is the current state of an organisations educational endeavour.

(v)

To improve health and safety:-Proper training can help

prevent industrial accidents. A safer work environment leads to more stable mental attitudes on the part of employees. Managerial mental state would also improve if supervisors know that they can better themselves through company designed development programmes.

(vi) Obsolescence prevention:-Training and development

programmes foster the initiative and creativity of employees and help to prevent manpower obsolescence, which may be due to age, temperament or motivation, or the inability of a person to adapt himself to technological changes.

(vii) Personal Growth:-Employees on a personal basis gain

individually from their exposure to educational experiences.Again, Management development programmes seem to give participants a wider awareness, an enlarged skill, and enlightened altruistic philosophy, and make enhanced personal growth possible.

2.2 STEPS IN TRAINING AN EMPLOYEE

Training is a systematic process for an organisation and it is most effectively done by HR people. A training program can be analyzed when it is conducted properly. The training process can be explained as follows:1. Organizational analysis:-This involves the study of the entire organisation in terms of its objectives, its resources the allocation and utilization of this resource for achievement of objectives. The

training philosophy for the entire organization can be developed through this process. In this case identification of organizational objectives needs growth, potential and resources are analyzed. 2. Role analysis:-in stage we analyse what type of knowledge and attitude is required for achieving the goal. If this involves a careful study of the job within an organisation it requires an orderly and systematic collection of data about the job. How they are to be performed, what behaviour technique the job holder must have to perform and hold i.e. specific task. 3. Manpower analysis:-The focus is on the individual in a given job rather than on job itself. Three basic issues are involved for training purposes:a. Appropriate observation and evaluation. b. Whether current employees are capable of being trained. c. Attitude of employees, are they willing to be improved and then training programs are organized. 4. Training needs:-when Training programs are organized, the focus is on the fact that it should always be beneficial for the employees and the organization and the results can be measured. 5. Developing training plans and procedures:-The next step is what type of training program can be organized for specification situation, planning is more difficult than conducting training.HR manager mostly organizes a training program, selects a resource person to make a course plan and then training starts. 6. Conducting training program:-In this individual training, group training, on the job training is organized. There may be different methods of training. They may be indoor or outdoor, on the job or off the job, conferences, lectures, seminars or workshops.

The planning is done by HR department but it should be beneficial for trainees. 7. Follow up:-After conducting program, evaluation is carried so that effectiveness of training program can be measured. 8. Feed back of results:-Feed back is taken from trainees, are they benefited, do they need something more important. Suggestion for further training program are analyzed. 9. Revise if necessary:-If necessary the training program can be re-conducted for those who require it.

2.3 METHODS OF TRAINING

In the field of Training, a number of programmes are available. Some of these are new methods, while others are improvements over the traditional methods. The training programmes commonly used to train operative and supervisory personnel are discussed below. These programmes are classified into on-the-job training.

A. On the job training:It is the most common method used by industry to train individual is on the job training. Every employee from clerk to general manager gets some on the job training. Under this method the employee is given training at his work place by its immediate superior. The management should keep a close watch on training program. There are 3 methods of on the job training:-

1. Coaching:The trainee is placed under a particular supervisor who functions as a coach in training the individual. The supervisor provides feedback to the trainee on his performance and offers him some

suggestions for improvement often the trainee shares some of the duties and responsibilities of the coach and relieves him of his burden. A limitation of this method of training is that the trainee may not have the freedom or opportunity to express his own ideas. 2. JOB ROTATION:This type of training involves the movement of the trainee from one job to another the trainee receives job knowledge and gains experience from his supervisor or trainer in each of the different job assignments. though this method of training is common in training managers for general management positions, trainees can also be rotated from job to job in workshop jobs. This method gives an opportunity to the trainee to understand the problems of employees on other jobs and respect them

3. SPECIAL ASSIGNMENTS:Under the committee assignment, a group of trainees are given and asked to solve an actual organizational problem. The trainees solve the problem jointly. It develops teamwork.

B. OFF THE JOB TRAINING:1. LECTURE:This is the most commonly and widely used technique. It is suitable when information is to be shared to a large audience. There are at least 2 valuations in this method talk and discussion. Talk involves trainee to raise questions thus maintaining the interest in the topic. In discussion knowledge, ideas and Opinion are freely exchanged among the trainees.

2. CONFERENCES:This method is used to help employees to develop problem solving skills. Group discussion and meetings are 2 common techniques often made use in organization. Trainer leads the discussion and the trainee attempts to solve the problem and give reasons. Leader should be able to lead the discussion without losing sight of the topic. It participate employees and helps to upgrade their knowledge which brings a change in behaviour.

3. CASE STUDY AND ROLE PLAY:Case study method is developed by Christopher Langdeln in 1980 at Howard Law School to help students to learn for themselves by management thinking. It is a common form of training to the employees. In this method a case is given to the employees where they need to solve it by using modern techniques. As each employee answer will be differing form each other this will be help them from different angles. Role play was develop by MORENO. In this method an artificial situation experiencing the problem. This makes them solve quickly and find appropriate solution. It consists of employee employer relation, hiring or firing, etc. It helps the employees to develop insight. 4. IN-BASKET TRAINING:It is a method of training and a type of management games. In basket many times situation are given a chit an employees have to write their own reaction on situation and in this way they release their tension.

Thus training and development is important for any organization to develop or achieve goals. The HR department should be careful while planning for training. There are many methods of training depending upon organization to organization. But, the above mention some of the methods of training and development.

CHAPTER-3 3. PERFORMANCE APPRAISAL

INTRODUCTION Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees.

3.1 OBJECTIVES OF PERFORMANCE APPRAISAL

Following are the objectives of performance appraisal: 1. Review the performance of the employees over a given period of time. 2. Judge the gap between the actual and the desired performance. 3. Help the management in exercising organizational control. 4. Diagnose the training and development needs of the future. 5. Provide information to assist in the HR decisions like promotions, transfers etc. 6. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. 7. Judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. 8. Reduce the grievances of the employees. 9. Helps to strengthen the relationship and communication between superior subordinates and management employees

3.2 THE PROCESS OF PERFORMANCE APPRAISAL

1. ESTABLISHING PERFORMANCE STANDARDS The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards. 2. COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the employees. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

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

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

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance.

5.DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

6.DECISION MAKING
The last step of the process is to take decisions which can be

taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

3.3 ISSUES RELATED TO PERFORMANCE APPRAISAL SYSTEM

1. Whose performance?
Everyone in the organization. Assigned by managers. Selected by level. Selected by division or department. Self-selected.

2. Who are the raters?

Reviewee himself. Manager. Peers. Subordinates. Clients or customers.

3. What are the problems?

1. Leniency or severity: this makes the performance subjective. 2. Central tendency: safe playing attitude of raters which results in employees being rated near the average or middle of the scale 3. Halo error: it takes place when one aspect of an individual performance influences the evaluation of the entire performance of the individual. 4. Rater effect: this includes favouritism, stereotyping and hostility. Sex, age, race and friendship biases are examples of this type of error. 5. Primary or recency effects: raters ratings are influenced by the employees behavior either at the beginning or end of review period. 6. Perceptual set: this occurs when the raters assessment is influenced by previously held beliefs. 7. Performance dimension order: when two or more similar dimensions are put close to each other on PA form, rater gives same ratings to both. 8. Spillover effect: this refers to past performance appraisal ratings to unjustifiably influence current ratings.

9. Status effect: it refers to over rating of employees in higher level jobs held in high esteem & under rating employees in lower level jobs held in low esteem.

4. When to evaluate?
Performance can be appraised: After each project is completed After a milestone is reached Quarterly Semi-annually Annually

5. What to evaluate? Evaluation criteria should be: Aligned with organizational goals Relevant to given roles Specific and measurable Under employees control Understood and accepted by participants

Criteria can be based on: Quantitative and/or qualitative factors Competencies and/or performance

 Effort and/or results Frequency of behaviors

3.4 THE ESSENTIALS OF AN EFFECTIVE PERFORMANCE SYSYTEM ARE AS FOLLOWS:1. Documentation means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. 2. Standards / Goals the standards set should be clear, easy to understand, achievable, motivating, time bound and measurable. 3. Practical and simple format -The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information. 4. Evaluation technique An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employee. 6. Communication Communication is an indispensable part of the Performance appraisal process. The desired behavior or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. 7. Feedback The purpose of the feedback should be 5.

developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees future performance. 8. Personal Bias Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively.

3.5 METHODS/APPROCHES OF PERFORMANCE APPRAISAL PERFORMANCE APPRAISALTRADITIONAL APPROACH

Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.

This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development needs or career developmental

possibilities. The primary concern of the traditional approach is to judge the performance of the organization as a whole by the past performances of its employees Therefore, this approach is also called as the overall approach. In 1950s the performance appraisal was recognized as a complete system in itself and the Modern Approach to performance appraisal was developed.

PERFORMANCE APPRAISAL-MODERN APPROACH

The modern approach to performance development has made the performance appraisal process more formal and structured. Now, the performance appraisal is taken as a tool to identify better performing employees from others, employees training needs, career development paths, rewards and bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern approach to performance appraisals includes a feedback process that helps to strengthen the relationships between superiors and subordinates and

improve communication throughout the organization.

The modern approach to Performance appraisal is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development.

TRADITIONAL METHODS OF PERFORMANCE APPRAISAL 1.ESSAY APPRAISAL METHOD:This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

2.STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall

performance. It is quite useful for a comparative evaluation.

3.PAIRED COMPARISON
A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. 4. CRITICAL INCIDENTS METHODS In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.

5. FIELD REVIEW
In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias.

6.CHECKLIST METHOD
The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

7. GRAPHIC RATING SCALE

In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION
To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.

MODERN METHODS OF PERFORMANCE APPRAISAL 1. ASSESSMENT CENTRES :An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation; career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees.

2. BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and

critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioural statements describing important job performance qualities as good or bad (for eg. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employees actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge.

3. HUMAN RESOURCE ACCOUNTING METHOD

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

4. 360 DEGREE PERFORMANCE APPRAISALS

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the "on-thejob" performance of the employee.

360 degree performance appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others perceptions about the employees. A 360 degree

appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

5. MANAGEMENT BY OBJECTIVES
The concept of Management by Objectives (MBO) was first given byPeter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities.

THE MBO PROCESS

UNIQUE FEATURES AND ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals.

Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART goals i.e. goals that are: SMARTSpecific, Measurable, Achievable, Realistic and Time bound. The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.

The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.

Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

3.6 PROBLEMS OF APPRAISAL

1. Leniency or severity: this makes the performance subjective. 2. Central tendency: safe playing attitude of raters which results in employees being rated near the average or middle of the scale.

3. Halo error: it takes place when one aspect of an individual performance influences the evaluation of the entire performance of the individual. 4. Rater effect: this includes favoritism, stereotyping and hostility. Sex, age, race and friendship biases are examples of this type of error. 5. Primary or recency effects: raters ratings are influenced by the employees behavior either at the beginning or end of review period. 6. Perceptual set: this occurs when the raters assessment is influenced by previously held beliefs. 7. Performance dimension order: when two or more similar dimensions are put close to each other on PA form, rater gives same ratings to both. 8. Spillover effect: this refers to past performance appraisal ratings to unjustifiably influence current ratings. 9. Status effect: it refers to over rating of employees in higher level jobs held in high esteem & under rating employees in lower level jobs held in low esteem.

3.7 WHY APPRAISAL TECHNIQUES PROVE FAILURE

Performance appraisal techniques have often failed to give a correct assessment of the employee. According to Zavala, the causes of such failures are:

a. The supervisor plays dual and conflicting role of both the judge and the helper. b. Too many objectives often cause confusion. c. The supervisor feels that subordinate appraisal is not rewarding. d. A considerable time gap exists between 2 appraisal programmes. e. The skills required for daily administration and employee development are in conflict. f. Poor communication keeps employees in the dark about what is expected of them. g. There is a difference of opinion between a supervisor and a subordinate, in regard to the latters performance. h. Feedback on appraisal is generally unpleasant for both supervisor and subordinate. i. Unwillingness on the part of supervisors to tell employees plainly how to improve their performance.

3.8 HOW APPRAISALS MAY BE MADE SUCCESSFUL?

The rater must be thoroughly well-versed in the philosophy and nature of the rating system. Factors and factor scales must be thoroughly defined, analysed and discussed. The success of an appraisal programme depends upon:a) The existence of an atmosphere of confidence and trust so that both supervisors and employee may discuss matters frankly and offer suggestions which may be beneficial for the organisation and for an improvement of the employee.

b) The supervisor must very thoroughly evaluate the employees performance so that he is capable of meeting challenges about his ratings of his subordinates. c) The results of performance rather than personality traits should be given due weight. Suggestions for improvement should be directed towards the objective facts of the job (such as work schedules, output, reports completed, sales made, losses incurred, profits earned, accomplishments, etc. ). Plans for the future must be developed jointly after consultation with subordinates. The individual as a person should never be criticised. d) The supervisor should try to analyse the strengths and weaknesses of an employee and advise him on correcting the weaknesses. e) The appraisal programme should be less time consuming and less costly. At the same time , it should bring the maximum benefit. f) Which particular technique must be adopted for appraisal should be governed by such factors as the size, financial resources, philosophy and objectives of an organization. g) The results of the appraisal, particularly when they are negative, should be immediately communicated to the employees, so that they may try to improve their performance. h) A post- appraisal interview should be arranged so that employees may be supplied with feedback and the organization may know the difficulties under which the employees work, so that their training needs may be discovered. i) The standards of performance appraisal can be improved by

the training of the evaluators. It has been indicated that appraisers who are trained in how to evaluate subordinates tend to be more effective appraisers than those who had not undergone such training. j) Lastly, many of the problems or hindrances can be minimised if right appraisal tools are chosen.

3.9 ETHICS OF APPRAISAL

In any performance appraisal, due consideration must be given to ethics of appraisal, failing which many organisational problems may crop up and the very purpose of appraisal may be defeated. In this connection, M.S.KELLOG has suggested the following dos and donts:i. ii. iii. iv. v. Dont appraise without knowing why the appraisal is needed; Appraise on the basis of representative information; Appraise on the basis of sufficient information; Appraise on the basis of relevant information; Be honest on your assessment of all the facts you have obtained; vi. vii. Dont write one thing and say another; In offering an appraisal, make it plain that this is only your personal opinion of the facts as you see them; viii. Pass on appraisal information only to those who have good reason to want it; ix. Dont imply the existence of an appraisal that has not been made; x. Dont accept anothers appraisal without knowing the basis on which it was made.

CHAPTER-4 4. LEARITA PRIVATE ENGINEERING LIMITED 4.1 COMPANY INFORMATION JUDE INDIA
This organization was founded in the year 1992 with humble beginnings doing general fabrication jobs by Mr. Antony Sequeira. However, the year 1994 brought in a new era for this company. We diversified into manufacturing mechanical systems for medical x-ray machines. As our product is health related and considering population growth in India, we found it to be the best to rely on. Therefore we have become one of the major suppliers to Philips Electronics India Limited. We have also started developing new products (mechanical) for Philips Electronics (India) Limited and few other companies like Medx Technologies (P) Limited.

LE-ARLITA ENGINEERING PVT LIMITED

As our parent company Judes India grew and space became a criteria for expansion, we bought a new SSI unit in the year 2002 and christened it Le-Arlita Engineering Pvt Limited. Here too we are carrying out the same activities as Judes India and we are able to meet the growing demands of our products. Complete x-ray machines are manufacture in le-arlita company but only the camera and x-ray tube is been imported from Japan. The branded x-ray machines cost upto 16 lakhs.

And the machines which le-arlita manufacture cost upto 7-9 lakhs. They export 20- 30 xray machines in a at a time previously they used to sell 50 machines at a time .Now they have started exporting 25-30 x ray machines to Philips Electronics. All the machines are usually manufactured at learlita company in ambarnath itself and sometimes it is manufactured at their Goa branch. Current they have 5 supervisors and 60 workers working in both the units i.e in Judes India and le- arlita ltd.

MANUFACTURING PROCESS
1. Procurement of raw materials 2. Manufacturing of components either in-house or by subcontracting. 3. Inspection 4. Assembly 5. Inspection 6. Despatch

4.2 PERFORMANCE APPRAISAL IN LEARLITA ENGINEERING PRIVATE LIMITED

Performance appraisal has been considered as a most significant and indispensable tool for our organization. They help pinpoint weak areas in the primary systems (e.g. marketing, finance and production).It is easier for the managers to see which employee needs training or counselling. It has also helped us in achieving our objectives

like maintain individual and group development, to suggest ways of improving the employees performance, to identify the training and development needs of the employees and to evaluate effectiveness of training and development programmes. We have the traditional method of performance appraisal in our company.

4.3 METHODS OF PERFORMANCE APPRAISAL USED IN LEARLITA

We have traditional method of performance appraisal in our company they are as follows: Essay appraisal:-it is based on description of the performance of the employee by his supervisor. Paired comparisons:-each employee is compared with all the others in the group one at a time. Critical incidence method:-the supervisor makes a note on how did the employee behaved during that incidences and on the basis of which performance appraisal is done. Field review:-supervisor rates the employee and a senior of HR department discuss it with the supervisor.

4.4 PERSON INTERVIEWED

Learlita ltd has a training policy in which they have they set rules and procedures for training they need employees with atleast a basic education till 10th .They also hire employees who have a knowledge about manufacturing companies and people like the turner, welder, fitter from outside. They also train the employees in different type of work so that they have knowledge about each and every function which takes place in the company. They identify their training needs for the following: To improve their productivity. To improve their quality. To help a company fulfil its future personnel needs. To improve Organisational climate. To improve Health and safety. Obsolescence prevention. Personal growth. Based on the results of productivity and the employees behaviour towards his work and his attitude they determine which employee needs to be trained. Mostly the old employees dont need training as they are been trained before being hired on the job but based on their performances sometimes the old employees also need training so we do train them accordingly. The new employees need to be trained as they are not aware of the machines and their functioning. Hence both the old employees and the new employees are trained as per their requirements.

Following is the steps for the preparation of the learner/trainee: Putting the trainee at ease. Telling him the importance &ingredient of the job. Explaining him why he is being taught. Creating his interest and what already he knows about the job. Putting him in his normal working condition. And making him aware of all the machines.

Training is structured in the following manner: Basic knowledge about the job and the design is given. Then he is given knowledge about different types of raw materials which used during the manufacturing process. They are also been taught time and motion study and how they can reduce the manual work by using automation . Then he is given knowledge about marking and taking measurement. Then he is given knowledge about how cutting is done effectively by using the machines provided for the same. Proper finishing is given to the part which is been cut. Then how to read the design is been taught and fitting of the part is taught. Then assembling of the parts is been taught. Then quality control and quality inspection is done.

The worker is given to work on his own and the supervisor

continuously supervises the employees work and provide them with proper guidance whenever required and the supervisor makes a note of the employee performance at work his and this how they get to know whether the training is been effective or not.

Following are the steps or processes which we conduct before performance appraisal: Goals and the desired behaviour is explained to the employee. The appraiser is supposed to fill up a performance appraisal form. The form contains 3 columns one is for the appraiser, second for the supervisor and the third for the manager. In this each of them fill the details required then this form is been submitted to the HR department. Documentation about the employees work is done as a proof. Proper feedback is given. And there is Elimination of personal bias.

Employees who are below average are removed from the job but normally it doesnt happen here they are trained if they are below average. Employees who have high potential are encouraged and given increment or they are promoted to a better job. Employee who performed bad are removed from the job. We use on the job technique of training we teach each and we

give regular coaching to them regarding the job and it is not limited to a particular employee but to all the employee. We always give them suggestion and also clear their doubts if needed. We also do job rotation for every employee so that he learns different job and he will not get bored doing the same job. Before training the status of the company was not that good but after training the productivity and the quality as increased and employees personal development is also done. Employees who perform well and the employee who self select themselves for performance appraisal their performance is appraised. Manger and the supervisor are the evaluators who evaluate the employees performance. Performance appraisal is done quarterly and annually. Following is the criteria for evaluation: Aligned with the organizational goals. Quantitative and qualitative factors are considered. Performances and end results are considered.

We have traditional method of performance appraisal in our company they are as follows: Essay appraisal:-it is based on description of the performance of the employee by his supervisor. Paired comparisons:-each employee is compared with all the

others in the group one at a time. Critical incidence method:-the supervisor makes a note on how did the employee behaved during that incidences and on the basis of which performance appraisal is done. Field review:-supervisor rates the employee and a senior of HR department discuss it with the supervisor.

Yes, Training and performance appraisal has helped our organisation and it has been effective because the productivity and quality of the products have increased, our sales have increased and employees personal development has also taken place.

5. CONCLUSION
More than any other tool in the organizational arsenal, the performance appraisal process has the power to direct the attention and energy of every organization member toward the achievement of strategic goals and corporate values. Although performance appraisal serves many important functional duties, performance appraisal is not an end in itself. Performance appraisal, used to its maximum benefit, is the means by which everyone in the organization understands and is held accountable for meeting truly important objectives.

5.1 COMMON MISTAKES & SOLUTIONS

Company uses only the Traditional method of appraisal. It does not use modern methods of performance appraisal. They should use modern method of appraisal as it will help their company more and the employees will also have a better idea about their companys goals, standards and they will work accordingly.

5.2 CONCLUSION