A REPORT

SUMMER

TRAINING

ON

PERFORMANCE APPRAISAL

AT

NATIONAL FERTILIZERS LTD. PANIPAT (HARYANA)

SUBMITTED IN THE PARTIAL FULFILMENT OF THE REQUIRMENT FOR THE TWO-YEAR FULLTIME DEGREE COURSE IN MBA

SUBMITTED BY: R OOHI SIKKA R OLL NO 15

ROYAL INSTITUTE OF MANGEMENT AND TECHNOLOGY (AFFILATED TO MD UNIVERSITY)

DECLARATION

I, ROOHI Roll no-15,class M.B.A. 3rd sem. of RIMT (chidana) of business studies hereby declare that the summer training report entitled PERFORMANCE APPRAISAL at NATIONAL FERTILIZERS LIMITED is on original work and has not been submitted to any other institute for award of any other degree.

ROOHI SIKKA

PREFACE
Management Education has contributed a lot in the growth of business and industry throughout the world. This report is a part of Post Graduate Degree in Human Resource Management. The objective of this summer training is to make student aware of the practicalities of business. It provides good opportunity to the student to work with experienced manager in the Industry. The study on Training procedure was conducted for NATIONAL FERTILIZERS LIMITED All efforts made to accomplish this work sincerely as the requirement of this course.

ACKNOWLEDGEMENT
I have submitted the project report on PERFORMANCE APPRAISAL SYSTEM in the partial fulfillment of the requirement of Kurukshetra University . A large number of individual have contributed to this project. I am thankful to all of them for their help and encouragement. As far as possible, they are fully acknowledged at their appropriate places. I express my gratitude to all of them. I express my gratitude to Shri M.K. Agarwal, Chief Manager(P&A) to allow me to do training at NFL. I graciously thank Shri HIRA for his nice guidance and proper direction while working for project. He has been constant source of motivation. Further I acknowledge Shri P.Jairajan for his suggestions and time to time guidance. I am also thankful to Shri S.C.SAINI, HR Asst. Manager for his valuable guidance and information.

CONTENTS
Preface Acknowledgement Introduction to industry Company profile Introduction to topic Performance appraisal system in NFL Objectives of study Research methodology Analysis and interpretation Conclusions Limitations Recommendations Annexure Bibliography

INTRODUCTION TO FERTILIZERS INDUSTRY India fertilizer industry is one industry with immense scopes in the future. India is primarily agriculture oriented country and its economy is highly dependent on the agrarianproduce. The majority of the populace of India lives in rural areas and the foremost occupation in the villages is agriculture. Developments pertaining to different industries are being made on a massive scale to change the country's economy from an agrarian one to a industrial one. It is extremely important for the fertilizer industry India to have development in terms of technologically advance manufacturing process and innovative new-age products. The agricultural sector and its other associated spheres provide employment to a large section of the country's population and contribute about 25% to the GDP. The Indian Fertilizer Industry is one of the allied sectors of the agricultural sphere. India has emerged as the third largest producer of nitrogenous fertilizers. The adoption of back to back Five Year plans has paved the way for self sufficiency in the production of food grains. In fact production has gone up to an extent that there is scope for the export of food grains. This surplus has been facilitated by the use of chemical fertilizers. The large scale use of chemical fertilizers has been instrumental in bringing about the green revolution in India. The fertilizer industry in India began its journey way back in 1906. During this period the first Single Super Phosphate (SSP) factory was established in Ranipet in Chennai. It had a capacity of producing 6000 MT annually. In the pre and post independence era a couple of large scale fertilizer units were established namely the Fertilizer Corporation of India in Sindri, Bihar and the Fertilizer & Chemicals Travancore of India Ltd in Cochin, Kerala. The Indian government has devised policies conducive to the manufacture and consumption of fertilizers. Numerous committees have been formed by the Indian government to formulate and determine fertilizer policies. The dramatic development of the fertilizer industry and the rise in its production capacity has largely been attributed to the favorable policies. This has resulted in large scale investments in all three sectors viz. public, private and co-operative. The Department of Fertilizers is responsible for the planning, promotion and development of the Fertilizer industry. It also takes into account the import and distribution of fertilizers and also the financial aspect. There are four main divisions of the department. These include Fertilizer Imports, Movement and Distribution, Finance and Accounts, Fertilizers Projects and Planning and Administration and Vigilance. It makes an assessment of the individual requirements of the states and union territories and Though the soil in India is rich in silt, it lacks chief plant nutrients like potassium, nitrogen and phosphate then lays out an elaborate supply plan. At present there are 57 large scale fertilizer units. These manufacture an extensive range of phosphatic, nitrogenous and complex fertilizers. 29 of these 57 units are engaged in the manufacturing of urea, while 13 of them produce Calcium Ammonium Nitrate and Ammonium Sulphate. The remaining 20 fertilizer plants manufacture complex fertilizers and DAP. There are also a number of medium and small scale industries in operation, about 72 of them. The following table elucidates the installed capacity of each sector.

Sl. No

Sector

Capacity (LMT)

Percentage Share

N 1 2 3

P Private Sector Public Sector

N 53.94 34.98

P 35.13 4.33 17.13 56.59 44.73 29.0 26.27 100.0 62.08 7.65 30.27 100.0

Cooperative Sector 31.69 Total 120.61

MARKET SHARE

Private Sector Public Sector Cooperative Sector

Reports showed the total installed capacity of fertilizer production in 2004 to be 119.60 LMT of nitrogen and 53.60 LMT of phosphate. These figures went up to 120.61 LMT of nitrogen and 56.59 LMT of phosphate in 2007. The production of fertilizers was 113.54 LMT of nitrogen and 42.21 LMT of phosphate during 2005-06. The target of production for 2006-07 was set at 114.48 LMT of nitrogen and 48.20 LMT of phosphate. Though the target production was not met, there was a growth in production during 2006-07 as compared to the production during 2005-06.

Indian fertilizer industry has reached international levels of capacity utilization by adopting various strategies for increasing the productions of fertilizers. These include the following:

 Expansion and increase in efficiency through modernization and revamping of existing fertilizer units. Reviving some of the closed fertilizer plants. Using alternative sources, such as coal or liquefied natural gas for the production of fertilizers, especially urea. Establishing joint venture projects with companies in countries that abound in cheaper resources of raw materials. In order to meet the demand for gas, which is one of the prime requirements for the production of nitrogenous fertilizers, India has entered into joint ventures with foreign companies in a number of countries. Joint ventures have also been established for the supply of phosphoric acid. Indian fertilizer manufacturing companies has joined hands with companies in Senegal, Oman, Jordan,Morocco,Egypt,Tunisia and other countries. It is, therefore, evident that the Indian fertilizer industry has witnessed extensive growth and development in a short span of time. With such extensive growth, it is not surprising that the India ranks among the leading fertilizer manufacturing countries of the world.

LOCATION OF FERTILIZER COMPANY

National Fertilizers Limited, Panipat Unit

THE COMPANY AS A WHOLE NFL is a Schedule -A & Mini Ratna Category- I Company and is a market leader in the fertilizer Industry in India with about 16.5% share in Urea Production. It is a profitable public sector undertaking operating under the administrative control of Department Of Fertilizers in the Ministry of Chemicals & Fertilizers. NFL was incorporated on 23rd August 1974 with two manufacturing Units at Bathinda and Panipat. Subsequently, on the reorganization of Fertilizer Group of Companies in 1978, the Nangal Unit of Fertilizer Corporation of India came under the NFL fold. The Company expanded its installed capacity in 1984 by installing and commissioning of its Vijaipur gas based Plant in Madhya Pradesh. Subsequently, the Vijaipur plant doubled its capacity to 14.52 Lakh MT by commissioning Vijaipur Expansion Unit i.e. Vijaipur-II in 1997. The plant annual capacities have now been re-rated w.e.f. 1.4.2000 from 7.26 lakh MT of Urea to 8.64 Lakh MT for Vijaipur-I and Vijaipur-II Plants each. Installed Capacity: The Company has an installed capacity of 32.31 lakh MTs of Nitrogenous Fertilizers and has recorded an annual sales turnover of Rs. 3865.68 crores during 2006-07. The Companys strength lies in its sizeable presence, professional marketing and strong distribution network nationwide. Kisan Urea: NFLs popular brands are sold over a large marketing territory spanning the length and breadth of the country. The Company also manufactures and markets Biofertilizers and a wide range of industrial products like Methanol, Nitric Acid, Sulphur, Liquid Oxygen, Liquid Nitrogen etc. The Company has developed Neem Coated Urea which improves the crop yield by 4-5%. The Company is focusing its thrust to widen the marketing operations of Neem Coated Urea. NFL is an ISO Certified Company: All NFL plants including Corporate Office/ Marketing operations have been certified for ISO9001:2000 for conforming to international quality standards and International Environmental Standard i.e.ISO-14001.NFL is equally concerned about the safety of its plants and people therefore implemented internationally accredited OHSAS-18001 safety standards. Thus NFL has become the first Fertilizer Company in the country to have its total business covered under ISO Certification.

Urea is an essential commodity under the Essential Commodities Act, 1955 The Department of Fertilizers plans and monitors production, import and distribution of fertilizers and management of subsidy for indigenous and imported fertilizers in the country.

Products Kisan Urea Kisan Urea is a highly concentrated, solid, nitrogenous fertilizer, containing 46.0% Nitrogen. It is completely soluble in water hence Nitrogen is easily available to crops. IT is ideally suitable for all types of crops and for foliar spray which instantly removes nitrogen deficiency and helps in absorption of other nutrients like phosphate and Potash by roots of crop. Neem Coated Urea National Fertilizers Limited (NFL) is the first fertilizer manufacturer in the country, which has developed Neem Coated Urea and the process for its manufacture on large scale. Neem Coated Urea regulates the release of Nitrogen to the plants over longer period and has better self life in respect of tendency to become cake during storage. The Panipat Unit of National Fertilizers Ltd. Is situated on National Highway No. 1 and DelhiAmritsar railway trunk route. Panipat city is about 90 km from Delhi and is covered in the National Capital Region. Panipat is a historical city, which was the scene of three historical battles. Panipat is also famous for its handloom industry. The Panipat Project was approved by the Govt. of India on 10th February 1975 for implementation. Prime consultants for design, engineering, erection and commissioning of the Plants were M/s Toyo Engineering Corporation of Japan and M/s Engineers India Ltd. Starting from the zero date 30.04.75, the Feed-in was achieved on 01.09.78 i.e. within 40 months of the Zero-date. The Unit went in commercial production from 01.09.1979. The cost of the project was Rs. 221.33 Crore (Rs. 2213.3 Million).

ACHIEVEMENTS It has won number of awards and recognitions in the fields of production, productivity, safety, welfare, innovation, environment protection, skills etc. The Unit is also well known for its commitment towards environment protection and social welfare in the region.

Plant & Capacities Plant Ammonia Plant Urea Plant Capacity 900 MT/ day 1550 MT/ day

Sulphur Recovery Plant Steam Generation Plant Captive Power Plant Captive Power Plant Boiler Coal Handling Plant DM Water Plant Raw Water Plant Bagging Plant Effluent Treatment Plant

26.5 MT/ day 3 x 150 MT/hr 2 x 15 MWH 210 MT / hr 150 & 250 MT/hr 375 M3/hr 2,400 M3 / hr 4,000 MT/day 200 M3/hr

Environmental Control & Ecological Balance at NFL, Panipat Panipat Unit is acknowledged for its environmental friendliness. The unit is fully conscious of its responsibility towards pollution control & environmental protection. Utmost care is taken to ensure that no harmful gases are discharged to the atmosphere. The Unit is regularly monitoring the level of emissions for various stacks before letting down to atmosphere. The Unit has obtained ISO-14001 certification relating to Environment Management System which has resulted in maintaining pollution free environment through continuous efforts and achieving 0 discharge of effluents. Periodical analysis of Ambient Air and Liquid Effluent is carried out and the same has always been well within the prescribed limit of State Pollution Control Board & MINAS.

Coal and Oil Quality: NFL constantly ensures receipt of coal and oil with low sulphur and ash contents so as to have minimum discharge of effluents in air and water. Moreover, the sulphur present as impurity in feedstock is recovered as valuable import substitute product in sulphur recovery plant and not allowed to be vented as waste effluent gas. Air Quality:

The boiler flue gas discharge stacks have sufficient height which allows complete dispersion and dilution of pollutants at ground level. The sulphur dioxide emitted in flue gases coming out of the stack is as low as 300 mg/ NM3 against prescribed limit of 834 for SGP and 2245 mg/ NM3 for CPP. The NOX level metered at various ambient air quality monitoring stations is about 10 ug/M3 against prescribed limit of 120 ug/M3. The ammonia content is less than 30 ug/M3 against 100 ug/M3 prescribed by State Authorities. Additional electrostatic precipitators have been installed in each boiler to further reduce the particulate matter. The fly ash emissions from the stacks are controlled to less than 65 mg/NM3 and 141 mg/NM3 from CPP and SGP boiler respectively against the prescribe limited of 350 mg/NM3. Water Quality: The total liquid effluent generated is monitored by measuring its pH, free ammonia, BOD, COD, total Kjeldahl nitrogen(TKN), heavy metals etc. which remain well within the prescribed limit of MINAS and State Pollution Control Board. Moreover, the entire quantity of treated effluent along with storm water is reused for de-ashing of boiler ash. Approximately 4% ash in the form of slurry is discharged to lined ash ponds and allowed for natural drying. Sufficient capacity is available in these ash ponds. In addition to above, NFL is committed to maintain an ecological balance in and around the factory area for which a dense thick green belt has been provided and new trees are planted every year. Further an environmental audit report is submitted annually to the State Pollution Board and no deviations whatsoever have so far been observed.

Employee Welfare Modern Township (Area 132 Acres) 100% Housing Satisfaction (912 Houses) 25 Bed Hospital First Aid Centre in Factory Canteen Facilities Shopping Centre, Recreation Centre & Fertilizer Club

School Upto 10+2 Bus facilities for students Community Hall Multipurpose Co-op. Society Post Office ATM Facility in Township Bank facility in Plant

NFL's MISSION

To be a market leader in fertilizer and a significant player in all it's other business; reputed for customer delight, optimum rewards to share holders, ethics, professionalism and concerned for ecology and the community.

Corporate objective NFL is an instrument of Society. It has to serve the needs of people within the scope of its basic objectives. NFL was set up to manufacture & market chemical fertilizers, other chemical & byproducts and provide allied services. Micro Objectives

Productivity Raise Capacity Utilization & improve upon consumption norms with emphasis on safety, pollution control and plant maintenance. 1. 2. Research and Development Profitability Reasonable return on investment Generation of increasing internal resource

Marketing & Consumer Services Organization Environment

To develop and maintain an organizational environment for encouraging individual & group initiative, innovation & productivity.

Growth To achieve reasonable & consistent growth in the business To work out diversification/ expansion schemes Obligation to Society To conduct business with ethical & legal standards and to economic activities. undertake socio-

To promote development of ancillary industries.

Plants

NFL Operating Plants are at : National Fertilizers Limited, Vijaipur, Distt. Guna, Madhya Pradesh-473111. Email : cc@nfl.co.in Fax : 07544 - 273089, 273109 Tel. : 91- 7544 - 273101, 273090

Vijaipur Plant

National Fertilizers Limited, Gohana Road, Panipat, Haryana-132106. Email : nflpanipat@nfl.co.in Fax : 0180- 2652515 Tel. : 0180- 2652481 to 485, & 0180- 2655570

Panipat Plant National Fertilizers Limited, Sibian Road, Bathinda, Punjab-151003. Email : nfladm@nfl.co.in Fax : 0164- 2270463; 0164- 2271270 Tel. : 0164- 2270220/2271200

Bathinda Plant National Fertilizers Limited, Naya Nangal, Distt. Ropar, Punjab-140126. Email : nangal@nfl.co.in Fax : 0187-220541 Tel. : 0187-220543

Nangal Expansion Plant

SWOT ANALYSIS OF NFL

S-STRENGTHS

W-WEAKNESS

O-OPPORTUNITY

T-THREATS

STRENGTHS

The Company with an excellent track record and high profits. An early starter - more than 30 years experience in the fertilizer industry. being Highly motivated and dedicated workers and officers Specialized service provided of international level. Maintaining hormonal industrial relations. Plant situated amidst high fertilizers consumption areas. A well-developed and efficient marketing network including private and institutional marketing arrangements. Excellent WEAKNESSES growth prospects with significant additions, modifications and replacements.

Over-staffing Modern technology because it is coal based not gas based

OPPORTUNITY It can lead India as the giant manufacturer of fertilizers in 21st century Potentials become a sourcing centre To develop marketing strategy to further add new customer in it existing list with innovation

THREATS

Threats from their competitor More aggressive marketing by the competitors

INTRODUCTION TO PERFORMANCE APPRAISAL HISTORY The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! MEANING Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to

dismiss employees or decrease pay.)

Definition IT IS THE SYSTEMATIC EVALUATION OF THE INDIVIDUAL WITH RESPECT TO HIS / HER PERFORMANCE ON THE JOB AND HIS OR HER POTENTIAL FOR DEVELOPMENT Performance Appraisal is aimed at: To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future. Provide information to assist in the HR decisions like promotions, transfers etc.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees. Helps to strengthen the relationship and communication between superior subordinates and management employees. Benefits of Appraisal Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive. Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced. Motivation and Satisfaction Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all. Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations. Recruitment and Induction Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years? Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining. Employee Evaluation Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal.But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual.

Process of performance apprasial

Methods of Performance Appraisal

TRADITIONAL METHODS Under the individual evaluation methods of merit rating, employees are evaluated one at a time without comparing them with other employees in the organization.

Confidential report: It is mostly used in government organizations. It is a descriptive report prepared, generally at the end of every year, by the employees immediate superior. The report highlights the strengths and weaknesses of the subordinate. The report is not databased. The impressions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee. The appraisee is not very sure about why his ratings have fallen despite his best efforts, why others are rated high when compared to him, how to rectify his mistakes, if any; on what basis he is going to be evaluated next year, etc. Since the report is generally not made public and hence no feedback is available, the subjective analysis of the superior is likely to be hotly contested. In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraisee. (b)Essay evaluation: Under this method, the rater is asked to express the strong as well as weak points of the employees behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating. While preparing the essay on the employee, the rater considers the following factors: (i) Job knowledge and potential of the employee; (ii) Employees understanding of the companys programmes, policies, objectives, etc.; (iii) The employees relations with co-workers and superiors; (iv) The employees general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general. Essay evaluation is a non-quantitative technique. This method is advantageous in at least one sense, i.e., the essay provides a good deal of information about the employee and also reveals more about the evaluator. The essay evaluation method however, suffers from the following limitations: It is highly subjective; the supervisor may write a biased essay. The employees who are sycophants will be evaluated more favorably then other employees. Some evaluators may be poor in writing essays on employee performance.

Appraiser takes a long time, this becomes uneconomical from the view point of the firm, because the time of the evaluator (supervisor) is costly.

(c)Critical incident technique: Under this method, the manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers performance. (d)Checklists and weighted checklists: A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent

variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others.

The following are some of the sample questions in the checklist. i) ii) iii) iv) v) Is the employee really interested in the task assigned? Is he respected by his colleagues (co-workers) Does he give respect to his superiors? Does he follow instructions properly? Does he make mistakes frequently? Yes/No Yes/No Yes/No Yes/No Yes/No

A rating score from the checklist helps the manager in evaluation of the performance of the employee. The checklist method have serious limitation. The rater may be biased in distinguishing the positive and negative questions. This method is expensive and time consuming.

Table: Typical Graphic Rating Scale Employee Name................... Job title................. Department......................... Data.................................. Rate...............

Quantity of work: Volume Unsatisfactory Fair of work under normal working conditions Quality of work: Neatness, thoroughness and accuracy of work Knowledge of job A clear understanding of the factors connected with the job Attitude: Exhibits

Satisfactory Good

Outstanding

enthusiasm and cooperativeness on the job Dependability: Conscientious, thorough, reliable, accurate, with respect to attendance, reliefs, lunch breaks, etc. Cooperation: Willingness and ability to work with others to produce desired goals.

From the graphic rating scales, excerpts can be obtained about the performance standards of employees. For instance, if the employee has serious gaps in technical-professional knowledge (knows only rudimentary phases of job); lacks the knowledge to bring about an increase in productivity; is reluctant to make decisions on his own (on even when he makes decisions they are unreliable and substandard); declines to accept responsibility; fails to plan ahead effectively; wastes and misuses resources; etc., then it can safely be inferred that the standards of the performance of the employee are dismal and disappointing.

(g) Forced choice method: This method was developed to eliminate bias and the preponderance of high ratings that might occur in some organizations. The primary purpose of the forced choice method is to correct the tendency of a rater to give consistently high or low ratings to all the employees. This method makes use of several sets of pair phrases, two of which may be positive and two negative and the rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker. Actually, the statement items are grounded in such a way that the rater cannot easily judge which statements applies to the most effective employee. The following box is a classic illustration of the forced choice items in organizations.

Table: Forced Choice Items 1. Least A B Does not anticipate difficulties Grasps explanations easily and quickly B Most A

C D 2. Least A B C D

Does not waste time Very easy to talk to

C D Most

Can be a leader Wastes time on unproductive things At all times, cool and calm Smart worker B C D

The favorable qualities earn a plus credit and the unfavorable ones earn the reverse. The worker gets over plus when the positive factors override the negative ones or when one of the negative phrases is checked as being insignificantly rated.

They overall objectivity is increased by using this method in evaluation of employees performance, because the rater does not know how high or low he is evaluating the individual as he has no access to the scoring key. This method has a strong limitation. In the preparation of sets of phrases trained technicians are needed and as such the method becomes very expensive. Managers may feel frustrated rating the employees in the dark. Finally, the results of the forced choice method may not be useful for training employees because the rater himself does not know how he is evaluating the worker In spite of these limitations, the forced choice technique is quite popular.

MODERN TECHNIQUES

(a) Behaviorally anchored rating scales: Also known as the behavioral expectations scale, this method represents the latest innovation in performance appraisal. It is a combination of the

rating scale and critical incident techniques of employee performance evaluation. The critical incidents serve as anchor statements on a scale and the rating form usually contains six to eight specifically defined performance dimensions. The following chart represents an example of a sales trainees competence and a behaviorally anchored rating scale.

Table: An Example of Behaviorally Anchored Rating Scale (BARS)

Performance Extremely good

Points 7

Behavior Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch with the customers throughout the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor. Can expect to inform only a part of the customers. Can expect to take extended coffee breaks and roam around purposelessly.

Good Above average Average Below average Poor Extremely poor

6 5 4 3 2 1

How to construct BARS? Developing BARS follows a general format which combines techniques employed in the critical incident method and weighted checklist ratings scales. Emphasis is pinpointed on pooling the thinking of people who will use the scales as both evaluators and evacuees.

Step 1: Collect critical incidents: People with knowledge of the job to be probed, such as job holders and supervisors, describe specific examples of effective and ineffective behavior related to job performance.

Step 2: Identify performance dimensions: The people assigned the task of developing the instrument cluster the incidents into a small set of key performance dimensions. Generally between five and ten dimensions account for most of the performance. Examples of performance dimensions include technical competence, relationships with customers, handling of paper work and meeting day-to-day deadlines. While developing varying levels of performance for each dimension (anchors), specific examples of behavior should be used, which could later be scaled in terms of good, average or below average performance?

Step 3: Reclassification of incidents: Another group of participants who are knowledgeable about the job is instructed to retranslate or reclassify the critical incidents generated (in Step II) previously. They are given the definition of job dimension and told to assign each critical incident to the dimension that it best describes. At this stage, incidents for which there is not 75 per cent agreement are discarded as being too subjective.

Step 4: Assigning scale values to the incidents: Each incident is then rated on a one-to-seven or one-to-nine scale with respect of how well it represents performance on the appropriate dimension. A rating of one represents ineffective performance; the top scale value indicates very effective performance. The second group of participants usually assigns the scale values. Means and standard deviations are then calculated for the scale values assigned to each incident. Typically incidents that have standard deviations of 1.50 or less (on a 7-point scale) are retained.

Step 5: Producing the final instrument: About six or seven incidents for each performance dimension all having met both the retranslating and standard deviation criteria will be used as behavioral anchors. The final BARS instrument consists of a series of vertical scales (one for each dimension) anchored (or measured) by the final incidents. Each incident is positioned on the scale according to its mean value.

Because the above process typically requires considerable employee participation, its acceptance by both supervisors and their subordinates may be greater. Proponents of BARS also claim that such a system differentiates among behavior, performance and results and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job-specific and identifies observable and measurable behavior, it is a more reliable and valid method for performance appraisal.

Management by Objectives (MBO): MBO represents a modern method of evaluating the performance of personnel.
(b)

According to Drucker, McGregor and Odiorne in management science. Management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members.

MBO thus represents more than an evaluation program and process. Practicing management scientists and pedagogues view it as a philosophy of managerial practice; it is a method by which managers and subordinates plan, organize, control, communicate and debate. Features MBO emphasizes anticipatively set goals that are tangible, verifiable and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods). MBO, by concentrating on key result areas translates the abstract philosophy of management into concrete phraseology. The technique can be put to general use (nonspecialist technique). Further it is a dynamic system which seeks to integrate the companys need to clarify and achieve its profit and growth targets with the managers need to contribute and develop himself. MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals. It allows the subordinate plenty of room to make creative decisions on his own.

(c)360 degrees the 360-degree technique is understood as systematic collection of performance data on an individual or group , derived from a number of stake holders., being immediate supervisors, team members,customers,peers, and, self. the 360-deGREE appraisal provides a brooders perspective about an employees performance. In addition , the technique facilitates greater self development of the employees. For ones development, multi sources feedback is highly useful. It enables employee to compare his/her perception about self with perception of others. This technique is particularly helpful in assessing soft skills possessed by employees. By design, the 360-degree appraisal is effective in identifying and measuring interpersonal skills, customer satisfaction, and team building skills.

Drawback Receiving feedback on performance from multiple sources can be intimating. Time consuming Biasness (d)The Critical Incidents File

The critical incidents file is a performance appraisal method in which the manager writes down positive and negative performance behavior of employees throughout the performance period. The critical incidents file is a form of documentation that is needed in this litigious environment These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers performance. This method provides an objective basis for conducting a thorough discussion of an employees performance. This method avoids recency bias (most recent incidents get too much emphasis). This method suffers however from the following limitations:

Negative incidents may be more noticeable than positive incidents. The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session. It results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it. Most frequently, the critical incidents technique of evaluation is applied to evaluate the performance of superiors rather than of peers of subordinates.

RESEARCH METHODOLOGY

RESEARCH METHODLOGY The main conclusion and give recommendation it is necessary to search about the given topic. As my topic is related to the performance appraisal system, the secondary data has been very useful for this purpose. The forms which are used in performance appraisal are used. Mainly secondary data has been used. To know about the performance appraisal , I have talked to various persons in P &A department. Main topics of Research methodology are: Reason for choosing this topic Objective of the study

 Research Methodology Steps in Research Methodology Collection of data Organization of data Presentation of data Interpretation of data REASON FOR CHOOSING THIS TOPIC It will be helpful to me in my professional career. Performance appraisal system is an important part for every organization. It will be helpful for checking the effectiveness of performance appraisal. It will be helpful for making decision. It will be helpful to draw the shortcomings faced by the organization. It will be helpful for studying why profits are decreasing and liabilities are increasing.

OBJECTIVE OF THE STUDY An organizations goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his/her best performance on a given job? The answer is performance appraisal. Employee assessment is one of the fundamental jobs of HRM, but not an easy one though. Performance appraisal is an objective assessment of an individuals performance against well defined bench marks. PRIMARY OBJECTIVE To evaluate the effectiveness of performance appraisal system in NFL To study the perception of employees towards the existing performance appraisal system in NFL To measure the satisfaction level in employees in their current job To know the factor which are help in getting a good result in the performance appraisal rating To know the improvement points of doing performance appraisal system in their organization from employees

SECONDARY OBJECTIVE

RESEARCH METHODOLOGY PROBLEM To study the performance appraisal system in NFL and effectiveness of system. TYPES OF RESEARCH This research employed four type of research: Descriptive research. Analytical research. Qualitative research. Quantitative research. DESCRIPTIVE RESEARCH OR EX-POST FACT RESEARCH To conduct the research work accurately, we conducted descriptive research. It includes surveys and fact finding inquires of diff. Kinds. It is done to know following fact: To know the attitude of management towards performance appraisal system To know the attitude of employees towards the performance appraisal system To know the effectiveness of performance appraisal

ANALYTICAL RESEARCH In it, we have to use facts and information already available and analysis these to make an evaluation for project. QUALITATIVE RESEARCH In selecting the approximate research design of the study and the type of data needed, the choice of data collection techniques is done . QUANTITATIVE RESEARCH

Quantitative research is obtained to rate the different aspect on parameters. METHODOLOGY The project includes both primary % secondary sources of data. The data collected through these sources has been org. analyzed and interpreted so as to draw conclusion and arrive at appropriate recommendation. Primary source of data: - personal interview and by filling questionaire. Secondary source of data: - manual, website of NFL. Company which contains details which is helpful for making my project report. SAMPLE DESIGN Sample design is definite plan determine before any data are actually gathered for obtaining a sample from a given population Sample area- employees of the organization (NFL) Sample size- 100

STEPS IN METHODOLOGY Collection of Data Organization of Data Presentation of Data Analysis of Data Interpretation of Data

COLLECTION OF DATA: both the primary and secondary data has been collected from the market and the company respectively. The secondary data are provided through the annual report; website etc. of the company and the primary data was collected through the medium of face-to-face intersection through questionnaire.

ORGANIZATION OF DATA: Data once collected needed to be organization for further processing. Data collected by me was carefully gone through then the relevant and useful matter was assorted and properly organized.

PRESENTATION OF DATA: The data collected is no use unless and unstill it is given in presentable form. Thus after proper organization the data is given in a presentable form with complete detail with the help of bar diagrams, pie chart etc.

ANALYSIS OF DATA: The data is carefully analyzing keeping in consideration both the pros and cons for the purpose of arriving at concentrate conclusion.

INTERPRETATION OF DATA: After carefully analyzing the data, it has been apply interpreted in order to give concrete conclusion and proper recommendation.

1. WHAT ARE THE OBJECTIVES OF PERFORMANCE APPRAISAL? IN THIS QUESTION YOU CAN TICK MORE THAN ONE OPTION:-

FOR PROMOTION

TO CONFIRM THE SERVICE OF PROBATIONARY EMPLOYEES

FOR TRAINING AND DEVELOPMENT

TO LET THE EMPLOYEE KNOW WHERE THEY STAND

E TO DETERMINE WHETHER HR PROGRAMMERS SUCH AS TRAINING, RECRUITMENT ETC HAVE BEING EFFECTIVE OR NOT

A 80

B 3

C 10

D 5

E 2

PERCENTAGE
90 80 70 60 50 40 30 20 10 0 1 OPTION A B C D E

Findings: 80% says objective of performance appraisal is promotion 2% says objective of performance appraisal is to determine whether HR such as training, recruitment etc have being effective or not. programmer

2. WHICH CATEGORY DO YOU BELONG?

EXECUTIVE STAFF

NON-EXECUTIVE STAFF

C D

SUB-STAFf OTHERS

A 60

B 12

C 24

D 4

60 50 40 30 20 10 0 1 A B C D A B C D

Findings: 60% respondents belongs to executive category 12% respondents belongs to non-executive category 24% respondents belongs to sub-staff category 4% respondents belongs to others category 3. WHAT IS THE DIVISION OF PERFORMANCE OF PERFORMANCE APPRAISAL?

DEPARTMENT VISE

AT DIFFERENT LEVEL

SAME FOR LEVEL & DEPARTMENT

D A 16

ANY OTHER B 76 C 4 D 4

Findings: 76% respondents say the division of performance of performance appraisal is according to the different level. 4% respondents say the division of performance of performance appraisal is same for level and department.

4. HOW DOES THE COMPANY CONDUCT A PERFORMANCE APPRAISAL?

THROUGH FORMS

ESSAY

CRITICAL INCIDENT

MBO

CONFIDENTIAL REPORT

BARS

A 24

B 8

C 8

D 0

E 76

F 0

PERCENTAGE 80 70 60 50 40 30 20 10 0 A B C A B C D D E F F OPTION E

Findings: 76% respondents say performance appraisal is conduct through confidential reports. 24% respondents say performance appraisal is conduct through forms. 8% respondents say performance appraisal is conduct through critical incident. 0% respondents say performance appraisal is conduct through MBO and BARS. 5. IF THE COMPANY USES A PERFORMANCE APPRAISAL FORM THAN WHAT CRITERIA DOES IT USE?

NUMBER OF TRAITS

NUMBER OF PERFORMANCE INDICATOR

BEHAVIOR INDICATOR

ANY OTHER

A 10

B 80

C 5

D 3

90 80 70 PERCENTAGE 60 50 40 30 20 10 0 A B C OPTION D E

Findings: 80% respondents say criteria used by company is number of performance indicator.3% respondents say criteria used by company is other.

7. WHO DOES THE EVALUATION OF PERFORMANCE?

SUPERVISORS

SELF

CUSTOMS

PEERS

SUBORDINATE

A 96

B 4

C 0

D 0

E 0

100 90 80 70 60 % 50 40 30 20 10 0

A B C D E

Findings: 96% respondents say the evaluation of performance is done by supervisors. 4% respondents say the evaluation of performance is done by self.

1 OPTION

8. DOES THE COMPANY INFORM THE EMPLOYEE THAT HIS PERFORMANCE IS BEING APPRAISED?

YES

NO

YES 90

NO 10

100 90 80 70 60 50 40 30 20 10 0 YES OPTION NO

Series1

Findings: 90% respondents say company inform the employee that his performance is being appraised? 10% respondents say company does not inform the employee that his performance is being appraised?

9. DOES THE COMPANY FACE ANY PROBLEM IN CONDUCTING A PERFORMANCE APPRAISAL?

YES

NO

IF YES THEN PLEASE TICK

INDIVIDUAL HESITANCY

LACK OF PROPER PERFORMANCE

MORE STRICTNESS

FEELING OF THREAT TO SUPERVISORS

ANY OTHER BIAS

YES 16

NO 84

90 80 70 60 % 50 40 30 20 10 0 YES OPTION NO Series1

Findings: 84% respondents say the company does not face any problem in conducting a performance appraisal.

16% respondents say the company face any problem in conducting a performance appraisal.

PROBLEM FACED BY EMPLOYEES WHILE FILLING THE FORMS

INDIVIDUAL HESITANCY

LACK OF PROPER PERFORMANCE

MORE STRICTNESS

FEELING OF THREAT TO SUPERVISORS

ANY OTHER BIAS

A 4

B 3

C 2.25

D 5

E 1.75

5 4.5 4 3.5 3 % 2.5 2 1.5 1 0.5 0

A B C D E

1 OPTION

Findings: 4% respondents say they feel hesitancy

3% respondents say they face the problem of lack in their performance 5% respondents say they feel the fear of threat from supervisors 10. DOES THE COMPANY CONDUCT ANY TRAINING PROGRAM TO GUIDE EVALUATE ON HOW TO FILL THE FORM?

YES

NO

YES 76

NO 24

80 70 60 50 % 40 30 20 10 0 1 OPTION

YES NO

Findings: 76% respondents say yes that company conduct training program.

24% respondents say no that company does not conduct training program.

11. DOES THE COMPANY FIND THE PERFORMANCE APPRAISAL REALLY USEFUL?

YES

NO

YES 100

NO 0

100 80 PERCENTAGE 60 40 20 0 1 OPTION YES NO YES NO

Findings: 100% respondents say they feel performance appraisal is really useful. 0% respondents say they feel performance appraisal is not useful.

CONCLUSION

CONCLUSION

After the study it may conclude that performance appraisal system plays a very important role in an organization. With the help of the performance appraisal firm can measure the performance of the firm can take corrective steps. Without performance appraisal system no firm can evaluate the performance of the employee. In NFL, performance appraisal system is conducted annually. In NFL the performance appraisal is conducted through confidential reports. These reports are filled by superiors after that it sends to reviewing authority after that evaluation is completed. By analysis and interpretation of the data given conclusion can be drawn.

By conducting the performance appraisal good industrial relation has been established. Employees are satisfied

Good market image Due to effective performance appraisal system efficiency of employees has been increased which results in increase in profits. Effect of performance appraisal system is positive Low employee turnover ratio. Employees are well- motivated Good working environment

LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY In spite of the best efforts the study was subjected to the following limitations: Managers sometimes denied from disclosing some important information matters that can be helpful in this study.

Sample size is small that is hundred which is not sufficient for effective results. Some employees hesitate in filling questionnaire. Some Employees are not interested in filling the questionnaire. Employees are not correctly filling the questionnaire because they do not want mention any wrong about their firm Time constraint project has to be prepared in four weeks which is not sufficient

Recommendations
Each method has some its merits and demerits likewise performance appraisal used in NFL has also some loopholes and these loopholes can be removed by recommendation given below.

By adopting 360 degree methods.

 By considering the behavior indicators. Through training and interaction. Performance of the employee is appraised by the supervisors without any biasness under information to the concerned employee. Performance appraisal system should be conducted and taken by interest. Through regular training programs. By adopting self appraisal system.
Performance appraisal should be viewed strictly on the basis of job performance not on

the basis of job title, opportunity should be given to employees to work in his key areas. Performance appraisal system can be improved by introducing 360 degree and by measuring the performance free from any biasness. Performance of the individual should be communicated.
Performance should be measured by subordinate and superior of the appraisee.

QUESTIONNAIRE REGARDING PERFORMANCE APPRAISAL

(ALL THIS INFORMATION WILL BE KEPT CONFIDENTIAL AND IT IS USED ONLY FOR ACADEMIC PURPOSE ONLY)

1. WHAT ARE THE OBJECTIVES OF PERFORMANCE APPRAISAL? IN THIS QUESTION YOU CAN TICK MORE THAN ONE OPTION:-

FOR PROMOTION

TO CONFIRM THE SERVICE OF PROBATIONARY EMPLOYEES

FOR TRAINING AND DEVELOPMENT

TO LET THE EMPLOYEE KNOW WHERE THEY STAND

TO DETERMINE WHETHER HR PROGRAMMERS SUCH AS TRAINING, RECRUITMENT ETC HAVE BEING EFFECTIVE OR NOT

2. WHICH CATEGORY DO YOU BELONG?

EXECUTIVE STAFF

NON-EXECUTIVE STAFF

SUB-STAFF

OTHERS

3. WHAT IS THE DIVISION OF PERFORMANCE OF PERFORMANCE APPRAISAL?

DEPARTMENT VISE

AT DIFFERENT LEVEL

SAME FOR LEVEL & DEPARTMENT

ANY OTHER

4. HOW DOES THE COMPANY CONDUCT A PERFORMANCE APPRAISAL?

THROUGH FORMS

ESSAY

CRITICAL INCIDENT

MOB

CONFIDENTIAL REPORT

BARS

5. IF THE COMPANY USES A PERFORMANCE APPRAISAL FORM THAN WHAT CRITERIA DOES IT USE?

NUMBER OF TRAITS

NUMBER OF PERFORMANCE INDICATOR

BEHAVIOR INDICATOR

ANY OTHER

6. ON WHAT BASIS DOES THE COMPANY CONDUCT PERFORMANCE APPRAISAL?

QUANTITY + OUTPUT + RESULT

QUALITY + BEHAVIOR + ACTIVITY

TRAITS + COST OUTCOMES + BEHAVIOR

7. WHO DOES THE EVALUATION OF PERFORMANCE?

SUPERVISORS

SELF

CUSTOMS

PEERS

SUBORDINATE

8. DOES THE COMPANY INFORM THE EMPLOYEE THAT HIS PERFORMANCE IS BEING APPRAISED?

YES

NO

9. DOES THE COMPANY FACE ANY PROBLEM IN CONDUCTING A PERFORMANCE APPRAISAL?

YES

NO

IF YES THEN PLEASE TICK

AN INDIVIDUAL HESITANCY

LACK OF PROPER PERFORMANCE

MORE STRICTNESS

FEELING OF THREAT TO SUPERVISORS

ANY OTHER BIAS

10. DOES THE COMPANY CONDUCT ANY TRAINING PROGRAM TO GUIDE EVALUATE ON HOW TO FILL THE FORM?

YES

NO

11. DOES THE COMPANY FIND THE PERFORMANCE APPRAISAL REALLY USEFUL?

YES

NO

BIBLIOGRAPHY

www.performance_appraisal.com www.books.google.co.in www.managementhelp.org www.humanresources.about.com www.nflpanipat.com