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Project Report on Performance Appraisal System at Luminous Power Technologies Pvt.

Ltd. [SAR Group] [Submitted in the partial fulfilment for the award of the degree of Bachelor of Business Administration] Submitted By: Swati Pradhan University Roll No. - 56317UT10070 Faculty Guide:Corporate Guide: Prof. Biswaranjan Parida Mr. Vikas Sikka CERTIFICATION FROM THE FACULTY GUIDE This is to certify that Swati Pradhan, bearing University roll no. 56317UT10070, has successfully completed the project on “Performance Appraisal System” at Luminous Power Technologies Pvt.

Ltd. [SAR Group] from 16th May to 30th June 2012, for the partial fulfilment of BBA program of ASBM institute of BBA prescribed by Utkal University. To the best of my knowledge and belief, the thesis embodies the work of the candidate himself and has been duly completed. Simultaneously, the thesis fulfils the requirements of the rules and regulations related to the summer internship of the institute and I am assured that the project is up- to the standard both in respect to the contents and language for being referred to the examiner. Prof.

Biswaranjan Parida Faculty Guide ) ACKNOWLEDGEMENT The project as it stands today is the contributions of a few spirited individuals. I should not hesitate to thank them. Firstly, I take this opportunity to express my sincere gratitude to my corporate guide, Mr. Vikas Sikka, for his outstanding and relentless help and support. Secondly, I would like to thank my faculty guide, Prof. Biswaranjan Parida, whose sincere dedication and guidance helped me a lot to accomplish the work with an appreciable success.

Thirdly, I would like to thank our principal Prof. Dr. H. K.Panda for providing me the opportunity to do my summer internship project through which I got to learn so much. Fourthly, I would like to thank my family, friends, colleagues and teachers.

This project would not have been possible without them. Their utmost support and help made me to prepare a complete project of great praise. And lastly, it is only when one types out something that one realizes the true power of MSWord, from grammar checks to replace-alls. Without this software, this project could not have been written.

Thank you Mr. Bill Gates and Microsoft Corp!Swati Pradhan DECLARATION Date: I do hereby declare that the project titled “Performance Appraisal System” submitted to ASBM Institute of BBA is fully prepared by me and no part of it is copied. The project work is prepared solely for the submission in partial fulfilment of the requirements of Bachelor of Business Administration under Utkal University and it is not submitted for the award of any other degree, diploma or other similar title or prize. The above mentioned facts are true to the best of my knowledge and belief.

Swati Pradhan CHAPTERISATION Chapter-1Introduction 1. 1 Review of Literature 8 1. 2 Meaning of the study 9 1. 3 Objectives of the study 13 1.

4 Significance of the study 14 1. 5 Methodology 16 1. Sources of data collection 17 1. 7 Limitation of the study 20 Chapter-2 Company Profile 2. 1 Brief history of the company 21 2.

2 Vision, Mission and Objective of the company 22 Chapter- 3 Research Methodology 3. 1 Sampling Design 27 3. Methods of data collection 28 3. 3 Tool or technique used 29 Chapter-4 Data analysis & interpretation 31 4. 1 Data analysis 4. 2 Data interpretation Chapter-5 Conclusion 5.

1 Findings 46 5. 2 Suggestions 46 5. Conclusion 47 Annexure 48 CHAPTER 1: INTRODUCTION 1. 1 REVIEW OF LITERATURE Human Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every manager’s responsibility, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. People are our most valuable asset” is a cliche, which no member of any senior management team would disagree with.

Yet, the reality for many organizations is that their people remain undervalued, under trained and underutilized. Performance Appraisal is the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in the working organizations to evaluate personalities, contributions and potentials of employees.Managing human resources in today’s dynamic environment is becoming more and more complex as well as important.

Recognition of people as a valuable resource in the organization has led to increases trends in employee maintenance, job security, etc My research project deals with “Performance Appraisal as carried out at The Luminous Power Technologies PVT. LTD. [SAR Group]”. In this report, I have studied and evaluated the performance appraisal process as it is carried out in the company.The first section deals with performance appraisal.

In this section, I have given a brief conceptual explanation to performance appraisal. It contains the definition, process and significance of performance appraisal. The second section of my report deals with a detailed company profile. It includes the company’s history: its activities and operations, organizational structure, etc.

this section attempts to give detailed information about the company and the nature of its functioning.In the third section of my report, I have conducted a research study to evaluate the process of performance appraisal at The SAR Group; this section also contains my findings, conclusions, suggestions and feedback. The fourth and final section of this report consists of extra information that I related to the main contents of the report. These annexure include some graphs and diagrams relating to the company, graphs relating to the research study and important documents upon which the project is based.

1. 2 MEANING OF THE STUDYPerformance Appraisal is the important aspect in the organization to evaluate the employees’ performance. It helps in understanding the employees work culture, involvement, and satisfaction. It helps the organization in deciding employees’ promotion, transfer, incentives, pay increase. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization: * Recruitment * Selection * Induction * Performance Appraisal * Training & DevelopmentRecruitment The process of recruitment begins after manpower requirements are determined in terms of quality through job analysis and quantity through forecasting and planning. Selection The selection is the process of ascertaining whether or not candidates possess the requisite qualifications, training and experience required.

Induction Induction is the technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the organization. WHAT IS “PERFORMANCE APPRAISAL”?Performance Appraisal is defined as the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in working organizations and potential of employees. According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job. ” CHARACTERISTICS * Performance Appraisal is a process. It is the systematic examination of the strengths and weakness of an employee in terms of his job.

* It is scientific and objective study. Formal procedures are used in the study. * It is an ongoing and continuous process wherein the evaluations are arranged periodically according to a definite plan. * The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee. PROCESS The process of performance appraisal: * Establishing performance standards * Communicating the Standards * Measuring Performance Comparing the actual with the standards * Discussing the appraisal * Taking Corrective Action BENEFITS * Measures an employee’s performance. * Helps in clarifying, defining, redefining priorities and objectives.

* Motivates the employee through achievement and feedback. * Facilitates assessment and agreement of training needs. * Helps in identification of personal strengths and weaknesses. * Plays an important role in Personal career and succession planning. * Clarifies team roles and facilitates team building.

* Plays major role in organizational training needs assessment and analysis. Improves understanding and relationship between the employee and the reporting manager and also helps in resolving confusions and misunderstandings. * Plays an important tool for communicating the organization’s philosophies, values, aims, strategies, priorities, etc among its employees. * Helps in counselling and feedback.

LIMITATIONS * Errors in Rating * Lack of reliability * Negative approach * Multiple objectives * Lack of knowledge 1. 3 OBJECTIVES OF THE STUDY To carry out the study, I framed the following objectives * Identification of the technique of performance appraisal followed. Employee attitude towards the present appraisal system. * Review of the current appraisal system in order to Enhance productivity Attain global standards * To provide suggestions & recommendations from the study conducted.

Objectives of Performance Appraisal: * To enable the employees towards achievement of superior standards of work performance. * To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way. Boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism. * Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching. * Identifying the barriers to effective performance and resolving those barriers through constant onitoring, coaching and development interventions. * Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.

* Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills. 1. 4 SIGNIFICANCE OF THE STUDY According to Lockett (1992), performance appraisal aims at developing individuals with the required commitment and competencies for working towards the shared meaningful objectives within an organizational framework.Performance management frameworks are designed with the objective of improving both individual and organizational performance by identifying performance requirements, providing regular feedback and assisting the employees in their career development.

Performance management aims at building a high performance culture for both the individuals and the teams so that they jointly take the responsibility of improving the business processes on a continuous basis and at the same time raise the competence bar by upgrading their own skills within a leadership framework.Its focus is on enabling goal clarity for making people do the right things in the right time. It may be said that the main objective of a performance management system is to achieve the capacity of the employees to the full potential in favour of both the employee and the organization, by defining the expectations in terms of roles, responsibilities and accountabilities, required competencies and the expected behaviours. The main goal of performance management is to ensure that the organization as a system and its subsystems work together in an integrated fashion for accomplishing optimum results or outcomes.

Performance appraisal system includes the following actions. * Developing clear job descriptions and employee performance plans which includes the key result areas (KRA') and performance indicators. * Selection of right set of people by implementing an appropriate selection process. * Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks. * Providing continuous coaching and feedback during the period of delivery of performance.

Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement. * Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans. * Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks. * Providing promotional/career development support and guidance to the employees.

Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization. 1. 5 RESEARCH METHODOLOGY Statistical Survey: The method used here is called a statistical survey. Statistical survey is a method used to collect in a systematic way, information from a sample of individuals. Although most people are familiar with public opinion surveys that are reported in the press, most surveys are not public opinion polls (such as political polling), but are used for scientific purposes. Surveys provide important information for all kinds of research fields.

Since survey research is always based on a sample of the psychology, health professionals and population, the success of the research is dependent on the representativeness of the population of concern. The whole research process is smooth due to the selection of appropriate research methodology. Hence I have chosen the statistical survey, which deals with collecting information from primary source directly in the form of oral interview or questionnaire. This method is proved to be efficient one to get the data accurately and within the timeframe. 1. 6 SOURCES OF DATA COLLECTION Data collection is practical aspect of research methodology.

There are two sources of data collection for the research: 1. Primary source; and 2. Secondary source. Primary source refers to the first hand data. They are collected through direct interaction of the respondents.

The primary data are those which are collected afresh and for the first time, and therefore happen to be original in character. The secondary data are those which have already been collected by someone else and which have already been passed through the statically. The primary data can be collected through the following methods: 1. Observation, 2. Questionnaire, 3. Interview 4.

Survey, etc.The secondary data can be collected through the following: 1. Internet, 2. Published data (electronic, printed, etc. ), 3. Standardized source, 4.

Internal documents and reports, etc. Primary source 1. Observation: According to Gardner “Observation is the selection, provocation, recording and encoding of that set of behaviour and settings concerning organisms which are consistent with empirical aims. ” So observation is a method to collect primary data. In this method, the researcher observes and records the data.

2. Questionnaire: In general, it refers to a technique or device for securing nswers to the questions, by using a form which the respondent needs to answer him whether in written form or verbal form. 3. Interview: According to Gardner” interview is a two person conversation initiated by the interviewer for the specific purpose of obtaining research relevant information and focussed by him on the contents specified by the research objectives of description and explanation. ” So interview is method to collect primary data through face to face interaction and direct communication between interviewer and interviewee.

It also involves questionnaire method in it.The above primary data were collected through responses of employees or the workforce was conducted through questionnaires prepared for them. Secondary source 1. Internet: Internet contains a wide range of data on any topic. The derivation of data through this is a case of secondary source of data collection.

2. Published data: It refers to the data that are published in newspaper, magazine, journals, books, articles, hoardings, etc. It serves as the secondary data. 3. Standardised source: It refers to the store audits, warehouse withdrawals, consumer purchase panels and multimedia services, etc.

4.Internal documents and reports: It refers to the sales records, marketing activities, cost information, distribution reports feedbacks, etc. These types of data in the study are: i) Company Profile ii) Product Profile The aforesaid data were collected through Internet and company’s report. In this research work, the data is collected by questionnaire and interview method.

They are primary tool of data collection. The secondary data is collected through company reports, journals magazines and internet. 1. 7 LIMITATIONS OF THE STUDY There were certain difficulties that were experienced by the researchers (i.

e. us) while conducting the study.The limitations were:- * The researchers alone conducted the entire study. So it is difficult on the part of the researcher determine the accuracy and correctness of the data gathered. * Being an outsider to the organization, it is not easy on the part of the researcher to collect information that are confidential to the organization * It is very difficult to collect more samples for opinion survey.

CHAPTER 2: COMPANY PROFILE 2. 1 BRIEF HISTORY Founded in 1988 by Mr. Rakesh Malhotra, the SAR Group is a Delhi based group of companies which started with the marketing and distribution of DB UPS and Standard Batteries.SAR has also handled the distribution of Lubricants for some time.

1992- Direct Sales of Luminous Inverters. 1994- Luminous Inverter Channel Sales initiated. Luminous UPS Launched. 1997- Sar Softech Pvt. Ltd. is established.

Sar Adventure Tourism ; Holidays Pvt. Ltd. is established. 1998- Luminous Inverter Channel Sales Delhi NCR. 1999- Luminous Inverter Channel - North India.

2002- Luminous Inverter Channel - National Penetration initiated. Luminous LPG Geysers Launched. Tez Inverters Launched. 2003- Luminous Inverter National Reach through 100 plus distributors and 4000 plus resellers and growing.Luminous Electric Storage Geysers Launched: February 2003.

India's First Zero Pollution Inverter Launched - Luminous Bi2 Zero P:May 2003 Luminous Tiranga Inverters Launched: July 2003 Luminous Water Purifiers (UV and RO) Launched in Delhi & NCR. Luminous LPG Geysers Launched: November 2003 Luminous Emergency Light Launched: November 2003 2004- Tez LPG Geyser Launched: January 2004 Luminous Eagle Picher Technology Tie-Up: Feb 2004 Luminous Coolers Launched: March 2004 Tez Coolers Launched: March 2004Luminous EaglePicher Batteries Launched: April 2004 Luminous iON Inverter Launched: August 2004 2005- Luminous Minimax Inverter Launched: February 2005 Luminous Crystal RO Water Purifier Launched: March 2005 Luminous Home UPS Launched: May 2005 Luminous Sinewave Inverters Launched: May 2005 2. 1 VISION, MISSION AND OBJECTIVES Vision: "Passionately innovate to make life comfortable and efficient. "| | Mission: Be the brand of choice for products and services that generate, control, store and use electricity efficiently.

Through passionate people we innovate to consistently deliver a tangible competitive advantage in reliability, service and cost. Core Values: "CUSTOMER DELIGHT through INNOVATION & PASSION with focus on EXECUTION & TEAMWORK (TOGETHERNESS)" Corporate Philosophy: * We will constantly listen and respond to our Employees, End Customers, Channel Partners and Suppliers * All our products and processes will be aligned to meet the end customer needs. * We will constantly improve the quality of our products and services. * We will be a lean and flexible organization that quickly and correctly responds to business opportunities. All our employees, suppliers and channel partners must make a measurable, positive contribution towards the success of our business. * All aspects of our business will be quantified and performance measurement will be directly linked to business decisions, compensation and rewards.

It specifies the method and procedure for acquiring information needed to conduct the research effectively.It is the overall operational pattern of the project stipulated what information needed to be collected, for which sources and by what method. In statistics and survey methodology, sampling is concerned with the selection of a subset of individuals from within a population to estimate characteristics of the whole population. 3.

1 SAMPLING DESIGN Sampling is that part of statistical practice concerned with the selection of unbiased and random subset of individual observation within may be challenged about the population and concerned especially for the purpose of making prediction based on statistical reference.Sampling is an important aspect of data collection. Sample is the small group taken under consideration from the total group. The sampling process comprises several stages: * Defining the population of concern * Specifying a sampling frame, a set of items or events possible to measure * Specifying a sampling method for selecting items or events from the frame * Determining the sample size * Implementing the sampling plan * Sampling and data collecting The Sampling design I adopted for my research was: Sample Size= 50 Employees Duration= 45 days 3. 2 DATA COLLECTION METHODS Primary Data:Primary data was collected through survey method by distributing questionnaires to 50 employees of the organisation.

The questionnaires were carefully designed by taking into account the parameters of my study. Primary data was collected through a questionnaire. It is one of the most common methods of collecting primary data. A questionnaire was prepared for the employees in the survey to understand the pros and cons of Performance Management over the company as well as the workforce or human resource. Secondary Data: Data was collected from books, magazines, web sites, going through the records of the organisation, etc.

It is the data which has been collected by individual or someone else for the purpose of other than those of our particular research study. Or in other words we can say that secondary data is the data used previously for the analysis and the results are undertaken for the next process. These types of data in the study are: i) Company Profile ii) Company Database 3. 3 TOOLS OR TECHNIQUES USED Questionnaire A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents.Although they are often designed for statistical analysis of the responses, this is not always the case. The questionnaire was invented by Sir Francis Galton.

Questionnaires have advantages over some other types of surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. However, such standardized answers may frustrate users. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them.Thus, for some demographic groups conducting a survey by questionnaire may not be practical. As a type of survey, questionnaires also have many of the same problems relating to question construction and wording that exist in other types of opinion polls. Data Evaluation The data so collected were not simply accepted because it contained unnecessary information and over or under emphasized facts.

Therefore only relevant data were included in the report, which helped in achieving the objectives of the project. CHAPTER 4: DATA ANALYSIS AND INTERPRETATION FINDINGS AND ANALYSISEmployees Opinion as to the Purpose of Performance Appraisal Performance standards / yardsticks Options| Response| Yes| 84| No| 16| Awareness of technique of Performance Appraisal being followed among Employees Options| Response| Yes| 72| No| 28| Number of Employees being appraised during their service period Options| Response| Yes| 68| No| 32| Employees’ opinion as to the present appraisal system Options| Responses (in %)| Fully Satisfied| 2| Satisfied| 24| Can’t Say| 44| Dissatisfied| 30| Employee perception as to the frequency of appraisal Options| Response (in %)| Once During The Service Period| 2|Continuous| 92| Never| 0| Can’t Say| 6| If continuous appraisal – what should be the gap between two appraisal period Options| Response (in %)| Quarterly| 20| Half Yearly| 44| Yearly| 36| How Performance Appraisal affects the productivity of the employees | Motivated| Indifferent| Demotivated| + Feedback | 38| 12| -| - Feedback | 12| 10| 28| Neutral | 24| 21| 5| Who should do the appraisal? Options| Response ( in % )| Superior| 24| Peer| 0| Subordinate| 0| Self Appraisal| 8| Consultant| 4| All of the above| 48| Superior + Peer| 16| Does appraisal help in polishing skills and performance area?Options| Response ( in % )| Yes| 74| No| 10| Somewhat| 16| | | | | If the process of appraisal does not lead to the improvement of the skills and proficiency of the employees, the very purpose of appraisal becomes illogical. In the survey conducted it was observed that nearly 74 % of the respondents agree that Performance Appraisal does leads to polishing the skills of the employees. Nearly 10 % of the respondents view that it does not serve this purpose and around 16 % were not able to respond as to whether it serve any such purposes or not. Does personal bias creeps-in while appraising an employee?Options| Response ( in % )| Yes| 82| No| 18| | | In the process of appraising, both the parties are human being, that is, the one who is being apprised and the other who is appraising. Thus, there bound to be subjectivity involved, be it an objective way of appraising.

Thus, when asked from among the sample size of 50 respondents, as huge as 82 % responded that personal bias do creep in while appraising an individual. Hence, it is inevitable to say that personal likings do not come in the process of appraisal. It is the extent to which the appraiser manages it so that it does not become very partial and bias.If given a chance, would employees like to review the current appraisal technique? Options| Response ( in % )| Yes| 72| No| 4| Can’t Say| 24| Appropriate method of conducting the performance appraisal Options| Response ( in % )| Ranking Method| 12| Paired Comparison| 0| Critical Incidents| 20| MBO| 58| Assessment Centre| 4| 360 degree| 6| Does performance appraisal leads to identification of hidden potential? Options| Response ( in % )| Yes| 96| No| 4| CHAPTER 5: CONCLUSION 5.

1 FINDINGS After having analyzed the data, it was observed that practically there was no appraisal in the organization.To be an effective tool, it has to be on the continuous basis. This is the thing that has been mentioned time and again in the report, as, in the absence of continuity, it becomes a redundant exercise. 5. 2 SUGGESTIONS Before actually deciding drafting what should be the kind of appraisal the following things should be taken care of: 1.

The very concept of performance appraisal should be marketed throughout the organization. Unless this is done, people would not accept it, be it how important to the organization. 2. To market such a concept, it should not start at bottom, instead it should be started by the initiative of the top management.

This would help in percolating down the concept to the advantage of all, which includes the top management as well as those below them. This means that the top management has to take a welcoming and positive approach towards the change that is intended to be brought. 3. Further, at the time of confirmation also, the appraisal form should not lead to duplication of any information. Instead, detailed appraisal of the employee’s work must be done – which must incorporates both the work related as well as the other personal attributes that are important for work performance.

. It should be noted that the appraisal form for each job position should be different as each job has different knowledge and skill requirements. There should not be a common appraisal form for every job position in the organization. 5.

The job and role expected from the employees should be decided well in advance and that too with the consensus with them. 6. A neutral panel of people should do the appraisal and to avoid subjectivity to a marked extent, objective methods should be employed having quantifiable data. 7.The time period for conducting the appraisal should be revised, so that the exercise becomes a continuous phenomenon.

8. Transparency into the system should be ensured through the discussion about the employee’s performance with the employee concerned and trying to find out the grey areas so that training can be implemented to improve on that. 5. 3 CONCLUSION Ideally in the present day scenario, appraisal should be done, taking the views of all the concerned parties who have some bearing on the employee.

But, since a change in the system is required, it cannot be a drastic one.It ought to be gradual and a change in the mindset of both the employees and the head is required. Annexure Questionnaire for Research Personal Details: Name:_____________________________________________ Age:________ Email:________________________@_______________________ Address:______________________________________________________________________ ___________________________________________________________________________________________________________________ 1. Employees’ opinion as to the present appraisal system a) Fully Satisfied b) Satisfied ) Can’t Say d) Dissatisfied 2.

Employee perception as to the frequency of appraisal a) Once during the service period b) Continuous c) Never d) Can’t Say 3. What in your opinion should be the time period of conducting continuous Appraisal? a) Quarterly b) Half Yearly c) Yearly Any specific reason……………………………… 4. Does Performance Appraisal helps in improving the productivity of the employees? MotivatedIndifferentDemotivated + Feedback - Feedback Neutral . Who in your opinion should appraise the employee? a) Superior b) Peer c) Subordinates d) Self Appraisal e) Consultant f) All of the above g) Superior + Peer 6. Does the appraisal system helps in polishing the skills or performance area? a) Yes b) No c) Somewhat 7. Do you think personal bias creeps in while appraising an individual? a) Yes b) No 8.

If given a chance or an opportunity would you like that the current appraisal procedure should be reviewed? ) Yes b) No c) Can’t Say 9. What according to you should be the appropriate method for conducting performance appraisal? a) Ranking Method b) Paired Comparison c) Critical Incidents d) MBO e) Assessment Centre f) 360 Degree 10. Does Performance Appraisal leads to identification of hidden potential of the employees? a) Yes b) No Suggestions and views…………………………………...

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