ACKNOWLEDGEMENT

I consider myself very fortunate to get the opportunity to conduct the training approval and

project assignment by TOSCANO. I got opportunity to get practical exposure into actual

environment and it provides me the golden opportunity to make my theoretical concept of

recruitment and selection process in a clearer way.

I am very much thankful to MR. Bruce Jansen for providing me the opportunity to do

the training in TOSCANO. Also, thankful to all the officials at TOSCANO for their

cooperation during my training, training for providing me necessary information without

which this project report would not have been completed.

I have gone through various sites, Research Books, Magazines and Newspapers to get

the accurate information for analysis and tried to find the best conclusion.

KONE MOHAMED

(BBM VIth SEM)

PREFACE

Summer training is the most vital part of an BBM course, both as a link between theory and

actual industrial practices as well as an opportunity for hands on experience in corporate

environment. I therefore, consider myself fortunate to receive the training in an esteemed

organization viz. TOSCANO. Yet the opportunity could not have been utilizes without the

guidance and support of many individuals who although held varied positions, but were

equally instrument for although completion of my summer training.

Mr. Bruce Jansen And also thanks to all my faculty members and my Parents and friends.

However, I accept the sole responsibility errors of omission and would be extremely grateful

to readers of this project report if they bring such mistake to my notice.

KONE MOHAMED

(BBM VIth SEM)

EXECUTIVE SUMMERY

Most organization have a performance appraisal (PA) program that has evolved over

time and is likely not meeting the need of employees and managers.

Many competing PA theories and practices exist making development of an effective

program difficult. However, done well, a strong PA program reinforces organizational

culture and helps employees achieve high levels of performance.

An effective PA program can improve key business measures such as Return on

Assets, Return on Equity, profit margins and earnings.

Every strong PA program has three elements performance tracking, informal

feedback, and formal appraisal.

Build on these three elements to customize your program to your organization’s goals

and values:

o Informal coaching is the single most significant factor in easing

retention and development talent.

o Forced ranking and forced distribution are techniques that work well in

competitive environments. Avoid them in team-based departments.

o 360-degree evaluations help to improve people management abilities.

Stay away from using them for manager compensation or disciplinary

purposes.

TABLE OF CONTENT

COMPANY PROFILE

INTRODUCTION

PERFORMANCE APPRAISAL

Management Performance appraisal is a method of evaluating the behavior of employees.

Performance appraisal or merit rating is one of the oldest and most universal practices of in

the work spot. Normally including both the quantitative and qualitative aspects of job

performance. Performance appraisal can be an effective instrument for helping people grow

and develop in organizational setting. Through a Well organized appraisal system. An

employee can create learning spaces for himself in an organization.

Effectively practiced and development oriented performance appraisal & Review system,

substantially contribute to the organization health. Organization cannot do away with

PERFORMANCE APPRAISAL. Some form of assessment of performance on a continuing

basis is essential for survival as well as growth of an organization. If and develop yardsticks

to measure it. If you want to improve performance. The performer has to be able to

understand it.

Performance appraisal is a systematic appraisal of the employee’s personality traits and

performance on the job and is designed to determine his contribution and relative worth to the

firm.

A formal definition of performance appraisal is that it is the systematic evolution of the

individual with respect to his or her performance on the job and his or her potential for

development

“Performance appraisal is a formal structured system of measuring and evaluating an

employee’s job, related behaviors and out comes to discover how and why the employee is

presently performing on the job an how the employee can perform effectively in the future

so that the employee, organization and society all benefit.”

Under performance appraisal, we evaluate not only the performance of a worker but also

his potential for development.

COMPONENTS OF APPRAISAL EVALUATION

As we have seen performance evolutions can be made a verity of reasons-counseling,

promotion, research, salary, administration or a combination of these therefore it is necessary

to begin by stating very clearly the objectives of the evolution program. Having done this, the

personal evolution system should address the questions, who, what, when, where, how? Of

performance appraisal

“WHO”

The appraisal can be accomplished by one or more individuals involving a combination of the

immediate supervisor, a higher level manager, a personal manager, the assessee’s peers, the

assesse himself and the assessee’s subordinates.

Usually the immediate supervisor must be interested with the task of rating the assesse

because he his most familiar with his work, and because he is also responsible for

recommencing or approving personal action based on the performance appraisal. The staff

specialists, i.e. the personal offer officer also do appraisal.

They may advise the supervisor while evaluating their subordinates stressing the need for

evidence for making specific appraisal judgments and comparing a particular subordinate’s

evolution with those of others.

The appraisal of an individual may also be done by his peers such appraisal proves effective

in predicting future management success.

This approach has its disadvantage that the individual may rate himself excessively high then

it would be if his superior rated him. Many companies use rating committees to evaluate

employees. These committees consist of supervisors, peers, and subordinates.

“WHAT”

The “why” of an appraisal is concerned with –

a) Creating and maintaining a satisfactory level of performance of employees in three

present jobs.

b) Highlighting employee needs and opportunities for personal growth and development.

c) Promoting understanding between the supervisor and his subordinates.

d) Providing a useful criterion for determining the validity of selection and training

methods and techniques and forming concrete measures for attracting individual of

higher caliber to the enterprise.

“WHEN”

The “when” answers the query about the frequency of appraisal? It has been suggested in

formal counseling should occur continuously. The manager should discuss an employee’s

work as soon as possible after he has judged it.

“WHERE”

The where indicates the location where an employee may be evaluated. It is usually done at

the place of work or office of the supervisor.

“HOW”

Under how the company must decide what different methods are available and which of these

may be used for performance appraisal. Based on the comparative advantages and

disadvantages it is decided which method suit the propose best.

PURPOSE OF PERFORMANCE APPRAISAL

To create and maintain a satisfactory level of performance

To provide information making decision for rewardingly of retrenchment etc

To guide the job changes with the help to continuous ranking

To contribute to the employee growth and development through training, self and

management development program.

To facilitate for testing and validating selection tests, interview techniques through

compeering there scores with performance appraisal ranks.

To facilitate fair and equitable compensation based on performance.

To help the superiors to have proper understanding about there subordinates.

WHAT SHOULD BE RATED

The seven criteria for assessing performance are:

1) Quality: The degree to which the process or result of carrying out an activity

approach perfection

2) Quantity: The amount produce expressed in monetary terms number of units, or

number of completed activity cycles

3) Timeliness: The degree to which an activity or an result produced

4) Cost effectiveness: The degree to which the use of organizations resources ( e.g,

human, monetary, technological, material) is maximized in the séance of waiting

the highest gain

5) Need for supervision: The degree to which a job performer can carry out job

function without supervisory assistance

6) Interpersonal impact: The degree to which performer promotes feeling of self-

esteem, goodwill and cooperation among co-workers and subordinates.

7) Training: Need for training of improving his skills knowledge.

OBJECTIVE OF PERFORMANCE APPRAISAL

A good performance appraisal has following objectives: -

Help employee to TOSCANO. His weaknesses, and improve his strengths, and thus

enable him to improve his performance and that of the department.

Generate adequate feedback and guidelines from the reporting officers to the

employee

Contribution to the growth and development of the employee thru helping in realistic

goal setting

Help identifying employees for the purpose of motivating, training and developing

them.

Generate significant relevant, free and valid information about employees thus good

performance appraisal and review system should primarily focus on employee

development

METHODS OF APPRAISAL

Broadly all the approaches to appraisal can be classified into: -

Past-oriented:

Rating scales

Checklist

Forced choice method

Forced distribution

Critical incident method

Behaviorally anchored scales

Field review method

Annual confidential report

Essay method

Cost accounting approaches

Comparative evolution approach

Ranking method

Paired-comparison method

Future-oriented:

Management by objectives

Psychological appraisals

Assessment center

METHODS OF PERFORMANCE APPRAISAL

Past Oriented Methods

Rating scales:

This is the simplest and the most popular technique for employee performance. The

typical rating-scales system consists of several numerical scales, each representing job

related performance criterion such as dependability, initiative output, attendance,

attitude, co-operation and the like. Each scales ranges from excellent to poor. The rater

checks the appropriate performance level on each criterion, and then computes the

employees total numerical scores.

Checklist:

In this method, the raters don’t evaluate employee performance, he supplies reports

about it and the personal department does the final rating a series of question are

presented concerning and employee to his behavior. The rater, then, to indicate if the

answer to a question about an employee in positive or negative. Generally, the

questions are on yes/no pattern.

Forced choice method:

In this rater is given a series of statements about employee. These statements are

arranged in block of two or more, and the rater indicates which statements is most or

least disruptive of the employee

Critical incident method

The approaches focus on certain critical behavior of an employee that makes all the

difference between effective and noon effective performance of a job. Such incidents

are recorded by the superiors as and when occur.

Behaviorally Anchored Rating Scales

Sometimes this is called behavioral expectation scales, are rating scales whose scale

point are determined by statements of effective and ineffective behaviors. A rater must

indicate which behavior on each scale best describes an employee’s performance.

Field review method

This is an appraisal by someone outside the assesses on department usually someone

from the corporate office or H.R department. The outsider review employee records

and holds interviews with the rate and his or her superior, the method is primarily used

for make promotional decision at the managerial level.

Annual confidential report method

In this method each employee is rated confidentially by one or more senior officers

for his performance. The report deals with the years work and general opinion of the

rater towards the employee. The main problem with his method is that it is not data

based and the appraisal is done the bases of impression.

Essay method

In the essay method, the rater must describe the employee with in a number of broad

categories such as-

a) The rater’s overall impression of the employee’s performance

b) The promotability of the employee

c) The jobs that the employee is now able or qualified to perform

d) The strength and weakness of the employee and the training and the development

assistant required the employee.

Comparative Evolution Approaches

These are a collection of a different methods that compare one worker’s performance

with that his/ her co-workers. Supervisors usually conduct comparative appraisals. As

these appraisals can results in a ranking from best to worst they are useful on deciding

merits-pay increases promotions and organizational rewards. We can classify it into-

a) Ranking method

In this, the superior his or her subordinates in the order of there merits starting from

the best to the worst. This method is subject to the hallo and recency effects, although

ranking by two or more raters can be averaged to help reduce biases. It advantages

include ease of administration and explanation.

b) Paired-Comparison method:

Under this method the appraiser compares each employee with every other employee,

one at a time. The number of comparisons may be calculated with the help of formula,

which reads thus-:

N (N-1)/2

360 DEGREE PERFORMANCE APPRAISAL

Typical appraisers are: supervisors, peers, subordinates employees themselves users

of service and consultants. Performance appraisal by all these parties is called “#^)

DEGREE PERFORMANCE APPRAISAL”

1. Supervisors: Supervisors include superiors of the employee other superiors having knowledge

about the work of the employee and department head or manager. General practices is

that immediate superiors appraise the performance, hitch in turn reviewing by the

departmental head/ manager.

2. Peers: Peer appraisal may be reliable if the work group is stable over a reasonably long

period of time and perform tasks that require integration.

3. Subordinates: The concept of having superiors rated by subordinates is being used in most

organizations today especially in developed countries, such a novel method can be

useful in other organizational settings too provided the relationship between superiors

and subordinates are coordinal.

4. Self-Appraisal: - In individuals understand the objective they are expected to achieve and the standard

by which they are to be evaluated, they are to a great extent in the best position to

appraise their own performance.

5. Users of service customers: - employee performance in service organization relating to behaviors, promptness,

speed in doing the job accuracy, can be better judged by the customers or users of

services.

6. Consultants: - Sometimes consultants may be engaged for appraisal when employees or employers

not trust supervisor and management does not trust the self-appraisal a peer appraisal

or subordinate appraisal.

THE POST APPRAISAL INTERVIEW

This interview provides the employee the feedback information, and an opportunity to the

appraiser to employee his rating, the trail and behavior he has taken into consideration etc.

Further it helps both the parties to review standards, set new standards based on the reality

factors and helps the appraisal to offer his suggestion, help, guide and coach the employee for

his advancement.

Thus, the post appraisal interview is designed to achieve the following the objectives.

To let employee know where stand

To help employee do better job by clarifying what is expected of them

To plan opportunities for development and growth

To provide an opportunity for employees to express themselves on performance relate

issue.

Thus, post appraisal interview is most helpful to the employee as well as his superior.

KEY ELEMENTS OF PA SYSTEMS

1) Performance improvement: -

Performance feedback allows the employee, manager, and personnel specialists to

interview with appropriate action to improve performance.

2) Compensation adjustments: -

Performance evaluations help decision-makers determine who should receive pay

raises.

Many firms grants part or all of their pay increase and bonuses based upon merit,

which is determine mostly through performance appraisal.

3) Placement decisions: -

Promotions, transfers, and demotions are usually based on past on anticipated

performance.

4) Training and Development Needs: -

Poor performance may indicate the need for retraining. Likewise, good performance

indicates untapped potential that should be developed.

5) Career Planning And Development: -

Performance feedback guides career decisions about specific career paths.

6) Information Inaccuracies: -

Poor performance indicate errors in job analysis information’s human resource plan,

or other parts, or the personal management information’s systems. Reliance on

inaccurate information may have led to inappropriate hiring, training, or counseling

decisions.

7) Job Decision Errors: -

Poor performance may be a system of ill-conceived job designs. Appraisal help

diagnose these others.

8) Equal Employment opportunity: -

Accurate performance appraisals that actually measure job- related performance

ensure that internal placement decisions are not discriminatory.

9) Feedback to human resource: -

Good/bad performance throughout the organization indicate how well the human

resource function is performing.

STAGES OF PERFORMANCE APPRAISAL

PROCESS

Performance Appraisal is a Nine-Step Process: -

1PERFORMANCE STANDARDS ARE ESTABLISHED

2INFORM THESE STANDARDS

3INSTRUCTION GIVEN FOR APPRAISAL

4FINDING OUT THE INFLUENCE

5COMPARING THE PERFORMANCE

6FINDING OUT DEVIATION

7COMMUNICATING, THE ACTUAL PERFORMANCE

8SUGGESTING NECESSARY CHANGES

9FOLLOW-UP OF PERFORMANCE APPRAISAL REPORT

At the First stage, performance standards are established based on job description

and job specification. The standard should be clear, objective and incorporate all

the factors.

The Second stage, is to inform these standards to all the employees including

appraisers.

The Third stage, is following the instruction given for appraisal measurement of

employee performance by the appraisers through observations interview, records

and reports

The Fourth stage, is finding out the influence of various internal and external

factors on actual performance.

The Fifth stage is comparing performance with that of other employee and

previous performance.

The Sixth stage is comparing the actual performance with the standards and

finding out deviations.

The Seventh stage, is communicating the actual performance of the employee and

other employees doing the same job and discuss with him the reasons for positive

or negative deviations from the preset standards as the case may be.

The Eighth stage is suggesting necessary changes in standards, job analysis

internal and external environment.

The Ninth stage is fallow up performance appraisal report. This stage includes

guiding, counseling coaching and directing the employee or making arrangements

for the training and development of the employee.

PROBLEMS OF PERFORMANCE APPRAISAL

The major problem in performance appraisal: -

1) Rating Biases: -

The problem subjective measure (is that rating which is not verifiable by

others) has the opportunity for biases include: -.

a) Halo effect

b) The error of central tendency

c) The leniency and strictness biases

d) Personal prejudice

e) The Recency effect

Halo Effect: -

It is the tendency of the raters to defend excessively on the rating of

one trait or behavioral consideration in rating all other traits or

behavioral consideration. One way of minimizing the halo effect is

appraising all the employee by one trait before going to rate basis of

another trait.

The Error Central Tendency: -

Some raters fallow play safe policy in-rating al the employee on the

middle point of the rating scale and they avoid rating the people at both

the extremes of the scale. They fallow play safe policy because of a

answerability to management or lack of knowledge about the job and

person he is rating or least interest in his job.

The leniency and Strictness: -

The leniency bias crops when some raters have an tendency to be

liberal in their rating by assigning higher rates consistently such rating

do not several any purpose equally damaging one is assigning

consistently low rates.

Personal Prejudice: -

If the rater dislikes any employee or any group, he may rate them at the

lower them which may distort the rating purpose affect the career of

these employee.

The Recency Effect: -

The raters generally remember the recent actions of the employee at

the times of rating and rate on the basis of this recent action.

1) Favorable or unfavorable rather than on the whole activities.

2) Failure of the superior in conducting performance appraisal and

post performance appraisal interview.

3) Most part of the appraisal is based on subjectivity.

4) Less reliability and validity of the performance appraisal technique.

5) Negative ratings affect interpersonal relations system.

WHY APPRAISAL TECHNIQUES PROVE FAILURE

Performance appraisal techniques have often failed to give a correct assessment of the

employee. The causes of such failure are: -

1) The supervisor plays dual and conflicting role of the both the judge and the helper.

2) Too many objectives often cause confusion.

3) The superior feels that subordinate appraisal is not rewarding.

4) A considerable time gap exist between two appraisal programs.

5) The skills required for daily administration and employee development are in conflict.

6) Poor communication keeps employees in the dark about what is expected of them.

7) There is the difference of opinion between a supervisor and a subordinate concerning

the liter’s performance.

8) Feedback on appraisal is generally unpleasant for both supervisor and subordinate

9) Unwillingness on the part of superior to tell employee plainly how to improve their

performance.

About Employee: -

Safe and friendly Work Environment-:

What sort of environment are you providing your employees?

Use of Employees-:

Is the business maximizing it’s use of employee to best suit the business needs?

Employee Knowledge-:

How familiar (what knowledge) are your employee with the running of

machine/equipment, products of the companies? Does employee require training?

Employee Happiness-:

Are the employees happy with their wages, rewards and hours of work given?

PERFORMANCE MATRIX

In principle the individual performance matrix (IPM) can be notionally divided into two

parts-:

Team matrix

Individual matrix

KRA 1 to 5

For achievement of the set targets, the prescribed credit points would accrue to all

team members for the team performance and to an individual for the individual

performance.

Any drop / deviation from the targets will lead to ‘Debit’ to while the overall debit

points for the negative variance vis-à-vis has been prescribed for the team the

individual will be liable to the lose additional points bin case of direct responsibility

for deviation.

These ‘debit’ points will be determine depending on gravity of error, quantum of loss,

extraneous/inhibiting factors, etc, as a part of appraisal process.

KRA 6

It is intended to cover every individual distinguishing contribution/ efforts made in respect of

either assigned projects or innovations, cost saving measures value additions etc. this has

been specifically design to acknowledgement and reward individual excellence.

KRA 7

(health Safety/fire, environment) “Debit” will apply to an individual and his superiors but his

not peers / others who may not be connected with the safety incident. Similarly there is scope

to earn separate credit points for an individual through safety suggestion and reporting of

“near misses” and unsafe acts/conditions/

KRA 8

(Training and HR) this is intended to cover self training, training of subordinates, for the

training programs organized by learning center are HR based on individual need assessment

of self & subordinates.

These also include quarterly review, counseling and maintaining of performance diary.

KRA 9

(Quality System & Documentation) this include proper maintenance of each and every

documents of ISO 9000 and 14001 for surveillance audits, also revision of SOPs / SOCs

decided by the plant.

KRA 10

(Industrial Relations) there is a scope for a team to earn separate credit points based on the

number of implement suggestion. In this case the team means the concern immediate

supervisor, production / department manager and plant manager.

Disciplinary Action

It will be deemed to be complete when the matter is brought to logical Conclusion resulting

in either appropriate punishment or withdrawal of Chargge sheet. However, no debit will be

accrued in the event of Prolonged enquiry beyond the control of the employee. Further for the

Discipline violations not reported and discovered.

Tier – II

The appraisal for managerial key dimension determined carder wise with 20% weightage.

Performance Diary

The performance diary is a meant to track / capture the significant performance events

whether positive or negative ( Credit or Debit). This is also the tool for recording the personal

contribution in terms of innovative ideas, suggestions, cost saving efforts etc.

The filling up the performance diary is most critical and important aspect on which the entire

system rests. Each and every individual has responsibility to highlight ‘event’ in the

performance diary, timely and properly.

While for an individual on the other hand, it may mean establishing clear responsibility for a

fault/formal operation / misjudgment etc. on the other hand it will mean recording of credits

worthy efforts / contribution which may otherwise go unnoticed.

It is also essential to mention the impact of the incident in the terms of beneficial and

detrimental consequences as the case may be. Where ever possible, the consequence needs to

be quantified. Two important factors which is likely to be recorded in the performance diary

are as follows-:

Facilitating Factor:

Are those factors that are beyond the control of the appraise that have led to better

performance. Example: Availability of resources in time.

Inhibiting Factor:

Are those factors that are beyond the control of the appraise they have led to poor

performance. EXAMPLE: power failure that has led to loss of output.

Whom it will be Available:

The performance diary will remain in custody of the immediate superior and it will be the

joint responsibility of the appraise to maintain the sanctity of this instrument through timely

and meticulous recording. Infect, maintenance of “performance diary” has been kept as the

important parameter for performance assessment.

Who will be The Appraiser:

The appraiser will be the sectional head / departmental head.

RESEARCH METHODOLOGY