ashish project

SUMMER TRAINING REPORT

ON

EFFECTIVENESS OF

PERFORMANCE APPRAISAL

SYSTEM IN ESCORTS AGRI-

POWERTRAC LTD,

FARIDABAD

SUBMITTED IN THE PARTIAL FULFILLMENT OF THE DEGREE

OF BACHELOR OF BUSINESS ADMINISTRATION (2006-2009).

SUBMITTED TO: SUBMITTED

BY:

CONTROLLER OF EXAMINATION Nupur Singh

M.D. UNIVERSITY, 2405

ROHTAK BBA 5TH

SEMESTER

D.A.V INSTITUTE OF MANAGEMENT

INDEX

Sr. No. ParticularsChapter -1 INTRODUCTION OF THE

TOPICMan power planningObjectives of HRMScope of HRMRole of HRMManagerial function of HRMTeam EffectivenessObjectives of the study

Chapter-2 COMPANY PROFILEHistory of InsuranceInsurance sector in IndiaImportant MilestoneHistory of ICICI InsuranceDifferent Plans of ICICIVision and missionResearch methodologyMethods of data collectionPrimary data Secondary data

Chapter-3 ANALYSIS AND INTERPRETATIONSurveys of customers Limitations of the study

Chapter-4 CONCLUSIONS AND RECOMMENDATIONAnnexureBibliography

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ACKNOWLEDGEMENT

This project report prepared by me is a result of the joint effort of several

helping hands of the Personnel Department of Escorts Ltd., Farmtrac Division,

Faridabad. The knowledge of our theoretical studies is absolutely incomplete without

its proper implementation and application in the diversified corporate world of today.

I have been really opportunistic to be a part of the Escort Group during my summer

training, which is one of the leading business houses in today’s scenario.

An undertaking of study like this is never an outcome of efforts put in by a

single person, rather it bears imprint of number of persons who directly or indirectly

helped me in completing the study.

At the outset I would like to extend my sincere gratitude to Mr. K. S. Yadav,

(Head of Personnel Department, Farmtrac Division) for providing the opportunity to

carry out the research & for providing guidance during the preparation of the report

whenever needed.

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I would like to thank Mr. VISHAL SINGH Personnel Manager-I.R. for

providing the basic knowledge on personnel management, project topic & the

methodology to be used for preparing the report. I am also thankful to Mr. S.P

Tyagi, (HR Manager), for sharing his knowledge.

Last but not the least, I am thankful to the MS. SURBHI KAPOORlecturer

who has provided me the necessary guidance and shared her experiences without

which it was not possible for me to complete this project.

I am once again, thankful to members of ESCORTS Group for their co-operation.

(NUPUR SINGH)

PREFACE

The study conducted in Farmtrac division of Escorts was aimed at finding out the effectiveness of performance appraisal system and to give suggestions to improve the system.

For the purpose of collection of the information the mode of communication of survey adopted was the collection of primary data through questionnaire with personal interview of the junior managers.

I have measured the effectiveness of performance appraisal system on the basis of certain aspects. These are:-

How regularly appraisal is done.

Is appraisal system has the scope for communicating top management objectives.

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Is appraisal system also helpful in explaining what is expected from the employee?

Is appraisal system focuses on individual development for better results.

To what extent appraiser helps appraisee to plan performance in advance.

Are appraisal system helps employees to plan their performance well in advance?

Is counseling helps in communicating the support needed by the employees from their superiors.

True feedback is there or not. And if it is there then whether it helps in getting insights into employees’ weaknesses and strengths.

Whether management is serious for the appraisal outcomes and follow-up with the training needs identifies during performance appraisal.

CHAPTER-1

INTRODUCTION TO THE

“ESCORTS LIMITED

(FARMTRAC)”

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THE ESCORTS SYMBOL

The Escorts symbol means more than a seen by the eye. It has been prepared

with certain objective in mind and is symbolic in more then one way.

The philosophy behind Escorts and the ‘E’ in the Escorts is “Enterprise”. The

Hexagon is a symbol of productivity, precision when interposed as a nut. It

symbolizes a craftsmanship, and mending productivity. The sprains superimposed on

the Hexagon represent the workers and the people of the Escorts. This forms the letter

‘E’ the first of Escorts a company even on the more changing unveiling the future.

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ESCORTS AGRI MACHINERY GROUP

The Vision

We shall strive to be the Numero Uno in the Indian

tractor industry and top five tractor manufacturers

in the world.

We shall continuously strive to meet the ever rising

expectations of our valued customers at the

lowest internal cost.

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We shall aim to offer the farming community a

range of innovative products and services, which

shall enable them to improve their productivity

and

competitiveness.

We shall achieve a turnover of RS. 20 Billion And

profit of RS. 2 Billion By the year 2000.

Transcending national boundaries, we shall strive

to attain exports of one tenth of our total tractor

production by the year 2000.

MISSION

We will achieve leadership in market share & profitability in the domestic

tractor market by the year 2004-2005 and shall be the world's largest supplier of

sub 100 HP tractors. We shall proactively contribute to the prosperity of the rural

economy by defining a larger role for ourselves in the Food and Agriculture sector.

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COMPANY PROFILE

ESCORTS LIMITED are the holding company of Escorts groups. Post restructuring,

Agri Machinery or tractors has become the focus area of operations. Other businesses

like I.T., construction equipment are controlled through subsidiaries and joint

ventures.

HISTORICAL BACKGROUND

Escorts came into being with a vision and a mission. A vision that led two

brothers YUDI NANDA and HARI NANDA to branch out from their family’s

prospering transport business and institute ventures that were to become the

foundation of ESCORTS Ltd. Escorts agents limited was born at Lahore on 17th Oct,

1944 with YUDI NANDA as managing director and HARI NANDA as the chairman.

After that owning to the opportunities lying in the Indian villages Escorts

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(Agricultural Machines) Ltd., was launched in 1948 with YUDI NANDA as the

director. Tragically, he died in an accident in 1952. Then Escorts Agents Ltd. And

Escorts (Agricultural Machines) Ltd. Was merged in 1953 to create a single entity

Escorts Agents Pvt. Ltd. The company’s incorporation in its present name, Escorts

Ltd. was effected on 18th January 1960.

Having initially started with a franchise for vesting house domestic

appliances, Escorts has come a long way in manufacturing and marketing a large

range of products. It has pioneered farm mechanization in India through import and

distribution of agricultural tractors.

The manufacturing operations commenced in 1954, and since then the

following range of products have been introduced in the country:-

1954: Piston rings and Cylinder liners

1960: Pistons

1961: Assembly of tractors

1962: Motorcycles and railway couplers

1963: Automotive shock absorbers

1965: Agricultural tractors under Escorts brand name

1969: Agricultural tractors under Ford brand name

1971: Industrial and construction equipment

1979: Excavator loaders

1981: 100cc motorcycles

1985: Electronic PABXs

1991: Harvester combines

1992: VSAT Satellite Communication System

1993: Mobile communications

1995: Fork lift trucks

1996: Disengagement of joint venture collaboration with New Holland and launch of

FARMTRAC Tractor.

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The single word completely described the character philosophy and success

of the company, which grew from a small beginning to one of the ever-changing

dimensions. For five decades Escorts has been in the core sectors like Agriculture,

Transportation, Construction & Resources for Engineering change through optimum

product performance.

Today Company is running with nearly 10,000 employees, 19 modern

manufacturing plants and a turnover exceeding Rs. 400 crores. The Escorts group

ranks among India’s leading Engineering Conglomerates.

From its inception Escorts has firmly believed that success inspiring on being

close to the customer thus every corporate endeavor addresses it to end used,

adjusting to ever changing markets.

At every step of the way, Escorts had inducted the latest technology by

forming alliances with the world’s most advanced Engineering and Electronic

companies, constantly adopting their technology according to India’s need and

situation.

To make sure the finished product delivers on its promise the company had

created an extra-ordinary distribution and service network that stays with the

customer.

Escorts came into its own with a far reaching vision for the future to stay over

close to the customers with products made in India to international standards. The

source of Escorts consistent growth is commitment and contribution to the core needs

of the country. Escorts have firmly believed that success depends on being close to

the customers. As early as in 1944 while others were concentrating on selling their

goods. Escorts sought to “Escorts” its merchandise right up to the customer’s

doorstep. This meant staying close to the customer, understanding their needs, giving

them a product that met these needs ensuring that it worked smoothly thereafter.

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Today with Mr. Rajan Nanda as a Chairman and Mr. Anil Nanda as a Vice-

Chairman the ideals have not changed. Thus, every corporate endeavor addresses to

the end users and the ever-changing market, substantial man-hours are being devoted

to planning a new range with the objective of consistently offering greater value to

the customer.

“In every area we touch our task has always remained one of engineering

change” Rajan Nanda. In every step, Escorts has induced the latest technology to

make products that are not merely “better” but those meet international standard. For

Escorts, these are two benchmarks of industrial achievements, the distinct, undisputed

edge of technology and the internationalization of business.

In five decades Escorts has grown to become one of the top industrial

conglomerates in the country.

FIVE DECADES OF ENGINEERING CHANGE

THE DECADE OF CREATION: 1944-1954

The launch of Escorts Agents Pvt. In Lahore and setting it all up again in

Delhi after the country’s partition. The beginning of an industry legend, with a tractor

franchise, followed by India’s first institute of farm mechanization and the

company’s first industrial venture, Goetze (India) Ltd., at Patiala, in equity

collaboration with Goetze of Germany.

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THE DECADE OF AUTOMATION: 1955-1964

Escorts goes public. A full-fledged manufacturing orientation takes roots with

the commencement of Escorts’ own brand of tractors and next major field of

operation: motorcycles. The company joins hands with Mahle to produce India’s

most advanced pistons.

THE DECADE OF CONSOLIDATION: 1965-1974

The foundation of the Ford-Escorts alliance for India’s finest tractors, soon to

make the group the largest selling tractor manufacturing. Escorts Employees

Ancillaries Ltd., a unique venture in industrial democracy, comes into being.

Escorts receives FICCI Award for outstanding contribution to Indian

agriculture. The company crossed national boundaries with its first export of 400

tractors to Afghanistan, won in a global tender. A triumph of Escorts quality and

competitiveness, this was perhaps the world’s largest ever commercial airlift of its

kind.

THE DECADE OF DIVERSIFICATION: 1975-1984

One with Knorr Bremse follows an epoch-making alliance with JBC for

India’s first Excavator-loaders for railway breaks. With the Yamaha collaboration,

Escorts become the country’s largest motorcycle manufacturer. Acknowledged

leadership in automotive ancillaries- Mahle pistons and Goetze rings.

THE DECADE OF GLOBALISATION: 1985-1995

Escorts enters into joint venture with buy back arrangement with Class

(Harvester Combines) and Herion (Hydraulic valves) providing an entry to world

markets. A tie-up with Faun, powers the company to supremacy in hydraulic mobile

cranes. Escorts fights an epic battle against a corporate raid, the ultimate victory

providing the unshakable confidence of the company’s small shareholders

countrywide. Escorts Heart Institute commissioned, hailed as among Asia’s most

advanced. Escorts turnover crosses Rs. 15 billion. In the sunrise telecom sector,

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alliances with JS telecom, a Bosch company, and Hughes Network systems, world

leaders in VSAT networks.

THE DECADE AHEAD: 1996-

The Mission is Globalization and the emphasis will be on core sector

investments. Escorts is going in for a global network and for mega projects in the

21st century.

ESCORTS: RESTRUCTURING

Escorts Limited is all set to meet the future by drawing on its 50-year equity gained

from its inherent strengths, a strong presence in the Core Sector providing

complementary product lines and a vast marketing network; combining them with

India’s intrinsic cost advantages to become a global source point for high value

engineering products.

In order to meet the challenge of the future and to leave an indelible mark on

industrial scenario, Escorts has restructured the group along 4 business lines, each

headed by an independent CEO. The business groups are as follows:-

1) Agri Machinery Group

2) Construction Equipments

3) Automotive Ancillaries

4) Financial Services

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ESCORTS – THE GROUP INFRASTRUCTURE

The flagship of the Escorts group is Escorts Ltd. in the words of Mr. Rajan

Nanda. Chairman Escorts Limited., “in the last 50 years Escorts has been more than

merely one of India’s largest Engineering Companies. It has been a prime mover on

the industrial front; at every stage introducing products and technologies that helped

take the country forward in key areas. Today as the nation engages in its most

momentous economic transformation ever, we are once again adapting ourselves

towards being catalysts for qualitative growth by Engineering Change with a global

perspective.”

The group infrastructure comprises:-

23 main associates/subsidiary companies

12 manufacturing locations

A full-fledged R&D facility

Nearly 10,000 employees

24 regional marketing offices

Nearly 500 ancillaries forming the vendor base

4 financial services companies

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Asia’s best training institute of Farm Mechanization with 100 acre

demonstration farm.

EDDAL

Escorts Dealer Development Association providing management and

financial support to dealers.

THE ESCORTS GROUP

THE FLAGSHIP COMPANY

Escorts Limited

OPERATING DIVISIONS

o Agri machinery division

o Engineering division

o International business division

SUBSIDARY COMPANIES

o Escorts construction equipment Ltd.

(Cranes, excavators, truck loaders)

o Esconet services

o Escorts Automotives

(Investment)

o Escosoft technologies

o Escortal tele communication ltd.

o Cellnext solutions

o Automatrix India

o Escorts heart institute & research center

o Escorts hospital & research center

Medical care (erstwhile division of Escorts lived off 100% subsidy

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ASSOCIATE COMPANIES

o India Ltd. GOETZE (India) Ltd.

o GOETZE TP (India) Ltd.

o GOETZE (India) assets management Ltd.

o Escorts securities ltd.

o Escorts Mahle Ltd.

o Escorts Employees Ancillaries Ltd.

o Escorts Finance Ltd.

o IFS India Escorts

o Hughes Escorts communication ltd.

o Carraro (India) ltd.

ESCORTS GROUP CORE BUSINESSES

BUSINESS GROUPS PRODUCTS

Agri-Machnary Tractors

Construction equipment Earth moving Machines

Vibratory Rollers

Material Handling Equipments

Automotives Pistons, Piston Rings

Aluminum Cylinders

Shock Absorbers

Carburetors

Magnetos

Clutches

Railways Air Brakes

Couplers

Electro-Pneumatic Brakes

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Shock Absorbers

Telecom Cellular Telephone services

VSAT Services (satellite

communication system)

Financial Services Automobile Financing

Consumer Finance

Mutual Funds

Fixed Deposits

Manufacturing Facilities Machining

Painting

Assembly

Product Units(Pus) Engine PU

Transmission PU

Rear Axle PU

Assembly/tractor PU

Departments Personnel & HRD

Finance

Manufacturing Engineering

Plant Engineering & Machine

Maintenance

Information Systems

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THE BIRTH OF FARMTRAC

The Escorts Tractors Ltd, (ETL) came in existence as a separate company in

1969, after a collaboration of Escorts Ltd. with R.J.Hampson, executive vice

president, Ford Motor Company, USA and Mr. H.P.Nanda, President ETL. The

company entered to a capital market with a public-cum-right issue of partly

convertible debentures of 40.89 crores.

The Escorts group initiated the business reconstruction exercises in order to

strengthen its business in the face of reemerging challenges. New Holland the

international partner too was looking for ways to independently pursue its business

goals in this country. This lead to an amiable agreement between escorts and Ford

Motors to end their joint venture association. Escorts acquired the entire equity stack

of its international partner whereby the company is now the subsidiary of Escorts Ltd.

This acquisition has taken its logical conclusion on 1st April 1996 with the

emergence of Farmtrac division, which produces Farmtrac tractors with Escorts Ltd.

This led to the emergence of Escorts Agri-Machinery Group.

The parting of ways with New Holland also meant saying goodbye to Ford, a

brand name that has stood the company in excellent stead over two decades and half.

The brand name has also been changed from Ford to Farmtrac and the name of the

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Md. models Ford 3600, 3610 and 3620 has been changed to Farmtac 50 and Farmtrac

60.

A TRADITION OF TRUST

Economy range 27 - 35 HP

The very first range of tractors introduced by Escorts range of tractors has a

tradition of service and trust behind them. They are farmer year round dependable

friends.

MODELS

Escorts 325

Escorts 335

THE SUPER DIESEL SAVER

Value range 30- 47HP

The Powertrac range of tractor is designed to give spectacular diesel

economy. They act as ambrosia during there trying times of rising diesel costs.

MODELS

Escorts 430 powertrac- 30 HP




THE WORLD CHAMPIONS

Premium range 30- 75HP

Exported to the most advanced markets in the world, they are sophisticated

machines designed for the world demanding requirements of the progressive farmers.

This range is accepted very well in abroad. The farmtrac range is the ultimate icon in

the tractor technology with the advanced features for scientific farming and other

applications.

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MODELS

Farmtrac30- 30HP

Farmtrac35- 35HP

Farmtrac45- 42HP

Farmtrac50- 45HP

Farmtrac60- 50HP

Farmtrac70- 60HP

Farmtrac80- 75H

FARMTRAC DIVISION – A PROFILE

1) MANPOWER : 1659

MANAGERS : 162

SUPERVISORS : 156

TEAM MEMBERS : 1341

2) PRODUCTION CAPACITY

120 Tractors per day

3) CURRENT PRODUCT RANGE

FT 30

FT 35

FT 45

FT 50

FT 55

FT 60

FT 70

FT 80

4) TURNOVER

Rs. 400 CRORES

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5) EXPORTS

EXPORTED TO USA, TURKEY

TRACTORS EXPORTED IN 2001-02:

PLANNED FOR 2002-03 :

6) ISO 9000 CERTIFIED

ISO 9001 CERTIFIED

THE PLANT

The plant is equivalent with the following units:-

Engine Productive Unit (EPU)

Transmission Productive Unit (TPU)

Rear Axle Productive Unit (RAPU)

Tractor Productive Unit (TPU)

Paint Shop

Now transmission productive unit and rear axle productive unit have been

merged and now it is one productive unit known as transmission and rear axle

productive unit.

The plant is equipped with the following facilities:-

MACHINE SHOP: EPU, RAPU AND TPU have separate machine shops equipped

with several purpose machine (SPM) as well as Computerized Numerically

Controlled (CNC machine).

The different components machine in these shops with their

respective sections are listed below:

Cylinder Head, Cylinder Block and Connecting Rod.

Case Transmission.

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Center Housing & Trumpet Housing.

Tool Room.

Turning, CNC, Gear Cutting, Grinding & Heat Treatment.

In heat treatment shop following facilities are available:

Gas Carbonizing, Hardening & Tempering

Induction Hardening

Following facilities are available in the various productive units:

Transmission assembly

Rear axle assembly

Engine assembly and testing

Tractor assembly and testing

QUALITY POLICY

We shall strive to continuously

Improve to meet the ever rising

Expectations of our customers

At the lowest cost.

Each one of us must fulfill the

Need of our customers, both

Internal and external, with the

Highest degree of commitment,

Thereby creating a quality

Organization geared to ensure

Total customer satisfaction and

The sustained health and

Prosperity of our business.

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QUALITY OBJECTIVES

Escorts Limited – AMG Plant-II Quality Objectives are derived for the

quality policy and are intended to provide quality direction to employees in the day to

day operation of the plant.

The quality objectives are applicable to AMG Plant-II is approved by Plant

Head. The approved quality objectives are below:

Escorts Limited- AMG Plant Quality Objectives are derived from the Quality

policy and are intended to provide Quality Director to Employees in the day

to day operations of the company.

We will attempt to give our Customers the best value for their money by

supplying products to match customer specifications/needs.

We will attempt full customer satisfaction by monitoring customer

perceptions and brand image of our product through market surveys and

periodic direct customer contact in the market place.

We will pursue continuing improvement in Product Quality and Productivity

by suitable indicators to measure the trends of improvement resulting from

our efforts.

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We will strive to ensure full commitment and conformance to the Escorts

Limited – AMG Plant-II Quality Management System in all areas of work

and take prompt corrective action on any problem that may occur.

We will work together as a team across departments and organizational levels

using Task Forces to develop a common focus and greater effectiveness in

solving problems.

Specific Corporate and Departmental Objectives for a particular year will be

derived from the above used to monitor and control company operations.

Best value for money, customer satisfaction, continued improvement in product

quality, productivity conformance to quality management system in each area of

work, prompt corrective action and team building are the major focus areas of quality

objective of AMG Plant-II.

PERFORMANCE MEASUREMENT

Yearly quality objectives business objectives for Plant-II are finalized on

yearly basis to achieve the Corporate Business Objective and ensure continual

improvement in Quality Management System.

Plant objectives are further sub divided for each PU/Department and key

result area are identified for measurement of performance for each process.

PU/Department Head Monitors the performance and reviews the actual

performance as compared to the objective. Finalizes corrective/preventive action plan

to achieve laid down objective on monthly basis for continual improvement.

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MANAGEMENT REVIEW

FEEDBACK OF Department review is forwarded to MR as input to

management review.

Formal management review covering all aspects of review input & output.

Agenda in line with ISO 9001:2000 takes place once in six months frequency. The

frequency may be increased or decreased based on the level of effective

implementation.

Head of AMG Plant-II or PU Head authorized by him in his absence conducts

Management Review to ensure continued suitability, adequacy and effectiveness of

the Quality Management System.

All the PU Heads, Departmental Head of Manufacturing Operations of AMG

or their nominated representatives attend the Management Review.

ISO 9001

The international organizational organization for standardization (ISO) is a

specialized international agency for standardization, presently comprising the

national standard bodies of 91 countries including India.

The objective of ISO is to promote development of standardization with a

view to facilitate international exchange of goods, services and also develop a

cooperation in the sphere of intellectual scientific, technological and economic

activities.

The Escorts Tractors Ltd. enjoys a formidable reputation in the market solely because

of its unrivaled quality. It is because of the company’s entirely uncompromising

commitment to quality improvement and maintenance that in the course of the year it

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became the first tractor company in the country to receive the highly coveted and

prestigious ISO-9001 certification under the revised rules of 1994.

CHAPTER-2

REVIEW OF

LITERATURE

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People differ in their ability and aptitudes. These differences are natural to a

grate extent and cannot be eliminated even by giving the same basic education and

training to them. There will be some differences in the quality and quantity of work

done by different employees even on the same job. Therefore, it is necessary for

management to know these differences so that the employees having better abilities

may be rewarded and the wrong placements of employee may be rectified through

transfers. The individual employee may also like to know the level of his

performance in comparison to his fellow employees so that he may improve upon it.

Thus there is grate need to have suitable performance appraisal system to measure the

relative merit of each employee.

The basic purpose of performance appraisal is to facilitate orderly

determination of an employee’s worth to the organization of which he is a part.

However, a fair determination of the worth of an employee can take place only by

appraising numerous factors some of which are highly objective, as for instance,

attendance, while others are highly subjective, as for instance, attitude and

personality.


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Performance appraisal means systematic evaluation of the personality and

performance of each employee by his supervisor or some other person trained in the

techniques of merit rating. “Performance appraisal includes all formal procedures

used to evaluate personalities and contributions and potentials of group members in

a working organization. It is a continuous process to secure information necessary

for making correct and objective decisions on employees.”

Performance appraisal is the systematic evaluation of the individual with

respect to his performance on the job and his potential for development. Performance

appraisal is concerned with determine the differences among the employees working

in the organization.

PURPOSES OF PERFORMANCE APPRAISAL

1) Promotions:- promotion is the most important objective of performance

appraisal. It is to the common interests of both the management and

employees to promote employees into positions where they can most

effectively utilize their abilities. It is mismanagement to promote employees

into positions where they cannot perform effectively at the time in question.

A properly developed and administered performance appraisal system can aid

in determining whether individuals should be considered for promotion or

not. The system should rate the individual for the present job and his

potentialities for the higher job. A person performing his job well does not

necessarily mean that he is fit for promotion.

2) Human resource planning: - Performance appraisal generates significant,

relevant and useful information about the promo ability and potential of

employees. This information is used to assess the organization’s internal

supply of human resources and availability of managerial personnel for

succession planning.

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3) Recruitment and selection: - Evaluation made in performance appraisal can

be used to find out the particular areas of knowledge, skills and experience

which successful performer’s posses. This information can be used to review

effectiveness of recruitment and selection procedures and practices so that

right type of candidates can be selected.

4) Training and development: - Performance appraisal helps in identifying

development needs of employees. This information can be used to advise

suitable training and development programmes to enable employees to

overcome their weaknesses and improve their strengths.

5) Compensation: - Information gathered through performance appraisal

provides inputs for making decisions concerning salary administration,

financial incentives, appreciations, additional responsibilities etc.

PERFORMANCE APPRAISAL PROCESS

Establishing performance standards

Communicating the standards to employees

Evaluating actual performance

Comparing actual performance with standards

Discussing the appraisal results with the employees

Taking corrective action, if necessary

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METHODS OF PERFORMANCE APPRAISAL

Written essay

Critical incidents

Checklist

Graphic rating scale

Behaviorally anchored rating scales (BARS)

Group order ranking

Individual or straight ranking

Paired comparison

MBO (result oriented appraisal method)

Group appraisal of subordinates

Peers appraising the colleague

Subordinates appraising the boss

360 degree feedback method

Assessment centers method

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ERRORS IN PERFORMANCE APPRAISAL

Leniency or severity error

Central tendency

Halo effect/error

Similarity error

Contrast error

Shifting standards

Influence of recent events

Tendency to give high rating

Length of service bias

Personal bias

HOW TO MINIMISE ERRORS

Clearly defined performance dimensions and standards

Performance appraisal only for providing feedback

Combination of methods for appraising performance

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Continuous feedback

Many appraisers rating backed up with examples

Appraisal of subordinates on the same performance dimensions

Appraiser with ability to appraise

Training of appraisers

PERFORMANCE APPRAISAL IN ESCORTS LIMITED

PREFORMANCE APPRAISAL

In today’s competitive environment it is essential to harness individual

aspiration and potential and gear them suitably to meet business objectives. To make

this happen, both you and the organization would like to know how you have been

performing and your potential for growth.

THE OBJECTIVES OF PERFORMANCE APPRAISAL

To be developmental in nature where individuals grow with the organization.

To integrate individual performance and contributions to larger

organizational goals and needs.

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To open greater communication between superior and subordinate.

To ensure a realistic link between performance, recognition and reward.

To provide core data for human resource development / organizational

development efforts.

To encourage innovativeness through unique contribution.

To focus on employee contribution and not on efforts.

APPRAISAL CYCLE

The appraisal cycle for DGM and above is 1st June to 30th June. Increments /

promotions are effective from 1st July every year.

The appraisal cycle for employees in grades M2 to M8 grade become

effective from 1st Jan. each year and from M8 to DGM from 1st April. Consequently,

the appraisal period in respect of such employees after promotion is of 15 month for

the first year i.e. the next review would be on 1st April or 1st July, as the case may be,

of the following year.

APPRAISAL OF EMPLOYEES ON DEPUTATION

In case the employees are working on deputation in a different

company/division of Escorts, the parent company division shall carry out employees’

appraisal. This is not applicable to employees in the categories of DGM and above

and their cases will continue to be processed as usual from the chairman / vice

chairman’s office as is being done at present.

APPRAISAL OF TRAINEES. (All categories)

Only trainees who have been regularized (confirmed on or before 30 th

September) shall be eligible for performance appraisal for that block of appraisal

period. Trainees regularized there shall be eligible for confirmation appraisal

according to the rules laid there under.

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CONFIRMATION APPRAISAL

Trainees on completion of the training period and employees on completion

of probation period shall be appraised for regularization / confirmations. During

confirmation / regularization, incumbents are evaluated for:-

1. Group performance

2. Personal performance

3. Supervision and leadership qualities

4. Developmental needs

Employees are covered for superannuating only after confirmation but with effect

from their date of joining.

MANAGERIAL PERFORMANCE APPRAISAL PROCESS

OBJECTIVE:

To identify and categorize employees of managerial cadre, in three distinct

contributory levels based on performance review against last year’s KRAs and

assessment of competencies.

HOW TO FILL APPRAISAL FORM:

The managerial appraisal form consists of the following sections.

Section A: Review of goals achieved against KRA’s

Section B: Feedback on managerial competencies.

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Section C: Development Needs

Section A: Review of goals achieved against KRAs

This section consists of 70 points. In this section appraisee is required to fill

details of KRAs, objectives and achievements and assign weightages against each

KRA, agreed in the beginning of the review period. Appraiser is required to capture

his/her observations and score each KRA.

Section B: Feedback on managerial competencies

This section consists of 30 points. In this section appraiser is required to give

feedback on the listed managerial competencies indicating the performance factor

that best describes the appraisee, substantiating it with actual events/behaviour.

Section C: Development needs

In this section the appraiser is required to fill in the strengths/areas of

improvements relevant to appraisee in carrying out his current job or higher

responsibilities.

REVIEW PROCESS:

The review discussion should take place on a one-to-one basis in an

uninterrupted manner and it is expected that typically such a meeting would last for

about 60 to 120 minutes. This discussion would be based on performance plan

documents (KRA’s) agreed last year. Sequence of the process would be as described

below:-

Step 1: Appraiser to gather adequate data on the appraisee’s performance against

predefined KRAs.

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Step2: Appraiser to schedule a meeting for performance review with the appraisee.

Step3: Appraiser to give feedback to appraisee based on his observations with

emphasis on performance aspects where appraisee can improve. Appraiser

should avoid loaded / judgmental terms that may lead to emotional setbacks.

Step4: Towards conclusion, the appraiser should complete the form. This would

form the summary of discussions that took place between appraisee and

appraiser.

Step5: The performance against KRAs is to be quantified and scored out of a

maximum of 70 points. In addition, the appraiser needs to give score against

competencies defined out a maximum of 30 points. Thus each appraisee will

have a total score received out a maximum of 100 points.

Important

Since the subject under discussion is highly sensitive, the details of the

discussions should remain confidential between the two.

Step6: The completed format with total score assigned based on the review may be

forwarded to the reviewer for his concurrence.

Step7: Reviewer to review appraisals of all manager’s in his/her area to ensure that a

fair process has taken place and no biases have crept into the assessment.

Step8: Thereafter, the data is to be collected at DMG / Department level for each

area. If the strength is less, appropriate aggregation at Divisional / Functional

level may be done. For example, in R&D center, aggregation may be done at

a divisional level. All managers’ have to be ranked from top to bottom on a

relative basis to arrive at the final ratings at this level as defined below.

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Concerned HR manager would help the DGM / MANCOM member in

finalizing the ratings.

Step9: HR would summarize the data for whole of AMG and present before business

head for his concurrence before issuing letters to individuals.

PERFOMANCE RATING:

The three performance rating categories and expected distribution pattern, as

a percentage is as under.

Rating Category %age Distribution Description

Cat-1 20% top 20 percentile

Cat-2 70% next 70 percentile

Cat-3 10% bottom 10 percentile

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CHAPTER-3

SYNOPSIS

39

OBJECTIVES OF THE STUDY

The objectives of doing work on the performance appraisal in the escorts ltd company

are as follows:

1. To study the effectiveness of appraisal system in the escorts ltd company.

2. To study the performance appraisal process of Junior Managers in the escorts ltd

company.

3. To study, whether the system is helpful for both the employer (to communicate the

organizations plans, expectations, etc.) and employees (to express the training &

development needs).

4. To study the employees view points on their performance appraisal.

40

LIMITATIONS OF THE STUDY

With the proper due care this study has been conducted but it consists of some of its

limitations also which are as follows:

1. Sample size was small i.e. 40Junior Managers.

2. The time limit is also one of the major constraints in conducting study.

3. Biases may creep in the information given by the respondents.

4. Main root of this research study was questionnaire & interview, which has its own

limitations, for example we can’t measure the reliability, enthusiasm dissonance

etc.

SCOPE OF THE STUDY

I have chosen the topic “PERFORMANCE APPRAISAL in Escorts LTD”.

Keeping in mind the company nature of work, with a hope that the company is

41

benefited from its findings by modifying its existing performance appraisal rules if

felt necessary.

The study has immensely helped in understanding the various steps of the process of

performance appraisal as well as the various process of the motivation. I had the

privilege to gain practical experience by working in the Escorts Ltd.

RESEARCH

METHODOLOGY

42

RESEARCH METHODOLOGY

The research methodology is a way to solve the research problem in a

systematic manner. It depends upon the various steps like objectives of the study,

how the data is collected, how much is the sample size required and the limitations

of the study. Properly conducted study is a valuable tool for the top management in

making some decisions. Good study reduces the uncertainty. Effective research

methodology leads to good research.

RESEARCH DESIGN

Research design is the arrangement of the condition for collection and analysis of

data in the manner that aims to combine relevant to the research purpose with the

economy in the procedure.

Research design of the study is Exploratory Research Design

Exploratory research design’s major emphasis is on the discovery of ideas and

insights. In this research problem is transformed into one with more precise meaning.

43

Methods of explorative research design -:

1. Depth Interviews

2. case study

3. surveys

Sample Size for the study was 50 employees and managers

COLLECTION OF DATA

The data collection is mainly of two types:

1) primary data

2) secondary data

Primary Data was collected by conducting

(a) Questionnaire and

(b). By conducting personnel interview of the managers

Different methods of collecting primary data

1. Questionnaire Method : A questionnaire is means of elicting the

feeling, beliefs, experience, perception & attitude of sample of the individual.

As a data collecting instruments. It could be:-

a) Structured

b) Unstructured

2. Interviews: Finally, for the purpose of additional information all the

respondents were personally interviewed. In addition, classification and

44

To know about the performance appraisal, the QUESTIONNAIRE, INTERVIEW

method has been used.

I have prepared a list of questions regarding recruitment process of Escorts Agri –

Powertrac Ltd., Faridabad and distributed it to the respondents.

This questionnaire has 17 questions, which are aimed to achieve the objectives of the

study. All the questions are close ended with two to five options.

For the purpose of analysis, various tables and charts were prepared with numbers

and percentages of the employees in different choices.

Along with primary data collected through questionnaire-interview, I also have used

secondary data, which include theory part from some books and the performance

appraisal process in Escorts from its own policies.

Sample size for the study was 40 Junior Managers.

Secondary Data was collected from websites, company reports, company manuals

and management books.

45

CHAPTER-4

46

DATA

COLLECTION AND

ANALYSIS

47

TABLE 1

Awareness of performance appraisal system in employees

AWARENESS OF APPRAISAL SYSTEM

Number of employees aware

of performance appraisal

system in escorts.

AWARE NOT AWARE

40 0

100% 0%

48

From above it is clear that all the employees of the escorts ltd. are aware of appraisal

system

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TABLE 2

Appraisal is done by:

HOD Immediate

superior

Any other

15 12 3

52% 43% 5%

50

BY WHOM APPRAISAL IS DONE

Thus, we can say that mostly performance appraisal is done by Immidiate superior

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TABLE 3

Objectives of performance appraisal

Objectives of

performance

appraisal in Co.

Pay hikes Promotion Training needs Any other

15 15 11 9

30% 30% 22% 18%

52

Objectives of performance appraisal

PH- Pay Hikes, P- Promotion

ITN- Identify training needs, AO- Any Other

Therefore it can be concluded that according to employees the main objective of

appraisal system is to increase their pay and to increase their promotion.

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TABLE 4

Methods of performance appraisal

Methods of

performance

appraisal used in

escorts.

Superior

appraises

360 degree MBO Any other

37 0 13 0

74% 0% 26% 0%

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Methods of performance appraisal

SA- superior appraises, 360- 360 degree, AO- any other

Maximum number of employees agrees with the method of superior appraisal.

As a tool for performance appraisal of employees.

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TABLE 5

Understanding of objectives of management &

performance appraisal

Clarity about objectives of

performance appraisal

to employees

SA A N D SD

19 26 3 1 1

38% 52% 6% 2% 2%

view of employees towards

the scope for

communicating top

management objectives in

appraisal system

19 23 5 2 1

38% 46% 10% 4% 2%

Provision of opportunity to

employees to have a clear

understanding of what is

expected from them.

48% 44% 2% 2% 4%

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Understanding of appraisal objectives

Majority of employees agree that the objectives of performance appraisal

are clear to them.

57

Understanding of management objectives

. Maximum number of employees agrees with the fact that Appraisal system has

scope for communicating top

management objectives with employees.

Clear understanding of the expectations

58

Therefore maximum number of employees strongly agrees that appraisal system

provides an opportunity to them to have a clear understanding of what is expected

from them.

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TABLE 6

Effectiveness of counseling

Counseling provides an

opportunity to communicate

the support employee need

with their superior to

perform their job well

SA A N D SD

19 28 0 1 2

38% 56% 0% 2% 4%

Counseling provides

opportunity for discussion

between employee & their

appraiser on the

expectations, achievements

and the area of improvement

required

19 29 1 1 0

38% 58% 2% 2% 0%

Counseling provides opportunity for communicating the

support needed

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From above we can conclude that many employees agrees that counseling provides

an opportunity to communicate the support employee need with their superior to

perform their job well

Counseling provides opportunity for discussion on the

expectations, achievements and the area of improvement

required

61

Maximum number of employees agrees that counseling provides opportunity for

discussion between them & their appraiser on the expectations, achievements and the

area of improvement required

TABLE 7

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Feedback helps to get insight into weaknesses & strengths

Appraisal system gives the

clear understanding of job &

factors affecting employee’s

performance to appraiser &

appraisee.

SA A N D SD

22 24 3 1 0

44% 48% 6% 2% 0%

Feedback helps employees

to get insight into their

weakness and strengths.

18 25 5 1 1

36% 50% 10% 2% 2%

Clear understanding of job

63

48% of employees agree that appraisal system gives the clear understanding of job &

factors affecting their performance to appraiser & appraisee.

Insight into weaknesses & strengths

64

Maximum number of employees agrees with the fact that feedback helps them to get

insight into their weakness and strengths.

65

FINDING OF THE STUDY

66

Findings of the Study

Finding of the study on the basis of collection and analysis of the data are as

follows-:

1) All the employees at junior manager level in the company have the awareness

of the performance appraisal system.

2) Most of the employees say that their immediate superior does their appraisal,

60% of the respondents says this. Performance appraisal is done annually in

Escorts. In actual MBO method of performance appraisal is used but 70% of

the respondents said that their immediate superior does the appraisal. Only

26% of the employees said that the method of performance appraisal in

Escorts is MBO.

3) 80% of the employees have the clear understanding of the objectives of the

performance appraisal. 80% of the employees were strongly agree/agree with

the statement “objectives of performance appraisal are clear to you”.

4) 30% of the respondents said that the pay hikes (annual increments) is the

main objective of performance appraisal. While other 30% respondents said

the objective of performance appraisal is promotion. 22% said that the

identification of training needs is the main objective. But in actual all of these

three and many more the objectives of the appraisal.

5) The immediate superiors do appraisal in Escorts. Assessment centers are also

used in Escorts but for promotions only.

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6) Appraisal system in the company has the grate scope for communicating top

management objectives to the employees. 84% of the respondents were

strongly agree/agree that appraisal system helps in understanding top

management objectives.

7) 90% of the respondents were strongly agree/agree with the statement, which

state that appraisal system provides an opportunity for understanding what is

expected from the employees.

8) Counseling part of the appraisal system is good enough in Escorts. 94% of the

respondents were strongly agree/agree with the statement which states that

counseling provides an opportunity to communicate the support needed from

superior to perform the job well.

9) Most of the respondents were satisfied with the counseling done by the

superiors. They said that counseling facilitates discussion between appraiser

and appraisee, by which appraisee come to know about their areas where they

need improvements, what is expected from them, what is their job all about

and what factors affect their performance.

10) 86% of the respondents were satisfied with the feedback given to them and

they also accepted that true feedback helps to get insight into their

weaknesses and strengths.

68

CHAPTER-5

69

CONCLUSION AND

SUGGESTION

70

CONCLUSIONS

Based on the analysis, through the observation process, through the questionnaire

responses, following in the conclusions of the study:-

The employees are up to some extent is satisfied with the existing

performance appraisal system process.

Performance appraisal system in escorts ltd is highlighting employee

needs and opportunities for personal growth and development.

Promoting understanding between the supervisor and his subordinates.

Counseling facilitates discussion between appraiser and appraisee, by

which appraisee come to know about their areas where they need

improvements, what is expected from them, what is their job all about and

what factors affect their performance.

It has identified training and development needs and to evaluate

effectiveness of training and development programmes.

This has encouraged the innovativeness of employees through unique

contribution.

To conclude we can say that performance appraisal system in Escorts Limited is an

effective method. Most of the employees are satisfied with the appraisal process and

the criteria of the appraisal. Counseling associated with the appraisal is the most

motivating factor for the employees to give their best.

71

SUGGESTIONS

The purpose of performance appraisal is to reward the employees, give them

recognition, and help them in career growth.

o The production managers or the personnel managers should interact more

directly with their subordinates and try to know their needs, their problems

and help or suggest them to overcome those difficulties.

o The feedback process should be made more sound and effective so that the

employees could know the areas where their performance is low so that they

could make it better in the future.

o Special training sessions should be organized besides regular training

programmes for low performance areas.

o There should be more transparency in awarding marks to the employees. It

should be effectively based on the merit and performance of the employees

and not on the basis of any personal contacts, blood relation or any affection.

o A small committee should be found that will keep a close watch on the whole

exercise and make ensure that it should be a fair process.

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ANNEXURE

73

QUESTIONNAIRE

Q.1 Are you aware of the employees appraisal system in Escorts Limited system.

a) Yes b) No

Q.2 Who does the appraisal?

a) HOD b) Immediate supervisor

c)Any other, specify…

Q3. What are the objectives of performance appraisal in Escorts Limited?

a) Pay hikes b) Promotion

c) Identify training need d) Any other, specify…

Q4. What methods of performance appraisal are used?

a) Superior appraises the employee.

b) 360 Degree

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c) MBO

Strongly

Agree

Agree neutral Strongly Disagree

Any other, specify

Q5. Are objectives of performance appraisal clear to all employees

Q6.Do you think that

appraisal system

has scope for

communicating top

management

objectives to the

employees.?

Q7.According to you

does appraisal

system provides an

opportunity to you

to have a clear

understanding of

what is expected

from you.

Q8. Is Counseling an affective measure to get a boost from the superiors?

75

Q9.Does Counseling provides

opportunity for discussion

between you & your appraisal on

the area of improvement

required?

Q10. Is appraisal system giving

the clear understanding of job

and factors affecting your

performance to appraiser and

appraisee?

Q11. Does Feedback helps you to

get insight into your weaknesses

& strengths?

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BIBLIOGRAPHY

GUPTA, C.B., HUMAN RESOURSE MANAGEMENT, SULTAN

CHAND & SONS, NEW DELHI-2006.

ASHWATHAPA, K.-HUMAN RESOURSE & PERSONNEL

MANAGEMENT, TATA MC GRAW HILL CO. LTD,NEW

DELHI-2005.

DESSLER ,GARY -HUMAN RESOURSE MANAGEMENT, I0

EDITION, TATA MCGRAW HILL CO. LTD., NEW DELHI.

STEPHEN P. ROBINSON- MANAGING HUMAN

RESOURCES, 4TH EDITION, TATA MC GRAW HILL CO.

LTD., NEW DELHI.

OTHER RESOURCES:-WEBSITES;-

www.google.com

www.escortsgroup.com

www.wikipedia.com

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http://www.escortsgroup.com/

http://www.google.com/

MANUALS:-

PERSONNEL MANUAL, ESCORTS LIMITED, CORPORATE HR

& IR, FARIDABAD

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ashish project

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