A

WINTER TRAINING REPORT

ON
PERFORMANCE APPRAISAL AT MARUTI SUZUKI
Submitted to Mr. Pramod Kumar Pandey
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
In partial fulfillment of the requirement
For the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
(INDUSTRY INTEGRATED)
(Vth Semester)
Submitted by
Name: Ajay Singla
egn. No.: !!"#"$###"
oll No. : !!%#!!!!%&

1AGANNATH INSTITUTE OF MANAGEMENT SCIENCES
'() )*+': 330912010
*)F Site N*.$, Se-tor.), Near Poli-e Station, Nel/on Mandela oad,
0a/ant Kunj, New +elhi.&#
Mar-h, $#!1
CERTIFICATE
2hi/ i/ to -ertify that Ajay Singla a /tudent of the Mahari/hi +ayanand
3ni4er/ity, ohta5, ha/ prepared hi/ 2raining eport entitled PERFORMANCE
APPRAISAL AT MARUTI SUZUKI a MARUTI SUZUKI LTD under my
guidan-e. 6e ha/ fulfilled all hi/ requirement/ leading to award of the degree of
77A 8Indu/try Integrated9. 2hi/ report i/ the re-ord of bonafide training underta5en
by hi/ and no part of it ha/ been /ubmitted to any other 3ni4er/ity or 'du-ational
In/titution for award of any other degree:diploma:fellow/hip or /imilar title/ or pri;e/.
I wi/h hi/ all /u--e// in life.
Signature of Fa-ulty <uide:
Name of Fa-ulty <uide:
+e/ignation:
=ualifi-ation/:
Seal of the '():

STUDENTS DECLARATION
I hereby de-lare that the 2raining eport -ondu-ted at

Maruti Suzuki LTD
3nder the guidan-e of
Mr. Deepak Singla
/ubmitted in Partial fulfillment of the requirement/ for the +egree of
7A)6'(* *F 73SIN'SS A+MINIS2A2I*N
8Indu/try Integrated9
TO
MAHARSHI DAYANAND UNIVERSITY,ROHTAK
I/ my original and the /ame ha/ not been /ubmitted
for the award of any other +egree:+iploma:Fellow/hip
*r other /imilar title/ or pri;e/.
Place: New Delhi A1AY SINGLA
+ate: Feb.,$#!" egn No.:!!"#"$###"
oll No.: !!%#!!!!%&
ACKNOWLEDGEMENT
2he beatitude, bli// and euphoria that a--ompany /u--e//ful -ompletion of any ta/5
would be in-omplete without the e>pre//ion of gratitude to the people who made it
po//ible with their e4ery bit of help. A/ /u--e// in any wor5 i/ -redited to hard wor5,
but without a proper guidan-e it may be out of one?/ rea-h, /o with re4eren-e and
honor we a-5nowledge all tho/e who helped u/ in -arrying out thi/ proje-t
/u--e//fully.
@e a4ail thi/ opportunity to e>pre// our profound /en/e of /in-ere and deep gratitude
to
Mr. Deepak Singla who guided u/ with hi/ 4aluable help in -hanneli;ing our effort in
the right dire-tion during the -our/e of the proje-t.
@e are al/o grateful people who filled in the que/tionnaire and pro4ided u/ the input/
/o that the /ampling data -ould the prepared.
(a/t but not the lea/t, we are 4ery mu-h than5ful to our friend/ and well.wi/her/ and
all other/ who ha4e been in/trumental in -ompletion of thi/ wor5.

.
(Ajay Singla )
TABLE OF CONTENTS
S. No TOPIC Page. No
Chapter 1 - Introduction 1-68
!.!. *4er4iew of Indu/try a/ a whole
!.$. Profile of the *rgani;ation
*rigin
e-ent A-hie4ement/
Mi//ion A 0i/ion
Produ-t/
*rgani;ation Stru-ture
!." Introdu-tion to the 2opi-:2itle:Problem Studied
Chapter 2 - Objective & Methodology 69-73
$.!. *bje-ti4e/ of the Study
$.$. e/ear-h Methodology
e/ear-h +e/ign
Sour-e/ of data
Sampling 2e-hnique
Sample /i;e, if any
Method/ of data -olle-tion
2ool/ and te-hnique/ of analy/i/
$.". (imitation/ of the Study
Chapter 3 - Data Analysis & Interpretation 74-85
Chapter 4 - Findings 86-87
Chapter 5 - Recommendations 88-89
Annexures 90-92
=ue/tionnaire:/
2able/:<raph/: Annual eport/ of )ompany:Indu/try et-.
Any other rele4ant do-ument/
Bibliography/References 93-94
CHAPTER-1
INTRODUCTION
INTRODUCTION
1.1. Overview of Industry as a whole
2he automobile indu/try i/ one of the large/t in term/ of employment and 4alue
addition. A/ a leader in produ-t and pro-e// te-hnologie/ for the manufa-turing
/e-tor, it ha/ been a--epted a/ one of the important dri4er/ of e-onomi- growth.
<lobal trend/ indi-ated that the auto mar5et ha/ mo4ed from the growth and
de4elopment pha/e to the -on/olidation pha/e. 2he Bapane/e automobile major/,
be/ide/ te-hnologi-al inno4ation/, implemented /ome modern management
philo/ophie/, whi-h were gradually adopted by the automobile indu/try of the 3nited
State/ and other 'uropean -ountrie/. )urrently, almo/t fifty per-ent of the global
pa//enger -ar produ-tion -ome/ from three -ountrie/, 4i;., the 3S 8$#C9, Bapan
8!%C9 and <ermany 8!$C9. In the -ommer-ial 4ehi-le -ategory, the /hare of the 3S i/
1D per -ent followed by Bapan 8!!C9 and )hina 8%C9.In both the/e -ategorie/ of
4ehi-le/, IndiaE/ /hare in the total world produ-tion i/ ! per -ent.
2he fir/t motor-ar on the /treet/ of India wa/ /een in !F%F. 2hen for the ne>t fifty
year/, -ar/ were imported to /ati/fy dome/ti- demand. 7etween !%!# and $#E/ the
automobile indu/try made a humble beginning by /etting up a//embly plant/ in
Mumbai, )al-utta and )hennai. 2he import:a//embly of 4ehi-le/ grew -on/i/tently
after the !%$#E/, -ro//ing the "#,### mar5 in !%"#. In !%1D, Premier Automobile (td
8PA(9 earned the di/tin-tion of manufa-turing the fir/t -ar in the -ountry by
a//embling E+odge +eSotoE and EPlymouthE -ar/ at it/ Kurla plant. 6indu/tan Motor/
86M9, whi-h /tarted a/ a manufa-turer of auto -omponent/ graduated to manufa-ture
-ar/ in !%1%. Indian road/ were ruled by Amba//ador )ar from 6indu/tan Motor/ and
the Fiat from Premier Auto (td. for many of the initial year/
In !%G$ the <*I a/5ed a//embly plant/, whi-h did not ha4e plan/ to /et up
manufa-turing fa-ilitie/, to /hut operation/. A/ a re/ult <eneral Motor/, Ford and
other a//embler/ -lo/ed operation/ in the -ountry. 2he year wa/ !%G1 and thi/
de-i/ion of the go4ernment mar5ed a turning point in the hi/tory of the Indian -ar
indu/try. 2he <*I al/o had a /ay in what type of 4ehi-le ea-h manufa-turer /hould
ma5e. 2herefore, ea-h produ-t wa/ /afely -o-ooned in it/ own /egment with no fear/
of any impending -ompetition. Al/o, no new entrant wa/ allowed e4en though they
had plan/ of a full.fledged manufa-turing program. 2he re/tri-ti4e /et of poli-ie/ wa/
-hiefly aimed at building an indigenou/ auto indu/try. 6owe4er, the re/tri-tion/ on
foreign -ollaboration/ led to limitation/ on import of te-hnology through te-hni-al
agreement/. In the ab/en-e of adequate te-hnology and pur-ha/ing power, the -ar
indu/try grew at a /nailE/ pa-e in the D#?/. 2he demand for -ar/ in !%D# wa/ to the
tune of !G,&!1. In the ne>t two de-ade/ the number in-rea/ed to "#,%F% i.e. a )A<
of only ".G per -ent.
In the early F#E/, 2he <*I entered the -ar bu/ine//, with a &1C /ta5e in Maruti 3dyog
(td 8M3(9, the joint 4enture with Su;u5i Motor/ (td of Bapan. 2he 4ery fa-e of the
indu/try wa/ -hanged for e4er in !%F" with the entry of publi- /e-tor Maruti 3dyog in
a joint 4enture with the Su;u5i )orporation of Bapan . )ar /ale/ grew by 1$ per -ent in
!%FG after Maruti F## wa/ laun-hed. 2han5/ to M3( -ar /ale/ regi/tered a )A< of
!F.D per -ent i.e. from !%F! to !%%#.
In !%FG, the <*I announ-ed it/ famou/ broad banding poli-y whi-h ga4e new
li-en/e/ to broad group/ of automoti4e produ-t/ li5e two and four.wheeled 4ehi-le/.
2hough a liberal mo4e, the li-en/ing /y/tem wa/ /till 4ery mu-h inta-t. M3(
introdu-ed EMaruti F##E in !%F" pro4iding a -omplete fa-elift to the Indian -ar
indu/try. 2he -ar wa/ laun-hed a/ a Hpeople/ -arH with a pri-e tag of /1#, ###. 2hi/
-hanged the indu/tryE/ profile dramati-ally. Maruti F## wa/ well a--epted by middle.
in-ome familie/ in the -ountry and it/ /ale/ in-rea/ed from !,$## unit/ in FIF1 to
more than $##,### unit/ in FI%%. 6owe4er in FI$###, thi/ figure -ame down to
!F%,!F1 unit/, due to ri/ing -ompetition from MA32IE/ ESantroE, 2el-oE/ Indi-a and
+aewooE/ EMati;E.
M3( e>tended it/ produ-t range to in-lude 4an/, multi.utility 4ehi-le/ 8M30/9 and
mid./i;ed -ar/. 2he -ompany ha/ /ingle handedly dri4en the /ale/ of -ar/ in the
-ountry from 1G,### in FIF1 to 1#%,%G! -ar/ by FI$###, -ornering around &%.DC
mar5et /hare. @ith in-rea/ing -ompetition from new entrant/, thi/ mar5et /hare ha/
plummeted to almo/t D$C in FI$###.
A brief ".year downturn till !%%" and -ar /ale/ boun-ed ba-5 to regi/ter a !& per -ent
growth rate in !%%&.Sin-e then, the e-onomy /lumped into re-e//ion and /ale/ of -ar/
remained quite /tagnant FI%& and FI%%. 2he Finan-ial year $### ha/, howe4er, been
the turnaround year for the Auto indu/try with the e-onomy loo5ing up. 2he indu/try
a-hie4ed 4olume /ale/ of D"F,F!G unit/ a/ again/t 1#%,%G! unit/ in !%%%, thu/,
-ro//ing the half million mar5 for the fir/t time. 2herefore, at pre/ent, the )A<
between FI%D and FI$### /tand/ at !D.D per -ent. 8Former finan-e mini/ter,
Manmohan SinghE/ liberali;ation poli-y wa/ major dri4er whi-h led to indu/try
undergoing thi/ -omplete tran/formation.9 *4erwhelmed by newer model/ from new
and e>i/ting player/ had to an impre//i4e /hift from a -on/trained /upply /ituation to a
/urplu/ one. @ithin the pa/t de-ade, about "# model/ ha4e entered the Indian mar5et
with a number of model/ /till awaiting laun-h. 2he de.li-en/ing of auto indu/try in
!%%" opened the gate/ to a 4irtual flood of international automa5er/ into the -ountry
with an idea to tap the large population ba/e of %G#mn people. Al/o the lifting of
quantitati4e re/tri-tion/ on import/ by the re-ent poli-y i/ e>pe-ted to add up to the
flurry of foreign -ar/ in to the -ountry.
Many -ompanie/ ha4e entered the -ar manufa-turing /e-tor, to tap the middle and
premium end of -ar indu/try. 2he new entrant/ are +aewoo 8Mati;9, 2el-o 8Indi-a9
and MA32I 8Santro9 in upper end of e-onomy -ar mar5et. <M, Ford, Peugeot,
Mit/ubi/hi, 6onda and Fiat ha4e entered the mid./i;ed -ar /egment and Mer-ede/.
7en; i/ in the premium end of mar5et. )ar manufa-turer/ li5e Malya/ia ba/ed Proton
are al/o in line to hit the Indian ramp.
2he Indian pa//enger -ar indu/try i/ relati4ely re-ent in origin/. '>-ept the ubiquitou/
Amba//ador and the Premier PadminiE/ there wa/ not mu-h mo4ing around with an
Indian tag. 2he re/tri-ti4e poli-ie/ of the Indian go4ernment did not allow foreign
player/ to /et /hop in India and in the ab/en-e of adequate te-hnology and pur-ha/ing
power it re/ulted in the /low growth of the indu/try e4en after a long time /in-e
independen-e. 2he demand for -ar/ in-rea/ed from !G,&!1 in FID# to "#,%F% in FIF#
at a )A< of only ".GC. 2he entry of Maruti 3dyog (td, a <oI B0 with Su;u5i of
Bapan, in !%F" with a /o.-alled Hpeople/H -ar and a more fa4orable poli-y framewor5
re/ulted in a )A< of !F.DC in -ar /ale/ from FIF!.FI%#.
After witne//ing a downturn from FI%# to FI%", -ar /ale/ boun-ed ba-5 to regi/ter
!&C growth rate till FI%&. Sin-e then, the e-onomy /lumped into re-e//ion and thi/
affe-ted the growth of the automobile indu/try a/ a whole. A/ a re/ult -ar /ale/
remained almo/t /tagnant in the period between FI%& and FI%%. 6owe4er, with the
re4i4al in the e-onomy, FI$### turned out to be a /ignifi-ant year for the indu/try in
whi-h it re-orded 4olume /ale/ of D"F,F!G unit/ a/ again/t 1#%,%G! unit/ in the
pre4iou/ year. 2hu/, the )A< for the period FI%D . FI$### /tand/ at !D.DC. *n
the ba/i/ of pri-e, the Indian -ar indu/try -an be -la//ified into e-onomy or the E/mallE
-ar 8up to /#."mn9, mid./i;e 8/#.".#.Gmn9, lu>ury -ar 8/#.G.!mn9 and /uper
lu>ury -ar /egment/ 8abo4e /!mn9. '-onomy /egment dominate/ with a mar5et
/hare of about F#C of total -ar /ale/ in FI$###.
2a5ing into -on/ideration the ri/e in e>pendable in-ome le4el/ and ne-e//ity of
per/onal tran/portation a/ a re/ult of ineffi-ient or defi-ient publi- tran/portation
mean/, the demand for -ar/ i/ e>pe-ted to in-rea/e. FI$### wa/ an indi-ator of the
growth pha/e to follow, regi/tering a $#.year high growth rate of GDC. 2he /e-ond
highe/t growth wa/ re-orded in !%FG at 1$C when Maruti had entered the mar5et.
iding on the popularity of the /mall -ar /egment, -oupled with the boo/t in /ale/ of
the mid /i;e /egment, total /ale/ grew by GDC. 6owe4er, /u-h high le4el of growth i/
highly un/u/tainable in the long run gi4en the fa-t that there i/ an a/ yet unutili;ed
-apa-ity in the indu/try. 2hi/ would ma5e the que/tion of /ur4i4al important and
-arma5er/ would ha4e to play their -ard/ well to remain in -ontention. Moreo4er,
/ale/ growth in FI$### wa/ -al-ulated on a lower ba/e of FI%%.
'>port/ are e>pe-ted to in-rea/e a/ a re/ult of o4er -apa-ity in the dome/ti- -ar
indu/try and the go4ernmentE/ poli-y to bring in a more liberal regime on the foreign
e>-hange front. 2he flood of new entrant/ into the -ar indu/try a/ a re/ult of
liberali;ation ha/ led to a -omplete tran/formation of the /e-tor. 2he -ar /egment i/
flooded with new model/ from new and e>i/ting player/, a 4i/ible /hift from a
-on/trained /upply /ituation to a /urplu/. In the la/t de-ade or /o, a/ many a/ "#
model/ ha4e in4aded the mar5et ma5ing it a -a/e of embarra//ment of
ri-he/. Moreo4er a lot many model/ are waiting to hit the ramp by the end of the year.
2he -apa-ity of -ar produ-tion ha/ in-rea/ed /ub/tantially in the la/t three year/ and i/
e>pe-ted to grow manifold in the -oming year/. 2he low -apa-ity utili;ation will
for-e a mar5eting war between the -ar manufa-turer/. 2he 3SJ D.F billion Indian -ar
indu/try ha/ regi/tered a )A< of !&C between!%%F.$##" and i/ proje-ted by
A)MA 8Auto )omponent/ Manufa-turer/ A//o-iation of India9 to grow at a !GC
)A< till fi/-al $#!$. 2he -ar buyer will be the major benefi-iary of the mar5eting
war in the /egment a/ they will be able to get te-hnologi-ally better produ-t/ at good
term/ and -ondition/. 7ut with an e>pe-ted /ha5e out, the threat of di/-ontinuation of
a model i/ al/o high
1.2: PROFILE OF THE ORGANIZATION
1.2.1 Origin:
2he -ompany wa/ in-orporated in !%F! to ta5e o4er the a//et/ of the er/twhile Maruti
(td. Maruti (td /et up in Bune !%&! had been wound up by a 6igh )ourt order in
!%&F. 2he a//et/ of Maruti (td were then a-quired by the <o4ernment under the
Maruti (td 8A-qui/ition And 2ran/fer of 3nderta5ing/ A-t, !%F#9.
2he fir/t produ-t, Maruti F## wa/ laun-hed in !%F1. In !%FG, the all.terrain 4ehi-le
<yp/y wa/ laun-hed and Maruti /old it/ G#,###th 4ehi-le. 2he Maruti !### wa/
laun-hed in !%%# and the Ken in !%%".
The First Customer
Mr. 6arpal Singh, Maruti?/ fir/t -u/tomer, proudly re-ei4ed the 5ey/ of the Maruti
F## -ar from the Prime Mini/ter Smt. Indira <andhi on +e-ember !1, !%F".
)ar Mar5et S-enario
@hen Maruti began operation/ in !%F", there were only two other -ar -ompanie/ in
India and the total /i;e of the Indian pa//enger -ar mar5et wa/ a mea/ly 1#,### unit/
per year. From the /tart, Maruti -aught the imagination of Indian -ar -u/tomer/ and
laun-hed four new model/, in-luding a hat-hba-5, a mini multipurpo/e 4an, an entry
/edan and a S30, o4er the ne>t de-ade. 'a-h of the/e model/ wa/ an in/tant draw
with the Indian -on/umer/. Su;u5i Motor )orporation in-rea/ed it/ /ta5e on two
o--a/ion/ 8$DLL 1# LL G# LL -ontrolling /ta5e and brought it to G# per -ent in the
mid !%%#/ 8and to G1C with pri4ati;ation in $##$-ompany manufa-ture/ pa//enger
-ar/ at it/ fa-tory in <urgaon, 6aryana. It/ in/talled -apa-ity of "G#,### 4ehi-le/ i/
e>pe-ted to ri/e to 1G#,### in the year !%%%. 2he -ompanyE/ model/ in-lude the F##--
/mall -ar, '/teem, Ken and <yp/y.
In the -ar /egment, it had a mar5et /hare of F"C in FI%F, with /ale/ of "1G,"#" -ar/.
For the period April E%F to Banuary E%%, M3( -ar /ale/ ha4e dropped by D.1C to
$D",DF! -ompared to $F!,D%& -ar/ for the -orre/ponding period for FI%F.
2he -ompany i/ a /ignifi-ant e>porter with e>port/ to o4er G# -ountrie/. +uring
FI%F, e>port/ al/o witne//ed a drop of $D.F&C to $1,&G& -ar/. For the period April
E%F to Banuary E%%, M3( -ar e>port/ dropped by !#C to !&,!GG -ompared to !%,#G1
-ar/ for the -orre/ponding period in FI%F. In Augu/t E%F, the -ompany laun-hed the
die/el 4er/ion of the Ken that i/ powered by a !G$& -- engine /upplied by Peugeot
)itreon Motor/, Fran-e. 2he -ompany al/o intend/ to laun-h a die/el 4er/ion of the
<yp/y and a new model in the F## -- /egment/.
2he i//ue re/ulted in a major di/pute with SM) dragging the <*I to the International
)ourt of Arbitration. At that time, the <*I wa/ led by the 3nited Front go4ernment.
2he indu/try mini/ter at that time, Mr. Mura/oli Maran e4en /tarted /-outing for a
new partner to repla-e SM). 2he i//ue wa/ finally re/ol4ed in Bune !%%F when 7BP
led go4ernment too5 o4er at the -enter. A -ompromi/e wa/ wor5ed out between the
two partner/ wherein it wa/ de-ided that 7ha/5arudu would retire on "!/t +e-ember
!%%% in/tead of the earlier /-heduled time of $##$. Bagdi/h Khattar, e>e-uti4e dire-tor
wa/ made the Boint Managing +ire-tor and wa/ /-heduled to ta5e o4er a/ managing
dire-tor from 7ha/5arudu in Banuary $###.
In +e-ember E%F, M3( /la/hed the pri-e/ of it/ F##-- and Ken -ar/ by about /$1,
### and /G!, ### re/pe-ti4ely. 2hi/ ha/ helped M3( to re/tri-t the /lide in it/
mar5et /hare, due to entry of new -ar manufa-turer/. A/ a pro-e// of it/
di/in4e/tment/ in PS3, the <*I i/ /eriou/ly -on/idering di/in4e/ting it/ holding
M3(, in the dome/ti- mar5et. 7ut there ha4e been no announ-ement/ regarding thi/
from the -ompany.
Bagdi/h Khattar would ha4e made an e>-ellent po5er player .. the managing dire-tor
of Maruti 3dyog rarely let/ any emotion /how on hi/ -ountenan-e. 2he/e day/
though, aggre//ion i/ -learly written on hi/ fa-e. 6e need/ that aggre//ion. Khattar got
an unen4iable ta/5 on hi/ hand/. @hen Khattar had ta5en -harge at Maruti in Augu/t
la/t year, he had pinpointed the rea/on behind MarutiE/ rapidly dropping mar5et /hare.
Maruti depended ju/t too hea4ily on a /ingle produ-t .. the Maruti F## 8with the
*mni, whi-h wa/ built on the /ame F## platform9, whi-h a--ounted for &GC of the
unit /ale/ of the -arma5er a/ late a/ !%%&.%F. Sin-e the Maruti F## 8with the *mni9
al/o a--ounted for D$C of the -ar /ale/ in the -ountry, fo-u/ing on it /eemed to ma5e
/en/e.
*nly, by !%%%, e4en a/ Khattar too5 o4er, the profile of the -ar mar5et had begun
-hanging radi-ally. 2he entry le4el, /ub./ $.G la5h Maruti F## /egment wa/ no
longer the bigge/t -hun5 of the mar5et. 'a/y a--e// to -ar finan-e and the entry of
ri4al/ li5e the +aewoo Mati;, the 6yundai Santro, the 2el-o Indi-a and the Fiat 3no
in the / " la5h to / 1 la5h /egment had turned that into the hotte/t portion of the
mar5et, a--ounting for a whopping 1#C plu/, of the total -ar mar5et in term/ of unit
/ale/. @hile MarutiE/ Ken remained the leader in it/ pri-e band, it had le// than G#C
/hare of it/ /egment. @hatE/ more, be-au/e the ba/i- Maruti F## had remained
un-hanged for o4er !G year/, and e4en the Ken had been in the mar5et for o4er fi4e
year/, the -on/umer per-eption wa/ that Maruti wa/ peddling old model/. In e//en-e,
the -ountryE/ bigge/t -arma5er wa/ fa/t getting the /ame image that 6indu/tan
Motor/E Amba//ador and Premier Automobile/E Padmini had when Maruti fir/t
entered the mar5et. Maruti ha/ only one new weapon left that it -an borrow from
parent Su;u5iE/ /mall -ar armory .. the Alto. And the laun-h of the Alto -ould bring it/
own problem/ .. it might further erode Maruti F## /hare rather than add fre/h /ale/.
For Khattar, therefore, the pre//ure i/ mounting with the di/in4e/tment -lo-5 ti-5ing
away. And there /eem/ no ea/y /olution. If he -anEt get MarutiE/ mar5et /hare/ to
mo4e up fa/t, it/ mar5et 4alue will drop e4en more. If it -ut/ pri-e/ to /hore up mar5et
/hare, it will be at the e>pen/e of profit/ .. and that will again pu/h down the
-arma5erE/ 4aluation. 2he / $#,### pri-e -ut in the Maruti F## alone -ould mean
almo/t / "&D -rore in lo/t /ale/ reali;ation/ o4er the full year. And hi/ ri4al/ in the
mar5et are wat-hing him -lo/ely to /ee what -ard he will play ne>t. @at-h thi/ /pa-e.
+e-ember !%F" heralded a re4olution in the Indian -ar indu/try. Maruti -ollaborated
with Su;u5i of Bapan to produ-e the fir/t affordable -ar for the a4erage Indian. At thi/
time, the Indian -ar mar5et had /tagnated at a 4olume of "#,### to 1#,### -ar/ for the
de-ade ending !%F". 2hi/ wa/ from where Maruti too5 o4er.
2he /ale/ figure for the year !%%" rea-hed up to !,%D,F$#. 2he -ompany rea-hed a
total produ-tion of one million 4ehi-le/ in Mar-h !%%1 be-oming the fir/t Indian
)ompany to -ro// thi/ mile/tone. It -ro//ed the two million mar5 in !%%&. IndiaE/
large/t automobile -ompany, Maruti entered the Indian -ar mar5et with the a4owed
aim to pro4ide high quality, fuel .effi-ient, low. -o/t 4ehi-le/. It/ -ar/ operate on
Bapane/e te-hnology, adapted to Indian -ondition/ and Indian -ar u/er/. Maruti -ome/
in a 4ariety of model/ in the F## /egment.
2o fend off growing -ompetition, Maruti ha/ re-ently -ompleted a /. 1 billion
e>pan/ion proje-t at the -urrent /ite, whi-h ha/ in-rea/ed the total produ-tion -apa-ity
to o4er ",$#,### 4ehi-le/ per annum. It ha/ further plan/ to moderni;e the e>i/ting
fa-ilitie/ and to e>pand it/ -apa-ity by !,##,### unit/ in the year !%%F.%%. 2he total
produ-tion of the -ompany will e>-eed 1,##,### 4ehi-le/ per year.
In the /mall -ar /egment it produ-e/ the Maruti F## and the Ken.
2he big -ar /egment in-lude/ the Maruti '/teem and the Maruti !###.
It al/o manufa-ture/ the Maruti *mni.
2he late/t addition to the Maruti able i/ the )la//i-, billed a/ the -ar that will lead
the way to the ne>t millennium. *ther model/ on their way in-lude the @agon
and the 7aleno.
1.2.2: Achievements
2he /aga of thi/ -ompany ha/ been an ody//ey of opportunity, -hallenge, growth,
/o-ial le4elling, mobility M and the 4i/ible e>-itement M it brought to an entire nation.
2hough o4er $G manufa-turer/ offer nearly F# model/ to Indian -ar buyer/, Maruti
Su;u5i -ontinue/ to retain it/ leader/hip. @ith per-ei4able benefit/ of quality,
reliability, te-hnology, performan-e, tru/tworthine// and /er4i-e, it dominate/ the
large/t mar5et /egment M affordable, 4aluepa-5ed, fuel.effi-ient -ar/ M and i/ /-oring
/ignifi-ant /u--e//e/ in fa/t.growing upper /egment/ a/ well. Maruti Su;u5i al/o ha/
fully operational, India?/ large/t /er4i-e networ5, /panning o4er !$## town/ and
-itie/. Maruti Su;u5i?/ greate/t a-hie4ement ha/ been the /pe-ial ni-he it ha/ -ar4ed
for it/elf with -u/tomer/.
Awards and Achievements
Iear $##%.!# HPlatinum +ealerH, Pre/tigiou/ award for the be/t o4erall
performan-e whi-h wa/ won by u/.*nly 1# dealer/ were honoured with thi/
band among F##N dealer/hip outlet/ a-ro// India.
7a-5 to ba-5 Award/ from Maruti Su;u5i India (td
Mr.+ine/h N ) ha/ won the Maruti Su;u5i 'meging Star, )onte/t held in
7angalore on $!/t September $#!#.
Mr.6emanth Kumar 6 N ha/ been !/t unner up in Maruti Su;u5i Sale/
)aptain )onte/t held in 7angalore on $$nd September $#!#.
M/. +i4ya Naya5 ha/ been awarded "rd Pla-e in Maruti Su;u5i 2rue 0alue
Selling S5ill )onte/t held on $&
th
Sepember $#!#.
Ser4i-e: Award for lowe/t I)8In/uran-e )laim/ atio9 in the -ountry
Ser4i-e: Award for 7e/t )u/tomer elation/hip 7uilding a-ti4itie/.
Particulars Year
Platinum +ealer Award $##% . $#!#
@inner of H7e/t )u/tomer elation/ 7uilding A-ti4ityH $##%
(owe/t HIn/uran-e )laim atio 0alueH $##%
1.2.3: COMPANY`S MISSION & VISION
1) Company`s Portfolio:
Maruti 3dyog (imited 8M3(9,IN+IA?/ fine/t and A/ia?/ large/t automobile indu/try
wa/ e/tabli/hed in !%F! by an a-t of parliament.M3(, the fir/t automobile -ompany
in the world to be honored with an IS* %###:$### -ertifi-ate, i/ a /ub/idiary of
Su;u5i Motor )orp 8hold/ a G1C equity /ta5e9. 2he <o4ernment of India remain/ a
/ignifi-ant equity /ta5eholder 8!#C9.@ith it/ early mo4er ad4antage in Indian mar5etO
Maruti retain/ a dominant Mar5et /hare de/pite in-rea/ing -ompetition.
2) Business Portfolio:
2he <roupE/ prin-ipal a-ti4ity i/ to manufa-ture, pur-ha/e and /ale of Motor 0ehi-le/
and Spare part/. 2he other a-ti4itie/ of the <roup -ompri/e/ of fa-ilitation of Pre.
*wned )ar Sale/, Fleet Management and )ar Finan-ing. 2he <roup al/o pro4ide/
/er4i-e/ li5e framing of -u/tomi;ed -ar poli-ie/, e-onomi-al lea/ing of -ar/,
maintenan-e management, regi/tration and in/uran-e management, emergen-y
a//i/tan-e and a--ident management. 2he produ-t range in-lude/ ten ba/i- model/
with more than G# 4ariant/. 2he <roup ha/ operation/ in o4er !## -itie/ with more
than !G# outlet/ and al/o e>port/ -ar/ to other -ountrie/.
Vision:
0i/ion/ of any -ompany are tho/e 4alue/ on whi-h -ompany wor5/. A/ the M3( i/
/tarted by <o4ernmental initiati4e/ it tend/ to be more -on/umer oriented and hen-e
-o/t effe-ti4e, but on the other hand Su;u5i?/ parti-ipation en/ure/ not only need of
the profit, but of the need of ma>imum profit. 2he only way for thi/ Nora?/ dilemma
of /ele-ting prin-ipal/ for -ompany?/ wor5ing 4i/ion ,wa/ to ma>imi;e profit and
redu-ing -o/t by ma>imi;ing output and /ale/ 6en-e M3( de-lared it/ 0i/ion a/.
P2he (eader in the Indian Automobile Indu/try, )reating )u/tomer +elight! and
ShareholderE/ @ealth$O e4entually be-ome a pride of IndiaQ
)u/tomer +elight! i/ ma5ing /ure that performan-e, after /ale/ /er4i-e and -u/tomer
/upport are be/t and beyond e>pe-tation. Shareholder?/ wealth$ i/ the prime -on-ern
for running bu/ine// /moothly.M3( 5now/ thi/ and under/tand/ P-u/tomer i/ 5ingQ,
he -an -hange the fortune of any -ompany, hen-e goe/ -ompany?/ brand line:
)*3N2 *N 3SR
Mission:
Mi//ion i/ the /tatement of an organi;ation?/ purpo/e, what it want to a--ompli/h in
the larger en4ironment and it/ goal/ whi-h are /pe-ifi-, reali/ti- and moti4ating.
Mi//ion/ are de/-ribed o4er 4i/ion/ and 4i/ion/ demand -ertain obje-ti4e/. 2he main
obje-ti4e/:Mi//ion/ of M3( are:
Moderni;ation of the Indian Automobile Indu/try.
+e4eloping -ar/ fa/ter and /elling them for le//.
Produ-tion of fuel.effi-ient 4ehi-le/ to -on/er4e /-ar-e re/our-e/.
Produ-tion of large number of motor 4ehi-le/ whi-h wa/ ne-e//ary for
e-onomi- growth.
Mar5et Penetration, Mar5et +e4elopment Similarly Produ-t +e4elopment and
+i4er/ifi-ation.
Partner relation/hip management, 0alue -hain, 0alue deli4ery networ5.
1.2.4: Products of the Company
A-STAR
Maruti Su;u5iE/ -ompa-t A.Star, whi-h will be laun-hed in *-tober, i/ e>pe-ted to
/urpa// the earlier /tri-t emi//ion norm/ announ-ed by the -ompany.
'mi//ion from the A.Star not only -omplie/ with the 'uro " 87harat."9 norm/ that are
operational in !" Indian -itie/, in-luding +elhi, but al/o geared to meet /tringent
emi//ion norm/ that will be implemented a-ro// 'urope in the -oming year/.
2he A.Star/ )*$ emi//ion will be e4en lower than !#% gm:5m whi-h we had
en4i/aged earlier. 2hi/ i/ mu-h lower than the 'uropean emi//ion norm/ that require
-ar/ to emit !$# gm:5m in the future /aid Shin;o Na5ani/hi, M+, Maruti Su;u5i.
IndiaE/ 'uro " norm/ i/ G year/ behind tho/e -urrently enfor-ed in 'urope, while 'uro
1 norm/ that are enfor-ed out/ide the !" Indian -itie/ are !# year/ behind 'uropean
ben-hmar5/. @hile ga/eou/ and parti-ulate matter -ompri/e 'uro 1 gradation in India,
'uropeE/ emi//ion report/ e/timate the )*$ di/-harge le4el/ only. (ower )*$ le4el/
in -ar/ mean/ the -ar ha/ /uperior fuel effi-ien-y, /aid Anomita )howdhury, A//o-iate
+ire-tor, )entre for S-ien-e and 'n4ironment.
Maruti Su;u5iE/ de-i/ion to manufa-ture the A.Star -ar in India i/ part of parent
Su;u5iE/ o4erall /trategy to ma5e India the manufa-turing hub for the produ-tion of
/mall -ar/ li5e the Alto, Swift, and Maruti F##. @e may -on/ider manufa-turing the A
Star later in )hina whi-h will -ater to the )hine/e mar5et only. In that -a/e we may
ha4e to e>port auto -omponent/ from India to )hina, /aid Na5ani/hi. 2he firm hope/
to e>port about one la5h unit/ of the A.Star to 'urope. In about $." year/ from the
laun-h, we may e>port to S Ameri-a and the S' A/ian region, he /aid. A/ part of it/
/trategy to -on/olidate it/ po/ition in the A$ /egment, whi-h will witne// newer
player/ li5e Ni//an,
2oyota, and 6onda thi/
year onward/, Maruti
Su;u5i ha/ indi-ated it
will laun-h the
-ompa-t Spla/h ne>t
year.
SWIFT DZIRE
Performance
2he '/teem?/
repla-ement i/ a Swift with a boot. It?/ a4ailable with the /ame engine/ a/ it/
hat-hba-5 -ou/in whi-h i/ the !." litre petrol unit from the '/teem and the fabulou/
++IS multijet die/el motor from the Swift +ie/el. @eight penalty o4er the Swift i/
only around "#5g/, /o performan-e le4el/ are /imilar to the hat-hba-5. 2he petrol ha/
all the a-tion toward/ the top.end of the powerband and may feel a little lethargi-
when fully loaded. 2he die/el howe4er, i/ the one that ma5e/ the mo/t of the torque
a4ailable. A /light hint of lag below $###rpm, but after that the motor -ome/ into it/
own and pi-5/ up the pa-e -on/iderably. 2he gearbo> i/ again -arried o4er from the
Swift, /o it -ome/ with a /weet /hifting a-tion with /hort and dire-t throw/.
Ride & Handling
2he rear /u/pen/ion ha/ been /tiffened due to the added weight of the boot and the
Swift already had a /lightly bumpy rear /eat ride, thi/ remain/ in the +;ire a/ well.
2hi/ mean/ on rough pat-he/, you will ha4e to /low down unli5e in the (ogan whi-h
you -an dri4e without a -are o4er bad road/. 7ut the /tiff /etting/ pay di4idend/ in
handling. Iou -an pu/h the -ar through -orner/, there i/ minimal body roll and the
'PS /teering al/o feel/ pre-i/e that weigh/ up with /peed.
Refinement
2he engine/ both die/el and petrol are refined powerplant/ and you will not find any
rea/on to -omplain. 2he interior/ loo5 good and are made of good material/, but a/ in
the Swift, they may /tart to rattle fairly early in the -ar?/ life. 2he /u/pen/ion doe/n?t
ma5e it/ pre/en-e 5nown e4en on rough pat-he/.
SS 1
It i/ e>pe-ted to be laun-hed in Indian mar5et in three month/. 2he new Maruti SS1
/edan i/ e>pe-ted to be built at MarutiE/ new manufa-turing fa-ility at Mane/ar. It will
be offered in the A" /egment, whi-h -urrently a--ount/ for !G C of the Indian
pa//enger -ar mar5et. '>ep-ted prei-e range i/ D la-/ to & la-/ .
Su;u5i, a world leader in the -ompa-t -ar/ a-hie4ed an image ma5eo4er with the
laun-h of Swift.Apart from India, Swift re-ei4ed the )ar of the year award a-ro// the
world. 2he un4eiling of the SS1 /edan at <ene4a i/ Su;u5iE/ effort to ma5e it/
pre/en-e felt in the premium /edan /egment in front of a global audien-e.
ZEN ESTILO
Ken '/tilo ha/ the /ame engine
8!#D!--, D1.Fp/, F1Nm, 1.-ylinder, !D.
4al4e, MPFI F!#+ Petrol9 under the
hood that i/ found in Maruti @agon .
Ab/olutely nothing ha/ been
-hanged e>-ept for the fa-t that thi/
engine i/ mu-h refined and i/
/lightly better at re/pon/i4ene//
and fuel e-onomy. 2hi/ /imply tran/late into EKen '/tilo i/ a bit fa/ter and more fuel
e-onomi- than @agon E. +ue to highly good dri4ability, dri4ing in -ity would be
more fun with Ken '/tilo. 'le-troni- Power Steering 8not a4ailable in (S 4er/ion9
really help/ in -rowded traffi-. *wning and maintaining Ken '/tilo wonEt be a
problem, engine i/ pro4en reliable and 4irtually maintenan-e.proof.
VITARO
<rand 0itara i/ well equipped with it/ 4ariou/ /afety and -omfort feature/. @ith it/
$.& litre +*6) 0D engine -apa-ity and with the low.end torque of !$& 5w T D###
rpm, it -an effortle//ly run from muddy, du/ty terrain to any normal highway. It/
/afety feature/ in-lude rear door -hild /afety lo-5/, /tandard four.wheel A7S, power
a//i/ted ra-5 pinion /teering /y/tem, high.ten/ile /teel in a A, 7, and ) pillar/, high
impa-t door beam/, front and rear -rumple ;one/ et-.
It/ -omfort feature/ in-lude better /pa-e and three row/ of /eating arrangement.
It -ome/ in different -olor/:
)ool 7eige Metalli-
7lui/h 7la-5 Metalli-
<ro4e <reen Pearl Metalli-
Pearl @hite
)a//i/ ed Pearl
MARUTI 800
+imen/ion/
(ength """G mm
@idth !11# mm
6eigth !1#G mm
@heelba/e $!&G mm
<round -learan-e !&# mm
Min. turning radiu/ 1.1 m
@eight
3nladen 8/td.9 D1# Kg
2ran/mi//ion Manual 1:GU forward,
all /yn-hrome/h ! re4er/e
'ngine
2ype 1 /tro5e -y-le, water -ooled
S*6) ! )$ 0:i)10U
Number of -ylinder/ "
2yre/
Std. G.DG.!$.1 P
'S A +S adial/ !1G:&#..!$
OMNI
Spe-ifi-ation
(ength ""&# mm
@idth !1!# mm
6eight !D1# mm: !F"G mmU
@heel ba/e !F1# mm
<round -learan-e !DG mm
Min. turning radiu/ 1.! m
Kerb weight &1# Kg: &GG KgU
2ran/mi//ion Manual, 1 forward, all /yn-hrome/h
! re4er/e
'ngine
2ype 1 /tro5e -y-le water -ooled
Number of -ylinder/ "
Swept 0olume &%D--
Ma>imum power "&.# bhpTG### rpm.
Ma>imum torque G.F KgmT$G## rpm
Su/pen/ion/
Front M-Pher/on Strut
ear (eaf /pring with /ho-5 ab/orber/
7ra5e/
Front +rum
ear +rum
2yre/ 1.G#.!$.DP 3(2
)apa-ity
Fuel tan5 "D (t/
Seating G : F /eater option/ a4ailable
ZEN
+imen/ion/
(ength "1%G mm
@idth !1%G mm
6eight !1#G mm
@heelba/e $""G mm
<round -learan-e !DG mm
Min. turning radiu/ 1.% m
'ngine
2ype Aluminum, @ater )ooled,
S*6):23+G, I+IUU
No. of -ylinder/ 1, in.line
+ie/el : Non.MPFI $ 4al4e/ per -ylinder
Fuel deli4ery M +ie/el otary di/tributor type
2ran/mi//ion
Manual type G forward, ! re4er/e
Automati- type " /peed with planetary geatU
2ran/mi//ion
Manual type G forward, ! re4er/e
Automati- type " /peed with planetary gearU
Su/pen/ion
Front M-Pher/on Strut
7ra5e/.boo/ter a//i/ted
Front +i/-
ear +rum
A(2*
Spe-ifi-ation
(ength "1%G mm
@idth !1%G mm
6eight !1D# mm
@heel ba/e $"D# mm
Min. turning radiu/ 1.D m
'ngine
2ype F), 1 4al4e/ per -ylinder,
MPFI
)ontrol !D. bit )omputer
Number of -ylinder/ ": 1U
Pi/ton di/pla-ement &%D--:!#D! --U
Front Ma-pher/on Strut with tor/ion type anti.
roll bar.
ear )oil /pring with double a-tion tele/-opi-
/ho-5 ab/orber/.
7ra5e/ . boo/ter a//i/ted
Front +i/-
ear +rum
2yre/
)apa-ity
Fuel tan5 "G (t/
Wagon R
Spe-ifi-ation
(ength "1%G mm
@idth !1%G mm
6eight !DD# mm
@heel ba/e $"D# mm
<round -learan-e !DG mm
Min. turning radiu/ 1.D m
Kerb weight F$G Kg: F1# Kg
<ro// weight !$$G Kg for (S, (>i, 0>i,
!$1# Kg of A>
2ran/mi//ion
Manual type G forward all /yn-rome/h,
! re4er/e gear
Automati- type " /peed with planetary gearU
'ngine
Number of -ylinder/ 1 in.line, F) engine:
1 4al4e/ per -ylinder.
Swept 4olume !#D! --
Ma>imum power D$ bhp T D### rpm
Ma>imum torque F.1 Kgm T "G## rpm
Su/pen/ion
Front M-Pher/on Strut with tor/ion type roll
-ontrol de4i-e
ear )oil /pring and ga/ filled /ho-5 ab/orber/
with three lin5 rigid a>le and i/olated
trailing arm/
7ra5e/ . boo/ter a//i/ted
Front +i/-
ear +rum
2yre/ !1G:&# !" 8adial9
)apa-ity
Fuel tan5 "G (t/
BALENO
+imen/ion/
(ength 1$$G mm: 1"&G mmU
@idth !D%# mm
6eight !"%# mm : !1D# mmU
@heelba/e $1F# mm
Min. turning radiu/ 1.% m
@eight
Kerb weight %&G Kg:!#$# KgU
2ran/mi//ion Manual G forward,
'ngine
2ype All Aluminum
)ontemporary, !D 4al4e S*6)
Number of -ylinder/ : 4al4e/ 1 in.line, !D
Ma>imum torque !"$ NMT"### rpm
Fuel +i/tribution MPFI
7ra5e/ . 0a--um a//i/ted hydrauli-
Front 0entilated di/-
ear +rum, leading : trailing
2yre/ !DG:F#.!"
Fuel tan5 G! (t/.
SALES FIGURES
Maruti Su;u5i /ale/ in September $#!# New +elhi, *-tober #!, $#!# 2he -ompany
had /old a total of &!,### 4ehi-le/ in September $##%.
The sales figures for September 2010 are given below:
Segment Models
In September Till September
April'08 -
March'09 2010 2009

Change
2010-
10
2008-
09

Change
A! MF## "$#& "1D& .&.GC !GFGD $F&FD .11.%C 1%"F"
) *mni, 0er/a F$%& &1!D !!.%C 111"" 1#%&# F.GC &&%1F
A$
Alto, @agon.
, Ken, Swift,
A./tar, it;
G$G#F 1GD$! !G.!C $%%F$% $1"G!# $".!C G!!"%D
A" SS1, +E;ire &"GD &1!" .#.FC 11$$G "1&F% $&.!C &G%$F
Total Passenger Cars 71368 63917 11.7 404343 348055 16.2 714655
M30 <yp/y, 0itara $$D &DG .&#.GC $!GG "&11 .1$.1C &1F%
Domestic 71594 64682 10.7 406498 351799 15.5 722144
'>port !!&!$ D"!F FG.1C DD1!% "#$"D !!%.&C &##$"
Total Sales 83306 71000 17.3 472917 382035 23.8 792167
` A-star launched in November09, Ritz launched in May10, Grand Vitara 2.4
launched in 1uly09.
1.2.5 Organization Structure

Maruti Su;u5i India (imited 8MSI(, formerly Maruti 3dyog (imited9, a /ub/idiary of
Su;u5i Motor )orporation of Bapan, i/ India?/ large/t pa//enger -ar -ompany,
a--ounting for o4er G# per -ent of the dome/ti- -ar mar5et.
Maruti offer full range of -ar/. from entry le4el Maruti F## A Alto to /tyli/h
hat-hba-5 it;, A /tar, Swift, @agon , '/tillo and /edan/ +Kire, SS1 and Sport/
3tility 4ehi-le <rand 0itara.
Major -orporate e4ent/ 8Mile/tone9
Iear '4ent/
1982 2ripartite agreement with the Indian go4ernment, Maruti and Su;u5i Motor
)orporation for the produ-tion of /mall pa//enger -ar/
1983 Fir/t -ar/ roll out
1998 Maruti hold/ o4er &#C of the Indian pa//enger -ar mar5et
2000 (aun-he/ Alto, de/igned /pe-ially for Indian road/
2003 Su;u5i Metal India?/ foundry, a B0 between Su;u5i Motor )orporation of
Bapan and Maruti 3dyog (td, -ome/ on /tream
2005 Maruti Su;u5i Automobile/ India e/tabli/hed in -ollaboration with Su;u5i
Motor )orporation to build a new manufa-turing plant with a total in4e/tment
of /!Gbn
S.W.O.T ANALYSIS OF THE ORGANIZATION
STRENGTHS:
Boint 4enture of Su;u5i Motor )orporation, Bapan.
*nly produ-er of the A! /egment -ar in India -urrently.
Strong di/tribution networ5 all o4er India.
It ha/ the ma>imum number of /er4i-e /tation/ all o4er the -ountry, with /er4i-e/
a4ailable in the remote area/ too.
)ar/ 5nown for there effi-ien-y, effi-ien-y in term of maintenan-e -o/t and
running -o/t.
WEAKNESS:
2he -ompany doe/ not offer die/el 4er/ion of there brand/.
2he number/ of model/ offered in A" and ) /egment are 4ery le//.
2he model/ offered by the -ompany are 4ery old and loo5/ outdated in
-ompari/on to the new -ar/ a4ailable in the /egment.
OPPORTUNITY:
*pportunity e>i/t/ in the A" /egment, whi-h ha/ re-orded a double digit growth of
!GC in Indian mar5et.
2he -ompany -an /ign in -ontra-t/ with MN)?/ for pro4iding them with the -ar/
for purpo/e of pi-5 and drop. 2hi/ way the /ale/ of 0er/a -an be impro4ed.
THREATS:
2he /. !.G la5h -ar to be laun-hed by 2ata and 20S India.
(aun-h of new -ar/ li5e <et;, Fu/ion in the upper A$ /egment.
(aun-h of ba/e model Santro for $.F la-/, -lo/er to Maruti?/ Alto?/ pri-e and a threat
for Maruti?/ A!/egment
1.3 Introduction to the Topic/Title/Problem Studied
Performan-e apprai/al, a Phuman re/our-e/Q a-ti4ity u/ed to determine the e>tent to
whi-h the employee/ are performing the job effe-ti4ely.
Performan-e mean/ to do /omething and Apprai/al mean/ to de-ide the 4alue of the
wor5 done. Performan-e apprai/al together, mean/ di4iding the 4alue of the wor5
done by an indi4idual. 2herefore, performan-e apprai/al i/ a pro-e// of re-ording
a//e//ment/, -riteria, performan-e, potential and de4elopmental need/.
2herefore, performan-e apprai/al may be defined a/ any pro-edure that
in4ol4e/:
!. Setting wor5 /tandard/.
$. A//e//ing the employee?/ a-tual performan-e relati4e to their /tandard/.
". Pro4iding feedba-5 to the employee/ with the aim of monitoring that per/on to
eliminate hi/ defi-ien-ie/ and:or -ontinue to perform better.
<enerally, apprai/ing the performan-e of an indi4idual ha/ been 5nown a/ merit
rating. 7ut in re-ent year/, different terminologie/ ha4e been u/ed to denote thi/
pro-e//, /u-h a/ performan-e apprai/al, performan-e re4iew, performan-e e4aluation,
employee apprai/al, progre// report, per/onnel re4iew et-.
Performan-e apprai/al or merit rating i/ one of the olde/t and mo/t uni4er/al pra-ti-e/
of management. It i/ an ine4itable pro-e//, where4er men are employed on any 5ind
of produ-ti4e wor5 in any organi;ation. It i/ ob4iou/ that /ome form of /y/temati-
performan-e apprai/al pro4ide/ management with data for wage and /alary
admini/tration, tran/fer, training, e4en termination of employment.
Performan-e apprai/al i/ e//ential to under/tand and impro4e the employee?/
performan-e through human re/our-e de4elopment. In fa-t, performan-e apprai/al i/
the ba/i/ for human re/our-e de4elopment. e-ent de4elopment/ in human re/our-e/
management indi-ate that apprai/al i/ the ba/i/ for employee de4elopment.
Performan-e apprai/al indi-ate/ the le4el of de/ired performan-e, le4el of a-tual
performan-e and the gap between the/e two. 2hi/ gap /hould be bridged through
human re/our-e/ te-hnique/ li5e training, de4elopment et-.
2here i/ hardly any organi;ation whi-h doe/ not own the importan-e of it/ human
a//et; yet, how many of them 5now it and 5eep an a--ount of itV 2he human a//et i/
/harp and fle>ible, with undefined potential. Performan-e i/ the 5ey word in the life of
an enterpri/eO it i/ the /taffing that perform/ the management ta/5/O not the ma-hine/
or the material/. It i/, therefore, ama;ing, yet under/tandable, how the apprai/al of the
employee effe-ti4ene// i/ mo/tly left to -han-e. It i/ ama;ing be-au/e of the
importan-e of the ta/5M the /ta5e that it hold/ for the enterpri/e. And it i/ yet
under/tandable, be-au/e of the diffi-ulty of the apprai/al.
It will be our 'ndea4our, in thi/ report to probe the -ontent of the apprai/al pro-e//,
e>amine the problem/, /ur4ey the apprai/al method/ in -urrent pra-ti-e and -ome to a
-on-lu/ion.
MEANING AND IMPORTANCE
Meaning:
Performan-e apprai/al i/ the /y/temati-, periodi- and impartial rating on an
employee?/ e>-ellen-e in matter/ pertaining to hi/ pre/ent job and to hi/ potentialitie/
for a better job. @hen properly -ondu-ted, performan-e apprai/al /hould not only let
the employee 5now how well he i/ performing but al/o influen-e the employee?/
future performan-e.
Performan-e apprai/al i/ a method of e4aluating the beha4iour of employee/ in the
wor5/pot, normally in-luding both the quantitati4e and qualitati4e a/pe-t/ of job
performan-e. It indi-ate/ how well an indi4idual i/ fulfilling the job demand/. *ften
the term i/ -onfu/ed with effort, but performan-e i/ alway/ mea/ured in term/ of
re/ult/ and not effort/.
Performan-e apprai/al i/ not job e4aluation. It refer/ to how well /omeone i/ doing
the a//igned job. Bob e4aluation determine/ how mu-h a job i/ worth to the
organi;ation and therefore, what range of pay /hould be a//igned to the job.
2hu/, performan-e apprai/al i/ a pro-e// of e/timating or judging the 4alue,
e>-ellen-e or qualitie/ of employee/ in an organi;ation.
Importance
Performan-e apprai/al ha/ be-ome a 4ery /ignifi-ant a-ti4ity in mo/t of the
enterpri/e/ be-au/e it pro4ide/ data about pa/t, pre/ent and e>pe-ted performan-e of
the employee/, whi-h i/ helpful in ta5ing de-i/ion/ on /ele-tion, training and
de4elopment, in-rea/e/ in pay, tran/fer/ and the li5e. 2he/e day/ a large amount of
money i/ being /pent on apprai/al/ by mo/t of the organi;ation/. 2he following
benefit/ of performan-e apprai/al ju/tify the de/igning of an effe-ti4e program of
performan-e apprai/al:
Performan-e Impro4ement . Performan-e feedba-5 pro4ide/ a /-ientifi- ba/i/ for
judging the merit or worth of employee/ who will try to impro4e their
performan-e if it i/ not up to the /ati/fa-tion of the employer/.
Pla-ement +e-i/ion/ . It i/ a /ound ba/i/ for promotion/, demotion/, tran/fer/ or
e4en termination of employee/. *ften promotion/ are a reward for pa/t
performan-e/.
2raining and +e4elopment Need/ . It help/ in di/tingui/hing between effi-ient and
ineffi-ient wor5er/. Poor performan-e may indi-ate the need for retraining.
(i5ewi/e, good performan-e may indi-ate untapped potential that /hould be
de4eloped.
)areer Planning and +e4elopment . Performan-e feedba-5 guide/ -areer
de-i/ion/ about /pe-ifi- -areer path/ one /hould in4e/tigate. It al/o help/ the
management to a//ign wor5 to indi4idual/ for whi-h they are be/t /uited.
'>ternal )hallenge/: Sometime/, performan-e i/ influen-ed by fa-tor/ out/ide the
wor5 en4ironment, /u-h a/ family, finan-ial, health or other per/onal matter/. If
un-o4ered through apprai/al/, the human re/our-e/ department may be able to
pro4ide a//i/tan-e.
If the apprai/al i/ done /-ientifi-ally and /y/temati-ally, it will pre4ent grie4an-e/ and
de4elop a /en/e of -onfiden-e among the wor5er/. 2hu/, apprai/al help/ in -reating a
-ongenial en4ironment of employer.employee relation/.
Objectives of Appraisal
2he o4erall obje-ti4e of performan-e apprai/al i/ to impro4e organi;ational
effe-ti4ene// by pro4iding information about effi-ien-ie/ and defi-ien-ie/ of it/
human re/our-e/.
2he fir/t fun-tion of thi/ -ontrol me-hani/m i/ admini/trati4e i.e., it help/ in
admini/trating a reward and penalty /y/tem. It often pro4ide/ the rational foundation
for the e/timation of the -ontribution/ of employee/, and help/ to determine the
reward/ and pri4ilege/ rationally.
2he ne>t important u/e of /u-h apprai/al i/ that it enable/ the management to inform
the employee/ where they /tand. In other word/, it /er4e/ a/ a feedba-5 to the
employee. 7y letting the employee 5now how well he i/ doing or where he /tand/, it
tell/ them what they -an do to impro4e their performan-e.
A third purpo/e of /u-h apprai/al i/ to lo-ate or identify the potential for growth of
indi4idual employee/. 7y identifying the /trength/ and wea5ne//e/ of an employee, it
/er4e/ a/ a guide for formulating a /uitable training and de4elopment program to
impro4e their quality of wor5. Al/o, it help/ to determine whether an employee -an
-ontribute more in a higher or different job. It help/ in their /uitable promotion or
pla-ement.
(a/tly, an analy/i/ of the periodi-al a//e//ment/ of all employee/ pro4ide/ a fairly
dependable -onne-ti4e data on the effi-ien-y of the organi;ation/, /tate of employee
morale et-. to the top management where the apprai/al/ are /o /tru-tured a/ to eli-it
/u-h information.
In a -on-i/e manner, we -an /ay that performan-e apprai/al/ aim at attaining the
following different purpo/e/:
2o -reate and maintain a /ati/fa-tory le4el of performan-e.
2o -ontribute to the employee growth and de4elopment through training, /elf
and management de4elopment program/.
2o help the /uperior/ to ha4e a proper under/tanding about their /ubordinate/.
2o guide the job -hange/ with the help of -ontinuou/ ran5ing.
2o fa-ilitate fair and equitable -ompen/ation ba/ed on performan-e.
2o fa-ilitate te/ting and 4alidating /ele-tion te/t/, inter4iew te-hnique/
through -omparing their /-ore/ with performan-e apprai/al ran5/.
2o pro4ide information for ma5ing de-i/ion/ regarding lay off, retren-hment
et-.
2o en/ure organi;ational effe-ti4ene// through -orre-ting the employee for
/tandard and impro4ed performan-e and /ugge/ting the -hange in employee
beha4ior.
The Appraisal Process
Approaches to Performance Appraisal:-
Method/:2e-hnique/ of Apprai/al
!. 2raditional Method/
$. Modern Method/
Approaches to Performance Appraisal
<enerally /pea5ing, three approa-he/ are u/ed in -ondu-ting performan-e apprai/al.
2he/e are:
1. The goal or objective approach- 2heoreti-ally, thi/ approa-h i/ the /imple/t and
the mo/t /ati/fying. @hen there i/ a goal for the manager. an obje-ti4e, ta/5, norm or
target.in mea/urable or 4erifiable form, the apprai/al pro-e// i/ /implified to a
quantitati4e -ompari/on of the a-hie4ement of the goal or obje-ti4e. 7a/i-ally, under
thi/ /y/tem, /pe-ifi- obje-ti4e/ are e/tabli/hed for ea-h po/ition and they are
apprai/ed o4er a /pe-ifi- period of time.
2. The trait or traditional approach- 2he trait or traditional approa-h tend/ to
apprai/e people on per/onality rather than on performan-e. 2he logi- behind thi/
approa-h i/ the a//umption that there are -ertain qualitie/, trait/ et-. pre/ent in
e4eryone. /ome of them are natural, other/ a-quired and -ulti4ated o4er a period of
time. 2he po//e//ion of the/e trait/ in 4arying mea/ure/ /upplie/ the ba/i/ for
apprai/al. 6en-e, the /-ope wa/ limited only to the e>tent of trait/ and per/onality in
thi/ approa-h.
3. The functional approach- 2hi/ approa-h to apprai/al i/ ba/ed on the the/i/ that an
employer mu/t /u--eed a/ an offi-er or manager. 6e mu/t be judged by how mu-h
and how well he perform/ the fun-tion/ of hi/ po/t. planning, organi;ing, /taffing,
dire-ting and -ontrolling. A weightage i/ de-ided for the /e4eral fun-tion/ and the
employer?/ /-ore i/ re-orded again/t ea-h. 2he total /-ore gi4e/ an inde> of hi/ rating.
Apart from the abo4e.mentioned approa-he/, there are two approa-he/ that are
-olle-ti4ely 5nown a/ -ompo/ite approa-he/.
These are:
8a9 2he trait.-um.goal approa-h
8b9 2he goal.-um.fun-tional approa-h
2he/e approa-he/ ha4e the -ombined feature/ of any two approa-he/. 2he prin-iple i/
that the goal ha/ to be rea-hed but through the po//e//ion and pra-ti-e of -ertain
e//ential trait/:qualitie/ and fun-tion/.
METHODS/ TECHNIQUES OF APPRAISAL
Se4eral method/ and te-hnique/ are a4ailable for mea/urement of the performan-e of
an employee. 2he method/ A /-ale/ 4ary for many rea/on/:
!. 2hey differ in the /our-e/ of trait/ or qualitie/ to be apprai/ed.
$. 2hey differ be-au/e of the different 5ind/ of wor5er/ who are being rated.
". It may be be-au/e of the degree of pre-i/ion attempted in an e4aluation may
be different.
1. 2hey may differ be-au/e of the method/ u/ed to obtain weighting/ for 4ariou/
trait/.
2here i/ mu-h argument on the be/t method to e4aluate performan-e. +ifferent
author/ ha4e /ugge/ted different approa-he/. For e>ample, o-5 A (ewi/
-la//ifi-ationO -la//ifi-ation by obbin/O Strau// A Sayle/ -la//ifi-ation /y/tem et-.
2he mo/t widely u/ed -ategori;ation i/ gi4en by Strau// A Sayle/. 2hey ha4e
-la//ified performan-e apprai/al method/ into traditional and newer or modern
method/.
2he traditional method/ lay empha/i/ on the rating of the indi4idual?/ per/onality
trait/ /u-h a/ initiati4e, dependability, dri4e, re/pon/ibility, -reati4ity, integrity,
leader/hip potential, intelligen-e, judgement, organi;ing ability et-.
*n the other hand, newer method/ pla-e more empha/i/ on the e4aluation of wor5
re/ult/, job a-hie4ement/ et-., than on per/onal trait/.
Traditional Methods
1. Straight Ranking Method. In thi/ /y/tem, the rating of a man in a wor5 group i/
done again/t that of another. /imple/t method of /eparating the mo/t effi-ient from the
lea/t effi-ient. It i/ relati4ely ea/y to de4elop and u/e.
7ut the greate/t limitation of thi/ method i/ that, in pra-ti-e it i/ 4ery diffi-ult to
-ompare a /ingle indi4idual with another. Se-ondly, the ta/5 of ran5ing indi4idual/ i/
diffi-ult when a large number of per/on/ are rated.
2. Paired Comparison Method- 7y thi/ te-hnique, ea-h per/on i/ -ompared with all
other employee/ to be e4aluated. 2he e4aluator then -he-5/ the per/on he or /he felt
had been the better of the two on the -riterion of o4er all ability to do the pre/ent job.
2he number of time/ a per/on ha/ been preferred i/ tallied and the tally de4eloped i/
an inde> of the performan-e/. 2hi/ method i/ not /uitable for a large group.
3. Man-to-man Comparison Method- 7y thi/ method -ertain fa-tor/ are /ele-ted for
the purpo/e of analy/i/ 8e.g. leader/hip, dependability, initiati4e9 and the rater de/ign/
a /-ale for ea-h fa-tor. )ertain /-ore/ for ea-h fa-tor are awarded to the apprai/ee.
2hi/ method i/ u/ed in job e4aluation and i/ al/o 5nown a/ the fa-tor -ompari/on
method. It i/ not mu-h u/e, be-au/e the de/igning of /-ale/ i/ a -ompli-ated ta/5.
4. Grading Method- 3nder thi/ /y/tem, the rater -on/ider/ -ertain feature/ and mar5/
them a--ordingly to a /-ale. 2he /-ale may be: A.out/tanding, 7.4ery good, ).good
or a4erage, +.fair, '.poor and F.4ery poor or hopele//. 2he a-tual performan-e of an
employee i/ then -ompared with the/e grade definition/ and he i/ allotted the grade
whi-h be/t de/-ribe/ hi/ performan-e.
5. Graphic/ Linear Rating Scale- It i/ the olde/t and mo/t widely u/ed performan-e
apprai/al method. 2he rating -an be a matri> of bo>e/ or a bar graph where the
e4aluator -he-5/ off a lo-ation relati4e to the rating.
2hi/ method i/ ea/y to under/tand and u/e. It permit/ a /tati/ti-al tabulation of /-ore/.
*ne /eriou/ di/ad4antage i/ that, often the rating -lu/ter/ on the high /ide when thi/
method i/ u/ed.
6. Forced Choice Description Method- It attempt/ to -orre-t a rater?/ tenden-y to
gi4e -on/i/tently high or -on/i/tently low rating/ to all employee/. 3nder thi/ method,
the rating element/ are /e4eral /et/ of phra/e/ relating to job profi-ien-y or per/onal
qualifi-ation/. 2he rater i/ a/5ed to indi-ate whi-h of the phra/e/ i/ mo/t and lea/t
de/-ripti4e of the employee.
7. Forced Distribution Method- 2hi/ /y/tem i/ u/ed to eliminate or minimi;e rater?/
bia/. A G.point performan-e /-ale i/ u/ed to rate the employee/, without any
de/-ripti4e /tatement. 'mployee/ are pla-ed between the two e>treme/ of Wgood? and
Wbad? job performan-e/.
2hi/ method tend/ to eliminate or redu-e bia/. 2hi/ method i/ highly /imple and 4ery
ea/y to apply in organi;ation/.
8. Checklist Method- 3nder thi/ method, the rater doe/ not e4aluate employee
performan-e, he /upplie/ report/ about it and the per/onnel department doe/ the final
rating. A /erie/ of que/tion/ are pre/ented -on-erning an employee?/ beha4iour. 2he
rater then -he-5/ to indi-ate, if the an/wer to a que/tion about an employee i/ po/iti4e
or negati4e.
2hi/ method /uffer/ from bia/ on the part of the rater be-au/e he -an di/tingui/h
po/iti4e A negati4e que/tion/. 2hi/ pro-e// -an be 4ery e>pen/i4e A time -on/uming.
9. Free Essay Method- 3nder thi/ method, the /uper4i/or ma5e/ apprai/al of an
employee in hi/ own word/ and put/ down hi/ impre//ion/ about the employee. 6e
ta5e/ note of a number of fa-tor/ li5e relation/ with -olleague/, general organi;ing,
planning ability, job 5nowledge, potential, attitude, de4elopment need/ for future et-.
2here are no -ommon -riteria for e4aluation. 2hi/ /y/tem require/ -on/iderable time
and thought from the apprai/er.
10. Critical Incident Technique- 2hi/ /y/tem attempt/ to mea/ure a wor5er?/
performan-e in term/ of -ertain We4ent/? or Wepi/ode/? that o--ur in the performan-e of
the job. 2he/e e4ent/ are 5nown a/ -riti-al in-ident/. 2he -olle-ted in-ident/ are then
ran5ed in order of frequen-y and importan-e. 2hi/ method ha/ a limitation that
negati4e in-ident/ are generally more noti-eable than po/iti4e in-ident/.
11. Group Appraisal Method- 3nder thi/ method, an apprai/al group rate/
employee/, -on/i/ting of /uper4i/or/ who ha4e /ome 5nowledge of their performan-e.
2he group then di/-u//e/ the /tandard/ of performan-e for that job, the a-tual
performan-e of the jobholder, and the -au/e/ of their parti-ular le4el of performan-e
and offer/ /ugge/tion/ for future impro4ement, if any. 2hi/ method i/ 4ery time
-on/uming.
12. Field Review Method- 3nder thi/ method, a trainer employee from the per/onnel
department inter4iew/ the /uper4i/or/ to e4aluate hi/ /ubordinate/. 2he /uper4i/or i/
required to gi4e hi/ opinion about the progre// of hi/ /ubordinate/, the le4el of the
performan-e of ea-h /ubordinate, hi/ wea5ne//e/, good point/, ability et-.
2he /u--e// of thi/ /y/tem depend/ upon the -ompeten-e of the inter4iewer. *ne
defe-t i/ that it 5eep/ two management repre/entati4e/ bu/y with the apprai/al.
Modern Methods
1. Appraisal by Results/ Management By Objectives (MBO)- Management by
obje-ti4e/ -an be de/-ribed a/ Pa pro-e// whereby the /uperior and /ubordinate
manager/ of an organi;ation jointly identify it/ -ommon goal/, define ea-h
indi4idual?/ major area/ of re/pon/ibility and -ontribution/ of ea-h of it/ member/.Q
It /trongly reinfor-e/ the importan-e of allowing the /ubordinate to parti-ipate
a-ti4ely in the de-i/ion/ that affe-t him dire-tly. Subordinate/ be-ome in4ol4ed in
planning their own -areer/. M7* i/ re/ult.oriented. M7* help/ in in-rea/ing
employee moti4ation. 7ut M7* program ta5e/ a great deal of time, energy and form.
2here i/ /ometime/ a Ptug of warQ in whi-h the /ubordinate trie/ to /et the lowe/t
target po//ible and the /uper4i/or the highe/t.
2. Assessment Center Method- 3nder thi/ method, many e4aluator/ join together to
judge employee performan-e in /e4eral /ituation/ with the u/e of a 4ariety of -riteria.
A//e//ment/ are made to determine employee potential for promotion. 2he
a//e//ment -enter/ generally mea/ure interper/onal /5ill/ and other a/pe-t/ /u-h a/:
organi;ing and planning, getting along with other/, quality of thin5ing, re/i/tan-e to
/tre//, moti4ation to wor5 et-.
3. 360 Degree Performance Appraisal- Some organi;ation/ ha4e e>panded the idea
of upward feedba-5 into what they -all "D# degree feedba-5. Performan-e
information i/ -olle-ted Pall roundQ an employee. From hi/ /uper4i/or/, /ubordinate/
peer/ and internal and e>ternal -u/tomer/. 2he feedba-5 i/ generally u/ed for training
and de4elopment rather than for pay in-rea/e.
4. Human Asset Accounting Method- 2he human a//et a--ounting method refer/ to
a-ti4ity de4oted to atta-hing money e/tima e>ternal -u/tomer goodwill. If able, well.
trained per/onnel lea4e a firm, the human organi;ation i/ worthle//O if they join it, it/
human a//et/ are in-rea/e. 2hi/ method i/ not yet 4ery popular.
5. Behaviorally Anchored Rating Scales (BARS)- 2hi/ i/ a new apprai/al te-hnique.
It pro4ide/ better, more equitable apprai/al/ a/ -ompared to other te-hnique/. Sin-e
7AS i/ done by per/on/ who are e>pert in the te-hnique, the re/ult/ are /uffi-iently
a--urate. 2he te-hnique i/ not bia/ed by the e>perien-e and e4aluation of the rater.
COMPONENTS OF APPRAISAL
A. @ho of the Apprai/al
7. @hat of Apprai/al
). @hy of Apprai/al
+. @hen of Apprai/al
'. @here of Apprai/al
F. 6ow of Apprai/al
WHO OF APPRAISAL
2he Wwho? of the apprai/al i/ -on-erned with Pwho /hould be rated and who /hould do
the ratingVQ 2he an/wer to the fir/t query i/ that all employee/ of an organi;ation
/hould be apprai/ed, for one rea/on or the other.
egarding the /e-ond i//ue, it may be /aid that the apprai/al -an be a--ompli/hed by
one or more indi4idual/ who -an be the immediate /uper4i/or, other manager/
a-quainted with the apprai/ee?/ wor5, a higher le4el manager, a per/onnel manager,
the apprai/ee?/ peer/, the apprai/ee him/elf or the apprai/ee?/ /ubordinate/.
3/ually the immediate /uper4i/or mu/t be entru/ted with the ta/5 of rating the
apprai/ee be-au/e he i/ mo/t familiar with hi/ wor5 and he i/ al/o re/pon/ible for
pro4iding a feedba-5 of performan-e apprai/al to the /ubordinate. 2he /taff
/pe-iali/t/, i.e., the per/onnel offi-er/, may al/o do the apprai/al. 2hey may
/ometime/, ju/t ad4i/e the /uper4i/or/ in the pro-e//.
6i/ peer/ may al/o do the apprai/al of an indi4idual. Su-h apprai/al pro4e/ effe-ti4e
in predi-ting future management /u--e//. Sometime/, /elf.e4aluation i/ al/o
employed for e4aluating performan-e. It empha/i;e/ human relation/ with the
/uper4i/or.
(a/tly, in many -ompanie/, /ubordinate/ and /uperior/ jointly e/tabli/h goal/ and
periodi-ally e4aluate the /ubordinate?/ performan-e with re/pe-t to the/e goal/.
WHAT OF APPRAISAL
2he Wwhat? of the performan-e apprai/al -on/i/t/ of the qualitie/ and attribute/ that
/hould be /-rutini;ed, in order to judge the ability and the performan-e of the
apprai/ee. '4ery organi;ation ha/ to de-ide the -ontent/ to be apprai/ed before the
program i/ appro4ed. <enerally, the -ontent to be apprai/ed i/ determined on the ba/i/
of job analy/i/. 2he -ontent to be apprai/ed may 4ary with the purpo/e of apprai/al
and type and le4el of employee/.
2he 4ariou/ -riteria for a//e//ing a performan-e are:
egularity of attendan-e
Self.e>pre//ion: written and oral
Ability to wor5 with other/
(eader/hip /tyle/ and abilitie/
Initiati4e
2e-hni-al /5ill
2e-hni-al ability or 5nowledge
Ability to gra/p new thing/
Ability to rea/on
*riginality and re/our-efulne//
)reati4e /5ill/
Area/ of intere/t
Area of /uitability
Budgment /5ill/
Integrity
)apability for a//uming re/pon/ibility
(e4el of a--eptan-e by /ubordinate/
6one/ty and /in-erity
2horoughne// in job and organi;ational 5nowledge
Knowledge of /y/tem/ and pro-edure/
=uality of /ugge/tion/ offered for impro4ement
2he abo4e -riteria relate to pa/t performan-e and beha4iour of an employee. 2here i/
al/o the need for a//e//ing the potential of an employee for future performan-e,
parti-ularly when the employee i/ e>pe-ted to a//ume greater re/pon/ibilitie/.
WHY OF APPRAISAL
In today`s competitive World, the word is PERFORM or PERISH.
2he Wwhy? of an apprai/al i/ -on-erned with the purpo/e that i/ /er4ed by the pro-e//.
Performan-e apprai/al/ are e//ential for the effe-ti4e management and e4aluation of
/taff. Apprai/al/ help de4elop indi4idual/, impro4e organi;ational performan-e, and
help in bu/ine// planning. Annual performan-e apprai/al/ enable management and
monitoring of /tandard/, agreeing e>pe-tation/ and obje-ti4e/, and delegation of
re/pon/ibilitie/ and ta/5/. 2hey al/o help to e/tabli/h indi4idual training need/ and
organi;ational training need/ and planning to fulfill tho/e need/.
Performan-e apprai/al/ are important for /taff moti4ation, attitude and beha4iour
de4elopment, -ommuni-ating organi;ational aim/, and en-ouraging po/iti4e
relation/hip/ between management and /taff. In /hort, performan-e and job apprai/al/
are 4ital for managing the performan-e of people and organi;ation/.
Performan-e apprai/al/, thu/, help in a-hie4ing the following obje-ti4e/:
Performan-e mea/urement . /hort, medium and long term.
)larifying and defining prioritie/ and obje-ti4e/.
Moti4ation through agreeing to helpful aim/ and target/.
Moti4ation through a-hie4ement and feedba-5.
A//e//ing the training need/ and learning de/ire/ M indi4idual and organi;ational.
Identifi-ation of per/onal /trength/ and dire-tion, in-luding unu/ed hidden
/trength/.
)areer and /u--e//ion planning . per/onal and organi;ational.
2eam role/ -larifi-ation and team building.
Apprai/ee and manager mutual awarene//, under/tanding and relation/hip.
e/ol4ing -onfu/ion/ and mi/under/tanding/.
einfor-ing organi;ational philo/ophie/, 4alue/, aim/, /trategie/, prioritie/, et-.
+elegation, additional re/pon/ibilitie/, employee growth and de4elopment.
)oun/eling and feedba-5.
Manager de4elopment . all good manager/ /hould be able to -ondu-t apprai/al/
well, itE/ a fundamental pro-e//.
@ell.prepared and well.-ondu-ted performan-e apprai/al/ pro4ide unique
opportunitie/ to help apprai/ee/ and manager/ impro4e and de4elop, and thereby al/o
the organi;ation/ for whom they wor5.
WHEN OF APPRAISAL
2he Wwhen? an/wer/ the query about the frequen-y of apprai/al. 2he time period
between two appri/al/ 4arie/ -on/iderably with different organi;ation/. Apprai/al/ are
-ondu-ted by organi;ation/ e4ery three month/, e4ery /i> month/ or /ometime/ e4en
annually. Sugge/ted time period/ in-lude three and /i> month apprai/al/, a/ during
thi/ time the employee i/ learning the e>pe-tation/ of the job and the -ompany.
Performan-e apprai/al/ are effe-ti4e and u/eful during the beginning period of
employment, at /et inter4al/ or when an employee -hange/ job dutie/. New
employee/ are rated more frequently than the older one/.
Apprai/al/ /hould immediately be followed by di/-u//ion/ between the apprai/er and
the employee who ha/ been apprai/ed. 'ffe-ti4e management require/ timely
feedba-5 to an employee . not % month/ after an e4ent o--ur/.
A performan-e apprai/al /hould be a re-ap of the time period for whi-h the re4iew i/
ba/ed. <ood wor5 /hould be u/ed a/ an oppurtunity to pro4ide po/iti4e reinfor-ement
and poor wor5 /hould be u/ed a/ a ba/i/ for training.
2he time of rating /hould not -oin-ide with the time of /alary re4iew/, for if the two
o--ur together -on/tru-ti4e e4aluation and -on/ideration/ of /elf.de4elopment will
probably ta5e /e-ond pla-e to the pre//ure/ of pay.
WHERE OF ARPPRAISAL
2he Wwhere? indi-ate/ the lo-ation where an employee may be e4aluated. It i/ u/ually
done at the pla-e of wor5 or offi-e of the /uper4i/or. Informal apprai/al/ may ta5e
pla-e anywhere and e4erywhere, both on.the.job in wor5 /ituation/ and off.the.job.
A /uitable 4enue /hould planned and a4ailable . pri4ate and free from interruption/.
6otel lobbie/, publi- lounge/, -anteen/ et- /hould be a4oided, a/ pri4a-y i/ ab/olutely
e//ential. Al/o plane/, train/ and automobile/ are entirely un/uitable 4enue/ for
performan-e apprai/al/.
oom layout and /eating are important element/ to prepare al/o. (ayout ha/ a huge
influen-e on the atmo/phere and mood, irre/pe-ti4e of -ontent. 2he atmo/phere and
mood mu/t be rela>ed and informal. All barrier/ /hould be remo4ed.
HOW OF APPRAISAL
3nder Whow?, the -ompany mu/t de-ide what different method/ are a4ailable and
whi-h of the/e may be u/ed for performan-e apprai/al. *n the ba/i/ of the
-omparati4e ad4antage/ and di/ad4antage/ it i/ de-ided whi-h method would /uit the
purpo/e be/t.
*n-e thi/ ha/ been done, the pro-e// of apprai/al begin/. Fir/t of all, the apprai/er
/hould -olle-t all the rele4ant data, re-ord/, report/ et- of pre4iou/ performan-e of the
apprai/ee and hi/ -urrent job profile. 2he apprai/ee /hould be informed of the
apprai/al well in ad4an-e /o that he ha/ enough time to -olle-t the ne-e//ary
do-ument/ regarding hi/ pre4iou/ performan-e/ et-.
At the time of the apprai/al, the apprai/er /hould be friendly and warm. 6e /hould try
to put the apprai/ee at ea/e, a/ he may well be terrified. 2he apprai/er /hould try to
re/i/t judging the apprai/ee a--ording to hi/ own /tyle and approa-h and in/tead
pro4ide a good neutral ba/i/ for the di/-u//ion, free of bia/ and per/onal 4iew/.
An o4erall plan /hould be agreed with the apprai/ee, whi-h /hould ta5e a--ount of the
job re/pon/ibilitie/, the apprai/eeE/ -areer a/piration/, the organi;ationE/ prioritie/ et-.
2he plan -an -ontain an o4er4iew of the organi;ation?/ /hort, medium and long.term
a/pe-t/, but importantly it mu/t be agreed and reali/ti-.
2he 5ey to a//e//ing an employeeE/ performan-e i/ the /etting of obje-ti4e/. A 5ey
element of the performan-e apprai/al pro-e// /hould be re4iewing how well the
employee ha/ performed in relation to obje-ti4e/ that ha4e pre4iou/ly been /et for
them.
For obje-ti4e/ to be u/eful, it i/ often /aid they /hould be SMA2.
Spe-ifi-
Mea/urable
A-hie4able :Agreed
Re/ult oriented
Time framed
2he apprai/er /hould in4ite que/tion/ or querie/ from the apprai/ee and ma5e /ure to
/ati/fy them. (a/tly, the apprai/er /hould than5 the apprai/ee for their -ontribution to
the meeting and their effort through the year, thu/ helping in -lo/ing the apprai/al on a
po/iti4e note.
Apprai/al/ -an be-ome 4ery po/iti4e and enjoyable a-ti4itie/ if the abo4e mentioned
guideline/ are followed.
Apprai/al/ are not ju/t about job
performan-e and job /5ill/ training. 2hey /hould fo-u/ on helping the Ewhole per/onE
to grow and attain fulfillment.
Limitations of Appraisal
A. Problem/ with Apprai/al Method/
7. Fa-tor/ Affe-ting the Apprai/al
). '//ential/ of a <ood Apprai/al Sy/tem
+. 'thi-/ of Apprai/al
PROBLEMS WITH APPRAISAL METHODS
A performan-e apprai/al -ontain/ three /tep/ . defining the job, apprai/ing
performan-e and pro4iding feedba-5. Some apprai/al/ fail be-au/e /ubordinate/ are
not told ahead of time e>a-tly what i/ e>pe-ted of them in term/ of good performan-e.
*ther/ fail be-au/e of problem with the form or pro-edure u/ed to a-tually apprai/e
the performan-e. Still other problem/ ari/e during the inter4iew.feedba-5 /e//ion,
whi-h in-lude arguing and poor -ommuni-ation/.
Problem/ -an o--ur at any /tage in the e4aluation pro-e//. Some of the pitfall/ to
a4oid in performan-e apprai/al are: .
!. Unclear performance standards: @ithout /tandard/, there -an be no obje-ti4e
e4aluation of re/ult/, only a /ubje-ti4e gue// or feeling about performan-e. Standard/
/hould be e/tabli/hed by analy;ing the job output, to en/ure that /tandard/ are job
related. 2ho/e /tandard/ that are rea/onable, but -hallenging ha4e the mo/t potential
to moti4ate.
2. Use of abstract word: Problem/ of e4aluation /tandard/ might ari/e be-au/e of the
u/e of 4ery -ommon word/ for grading, 4i;. good, adequate, /ati/fa-tory and
e>-ellent, whi-h mean differently to different e4aluator/.
3. Rate errors: ate error/ in-lude rate/ bia/ or prejudi-e, halo effe-t, -on/tant error,
-entral tenden-y, and fear of -onfrontation et-.
4. Poor feedback to employees: Standard/ and:or rating/ mu/t be -ommuni-ated to
the employee in order to for the performan-e e4aluation to be effe-ti4e.
5. Negative communication: 2he e4aluation pro-e// i/ hindered by -ommuni-ation
of negati4e attitude/, /u-h a/ infle>ibility, defen/i4ene// et-.
6. Failure to apply evaluation data: Failure to u/e e4aluation/ in per/onnel de-i/ion.
ma5ing and per/onnel de4elopment -ontradi-t/ the primary purpo/e of performan-e
e4aluation/. 2he u/e and analy/i/ of multiple -riteria a/ well a/ the frequen-y of
e4aluation al/o pre/ent problem/.
FACTORS AFFECTING THE APPRAISAL
A well.de/igned performan-e apprai/al /y/tem might fail to bring about the de/ired
re/ult/ if the apprai/er/ are not properly trained. 2he apprai/er/ or rater/ often /uffer
from the following 5ind/ of error/ or wea5ne//e/:
1. Halo error- It o--ur/ when the rater allow/ one a/pe-t of a man?/ -hara-ter or
performan-e to influen-e hi/ entire e4aluation. In other word/, a /uper4i/or?/ rating of
a /ubordinate on one trait, bia/e/ the rating of that per/on on other trait/.
7eing aware of thi/ problem i/ a major /tep toward a4oiding it. *ne way of
minimi;ing the effe-t of halo error i/ to ha4e the /uper4i/or judge all of hi/
/ubordinate/ on a /ingle fa-tor or trait, before going on to ne>t. In thi/ manner, he -an
-on/ider all of the men, relati4e to a /tandard or to ea-h other, on ea-h trait.
2. Central tendency- It i/ perhap/ the mo/t -ommonly found error in performan-e
apprai/al. 2hi/ error o--ur/ when the rater i/ in doubt about the /ubordinate/, or ha/
inadequate information about them, or i/ gi4ing le// attention and effort to the rating
pro-e//. So he may play it /afe by neither -ondemning nor prai/ing the /ubordinate/
and may rate them Wa4erage/?. Su-h a re/tri-tion -an di/tort the e4aluation/, ma5ing
them le// u/eful for promotion, /alary, or -oun/eling purpo/e/. an5ing employee/
in/tead of u/ing a graphi- rating /-ale -an a4oid thi/ -entral tenden-y problem.
3. Leniency or strictness- Some /uper4i/or/ ha4e a tenden-y to be ea/y rater/ and
/ome other/, to be har/h in their rating/. (enient or ea/y rater/ a//ign -on/i/tently
high 4alue/ or /-ore/ to their /ubordinate/ and /tri-t or har/h rater/ gi4e -on/i/tently
low rating/. Stri-tne//:lenien-y i/ not a 4ery major problem.
4. Personal bias- '4aluator?/ bia/ toward /ome employee/ -an influen-e their
e4aluation. An effe-ti4e training of the e4aluator -an remo4e thi/ bia/. Mode of
e4aluation/ and promotion/ /hould be e>amined by manager/, to -he-5 a po//ible
di/-rimination at the time of e4aluation and ma5e amend/ to redu-e thi/ bia/.
5. Recent Behavior Bias- *ften /ome rater/ 4alue per/on?/ on the ba/i/ of their
performan-e in re-ent few wee5/O a4erage -on/tant beha4ior i/ not -he-5ed. Some
employee/ being aware of thi/ tenden-y /how better re/ult/ when they feel that they
are being ob/er4ed and the report of their performan-e i/ to be -omplied /oon.
Su-h apprai/al problem/ -an be a4oided by following /ome /imple yet effe-ti4e
guideline/. 2here are at lea/t three way/ to minimi;e the impa-t of apprai/al
problem/:
First, be /ure to be familiar with the problem. 3nder/tanding the problem -an help to
a4oid it.
Second, -hoo/e the right apprai/al tool. 'a-h tool /u-h a/ the graphi- rating /-ale or
-riti-al in-ident method ha/ it/ own ad4antage and di/ad4antage/.
Third, training /uper4i/or/ to eliminating error/ /u-h a/ halo, lenien-y, and -entral
tenden-y -an help them a4oid the/e problem/.
ESSENTIALS OF A GOOD APPRAISAL SYSTEM
A program of performan-e apprai/al mu/t -on/ider the following e//ential point/ for it
to be effe-ti4e:
1. It must be easily understandable. If the /y/tem i/ too -omple> or too time.
-on/uming, it may be an-hored to the ground by it/ own weight of -ompli-ated form/
whi-h nobody but the e>pert/ under/tand.
2. The appraisers should be given training beforehand. Super4i/or/ re/pon/ible for
performan-e apprai/al /hould be well trained in the art and /-ien-e of performan-e
apprai/al to en/ure uniformity, -on/i/ten-y and reliability.
3. It must have the support of all people who administer it.
If the line people thin5 it i/ too theoreti-al, too ambitiou/, and too unreali/ti- or that
the management ha/ impo/ed it on them, they will di/li5e it. Similarly, if they feel that
their role i/ not 4ery important they will not ta5e the /y/tem /eriou/ly.
4. The system should be sufficiently grounded in the requirements of the
organization. It /hould refle-t the 4alue /y/tem of the organi;ation. In fa-t, it /hould
tell the employee/ what /et of a-ti4itie/ or what qualitie/ are -on/idered de/irable by
the organi;ation. A/ /u-h, it /hould ha4e lin5age with the job de/-ription.
5. The system should be both valid and reliable. 2he 4alidity of rating/ i/ the
degree to whi-h they are truly indi-ati4e of the merit of the employee/. 7oth 4alidity
and reliability re/ult from obje-ti4ity. 2he apprai/al /y/tem/ of many organi;ation/
la-5 thi/, without ta5ing into a--ount their merit. 2hi/ produ-e/ out/tanding
performer/ but not out/tanding performan-e and rai/e/ doubt/ about the 4alidity of the
/y/tem.
6. The system should have built-in incentive, that i/, a reward /hould follow
/ati/fa-tory performan-e. 2hi/ rai/e/ the morale of the employee/ and in turn re/ult/
in impro4ement in performan-e.
7. The system should be open and participative. It /hould in4ol4e employee/ in the
goal./etting pro-e//. 2hi/ help/ in planning performan-e better.
8. The system should focus more on the development and growth of employees
than on generating data for admini/trati4e de-i/ion.ma5ing relating to promotion/,
in-rement/ et-.
It mu/t help in identifying employee/? /trength/ and wea5ne//e/ and indi-ate
-orre-ti4e a-tion/.
9. The system should be periodically evaluated to be sure that it is continuing to
meet its goals. 2hi/ will -he-5 the danger of the -riteria of apprai/al be-oming
/ubje-ti4e rather than the obje-ti4e. Furthermore, the /y/tem may be-ome rigid in a
tangle of rule/ and pro-edure/, many of whi-h are no longer u/eful.
10. There should be provision for appeals. 2he employee/ /hould ha4e the right to
appeal again/t apprai/al/ to en/ure -onfiden-e of the employee/ and their
a//o-iation:union/. 2he employee/ /hould be gi4en an opportunity to e>pre// their
feeling/ on the performan-e report/.
Ethics of Appraisal
In performan-e apprai/al, the ethi-/ of apprai/al /hould get due -on/ideration failing
whi-h many organi;ational problem/ may -rop up and the 4ery purpo/e of apprai/al
may be defeated. 2he e//en-e of the apprai/al i/ that one performan-e i/ ma5ing
judgment/ about -ertain a/pe-t/ of another. Although he i/ not ma5ing a total
judgement of the other per/on?/ worth, but it i/ true that he i/ judging hi/ re/ent or
future u/efulne// to a job or an organi;ation. 2herefore, the apprai/er/ /hould
approa-h employee apprai/al a/ a thoughtful, /eriou/ matter for whi-h they are
a--ountable. In thi/ regard, manager/ need to apply a few /imple rule/, whi-h will
-ontribute to their ethi-al handling of the apprai/al /ituation/.
2he e//ential -omponent/ of an effe-ti4e performan-e apprai/al are a/ follow/:
1. Determination of purpose- 2he obje-ti4e of the apprai/al program may be
weather to apprai/e the a-tual performan-e of indi4idual/ on their pre/ent job/ or to
determine the potential of indi4idual/ to do higher job/ or both. Sometime/
performan-e apprai/al program/ are a//o-iated with obje-ti4e/ li5e training and
de4elopment, tran/fer and promotion, in-rea/e in pay, et-.
2. Selection and training of appraiser- In order to a4oid /ubje-ti4ity in apprai/al, it
i/ ad4i/able to gi4e /uffi-ient training to the apprai/er. It i/ al/o /ugge/ted that two
per/on/ /hould apprai/e the performan-e of one man independently, in order to ha4e
obje-ti4e re/ult/.
3. Establishing standards of performance- 2he /tandard/ of performan-e /hould be
laid down in -learly and -ommuni-ated to the /ubordinate/ well in ad4an-e. 2hi/ will
help the /ubordinate/ in under/tanding the e>pe-tation/ of the management.
4. Frequency of appraisal- 2he frequen-y of apprai/al /hould be determined by the
obje-ti4e and /-ope of performan-e apprai/al.
5. Preparation of forms. Suitable form/ /hould be de/igned to help the apprai/er/ in
their wor5. 2he form /hould be related to the job and the -ontent/ and de/ign of the
form/ /hould refle-t the obje-ti4e/ of the performan-e apprai/al program/.
6. Conveying of results- 2he re/ult/ of the apprai/al whether po/iti4e or negati4e,
/hould be -on4eyed to the employee/ in a -on/iderate manner. Al/o, -ertain /tep/
/hould be ta5en ba/ed on the finding/ of the e4aluation, li5e -ondu-ting training/ or
pro4iding -oun/eling, for the de4elopment of the employee/ et-. 2o /um up,
performan-e apprai/al /hould be an obje-ti4e a//e//ment, balan-ed on judgment/ and
unbia/ed e4aluation on the job of any performer by hi/ /uperior.
THE EVALUATION PROCESS
ESTABLISH PERFORMANCE
STANDARDS
COMMUNICATE PERFORMANCE
EXPECTATIONS TO EMPLOYEES
MEASURE ACTUAL PERFORMANCE
PERFORMANCE
COMPARE ACTUAL PERFORMANCE WITH
STANDARDS
DISCUSS THE APPRAISAL WITH THE
EMPLOYEE
IF NECESSARY, INITIATE CORRECTIVE
ACTION
THE EVALUATION PROCESS
ESTABLISH PERFORMANCE STANDARDS
At the time of de/igning a job and formulating a job de/-ription, performan-e
/tandard/ are u/ually de4eloped for the po/ition. 2he/e /tandard/ /hould be -lear and
not 4ague, and obje-ti4e enough to be under/tood and mea/ured. 2he/e /tandard/
/hould be di/-u//ed to find out whi-h different fa-tor/ are to be in-orporated, weight/
and point/ to be gi4en to ea-h fa-tor and the/e then /hould be indi-ated on the
Apprai/al Form, and later on u/ed for apprai/ing the performan-e of the employee/.
COMMUNICATE PERFORMANCE EXPECTATIONS TO THE EMPLOYEES
2he ne>t /tep i/ to -ommuni-ate the/e /tandard/ to the employee/, for the employee/
left to them/el4e/, would find it diffi-ult to gue// what i/ e>pe-ted of them. 2o ma5e
-ommuni-ation effe-ti4e feedba-5 i/ ne-e//ary from the /ubordinate to the manager.
Sati/fa-tory feedba-5 en/ure/ that the information -ommuni-ated by the manager ha/
been re-ei4ed and under/tood in the way it wa/ intended.
MEASURE ACTUAL PERFORMANCE
2o determine what a-tual performan-e i/, it i/ ne-e//ary to a-quire information about
it. @e /hould be -on-erned with how we mea/ure and what we mea/ure. Four /our-e/
are frequently u/ed to mea/ure a-tual performan-e:
Per/onal ob/er4ation/
Stati/ti-al report/
*ral report/
@ritten report/
COMPARE ACTUAL PERFORMANCE WITH STANDARDS
2he employee i/ appri/ed and judged of hi/ potential for growth and ad4an-ement.
Attempt/ are made to note de4iation/ between /tandard performan-e and a-tual
performan-e.
DISCUSS THE APPRAISAL WITH THE EMPLOYEE
2he re/ult/ of apprai/al are di/-u//ed periodi-ally with the employee/, where good
point/, wea5 point/ and diffi-ultie/ are indi-ated and di/-u//ed /o that performan-e i/
impro4ed.
IF NECESSARY, INITIATE CORRECTIVE ACTIONS: )oa-hing, -oun/elling
may be done or /pe-ial a//ignment/ and proje-t/ may be /etO per/on/ may be deputed
for formal training -our/e/, and de-i/ion ma5ing re/pon/ibilitie/ and authority may be
delegated to the /ubordinate/. Attempt/ may al/o be made to re-ommend for /alary
in-rea/e/ or promotion/, if the/e de-i/ion/ be-ome plau/ible in the light of apprai/al/.
2he detail/ gi4en abo4e may 4ary from organi;ation to organi;ation but the/e /tep/
u/ually form the prin-ipal /tep/:feature/ of a /ound e4aluation programme.
METHODS OF PERFORMANCE APPRAISAL
(a) GRAPHIC RATING SCALE METHOD
2he graphi- rating /-ale method pro4ide/ a form wherein, for ea-h per/on who i/ to
be rated, the number of qualitie/ and -hara-teri/ti-/ are enumerated, e.g.. the
analyti-al ability, de-i/i4ene//, leader/hip, job performan-e, emotional /tability, et-.
*ne form of the rating /-ale i/ the -ontinuou/ /-ale wherein the rater pla-e/ a mar5
/omewhere on a -ontinuum a/ the tabular matter /how/.
WORK ATTITUDE
0 5 10 15 20
N* IN+IFF''N2 IN2''S2'+ 'N263SIAS2I) 0I<**3S
IN2''S2 2* IN
IN @*K INS23)2I*N @*K
2he rating /y/tem generally depend/ on the allo-ation of mar5/ in order to qualify.
2he mea/urement of performan-e. 2he e>a-t allo-ation of mar5/ to differentiate the
performan-e of one indi4idual from another i/, of -our/e, a deli-ate job. <enerally, in
the rating, if a man i/ gi4en %# mar5/ and another FF, it i/ hardly po//ible to
di/-riminate a--urately on thi/ ba/i/. 2here are many 4ariation/ of thi/ method in the
graphi- form or de/-ripti4e form.
Employee Comparison Method
2he employee -ompari/on method -an be /ub di4ided into two further -ategorie/, 4i;
Ranking Method
2he ran5ing /y/tem require/ the rater to ran5 hi/ /ubordinate/ on o4erall performan-e.
2hi/ -on/i/t/ in /imply putting a man in a ran5 order. 2he major drawba-5 in thi/
method i/ that it doe/ not pinpoint the per/on /trength or wea5ne//e/ nor tell u/ of hi/
ab/olute worth. 2hi/ /y/tem al/o -annot be applied in a large underta5ing /in-e /imple
ran5ing i/ a diffi-ult job and ha/ limited utility.
Forced Distribution Method
2hi/ method i/ de/igned to pre4ent the /uper4i/or/ from -lu/tering their men mo/tly
on the high /ide or on the low /ide. It ta-5le/ the error/ due to e>-e//i4e lenien-e,
/tiffne// and -entral tenden-y. It require/ the rater to allo-ate the rating of hi/
/ubordinate/ in a pattern -onfirming to a normal -ur4e, e.g.: the /uper4i/or mu/t put
!#C of hi/ people in the top few, $#C in the ne>t highe/t -ategory, 1#C in the
middle, $#C in the lower and !#C at the bottom -ategory. Although it i/ true that
mo/t organi;ation/ ha4e a wor5 for-e who/e abilitie/ and performan-e fall in a normal
-ur4e, yet, thi/ /y/tem di/regard/ e>-eptional -a/e/ where mo/t of the per/on may fall
into the top -ategory or into the lowe/t -ategory.
Critical Incident Method
Some organi;ation/ follow thi/ method, whi-h require/ e4ery /uperior to adopt the
pra-ti-e of 5eeping a noteboo5 of /ignifi-ant in-ident/ in ea-h employee?/ beha4ior
that indi-ate/ hi/ /u--e//ful or poor performan-e. 2here are /pe-ially de/igned
noteboo5/ -ontaining appropriate -hara-teri/ti-/ and -ategorie/ on the ba/i/ of whi-h
the performan-e rating i/ done. 2he danger in /u-h a method i/ that it lead/ to a
danger where the /ubordinate/ feel that their bo// i/ breathing down their ne-5/.
Sometime/, it -reate/ a diffi-ulty in maintaining high morale.
Field Review System Method
2he e//en-e of thi/ method i/ that line offi-er/ do not them/el4e/ fill up the rating
formO in/tead repre/entati4e/ of the per/onnel department -ome to the /hop floor and
inter4iew the /uper4i/or/ to obtain pertinent information about employee/. 2hi/
information i/ then /ent to the /uper4i/or/ for appro4al. 2hen, the men are -ategori;ed
on thi/ ba/i/. )ompared to the /y/tem of per/onnel men a//e//ing dire-tly, thi/ /y/tem
ha/ a better potential for obje-ti4ity.
FREE FORM ESSAY METHOD
In thi/ form, no /-ale, -he-5li/t/ or other de4i-e/ are u/ed, but a /uper4i/or i/ /imply
required to write down hi/ impre//ion/ about an indi4idual on a /heet of paper. 2hi/
/y/tem ha/ ob4iou/ limitation/.
Checklists Method
)he-5li/t method -an al/o be further /ub di4ided in two broad -ategorie/, 4i;O
Weighted Checklist Method
In thi/ /y/tem a large number of /tatement/ that de/-ribe a parti-ular job are gi4en.
'4ery /tatement ha/ a weight or /-ale 4alue atta-hed to it. @hile rating an employee
the /uper4i/or -he-5/ all tho/e /tatement/ that mo/t -lo/ely de/-ribe the beha4ior of
the indi4idual under atta-hment. A4eraging the weight/ of all the /tatement/ -he-5ed
by the rater then /-ore/ the rating /heet. A -he-5li/t i/ -on/tru-ted for ea-h job by
ha4ing per/on/ who are quite familiar with the job/. Budge/ then -ategori;e the/e
/tatement/ and weight/ are a//igned to the /tatement/ in a--ordan-e with the 4alue
atta-hed by the judge/. 2hi/ /y/tem, howe4er, in4ol4e/ too mu-h of /taff wor5 and i/
not fea/ible in a large underta5ing where great many job/ and men are in4ol4ed.
Forced Choice Method
In thi/ /y/tem a rating form i/ /pe-ially -on/tru-ted for a type or group of job/ with a
group of four to fi4e /tatement/ for ea-h fa-tor. 2he apprai/er i/ a/5ed to pi-5 up the
/tatement, whi-h i/ the lea/t appli-able to the apprai/al. 2he weight age a//igned to
the /tatement/ i/ 5ept /e-ret from the /uper4i/or/. 2hey are only /uppo/ed to gi4e the
-orre-t de/-ription of the performan-e of the indi4idual in term/ of the higher offi-er
or the apprai/er a/ to whi-h i/ in fa4or and whi-h i/ again/t the indi4idual.
Group Appraisal Method: 2he group apprai/al method i/ in 4ogue in /ome
organi;ation/. +e-i/ion/ pertaining to promotion/, pay in-rea/e/, job -hange/ and
other /u-h i//ue/ are di/-u//ed in a meeting between the /uper4i/or/ and the
/ubordinate/.
Management by Objective: +ougla/ M-<regor ha/ de4eloped a new performan-e
apprai/al te-hnique. 6i/ method en4i/age/ a /ubordinate /etting up hi/ own /hort.term
performan-e goal/ in -ooperation with hi/ /uper4i/or. 2he /uper4i/or guide/ thi/
pro-e// to en/ure that it i/ en-ouraged to ma5e an analy/i/ of hi/ job, it/ /trength/ and
wea5ne//e/. '4ery few month/, the two get together, di/-u// the progre// toward/ the
goal/ and the indi4idual parti-ipate/ in the pro-e// of e4aluation. 2hi/ method i/
u/eful for e>e-uti4e -adre/, but i/ not appli-able in the -a/e of a large wor5 for-e and
ha/ limitation/ in the form of a4ailability of time and attention.
Behaviourally Anchored Rating Scale Method: 7AS -ombine/ major element/
from the -riti-al in-ident and graphi- rating /-ale approa-he/. 2he apprai/al rate/ the
employee on a-tual beha4ior on the gi4en job rather than the general trait/. 2hi/
method redu-e/ the amount of judgment required of the rater and relie/ mo/tly on
rater?/ power of ob/er4ation.
Paired Compaison Method: 2hi/ i/ a modified form of man to man ran5ing. 6erein,
ea-h employee i/ -ompared with all other/ in pair one at a time. 2he number of time/
an employee i/ judged better than the other/ determine/ hi/ ran5. )ompari/on i/ made
on the ba/i/ of o4erall performan-e. 2he number of -ompari/on/ to be made -an be
de-ided on the ba/i/ of the formula: .
N (N-1)/2: @here N i/ the number of per/on/ to be -ompared. 2hi/ method i/
illu/trated a/ under:
A 7 ) + ' FINA(
A . . . N N "
7 N . . N N $
) N N . N N !
+ . . . . N 1
' . . . . . G
6erein, plu/ /ign 8N9 implie/ that the employee i/ -on/idered better and minu/ /ign 8.9
mean/ wor/e than other employee/. In the pair W)? get/ the highe/t number of plu/
/ign/, therefore, hi/ ran5 i/ the highe/t and /o on.
Paired -ompari/on method i/ ea/ier and /impler than ran5ing method. 7ut it i/
/ubje-ti4e be-au/e apprai/al i/ not ba/ed on /pe-ifi- job related performan-e.
Se-ondly, it be-ome/ 4ery -umber/ome when the number of employee/ to be related
i/ large.
Confidential Report Method: 2hi/ i/ traditional form of apprai/al u/ed in mo/t
<o4ernment organi;ation/. A -onfidential report i/ a report prepared by the
employee?/ immediate /uper4i/or. It -o4er/ the /trength/ and wea5ne//e/, main
a-hie4ement/ and failure, per/onality and beha4ior of the employee. It i/ de/-ripti4e
apprai/al u/ed for promotion and tran/fer of employee/. 7ut it in4ol4e/ a lot of
/ubje-ti4ity be-au/e apprai/al i/ ba/ed on impre//ion rather than on data. No feedba-5
i/ pro4ided to the employee. 2he employee who i/ appri/ed ne4er 5now/ hi/
wea5ne// and the opportunitie/ a4ailable for o4er-oming them.
Human Resource Accounting Method: 6uman re/our-e i/ a 4aluable a//et of any
organi;ation. 2hi/ a//et -an be 4alued in term/ of money. @hen -ompetent and well.
trained employee lea4e/ an organi;ation, the human a//et i/ de-rea/ed and 4i-e 4er/a.
3nder thi/ method, performan-e i/ judged in term/ of -o/t/ and -ontribution of
employee/. )o/t/ of human re/our-e -on/i/t of e>penditure on human re/our-e
planning, re-ruitment, /ele-tion, indu-tion, training, -ompen/ation, et-. -ontribution
on human re/our-e i/ the money 4alue of labor produ-ti4ity or 4alue added by human
re/our-e/. +ifferen-e between -o/t and -ontribution will refle-t the performan-e of
employee. 2hi/ method i/ /till in the tran/ition /tage and i/ therefore not popular at
pre/ent.
Assessment Centre Method: An a//e//ment -enter i/ a group of employee/ drawn
from different wor5 unit/. 2he/e employee/ wor5 together on an a//ignment /imilar to
one they would be handling when promoted. 2he e4aluator/ ob/er4e and e4aluate
employee/ a/ they perform. '>perien-ed manager/ with pro4en ability /er4e a/
e4aluator/. 2hey e4aluate all employee/ indi4idually and -olle-ti4ely by u/ing
/imulation te-hnique/ li5e role playing, bu/ine// game/ and in ba/5et e>er-i/e/.
'mployee/ are e4aluated on job related -hara-teri/ti-/ -on/idered important for job
/u--e//. @ith a//e//ment -enter method, rater?/ per/onal bia/ i/ redu-ed. 7ut thi/ i/ a
time -on/uming and e>pen/i4e method. Further, the -andidate who re-ei4e/ negati4e
report may feel demorali;ed.
The Halo Effect or Error: 2he halo effe-t i/ a tenden-y to let a//e//ment of an
indi4idual?/ one.trait influen-e/ the e4aluation of that per/on on other /pe-ifi- trait/.
2he halo effe-t refer/ to the tenden-y to rate an indi4idual -on/i/tently high or low or
a4erage on the 4ariou/ trait/, depending upon whether the rater?/ o4erall impre//ion
of the indi4idual i/ fa4orable or not. 2he halo effe-t/ ari/e when trait/ are unfamiliar,
ill defined and in4ol4e per/onal relation/.
2hi/ often o--ur/ when an employee tend/ to be more -on/-ientiou/ and dependable,
that the apprai/er might be-ome bia/ed toward/ that indi4idual to the e>tent that the
apprai/er rate/ him high on many de/irable attribute/O or when the employee i/ more
friendly or unfriendly toward/ the apprai/er.
Problems of Performance Appraisal: 2he ideal approa-h to performan-e e4aluation
i/ that in whi-h the e4aluator i/ free from per/onal bia/e/, prejudi-e/, and
idio/yn-ra/ie/. 6owe4er, a /ingle foolproof e4aluation method i/ not a4ailable.
Inequitie/ in e4aluation often de/troy the u/efulne// of the performan-e /y/tem.
re/ulting in ina--urate, in4alid apprai/al/, whi-h are unfair too. 2here are many
/ignifi-ant fa-tor/, whi-h deter or impede obje-ti4e e4aluation. 2he/e fa-tor/ are:
Leniency or Strictness Tendency or Constant Error
elati4e to the true and a-tual performan-e an indi4idual e>hibit/, /ome /uper4i/or/
ha4e a tenden-y to be liberal in the rating i.e. they -on/i/tently a//ign high 4alue/ to
the employee, while at other time/ they may ha4e a tenden-y to a//ign low rating/.
2he former tenden-y i/ 5nown a/ po/iti4e lenien-y error, while the latter a/ negati4e
lenien-y error. 7oth the/e trend/ u/ually ari/e from 4arying /tandard/ of performan-e
ob/er4ed by /uper4i/or/ and from different interpretation of what they e4aluate in
employee performan-e.
The Central Tendency Problem
It i/ the mo/t -ommonly found error. It a//ign/ a4erage rating/ to all the employee/
with a 4iew to a4oiding -ommitment/ or in4ol4ementO or when the rater i/ in doubt or
ha/ inadequate information or la-5 of 5nowledge about the beha4ior of the employee
or when he doe/ not ha4e mu-h time at hi/ di/po/al. Su-h tenden-y /eriou/ly di/tort/
the e4aluation/, ma5ing them mo/t u/ele// for promotion, /alary or -oun/eling
purpo/e/.
Similarity Error
PROBLEMSOF
PERFORMANCE
APPRAISAL
SOCIAL
DIFFERENTIATION
MISCELLANEOUS
BIASES
Leniency/
Strictness
Tendency
HALO EFFECT
CENTRAL
TENDENCY
SIMILARITY
ERROR
2hi/ type of error o--ur/ when the e4aluator rate/ other people in the /ame way he
per-ei4e/ him/elf. For e>ample, the e4aluator who per-ei4e/ him/elf a/ aggre//i4e
may e4aluate other/ by loo5ing for aggre//i4ene//. 2ho/e who /how thi/
-hara-teri/ti- may be benefited while other/ may /uffer. 2hi/ error al/o wa/he/ out if
the /ame e4aluator apprai/e/ all people in the organi;ation.
Social Differentiation
ating i/ /ometime/ impeded by the e4aluator?/ /tyle of rating beha4ior. Pigou ha/
-la//ified rater/ a/: high differentiator/. i.e. u/ing all or mo/t of the /-ale. 6e
ob/er4e/: low differentiator/ tend to ignore or /uppre// differen-e/, per-ei4ing the
uni4er/e a/ more uniform than it really i/. 6igh differentiator/, on the other hand, tend
to utili;e all a4ailable information to the utmo/t e>tend and, thu/, are better able to
per-eptually deny anomalie/ and -ontradi-tion/ than low differentiator/. So-ial
differentiator/ ma5e e4aluation u/ing trait -riteria unreliable.
Miscellaneous Biases
7ia/ again/t employee/ on ground of /e>, ra-e, religion or po/ition i/ al/o -ommon
error in rating. 7e/ide/ the/e, there may be opportunity bia/, group -hara-teri/ti- bia/
and 5nowledge.of.predi-tor bia/.
PERFORMANCE APPRAISAL IN INDIAN INDUSTRIES
A. Apprai/al in <o4ernment +epartment/
B. Appraisal in Public Sector
Undertakings
C. Appraisal in Private Organizations
APPRAISAL IN GOVERNMENT DEPARTMENTS
2he go4ernment i/ the bigge/t employer in the -ountry. It/ /u--e// ultimately depend/
upon how well or badly it/ employee/ perform on their job/. 7ut the e>i/ting
/y/tem of performan-e apprai/al doe/ not help the go4ernment to identify the
/trength/ and wea5ne//e/ of it/ employee/, or to ta5e -orre-ti4e a-tion by way
of promoting the /trength/ and remo4ing the /hort-oming/.
2he /y/tem i/ not de/igned to impro4e the performan-e of the employee/. It i/ u/ed
mainly a/ a mean/ to di/-ipline employee/, or a/ a /our-e of -olle-ting
information required for -ertain admini/trati4e purpo/e, li5e ta5ing de-i/ion on
promotion/. Mo/t flaw/ in the e>i/ting /y/tem of performan-e e4aluation in u/e
in a go4ernment originate from the la-5 of -larity about ba/i- obje-ti4e/. If one
analy/e/ a performan-e apprai/al form in u/e in a go4ernment department, one
will noti-e a li/t of per/onality.oriented trait/ li5e ;eal, 5eenne//, loyalty,
per/onality, patien-e, re/our-efulne//, ta-t, temperament et-. 2he job -entered
trait/ are either -on/pi-uou/ by their ab/en-e or their number i/ in/ignifi-ant.
2a5e, for in/tan-e, loyalty. 2he a//e//ment of /u-h a trait may 4ary with the 4iewpoint
of the apprai/er. In -a/e, hi/ interpretation empha/i;e/ the per/onal loyalty of
the employee toward/ him, it may re/ult in hi/ gi4ing high grading to Wye/ men?
in the department and low grading to tho/e who are not loyal or dependable in
that /en/e of the term.
2he te-hnique, whi-h i/ u/ed in go4ernment department/, i/ 5nown a/ the graphi-
rating /-ale method. At the end of e4ery year, a -onfidential report form
-ontaining a li/t of per/onality and beha4ioural trait/ i/ pre/ented to the rater,
who i/ required to indi-ate the degree of the trait po//e//ed by the employee by
u/ing pre.determined phra/e/ or adje-ti4e/ li5e out/tanding, 4ery good, good,
/ati/fa-tory, poor, abo4e a4erage, a4erage. 2he u/e of the/e /ummary
e>pre//ion/ re/tri-t/ the /-ope of the apprai/ing offi-er to bring out the realitie/
of employee performan-e.
2he apprai/al form pre/-ribed for /ome go4ernment department/ doe/ not require the
apprai/ing offi-er/ to u/e /u-h e>pre//ion/, but in their -a/e/ the entire
e4aluation i/ done under one broad heading of Pgeneral a//e//mentQ. @hen the
grading i/ done on the ba/i/ of o4erall impre//ion, it ha/ a greater ri/5 of being
/ubje-ti4e than the /pe-ifi- trait/ bound apprai/al. It al/o doe/ not pro4ide a
-omplete pi-ture of the /trength/ and wea5ne//e/ of an offi-er in re/pe-t of
/pe-ifi- fa-tor/ rele4ant to hi/ job.
)on/iderable re/ear-h ha/ been done in the field of management to impro4e the
traditional method/ of apprai/al in order to redu-e the element/ of /ubje-ti4ity.
<o4ernment department/ ha4e not made mu-h u/e of /u-h re/ear-h re/ult/. *n
a re-ommendation made by the admini/trati4e reform -ommi//ion many year/
ago, the <o4ernment had introdu-ed a method 5nown a/ P/elf apprai/al
methodQ. 2hi/ method require/ the employee to apprai/e hi/ own performan-e,
whi-h i/ /upplemented by a rating done by the /uper4i/or. 2here are /ome
ob4iou/ ad4antage/ of thi/ method, but it i/ being u/ed only in the -a/e/ of a
few ran5/. 2he method ha/ not been adopted by all organi;ation/.
At pre/ent, the e4aluation report i/ written at the end of the -alendar or finan-ial year.
Sin-e no re-ord i/ 5ept about the performan-e of the employee, the reporting
offi-er i/ for-ed to e4aluate either on the ba/i/ of hi/ o4erall impre//ion about
the employee?/ general performan-e or to fall ba-5 upon hi/ memory. 2wo mo/t
-ommon error/ re/ulting due to thi/ pra-ti-e are Phalo error/Q, whi-h ari/e/
when all the trait/ are a//e//ed on the ba/i/ of an o4erall impre//ion, and the
Werror of o4er.weighting?, whi-h ari/e/ when the rater i/ unduly influen-ed by
e4ent/ nearer the end of the rating period.
It i/ not that the go4ernment department/ do not re-ogni;e the importan-e of
pro4iding feedba-5 of the apprai/al information to the /ubordinate/. 2he /y/tem
doe/ re-ogni;e the need to -ommuni-ate to them thi/ information, but only in /o
far a/ it relate/ to the negati4e a/pe-t/ of their performan-e.
2he e>i/ting /y/tem of performan-e apprai/al in the <o4ernment +epartment/, need/
to be impro4ed dra/ti-ally in order to en/ure better the o4erall performan-e of the
employee and in turn that of the organi;ation it/elf.
APPRAISAL IN PUBLIC SECTOR UNDERTAKINGS
All publi- /e-tor underta5ing/ ha4e /ome 5ind of an employee e4aluation on the
performan-e of their per/onnel, through progre// report/ while other/ u/ing merit.
rating program/. 2he apprai/al/ or rating/ are ba/ed on per/onality, -hara-teri/ti-/ li5e
ability to plan, delegate, -ontrol A -o.ordinate et-, and performan-e, are generally
-ondu-ted annually. Su-h apprai/al/ are found u/eful e/pe-ially for promotion/, and
aid the employee/ in 5nowing their /ub.ordinate/. Al/o they help them to 5now their
progre//, training A de4elopment.
2he apprai/al in publi- enterpri/e/ i/ -ondu-ted on the ba/i/ of -ertain /tandard/ and
-riteria. 2he obje-ti4e/ 4ary from enterpri/e to enterpri/e. Some of the parameter/
may -hange due to e>ternal or e4en internal fa-tor/ /ub/equent to the /etting up of the
enterpri/e. 2he enterpri/e/ ha4e their long and /hort term -apital and operational
plan/. 2he/e pro4ide another /et of referen-e point/ for a//e//ment of the
performan-e. )o/t effi-ien-y i/ another important ba/i/ for apprai/ing performan-e.
7a/i-ally, the /tru-ture of a publi- /e-tor would in-lude the law/, regulation/ and
pra-ti-e/ go4erning re-ruitment, promotion/, and the prin-iple/ of the hierar-hy. 2he
-ulture of the organi;ation, on the other hand, will influen-e the informal -ode/, rule/,
norm/, and beha4ioural pra-ti-e/ of publi- /er4ant/ in relation to the o4erall /tru-ture
of the organi;ation. In the -a/e of the publi- /e-tor, there i/ the problem of
e/tabli/hing pre-i/e and mea/urable -riteria by whi-h performan-e -an be a//e//ed. In
mo/t in/tan-e/, a primary obje-ti4e of the apprai/al /y/tem i/ that it pro4ide/ reward/
for /ati/fa-tory performan-e. 2he human re/our-e management ha/ redefined
-on4entional pro-edure/ of re-ruitment, /ele-tion, promotion, and di/-ipline and ha/
empha/i;ed the need to in-rea/e produ-ti4ity by introdu-ing performan-e /y/tem/ and
/tandard/ and lin5ing them to reward/.
APPRAISAL IN PRIVATE ORGANIZATIONS
In organi;ation/ falling under the pri4ate /e-tor, mo/t -ompanie/ ha4e formal
performan-e apprai/al /y/tem/ or merit.rating program/, whi-h are found 4ery u/eful
in the area/ /u-h a/ the ability to ta5e de-i/ion/, -o.ordination with -olleague/ and
/uperior/ and rai/e in the o4erall performan-e of the employee/.
2he /u--e// of the/e plan/ depend/ on the -are with whi-h they are planned, operated
and -ontrolled. It i/ e//ential that the apprai/al or merit.rating plan/ mu/t not be u/ed
beyond their -apa-itie/.
PERFORMANCE APPRAISAL IN MARUTI SUZUKI
These are 3 kinds of Performance Appraisal forms through which the emp1oyees
are appraised.
i9 Manager/ Performan-e Apprai/al form.
ii9 Super4i/or/ Performan-e Apprai/al form
iii9 'mployee/ Performan-e Apprai/al form.
Potential of employee i/ e4aluated after e4ery D month/. MA32I S3K3KI al/o ha/
a /elf apprai/ing /y/tem.
Rating is divided in 3 categories.
i9 'mployee
ii9 Super4i/ory
iii9 Management
2he performan-e of e>e-uti4e/ and /uper4i/or i/ apprai/ed both by the apprai/er and
apprai/ee, a--ording to the e4aluation tran/fer/ and Promotion/ ta5e/ pla-e
The scale used for all the three categories are.
i9 Poor
ii9 A4erage in
iii9 <ood
i49 '>-ellent
In the 'mployee Performan-e Apprai/al form the apprai/er/ a/ well a/ the apprai/ee/
-omment/ are ta5en after the apprai/er gi4e/ hi/ remar5/ after thi/ -omment/ of the
head of the department i/ ta5en along with Per/onnel Manager?/ and <eneral
Manager?/ -omment/. Finally, the per/onnel A-tion form i/ filled at along with the
final -omment/ of the per/onnel Manager and the head of the +epartment
Thus, the Employees Performance Appraisal form of the comments & remarks
from:
i9 Apprai/er 8Super4i/or9
ii9 Apprai/ee 8'mployee:/taff9
iii9 6ead of the +epartment
i49 Per/onnel Manager
49 <eneral Manager
In the /uper4i/or?/ performan-e Apprai/al form the -omment/ of the apprai/er and
apprai/ee are ta5en after the remar5/ from the apprai/ee him/elf. After thi/ the
apprai/er/ along with the head of the department -omment/ are al/o -on/ider. 2hen
finally, 6+ A Per/onnel:Admini/tration Manager a/ well a/ the Senior 0i-e
Pre/ident and <eneral Manager gi4e/ their -omment/. Finally, the Per/onnel a-tion
form i/ filled up, along with the final -omment/ of the Per/onnel Manager and the
head of the department.
2hu/ the /uper4i/or?/ Performan-e Apprai/al form -on/i/t/ of the -omment/ and
remar5/ from:
i9 apprai/ee 8Super4i/or9
ii9 Apprai/er
iii9 6ead of the department
i49 Per/onnel Manager
49 Senior 0i-e Pre/ident A <eneral Manager.
Management Performance Appraisal forms consists of 3 sections.
Section 1 - General Performance Appraisal.
Section 2- Overall Performance Appraisal
Section 3 - Individual Training and Development Plan.
In /e-tion of <eneral Performan-e Apprai/al the -omment/ of the Apprai/e and
Apprai/er are ta5en en /e4eral a/pe-t/ /u-h a/
Appearan-e:<rooming
Admini/trati4e /5ill/
=uality of re/pon/ibility
(eader/hip qualitie/ et-.
2he /e-tion of o4erall performan-e apprai/al -on/ider/ all a/pe-t/ of the apprai/er?/
performan-e and a-hie4ement/ whi-h i/ filled up by the apprai/er after -on/idering
hi/ a/ well a/ apprai/er?/ -omment/ on the following /-ale.
'>-ellent Performan-e
<ood Performan-e
A4erage Performan-e
3n/ati/fa-tory Performan-e
In the /e-tion of Indu/trial 2raining and +e4elopment Plan the apprai/ee him/elf
gi4e/ the -omment/ on in whi-h area he need/ the training and whether the pa/t ha/
been -arried out /u--e//fully. Similarly the apprai/er gi4e/ -omment/ regarding the
training need of apprai/e. Finally, the 0i-e Pre/ident and <eneral Manager gi4e/ their
-omment/. After ta5ing down all the -omment/, per/onal a-tion form i/ filled up,
along with the final -omment/ of the Per/onal manager and the <eneral Manager.
The Objectives of Performance Appraisal in MARUTI SUZUKI
Performan-e Apprai/al in MA32I S3K3KI i/ done mainly to meet the following
obje-ti4e/:
Manpower Planning
For -reating and maintaining a /ati/fa-tory le4el of performan-e of employee/
in the pre/ent job.
For identifying training and de4elopment need/.
For promotion
For /alary in-rement
2o moti4ate the employee/
2o 5now the feeling of the employee/ toward MA32I S3K3KI pra-ti-e/
and poli-ie/ and about the other /taff.
Steps taken by MARUTI SUZUKI for performance appraisal below standards:
!. @arning letter/ are gi4en to the employee
$. 2ermination
". In-rement/ are held
1. Promotion/ are held
G. Pro4ide training
D. )oun/eling i/ gi4en
AWARDS FOR GOOD PERFORMANCE IN MARUTI SUZUKI:
Monthly Best worker Award Scheme
AIM: 2o enhan-e the performan-e le4el and moti4ate po/iti4ely their wor5er/ for
a-hie4ing higher le4el of gue/t /ati/fa-tion.
SCOPE: 2hi/ /-heme /hall -o4er all -onfirmed employee/ of MA32I S3K3KI.
FEATURES:
!. All employee/ are judged obje-ti4ely by 6ead of +eptt on the following
parameter/:
Pun-tuality
<rooming
@or5 *utput and wor5 5nowledge
Adheren-e to di/-iplinary norm/.
'>-ellen-e in gue/t /er4i-e
Ability to relate and guide -olleague/:/ubordinate/
*rgani;ing ability and e>e-ution
$. 2he employee/ mu/t ha4e made /ome po/iti4e and tangible -ontribution to hi/:her
deptt.
Procedure for selection; All 6*+?/ will nominate per/on who they thin5 fit and
worthy the award along with a write up on the per/onality trait/ of the indi4idual.
All nomination/ /hould rea-h the 6 deptt. by $F
th
of ea-h month in the format
pro4ided. A meeting -haired by the <eneral Manager along with other 6*+?/ will
them -hoo/e the per/on for the monthly be/t wor5er award.
PRIZE:
)a/h reward of /.G##!:.
)ertifi-ate of merit by Managing +ire-tor: <eneral Manager
Annual Best Worker Award:
Features:
All the employee/ will be judged obje-ti4ely by +eptt. head/ on the following
parameter/:
Same a/ that of Monthly 7e/t @or5er Award
*rgani;ing Ability and e>e-ution
6igh le4el of initiati4e in gue/t /er4i-e/, po/iti4e -omment/ by gue/t/.
6igh degree of /elf impro4ement willingne// to learn and impro4e
Potential for further growth
'mployee mu/t ha4e made /ame tangible -ontribution to hi/:her deptt/.
Procedure for selection:
2he /taff /ele-ted a/ 7e/t 'mployee on monthly ba/i/ in one -alendar yr 8April.
Mar-h9 will be entitled to be 4oted by ea-h -on-erned deptt/ a/ employee of the year.
All nomination /hould rea-h the 6 deptt by !G
th
Mar-h in the format pro4ided.
A meeting )haired by <eneral Manager along other 6*+?/ will then -hoo/e the
per/on for the Annual 7e/t @or5er Award.
PRIZE:
A eturn Air 2i-5et for two to any de/tination in India with /tay for $ night/ and "
day/.
)a/h reward of /. $##!
)ertifi-ate of Merit by Managing +ire-tor: <eneral Manager
Beach observes: PA-tual e>perien-e with rating ha/ demon/trated that /uper4i/or/
will rate their people near the middle of the /pe-trum 8a4erage9 if their bo//e/ put
pre//ure on them to -orre-t the /ub.par performer/ 8or get rid of them9 and if they are
-alled upon to really ju/tify an out/tanding rating. In other word/, they will follow the
path of lea/t re/i/tan-e be-au/e they 5now that the 7ig 7o// will que/tion them about
tho/e rated low or 4ery high.
CHAPTER- 2
OB1ECTIVE & METHODOLOGY
OB1ECTIVE & METHODOLOGY
2.1: RESEARCH OB1ECTIVE
2o analy/e the e>i/ting Performan-e Apprai/al Sy/tem in MA32I S3K3KI
2o determine whether any -hange:modifi-ation i/ required in thi/ /y/tem in
MA32I S3K3KI
2o obtain employee/ 4iew on performan-e Apprai/al in MA32I S3K3KI and
their 4aluable /ugge/tion/ on the impro4ement of e>i/ting /y/tem
SCOPE OF THESIS WORK
2he /tudy with regard to the abo4e obje-ti4e will help MA32I S3K3KI, to
a/-ertain whether the e>i/ting Performan-e Apprai/al Sy/tem i/ adequate or any
-hange i/ required in thi/ /y/tem.
2he /tudy -on/i/t/ of employee/ 4iew on performan-e Apprai/al in MA32I
S3K3KI and their 4aluable /ugge/tion/ on the impro4ement of e>i/ting /y/tem.
2.2 RESEARCH METHODOLOGY
A e/ear-h Methodology define/ the purpo/e of the re/ear-h, how it pro-eed/, how to
mea/ure progre// and what -on/titute /u--e// with re/pe-t to the obje-ti4e/
determined for -arrying out the re/ear-h /tudy. 2he appropriate re/ear-h de/ign
formulated i/ detailed below.
Exploratory Research: thi/ 5ind of re/ear-h ha/ the primary obje-ti4e of
de4elopment of in/ight/ into the problem. It /tudie/ the main area where the problem
lie/ and al/o trie/ to e4aluate /ome appropriate -our/e/ of a-tion.
2he re/ear-h methodology for the pre/ent /tudy ha/ been adopted to refle-t the/e
realtie/ and help rea-h the logi-al -on-lu/ion in an obje-ti4e and /-ientifi- manner.
2he pre/ent /tudy -ontemplated an e>ploratory re/ear-h.
Research Design
2he re/ear-h de/ign i/ the ba/i- framewor5, whi-h pro4ide/ guideline/ for the re/t of
the re/ear-h pro-e//. 2he pre/ent re/ear-h -an be /aid to be e>ploratory. 2he re/ear-h
de/ign determine/ the dire-tion of the /tudy throughout and the pro-edure/ to be
followed. It determine/ the data -olle-tion method, /ampling method, the fieldwor5
and /o on.
Descriptive Research-
It in-lude/ /ur4ey/ and fa-t finding enquirie/ of different 5ind/. 2he major purpo/e of
de/-ripti4e re/ear-h i/ de/-ription of the /tate of affair/, a it e>i/t a/ the pre/ent. 2he
main -hara-teri/ti- of thi/ method i/ that the re/ear-h ha/ no -ontrol o4er the 4ariable,
he -an only report what ha/ happened or what i/ happening.
NATURE OF DATA
PRIMARY DATA: Primary data i/ ba/i-ally fre/h data -olle-ted dire-tly
from the target re/pondent/O it -ould be -olle-ted
through =ue/tionnaire Sur4ey/, Inter4iew/, Fo-u/
<roup +i/-u//ion/ 't-.
SECONDARY DATA: Se-ondary data that i/ already a4ailable and publi/hed.
It -ould be internal and e>ternal /our-e of data.
INTERNAL SOURCE: whi-h originate/ from the /pe-ifi- field or area where
re/ear-h i/ -arried out e.g. publi/h broa-her/, offi-ial
report/ et-.
EXTERNAL SOURCE: 2hi/ originate/ out/ide the field of /tudy li5e boo5/,
periodi-al/, journal/, new/paper/ and the Internet.
DATA COLLECTION
Primary data: Primary data wa/ /ele-ted from the /ample by a /elf.admini/trated
que/tionnaire in pre/en-e of the inter4iewer.
SAMPLE SIZE:
QUESTIONNAIRE DESIGN
Questionnaire: . A que/tionnaire -on/i/t/ of a /et of que/tion/ pre/ented to
re/pondent for their an/wer/. It -an be )lo/ed 'nded or *pen
'nded
Open Ended: . Allow/ re/pondent/ to an/wer in their own word/ A are diffi-ult
to Interpret and 2abulate.
Close Ended: . Pre./pe-ify all the po//ible an/wer/ A are ea/y to Interpret and
2abulate.
2he /ur4ey i/ -ondu-ted among !## re/pondent/
Sample Area: N) +elhi
Sample unit: 'mployee/ of MA32I S3K3KI, the/e people were reque/ted
to fill in the que/tionnaire/ during the lun-h inter4al/ at their
offi-e premi/e/
Secondary Data: Se-ondary data ha/ been -olle-ted through Arti-le/, eport/,
Bournal/, Maga;ine/, New/paper/ and Internet
SAMPLING TECHNIQUE:
andom /ampling te-hnique ha/ been employed to e>tra-t the fruitful re/ult/. 2hi/
in-lude/ the o4erall de/ign, the /ampling pro-edure, the data -olle-tion method/, the
field method/ and the analy/i/ pro-edure/
SAMPLING PROCEDURE ACTUALLY EMPLOYED:
2he pro-e// employed to /ele-t the /ample wa/ /imple random /ampling. Simple
random /ampling refer/ to that /ampling te-hnique in whi-h ea-h and e4ery unit of
the population ha/ an equal and /ame opportunity of being on the /ample. In /imple
random /ampling, whi-h item get/ /ele-ted i/ ju/t a matter of -han-e.
ANALYTICAL TOOLS:
Simple /tati/ti-al tool/ ha4e been u/ed in the pre/ent /tudy to analy;e and interpret the
data -olle-ted from the field. 2he /tudy ha/ u/ed per-entile/ method and the data are
pre/ented in the form of table/ and diagram/.
2.3: Limitations of Research
In thi/ form, no /-ale, -he-5li/t/ or other de4i-e/ are u/ed, but a /uper4i/or i/ /imply
required to write down hi/ impre//ion/ about an indi4idual on a /heet of paper. 2hi/
/y/tem ha/ ob4iou/ limitation/.
2hi/ method i/ u/eful for e>e-uti4e -adre/, but i/ not appli-able in the -a/e of a large
wor5 for-e and ha/ limitation/ in the form of a4ailability of time and attention.
2hi/ in-lude/ the o4erall de/ign, the /ampling pro-edure, the data -olle-tion method/,
the field method/ and the analy/i/ pro-edure/.
2he /tudy ha/ u/ed per-entile/ method and the data are pre/ented in the form of table/
and diagram/.
CHAPTER - 3
DATA ANALYSIS & INTERPRETATION
DATA ANALYSIS AND INTERPRETATION
TABULATION & ANALYSIS OF DATA
S.No.
=ue/tion e/pon/e
YES NO
!. +o you ha4e a formal apprai/al /y/tem in your offi-eV "F !$
$.
+o you thin5 that per/onnel /hould be apprai/ed
regularlyV
1% !
".
Performan-e apprai/al pro4ide/ an opportunity for /elf.
re4iew. +o you agreeV
1D 1
1.
+o you thin5 that both the per/onnel a/ well a/ the
organi;ation are benefited from apprai/al/V
1& "
G.
I/ any effort made to determine the employee?/
potential, during the apprai/al pro-e//V
"& !"
D.
+oe/ your organi;ation -ondu-t po/t.apprai/al
inter4iew/ or intera-tion/V
$# "#
&. Are the re/ult/ of the apprai/al -on4eyed to youV "# $#
F.
+oe/ the /y/tem pro4ide training and de4elopment after
apprai/alV
$! $%
%.
+o you thin5 that promotion/ and demotion/ /hould be
go4erned by apprai/al re/ult/V
1# !#
!#.
Are you /ati/fied with the pre/ent apprai/al /y/tem in
your organi;ationV
$% $!
DATA ANALYSIS
Q1. Do you have a formal appraisal system in your office?
I'S ................................. &DC
N*................................... $&C
Interpretation
Majority of the re/pondent/ /ay that they ha4e a formal apprai/al /y/tem in their
offi-e.
Q2. Do you think that personnel should be appraised regularly?
I'S ................................. %FC
N*................................... #$C
Interpretation
Majority of the re/pondent/ /ay that per/onnel /hould be apprai/ed regularly.
Q3. Performance appraisal provides an opportunity for self-review. Do you
agree?
I'S ................................. %$C
N*................................... #FC
Interpretation
Majority of the re/pondent/ /ay that performan-e apprai/al pro4ide/ an opportunity
for /elf.re4iew.
Q4. Do you think that both the personnel as well as the organization are
benefited from appraisals?
I'S ................................. %1C
N*................................... #DC
Interpretation
Majority of the re/pondent/ /ay that both the per/onnel a/ well a/ the organi;ation are
benefited from apprai/al/.
Q5. Is any effort made to determine the employee`s potential, during the
appraisal process?
I'S ................................. &1C
N*................................... $DC
Interpretation
Majority of the re/pondent/ /ay that an effort i/ made to determine the employee?/
potential during the apprai/al pro-e//.
Q6. Does your organization conduct post-appraisal interviews or interactions?
I'S ................................. 1#C
N*................................... D#C
Interpretation
Majority of the re/pondent/ /ay that their organi;ation doe/ not -ondu-t po/t.
apprai/al inter4iew/ or intera-tion/.
Q7. Are the results of the appraisal conveyed to you?
I'S ................................. 1#C
N*................................... D#C
Interpretation
Majority of the re/pondent/ /ay that the re/ult/ of the apprai/al are -on4eyed to them.
Q8. Does the system provide training and development after appraisal?
I'S ................................. 1$C
N*................................... GFC
Interpretation
Majority of the re/pondent/ /ay that the /y/tem doe/ not pro4ide training and
de4elopment after apprai/al.
Q9. Do you think that promotions and demotions should be governed by
appraisal results?
I'S ................................. F#C
N*................................... $#C
Interpretation
Majority of the re/pondent/ /ay that promotion/ and demotion/ /hould be go4erned
by apprai/al re/ult/.
Q10. Are you satisfied with the present appraisal system in your organization?
I'S ................................. GFC
N*................................... 1$C
Interpretation
Majority of the re/pondent/ /ay that they are /ati/fied with the pre/ent apprai/al
/y/tem in their organi;ation.
CHAPTER-4
FINDINGS
FINDINGS
Apprai/al i/ a /en/iti4e a/ well a/ a 4ery important i//ue in any organi;ation. It
dire-tly affe-t/ the tru/t and the relation/hip of the employee/ with the Superior/ and
the *rgni;ation. Performan-e Apprai/al/ /hould be authenti- and /ati/fa-tory in
MA32I S3K3KI. Feedba-5 /hould be made a4ailable to the employee/,
irre/pe-ti4e of whether the re/ult i/ negati4e or po/iti4e. Feedba-5 /hould al/o be
ta5en from employee/ to -he-5 whether apprai/al/ are /er4ing their obje-ti4e.
Majority of the re/pondent/ /ay that they ha4e a formal apprai/al /y/tem in their
offi-e.
Majority of the re/pondent/ /ay that per/onnel /hould be apprai/ed regularly.
Majority of the re/pondent/ /ay that performan-e apprai/al pro4ide/ an
opportunity for /elf.re4iew.
Majority of the re/pondent/ /ay that both the per/onnel a/ well a/ the organi;ation
are benefited from apprai/al/.
Majority of the re/pondent/ /ay that an effort i/ made to determine the employee?/
potential during the apprai/al pro-e//.
Majority of the re/pondent/ /ay that their organi;ation doe/ not -ondu-t po/t.
apprai/al inter4iew/ or intera-tion/.
Majority of the re/pondent/ /ay that the re/ult/ of the apprai/al are -on4eyed to
them.
CHAPTER-4
RECOMMENDATIONS
RECOMMENDATIONS
Some /ugge/tion/ in order to impro4e the apprai/al method/ and their u/e are a/
follow/:
Performan-e Apprai/al/ /hould be authenti- and /ati/fa-tory in MA32I
S3K3KI.
Feedba-5 /hould be made a4ailable to the employee/, irre/pe-ti4e of whether the
re/ult i/ negati4e or po/iti4e.
Feedba-5 /hould al/o be ta5en from employee/ to -he-5 whether apprai/al/ are
/er4ing their obje-ti4e.
Apprai/al/ /hould not in4ol4e any que/tion of /alary, in-enti4e/ et-. a/ the/e are
matter/ of different area and affe-t the morale of the employee/.
Observation and Conclusion
Apprai/al i/ a /en/iti4e a/ well a/ a 4ery important i//ue in any organi;ation. It
dire-tly affe-t/ the tru/t and the relation/hip of the employee/ with the Superior/ and
the *rgni;ation.
It wa/ /een during the -our/e of time that performan-e apprai/al/ were affe-ted by the
per-eption/ of the employee/ a/ well a/ the Manager/ in the /en/e that:
'mployee/, who were not happy with the pre4iou/ apprai/al/, did not a-ti4ely
parti-ipate in the ne>t apprai/al/ a/ well.
e-ent e>perien-e/ were fre/h in the mind/ of employee/ and the employer/,
whi-h affe-ted the apprai/al/ to a large e>tent.
Any 5ind of apprai/al -annot be held within /hort period of re/tru-turing in the
-ompany, a/ it i/ bound to affe-t the re/ult/ of the apprai/al.
ANNEXURES
ANNEXURES
Questionnaire with responses received from officials of MARUTI SUZUKI
Q1. Do you have a formal appraisal system in your office?
I'S .................................
N*...................................
Q2. Do you think that personnel should be appraised regularly?
I'S .................................
N*...................................
Q3. Performance appraisal provides an opportunity for self-review. Do you
agree?
I'S .................................
N*...................................
Q4. Do you think that both the personnel as well as the organization are
benefited from appraisals?
I'S .................................
N*...................................
Q5. Is any effort made to determine the employee`s potential, during the
appraisal process?
I'S .................................
N*...................................
Q6. Does your organization conduct post-appraisal interviews or interactions?
I'S .................................
N*...................................
Q7. Are the results of the appraisal conveyed to you?
I'S .................................
N*...................................
Q8. Does the system provide training and development after appraisal?
I'S .................................
N*...................................
Q9. Do you think that promotions and demotions should be governed by
appraisal results?
I'S .................................
N*...................................
Q10. Are you satisfied with the present appraisal system in your organization?
I'S .................................
N*...................................
BIBLIOGRAPHY & REFERENCES
BIBLIOGRAPHY & REFERENCES
7anerjee ShyamalO PPrin-iple/ and Pra-ti-e/ of ManagementQO *>ford A I76
Publi/hing )o. P4t. (td.O !%%#.
+wi4edi . S.O PManpower ManagementQO Prenti-e 6all of India P4t. (td., New
+elhiO !%F1.
Mamoria ). 7. A <an5ar S. 0.O P6uman e/our-e ManagementQO 6imalaya
Publi/hing 6ou/eO $##".
2ripathi P. ).O PPer/onnel Management and Indu/trial elation/QO Sultan )hand A
Son/, New +elhiO $##$.
Subba ao P.O PPer/onnel and 6uman e/our-e ManagementQO 6imalaya
Publi/hing 6ou/eO $##$.
Pra/ad (.M.O P6uman e/our-e ManagementQO Sultan )hand A Son/, New +elhiO
$##!.
Subramani P.N. A ajendra <.O P6uman e/our-e Management and Indu/trial
elation/QO 6imalaya Publi/hing 6ou/eO $##!.
Surendar KumarO PPerforman-e Apprai/al and Potential '4aluationQO <algotia
Publi/hing 6ou/eO $##!.
Reference & Illustrations:
www.wor5%!!.-om
www.ar-hernorth.-om
www.humanrightinitiati4e.org
www.foto/ear-h.-om