1

CHAPTER – I

INTRODUCTION
 2

INTRODUCTION

Gradual growth of industrialization brought about a new sense

of realization amongst the entrepreneurs to give higher importance
to man-management relations. And, around the sixties new
institutions like Xavier Labour Relations and Indian Institute of
Management came into existence and started offering diploma or
masters degree in Personnel management and business
administration. ‘Labour Management’ was reworded ‘Personnel
Management’, which focused not only on dealing with day-to-day
problems of labour from the administrative angle but also the
encouraged people to become more productive through work study
measurement techniques, etc. Thus the labour productivity
became the focus of attention.

There have been some significant events in the country like

observation for the need to augment labour and material
productivity as also managerial productivity. Observation of
productivity year in the 1970s in Japan also impacted the Indian
Industry resulting in a large scale thrust on productivity in the
industries. Another significant event took place in the 1980s when
the concern for increasing value added per rupee for payment had
tremendously increased. With the labour cost increasing in the
country, as a result of the forces of demand and supply in all
segments of industry – employers tended to recruit only the
number of absolutely needed and so made optimum use of the
manpower employed. Training and development, which is a
 3

significant branch of personnel and human resource management,

has since been receiving increasing attention in the country.

Demand for personnel specialists has increased in industries

and other organisations with rising complexity in managing people.
Understanding the people on the job has assumed center stage
and eliminating loss of man hours for any reason, whether due to
work stoppages of any kind or even accidents or entertainment,
etc., has also resulted in the demand for trained personnel
managers. There are other factors which are ascribed to the rise in
the demand of trained and experienced personnel managers /
professionals, such as opening up of the Indian Market as a result
of the change in the government policies which has resulted in the
entry of the MNCs. This has resulted in intense competition for the
Indian industries, and CEOs are attaching more importance to
‘people management’. ‘People power’ being considered for
fountainhead of all ideas, organisations are making better use of
human resource for competitive advantage.

INSTITUTE PROFILE:

Regional College of Management, Bhubaneswar, the first

management college in Orissa was established in 1982. The
institute has been adjudged consistently as one of the top four B-
Schools in Eastern India. It is rated among top 11 B-schools in the
country with an A+ grade given by AIMA Business India Survey of
best B-Schools.
 4

RCM is committed to an environment with a passion for

innovative education; which encourages intellectual curiosity and
ethical behavior. It conducive to creative and critical thinking for
decision making. It prepares students to be in search of self
actualization.

History And Development

Regional College of Management (RCM), Bhubaneswar is the

oldest management institute in the state of Orissa. This institute,
since its inception, has developed immensely in all areas right
from infrastructure to the quality of education. Of late, RCM has
been scaling new heights.

In 2002, Outlook ranked RCM as the 4th best in Eastern India

after IIMC, XLRI and XIMB. The same magazine in its 2003
ranking of the business schools in Indian also places RCM as the
4th best in Eastern India. Another prestigious B-schools ranking
done by Cosmode and Business world rates RCM as the 5th best
in Eastern and Central India.

The institute has 46 full time faculty members; eight of who are
Ph. Ds. Three of the faculty members have joined the institute
after a long stint in the industry where they held senior positions.
180 MBA students are admitted every year. RCM is now affiliated
to Biju Patnaik University of Technology (BPUT). The semester
system has been replaced for the MBA stream by a trimester
system. The curriculum is designed, keeping in mind what is
taught in some of India’s best B-schools.
 5

Mission

To create intellectual capital in the area of Business and

Industry through providing quality education of international
standards to meet ever changing skill requirements of the
industry. Established specialized facilities for Research and
Absorption of emerging and time relevant technologies, to enrich
the student’s skill set.

Vision
• To develop ethical moral values and appreciation for
professionals of today and tomorrow.
• To build fundamental base of IT in relation with latest trends
and innovations of Science & Technology.
• To create professionals to meet the needs of the industry with
their expertise and technical know how.
• To inculcate culture of team work and leadership qualities for
achieving excellence in every walk of life.

Affiliation

Both Master in Business Administration(MBA) and Master in

Computer Application(MCA) programs are affiliated to the Biju
Patnaik University of Technology(BPUT), Raurkela.

All the programs were affiliated to Utkal University upto the

year 2002 and students who have completed their studies before
the year 2003 have received their final certificate from Utkal
University.
 6

For students who have passed out in the year 2004 and
onwards have received their final certificates from BPUT,
Rourkela.

Recognition

Programs run by Regional College of Management (RCM) is

recognized by All India Council for Technical Education (AICTE)

About The Course

The PGDM is the most sought after programme of AIMA-CME.

It is being offered since 1993 and is widely acclaimed for its strong
curriculum in the industry and academic circles. It is designed not
only to impart the knowledge of core subjects such as accounting,
economics, finance, and marketing but also lays special stress on
developing skills and competencies through exposure to real
business situations in the form of case studies. AIMA leverages its
close linkages with the industry to asses emerging needs and
factors them onto its programmes.

Objectives of the Course

• To Prepare Graduates for Management Career through
AIMA’s unique blend of quality and flexibility.
• To enable working professionals rise in their organization
• To facilitate change of career to managerial and business
arena
• To enable students to take up B-School of their choice
among our Nodal centres.
 7

OBJECTIVES OF THE STUDY

• To analyze the performance appraisal system in NALCO.

• To have a detailed study on reporting format of appraisal

system.

• To find out various problems in performance appraisal and

solutions for it.

• To make a review of the old appraisal system.

METHODOLOGY:

The data collected for the project work is mainly from two
resources. A. Primary resources and B. Secondary resources.

In the primary resources the data is collected directly from the

respondents by the method of questionnaire. The respondents are
given a structured questionnaire (Mentioned in Annexure) and the
observations are studied carefully to draw conclusion.

In the secondary resource the library method is used for the

theoretical base of the research work. To collect the data of this
study the researcher has used the source of materials available in
State Library, Bhubaneswar, Journals, and Magazines of NALCO,
and also the Internet resources.

PLAN OF STUDY:

In this research paper there are six chapters dealing with

different part of this study.
 8

Chapter – I deals with the introduction part. It is the research

design of the study. It shows the needs of
performance appraisal. Its Scope and applications,
the Methodology, the Plan of study and the
limitations.

Chapter – II Describes the growth and development and history

of NALCO as a whole. Its products, marketing, HR
department and its function and policies. It also
analyses the SWOT of NALCO.

Chapter – III Deals with conceptual analysis of performance

appraisal system and its literature survey. The
different methods of performance appraisal system
and its implementation.

Chapter – IV Includes the process of performance appraisal

system at NALCO. It gives emphasis on reporting
formats, with key responsibility areas, the
background of performance appraisal system at
NALCO.

Chapter – V Deals with the Data analysis and interpretation from

the personal observations of the researcher and the
data collected through questionnaire.

Chapter – VI Deals with the conclusion and suggestions.

 9

LIMITATIONS:

It is the humble task on the part of the researcher to

explain about the performance appraisal system in NALCO. Time
is one limiting factor of the study. Another limitation was busy
schedule of the executives.
 10

CHAPTER – II

NALCO – AN OVERVIEW
 11

NALCO AT A GLANCE

HISTORY OF NALCO:

NALCO is considered to be a turning point in the history of

Indian Aluminium Industry. In a major leap forward, Nalco has not
only addressed the need for self-sufficiency in aluminium, but also
given the country a terminology edge in producing this strategic
metal to the best of world standards. Nalco was incorporated in
1981 in the Public Sector, to exploit a part of the large deposits of
bauxite discovered in the East Coast.

Thus, Nalco heralded a new era of aluminium making in the

country, not only in use of modern technology but also in
production of world standard aluminium products. As time moves
on Nalco takes bold initiative to enter the export market.

As Nalco enters the 25th year of its existence in 2005, a

national asset worth above rs.10,000 crore gets created out of an
initial investment of rs.2408crore, while yielding rich dividends for
the country, for the state and for the people at large. Thus its story
continues.

With consistent track record in capacity utilization, technology

absorption, quality assurance, export performance and posting of
profits, NALCO is a bright example of India’s industrial capability.
Today, as an ISO 9001: 2001, ISO 14001 and OHSAS
18001.Company, with its products registered in London Metal
 12

Exchange, Nalco has emerged as the largest integrated bauxite-

aluminium-aluminium complex in Asia.

VISION:

To be a company of global repute in aluminium.

MISSION:

To achieve growth in business with global competitive edge

providing satisfaction to the customers, employees, share holders
and community at large.

TECHNICAL FEATURES OF NALCO:

Incorporated in 1981, as a public sector enterprise of the

Government of India, National Aluminium Company Ltd. (NALCO)
is Asia’s largest integrated aluminium complex encompassing
bauxite mining, alumina refining, aluminum smelting and casting,
power generation, rail and port operations.

Nalco has got different segments with different capacities

having different technical features. Some of them have special
technological features. Nalco’s various segments are like Bauxite
mine at Panchpatmall in Orissa, Alumina Plant at Damanjodi in
Orissa, Aluminium Plant at Angul in Orissa, Power plant at Angul
in Orissa, Port Facilities at Vizag in Andhra Pradesh.
Segment/Capacity Special Technological Features
Bauxite Mine, # Fully mechanised Open Caste Mines
Panchpatmall, Orissa. with computerized mine planning.
 13

48,00,000 tpa # 370 million tones deposit estimated.

# 14.6 kms – long single – flight multi
curve.
Alumina Plant, # Atmospheric pressure digestion
Damanjodi, Orissa. process.
15,75,000 tpa # Energy efficient fluidized Bed
Calchers.
# Integrated facilities for manufracture
specialties aluminas, hydrates and
zeolite.
Aluminium Plant, Angul, # Advanced 180 KA Cell technology.
Orissa. # Micro processor based Pot-
3,45,000 tpa Regulation System.
# Fume treatment with dry scrubbing
system.
Power Plant, Angul, # Micro processor based Burner
Orissa. management.
960 MW # Automatic turbine run up system.
# Specially designed high-pressure
boilers.
# Advanced Electrostatic Precipitators.
Port Facilities, Vizag, # Mechanised storage facilities of
A.P. 3*25,000 T capacity.
For export of Alumina & # Mechanised Mobile Ship loader of
Import of Caustic Soda 2200 tph capacity.
Lye. # Capacity of ships upto 35,000 DWT.
 14

PRODUCTS OF NALCO:

Nalco Products enjoy worldwide reputation on account of

quality, backed by high standard of customer services. Its
products are distributed all over the world in response to high
demand. Right from the beginning till now Nalco’s product has
shown a tremendous rise. It is able to keep track with the rise in
demand of the product.

The company has now added rolled products to its product

range. The company has acquired a 50,000 tonne Rolled
Products Unit, integrated with Smelter Plant at Angul. The unit is
designed to produce aluminum cold rolled sheets and coils from
continuous caster route, based on the advanced technology of
FATA Hunter, Italy. Nalco is known for producing various products
like aluminum metal, alumina & hydrate, zeolite-A, special
products and rolled products.
ALUMINIUM METAL
This includes ingots, sows, billets, wire rods, alloy wire rods,
cast strips.
ALUMINA & HYDRATE
This includes calcined alumina and alumina hydrate.
ZEOLITE-A
This includes all kinds of zeolite metals.
SPECIAL PRODUCTS

This includes special hydrate/alumina.

 15

ROLLED PRODUCTS

This includes aluminum rolled products.

These are some of the important products, which are

produced by Nalco. But out of these the major product produced
by Nalco is aluminum and aluminum related products.
Aluminum Properties & Applications:

Aluminum- the wonder metal has many remarkable features.

They are given below;
• Aluminum weighs only 0.34 times as much as iron.
• Pure unalloyed aluminum is soft, but aluminum alloys may
surpass the tensile strength of steel.
• Aluminum surface can be reinforced to protect from
weather and chemical corrosion.
• Aluminum is equivalent in conductance while being 50%
lighter.
• Aluminum permits rapid heat dissipation.
• Aluminum is a good reflector of thermal, optical &
electromagnetic radiation.
• Even minor additions of iron have no significant magnetic
field of aluminum.
• Aluminum and its source are non-toxic and it is therefore
an important packaging material for food.
• Aluminum can be formed into different shapes by any of
the usual processes in industry.
 16

• Many possibilities are available for treating and texturing

aluminum surface.
A detail of Nalco products, for example Calcined Alumina,
Alumina Hydrate, Zeolite-A, Aluminum Ingots/Sows, Wire Rods,
Alloy Ingots, Aluminum Billets and Aluminum Cast Strips, etc.
CALCINED ALUMINA:
Product Code: CA10
Chemical Formulae: Al2O3
Type: Sandy – coarse
Physical Properties Typical Range

LOI (300-1000C)% 0.5-1.0

BET Surface Area (gm)
Alpha Alumina Content 60-80
%
GRANULOMETRY: 10 10 maximum
+125 Micron % 15 maximum
-45 Micron % 12 maximum
Bulk Density (T/M) 0.95-1.05

ALUMINA HYDRATE:
Product Code: AH10
Chemical Formulae: Al2O3 . 3H2O
Appearance: White
 17

Physical Properties Typical Range

LOI (110-1000 C)% 34-36 36 maximum
Moisture %
Granulometer 3-6 8 maximum
-45 Micron % 3-6 7 maximum

Special Hydrates: Special hydrates are widely used as a filler

material in plastic, rubber, paper, PVC, paint, etc. and also
used in several alumina chemicals.

Special Aluminates: Special aluminas are of three grades:

normal soda, intermediate soda and low soda. Aluminas are
further graded as per particle size and alpha content.

ZEOLITE-A(Detergent Grade):
Zeolite comes under a detergent brand. Their specification that
is its parameters and values are given below in a tabular form.

PARAMETERS VALUES
• Calcium binding capacity Min. 160
mg CaO/gm of dry Zeolite
• Particle size analysis
a) % Finer than 4.5 micron 85+_ 10
(Sedigraph)
b) Avg. particle size, d50 Not more than 4 micron
(Sedigraph) 11+_0.5
 18

• PH (5% slurry)
• Mole composition (based on 1.0+_0.2Na2O
chemical analysis)
• Bulk density, gm/cc 0.45+_ 0.1
• Christalinity (X-ray Min.90%
diffraction) Min.95%

• Whiteness index

ALUMINUM INGOTS/SOWS:
Its general composition is given below in a tabular form:
HIGH PURITY- 99.8% GENERAL CONFORMING TO IS-
(MIN.) 1980
• LME Grade-99.7%(min.) Primary aluminum with min. purity
of 99.7%
Fo= 0.20% max; S1= 0.10% max
EC Grade-99.9% (min.) For fabrication of electrical
conductors and other electrical
purposes generally conforming to
IS-4025

WIRE RODS:

Wire rods produced from Properzi Continuous Casting and

Rolling process are available in nominal diameter size of 9.5/11.95
mm in coil forms.
 19

Coil Dimension & weight:

ID: 760 mm
OD: 1520 mm
Height: 850 mm
Weight: 2000 kgs. (Approx.)

Specifications:
PRODUCT (CODE) ELECTRICAL
CONDUCTIVITY % iacs
EC Wire Rod (WE 10/12) >61.500
EC Wire Rod (WE 20/22) 61.00 to 61.499
CG Wire Rod (WC 10/12) <61.000

ALUMINUM BILLETS:

Nalco has 30,000 tpy Hot Top Maxi Cast Billet Casting facility.
The world-class billet casting technology provides distinct
advantages in production of superior quality DC cast Aluminum
Billets in soft and hard alloys- the basic input for manufacture of
high quality extrusions. Its details of diameter, length, square
ness, bow is given below in a table.
DAIMETER: 127mm+_ 1.5mm 178mm+_ 1.5mm
152mm+_ 1.5mm 203mm+_ 1.5mm
LENGTH: 400mm to 5800mm with a tolerance of 5mm for
every 1000mm length or part thereof.
SQUARENESS: 1mm max. per 100mm diameter.
BOW: 2mm per meter with 10mm max. per log.
 20

MANPOWER PLANNING OF NALCO:

Manpower planning is a very important aspect of an

organization. It plays an important role in determining the
respective goals, objectives of the organization. Manpower
planning refers to the planning of the people working in an
organization.

On the other hand it also refers to planning the right number

and right kind of people at right places and right times to
successfully achieve its overall objectives.

Like other organizations, Nalco also has its own manpower

planning. Nalco has got its very well developed and hardworking
people in the organization. The people working in such
organization are very challenging in nature.

Details of team who will be handling the proposed issue, their

status in the organization, their background, qualification,
experience and present address. The manpower in Nalco consists
of important personalities like supervisors, executives’ skilled &
unskilled workers.

TOP ORGANISATION STRUCTURE OF NALCO:

The top organization of Nalco is very simple and easy to

understand. Like other organizations it has also got its different
supervisors and subordinates working together in a cooperative
manner to fulfill its goals and stated objectives.
 21

Like other organizations, Nalco is the one which expels in largest

production of aluminum. The top organization structure as shown
above is highly connected and dependable on each others
working.

Then structure consists of heads in different departments.

There are directors in various sectors like Production sector,
Project & Technology sector, Personal sector, Financial sector
and Communication sector. Again each and every director of
different departments have got their executive directors to assist
them. Like in case of Production sector the workload is divided
among the executive directors of Smelting & Material/Refinery.
These executive directors are controlled and directed by the
director or head of the production sector. But unlike Production
sector in case of Project & Technolgy sector after the director the
G.M or general manager takes the responsibility. Here the general
manager is controlled by the director of this respected department.
There is one more executive director of Corporate Production who
 22

works under the leadership of the director of Production and

Project & Technological sector. Likewise under Personal sector
also there is executive director of HR administration working under
the respective director. So as in case of Financial department also
there is executive director who handles the job of financial sector
under the control of director. Director in communication also
includes Marketing and Material sectors. In this also there are
executives directors of marketing and material sector assisting the
director of this sector. Simultaneously with the directors of
different sectors there is also another important position held up
by CVO that is, Chief Vigilance Officer of the organization. The
CVO is the watchdog of the organization. He keeps a check on
the work of the superiors and subordinates through out the
organization. He verifies procedural lapses, violation of prevailing
rules and regulations while discharging duties in different levels in
the organization. He also investigates in the matter of abuse of
powers and misconducts of staffs and employees, and fraud
perforated in the organization. Moreover he works as the
investigating officer and keep overall vigil in the organization. After
his preliminary investigation charges are framed against the
concerned staff members on the findings of his facts in the
allegations. Thus job of vigilance officer is very pertinent in respect
of transparency of the performance of the organization.

Another head is the CMD or the Chief Managing Director who

holds an essential position in the organization. He is the higher
head of the organization that wholly controls the working of the
 23

organization. His duty is to develop coordination among the

working of different sectors.

HR POLICIES AT NALCO

HRM Philosophy:-

HR Policies of NALCO are based on treating HR as the key to

every excellence and ensuring them development, involvement
and satisfaction. These policies are formulated:

• To attract competent personnel with growth potential and

develop their skill and capabilities in a congenial manner amid
social environment through opportunities for training,
recognition, career advancement and other incentives.

• To develop and nurture favorable attitude among the

employees and to obtain their best contribution to the
organization by providing stable employment, safe working
condition, job satisfaction, quick redressal of grievances, and
through good pay and welfare amenities commensurate with
the company’s capacity to spend and the govt’s guidelines.

• To foster fellowship and sense of belongingness among all

selections of employees through closure association of
employees with management and by encouraging healthy
trade union policies.

These are the key HR Policies of NALCO not only to attract

competent personnel but also stabilize them in NALCO with every
satisfaction they need from organization.
 24

HR Practices:-

Following are the HR practices followed in Nalco:-

• Performance Appraisal System
• Total Quality Management
• Career Planning & Development
• Training & Development
• Scheme of Employee’s Participation in management
• Department Promotion Committee
• Quality Circle
• Open Forum
• Problem solving Award scheme for Nalco

HRD Meet:-

In recognition of the society in securing sustainable industrial

growth compatible with a wholesome environment, Nalco assigns
high importance to promotion to maintenance of o pollution free
environment in all its activities.

Keeping the above in view, Nalco has set the following

objectives:-
• To use non-polluting & environment friendly technology in all
its activities.
• To monitor regularly air, water, land, noise and other
environment conditions and pollutant fallouts.
• To constantly improve upon the Standards of pollution control
and provide a leadership in environment management.
 25

• To develop among the employees an awareness of

environmental responsibilities and adherence to sound
environmental practices.

HUMAN RESOURCES:-

Manning company, there are 7426 persons possessing a

variety of skills, qualifications and competence. The company is
truly youthful with the average age of the employees being below
37 years. Starting

With a core group of 262 employees in 1982, the progressive

growth in manpower has taken place in a planned manner,
matching the needs of the different stages of the project. Present
strength of 7426 as on Jan 2008 is close to optimum requirement
against existing capacity.

Human Resource Development

The total Manpower strength of the company as on

31.03.2008 is 7,413 against the previous year’s strength of 7,426.

The detailed break up is given below:

Category As on 31/03/2008 As on 31/03/2007
Executive 1,817 1,828
Supervisory 842 892
Skilled/highly skilled 3,627 3,561
Unskilled/semi 1,127 1,145
Skilled
Total 7,413 7,426
 26

Training & Development

Human Resources Development is the key for the success of

any business organization. Constant efforts are being taken in the
company. Company for functional and development training based
on the need identified for individual carrier growth as well as
keeping organizational interest. Emphasis is being given on
specific position related training needs and there is an attempt to
customize training programmes, to the extent possible. Training
effectiveness evaluation is also carried out in line with the
requirement of quality management systems to measure the
benefits emanating from the action. Competency mapping of
individual employees and thrust on training and development is
given to enhance the efficiency and knowledge level of
employees.

The training statistics for the year 2007-2008 is given below:

Persons Mandays

Executives 2,751 7,159

Non-executives 3,518 10,935

Total 6,269 18,094

CORPORATE PLANNING

The present robust global metal industry scenario and rapid

changes in global business environment have necessitated the
Indian corporates to review, renew and reposition their strategic
 27

corporate objectives. The Company is in the process of appointing

a reputed global consultant to study and frame a corporate Growth
Plan for chalking out the future road map for the next 10 to 15
years. Once the plans and programmes are finalized and
approved, the company will evolve suitable strategies and internal
systems for implementation and monitoring the plans and reviews
the targeted activities within the time parameters.

INDUSTRIAL RELATIONS

Employee involvement through encouragement of more

suggestions on production related issues, formation of quality
circles, fostering of communication channels and training , has
been adopted continuously to further the environment of mutual
co- operation and trust , for increasing production and productivity.

In a multi union scenario, each of the units of your company

has a recocnized union s per verification of membership through
secret ballot.the structured interactions with the recognized unions
continued on a regular basis on the matters of production,
productivity, discipline and work culture, besides resolving various
demands and employee related issues.

The industrial relations scenario of your company has

remained by and large peaceful. The total mandays lost due to the
total mandays avaibalable during the year was only 0.09% as
against 0.74% last year and the same was mainly due to
obstruction by local land displaced villagers at Damanjodi sector,
demanding employment for dependants of LDPemployees.
 28

VISIT BY PRLIAMENTARY COMMITTEES

The following parliamentary committees visited yhe coporate

office during the year and meetins were held with the
management of the company:
• The standing committee on industry on 8th and 9th june,2007.
• Committee on government assurance, Rajya Sabha on 8th
and 9th October,2007.
• Standing committee on coal and steel on 18th and 19th
janury,2008.

HR POLICIES OF NALCO:

Nalco’s HR policies include three important policies like;

Environment Policy, Quality Policy and Total Productive
Maintenance Policy (TPM Policy). These are discussed below:

Environment Policy:

In recognition of the interest of the society in securing

sustainable industrial growth, compatible with a wholesome
environment. Nalco gives high importance to promotion and
maintenance of a pollution free environment. Keeping the above in
view, Nalco has set the following objectives;
• To use non-polluting and environment friendly technology in all
industrial activities.
• To monitor regularly air, water, land, noise and other
environment conditions and pollutant fallouts.
 29

• To constantly improve upon the standareds of pollution control

and provide a leadership in environment management.
• To develop among the employees an awareness of
environmental responsibilities and their adherence to sound
environmental practices.
• To work closely with Government and local authorities to help
to prevent and minimize adverse consequences of the
industrial activities on the environment.
• To comply with all applicable laws governing environmental
protection through appropriate mechanism

Quality Policy:

Quality will form the core of our business philosophy. Meeting

the needs and expectations of the customer and consistently
improving our systems and ethos will be our chosen path in
achieving excellence in business and fulfilling our social
obligations.

Guiding Principles:
• To ensure a healthy return on investment by maximizing
Observational efficiency, Capacity Utilization and Productivity.
• To continually improve and redesign Systems, Process and
Practices in order to ensure error prevention and improve
response time.
• To adopt Internal Customer focus as a means to external
customer satisfaction.
 30

• To treat human resource as the key to Quality excellence and

ensure development, involvement and satisfaction of
employees.
• To ensure high quality of inputs trough proactive interaction
with suppliers.
• To meet obligations towards the society as a responsible
corporate citizen.
• To follow ethical business philosophy at all times.

Commitment:

We dedicate ourselves to the Quality Policy and Objectives of

the Company in letter and spirit and commit to continuously strive
for their fulfillment.

TOTAL QUALITY MANAGEMENT

In order to encourage the quality efforts in the state, the

company organized the All Orissa Quality Circle Convention and
Competition for NALCO Trophy for the twelveth consecutives year
in April, 2007. 30 Quality Circles/TPM circles drawn from different
organizations in the state participated. The convention is widely
recognized as one of the important events in the Quality
Movement in the state of Orissa.

Based on the projects carried out by QCs of the Company,

three QCs were selected & participated in the International
Convention at Beijing, China held during October, 2007.
 31

TPM implementation work at Alumina Refinery and CPP of the

Company continued with TPM Circles carrying out Autonomous
Maintenance in identified equipment & processes.

Quality related trainings were continued with major thrust on

training programmes on problem solving tools at Alumina Refinery
of your Company. Trainings on Quality Circles were also
conducted during the year under review.

Quality Management System of Smelter Plant, Mines and CPP

were successfully recertified to ISO 9001:2000 for a further period
of 3 years, while those of Alumina Refinery and Rolling plant
successfully underwent Surveillance Audits during the year.

SAFETY, HEALTH & ENVIRONMENT

The company gives utmost importance to pollution control,

health and environment management measures:
• All the units have valid consent to operate under air & water
act. All the 5 units are certified with for Environment
Management System (EMS) as per ISO-14001:2004 and
Occupational Health & safety Management System (OHSMS)
as per OHSAS 18001:1999.
• Four major units have valid authorization to handle hazardous
wastes materials.
• Both the hospitals at Damanjodi and Angul complex have valid
authorization for handling bio-medical wastes.
 32

• 16 Ha. mined out area has been rehabilitated by plantation of

42,000 number of trees. 3,03,600 nos. of trees have been
planted in M&R & S&P complexes.
• Zero discharge construction of oil & water separator unit and
canteen waste water treatment facility at mines have been
completed & are in operation.
• Municipal solid waste treatment facility at Damanjodi township
has been commissioned & is in operation.
• Stand post type water-cum-foam monitors (4 numbers)
installed in Fuel Oil pump house at CPP.

To further strengthen the environment management systems,

the following measures are under implementation:
• Additional effluent pond in Alumina Refinery is under
implementation.
• Pre-construction activities on secured Engineering land fill of
40,000 Tonne capacity have started in Smelter unit for
management of Hazardous Waste.
• Installation of on-line monitoring system in old Fume treatment
plant (1&2) in Smelter unit is in progress.
• Action initiated for complete waste water recirculation system
in Smelter unit.

Emergency Control room for control of Disaster at CPP was

established.
 33

MARKETING

You will be pleased to know that your company achieved the

highest ever sale of metal, rolled products and special grade
alumina/hydrate during the year. With launching of NALCO special
products alumina(NSPL)- 102 in the overseas market through
export of 41 MT to Vietnam during the year , yet another milestone
was reached.

To strengthen the marketing efforts, a new stockyard in

Chennai was opened during the year. MOUs were signed with 151
domestic customers for sale of metal during 2007-08 as against
118 MOUS during the previous year. The domestic sale of metal
were effected from the smelter plant at Angul and nine stockyards
at Kolkata, Baddi, Jaipur, Faridabad, Bhiwandi, Silvassa,
Banglore, Chennai and Visakhapatnam.

FINANCE

The company has achived a turnover of Rs. 5,576 crore, as

against the turnover of Rs. 6,354 crore during the previous year
and profit after tax stands at Rs. 2,3812 crore in the previous year
. the decline in sales realization and net profit during the year ,
compared to previous year , is mainly due to labour sales
realization from export of alumina, substantial appreciation of
rupee against US doller. Your company has achieved an export
earning of Rs. 2,135 crore as against Rs 2,585 crore achieved
during the previous year.
 34

ANCILLARY DEVELOPMENT

The company has participated in EXPO-ORISSA-2007, a

National Level Industrial Trade Fair jointly organized by Micro,
small & Medium Enterprise Development Institute, Cuttack and
Ministry of Micro, Small & Medium Enterprises, Government of
India and Development of Industries, Government of Orissa in
collaboration with other associations held from 2-6th November,
2007. In the Fair, the company had exhibited the items which
could be produced and supplied to the company on regular basis
by the Small Scale Industries in the State of Orissa. The company
bagged the best “Mother Plant” award for its contributions to the
development of Small Scale Industries in the state of Orissa.

The company awarded Ancillary status to 49 SSI units in

Orissa so far. The company is also encouraging the SSI units for
supply of quality raw materials to the company. The total
purchases made by the company from the Ancillary and SSI units
during the year 2007-08 are Rs. 36.74 crore.

The company has also participated in the celebration of

Entrepreneurs Week during 5-11th March, 2008 organised by the
Government of Orissa for encouraging ancillary and downstream
industries development in Orissa.

CORPORATE SOCIAL RESPONCIBILITY

Your company is among the very few central public sector

undertakings having an approved peripheral development policy,
 35

under which it allocates up to 1% of its net profit every year on

various development works for the socio- economic improvement
of the people of peripheral areas. A amount of Rs. 23.81 crore
was allocated for peripheral development activities, as part of
meeting corporate social responsibilities of the company for the
financial year 2007-08. Rehabilitation and peripheral development
advisory committees (RPDAC) have been constituted by
government of Orissa under the chairmanship of respective
revenue divisional commissioners. Other member of this
committee of the respective region include senior government
officials of the district, elected public representatives to parliament,
assembly and zilla parishad and senior officers of your company.
These committees prepare the annual peripheral development
projects for the respective regiona and also monitor their
implementation.

AWARDS & RECOGNITIONS

Your company received the following awards/ prizes during the

year under review, which is an ample testimony for the exhalent
performance of your company in various fields:
• ‘ Top export’ awards of CAPEXIL for the year 2006-2007, for
the record 20th year in succession.
• ‘Best environment management’ and ‘accident prevention,
safety management and communication system’ award for the
year 2006 instituted by director, factories and boiler, Orissa,
bagged by captive power plant.
 36

• ‘Industrial trade quality achievement’ award, for the highest –

ever production and export performance during 2006,
instituted by the council for industrial & trade development
(CITD).
• 2nd prize for ‘best practices in safety, health and environment
at enterprise Orissa 2007’, organized by the captive power
plant.
• Engineering export promotion council, eastern region’s gold
trophy, as ‘top exporter in the large enterprise category’, for
outstanding contribution to engineering export during the year
2005-06.
• 6 prizes including the overall best performance prize during
the annual ‘joint mines safety week’ 2007 of NALCO-NMDC
were bagged by panchpatmali bauxite mines.
• Shri Gopabandhu Dash of smelter plant and shri Parsuram
Swain of CPP of your company have been adjudged as the
recipients of ‘shram vir award’ and ‘sharm shree award’ of
government of India, respectively.

SWOT ANALYSIS OF NALCO:

The SWOT analysis involves matching internal capabilities i.e.

strengths & weakness with the environmental opportunities &
threats is known as SWOT analysis. The SWOT analysis of
NALCO is given as under:-

STRENGTH
• Easy availability of raw material.
 37

• Obtained ISO 9000:2001 certification of quality.

• Internationally acclaimed & Asia’s largest integrated aluminium
complex.
• Modern technology.
• Enters export market.
• Energetic opportunity.
• IT friendly culture.
• Expansion opportunity.
• Global trade.
• High share in the domestic market
• High quality products.

WEAKNESS:
• Negligence in performing social responsibility.
• The marketing strategy is not flexible.
• Limited product mix, no diversification of business, no
employment to those who has lost their lands.
• Inadequate Inventory management.
• Procedural & Bureaucratic.

OPPORTUNITY:
• Scope for fresh investment.
• Phase wise expansion.
• As a Psu it has an opportunity for exponential growth.
• Large domestic market.
• Huge demand of the product and the product mix.
• Export opportunities.
 38

THREAT:
• Stiff competition.
• Scope for privatization.
• Huge tax rate imposed on metals.
• All the competitors are giving attractive offers to the customers
& allowing easy financial assistance.
 39

CHAPTER – III

PERFORMANCE APPRAISAL
– AN OVERVIEW
 40

PERFORMANCE APPRAISAL

In an informal sense, performance appraisal is as old as

mankind itself. Earlier performance appraisal was known as ‘merit-
rating’. In the earlier fifties, attention shifted to the performance
appraisal of technical, professional and managerial personnel.
The common terms used to describe this concept is merit rating,
behavioral assessment, employee evaluation, personnel review,
staff assessment, progress report, etc.

In the context of an industrial organization, performance

appraisal is a systematic evaluation of personnel by supervisors or
those familiar with their performance. Thus it is a systematic and
objective way of judging the relative worth or ability of an
employee in performing his/her task. Performance appraisal is a
measurement process as well as an intensely emotional process.
After all it is an inexact human process. It helps in identifying the
employees who are performing their tasks well and also those
who are not and the reasons for such performance. Now the
question arises, what is the importance of such appraisal in an
organization?

IMPORTANCE / REQUIREMENT OF PERFORMANCE

APPRAISAL IN AN ORGANISATION

Right from the early time period till now performance appraisal
has been given a lot of importance in each and every
organization. It helps in rating the jobholders’ performance rate.
Through a cross-examination of an organizational practice it has
 41

been revealed that performance evaluation plays an important role

in meeting certain following purposes:

• It helps to identify employees for salary increases, promotion,

transfer and lay-off or termination of services.

• It also helps in determining training and development needs of

the employees.

• It motivates employees by providing feed back on their

performance levels

• It establishes a basis for research and reference for personnel

decisions in future.

• It also gives heavy importance on personal attributes of the

employees.

OBJECTIVES/SCOPE & METHODOLOGY OF PERFORMANCE

APPRAISAL

OBJECTIVES:

Each and every organization has got certain objectives

regarding the performance appraisal that they follow. These
objectives are linked with one another. These objectives are
followed mainly to determine qualifications for wage increase,
transfer, promotion, layoff. It provides heavy emphasis on
personal attributes of the employees. Other objectives is to
determine training and development needs of the employees, to
 42

motivate employees by providing feedback on their performance

level, as well as to establish relation for research and reference for
personal decisions in future. It is evaluated only after the
employee has been hired and placed on a job. It is done by
employees themselves, peers, supervisors or combinations of
them.

Other scopes of performance appraisal can be of various

types. Like it helps in providing performance feedback of the
employees, compensation, staffing decisions.

METHODOLOGY:

Methodology refers to the instruments or methods that can be

used to measure and appraise employees’ performance. In fact,
each organization has its own. Each method with its strengths and
weaknesses may be suitable for one organization and non
suitable for another. As such, there is no single appraisal method
accepted and used by all organization to measure their
employees’ performance. More widely used classification of
appraisal methods into two categories, viz., traditional and modern
methods, given by Strauss and Sayles.

TRADITIONAL METHODS:

RANKING METHOD: In this one employee is compared with all

others for the purpose of placing them in a simple rank order of
worth. The employees are ranked from the highest to lowest or
from the best to the worst. The greatest limitations of this
 43

appraisal are that it does not tell that how much better or worse
one is than another, it is very difficult to compare one individual
with others.

PAIRED COMPARISION: In this method, each employee is

compared with other employees on one-on-one basis, usually
based on one trait only. The number of times this employee is
compared as better with others determines his or her final ranking.
The number of possible pairs for a given number of employees is
ascertained by the following formula :

N (N-1)/2

The disadvantage of this method is that the method can become

unwieldy when large numbers of employees are being compared.

GRADING METHOD: In this method certain categories of worth

are established in advance and carefully defined. There are three
important categories established for employees like, outstanding,
satisfactory, and unsatisfactory. Employee performance is
compared with grade definitions. Major drawback is that the rater
may rate most of the employees on the higher side of their
performance.

FORCED DISTRIBUTION METHOD: This method assumes that

employees’ performance level confirms to a normal statistical
distribution i.e., 10, 20, 40, 20, and 10 percent. This is useful for
rating a large number of employees’ job performance and
 44

promotability. It suffers from the drawback that if all distribution

grades improve similarly, no single grade would rise in ratings.

FORCED CHOICE METHOD: It contains a series of groups of

statements, and rater rates how effectively a statement describes
each individual being evaluated.

CHECK-LIST METHOD: The basic purpose is to ease the burden

upon the rater. In this method the HR department prepares a
series of questions with answers in ‘yes’ or ‘no’. However, demerit
is that it is difficult to assemble, analyses and weigh a number of
statements about employee characteristics and contributions.

CRITICAL INCIDENTS METHOD: Here the rater focuses his or

her attention on those key or critical behaviors that make the
difference between performing a job in a noteworthy manner. The
basic idea behind this is to apprise the workers who can perform
their jobs effectively in critical situation. It is time consuming and
burdensome for evaluators.

GRAPHIC RATING SCALE METHOD: In this method the printed

appraisal form is used to appraise each employee. The rating is
done on the basis of points on the continuum. The common
practice is to follow five-point scale.

ESSAY METHOD: In this the rater writes a narrative description

on an employee’s strengths, weaknesses, past performance,
potential and suggestions for improvement. In the absence of any
 45

prescribed structure, the essays are likely to vary widely in terms

of length and content.

FIELD REVIEW METHOD: When there is reason to suspect

rater’s baisedness or his or her rating appears to be quite higher
than others, these are neutralized with the help of a review
process. It involves the following activities:

• Identify areas of inter-rater disagreement.

• Help the group arrive at a consensus.

• Ensure that each rater conceives of the standard similarity.

CONFIDENTIAL REPORT: in this usually a structured format is

devised to collect information on employee’s strength,
weaknesses, intelligence, attitude character, attendance,
discipline, etc. it is subjective evaluation based on evaluator’s
impression about the appraisee rather than on facts and figures.

MODERN METHOD

MANAGEMENT BY OBJECTIVES (MBO): the concept of MBO

as was conceived by Drucker, can be described as a “process
where by the superior and subordinate managers of an
organization jointly identify its common goals, define each
individual’s major areas of responsibility in terms of results
expected of him and use these measures as guides for operating
the unit and accessing the contributions of each of its members.”
 46

In fact it is viewed by the practicing managers and

pedagogues as a philosophy of managerial practices because it is
a method by which managers and subordinates plan, organize,
communicate, control and debate. An MBO program consists of
four main steps i.e. Goal setting, performance standard,
comparison and periodic review.

o In goal setting, goals are set which each individual is to

attain.

o In performance standards, the standards are set for the

employees as per the previously arranged time period.

o In comparison, the actual levels of goals attained are

compared with the goals agreed upon.

o In the periodic review step, corrective measure is initiated

when actual performance deviates from the standards
established in the first step goal setting stage.

Limitation of MBO includes setting immeasurable

objectives, time consuming, tug of war and lack of trust.

BEHAVIOURALLY ANCHORED RATING SCALES (BARS):

BARS are descriptions of various degrees of behavior with regard
to a specific performance dimension. This technique was
developed in 1960s. It combines the benefits of narratives, critical
incidents, and quantified ratings by anchoring a quantified scale
with specific behavioral examples of good or poor performance.
 47

Developing BARS typically involves 5 steps:

• Generating Critical Incidents: Critical incidents are those,

which are essential for the performance of the job
effectively. These critical incidents may be described in a
few short sentences or phrases using the terminology.

• Developing Performance Dimensions: The critical

incidents are then clustered into a smaller set of
performance dimensions usually 5 to 10.

• Reallocating Incidents: Various critical incidents are

reallocated dimensions by another group of people who
also know the job in question.

• Scaling Incidents: This also does the same thing as other.

It rates the behavior in terms of effectiveness or
ineffectiveness by using 7 to 9 points scale.

• Developing Final BARS Instrument: A subset of the

incidents is used as behavioral anchor for the final
performance dimension.

ASSESSMENT CENTRES: In business field, assessment center

are mainly used for evaluating executive or supervisory potential.
It is a central location where managers come together to
participate in well-designed simulated excises. They are
accessed by senior managers supplemented by the psychologists
and the HR specialists for 2 to 3 days. Advantages are that these
are more accurate evaluations, minimum biased ness, right
 48

selection. Limitation is that it is relatively costly and time

consuming.

360-DEGREE APPRAISAL: Under this performance information

such as employees’ skills, abilities and behaviors is collected “all
around” an employee, that is from his supervisors, subordinates,
peers and even customers and clients. All these appraisers
provide information or feedback on an employee by completing
survey questionnaires designed for this purpose. This is more
correct and more realistic.

COST ACCOUNTING METHOD: This method evaluates an

employee’s performance from the monitory benefits the employee
yields for his organization. While evaluating an employee’s
performance under this method, the following factors are also
taken into account: unit wise average value of production or
service, quality of product produced, overhead cost incurred,
accidents, spoilage, wastage, human relationship with others,
cost of the time supervisors spent in appraising the employee.
This is ascertained by establishing a relationship between the
cost involved in retaining the employee, and the benefits an
organization derives from him or her.

So these are some of the methodology, which are adopted to

measure performance appraisal of the employees in an
organization. These all methods help in proper evaluation of the
employee’s performance. In a particular organization. It helps in
deciding the transfer, promotion, training needs of an employee.
 49

Problem in Performance Appraisal

None of the methods discussed so far is absolutely valid and
reliable. There are some problems &issue associated with the
formal appraisal methods that make appraisal ineffective. This
sections highlight the major problem in appraisal methods.-

• Judgment Methods: -most of the appraisal methods

involves rater’s judgment of one kind of other. These could
be with in or beyond the rater’s control. The inherent error
of central tendency &leniency involve in process cause
judgment biasness. The rater liking or disliking of the rates
may be also cause judgment biasness. Another sources of
judgment biasness is Halo effects or a tendency access
the rate or one or two traits to influence assessment to
others.

• Faculty Managerial Assumptions: - Employment

performance appraisal also suffers from faculty
managerial assumption. Those managers wish to appraise
to their subordinates on a fair accurate basis based on a
criterion once for all the time.

• Criterion problem: - The objectives of performance

appraisal vary from organization to organization. Hence, a
criterion is used to appraise employee to vary from one
organization from another.
 50

CHAPTER – IV

PERFORMANCE APPRAISAL
AT NALCO
 51

STUDYING THE EXISTING SYSTEM OF

PERFORMANCE APPRAISAL IN NALCO:

The Executive Performance Appraisal System of Nalco for

Financial Year Apr 2006-Mar 2006.

The Key Personal Profile of the concerned Executive is given

below-:
• Name:
• Designation:
• Personal Number:
• Grade:
• Department:
• Unit:
• Date Of Birth:
• Qualification:
• Date Of Joining:
• Grade:
• Date Of Last Promotion:
Salient Features Of Nalco Performance Appraisal:

Form-A: Finalizing the key task by the appraisee himself.

Form-B: Performance Review by the Reporting Officer in

consultation with Appraisee to set up key tasks for the financial
year.

Form-C1: Performance Review for he achievement of set targets

during 1st week of July.
 52

Form-C2: Performance Review for the achievement of set targets

during 1st week of January.

Form-D1: Review of Appraisee’s target achievement with

reference to Form B, C1 & C2 by the Reporting Officer as well as
Reviewing Officer.

Form-D2: Assessment of Appraisee’s managerial skill appraisal

leading performance & potential factor by the Reporting &
Reviewing Officer.

Form-D3: Assessment of Appraisee’s managerial skill appraisal

leading to performance and potential factor by the Reporting and
Reviewing Officer.

Form-E: Appraisee’s final assessment by the appraisal cell with

reference to the specified weight age depending upon his grade.

Form-F; Overall comments on Appraisee’s performance by Senior

Executives.

EXECUTIVE PERFORMANCE APPRAISAL SYSTEM:

SL. ACTIVITIES TARGET
NO.
1. Reporting Officer informs concerned 31st
appraisee of Department/Section target, January
hands over Form A.
2. Appraisee makes own plans in Form A; lists 7th
key tasks of the year with time frame & February
relative weightages in Form A
 53

relative weightages in Form A

3. Both Reporting Officer & Appraisee mutually 15th
agree to a set of targets with time frame in February
Form B. Reviewing Officer finally accepts &
signs Form B.
4. Both Appraisee & Reporting Officer review 7th July/7th
key tasks on mid-term basis in Form C1 & January
C2.
5. Annual target achievement appraisal is done 7th April
by Reporting & Reviewing Officer in Form D1.
Annual appraisal (Managerial Skills,
6. Performance Factor & Potential Factors) is 10th April
done by Reporting & Rep. Officers (F) &
Reviewing Officer in Form D2 & D3
Appraisal Form is routed through Higher
7. Authority & Accepting Authority for their 20th April
observations.
Appraisal Cell in Form E calculates final 31st May
8. overall score & grade.
Final score & grade is calculated after 10th June
9. Moderation.

# Reporting Officer Reporting (F) and Reviewing Officer

will independently rate the managerial skills.
# Reporting Officer and Reviewing Officer will
independently rate the concerned appraisee on achievement of
 54

key tasks. Percentage of achievement and comments of the

Reporting Officer are to be shown to the concerned Appraisee in
Form D1.

OPERATIONAL PROCEEDURES OF NALCO PERFORMANCE

APPRAISAL SYSTEM FOR EXECUTIVES.
Objectives: Targets setting as a part of the appraisal system
aims at;
• Improving Performance Planning by setting mutually agreed
specific targets by the Appraiser (Superior Officer) and the
Appraisee (Concerned Executive).
• To provide objective assessment of executives through an
evaluation targets/objectives. The policy and procedures with
reference to various forms may please be noted which are as
under:

FORM ‘A’ (PERFORMANCE TARGET SETTING EXERCISE):

• The Reporting Officer will inform the Appraisee about the
Department/Section’s objectives and targets with reference to
the internal MoU/Action plan of the Unit/Office and will
handover Form-A.
• The Appraisee will identify Key Performance Areas (KPSs),
Key Tasks and additional Tasks, if any, and fill up Form-A. The
Appraisee may refer to the respective job profiles that have
been detailed for his/her position or senior to his/her level,
which is available with the concerned HoD / Reporting Officer.
 55

FORMAT:

KEY PERFORMANCEAREAS
1.

2.

3.

SL Annual
Key Tasks Weightage Remarks
No target

Timely completion
& submission of As detailed
1-
Appraisal Book let 0.05 in Appraisal
12
as per Appraisal calendar.
calendar

Signature of Appraisee
Name:
Date:
 56

FORM ‘B’ (TASKS AND TARGETS SET FOR THE YEAR):

• The Appraisee and the Reporting Officer will decide on the
relevant Key Performance Areas for the year and finally agree
to a set of key tasks with mutually agreed time schedule.
• The Appraisee will write down the key tasks with time frame.
The relative importance of the key tasks additional tasks, if
any, is to be indicated by the Appraisee.
• The Appraisee may project Support/facilities required to
achieve these tasks/targets.
• Each specific target will have to be assigned a certain
weightage depending on its relative importance, such that, the
sum of all the weightages, including the compulsory key tasks,
is equal to the objectives. The Appraisee and Reporting Officer
have to decide on these weightages mutually. These are to be
filled up in Form ‘B’ and to be signed by both. While adding
weightages of various tasks, it may be noted that the fixed
weightages of 0.05 earmarked for compulsory key task of
“timely completion and submission of appraisal booklet as per
appraisal calendar” in respect of Appraisee and/ or
Reporting/Reviewing Officer as the case may be, is to be
taken into account.
• While the Reviewing Officer and his/her decision will resolve
filling up Form ‘B’ any difference arising between Reporting
Officer and Appraisee, on the matter will be final.
• Form ‘B’ is to be filled up in duplicate and signed by both
Appraisee and Reporting Officer at the first stage and
 57

thereafter by the Reviewing Officer. Both the Reporting Officer

and the Appraisee will have one copy each.
FORMAT:
Name: Designation: Personal No.
KEY PERFORMANCE AREAS
1.
2.
3.

Annual
Sl.No. Key Tasks Weightage* Remarks
Target#

Timely completion
As
& submission of
detailed in
1-10 Appraisal Book-let 0.05
Appraisal
as per Appraisal
calendar.
calendar.

Additional tasks, if
any
1-2
1.0
*Weightage of all key tasks including additional tasks, if any,
should be 1.0.

Sign. Of Appraisee Sign. Of Reporting Officer Sign. Of Reviewing Officer

Name: Name: Name:
Designation: Designation: Designation:
Date: Date: Date:
 58

FORMS ‘C1’ & ‘C2’ (PERFORMANNCE REVIEW):

• The targets mutually agreed and decided upon at the beginning

of the year, will be reviewed twice in a financial year (Ref.
Forms C1 & C2). The objective of this review will be to focus on
the extent of achievement of the targets mutually agreed to and
to record the reason of variance and to record if any special
tasks were assigned. This review I to be done in 1st week of
July and in 1st week of January positively.

• It may be noted that Reporting Officer awards no rating or

score. The purpose of performance review is to review the
extent of achievement and give an oral feedback and
assistance to the Appraisee at the end of each review period
for meeting his/her target. Performance review can also be
used to verbally inform the Appraisee regarding any managerial
(performance & potential) traits in which the Appraisee needs
to improve.

• In the event of special tasks being assigned during the year,

maximum weightage to such task shall be limited to 10%.
Accordingly, weightage assigned to the original tasks agreed
(including additional tasks) shall be reduced proportionately by
10%.
 59

FORM ‘C1’: (DURING 1ST WEEK OF JULY)

A. Comments on achievement with respect to tasks agreed in
Form

B. Reasons for variance, if any

C. Suggestions for improvement

D. Special tasks, if any (indicate allocation of weightage & adjustment

against original KPAs)

Signature of Appraisee Date of Signature of Reporting

Review Meeting Officer
 60

N.B.: Performance is to be reviewed against targets with reasons

for variance, if any. In case of any difference of opinion, the same
is to be resolved by the Reviewing Officer.

FORM ‘C2’ (During 1st week of January):

A. Comments on achievement with respect to tasks agreed in
Form B.

B. Reasons for variance, if any

C. Suggestions for improvement

D. Special tasks, if any (indicate allocation of weightage & adjustme

against against original KPAs.)

Signature of Appraisee Date of Signature of Reporting

Review Meeting Officer
 61

N.B.: Performance is to be reviewed against targets with reasons

for variance, if any. In case of difference of opinion, the same is
to be resolved by the Reviewing Officer.

FORM ‘D1’ (ANNUAL TARGET ACHIEVEMENT APPRAISAL):

• Reporting and Reviewing Officers in Form-D1 do annual target
Achievement Appraisal at the end of the year (during April)
after performance reviews (done in Form C1 & C2).
• Here the Annual Target is compared against achievement (in
terms of quantity, quality or time frame/date, as the case may
be) and percentage of achievement is recorded separately in
column B and column C, both by Reporting Officer and
Reviewing Officer respectively. (Ref. Form D1). Weighted score
of a particular target/special task is calculated by Appraisal
Cell, giving 70% weightage to Reporting Officer and 30%
weightage to Reviewing Officer (Ref. Form D1).
• The Reporting Officer also gives his/her observation about the
Appraisee, which is shown, to the Appraisee and his/her
signature is taken. Subsequently the Reviewing Officer makes
his/her observation at the space provided for, in Form-D1.

FORMAT OF FORM-D1:
The Reporting Officer will separately rate the Appraisee’s
target achievement in terms of percentage with reference to
Annual target in terms of Quantity/Time frame/Date in Column B &
C respectively.
 62

Achieve
Weight- Annual Rep.
ment in Rev.Off
Sl. No. Key Tasks age Target Off
Qty./Date (C)%
*(A) ** (B)%
***

Timely-completion &
As
submission of
1 to detailed
Appraisal Booklet as 0.05
10 in Appr.
per Appraisal
Calend.
calendar

Additional Tasks

Special Tasks, Tasks,

if any assigned during
the year

Total 1.0

Total of Weighted average (to be done by Appraisal Cell Only)

=
Additional Sheet may be used if required
* Total weightage points for all key tasks, special tasks &
additional tasks should add to 1.0 only
** Quantity/Time Frame Date
*** To be Filled Up only by Reporting Officer
 63

OBSERVATION OF REPORTING OFFICER

Signature of Appraisee Signature of Reporting Officer

Date: Name:
Designation:
Date:
OBSERVATION OF REVIEWING OFFICER

Signature of Reviewing Officer

Name:
Designation:
Date:
 64

FORM ‘D2’, FORM ‘D3’ (MANAGERIAL SKILL APPRAISAL)

(PERFORMANCE & POTENTIAL FACTORS):
• The Appraisee will be appraised on managerial characteristics
(traits) i.e. six performance factors and nine potential factors,
at the end of the year. It is suggested that a record of specific
incidents be kept separately by Reporting Officer (both positive
and negative incidents) to the extent possible, for removing
subjectivity.
• Performance factors (skills required for performance) will be
rated in Form D2 and Potential factors (skills required for
growth) will be rated in Form D3 by Reporting Officer,
Reporting Officer (Functional) & Reviewing Officer, each of
whom will have 50%, 25% weightages respectively (Ref. Form
‘D2’ & D3) in absence of Reporting Officer (Functional), the
weightage will assign as 50% each.
• Before giving any rating, Reporting Officer, Reporting Officer
(Functional) & Reviewing Officer are required to go through
the checklist provided in D2 and D3. Rating can be given on
the point scale of 0.0 to 0.5 up to two decimal points against
any trait. For example, an Appraisee can be rated as 3.25 out
of 5.0 against performance potential factors.
• If the weighted score for any performance factor/potential
factor is less has 50%, a communication is to be made to the
concerned executive by the head of the Appraisal Cell through
the Reporting Officer for corrective action by the Appraisee.
 65

• A provision has been kept to identify the three major strengths

and three weaknesses of the Appraisee in Form D3. a list of
majo4r strengths and weaknesses have been provided below
for ready reference.
• This is meant to identify quickly the strengths and weaknesses
of the Appraisee for developmental purposes for future job
assignments confirming to specific needs of the top
management.
An attempt has been made to briefly list the major strengths
and weaknesses to be referred to for guidance of Reporting and
Reviewing Officers. However, any other traits (apart from the list)
can also be identified as strengths/weaknesses as deemed proper
by the Reporting Officer/Reviewing Officer. It is recommended that
both Reporting and Reviewing Officer may kindly come to a
consensus after a discussion and list the major strengths and
weaknesses of the Appraisee.

MAJOR STRENGTHS MAJOR WEAKNESSES

1. Planning and Organizing Limited Professional

Knowledge

2. Crisis management Lacks confidence and

makes mistakes in
application of basic
technique
 66

3. Leadership and Lacks vigour in

Subordinate Development implementing operation
procedure
Computer Friendliness Lacks Leadership and is
4.
distant from the work
Computer programming Lacks discipline and care in
5.
ability maintaining timely records
and correspondence
6. Interpersonal skill & Lacks proficient in labour
management human management qualities
resources
7. Self discipline & Quarrelsome, distrusting,
enforcement of discipline closed and suspicious in
relationship, lacks quality
interpersonal / inter-
departmental relationship
8. Operation Management Hasty and careless in job
output
9. Interfuntional Knowledge Constantly slips up on time
commitment
10 Coordination Ability Very reluctant to admit
errors
11 Cost Conciousness Unwilling to learn
12 Project Monitoring Inert to new of development
in the area of specialization
 67

FORM D2 MANAGERIAL SKILLS APPRAISAL

(PERFORMANCE FACTORS) FOR PERIOD APRIL TO MARCH:
The Reporting Officer, Reporting Officer (F) and Reviewing
Officer will assess the concerned executive on his/her managerial
traits by rating on the following scale.

Managerial Skill (Performance Factors) Wt. Rep. Rep. Rev.

Off. Off. Off
(A)
.(B) (F)(C) (D)

1. JOB KNOWLEDGE 0.25

*Exhibits managerial/technical skills
commensurate with his/her levels of
assignment in the job.
*Constantly applies his/her knowledge
and skills to improve results in his/her
work area.
*Exhibits sincerity to keep on learning.
2. MANAGERIAL EFFECTIVENESS 0.15
*Co-ordinates with other departments
and develops relationship with
colleagues to achieve desired levels
of performance.
*Seeks timely intervention of superiors
to solve problems & usually gets
support of superiors.
 68

*Possess the ability to

appreciate/analyze the
concepts/objectives of supervisors
and adjusts himself/herself to the work
style of his/her superiors.
3. COMMUNICATION SKILL 0.15
*Possesses clarity and precision in
both oral and written communication &
presentation.
*Listens actively and displays concern
to grasp ideas & instructions.
*Gives timely feedback & makes
planned efforts for free flow of
information between all concerned.
*Ensures that his/her subordinates
know company/departmental plans &
policies.
4. PLANNING AND ORGANISING 0.15
*Anticipates problems, develops
alternative strategies to prevent
frequent failures/crises.
*Prioritizes activities &
mobilizes/allocates resources
accordingly.
*Coordinates at parallel levels for
resources/services without your
having to intervene frequently.
*Monitors/reviews and improves
planning & coordination.
 69

5. PROBLEM ANALYSIS AND 0.15

DECISION MAKING
*Has the ability to assess a situation/
roblem and break it in to its logical
components.
*Seeks information and evolves
alternative solutions.
*Ensures that decisions are based on
identification & analysis of problems
and yet timely and creative enough to
be implentable.
*Shows promptness & confidence in
decision-making.
6. HUMAN RESOURCE UTILISATION 0.15
AND DEVELOPMENT
*Possess the ability to obtain the
desired levels of performance from
employees working under him/her.
*Possesses control over people and
ensures good discipline, high level of
motivation & teamwork.
*Has the ability to build and improve
competence of subordinates.
*Provides timely, guidance to people
working with him/her.
TOTAL WEIGHTAGE 1.00

Weighted average to be calculated by Appraisal Cell only

Total of Wt. Average=
 70

* Wt.Ave=Weighted Average=[A*(0.5B+0.25C+0.25D)]/5 where

B,C & D will be the score of respective factors. In the absence
of Reporting Off. (F), the weighted average score will be
computed as [A*(0.5B+0.5D)]/5 where B & D will be the score
of respective factors.
** Each Appraisee is required to devote minimum two hours per
week in adeveloping/training the subordinate employee working
under him/her.
N.B: All calculations will be computed in Appraisal Cell.

FORM D3 MANAGERIAL SKILLS APPRAISAL (POTENTIAL

FACTORS) FOR PERIOD APRIL TO MARCH:
The Reporting Off., Reporting Off. (F) and Reviewing Off. will
assess the concerned executive on his/her managerial traits by
rating on the following scale.

Managerial Skill (Potential Factors) Wt. Rep. Rep. Rev.

Off. Off. Off
(A)
.(B) (F)(C) (D)

1. ABILITY TO RESOLVE / MANAGE 0.10

CONFLICT
*Able to identify potential sources of
 71

conflict affecting a work situation.

*Makes efforts to resolve such
situations by careful planning and
appropriate strategy.

2. ABILITY TO DELEGATE 0.10

*Delegates and involves his/her
subordinates so that he/she is not
found to be over burdened with work.
*Provides his/her subordinates the
freedom to perform a job effectively by
communicating what he/she should
do, defining related authority,
explaining control systems and setting
deadlines.
*Develops and encourages his/her
subordinates to better their
performance.

3. COST AND TIME 0.15

CONSCIOUSNESS
*Displays conscious concern for cost
control, benefits and profits for the
Company.
*Makes optimum utilization of
resources and supports cost reduction
drives.
*Displays conscious concern for time
schedules affecting both external and
internal customers.
 72

4. AWARENESS ABOUT WORK / 0.10

BUSINESS ENVIRONMENT
*Keeps abreast of the latest
developments, technological changes
taking place in the respective
business/work environment.
*Contributes to professional journals
& associates himself/herself with
professional bodies.

5. COMMITMENT & SENSE OF 0.10

RESPONSIBILITY
*Exhibits dedication to work &
Company objectives.
*Exhibits reliability & perseverance to
complete assigned tasks.

6. INTER PERSONAL SKILLS 0.10

*Possesses ability to get along with
superiors, peers, subordinates and
clients/customers.
*Exhibits loyalty and tact.

7. CREATIVITY & INITIATIVE 0.15

*Is a self-starter & possesses ability
to generate new ideas.
*Is able to approach and analyze
problems from various angles and
come out with workable solutions.
*Makes continuous efforts to innovate
 73

and improve systems and procedures

in his/her own area of work.
*Takes initiative in work and
preserves till the end of the task.
8. POSITIVE MENTAL ATTITUDE & 0.10
LEADERSHIP QUALITIES
*Is flexible and open to change.
*Has the drive and enthusiasm of an
entrepreneur.
*Leads subordinates by assigning
appropriate tasks for enthusing and
motivating them.
*Continuously endeavors to train and
develop them.
9. SELF DISCIPLINE AND 0.10
SENSITIVITY
TOWARDS ORGANIZATIONAL
NEEDS
*Shows exemplary good behaviour
and conduct.
*Fully participates in the
implementation of Company rules and
policies.
*Is sensitive towards the needs of the
organization, especially those of the
line/staff functions.
TOTAL WEIGHTAGE 1.00
Weighted average to be calculated by Appraisal Cell only Total of
Wt. Average=
 74

Wt. Ave= Weighted Average= [A*(0.5B+0.25C+0.25D)]/5 where

B,C & D will be the score of respective factors. In the absence of
Reporing Officers (F), the weighted average score will be
computed as [A*(0.5B+0.5D)]/5 where B & D will be the score of
respective factors.
N.B: all calculations will be computed in Appraisal Cell.

A. OBSERVATION ON JOB ROTATION:

1. RECOMMENDATIONS OF REP. OFFICER ON JOB

ROTATION, IF ANY

2. RECOMMENDATIONS OF REVIEWING OFFICER ON JOB

ROTATION
 75

B. IDENTIFICATION OF MAJOR STRENGTHS &

WEAKNESSES OF APPRAISEE
THREE MAJOR STRENGTHS THREE MAJOR WEAKNESSES

C. INTEGRITY (Please tick)

Above board Yes
No
If no, separate note sheet is to be sent to GM (HRD), Corporate
Office (Ref. No. and Date is to be furnished)

FORM ‘E’ (FINAL ASSESSMENT):

• The Appraisal Cell at Corporate Office is to calculate the rating
given by the Reporting Officer, Reporting Officer (Functional)
and Reviewing Officer and fill up final score and final overall
grade of the Appraisee in Form-‘E’.
• The above calculations are to be checked and countersigned
by the Officer-in-charge of the Appraisal Cell.
 76

• Space has also been kept for incorporating the traits, which are
less than 50% to be communicated to the Appraisee through
the Reporting Officer.

FORM E - FINAL ASSESSMENT FOR THE PERIOD APRIL TO

MARCH: (TO BE PREPARED BY APPRAISAL CELL ONLY)

Name: Designation:
Personal No: Dept: Unit:

A. ALLOCATION OF WEIGHTAGES

Level Targets Performance Potential Total

(x) Factors (y) Factors (z) (x+y+z)
Junior
E0 to E3 60 20 20 100
Middle
E4 to E6 45 25 30 100
Senior
E7 to E9 30 30 40 100

B. TABLE FOR DETERMINATION OF OVERALL GRADE

Score Rating Overall Grade

Above 90% Outstanding A+
Above 80% & upto 90% Excellent A
Above 70% & upto 80% Very Good B+
Above 60% & upto 70% Good B
Above 50% & upto 60% Fair C+
Below 50% Poor C
 77

C. CHART FOR CALCULATION OF FINAL SCORE

Sl.No. Subject Weightage Score Final Score

1. Target Achievement (D1)
2. Performance Factors (D2)
3. Potential Factors (D3)

D. WHETHER THE CASE IS TO BE REFFERED TO THE

MODERATION COMMITTEE

Yes No. (Under Clause No. )

E. FINAL OVERALL GRADE AND SCORE OF THE EXECUTIVE

Signature of Officer Counter Signature of Officer-

Appraisal Cell in-charge of Appraisal Cell

Date: Date:

FORM ‘F’ (MODERATION COMMITTEE):

• As per the approved forms, after calculations of ratings, by the

Appraisal Cell, the cases fit for review will be put up to the
moderation committee for deliberations. Based on the
recommendations of the committee and subsequent approval
by the accepting authority final rating will be entered in the
appraisal dossier of the concerned Appraisee.
N.B: Overwriting/rewriting at any place has to be countersigned by
all concerned.
 78

D. OVERALL COMMENTS

1. Observation of Reporting Officer:

_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________

Signature of Reporting Officer

Name:
Designation:
Date:

2. Observation of Reporting Officer (F):

_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________

Signature of Reporting Officer (F)

Name:
Designation:
Date:
 79

3. Remarks:
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________

Signature of Higher Authority

Name:
Designation:
Date:

5. Remark
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________

Signature of Accepting Authority

Name:
Designation:
Date:
 80

N.B: Reporting Officer, Reporting Officer (Functional) and

Reviewing Officer are advised not to make any calculation of
addition of scores. All scores including weighted average in Form
D2 & D3 will be computed by Appraisal Cell.
LEVEL OF REPORTING OFFICER, REVIEWING OFFICER
AND HIGHER AUTHORITY: The level of Reporting Officer and
Higher Authority in respect of different levels of Appraisee will be
as under;

• Reporting Officer: The executive next higher in rank and grade

not below the level of E4 officer to whom the Appraisee reports.
In case the executive at E3 level, is the sectional head, the
concerned executive will be the Reporting Officer of E0, E1 and
E2 executives.
• Reporting Officer (F): The Reporting Officer (F) is the head of
the functional area in case of the executives administratively
reporting to the authority other than his/her functional areas.
• Reviewing Officer: The executive next higher in rank and grade
to the Reporting Officer and to whom the Reporting Officer
reports.
In case of Officers reporting to the Complex Head at ED level,
Reviewing Officer will be the concerned Functional Director.
• Higher Authority: The executive next higher in rank and grade
to the Reviewing Officer and to whom the Reviewing Officer
reports.
 81

• Personal Staff & Directly Reporting Staff: The respective

controlling officer will be the Reporting Officer of personal staff
and directly reporting staff.
• In case the specified level officers noted above are not in
position, the next higher officer will evaluate in his/her place.
• Accepting Authority: Appraisal Report after being routed
through Higher Authority, is to be placed before the Accepting
Authority, as indicated below, who in turn is required to pass on
the Appraisal Form to the Appraisal Cell at Corporate Officer.

Sl.No. Level of Appraisee Level of Accepting Authority

01. E7 and above CMD
02. E5 and E6 Director
03. E3 and E4 Executive Director
04. E0, E1 and E2 General Manager

For executives reporting to CMD, ratings given by CMD, will be

final and carry 100% weightage.
N.B: In case of transfer of Appraisee or Reporting Officer, the
Performance Appraisal Booklet is to be handed over to the HoD
under intimation to the Appraisal Cell.
 82

CALENDAR OF APPRAISAL ACTIVITIES

Sl.
Activity Responsibility Last Date
No.
Blank form is handed
over to Reporting Appraisal Cell/Unit
1. 15th January
Officer/HoD by Unit HRD Department
HRD Department.
Prior to start of
Appraisal Year,
Reporting Officer
communicates
Reporting Officer/Unit
2. His/her expectations 31st January
HRD Department.
to the Appraisee. The
respective Reporting
Officer hands over
Form A to Appraisee.
The Appraisee makes
his/her own list of key
tasks for the year and
fills up Form A and Appraisee/Reporting
3. holds discussions Officer/Reviewing 15th February
with his/her Reporting Officer.
Officer and Form B is
filled up after mutual
Agreement.
 83

Form B is shown to
Reviewing Officer for
4. Reviewing Officer 20th February
his/her acceptance
and signature.
1st Performance Appraisee/Reporting
5. 07th July
Review (Form C1) Officer

nd
07th
2 Performance
6. - do - January
Review (Form C2)
(Next Year)
Annual Appraisal of
7. Reporting Officer 07th April
Target Achievement.
The Reporting Officer
informs the rating and
observation given by
him based on
Reporting Officer and
8. performance on % 07th April
Appraisee
achievement of target
as agreed in Form B
and obtains signature
of Appraisee.
The Reporting Officer
fills up Form D2 and
9. Form D3 and rates the Reporting Officer 10th April
Appraisee against Six
Performance factors
 84

and Nine Potential

factors and gives
his/her overall
observation and over
the form to Reporting
Officer, as the case
may be.
The Reporting Officer
(Functional) gives
his/her rating in Form
10 D2 and Form D3 and Reporting Officer 12th April
his/Her observation
and sends the forms
to Reviewing Officer.
The Reviewing Officer
rates the Appraisee in
Form D1, D2, D3 and
gives his/her
11 Reviewing Officer 15th April
observation at places
indicated and hands
over the forms to
Higher Authority.
Officer designated as
Higher Authority / Higher Authority /
12 20th April
Accepting Authority Accepting Authority.
gives his/her
 85

observation and
returns the Form to
Appraisal Cell
All the forms are
received by Appraisal Appraisal Cell and
13 25th April
Cell at Corporate Head of Unit HRD
Office.
Final Assessment is
to be made by
14 Appraisal Cell 31st May
Appraisal Cell in Form
E.
Final score & grade is
Calculated after
review by Moderation
Officer-In-charge of
15 Committee, Form F is 10th June
Appraisal Cell
rechecked by Officer
In Charge of
Appraisal Cell.

N.B: the Head Unit HRD, Department and Executive-in-Charge of

Appraisal Cell will be responsible for continuous follow up to
ensure timely completion of the activities as mentioned above.
 86

CHAPTER – V
DATA ANALYSIS AND
INTERPRETATION
 87

ANALYSIS OF THE QUESTIONNAIRE

1. Performance appraisal system at Expectation.
Strongly No Strongly
Agree Disagree
agree opinion Disagree
The executive appraisal
system in NALCO
provides an opportunity
to have a clear
Q1. 12 41 6 1 0
understanding of what is
expected from you by
your appraiser during the
performance year.

PAS & EXPECTATION

10% 2%0%
20%
Strongly Agree
Agree
No Remarks
Disagree
Strongly Disagree

68%

From the analysis of question 1., we can conclude that the

appraisal system is effective in communicating the employees what
is been expected from them in the performance year. Out of the
total respondents, 88% of respondents responded in a positive way
to the above question.
In general we can conclude that in Nalco, every employee is
communicated about his or her duties and responsibilities before
the performance appraisal year.
 88

2. Performance Appraisal and Job Understanding.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system helps
you and your appraiser to
Q2. have a clear joint 9 42 3 6 0
understanding of each of your
job.

PAS & Job Understanding

10% 0%
15%
5%

Strongly Agree
Agree
No Remarks
Disagree
Strongly Disagree

70%

In the above analysis we can see that nearly 85% of the

employees of NALCO responded positively to the above question.
From the analysis of the above question it is very clear that the
performance appraisal system of NALCO is effective in
communicating the Performance objectives of all the employees
through a thorough discussion between the appraisee and the
appraiser.
 89

3. Performance Appraisal and Career Growth

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system helps in
Q3. planning for your future career 7 30 15 6 2
growth.

PAS & Career Growth

3% 12%
10%

Strongly Agree
Agree
No Remarks
25% Disagree
Strongly Disagree

50%

After interpreting the results it is understood that almost 62% of

employees are in the opinion that PAS do help in planning for their
future career growth. Thus we can conclude that the performance
appraisal system of the NALCO helps the employees not only to
review and know their performances at the same time this system
helps in planning for their future career growth in the organisations.
 90

4. Performance Appraisal and Performance Improvement

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system helps
Q4. you to manage your 5 34 12 7 2
performance.

PAS & Performance Improvement

3% 8%
12%

Strongly Agree
Agree
No Remarks
20%
Disagree
Strongly Disagree

57%

According to this feedback it is clear that 65% of the employees

agree that performance appraisal system of NALCO helps in
improving the performance of the executives and plan for their
future course of action. However some anomalies arise when we
do see nearly 35% of the employees have different opinion.
Overall we can conclude that the appraisal system of the
NALCO not only helps the employees to manage their
performance but also measures are taken to improve their
performance.
 91

5. Performance Appraisals and Support of Superiors.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system provides
an opportunity for you to
Q5. communicate the support you 3 40 8 9 0
need from your superiors to
perform your job well.

PAS & Support of Superiors

0% 5%
15%

Strongly Agree

13% Agree
No Remarks
Disagree
Strongly Disagree

67%

Almost 68% of the employees agree with this fact that the
performance appraisal system of NALCO provides an opportunity
to executives to communicate the support they need from their
superiors to excel in their performance. And the needful action is
taken by the superiors, in this respect to fulfill the requirements of
the executives and the improve their performance.
So the Performance Appraisal of NALCO is effective in this
aspect.
 92

6. Performance Appraisal and Clarity of Objective

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The objective of the appraisal
Q6. system is clear to all the 5 28 18 6 3
employees.

PAS & Clarity of Objective

5% 8%
10%

Strongly Agree
Agree
No Remarks
Disagree
Strongly Disagree
30%
47%

Out of all respondents 55% of the Appraisee stated that they

are clear regarding the basic objective of the Performance
appraisal system adopted by NALCO. But still 45% of respondents
reacted negatively.
So, for that it is necessary that some action plan should be
made to make the employees clear regarding the basic objectives
of PAS so that they can achieve the said objectives.
 93

7. Performance appraisal and exploring potential.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system has
Q7. scope for helping you to 6 31 11 7 5
discover your potential.

PAS & Identification of Potential

8% 10%

12%
Strongly Agree
Agree
No Remarks
Disagree
18% Strongly Disagree

52%

In response to the above question maximum number of

employees nearly 62%, have responsed in a positive way
regarding the effectiveness of the Performance appraisal system.
They believe that the PAS really help them to discover their
potential which definitely help them to develop on a long range.
However, 20% of the employees responded negatively to the
above question.
 94

8. Performance Appraisal and Open Feed Back.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system
encourages open
communication between you
Q8. 10 30 11 6 3
and your appraiser through
performance review
discussion.

PAS & Open Feed Back

5%
10% 17%

Strongly Agree
Agree
18%
No Remarks
Disagree
Strongly Disagree

50%

After interpreting results it is found that of course it is true that in

NALCO an open feed back system exists in the performance
appraisal process. Which help the employees to understand their
strengths and weaknesses and furthers to take necessary course
of action for their self development.
 95

9. Performance Appraisal and Review Discussion.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
Performance review
discussions are taken
Q9. seriously by your appraiser 4 29 13 10 4
and sufficient time is spent in
these discussions.

PAS & Review Discussion

7% 7%

17%
Strongly Agree
Agree
No Remarks
Disagree
Strongly Disagree
47%
22%

After through interpretation it is found that almost about 55% of

the employees are of the opinion that the performance review
surely takes place timely. According to them as per the planning
these review takes place twice in the financial year, that is, in the
first week of July and in the first week of January. It is also found
that the review takes place without any errors. But again on the
other hand nearly 25% of the employees disagree with this
question that performance review does take place timely.
 96

10. Performance Appraisal and Analysis of performance.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal system
encourages the appraiser and
Q10. you to have a common 4 30 18 8
understanding of the factors
affecting the performance.

PAS & Analysis of Performance

0% 7%
13%

Strongly Agree
Agree
No Remarks
Disagree
30%
Strongly Disagree
50%

Responding to the above question almost 57% of the

respondents are of the opinion that a thorough analysis of their
performance and pitfalls of performance are made. Which provide
an opportunity to all the employees to explain and justify their
stance.
However 30% of employees did not respond to this question.
 97

11. Performance Appraisal and analysis of KRA/KPAs:

Strongly No Strongly
Agree Disagree
agree opinion Disagree
Discussions on key
performance areas / Key result
Q11. areas / tasks / targets between 10 30 12 6 2
you and your appraiser is very
educative.

PAS & KRA/KPA

3%
10% 17%

Strongly Agree
Agree
20% No Remarks
Disagree
Strongly Disagree

50%

This analysis of the respondents it is clear that 67% of the

employees are in opinion that the process of PAS starts with
identification of the KPAs/ KRAs which in turn help them to
understand what is being expected from them and the way they
really can develop their performance.
However those who have responded negatively to this question
have said that it should have been done in a more scientific way.
 98

12. Performance Appraisal and Use of appraisal Data.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The performance review
committees do a through job in
Q12. 3 19 25 9 4
reviewing and using appraisal
data.

PAS & Use of Appraisal Data

7% 5%

15%

Strongly Agree
32% Agree
No Remarks
Disagree
Strongly Disagree

41%

Form the interpretation of this questionnaire we have received

a mixed response from the executives. While 37% of executives
know the way the performance data are interpreted or used. At the
same time 41% of executives are not clear regarding this part of
the PAS. And 22% of the employees are totally ignorant about the
process the data are used.
We can conclude that NALCO need to adopt still a better open
system of performance appraisal process.
 99

13. Performance Appraisal and Identification of potential

leaders.
Strongly No Strongly
Agree Disagree
agree opinion Disagree
There is a mechanism in
NALCO to identify potential
Q13. 1 16 26 12 5
leaders under the performance
appraisal system.

PAS & Identification of Leaders

8% 2%

27%
20% Strongly Agree
Agree
No Remarks
Disagree
Strongly Disagree

43%

Yes almost 29% of the employees are of the opinion that the
performance related data are used to identify the potential leaders
of the organisation. And 28% of the employees have responded
negatively to this question. But 43% of the executives are neutral in
responding to this question.
We can conclude that there is a mixed response, it can not be
concluded that whether the PA data are used or not in identifying
leadership in the organisation.
 100

14. Performance Appraisal and Transfer and placement.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
At NALCO Performance
appraisal System helps in
Q14. 3 9 28 13 7
transfer & placement of
employees.

PAS & Transfer and Placement

12% 5%

15%

Strongly Agree
22% Agree
No Remarks
Disagree
Strongly Disagree

46%

With this regard about 34% of the employees state that they
had never seen that transfers or proper placements are made on
the result of the performance appraisal process. Again 46% of the
employees are neutral where as only 20 of the employees are
having positive opinion regarding this.
We can conclude that the performance appraisal data are
seldom used to make proper placement or transfer of the
employees. So alternately it is hardly going to use the best
possible utilization of employees potential.
 101

15. Performance Appraisal and Job enrichment.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
The appraisal data are used
by the HRD department for
other development decisions
Q15. 3 18 24 7 8
like Job-rotation, Job-
enrichment, career planning,
succession planning, etc.

PAS & Job Enrichment

5%
13%

12% Strongly Agree

30%
Agree
No Remarks
Disagree
Strongly Disagree

40%

The feedback is ambiguous in nature. It is because about 35%

of them agree with this fact that Performance appraisal data are
used for job enrichment. Whereas 25% of them disagree with the
context. Rest 40% can’t give any such suggestions.
So a very confusing interpretation of the above question.
 102

16. Performance Appraisal and Motivation and recognition.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
At NALCO Performance
appraisal is used as a
Q16. motivational role for 4 25 20 5 6
recognition & encouragement
of higher performers.

PAS & Motivation and Recognition

10% 7%

8%
Strongly Agree
Agree
No Remarks
Disagree
42%
Strongly Disagree

33%

Out of this interpretation it is found that almost 50% of the

employees agree with this fact and again 50% of them disagree or
neutral to the above question.
Taking into account the responses we can conclude that
the Performance appraisal system of NALCO are partially motivate
the employees. Similarly regarding the recognition of performance
of the employees a solid conclusion can not be arrived at.
 103

17. Performance Appraisal and Promotion.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
You receive feedback on your
strength and weakness
through the performance
Q17. appraisal system about your 5 22 11 13 9
potential for higher-level job
from your Reporting officer
after appraisal.

PAS & Promotion

8%
15%

Strongly Agree
Agree
No Remarks
22% 37%
Disagree
Strongly Disagree

18%

Almost 45% out of all respondents have a positive answer

regarding this fact that the appraisal system surely provides an
opportunity for Promotion and growth. But again 37% and 18% of
them are disagree and neutral with this regard.
 104

18. Performance Appraisal and Training Requirements.

Strongly No Strongly
Agree Disagree
agree opinion Disagree
At Performance appraisal is
Q18. 7 16 16 11 10
used for training execution.

PAS & Training/Development

17% 12%

Strongly Agree
Agree
18% 26% No Remarks
Disagree
Strongly Disagree

27%

Almost 38% of the employees find that the performance

appraisal output are used to access their training requirements. But
still 35% of the employees responded that the organisation never
took care of their performance appraisal report to access the kind
of the training they require enhancing their performance. But still
27% of employees are still neutral to the above question.
 105

CHAPTER – VI

CONCLUDING
OBSERVATIONS
 106

CONCLUSION

By the analysis of the project “Executive Performance

Appraisal system at NALCO” it can be conclude that there is a
distinct differentiation of involvement of different level of
management in the performance appraisal mechanism. Where the
middle level manager shows an aggressive nature to be involved
to a great extent for the organization goal setting at the same time
the lower level management are entrusted in departmental goal
setting. All the level of management more or less agree on the
principle that there should be a good communication mechanism
between the superior and the subordinate regarding the
settlement of common goal. The higher authorities of the
management have agreed that the communication system should
be open for easy delegation of authority to convey their
subordinates “what to do?”. To achieve organization goal it is not
only the communication system but also the involvement of the
superior is highly necessary. And this will provide a standard
framework on the organizations goals, which are to be achieved in
appropriate time. The present review of performances are annual
in type there should be some provision of formal mid appraisal
system which will provide a scope to the appraise for enhancing
his motivation of rapid correction of weakness. It is satisfactory
that Performance Appraisal system in NALCO is bias free. There
is hardly any influence by any level by the traits takes religion,
sex, personality, and some personal relationship with appraisal.
 107

In NALCO self-appraisal system is been practiced as a

method for performance appraisal. The satisfaction level of
existing Performance Appraisal System among employee is not
high and it needs some modification or improvement. However in
NALCO the Performance Appraisal System is clearly understood
by the employees, which is a good sign for an organization.

It is also found that in NALCO there is no proper mechanism to

communicate the feed back to the individual employee after the
appraisal. At the same time the Performance Appraisal System in
NALCO is very much helpful in accessing the need for training for
the employees. But in practice the result of the entire process of
performance evaluation in NALCO is not properly used for the
purpose of personnel decisions like job enrichment, promotion and
training & development etc.

By a healthy performance appraisal system the appraisal well

get motivation, self discipline, creating to improve his work
performance in future. From the appraisal point of view a
sophisticated system gives a platform to assess the work of the
appraisal in a realistic manner and he is able to suggest fruitful
measures regarding the improvement for the weaknesses of the
appraisal in the final performance appraisal report on the whole. It
will benefit the appraisal the appraiser mostly to the organization.
The appraisal with positive attitude optimum dedication towards
the organizational goal will lead the organization, the path of
growth of prosperity in near future.
 108

SUGGESTION

1. There should be a more improvised Performance appraisal

system to be adopted in NALCO, which can really address
the typical issues related to the evaluation of the
employees’ performances.

2. Due emphasis should be given to the communication

among the employees and there should be a two-way
communication in the organisation for the effective
utilization of the performance appraisal system.

3. The frequency of evaluating performances of the

employees should be reduced to Six months for the better
productivity of employees.

4. The feedback and the factor of considerations of

performance appraisal system should be conveyed to the
individual employees, which can bring transparency in the
mechanism.

5. A section of employee feels organization does not provide

ample opportunity for growth, which is a de-motivational
factor. So the organisation should take care of the
employees by providing them training and developing them
as per the results obtained by the performance appraisal
system.
 109

ANNEXURE
 110

Annexure - 1
BIBLIOGRAPHY
• Dr. C. B. Gupta, Human Resource Management,
Published by Sultan Chand & Sons, New Delhi, 2002.
• Andrew Durbin, Personnel and Human Resource
Management, D. Van No. Stand Co. New York, 1981.
• Dale S. Beach, Personnel: The Management of People At
work, Mc. Millan Publishing Co. New York, 1975.
• Douglas Mc. Gregor, An uneasy look at Performance
appraisal, HBR, Jan – Feb, 1972.
• Heera Singh, A complete appraisal system, Journal, Nov.
20021.
• Martin Fisher, Performance appraisal, British Library
Cataloguing in Publication data, Kogan Page limited, 1995
• T. V. Rao, D. F. Pereira, Recent Experiences in HRD,
Oxford and IBH publishing Co. Pvt. Ltd. New Delhi, 1989
 111

Annexure - 2
QUESTIONNAIRE
EFFECTIVENESS OF EXECUTIVE APPRAISAL SYSTEM OF NALCO
NAME: __________________________________________________________
DESIGNATION: _________________________ LEVEL: ___________________
QUALIFICATION: _________________________________________________

√’ Mark in the appropriate Box)

(Please Fill the following information by putting a ‘√
Strongly No Strongly
Agree Disagree
agree opinion Disagree
The executive appraisal
system in NALCO provides
an opportunity to have a
Q1. clear understanding of what
is expected from you by your
appraiser during the
performance year.
The appraisal system helps
you and your appraiser to
Q2. have a clear joint
understanding of each of
your job.
The appraisal system helps
Q3. in planning for your future
career growth.
The appraisal system helps
Q4. you to manage your
performance.
The appraisal system
provides an opportunity for
you to communicate the
Q5.
support you need from your
superiors to perform your job
well.
 112

The objective of the

Q6. appraisal system is clear to
all the employees.
The appraisal system has
Q7. scope for helping you to
discover your potential.
The appraisal system
encourages open
communication between you
Q8.
and your appraiser through
performance review
discussion.
Performance review
discussions are taken
Q9. seriously by your appraiser
and sufficient time is spent in
these discussions.
The appraisal system
encourages the appraiser
Q10. and you to have a common
understanding of the factors
affecting the performance.
Discussions on key
performance areas / Key
Q11. result areas / tasks / targets
between you and your
appraiser is very educative.
The performance review
committees do a through job
Q12.
in reviewing and using
appraisal data.
There is a mechanism in
NALCO to identify potential
Q13.
leaders under the perf.
appraisal system.
 113

At NALCO Performance
appraisal System helps in
Q14.
transfer & placement of
employees.
The appraisal data are used
by the HRD department for
other development decisions
Q15.
like Job-rotation, Job-
enrichment, career planning,
succession planning, etc.
At NALCO Performance
appraisal is used as a
motivational role for
Q16.
recognition &
encouragement of higher
performers.
You receive feedback on
your strength and weakness
through the performance
Q17. appraisal system about your
potential for higher-level job
from your Reporting officer
after appraisal.
At Performance appraisal is
Q18.
used for training execution.

Q19. Do you find any problems with the existing Performance Appraisal System
at NALCO?
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
………………………………………………………………………………………
 114

Q20. Suggestions of your for improving the Performance Appraisal System at

NALCO?
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
………………………………………………………………………………………

Thank you for your kind cooperation and spending time in filling up this
questionnaire.

The information provided by you is confidential in nature and purely for academic
purpose.

Students of
Regional College of Higher Studies, Bhubaneswar