Bhanutej Final Project

Effectiveness Of Performance Management System In Hospitality sector
1. INDUSTRY PROFILE:
HOSPITALITY INDUSTRY IN INDIA
Hospitality segment, just like many other segments in India is booming at an

unprecedented pace. India faces a huge challenge of being "under roomed" while the
economy is growing rapidly. This provides for a huge opportunity for hospitality industry.
A lot of large real estate developers are also investing into this business to bridge the
demand-supply gap and leverage the opportunity.
A number of cities have blossomed with suburban "Silicon Valley" type Special Economic
Zones (SEZs). This is mostly driven due to strong growth in IT, BPO segments, increase in
foreign travelers, emphasized focus on tourism by government, affordable airlines fares, etc.
Several other factors such as Commonwealth Games in Delhi are fueling the need further.
The middle class is becoming more prosperous and native Indian tourist travel is growing
rapidly, particularly in places such as Goa, Kerala and Rajasthan.
Bangalore, Hyderabad, Chennai, Gurgaon, Pune and the suburbs of Mumbai are the areas
attracting international investment and as expected, are the cities with the largest
development pipelines. Combined, these cities account for 89 of the 161 projects in the
pipeline and 16,734 guestrooms, which is 68% of the rooms in India's total pipeline.
Of the 161 projects in India's pipeline, 100 will have 4 and 5 star designations. The other
61 are 1, 2 and 3 star developments. A number of them are new economy brands recently
designed for the Indian market place. Taj's Ginger Hotels is one such brand, Lemon Tree
and Red Fox are others in this category.
Almost all the major hotel operators such as Starwoods, Hilton, Intercontinental have
significant growth plans for India and have multiple projects in works or in pipeline.
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HOUSEKEEPING ORGANIZATIONS:THEIR HISTORY, PURPOSE,

STRUCTURES,AND PERSONNEL
By definition, hospitality is the cordial and generous reception and entertainment of

guests or strangers, either socially or commercially.From this definition we get the feeling
of the open house and the host with open arms, of a place where people are cared for.
Regardless of the reasons people go to a home away from home, the presumption is that they
need to be cared for there. They need a clean and comfortable place to rest or
sleep, food service, an area for socializing and meeting other people, access to stores and
shops, and a secure surrounding.Americans have often been described as a people on the
move, a mobile society. Even as our country expanded, we required bed and board.
Travelers in the early 1700s found hospitality similar to that in their countries of origin, even
though these new accommodations might have been in roadhouses, missions,or private
homes, and the housekeeping might have included no more than a bed of straw, changed
weekly.
Facilities in all parts of young America were commensurate with the demand of the
traveling public, and early records indicate that a choice was usually available; travelers
based the decision on where they expected to find good food, overnight protection, and
clean facilities. Even though the inns were crude, they were gathering places where anyone
could learn the news of the day, socialize, learn the business of the area, and rest.
The business of innkeeping has become the hotel industry of today, but the main
tenets remain: a clean, comfortable room, access to food and entertainment facilities, and
a courteous and concerned staff who mean it when they ask, “May we be of service?”
Housekeeping departments play a vital role in today’s lodging industry. People involved
in housekeeping operations service guest rooms, maintain and service public and
special areas, and, in many instances, operate laund ries and recreational and health facilities.
The people of housekeeping are also a part of the overall team of hosts and hostesses
who welcome the hotel’s guests. They show concern and care when something goes wrong
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with the guest’s visit, and they are quick to initiate action that will make things right again.
Major hotel companies have been quick to recognize the value of housekeeping and
other service industry workers. Good hotel management does not see housekeeping
work as demeaning or menial. To the contrary, all high-quality hotel operational
management
personnel have, at one time or another, performed housekeeping functions;
as a result, they understand the worth and value of the people who perform such functions
regularly.
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Garden & lawn
2. COMPANY PROFILE:
a. Background and inception of the company:
Dusters
 Leading Facilty Maintenance/ Management Services (FMS) company in Bangalore, IT capital of

India
 Second largest FMS company in India and amongst the top five players in the country
 Started in 1994, the company was transferred to the curent ownership in 1999
 Lead by a team of experienced management and advisors who between them have a combined
FMS experience of nearly 50 years
 Client Base of 350+ including many worldwide reputed firms
 Client base growing at more than 30% and expected to remain high for the next few years
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Vision Statement
“TO GROW AS A PREFERRED PARTNER PROVIDING BENCHMARKED SOFT SERVICES

WITH SKILLED AND COMMITED PEOPLE”
Mission Statement
At Dusters Hospitality Services Pvt. Ltd., we pledge to provide distinctive quality and
unparalleled customer service as we strive to gain the respect and trust of our customers,
suppliers and partnered vendors.
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The success of Dusters is determined by our success in operating as a unified team. We
have to earn the trust and respect of our customers every day in order to ensure the
customer makes the decision to choose our services.
Our success is built by creative & productive employees who are encouraged to make
suggestions while thinking "outside the box." Our job is essential to fulfilling our mission
everyday to the people who trust and respect us. The primary goal of Dusters and yours
as one of its employees is to live our mission and continue to be an industry leader. We
achieve this through dedicated hard work and commitment from every employee. It is the
desire of Dusters to have every employee succeed in their job, and be part of achieving
our goals.
Work Flow System
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Chart showing the distribution of the market
Industry Distribution
45
41
40
35
30
25
21
20
15
10 10 9 9
10
5
0
Sodexho Updater ISS Dusters Express Others
services
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Products/Services Profile:
Services offered
Housekeeping services
 Dusters has a specialized and an experienced team who will work in coordination with
their clients and deliver services in accordance with their standards and specification
 Daily sweeping and mopping of all the floor area
 Cleaning of Dust, cobwebs as and when required
 Cleaning of bathrooms, toilet blocks, wash basins, windows etc and provide air purifiers
for wash areas and wash basins
 Cleaning of window panels, glasses, partitions, scrubbing the floor tiles, etc.,
 Disposal of wastes
 Carpet shampooing – consisting of a well experienced and a trained team specialized in
carpet shampooing.
Office assistance
 Executives who are experienced in handling day to day activities such as back office
assistance, maintenance of stationery filling and handling interdepartmental errand jobs
Lift marshal
 People who are experienced in operating different kinds of elevators
Front tax
 Experienced in handling visitors/ customers and extending hospitality; and also attending
inbound and outbound calls
Mail room services
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 Experienced executives for handling overall mail room management, collecting
maintaining, monitoring and tracking of couriers
Café services
 Dusters provide trained/ experienced executives for taking care of cleanliness of the
cafeteria – tables, chairs, glass panes and kitchen area.
Administrative / general
 Provides well experienced people in all aspects of office administration- word processing
presentation formatting, contacts database maintenance, customer response, billing and
collection, appointment setting, calendar management, travel planning and coordination,
collecting and collating information, maintaining electronic records and databases,
maintaining mailing lists, sending mass mails etc.
Pantry services
 Pantry services include serving of tea and snacks to the customers, the daily arranging of
plates, fresh cups, clearing of used plate and cups, and the cleanliness of pantry area.
Reprographics
 Reprographics are responsible for the day to day bulk photocopying of data
Handyman services
 Dusters provide the manpower for handyman services such as electricians, plumbers,
carpenter, masons and painters\
Help desk
 Receive calls/ mails and contacting the appropriate team members to respond to the
request for support as needed and also responding to caller for requests for assistance.
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They provide people who have had prior experience in handling inbound inquiries and
providing accurate information
Services support
Dusters provide experienced office boy who can do add and errand jobs like
 To provide efficient internal/ external delivery and collecting of mails and documents
 Handling daily bank deposits and cash withdrawals
 Cheque and cash collection from customers
 Other tasks assigned by the superior.
Garden & Lawn Maintenance
Features
 Operations & Management of Daily Schedules

 Periodic Maintenance
 Renewal / Replanting
 Improvement of Aesthetics
 Periodic Manu ring & Nutrition
 Periodic Pesticide Control
 Maintenance of Indoor Plants
Pest Control Services
Features
 Design Pest Control Schedules

 Plan Control Strategies
 Latest Equipment & Technology
 MIS / Reporting
 Disposal & Removal
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 Use of Environment Friendly Chemicals
Area of Operation:
National
Competitors in the Industry
ISS
ISS is one of the world’s largest facility services provider, with market presence in Europe, Asia,
U.S.A. and Australia. ISS has its operations in 50 countries and aspires to Lead Facility Services
globally. ISS has more than 4,50,000 employees and more than 125,000 business-to-business
customer.ISS Facility Services India Pvt. Ltd is headquartered in Mumbai and has Operations in
more than 19 cities.
Avon FMS
Avon FMS offers a range of support functions services such as building management and allied
services as well as manpower services to leading corporate houses in the country. AVON is one
among the select few service providers to have certification from ISO for high standards of
service rendered at client locations.
Paradigm Property and Facility Management Services

Paradigm Services started by a group of professionals from the Property/Facility and Real Estate
field is an upcoming organization with good resources to meet the requirements of demanding
global standards in infrastructure, processes and living ambience. Paradigm is an ISO
9000:2001 certified Company.
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DMARC Services Pvt. Ltd.,

Incorporated in 2008, DMARC services Pvt. Ltd., is a facility management company having
experience in providing various services for industrial and commercial establishments in
Bangalore.
Sodexho
Sodexho Facilities Management India Pvt. Ltd is a subsidiary of French MNC, Sodexho.
Headquartered in Paris, Mr. Michel Landel is currently the Chief Executive Officer of Sodexho.
Sodexho has been a major provider of Food and Facilities Management services in India for
more than 10 years.
Updater services
Acme Facility Management Services Pvt. Ltd
Carewel Facilities India Pvt. Ltd
Handiman Services Limited
4. SWOT ANALYSIS
STRENGTHS
 Large workforce
Dusters has a workforce of almost 9000 employees including the House keeping staff
deployed at the different sites and the back office staff. This is the largest workforce in a
facility management / maintenance service provider in South India. And with the merger
with TOTAL SOLUTIONS (Mumbai) the workforce is expected to increase to nearly
16000 employees.
 Presence in 5 main cities in the south
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Dusters are proving their quality services in Bangalore, Mysore, Mangalore, Hyderabad
and Chennai in south India. Head office is located in Domlur, Bangalore. Dusters is also
present in Goa and Mumbai.
 600+ Clients
Dusters have a list of clients who are very big names in their respective fields. Some of
Dusters’ valued clients are Forum Mall, Gold’s Gym, Aditya Birla More, Reliance Com,
Central, IBM, HSBC, Honeywell, Big Bazaar, First source, Nokia, Kaati Zone,
Divyasree, FabIndia, The ORCHID and many more.
 Proper Training
Dusters provide training to the newly appointed House Keeping Staff on how to use the
various machineries while performing their jobs. This training is given to the HKS at a
6000sq ft. area in Whitefield.
 Merger with TOTAL SOLUTIONS

Dusters has gone into a merger with TOTAL SOLUTIONS from Mumbai. Now Dusters
will be able cater to the needs of the north Indian clients as well.
WEAKNESS
 No Advertising
The company unlike its competitors has no advertising done. The competitors are giving
out advertisements even though if they are small.
 Huge outstanding
Duster lacks in proper collection of their outstanding and as a result the outstanding
keeps on increasing.
 No proper communication
There is no proper communication between the departments or the people working in the
same department.
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 Lack of training
There is no training provided to the back office staff on their recruitment. A lot of
mistakes are done due to the lack of training.
 No Job description
A proper job description is not provided to the employees on their joining the company.
 No employee benefits
According to a recent survey conducted, majority of the employees said that they do not get any
employee benefits. Providing employee benefits will help the company to get more out of the
employees as it will be a motivating force to the employees.
OPPORTUNITIES
 Growing real estate and property management market
After recession the real estate business is booming, and this is an excellent opportunity
for the businesses who would like to expand. Dusters being number one in the market is
the top priority for these businesses to choose Dusters.
 Growth in BPO, IT sector

The number of BPO’s and IT companies being set up is high and these BPO’s and IT
companies would always prefer to outsource their maintenance work to those who are
good in that field. Dusters has an excellent chance to meet the needs of their clients.
 Boom in retail sector

The retail sector is recording a boom in its business. For example, Aditya Birla MORE
when established in Bangalore sought the services of Dusters and when they moved to
Mangalore, Dusters Mangalore provided services to them and the same followed when
MORE started in Mysore.
 Investment
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TVS Shriram Growth Fund I have invested in Dusters. This was done in November,
2009. Taking a cue from this investment Dusters can further expect more investment
from the foreign players who would like to enter the local FMS market. Dusters merger
with Total solutions from Mumbai is another reason for Dusters to expect further growth
in the market.
 Globalization
As world markets continue to expand and the competitive field for companies enlarges,
facility management professionals will be asked to provide more and more work.
THREATS:
 Availability of manpower
For any business one of the main problems is always loosing manpower to their
competitors or finding new employees. The same is the situation of Dusters. Dusters has
given the responsibility to their Area relationship Managers to hire people
 Large unorganized segment
 Growing competitors (local and international players)

The number of competitors is constantly increasing in the market. Many international
companies from the same sector are setting up their base in Bangalore, along with the
international companies many local companies are also emerging.
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5. ANALYSIS OF FINANCIAL STATEMENT:
Balance sheet for the year ended 2008-2009

Liabilities as at 31-Mar-2009 Assets as at 31-Mar-2009
Capital Account 100000.00 Fixed Assets 36067753.78

Share Capital Account 100000.00 BUILDING A/c 500929.00
Loans (Liability) 59924930.84 Cleaning Equipment 7830945.00
Bank OD A/c 42921183.42 Computers & Pheriperals 2344171.95
Secured Loans 6874332.62 Fixed Assets - Chennai 165775.00
Unsecured Loans 10090064.80 Fixed Assets - Goa
Advance for Sale of Asset 39350.00 Fixed Assets - Hyderabad 13525.00
American Express – Furniture & Fixtures 1596373.95
3769 338254 31016
Office Equipments 2000599.00
Citi Bank OD Loan
Current Liabilities 105609526.19 Plant & Machinery 12785229.43
Duties & Taxes 42417326.44 Vehicle - Four Wheeler 8802208.45
Provisions 11671724.00 Vehicle Two Wheeler 27997.00
Sundry Creditors 15271198.46 Provision for Depreciation
Deferred Tax Liability 156439.00 Current Assets 175651271.96
Medical Aid 541769.00 Closing Stock 743845.08
Met Life India Insurance -16088.00 Deposits (Asset) 4305168.73
Salaries Payable A/c 34845203.94 Loans & Advances (Asset) 1729515.00
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Shamsher Puri Sundry Debtors 155009529.53
Shamsher Salary Payable A/c 721953.35 Cash-in-hand 194045.75
Suspense A/c Bank Accounts -6238511.61
Suspense A/c Recoverable Expenses 52675.60
47706119.19 TDS Receivable 13872289.31
Opening Balance 10188979.87 Pre - Paid Expenses 592200.00
Current Period 37517139.32 Provision for Sales 4149275.00
Reimbursable Expenses -345392.43
Uniform Recoverable 1586632.00
Branch / Divisions 1621550.48
THE DUSTERS
B/DIVISION
Col. K P Puri
DHSPL – GH* 1621550.48
Total 213340576.22 Total 213340576.22
Mckensy’s 7S frame work with special reference to

organization study:
Current situation (Part-A)
Shared Strategy Structure Systems Style Staffs Skills

Values
Shared
Values
Strategy
Structure
Systems
Style
Staffs
Skills
Future (Part-B)
Shared Strategy Structure Systems Style Staffs Skills

Values
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Shared
Values
Strategy
Structure
Systems
Style
Staffs
Skills
a) Shared Values :
As the employee’s and Employer’s is having a good relation between them .They share their
thoughts directly face to face in the current situation.
As there is no proper hierarchy maintained in the organisation it might lead to problems in

future. Their has to have a proper hierarchy maintained between the employees and the
employer and properly followed. While taking any decisions by the higher level.
b) Strategy :
Strategy used by this organization is not so modernized . their has to be some changes in
terms of quality maintained by them.
c) Structure:
As per to this organization the structure followed by this organization is correct .I don’t think
there has to have any changes made in it.
d) Systems:
e) Style :
f) Staffs:
g) Skills:
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EXECUTIVE SUMMARY
In this study I have tried to find out the perception of the Employees about Performance
Management System. Employees have their different perception, by analyzing the responses
given by them I have given some suggestions. Sample size of 50 has been taken. In the survey
both Executives and Non-executives were taken. Questionnaires were designed in such a way
that it was easy to understand and both Executives and Non- Executives can fill it. In the study
86% were Executives and 14% were Non-Executives, 80% were Male employees and 20% were
Female Employees. The age group was mainly between 45-55. Questions were mainly
Structured in the form of YES or NO, Ranking and Rating questions were used, suggestions for
improving Performance Management System were also asked in the questionnaires. Before
making the final questionnaires testing of the questionnaire was also done which help in
knowing the problem faced by the respondent i.e. may be some questions were not clearly
understood, or meaning of the question was not clear.
Following are some criteria which were taken into consideration while designing the
questionnaires:-
Simple Language was used.
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Questions were not subjective.
Ambiguous Questions were avoided.
Questions were arranged in a logical order.
Complicated Questions were avoided.
In this study questions were asked taking the objective of the study in mind, and from
which correct analysis can be done and exact perception of the employees can be
known.
OBJECTIVES OF THE STUDY
The study was .Perceptional Analysis of the Employees about Performance Management
System
Objective of the study are: -
 Awareness of the employees towards the Performance Appraisal System.
 To find out that the employees were satisfied with the Performance Appraisal System.
 Was the Performance Appraisal System affective or not.
 What criteria were taken into consideration during Promotion?
 To provide suggestions for the improvement of the Performance Appraisal System.
METHODOLOGY
After being fully aware of the objectives of the study and the research problem, it was found
out that it was a descriptive research.
Data Collection: -
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The survey was based on the Primary and Secondary data. The subject i.e. the employees of
Executive and Non-Executive level of the organization were given a set of questions in the form
of Questionnaire. These questions were focused on the awareness, effectiveness, importance and
satisfaction level of the employees.
Primary Data: -
Primary source include Questionnaires of Executive and Non-Executives.
Secondary Data: -
Secondary data includes information from manuals, internet, Personnel Management
textbook.
Sampling: -
Random Sampling has been used in the survey. Sample size of 50 was taken. 86% were
Executives and 14% were Non-Executives, and the survey was conducted at the public sector
offices. The employees were given various questions to answer in the form of Questionnaire. I
conducted the survey at the organization I was able to get a response from 50 employees of
the organization.
PERFORMANCE APPRAISAL
Once the employee has been selected, trained and motivated, he is then appraised for his
performance. Performance Appraisal is the step where the management finds out how effective it
has been at hiring and placing employees. If any problems are identified, steps are taken to
communicate with the employee and to remedy them. A .performance appraisal. Is a process of
evaluating an employee’s performance of a job in terms of its requirements.
TERMINOLOGY USED
Employee appraisal techniques are said to have been used for the first time during the first
World War, when, at the instance of Walter Dill Scott, the US army adopted the .Man-to-
Man. rating system for evaluating military personnel. During the 1930 period rational wage
structure for hourly paid workers were adopted in industrial unit. Under this system, the policy
of giving grade wage increments on the basis of merit was expected. These early employees
plans were called merit-rating programmers, which continued to be so called up to the mid 50s.
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By then, most of these plans were of the rating scale type, where emphasis was given to factors,
degrees and points. In the early 50s, however attention began to be devoted to the performance
appraisal of technical, professional and managerial personnel. Since then, as a result of
experiment and a great deal of study, the philosophy of performance appraisal has undergone
tremendous changes. Consequently, a change has also taken place in the terminology used. Now,
the older phrase merit rating is largely restricted to the rating of hourly paid employees, and is
used frequently in developing criteria for salary adjustment, transfer, promotion etc. The later
phrase, personnel appraisal, places emphasis on development on the individual as and widely
used to evaluate technical, professional and managerial personnel.
Trends in Employee Appraisal

Item Former Emphasis Present Emphasis
Terminology Merit Rating Employee Appraisal
Performance Appraisal
Purpose Determine qualification for Development of the
wage increase, transfer, individual, improved
promotion, lay off. performance on the job, and
provide emotional security.
Application For hourly paid workers For technical, professional and
managerial employees.
Factors Rated Heavy emphasis upon Results, accomplishment,
personal traits. performance.
Techniques Rating scales with emphasis Mutual goal setting, critical
upon scales, statistical incident, group appraisal,
manipulation of data for performance standards, less
comparison purposes quantitative.
Post- Appraisal Interview Superior communicates his Superior stimulates employee
rating to employees and tries to analyze himself and set own
to sell his evaluation to him, objectives in line with job
seeks to have employees requirements, superior is
conform to his view. helper and counselor.
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IMPORTANCE AND PURPOSES
Performance appraisal has been considered as a most significant and indispensable tool for
an organization, for the information it provide is highly useful in making decisions regarding
various personal aspects such as promotions and merit increases. Performance measures also
link information gathering and decision-making processes, which provide a basis for judging
the effectiveness of personnel sub-division such as recruiting, selection, training and
compensation.
McGregor says: .Formal performance appraisal plans are designed to meet three needs, one
of the organization and the other two of the individual, namely:
They provide systematic judgments to back up salary increases, transfers, demotion
or termination.
They are means of telling a subordinate how he is doing, and suggesting needed changes in
his behaviors attitudes, skills, or job knowledge. They let him know .where he stands. with the
boss.
The superior uses them as a base for coaching and counseling the individual by the
superior. On the basis of merit rating or appraisal procedures of companies in India, the main
objectives of employee performance appraisal are:
To enable an organization to maintain and inventory of the number and quality of all
managers and to identify and meet their training needs and aspirations; To determine increments
rewards, and provide a reliable index for promotions and transfers to positions of greater
responsibility;
To maintain individual and group development by informing the employee of his
performance standard;
To suggest ways of improving the employee’s performance when he is not found to
be up to the mark during the review period;
To identify training and development needs and to evaluate effectiveness of training
and development programmers;
To plan career development, human resources planning based on potentialities It will, thus,
be seen that performance appraisal is an important tool of personnel management. It is a
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judgment of the characteristics, traits and performance of employees and has a wide range of
utility. For example:
It unifies the appraisal procedure so that all employees are rated in the same manner,
utilizing the same approach so that the ratings obtained of separate personnel are comparable.
It provides information, which is useful in making and enforcing important decisions about
selection, training, promotions, pay increases, lay-offs, discharges, salary adjustments, etc.
It provides information in the form of records about ratings, which may be produced as
evidence when decisions on rating are challenged in a court of law.
It serves to stimulate and guide employee development. Appraisal programmer provide
information on the weaknesses of employees and enable to gauge their own value and
accomplishments and to know what they are doing. The weaknesses provide the bases for
an individual development programmed.
The seven criteria for assessing performance are:

Quality: The degree to which the process or result of carrying out an activity
approaches perfection.
Quantity: The amount produced, expressed in monetary terms, numbers of units or
number of completed activity cycles.
Timeliness: The degree to which an activity or a result produced.
Cost Effectiveness: The degree to which the use of the organization’s resources is
maximized in the sense of getting the highest gain.
Need For Supervision: The degree to which a job performance can carry out a job
function without supervisory assistance.
Interpersonal Impact: The degree to which a performer promotes feelings of selfesteem,
goodwill and co-operation among co-workers and subordinates.
Training: Need for training for improving his skills knowledge The above criteria relate to
past performance and behavior of an employee. There is also the need for assessing the potential
of an employee for future performance, particularly when the
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employee is tipped for assuming greater responsibilities.
Approaches To Performance Appraisal
Generally speaking three approaches are used in making performance appraisal:

A casual, unsystematic, and often haphazard appraisal: This method was commonly
used in the past, but now it has given place to a more formal method, the main basis being
seniority or quantitative measures of quantity and quality of output for the rank-and-file
personnel.
The traditional and highly systematic measurement of: Employee characteristics, and
employee contribution, or both. It evaluates all the performance in the same manner, utilizing the
same approach, so that the ratings obtained of separate personnel are comparable.
The behavior approach, emphasizing mutual goal-setting: This approach is based on the
behavioral value of fundamental trust in the goodness, capability and responsibility of human
beings.
THE EVALUATION PROCESS
The process of evaluation begins with the establishment of .performance standards. At the time
of designing a job and formulating a job description, performance standards are usually
developed for the position. These standards should be clear and not vague, and objective enough
to be understood and measured. These standards should be discussed with the supervisor to find
out which different factors are to be incorporated, weights and points to be given to each factor
and these then should be indicated on the Appraisal Form, and later on used for appraising the
performance of the employee.
The next step is to communicate these standards to the employees, for the employees left to
themselves, would find it difficult to guess what is expected of them. To make communication
effective, .feedback. is necessary from the subordinate to the manager. Satisfactory feedback
ensures that the information communicated by the manager has been received and understood in
the way it was intended.
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The third step is the .measurement of performance.. To determine what actual performance is, it
is necessary to acquire information about it. We should be concerned wit
how we measure and what we measure. Four sources of information are frequently used to
measure actual performance: personal observation, statistical reports, oral reports, and written
reports.
The fourth step is the comparison of actual performance with standards. The employee is
appraise d and judged of his potential for growth and advancement. At the next stage, the results
of appraisal are discussed periodically with the employees, where good points, weak points, and
difficulties are indicated and discussed so that the performance is improved. The information
that subordinate receive about his assessment has a great impact on his self-esteem and on his
subsequent performance. Conveying good news is considerably less difficult for both the manger
and the subordinate than when performance has been below expectation.
The final step is the initiation of corrective action when necessary; immediate corrective action
can be of two types. One is immediate and deals predominantly with symptoms. The other is
basic and delves into causes.
Immediate corrective action is often described as .putting our fires., whereas basic corrective
action gets to the source of deviation and seeks to adjust the difference permanently.
ESTABLISH PERFORMANCE STANDARDS
COMMUNICATE PERFORMANCE EXPECTATION TO EMPLOYEES
MEASURE ACTUAL PERFORMANCE
COMPARE ACTUAL PERFORMANCEWITH STANDARDS
DISCUSS THE APPRAISALWITH THE EMPLOYEE
IF NECESSARY, INITIATE CORRECTIVE ACTION
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METHODS, TECHNIQUES OR TOOLS FOR APPRAISING
PERFORMANCE
Several methods and techniques are available for measurement of the performance of an
employee. The methods and scales differ for obvious reasons.
First, they differ in the sources of traits or qualities to be appraised. The qualities may differ
because of differences in job requirements, statistical requirements and the opinions of the
management.
Second, they differ because of the different kinds of workers who are being rated, viz,, factory
workers, executives or salesmen.
Third, the variations may be caused by the degree of precision attempted in an evaluation.
Finally, they may differ because of the methods used to obtained weightings for various
traits.
Methods of Performance Appraisal
Traditional Method Modern Method

1. Straight Ranking Method 1. Assessment Centre
2. Man-to-man Comparison Method 2. MBO
3. Grading 3. Human Asset Accounting
Method
4. Graphic Rating Scales 4. Behaviorally Anchored
Rating Scale
5.Forced Choice Description
Method
6. Forced Distribution Method
7. Check Lists
8. Free Form Essay Method
9. Critical Incidents
10. Group Appraisal
11. Field Review Method
Traditional Methods
Straight Ranking Method:

It is the oldest and simplest method of performance appraisal, by which the man and his
performance are considered as an entity by the rater. No attempt is made to fractionalize the
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ratee or his performance; the . whole man. is compared with the .whole man., that is, the
ranking of a man in a work group is done against that of another. The relative position of
each man is tested in terms of his numerical rank.
This is a simplest method for separating the most efficient from the least efficient, and relatively
easy to develop and use. But the greatest limitation of this method is that in practice it is very
difficult to compare a single individual with human beings having varying behavior traits.
Paired Comparison Technique:

By this technique, each employee is compared with every trait with all the other person in
pairs one at a time. With this technique, judgment is easier and simpler than with the ordinary
ranking method. The number of times each individual is compared with another is tallied on
a piece of paper. These number yield rank order of the entire group. This method is not suitable
when a group is large because, in that case, the number of judgment becomes excessively large.
Man-to-Man Comparison Method:

The USA army used this technique during the First World War. By this method, certain factors
are selected for the purpose of analysis, and the rater for each factor designs a scale. A scale of
man is also created for each selected factor. The drawback of this technique is that, it is not of
much use because designing of scales is a complicated task.
Grading Method:
Under this system the rater consider certain features and marks them according to a scale.
Selected features may be analytical ability, co-operative ness, dependability, self-expression,
job knowledge, judgment, leadership and organizing ability etc. They may be- Aoutstanding,
B- very good, C- good or average, D- fair, E- poor, and (B- negative) very poor or hopeless.
Graphic or Linear Rating Scale:

This is the most commonly used method of performance appraisal. Under it, a printed form,
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one for each person to be rated. According to jucius, these factors are: employee characteristics
and employee contribution. In employee characteristics are included such qualities as initiative,
leadership, co-operative ness, dependability, industry, attitude, enthusiasm, loyalty, creative
ability, decisiveness, analytical ability, emotional ability, and co-ordination. In the employee
contribution are include the quantity of work, the responsibility assumed, specific goals
achieved, regularity of attendance, leadership offered, attitude towards superiors and associates,
versatility, etc..,
This method was introduced by Walter D. Scott to get the judgment of superiors on
subordinates. The tow important features of this system are:
(a) The person who is making the judgment is freed from direct .quantitative. terms in
making his decision of merit on any quality; and
(b) The person who is making the judgment can make as fine a discrimination of merit
as he chooses.
These two facts eliminate the restrictions on natural judgments, which other rating methods
impose.
To ensure the success of this method, one should:
(a) Obtain the descriptions of persons at two extremes of the performance scale;
(b) Analyze these descriptions into simple behavioral qualities and present these either as
a statement or as trait names;
(c) Establish the descriptions value;
(d) Pair the statement or trait names and preference value;
(e) Pair high and low preference values forming an item;
(f) Prefer instructions for the rater, asking him to choose one .best fit. and one .least
appropriate. statement for the employees;
(g) Validate the technique, determine discriminating responses, and assign weights;
(h) Prepare a scoring key on the basis of responses and weights;
Forced Choice Description Method:
This method was evolved after a great deal of research conducted for the military services during
World War II. It attempts to correct a rater.s tendency to give consistently high or consistently
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low ratings to all the employees. The use of this method calls for objective reporting and
minimum subjective judgment. Under this method, the rating elements are several sets of air
phrase or adjectives relating to job proficiency or personal qualifications. The rater is asked to
indicate which of the four phrases is most and least descriptive pf the employee.
The following statements are illustrative of the type of statements that are used:
(a) Makes little effort and individual instruction;
(b) Organizes the work well;
(c) Lacks the ability to make people feel at ease;
(d) Has a cool, even temperament;
(e) Is punctual and careful;
(f) Is a hard worker and co-operative;
(g) Is dishonest and disloyal;
(h) Is overbearing and disinterested in work.
This method has certain drawbacks such as while choosing two statements from each series;
the rater is unable to introduce personal bias or halo effect, as only one of the favorable and of
the unfavorable phrases in each series is related to success or failure in the job. Further, he also
does not know how .How. or .Low. he is evaluating the individual because he has no access to
the scoring key. This increases the overall objectivity of this method.
Forced Distribution Method:
This system is used to eliminate or minimize raters bias, so that all personnel may not be placed
at the higher end or at the lower end of the scale. It requires the rater to appraise an employee
according to a pre-determined distribution scale. For this purpose, a five-point performance scale
is used without any descriptive statement. Employees are placed between the two extremes of
good and bad performances.
In addition to job performance, employees are rated for promotability. A three-point scale is
often used for this purpose:
Very likely promotional material;
May or may not be promotional material; and
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Very unlikely to be promotional material.
Checklist Method
Under this method, the rater does not evaluate employee performance; he supplies reports
about it and the final rating is done by the personnel department. A series of questions are
presented concerning an employee to his behavior. The rater, then, checks to indicate if the
answer to a question about an employee is positive or negative. The value of each question
may be weighted equally or certain questions may be weighted more heavily than others.
This method suffers from bias on the part of the rater because he can distinguish positive and
negative questions. Secondly, a separate checklist must be developed for different classes of job.
This process can be expensive and time consuming. Thirdly, it is difficult to assemble, analyze,
and weigh a number of statements about employee characteristics and contributions.
Free Essay Method:
Under this method, the supervisor makes a free form, open-ended appraisal of an employee
in his own words and puts down his impressions about the employee. He takes note of these
factors:
Relations wit fellow supervisors and personnel assigned to him;
General organization and planning ability;
Job knowledge and potential;
Employee characteristics and attitudes;
Understanding and application of company policy and procedures;
Production, quality and cost control;
Physical conditions; and
Development needs for future.
There are several advantages of this method. An essay can provide a good deal of
information, specially if the supervisor is asked. The explanation will give specific
information about the employee, and can reveal even more about the supervisor.
However, there are certain drawbacks too:
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It contains a subjective evaluation of the reported behavior of an individual and may
effect such employment decisions as promotion, lay-off, etc.
Some appraisers may be good at narrative appraisal, while others may not have the
facility to write a descriptive report.
The appraisal may be loaded with a flowery language about the quality of the ratee
than with the actual evaluation of performance.
Under this system the supervisor is required to devote considerable time and thought
to the procedure. He has to be critical. The appraisal depends more on the appraiser.s
literary skills than on an employees abilities and performance.
Rater bias is easily introduced into such ratings, since the essay is in the supervisor.s
own words.
Critical Incident Method:
This method was developed following research conducted by the armed forces in the United
States during World War II. The essence of this system is that it attempts to measure workers.
performance in terms of certain .events. or .episodes. that occur in the performance of the ratee.s
job. These events are known as critical incidents. The basis of this method is
the principle that .there are certain significant acts in each employee.s behavior and performance
which make all the difference between success and failure on the job.. However, this method has
significant limitations. These includes:
Negative incidents are generally more noticeable than positive ones.
The recording of incidents is a chore to the supervisor and may be put off and easily
forgotten.
Very close supervision may result, which may not be to the liking of an employee.
Managers may unload a series of complaints about incidents during an annual
performance review session.
The feedback may be too much at one time and appear as a punishment.
Group Appraisal Method:
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Under this method, employees are rated by an appraisal group, consisting of their supervisor and
three or four other supervisors who gave some knowledge of their performance. The supervisor
explains to the group the nature of his subordinates. duties. The group then discusses the
standards of performance for that job, the actual performance of the jobholder, and the causes of
their particular level of performance, and offers suggestions for future improvement, if any. The
advantage of this method is that it is thorough, very simple and is devoid of any bias.
Field Review Method:
Under this method, a trainer employee from the personnel department interviews line supervisors
to evaluate their respective subordinates. The appraiser is fully equipped with definite test
questions, usually memorized in advance, which he puts to the supervisor. The supervisor is
required to give his opinion about the progress of his subordinates, the level of the performance
of each subordinate, his weaknesses, good points, outstanding ability, promo ability, and the
possible plans of action in cases requiring further consideration.
This system is useful for a large organization, and does not suffer from the weaknesses, which
are evident in other systems. The over-all ratings are obtained by largely using a threeway
categorization, viz., outstanding, satisfactory and unsatisfactory. It relieves the supervisor of the
need for filling out appraisal forms. The main defect is that it keeps two management
representatives busy with the appraisal.
General Demerits Of Traditional Techniques
Many of the above traditional performance evaluation techniques have internal weaknesses.
Managers generally are not qualified to assess personality traits, and most managers
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are even not properly trained to conduct evaluation and performance interviews. They
have very vague notions of the purpose of evaluations. Hence, they do a poor job.
Some managers discourage good performance by over-emphasizing shortcomings and
almost neglecting good work.
Others have little effect on poor workers because they tend to sugarcoat their criticisms.
Consequently the real message is lost.
Rater.s personality also plays an important part in the effectiveness of evaluation
programmes. Some raters are by temperament, overtly harsh and give low rating;
some raters play favorites, some are victims of .halo. effect.
The relative status of raters in their organization is a factor that is important to the
validity of performance appraisal. Using more raters or endorsements by a superior reduces rater
bias and increases validity of appraisals.
MODERN METHOD OF APPRAISAL AND CAREER

DEVELOPMENT
As we have seen, most traditional methods emphasize either on the task or the worker.s
personality, while making an appraisal. In order to bring about a balance between these
two, modern methods have been developed. Of such methods, the most important are:
1. Appraisal by Results or Management by Objectives.
2. Assessment Centre Method.
3. Human Asset Accounting Method.
4. Behaviorally Anchored Rating Scales.
APPRAISAL BY RESULTS OR MANAGEMENT BY OBJECTIVES

(MBO)
This method has been evolved by Peter Drucker. MBO is potentially a powerful philosophy of
managing and an effective way for operational sing the evaluation process. It seeks to minimize
external controls and maximize internal motivation through joint goal setting between the
manager and the subordinate and increasing the subordinate.s own control of his work. It
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strongly reinforces the importance of allowing the subordinate to participate actively in the
decisions that affect him directly.
Management by objectives can be described as .a process whereby 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 assessing the contributions of each of its members..
Objectives of MBO:
MBO has an objective in itself. The objective is to change behavior and attitudes towards getting
the job done. In other words, it is results oriented; it is performance that counts. It is
management system and philosophy that stress goals rather than methods. It provides
responsibility and accountability and recognizes that employees have needs for achievement and
self-fulfillment. It meets these needs by providing opportunities for participation in goal-setting
process. Subordinates become involve in planning their own careers.
MBO Process:
Although MBO has something of an aura of mystery about it, it really is fairly simple
procedure. It consists of five basic steps as follows.
1. Set organization goals, i.e., establishment of an organization . wide strategy and goals. Such
goals are expressed clearly and concisely and can be measured accurately. They have to be
periodically revised. They should be challenging: high enough to provide motivation, but not so
high that the are out of reach.
2. Joint goal setting, i.e., establishment of short-term performance targets between the
management and the subordinate in a conference between them. The individual manager must
clarify in his own mind the responsibilities of their subordinates. Organization Charts and Job
Descriptions may be used.
The manager may ask his subordinates how he personally can help achieve these goals, and
request suggestions. The goals set should be flexible enough to accommodate new ideas, and
they should stress individual responsibility. The goals should be specific, and clear and should
be quantified for easier measurement;
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3. Performance reviews, i.e., frequent performance review meetings between the managers and
the subordinate. During the initial stages of the MBO programme, monthly review may be used
and then extended to quarterly reviews. For maximum effectiveness, reviews probably should be
made more often than once each year.
4. Set check posts, i.e, establishment of major check post to measure progress. The quirk of
human nature demands that the manger be constantly alert and exercise sound judgment.
However, as subordinate learns to establish objectives and direct activities towards their goals,
the rate of control and amount of checking gradually can be decreased.
5. Feedback, The employees who receive frequent feedback concerning their Performance are
more highly motivated than those who do not feedback that is specific, relevant, and timely helps
satisfy the need most people fell about knowing where they stand. Thus, under MBO
programme, an employee and his supervisor meet and together define, establish, and set certain
goals or objectives which the employee would attempt to achieve within the period of prescribed
time. They also discuss the ways and methods of measuring employee progress. The goals,
which are set, are work-related and career oriented. The employee periodically meets his
supervisor to evaluate the employee.s goals progress. If necessary, these goals may be revised.
Frequent feedback and supervisor subordinate interaction are the other key features of this
method. The supervisor plays supportive, counseling and coaching roles.
In sum, the three foundations of MBO are:

Goal-setting
Feedback
Participation
BENEFITS OF MBO PROGRAMME:

MBO is an important performance tool. It has certain advantages.
MBO helps and increase employee motivation because it relates overall goals to the
individual.s goals; and helps to increase an employee.s understanding of where the
organization is and where it is heading.
Managers are more likely to compete with themselves than with other managers. The
kind of evaluation can reduce internal conflicts that often arise when manger compete
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with each other to obtain scarce resources.
MBO results in a .means ends. chain. Management at succeeding lower levels in the
organization established targets, which are integrated with those at the next higher level. Thus, it
can help insure that trinity is ultimately aimed toward organization.s goals.
MBO reduces role conflict ambiguity. Role conflict exist when a person is faced with
conflicting demands from two or more supervisors; and role ambiguity exist when a person is
uncertain as to how he will be evaluated, or what he has to achieve. Such MBO aims at
providing clear targets and their order or priority, it reduces both these situations.
MBO provides more objective appraisal criteria. The targets that emerge from the MBO
process provide a sound set of criteria for evaluating the manager.s performance.
MBO forces and aids in planning. By forcing top management to establish a strategy
and goals for the entire organization; and by requiring other mangers to set their targets and plan
how to reach them.
MBO identifies problems better and early. Frequent performance review sessions make this
possible.
MBO identifies performance deficiencies and enables the management and the employees
to set individualized self-improvement goals and thus proves effective in training and
development of people.
MBO helps the individual manger to develop personal leadership, especially the skills of
listening, planning, counseling, motivating and evaluating. This approach to managing instills a
personal commitment to respond positively to the organizations major concerns as well as to the
development of human assets. Such a manger has a far greater chance to move ahead within the
management hierarchy than the non- MBO type.
MBO has some drawbacks also:

MBO programme takes a great deal of time, energy and from completing on the part of
managers. An individual becomes so enmeshed in performing assigned functions that he often
loses sight of the goal, the reason for performance. It has been called .the activity trap. by
Odiorne. It requires a great deal of investment of the top management time and effort before it
arrives at realistic targets and reviews the performance.
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MBO is far from panacea. Those executives who have been involved very often find it
difficult to apply MBO concepts to their own work habits. They find it hard to think about the
results of work rather than the work itself. They tend to over emphasize goals that are easy to
quantify, sometimes forgetting that workers often behave almost like children at play. when the
game no longer challenges, interest is soon lost.
In some areas, such as cutting costs or increasing scales, measuring performance is a
straightforward and more or less objective matter. But in many other areas, such as subordinate
development, appraising performance can be an acute problem.
Many times neither the manager knows the rationale and value of MBO, nor the
subordinates are clear about the goals. This unnecessarily becomes more exasperating.
There is sometimes a .tug of war. in which the subordinate tries to set the lowest
targets possible and the supervisor the highest.
2. ASSESSMENT CENTRE METHOD:

The Assessment center concept was initially applied to military situations by Simoniet in the
army in the 1930s and the war Office Selection Board of the British army in the 1960s. The
purpose of this method was and is to test candidates in a social situation, using a number of
assessors and a variety of procedures. The most important feature of the assessment center is
job-related simulations. These stimulations involve characteristics that managers feel are
important to the job success. The evaluators observe and evaluate participants as they perform
activities commonly found in these higher-level jobs.
Under this method, many evaluators join together to judge employee performance in several
situations with the use of a variety of criteria. It is used mostly to help select employees for
the first level supervisory positions. Assessments are made to determine employee potential
for purpose of promotion. The assessment is generally done with the help of a couple of
employees and involves a paper-and-pencil test, interviews and situational exercises. Some
of the other features of this system are:
(a) The use of situational exercises
(b) Evaluators are drawn from experienced managers with proven ability at different levels of
management;
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(c) They evaluate all employees, both individually and collectively, and each candidate is given
one of the three categories: more than acceptable, less than acceptable and unacceptable;
(d) A summary report is prepared by the members, and feedback on a face-to-face basis
is administered to all the candidates who ask for it.
Purpose of Assessment Centers:
Assessment centers are used for the following purpose:
1. To measure potential for first level supervision, sales and upper management positions; and
also for higher levels of management for development purposes.
2. To determining individual training and development needs of employees.
3. To select recent college students for entry level positions.
4. To provide more accurate human resource planning information.
5. To make an early determination of potential.
6. To assist in implementing affirmative action goals.
3. 360 DEGREE PERFORMANCE APPRAISAL:
The appraisal may be any person who has through knowledge about the job done by contents to
be appraised, standards of contents and who observes the employee while performing a job. The
appraiser should be capable of determining what is more important and what is relatively less
important. He should asses the performance without bias. The appraisers are supervisor, peers,
subordinates employees themselves users of service and consultants. Performance appraisal by
all these parties is called 360 degree appraisal.
4. HUMAN ASSET ACCOUNTING METHOD:
The human asset accounting method refers to activity devoted to attaching money estimates to
the value of a firm. internal human organization and its external customer goodwill. If able, well-
trained personnel leave a firm, the human organization is worthless; if they join it, its human
asset are increased. If distrust and conflict prevail, the human enterprise is devalued. If teamwork
and high morale prevail, the human organization is a very valuable asset. The current value of a
firm.s human organization can be appraised by developed procedures, by undertaking periodic
measurement of .key causal. and .intervening enterprise. variables. They key causal variables
include the structure of an organization.s management policies,
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decisions, business leadership, strategies, skills and behavior. The intervening variables reflect
the internal state and health of an organization. They include loyalties, attitudes, motivations,
and collective capacity for effective interaction, communication and decisionmaking These two
types of variable measurements must be made over several years to provide the needed data for
the computation of the human asset accounting.
5. BEHAVIOURALLY ANCHORED RATING SCALES (BARS):
This is a new appraisal technique which has recently been developed. Its supporter claim that
it provides better, more equitable appraisals as compared to other techniques. The procedure
for BARS is usually five stepped.
1. Generally Critical Incident:

Persons with knowledge of the job to be appraised are asked to described specific illustrations of
effective performance behavior.
2. Develop Performance Dimensions:
These people then cluster the incidents into a smaller set of performance dimensions. Each
cluster is then defined.
3. Reallocate Incidents:
Any group of people who also know the job then reallocate the original critical incidents. They
are given the cluster.s definitions, and critical incidents, and asked to redesign each incident to
the dimension it best describes. Typically a critical incident is retained if some
percentage of this group assign it to the same cluster as the previous group did.
4. Scale of Incidents:
This second group is generally asked to rate the behavior described in the incident as to how
effectively or ineffectively it represents performance on the
appropriate dimension.
5. Develop Final Instrument:
A subset of incidents are used as .behavior anchors. for the performance dimensions.
HOWAPPRAISAL MAY BE MADE SUCCESSFUL?
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The rater must be thoroughly well-versed in the philosophy and nature of the rating system.
Factors and factor scales must be thoroughly defined, analyzed, and discussed. The success of an
appraisal programme depends upon:
The existence of an atmosphere of confidence and trust so that both supervisor and
employee may discuss matters frankly and offer suggestions which may be beneficial for the
organization and for an improvement of the employee.
The supervisor must very thoroughly evaluate the employees performance so that he
is capable of meeting challenges about his ratings of his subordinate.
The result of performance rather than personality traits should be given due weight.
Suggestions for improvement should be directed towards the objective facts of the job. Plans for
the future must be developed jointly after consultation with subordinates. The individual as a
person should never be criticized.
The supervisor should try to analyze the strengths and weaknesses of an employee
and advise him on correcting the weaknesses.
The appraisal programme should be less time-consuming and less costly. At the same
time, it should bring the maximum benefit.
Which particular technique is to be adopted for appraisal should be governed by such
factors as the size, financial resources, philosophy and objectives of an organization.
The result of the appraisal, particularly when they are negative, should be immediately
communicated to the employees, so that they may try to improve their performance.
A post-appraisal interview should be arranged so that employees may be supplied with
feedback and the organization may know the difficulties under which employees work, so that
their training needs may be discovered.
ETHICS OF APPRAISAL:
In any performance appraisal, due consideration must be given to the ethics of appraisal, failing
which many organizational problems may crop up and the very purpose of appraisal may be
defeated. M.S.Kellog has suggested the following do’s and don’ts.
Don’t appraise without knowing why the appraisal is needed;
Appraise on the basis of representative information;
Appraise on the basis of sufficient information;
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Appraise on the basis of relevant information;
Be honest on your assessment of all the facts you have obtained;
Don’t write on thing and say another;
In offering an appraisal, make it plain that this is only your personal opinion of the
facts as you see them;
Pass on appraisal information only to those who have good reason to want it;
Don’t imply the existence of an appraisal that has not been made;
Don’t accept another’s appraisal without knowing the basis on which it was made.
1.Introduction to Performance Management System (PMS)
1.1 Philosophy of Performance Management System
To build a culture of performance by aligning individual and organizational objectives and

encouraging open communication and continuous feedback.
1.2 Objectives
 To accomplish the overall organizational vision and mission by linking individual

Performance to company objectives
 To cascade company’s strategic goals to individual level
 To promote professional excellence
 To encourage two-way communication between the executive and the reporting officer
And bring about transparency in the performance assessment process
 To evaluate the potential of the executive to assume higher responsibilities in the
Organization
 To provide a source of talent for meeting the organization’s growth requirements through
a process of mapping the competencies and potential of executives
 To translate future skill requirements of the organization into individual development
plans,
 To identify high performers and recognize them through rewards and incentives, and
 To facilitate fulfillment of individual aspirations
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PMS Cycle
2.1 Performance Assessment years
Performance assessment years have been set up as follows:

For E6 and above:
The performance assessment year commences from 1stApril of each year and continues until
31stMarch of the following year
For E1 . E5:
The performance assessment year commences from 1st January of each year and continues
until 31stDecember of the same year.
2.2 PMS Process
The PMS process is broadly divided into the following stages:
 Performance Planning
 Mid Year Review
 Annual Assessment
 Normalization
 Feedback, coaching and Counseling
2.2.1 Performance Planning
Performance Planning is the process of:

 Defining expectations i.e. the work to be done, the results/targets to be achieved and
Skills/competencies needed to achieve these objectives
 Setting .Measures. and .Targets., determining priorities and weight ages of results to be
achieved
 Identifying and allocating appropriate resources (such as manpower, tools, training,
Budget etc.) To enable the executive to achieve the targets. While defining work
objectives and measures, it is necessary to ensure that:
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 Goals/ Targets/ Objectives are SMART (Specific, Measurable, Agreed, Realistic and
Time bound)
 Results are substantially within the executive.s control
 Measures relate to results
 Data is available for measurement
 Agreement on mutually agreeable and achievable performance targets is arrived at after
Sufficient discussion between reporting officer and executive has taken place.
2.2.2 Mid Year Review
Performance management is not an event but an ongoing process. Mid year reviews help in
the following ways:
Reinforcing good performance in time
Updating the status of targets i.e. progress review
Identifying areas for .mid-course. correction
Revisiting KPAs and goals, if necessary
Assessing resource and skill requirements affecting the individual.s performance
Discussion and feedback on functional competencies, managerial competencies,
Potential competencies and core values actualization
Providing early warnings of non-performance, i.e. avoiding year end surprises
2.2.3 Annual Assessment
The objectives of Annual Assessment are to:

Discuss and arrive at an assessment of performance with respect to agreed targets
Assess the competencies, potential and core values actualization by the individual
Agree upon improvement plans and development needs for the individual.
2.2.4 Normalization
The objectives of the Normalization System in PMS are to:

Ensure parity and integrity by minimizing variation in rating by different reporting
officers across various departments and locations
Enhance objectivity and transparency in the appraisal system
To view individual performance from the perspective of organizational Achievement.
45
REVAITM,BENGALURU.
2.2.5 Feedback, Coaching and Counseling
In order to make PMS an open system and to enhance development orientation across the
organization; feedback, coaching and counseling are essential components. Communicating
the final performance results of the executive and providing developmental feedback are
critical to this process.
2.2.5.1 Feedback
Providing feedback on performance presents the following benefits:

Creates transparency making PMS more acceptable to individuals
Reinforces good performance on time
Enables development of coaching and mentoring relationship between reporting
Officer and executive
Ensures that organizational objectives are achieved to an acceptable standard and in
an acceptable form Providing performance feedback is a delicate matter and the reporting officer
should create suitable conditions for providing performance feedback in the most effective
manner. (Refer to appendix for tips to reporting officers on conducting effective appraisal
meetings.) In general:
Feedback should be focused on the specific performance actions and not on the Personality
of the executive
Feedback should be generated after reviewing all achievements and issues. Throughout the
assessment period and not focused on isolated incidents
Feedback calls for maintaining a log of critical incidents occurring during the Assessment
period for recording both achievements and failures with details, as an aid to memory during
performance discussions with the executive
Feedback be given as regularly as possible so that enough opportunities are Created
for executive to bridge performance gaps through self-development.
46
REVAITM,BENGALURU.
2.2.5.2 Coaching and Counseling
Coaching is an on-the-job approach to help individuals to develop and raise their skills and
levels of competence.
Coaching typically consists of:
Making executives aware of how well they are performing and their present level Of
knowledge and skill
Providing guidance to individuals to enable them to complete their work Satisfactorily
Motivating individuals to learn new skills and develop themselves
Facilitating individuals to raise their level of contribution and achievement. Counseling in
the PMS context essentially is a process by which executives can receive Assistance in sorting
out issues and related to current and future responsibilities and Aspirations. Therefore, reporting
officers are required to encourage individuals to plan for their own self-development. The
process of counseling is through:
Recognition and understanding of existing strengths
Empowering, i.e. enabling the individual to recognize their own problems and Expressing
the same.
Facilitating action through guidance and expertise, i.e. facilitating the process. Whereby the
individual evaluates alternatives and formulates action plans to Achieve the most suitable course
of action
Helping individuals to take ownership of the outcomes of their chosen action. Coaching and
counseling together act as a feedback mechanism for the individual on His/her performance. It is
often used by reviewer/reporting officer to communicate the Areas for development and
improvement to the executive.
47
REVAITM,BENGALURU.
Table no 1: Was the goal-setting done within 30 days of joining?
Attributes No of Percentage
respondents
Yes 17 34
no 33 66
total 50 100
GOAL SETTING
34%
YES
NO
66%
Interpretation:
As per the Above Graph we can say that goal setting part has to be taken care
48
REVAITM,BENGALURU.
Table no 2: What is the basis of the goal setting?
Attributes No of Percentage
respondents
Target 4 8
Performanc 30 60
e
general 13 26
others 3 6
total 50 100
basis of the goal setting
6% 8%
target
26% performance
general
others
60%
Interpretation:
According to the above table we can say that the goal setting is different for different departments with
regardance to their work profile.
49
REVAITM,BENGALURU.
Table no 3: I had the opportunity to bring out issues to bring out all my issues
during the last feedback?
Attributes No of
respondents
Strongly 0
Agree
S.Disagree 0
Disagree 05
Neutral 19
Agree 26
Total 50
30
26
25
19
20
15
10
5
5
0 0
0
strongly agree agree strongly disagree disagree neutral
Interpretation:
According to the above table we can say that the goal setting is different for different departments with
regardance to their work profile.
50
REVAITM,BENGALURU.
Table no 4: My manager was receptive during the feedback session?
Attributes No of
respondents
Strongly Agree 5
S.Disagree 0
Disagree 05
Neutral 22
Agree 18
Total 50
Feed Back
22
18
5 5
Interpretation:
As per the above table and Graph We can say that the feed back session with the manager was
effective.
51
REVAITM,BENGALURU.
Table no 5: All issues were addressed or planned to be addressed?
Attributes No of
respondents
Strongly Agree 0
S.Disagree 0
Disagree 04
Neutral 18
Agree 24
Total 50
30
25
20
15 28
10 18
5
0 0 4
0
Interpretation:
As per the table shown above the interpretation would be the issues are addressed and planned to be
addressed to the manager.
52
REVAITM,BENGALURU.
Table no 6: The discussion really helped in improving my performance?
Attributes No of
respondents
Strongly Agree 11
S.Disagree 0
Disagree 05
Neutral 10
Agree 24
Total 50
neutral 10
disagree 5
strongly disagree 0
agree 24
strongly agree 11
0 5 10 15 20 25
Interpretation:
As per the above data we can interpret that the performance of the employees had improved after the
discussion with the manager.
53
REVAITM,BENGALURU.
Table no 7: My relationship with my manager improved after the discussion

Attributes No of
respondents
Strongly Agree 07
S.Disagree 0
Disagree 05
Neutral 13
Agree 27
Total 50
Relationship Improvement
30
25 27
20
15
13
10
5 7
5
0
0
Interpretation:
As the relationship with the manager is improved after the discussion we can interpret that the discussion
is useful.
54
REVAITM,BENGALURU.
Attributes Response
Yes 33
Table no No 17
8: Do you perceive fairness
in performance evaluation?
Total 50
Chart Title
34%
yes
No
66%
Interpretation:
55
REVAITM,BENGALURU.
The Number of employees who had opted for is for the fairness in the performance evaluation so we
can say that the evaluation can be done accordingly.
Table no 9: How would you rate your level of satisfaction for the Performance
Appraisal System?
Attributes Response
H.Satisfied 3
Satisfied 21
Neutral 19
Disagree 7
H.dissatisfied 0
Total 50
56
REVAITM,BENGALURU.
Attributes Response
Yes 32
No 18
Total 50
25
20
15
21
10 19
5 7
3 0
0
Highly Satisfied Satisfied Neutral Dis Agree highly Dissatisfied
Interpretation: As we can see the data above that the level of satisfaction is fair and we can say that
The employees are satisfied with the performance appraisal system.
Table no 9: There was progress on the last review discussion?
57
REVAITM,BENGALURU.
Review Discussion
yes
No
36%
64%
Interpretation: The Data clearly states that the Progress in the last review discussion was very good
and the employees are making it useful.
Table no 10: Rate the Importance of following characteristics of a good

Performance Management System?
Attributes Description
Not Important 1
Somewhat Important 8
58
REVAITM,BENGALURU.
Important 15
Very. Important 20
Extremely Important 6
Total 50
20
20
18 15
16
14
12
10 8
8 6
6
4 1
2
0
nt nt nt nt nt
r ta r ta r ta r ta r ta
po po po po po
Im Im Im Im Im
t t
No ha Ve
ry ely
ew tr em
m
So Ex
Interpretation: The opinion of the employees differs from each other and it mainly depends on the
employees preferences.
Table no 11: Is Performance Appraisal linked with the following?

Yes 33
No 17
Total 50
59
REVAITM,BENGALURU.
Salary
yes
34% no
66%
Interpretation: There is much weightage for the salary and there is a link with the Performance.
Yes 25
No 25
Total 50
60
REVAITM,BENGALURU.
Promotion
yes
no
50% 50%
Interpretation: Equal Priority is given to the promotion half of their opinion is that its not much
prioritized.
Yes 27
No 23
Total 50
61
REVAITM,BENGALURU.
Improvement in Performance
23
No
27
Yes
Interpretation: Majority of Employees feel that there is Importance for the improvement in
Performance.
Table no 11: Does the organization provide any training to the employees who
are less productive?
Yes 27
No 23
Total 50 62
REVAITM,BENGALURU.
Training
40%
Yes
No
60%
FINDINGS AND RECOMMENDATIONS

 The goal-setting process was done for 34% of employees and it was not done for66%
of employees.
 The mid – review was conducted for 98% of the employees and it was not
conducted for one employee as the person was on a long leave.
 The annual performance review was conducted for 99% of employees and it did
63
REVAITM,BENGALURU.
not happen for one employee who was onsite.
 Nearly 66% of the employees agree that they had an opportunity to bring out their
issues during the feedback process and 7% of the employees disagree for the same
as they feel there was no enough time to discuss during the review session.
 The employees who felt that their manager was not receptive during the feedback
session were of the opinion that their manager had a fixed mindset during the
review session and were not open for discussions
 The employees felt that there is no proper mechanism to address the issues and
some were of the opinion that it will tae time to address certain issues which were
beyond the control of the manager.
 The employees feel though the areas of improvement are revealed in the review
process, no steps to overcome the weaknesses and improve the performance are
suggested by the manager.
 The discussions are too formal and the employees’ problems outside the work
area are not taken into account which may affect his performance
 Most of the employees feel that their relationship with their manager has always
been the same.
 50% of the employees are high on their role clarity and the rest feel that it was
never discussed during the review process and they needed a role change
 Employees whose appraisal rating affected negatively because they worked under
two managers feel that there was no proper communication between the two
managers.
 25% of the employees who perceived that the performance appraisal system as
unfair believed that the there was no fixed criteria across the organization and it
lacked transparency. This also reflected on the satisfaction level of employees on
the Performance Appraisal system in the organization.
 The entire review process was based on opinion of the manager rather than facts.
Recommendations
DUSTERS currently follows a feedback procedure which is a one-way feedback process
64
REVAITM,BENGALURU.
Wherein the manager gives his feedback to the employees about their performance. During the
post-review feedback survey, it was revealed that most of the employees feel that the manager’s
opinion can be biased and it is not supported by facts but purely based on the opinion of the
manager. This has a great repercussion on the motivation level of the employees which in turn
will affect the performance of the employees. The current performance review process lacks
customer orientation. Keeping in view the above factors, 360-degree feedback process can be
implemented.
360-degree feedback involves systematic collection and feedback of performance of data

on an individual or group derived from a number of the stakeholders on their performance. The
data is usually fed back in the form of ratings against various performance dimensions.
CONCLUSION
Managing employee performance is an integral part of the work that all managers and rating
officials perform throughout the year. It is as important as managing financial resources and
program outcomes because employee performance or the lack thereof, has a profound effect on
both the financial and overall objectives of any organization.
65
REVAITM,BENGALURU.
Research studies show that employees are likely to feel more satisfied with their appraisal result
if they have the chance to talk freely and discuss their performance. It is also more likely that
such employees will be better able to meet future performance goals. Employees are also more
likely to feel that the appraisal process is fair if they are given a chance to talk about their
performance. This is especially true when they are permitted to challenge and appeal against
their evaluation. It is very important that employees recognize that negative appraisal feedback is
provided with a constructive intention, i.e., to help them overcome present difficulties and to
improve their future performance. Employees will be less anxious about criticism, and more
likely to find it useful, when they believe that the appraiser's intentions are helpful and
constructive. In contrast, "destructive criticism" - which is vague, ill-informed, unfair or harshly
presented – will lead to problems such as anger, resentment, tension and workplace conflict, as
well as increased resistance to improvement, denial of problems, and poorer performance.
Goal-setting is an important element in employee motivation. Goals can stimulate employee
effort, focus attention, increase persistence, and encourage employees to find new and better
ways to work. The useful of goals as a stimulus to human motivation is one of the best supported
theories in management. It is also quite clear that goals which are specific, difficult and accepted
by employees will lead to higher levels of performance than easy, vague goals (such as doing
one’s best) or no goals at all. It is important that the appraiser (usually the employee's manager)
be well-informed and credible. Appraisers should feel comfortable with the techniques of
appraisal, and should be knowledgeable about the employee's job and performance. When these
conditions exist, employees are more likely to view the PMS process as accurate and fair. They
also express more acceptance of the manager’s feedback and a greater willingness to change for
the overall benefit of the organization.
A study on
“Effectiveness Of Performance Management System”
In Hospitality Sector
Organization__________________
66
REVAITM,BENGALURU.
Department __________________
Length of Service ______________
Designation ___________________
Name ________
Sir/ Madam,
Please answer all the questions. There is no right or wrong answers. I assure you that the
information collected will be used research purposes only.
1. Joining date at the organization:
2. Was the goal-setting done within 30 days of joining?
Yes/No
3. Which month did the goal-setting take place last?
________________________________________
4. What is the basis of the goal setting?
Target basis ( ) Performance Basis ( )
General Basis ( ) Others ( )
5. I had the opportunity to bring out issues to bring out all my issues during the last
feedback
Strongly Disagree ( )
Disagree ( )
Neutral ( )
Agree ( )
Strongly Agree ( )
Comments___________________________________________________
6. My manager was receptive during the feedback session

67
REVAITM,BENGALURU.
Disagree ( )
Neutral ( )
Agree ( )
Strongly Agree ( )
Comments _______________________________________________________
7. All issues were addressed or planned to be addressed
Disagree ( )
Neutral ( )
Agree ( )
Strongly Agree ( )
Comments _______________________________________________________
8. The discussion really helped in improving my performance
Disagree ( )
Neutral ( )
Agree ( )
Strongly Agree ( )
Comments ___________________________________________________
9. My relationship with my manager improved after the discussion
Disagree ( )
Neutral ( )
Agree ( )
Strongly Agree ( )
Comments _______________________________________________________
10. Do you perceive fairness in performance evaluation?
Yes /No
11. How would you rate your level of satisfaction for the Performance Appraisal
System?
Highly Satisfied ( )
Satisfied ( )
Neutral ( )
68
REVAITM,BENGALURU.
Dissatisfied ( )
Highly Dissatisfied ( )
12. There was progress on the last review discussion
Yes/ No
Comments _______________________________________________________
13. Rate the Importance of following characteristics of a good Performance Management

System---
Not Somewhat Important Very Extremely

Important Important Important Important
( ) ( ) ( ) ( ) ( )
14. Is Performance Appraisal linked with the following?
1. Salary Yes/No
2. Promotion Yes/No
3. Benefits Yes/No
4. Improvement In Performance Yes/No
15. Does the organization provide any training to the employees who are less productive?
Yes ( ) No ( )
16. Rank the following parameters of Performance Appraisal according to your perception of
their importance on a scale of 100?
1 Quality of work
2 Quantity of work
3 Job Knowledge
69
4REVAITM,BENGALURU.
Dependability
5 Attitude
Q17.What Suggestions would you give to improve the Performance Appraisal System in
your organization?
__________________________________________________________________
__________________________________________________________________
_____________________________________________________________________________
___________________________________________________
Thanks for your Precious Time..
BIBLIOGRAPHY
BOOKS AND JOURNALS

• Ashwathappa, Human Resources and Personnel Management, 3rd edition (199-239)
• Wayne. F. Casico, Managing Human Resources, 6th edition (328-363)
• Peter Ward, 360 Degree Feedback (3-38)
• Radha R Sharma,360 Degree Feedback, Competency Mapping and
70
REVAITM,BENGALURU.
Assessment Centre’s(4-26)
• D.A. Hume, Reward Management for Motivation, Performance & Results (35-54)
• Cooper and Schindler, Business Research Methods, 9th edition(144-422)
• Alan Bryman, Emma Bell, Business Research Methods(67-257)
WEBSITES
• www.hrvillage.com
• www.citehr.com
71
REVAITM,BENGALURU.

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Effectiveness Of Performance Management System In Hospitality sector

HOSPITALITY INDUSTRY IN INDIA

Hospitality segment, just like many other segments in India is booming at an

HOUSEKEEPING ORGANIZATIONS:THEIR HISTORY, PURPOSE,

By definition, hospitality is the cordial and generous reception and entertainment of

a. Background and inception of the company:

 Leading Facilty Maintenance/ Management Services (FMS) company in Bangalore, IT capital of

 Client Base of 350+ including many worldwide reputed firms

“TO GROW AS A PREFERRED PARTNER PROVIDING BENCHMARKED SOFT SERVICES

Work Flow System

Chart showing the distribution of the market

 People who are experienced in operating different kinds of elevators

Mail room services

Garden & Lawn Maintenance

 Operations & Management of Daily Schedules

Pest Control Services

 Design Pest Control Schedules

Competitors in the Industry

Paradigm Property and Facility Management Services

DMARC Services Pvt. Ltd.,

Acme Facility Management Services Pvt. Ltd

Carewel Facilities India Pvt. Ltd

Handiman Services Limited

 Presence in 5 main cities in the south

 Merger with TOTAL SOLUTIONS

 Growth in BPO, IT sector

 Boom in retail sector

 Large unorganized segment

 Growing competitors (local and international players)

5. ANALYSIS OF FINANCIAL STATEMENT:

Balance sheet for the year ended 2008-2009

Capital Account 100000.00 Fixed Assets 36067753.78

Mckensy’s 7S frame work with special reference to

Current situation (Part-A)

Shared Strategy Structure Systems Style Staffs Skills

Shared Strategy Structure Systems Style Staffs Skills

As there is no proper hierarchy maintained in the organisation it might lead to problems in

OBJECTIVES OF THE STUDY

Trends in Employee Appraisal

IMPORTANCE AND PURPOSES

The seven criteria for assessing performance are:

Approaches To Performance Appraisal

Generally speaking three approaches are used in making performance appraisal:

THE EVALUATION PROCESS

ESTABLISH PERFORMANCE STANDARDS

COMMUNICATE PERFORMANCE EXPECTATION TO EMPLOYEES

MEASURE ACTUAL PERFORMANCE

COMPARE ACTUAL PERFORMANCEWITH STANDARDS

DISCUSS THE APPRAISALWITH THE EMPLOYEE

IF NECESSARY, INITIATE CORRECTIVE ACTION

Methods of Performance Appraisal

Traditional Method Modern Method

Straight Ranking Method:

Paired Comparison Technique:

Man-to-Man Comparison Method:

Graphic or Linear Rating Scale:

Forced Choice Description Method:

Forced Distribution Method:

Free Essay Method:

However, there are certain drawbacks too:

Critical Incident Method:

Group Appraisal Method: