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PERFORMANCE APPRAISALS AND EVALUATION OF EMPLOYEE SATISFACTION

1. TITLE OF THE PROJECT
A STUDY ON DIFFERENT APPROACHES OF PERFORMANCE APPRAISALS AND
EVALUATION OF EMPLOYEE SATISFACTION: A SPECIFIC STUDY IN SOFTWARE
AND
COMMUNICATION INDUSTRY
2. EXECUTIVE SUMMARY
Performance appraisal is an important HRD mechanism. It is the process of evaluating
theperformance of employees in terms of the requirements of the job for which they are
employedfor administrative purpose, including suitable placement, selection, promotion, giving
financialrewards and other action which require differential treatment between the members if a
groupas distinguished from actions affecting all the members equally. Earlier performance
appraisalwas considered as a simple and confidential method of rating the job performance of
individualemployees by their superiors for the purpose of giving those remarks and rewards.
Earlyappraisal systems stressed assessment of personality tracts, which were difficult not only
tomeasure but also to relate constructively to the job itself. The purpose of
performanceevaluation is to generate information to support administrative decisions. The
difficulties inmeasuring performance in software companies like the performance evaluations are
highlysubjective. Goal setting is ineffective when goals are too simple, when goals of not
constitute thegoal job, when goal attainment is difficult to prove or measure, when performance
is the resultof term efforts, peer and subordinate rating not followed no incentive for
performance,implementation of the appraisal system may not be as planned because of time
constraint andspan of reports. Over a period of time appraisal become a ritual.
To address the above a study was conducted to study the different approaches of
appraisalsadopted by software companies. A sample of 30 software companies was taken. A
structurequestionnaire was administered to HR managers/ executives of different companies to
elicit theinformation.
Major findings of the study include the most common type of appraisal is the open system
followedby MBO, a few companies followed 360 feedback while most of the companies are
planning toimplement this powerful new model for employee assessment and performance
improvement. Thepositive areas/benefits of the appraisal system followed included training and
development inputs,career planning, and objectiveI setting etc.
PERFORMANCE APPRAISALS AND EVALUATION OF EMPLOYEE SATISFACTION
The criteria or measures to evaluate an employee in most of the companies are
technicalcompetence, performance, achievement vs. objectives, key result areas set at the
beginning of aspecific period, forming result oriented areas, leadership skills, team work, attitude
are behaviororiented areas compensation increase is related to performance and depended on the
performancecode/rating give. Target is set for employee being appraised for a period of 6
months; checklist forcarrying out appraisals and carrier planning is followed.
360° feedback process gives an all round perspective restricting the inconsistency factor that
exist intraditional appraisal system. Organizations remove layers of management, flatten their
structure, andbegin using self-directed terms; the, only practical option for performance feedback
is from multiplesources. As organization changes their culture to align with their vision and
values, 360° feedbacksbecomes an ideal choice to communicate the new competencies required
by the new values.
3. STATEMENT ABOUT THE PROBLEM
The research intends to study the different approaches of appraisals adopted by software
Companiesand employee attitude, employee Satisfaction and industrial morale. It also analyses
the mostcommonly occurring errors within performance appraisal methods and to understand the
level ofeffectiveness of 360º appraisal in the industry
3.1 NEED AND IMPORTANCE OF THE STUDY
This study is conducted with respect to understanding the different appraisal
systemsconducted in the software industry and their effects thereafter in the same. Due to time
and resourceconstraints, the study was restricted to the software industry in Delhi Region .
3.2 OBJECTIVES OF THE RESEARCH
1. To find out the different appraisal systems followed by software companies.
2. To find out who appraises the employees.
3. To analyze and study the benefits of the appraisal systems.
4. To analyze the shortcomings of the appraisal systems.
Ò. To identify the criteria and measures adopted to evaluate employee performance.
6. To find out the level of effectiveness of the 360 degree feedbacks.
3.3 REVIEW OF LITERATURE
Purpose
PERFORMANCE APPRAISALS AND EVALUATION OF EMPLOYEE SATISFACTION
The literature review section examines the importance of search studies, company data
orindustry reports that serve as a foundation for the setup of study. The research dimension of
therelated literature and the relevant information begins from an explanatory perspective,
approachingtowards specific studies which do related to the judge the limitations and
informational gaps in datafrom the secondary sources.
This analysis may reveal conclusions from past studies to realize the reliability of
thesecondary sources and their credibility. This in turn enables one to rely on a comprehensive
reviewfor the study.
ANALYSIS OF PREVIOUS STUDY
A survey about current practice, which is followed in companies to appraise performance:
( Phatak, International Dimensions of Management)
Almost all software companies responding do have formal appraisal programs.About 93%
ofsmaller organizations (those with fewer than Ò00 employees) have such programs.About
97%of large organizations have them.
Rating scales are by far the most widely used appraisal technique.About 62% of small
organizationuse rating scales, 20% use essays, and about 19% use MBO.Among the large
organizations, Ò1%use rating scales, just over 23% use essays and about 17% use MBO.
However, those using ratings as the main appraisal technique typically also require
narrativecomments to justify rating and to describe employee strengths and weakness and
documentdevelopment plans.Those using essays as the main appraisal technique usually require
an overallquantitative performance rating to facilitate employee comparisons for compensation
decisions.
The employee¶s immediate supervisor makes Ninety two percent of appraisals.These appraisals
arein turn reviewed by the appraiser¶s supervisor in 74% of the responding organizations. Only
about7% of the organizations use self-appraisal in any part of the overall appraisal process.
Virtually allemployees (99%) are informed of the results of their appraisals. Overall about 77%
are given achance to respond with written comments on their appraisals. In 69% of companies,
appraisals aredone annually.
METHODS OF REVIEWING THE LITERATURE

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PERFORMANCE APPRAISALS AND EVALUATION OF EMPLOYEE SATISFACTION
The review of literature does scrutinize the important research studies.The primary
sourcesthat provide relevant information are the best form to retrieve data from the research.The
primarysources were encouraged with the help of distribution of questioners as well as
conducting personalinterviews.With this the data received enables the researcher to accurately
arrive at the problem ofthe study and the consecutively solutions to the same.The secondary
sources were also relied onfor additional information.It includes company journal, newsletters,
records, manuals etc.
CONCLUSION
Performance management lays an evaluative and developmental dimension to its makeup, and
iscrucial in both linking rewards to performance and providing a platform for the development
ofemployees. Over concentration on the assessment of performance can work to the detriment
ofeffort aimed at establishing the development needs of the individual in an open and honest
way. Themanager, as an appraiser, may encounter difficulties in reconciling the roles of 'judge'
and 'mentor'.Managers need to develop the skills of coping with such tensions in their roles. In
someorganizations, this problem is solved by having different managers carrying out
performance anddevelopment appraisals. Appraisal provides the context in which mangers can
seek to ensure thatthere is acceptable congruency between the objectives of the individual and
those of the organization.
4. RESEARCH METHODOLOGY
TYPE OF RESEARCH
The research design comprise of the plan and structure of investigation conceived so as
toarrive at the responses to the research queries.It there by addresses the aims and objectives of
thestudy, both descriptively and analytically.
SAMPLING TECHNIQUE
The sampling technique adopted for the study is non-probability Random sampling technique
according to the convenience of the researcher.
A questionnaire was administered to HR managers / executives of different software companies
to
obtain data for the purpose of analysis.
SAMPLE SIZE
Data is collected using a sample of 30 software companies.
SAMPLE DESCRIPTIO