PROJECT REPORT STUDY AND EVALUATION OF PERFORMANCE APPRAISAL SYSTEM, IFFCO, NEW DELHI
Submitted in the partial fulfillment of the requirement for the award of degree of MASTER OF BUSINESS ADMINISTRATION
Under the Guidance of:
Submitted by:
Mrs. SASMITA BIRABAR
ADITYA SHARMA PGDM(HRM)
XAVIER INSTITUTE OF MANAGEMENT, BHUBANESHWAR
DECLARATION I hereby declare that this project report on “Study and Evaluation of Performance Appraisal at IFFCO” has been completely prepared by me as a part of my summer training project. This report is the outcome of my efforts and has not been submitted anywhere else. The contents of this report are fully verified as per my knowledge.
2
ACKNOWLEDGEMENT It is a matter of great pleasure to thank all those people who helped me in completing this project successfully otherwise it would not have been possible. Acknowledgement is not only a ritual, but also an expression of indebtness to all those who have helped in the completion of this project. I would like to express my deepest thanks to my project guide Mrs. Sasmita Birabar, for her guidance and constant encouragement which she extended to me throughout my project. I would also like to thank Mr. S.C. Gupta for his valuable inputs. Last but not the least, I would like to acknowledge the ongoing support of my family and friends, whose patience and encouragement has been paramount in making this project a reality.
3
PREFACE A performance appraisal (PA) or performance evaluation is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organizational objectives. Other aspects of individual employees are considered as well, such as behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc A central reason for the utilization of performance appraisals (PAs) is performance improvement (“initially at the level of the individual employee, and ultimately at the level of the organization”). Other fundamental reasons include “as a basis for employment decisions (e.g. promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid with communication (e.g. allowing employees to know how they are doing and organizational expectations), to establish personal objectives for training” programs, for transmission of objective feedback for personal development, “as a means of documentation to aid in keeping track of decisions and legal requirements” and in wage and salary administration. Additionally, PAs can aid in the formulation of job criteria and selection of individuals “who are best suited to perform the required organizational tasks”. A PA can be part of guiding and monitoring employee career development. PAs can also be used to aid in work motivation through the use of reward systems.
4
INDEX Topic 1. Objective of study 2. Company profile 3. Introduction to topic 4. Performance appraisal at IFFO 5. Research methodology 6. Data analysis 7. Conclusion and recommendations 8. Findings 9. Bibliography 10. Annexure
Page Number 7 8-11 12-14 15-19 20-21 22-36 37-40 41-42 43 44-47
5
OBJECTIVE OF STUDY
6
OBJECTIVE OF STUDY Any survey report begins with stating the objectives of the study: therefore, the first step in the survey analysis deals with the objectives. Next, the methodology adopted to collect the information required will be dealt with, that is, the survey design will be described. Generally, data sources include primary and secondary sources. Primary data sources can provide a range of information and therefore should be consulted first. If they don’t provide necessary information for the research then secondary data is to be collected.
MAIN OBJECTIVES OF THE STUDY To study the current performance appraisal system of the organization and identify the gaps between the current state and the desired state. To find out the performance dimensions relevant to the strategic plan of the company. To identify the potential areas for the scope of improvement in the current system and thereby in the organizational performance. To study the implications of an effective performance appraisal system on the productivity of employees and the organizational performance as a whole. To identify the key performance indicators and critical success factors for achieving organizational excellence.
7
CHAPTER : 1 INTRODUCTION TO COMPANY
8
INTRODUCTION Indian Farmers Fertiliser Co-operative Limited (IFFCO) was registered on November 3, 1967 as a Multi-unit Co-operative Society. On the enactment of the Multistate Co-operative Societies act 1984 & 2002, the Society is deemed to be registered as a Multistate Co-operative Society. The Society is primarily engaged in production and distribution of fertilizers. The byelaws of the Society provide a broad frame work for the activities of IFFCO as a Co-operative Society.
IFFCO commissioned an ammonia - urea complex at Kalol and the NPK/DAP plant at Kandla both in the state of Gujarat in 1975. After this another ammonia - urea complex was set up at Phulpur in the state of Uttar Pradesh in 1981. The ammonia - urea unit at Aonla was commissioned in the start of 1988.
VISION To augment the incremental incomes of farmers by helping them to increase their crop productivity through balanced use of energy efficient fertilizers, maintain the environmental health and to make cooperative societies economically & democratically strong for professionalized services to the farming community to ensure an empowered, forward looking and confident rural India.
9
MISSION IFFCO's mission is "to enable Indian farmers to prosper through timely supply of reliable, high quality agricultural inputs and services in an environmentally sustainable manner and to undertake other activities to improve their welfare".
-To provide to farmers high quality fertilizers in right time and in adequate quantities with an objective to increase crop productivity. -To make plants energy efficient and continually review various schemes to conserve energy. -Commitment to health, safety, environment and forestry development to enrich the quality of community life. -Commitment to social responsibilities for a strong social fabric. -To institutionalise core values and create a culture of team building, empowerment and innovation which would help in incremental growth of employees and enable achievement of strategic objectives. -Foster a culture of trust, openness and mutual concern to make working a stimulating and challenging experience for stake holders. -Building a value driven organisation with an improved and responsive customer focus. A true commitment to transparency, accountability and integrity in principle and practice. -To acquire, assimilate and adopt reliable, efficient and cost effective technologies. -Sourcing raw materials for production of phosphatic fertilisers at economical cost by entering into Joint Ventures outside India. 10
-To ensure growth in core and non-core sectors. -A true Cooperative Society committed for fostering cooperative movement in the country.
Emerging as a dynamic organisation, focussing on strategic strengths, seizing opportunities for generating and building upon past success, enhancing earnings to maximise the shareholders' value
11
CHAPTER : 2 INTRODUCTION TO THE PROJECT
12
Career Development as a Part of Performance Management Program One of the fundamental factors for bringing about an effective performance management program is often one of the most forgotten. All too often supervisor will mistakenly focus all of his or her resources entirely on rating and ranking the workforce, dolling out promotions or laying off workers as need be. While these steps are an essential element of performance management, they fall short in the long run. To begin with, employees are left feeling as though their company has neglected their individual career needs. This ultimately leads to higher employee turnover and makes it difficult for an organization to retain top quality talent. This is why effective performance management incorporates the workers’ needs with that of the company. When engaging an employee base on the level of their performance, the successful manager will work to align the company’s goals with those of the individualized career paths to ensure a high level of worker loyalty and long term productivity. One area of particular concern for performance management is a large and growing population of employees whose careers have reached the half way marker. For many employees, this is a crucial time for climbing up a few more steps on the corporate ladder. Unfortunately, the gaping absence of motivating organizational structure present in many business environments kills the career momentum for these people. This negatively affects the contribution made by these employees to the overall output and productivity on a corporate level. There are a variety of causes behind the lack of momentum within the halfway crowd. As mentioned before, lack of organization is a major culprit. This really stems from having little or no management at the top. Unfortunately, these important causes for the slowdown are seldom recognized, and the fault becomes that of the employees rather than the faulty system under which they work.
In order to combat this dilemma, one approach that has enjoyed widespread success is the organized setting of goals. If an employee can visualize the steps it takes to achieve a promotion, he or she will proactively take up the challenge to 13
improve his or her status. Another way to add to the challenge is to transfer an employee to a different job area. This allows the workers to learn new skills and become reignited in the process of advancement. A performance manger can even knock the employee down a rung or two before making a transfer. However, the supervisor should do so by showing the worker long term benefits of advancement and thus not packaging the transfer as a demotion that would lead to lower moral and productivity. Employees want to work hard and develop their careers, but they must be given the right incentive. By making the company’s increased productivity a shared goal between the employer and the employee, then positive results will be achieved on both sides.
14
PERFORMANCE APPRAISAL AT IFFCO
Performance appraisal in IFFCO, New Delhi, is done annually. For appraisal in IFFCO, New Delhi, a SELF APPRAISAL form is given to the staff members and they fill it up. And then after according to their self observation and through the appraisal form filled by the staff members rating is given to the members. Accordingly, incentives and promotions are granted. In IFFCO, the majority of the staff members submit all the information timely to their superiors. Mr. R.P. Singh Director, head of IFFCO start with the following objectives of1. 2. 3. 4. 5.
Evaluating performance of employees. For making decision regarding promotion of employees. Identifying the needs of training and development. To evaluate the morals of the employees. For the promotion of employees. The appraisal takes place once in a year in the month of March-April the appraisal report must be completed in all respects before the 30th of April of every yeas of the preceding assessment year. The appraisal report of the level below H1 shall be maintained by the personal and Administration Department of the concerned unit, division, head office.
15
The performance should be rated with reference to the task or activities assigned and/or undertaken and the results achieved thereof., during the period under review, as can be identified and described as follows: OutstandingConsistently exceptional performance despite constraints. Very goodHigh level performance. FairGenerally meets expectations. PoorDoesn’t meet expectations, requirement of job. Rating of attributes characterizing effectiveness of the appraise should be, as far as possible, based on sufficient evidence that can be adduced during the period under review and not on isolated recent occasions; for imparting objectivity to the assessment, the same should be based on facts and relevant or significant instances, both positive or negative. Each attribute should be taken independently of the other ones.
Attributes of performance Job knowledge Job performance Dependability
16
17
18
19
CHAPTER : 3 RESEARCH METHODOLOGY
20
RESEARCH METHODOLOGY
OBJECTIVE OF THE PROJECT To assess the effectiveness of thePerformance Ecellence Plan and Performace Development Plan of the company. To extract suggestions and views of the employees. To find out the constraints in Appraisal Process. To suggest improvemnts in the current appraisl system. To facilitate dialogue between mangers and employees/teams regarding progress vs. perfromance and development objectives. To clarify job objectives.
METHODOLOGY
Research approach Research design Sampling Measurement Scaling Data collection
HYPOTHESIS The investigator has classified, tabulated and interpreted the data information, so collected in a scientific manner and has drawn some fruitful results. Data has been collected for the use of not only this research project but can be used in some other projects as well. 21
CHAPTER : 4
DATA ANALYSIS
22
DATA ANALYSIS PERFORMANCE APPRAISAL QUESTIONNAIRE
Q-1. Is there a formal appraisal system in your organization? Yes- 30 No- 0 Total respondents- 30
35 30 25 20 YES
15 10 5 0 YES
NO
23
Q-2. Do you understand the basic objective of performance appraisal? Fully- 20 Partially-10 No-0 Total responses-30
25
20
15 FULLY PARTIALLY 10
NO
5
0 fully
Partially
no
24
Q-3. In your view does the performance appraisal system function fairly/ equitably?
YES- 30 NO-0 TOTAL RESPONSES- 30
35 30 25 20 YES
15 10 5 0 YES
NO
25
Q-4. How is your performance appraised- individually, in a team or both? Individually-10 In Team-14 Both-6 Total responses- 30
16 14 12 10 INDIVIDUALLY 8
IN TEAM BOTH
6 4 2 0 INDIVIDUALLY
IN TEAM
BOTH
26
Q-5. Do you agree that the performance appraisal system adopted by the firm is able to gauge the real performance of employee? Fully agree- 10 Partially- 20 Not at all- 0 Total respondents- 30
25
20
15 FULLY PARTIALLY 10
NO
5
0 fully
Partially
no
27
Q-6. Is the appraisal system able to show the areas in which a person needs improvement? YES- 22 NO-8 Total respondents- 30
25
20
15 YES NO
10
5
0 YES
NO
no
28
Q-7. Is the appraisal system able to show the progess one has made in order to his/her set target? YES- 17 PARTIALLY-13 NO-0 Total respondents- 30
18 16 14 12 10
YES PARTIALLY
8
NO 6 4 2 0 YES
Partially
NO
29
Q-8. Performance appraisal helps you in:PROMOTION - 15 CAREER PLANNING-9 GOAL ACHIEVEMNT-6 Total respondents- 30
16 14 12 10 PROMTION 8
CAREER PLANNING GOAL ACHIEVEMNT
6 4 2 0 PROMOTION
CAREER
GOAL
30
Q-9.Are you satisfied with the criteria adopted to appraise you? YES- 22 NO-8 Total respondents- 30
25
20
15 YES 10
5
0 YES
NO
31
Q-10. Is the performance appraisal system transparent? YES- 16 NO-14 Total respondents- 30
18 16 14 12 10
YES
8
NO
6 4 2 0 YES
NO
32
Q-11. Do you feel that the rewards are given according to your performance? YES- 23 NO-7 Total respondents- 30
25
20
15 YES NO
10
5
0 YES
NO
33
Q-12. Do you think that the feedback given to you is honest? YES- 30 NO-0 Total respondents- 30
35 30 25 20 YES
15 10 5 0 YES
NO
34
Q-13. If development or improvement of any skill is required ( after doing performance appraisal), is proper training given then? YES- 20 NO-10 Total respondents- 30
25
20
15 YES NO
10
5
0 YES
NO
35
Q-14. Are you satisfied with the current performance appraisal system?
YES- 24 NO-6 Total respondents- 30
30
25
20 YES
15
NO 10
5
0 YES
NO
36
CHAPTER : 5 RECOMMENDATIONS & CONCLUSION
37
CONCLUSION
At IFFCO, performance appraisal is conducted annually. The immediate boss who has been observing the immediate subordinate throughout the year rates him according to the self appraisal form filled and also through personal observation under following factors:
a. b. c. d. e. f. g. h. i. j. k.
Quality of work Quantity of work Job knowledge Dependability Innovation and creativity Ability to learn Attendance Reaction to criticism Discipline Customer relations Subordinate development
The rating given is confidential and out of the knowledge of their subordinates. Accordingly, promotions and incentives are granted to the deserving ones. Rating given to the senior production officers is done confidentially and whatever information is filled in the self-appraisal form is not cross questioned.
38
The sole objective for taking part in performance appraisal of senior officers at IFFCO is to get awarded with promotions and incentives but the basic reason why performance appraisal is conducted is to develop the performance and attitude. Senior officers of IFFCO follow the procedure of performance appraisal given by the senior managers because they have monotony in their work and they have no time for any innovation or creativity.
39
RECOMMENDATIONS The company should appraise the performance of the workers by giving them some incentives, which would motivate them to work to their fullest capacity and to encourage them to work more and show good and better results. For the top management of the company it should offer them holiday package, appraise performance by recognizing their work in their meetings etc. this will help in raising their morale and therefore they will work harder. Most of the employees don’t want financial help rather they would like some recognition for their work. For the lower income earning group the company should increase their wages, offer them pension schemes, and also provide them medical facilities etc. because they want financial help from the company to insure their proper living. The company should also keep changing the raters for performance appraisal system from time to time so that they don’t become bias at any time for any employee. The method of the company should be changed periodically so that the employees have no chance to complain for the method. The criteria decided upon which the performance has to be rated should not be fixed, it should be changed from time to time. The standards of the rating should be very specific, clear and concise. There should be a feeling of team work in the organization. The system should be cost effective and it should suit the budget of the company.
40
CHAPTER: 6
FINDINGS
41
FINDINGS 1. Performance appraisal at IFFCO, New Delhi is done annually. 2. For the above mentioned appraisal, a self appraisal form is given to the staff members, so that they can fill it. Simultaneously a form is given to their colleagues to rate them. A rating is given to the employee after taking in consideration the self appraisal form as well as the rating given by the staff members. 3. Promotions and incentives are given to an employee according to his or her performance rating. 4. At IFFCO, majority of the staff submits all the information regarding appraisal well within time to their supervisors. 5. All officers agree that performance appraisal system helps them to perform better.
42
BIBLIOGRAPHY
This project required a lot of literature survey before it can into this form. Following references were made BOOKS Human Resource Management- VSP Rao Human Resource Management- K Ashwathappa WEBSITES www.iffco.com www.wikipedia.org www.google.com Brochures,files, data, annexures and annual reports of IFFCO
43
ANNEXURE Performance Appraisal Questionnaire
Q-1. Is there a formal appraisal system in your organization? YesNo-
Q-2. Do you understand the basic objective of performance appraisal? FullyPartiallyNo-
Q-3. In your view does the performance appraisal system function fairly/ equitably? YESNO-
Q-4. How is your performance appraised- individually, in a team or both? IndividuallyIn Team-
44
Both-
Q-5. Do you agree that the performance appraisal system adopted by the firm is able to gauge the real performance of employee? Fully agreePartiallyNot at all-
Q-6. Is the appraisal system able to show the areas in which a person needs improvement? YESNO-
Q-7. Is the appraisal system able to show the progess one has made in order to his/her set target? YESPARTIALLYNO-
45
Q-8. Performance appraisal helps you in:PROMOTION CAREER PLANNINGGOAL ACHIEVEMNT-
Q-9.Are you satisfied with the criteria adopted to appraise you? YESNO-
Q-10. Is the performance appraisal system transparent? YESNO-
Q-11. Do you feel that the rewards are given according to your performance? YESNO-
46
Q-12. Do you think that the feedback given to you is honest? YESNO-
Q-13. If development or improvement of any skill is required ( after doing performance appraisal), is proper training given then? YESNO-
Q-14. Are you satisfied with the current performance appraisal system?
YESNO-
DEPARTMENT__________________ DESIGNATION__________________ EXPERIENCE __________________
47
