i

A Study on
PERFORMANCE APPRAISAL SYSTEM
in
COMPANIES

A
Project paper
Submitted
As a part of the
+3Commerce Degree Course
of Government Women’s College,
Puri-752001

By
BismitaSahu
Roll No.: BC18-076

Under the Guidance of

ShriBibekanandRana
Lecturer of Commerce
Government Women’s College,
Puri - 752001
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DECLARATION

I do hereby declare that this Project Paper on Performance

Appraisal submitted by me to the Government Women’s College, Puri,

is out of my own efforts and it has not been submitted to any other

Educational Institution or published at any time before.

Date: Bismita Sahu

Roll No.BC18-076

CERTIFICATE
This is to certify that Ms. BismitaSahu, +3 Commerce of
Government Wormen’s College, Puri, has successfully completed the
project work titled “A Study on Performance Appraisal System in
Companies” in partial fulfillment of requirement for the completion of
+3 Commerce Degree Course as prescribed by Government
Women’s College, Puri.
 iii

The Project Report is the record of authentic work carried out by her.
She has worked under my guidance.

Signature :

Name of the Project Guide: Shri Bibekanand Rana

Date:

ACKNOWLEDGEMENT

The study on PERFORMANCE APPRAISAL SYSTEM in Hotel

Shakti International, Puri, which is based on research work, is an
effort to find out and suggest some new ways & means for
improvement in the organization.
 iv

I am grateful to all the officials of Hotel Shakti International,

those who have helped me in conducting my study there.

Date: 1st July, 2021 BISMITA SAHU

Roll No.BC18-076

CONTENTS

Page No.

List of Charts &Tables : v

Chapter – I : 1
Introduction

Chapter – II : 6
 v

Profile of Hotel Shakti International,Puri

Chapter – III : 9
Performance Appraisal
A Theoretical Frame Work

Chapter – IV : 17
Performance Appraisal System in
Hotel Shakti International, Puri

Chapter –V : 20
Performance Appraisal (Opinion Survey)

Chapter – VI : 30
Summary, Conclusion and Suggestions

References

Appendix: Questionnaire

(i)

LIST OF CHARTS & TABLES

1. Chart No. 1 : Age Structure of Employees as on the date of survey.

2. Table No.1 : Departmental Distribution of Employees.

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3. Table No.2.1: Opinion About The Organization

4. Table No.2.2: Opinion About The Existing Appraisal System

5. Table No.2.3: Reasons Of Dis-Satisfaction With The Existing Appraisal System

6. Table No.2.4:Opinion About The Types Of Action Taken Against

Weaknesses Of The Employee

7. Table No.2.5: Reason For Change In Appraisal System

8. Table No.2.6:Reason For Change In Appraisal System

9. Table No.2.7:Opinion Of Different Appraisal

10. Table No.2.8:Criteria For Appraisal

11. Table No.2.9:Opinion On The Objectivity Of The Appraisal System

12. Table No.2.10:Desirable Changes In Appraisal System

13. Table No.2.11:Composition Of Appraisal Committee

 1

CHAPTER – I

I N T R O D U C T I O N

Performance appraisal or performance review is a systematic process in

which employee performance at work is evaluated in relation to the projects on
which employee has worked and his contribution to the organization. It is also
known as an annual review or performance review.

According to Edward Flippo, “Performance appraisal is the systematic,

periodic and an impartial rating of an employee’s excellence in matters pertaining to
his present job and his potential for a better job.”

The performance appraisal is the process of obtaining, analyzing and recording

information about the relative worth of an employee. The focus of the performance
appraisal is measuring and improving the actual performance of the employee and also
the future potential of the employee. Its aim is to measure what an employee does.
Performance appraisals are regular reviews of employee performance within
organizations.

Human Resources are the most indispensable factor for any organization. A
business organization can compete with another business organization, can
duplicate the business strategies of another and there is no monopoly in this regard.
But in a business organization or institution monopoly exists only in the field of its
people or workforce or in the other words workers, since no competitor can duplicate
the people of another organization. Hence, the development and survival of any
business organization completely depends upon its capability to maintain its human
resources updated with the changing business scenario and/or technology and for
which Human Resource Management plays a vital role here.
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Performance Appraisal is an important factor of Human Resource

Management. For the betterment of the organization as well as of the employees, it
is essential that performance of the employees should be appraised properly in a
scientific way. A modern, scientific and systematic appraisal system helps both the
individual as well as organization for achieving targets or organizational goals and at
the same time the individual becomes aware of the value of his/her job performance.

In this connection, it is relevant to examine the value and necessity of the

existing appraisal system in an organization and to find out the better ways of doing
for achieving organizational objectives.

SCOPE
The present study on Performance Appraisal System was conducted in Hotel
Shakti International, Puri, having total manpower of 30 employees. The study was based
on the both executive and non-executive employees of its various departments.

SIGNIFICANCE OF THE STUDY

Performance Appraisal is the most significant and indispensable component of
an organization through which the management makes an assessment of employee’s
performance and designs its development. In all organizations for making decisions in
the fields of selection, promotion, transfers, merit increases, training & development,
etc., the Performance Appraisal System provides helpful and accurate information about
the past, present and expected performance of the employees, which are also otherwise
important for organizational development. However, though there are varied techniques
and procedures used for appraisal but a basis, scientific, systematic and clear
understanding of the concept and its implementation is the most important one.

The problems of lack of laid down objectives, biasness on ratings and vindictive
attitude of the appraiser, system of non-participative of appraise, poor two-way
communication which keeps the appraise in darkness, etc., if these problems are not
solved and/or rectified, they may cause as barrier to any noticeable change of the
organization for effective use of this important component.
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The present study is made with a view to find out the strengths and weaknesses
of the existing appraisal system, opinion of the employees, for switching over to the new
system and problems, if any, likely to be faced in this regard by the organization.

OBJECTIVE
Though an attempt has been made to study the existing Performance Appraisal
System in respect of the both executive and non-executive employees in Hotel Shakti
International but the major objectives of the study are :-

i) To examine critically the present appraisal system and its strengths and
weaknesses.
ii) To assess the contribution of the appraisal system for organizational
development.
iii) To throw light on appraisal procedures like criteria for appraisal, evaluation by
committee, need for pre & post appraisal interview, etc. along with
necessities about the changes in the existing system.
iv) To recommend necessary changes, if required, for making the Performance
Appraisal System more objective and effective oriented.

METHODOLOGY

Methodology has an important role on reliable and pertinent data collection, up to

the final result of the study. This survey covers the both executives & non-executives of
the Hotel Shakti International, Puri.

SAMPLING

Here the random and purposive sampling method has been adopted, considering
the availability and willingness of the employees.

COLLECTION OF DATA
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The main aim of the study was to explore the method which is followed
and effectiveness of the employees. The primary data required for the study were
collected through structured questionnaire, personal interviews and informal
talks. The second data was from the company manuals and the website of the
company. The data were analyzed and the findings were arrived at the basis of
which suggestions are made.

PLAN OF THE STUDY

People differ in their abilities and their aptitudes. There is always some difference
between the quality and quantity of the same work on the same job being done by two
different people. Therefore, performance management and performance appraisal is
necessary to understand each employee's abilities, competencies and relative merit and
worth to the organization. Performance appraisal rates the employees in terms of their
performance. Performance appraisal takes into account the past performance of the
employees and focuses on the improvement of the future performance of the
employees.

A systematic approach has been applied to the whole study to make the study a
perfect one.
The 1stChapter, besides giving an introduction to the study, includes significance of the
study, scope, objective, methodology, sampling and collection of data.

The 2ndChapter reveals the background of the organization under survey. It also briefly
describes about the whole organization, its manpower position, organizational structure,
etc.

The 3rdChapter deals with the performance & appraisal system from theoretical point of
view, its objectives, Tools for Appraisal System, Methods, etc. along with an over view of
the system in practice in India.

The 4thChapter is based on the Performance Appraisal System at Hotel Shakti

International in particular.
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The 5thChapter is important one since analysis and interpretation of the data collected
about the existing appraisal system of Hotel Shakti International.

The 6thChapter which is the last chapter is the researcher’s own perception regarding
the system and is based on Summary, Conclusion and some useful suggestions for
further research to make the system more objective.

********

CHAPTER – II

PROFILE OF HOTEL SHAKTI INTERNATIONAL

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Organizational Background

Puri is the most popular tourist destination amongst low spending domestic
budget tourist mostly originating from Kolkata, Delhi, Cuttack, Bhubaneswar, etc.
Keeping in view the promotion of tourism and national integration, catering to the budget
minded tourist and generating employment opportunities, like many other hotels in Puri,
this Hotel Shakti International has been set up to cater to the needs of the tourists. It was
established on 7th December 2007. It is a 3-star category hotel in Puri with 36 Air
Conditioned rooms, One Restaurant, One Board Room, One Conference Hall and one
Spa.

MANPOWER PLANNING &POSITION

According to Geisler, manpower planning is the process—including forecasting,

developing and controlling—by which a firm ensures that it has the right number of
people and the right kind of people at the right places at the right time doing work for
which they are economically most useful.Manpower planning is “the process by which
management determines how the organization should move from its current manpower
position to its desired manpower position.”

As on the date of survey, the hotel is having total manpower strength of 15

employees in its all departments, like Front Office, Housekeeping, Food &Beverage,
Maintenance, Store, Accounts, Human Resources, and Security Department. The
department wise distribution of the employees is revealed from the Table No.1 and the
age structure of all the employees is revealed from the Graph at Chart No.1. This
indicates that maximum employees in the hotel belong to the age group category of 32-
36 years.

Table 1
Department wise Distribution of Employees
 7

At Hotel Shakti International, Puri.

Sl. No. Department Existing

Employees
1. Front Office 1
2. Housekeeping 2
3. Food & Beverage 2
4. Maintenance 2
5. Finance & Accounts 1
6. Store 1
7. Human Resources 1
8. Security 5
Total 15

Chart: 1

Age Profile
6

3 Age Profile

0
26-30
31-35
36-40
41-45

WAGES AND SALARY

Wages and salaries are the payment for work agreed between an employee and
his or her employer under the contract of employment in the private sector and for
contractual agents in the public service, or employment for civil servants.
 8

It includes the basic salary (or index-linked salary in the civil service) but also
bonuses and allowances, compensation for overtime hours worked, employee savings
(mandatory or optional profit-sharing, additional matching contributions), other
indemnities and related compensations (residence allowance, family allowance, etc.)
and payments in kind.
The salary is a kind of "price". Reduced to a unit of volume of work, which can be
an hour (hourly wage) or a full-time equivalent (FTE wage), it enables jobs or work
stations of different duration and working time to be compared.
The salary of the employees includes Basic Pay, House Rent Allowance,
Conveyance Allowance, and Washing Allowance.

WELFARE
As a welfare measure the hotel provides a small canteen for its employees.
Breakfast, Lunch and Dinner is provided to the employees free of cost. Free tea is also
provided twice a day. The menu for the Breakfast, lunch and Dinner along with canteen
timing is fixed by the hotel management.
Besides the above, Lockers have been provided to the staff members to keep
their belongings. Further uniform and shoes have also been provided to all the
employees.

ORGANISATIONAL STRUCTURE

The hotel is presently headed by a General Manager with other executives in

Front Office Department, Housekeeping Department, Maintenance Department, Food &
Beverage (Service) Department, Food & Beverage (Production) Department, Accounts
Department, Human Resources Department and Security Department including other
staff in these above mentioned departments.

CHAPTER – III

Performance Appraisal
A Theoretical Frame Work
 9

In an organization work is done for the accomplishment of some specific goals by

utilizing its human resources through the creation of such an atmosphere which
motivates people to work efficiently. In order to have a better work out put, the
management should have a systematic performance appraisal system for evaluating the
performance of employees on their jobs.

1
Formal appraisal of an individual’s performance began in the Wei Dynasty (A.D.
221 – 265) IN China, where an Imperial Rater appraised the performance of members
of the official family. In 1883, the New York City Civil Service in USA introduced a formal
appraisal programme shortly before World War I.

The main purpose lies in determining the aspects of performance

evaluation wherein for the appraiser it is easier to appraise the performance of the
appraisee rather determining the potential.

APPRAISAL DEFINED
Heyel2 observes, “It is the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he/she
is employed, for the purpose of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential
treatment among the members of a group as distinguished from actions affecting all
members equally”.

NEED OF PERFORMANCE APPRAISAL

Every organization needs a management technique or tool to evaluate how far
the personnel in the organization are performing the achieve the work standards in order
to fulfill the organizational objectives and that technique or tool is the evaluation of
Performance Appraisal.

A scientific and systematic appraisal system followed by regular

review/evaluation of the sub-ordinates performance by the top management helps the
organization for determining training and developmental needs of the personnel, which
leads to maintain a desired behavior.
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OBJECTIVE
Performance Appraisal Report is a mirror which reflects the strengths and
weaknesses of an employee and from which we get accurate and clear information
which plays a vital role in the organization as a whole in making decisions on various
personnel aspects, i.e., transfers, promotions, pay increases, etc.

McGregor3 says: “Formal performance appraisal plans are designed to meet

three needs, one of the organization and the other two of the individual, namely:
(i) They provide systematic judgments to back up salary increases, transfers,
demotions or terminations.
(ii) They are means of telling a subordinate how he is doing, and suggesting
needed changes in his behaviour, attitudes, skills or job knowledge. They let
him/her know “where he/she stands” with the boss.
(iii) They are used as a base for coaching and counseling the individual by the
superior”.

However, it is clear from the above that performance appraisal is a vital

component of HRD mechanism having a wide range of utility which determines
increments, lay-off, training needs, transfer & promotion to higher responsible positions,
selections, etc. It helps to find out the strengths and weak areas of the employee.

METHODS, TECHNIQUES OR TOOLS FOR PERFORMANCE APPRAISAL:

A number of performance appraisal methods are available. In fact each
organization has its own. The method and scales differ for various reasons. First, the
difference happens in the sources of traits or qualities to be noted, which differs owing to
the differences in the management’s opinion, requirements of job and statistical
requirements. Secondly, due to rating of different kinds of workers (i.e. workers like
factory workers, executives or salesmen, etc.), the difference arises. Thirdly, the
difference arises due to the degree of precision taken into account in the evaluation.
Finally, there may be the difference owing to the steps followed to obtain weightings for
various traits.
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The widely used categorization is that given by 4Strauss and Sayles. They have
classified performance appraisal methods into traditional, and never or modern methods.
The traditional methods lay emphasis on the rating of the individual’s personality traits,
such as initiative, dependability, drive, responsibility, creativity, integrity, leadership
potential, intelligence, judgment, organizing ability, etc. On the other hand, newer
methods place more emphasis on the evaluation of work results – job achievements –
than on personality traits. Results oriented appraisals tend to be more objective and
worthwhile, especially for counseling and development purpose.

TRADITIONAL METHODS

(a) Straight Ranking Methods:

It is the most oldest and simplest method of performance appraisal, by which
subordinates are rated in an overall basis with reference to their job performance.
Here, a person is compare with that of another by placing him/her in the whole
rank to determine most efficient to least efficient.
(b) Paired Comparision Method:
In this method every employee is compared with every other employee in order
to determine which is a better worker. For example, if a group consisting of five
workers (A,B,C,D, & E) are to be compared then A, is to be compared with B,
then with C, D and E. Similarly B is to be compared with C, D and E, so on and
not with A. In this way every employee is compared with every other employee
in the same family. The number of rank order would be n(n-1)/2, where n is the
total number of persons to be compared. Then the result of the comparison is
tabulated and rank is assigned to each.
(c) Man-to-Man Comparison Method:
Under this method factors like leadership, dependability and imitative are
selected a scale is designed to each factor. Each employee is rated and
compared with the key man in respect of one factor at a time.

(d) Grading:
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Here the rater selects some features like analytical ability, cooperativeness, self-
expression, leadership, job knowledge, etc. and rates them according to a scale,
which may be: - A-Outstanding, B-Very Good, C-Good, D-Satisfactory and son.
(e) Graphic Rating Scale:
Under this method a printed form is provided to the rater which contains
characteristics and contribution factors of the employee. These traits are then
measured on a continuous scale for determining place of each person
somewhere along the continuum.
(f) Forced Choice Description Method:
Here the rating form which contains a series of group statement, the rater makes
a check on how effectively the statement describes each individual who are
being evaluated.
(g) Forced Distribution Method:
This system is devised to force the rater to place the employees who are being
appraised into pre-determined ranges of scale in such a way that 10 percent of
them in “Outstanding”, 20 percent are in the group of “above average”, 40
percent in the “average”, 20 percent “below average” and 10 percent in the
“Poor”.
(h) Checklist :
Here, the appraiser instead of rating employee performance, supplies reports
about it and the final valuation is made by the Human Resources Department.
This is done on the basis of a questionnaire supplied to the rater concerning an
employee’s job related behaviour.
(i) Free Essay Method:
Under this system the supervisor makes a free form, open ended appraisal of an
employee, in his/her own words and the rater evaluates the performance traits
and behaviour of the employee.
(j) Critical Incident:
Under this method every supervisor records all the significant incidents in each
employee. Job related behaviour and these are recorded in a specially designed
note book. Feedback is provided about the incidents during performance review
session.

(k) Group Appraisal Method:

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In group appraisal method, the performance rating is done by a group consisting

of a supervisor of the employees and 3-4 other supervisors who have some
knowledge of the concerned employee’s performance. The supervisor explains
the nature of duties of his/her subordinate to the group who in turn evaluates the
performance and future improvement, if any, is suggested.
(l) Field Review Method:
In this system, line supervisors are interviewed by an expert of Human Resource
Department for collecting information on each employee. The supervisor is
required to give his opinion about the progress of his/her subordinate’s level of
performance. The detailed notes of the answer are then approved by the
supervisor and placed in the personal file of the employee.

MODERN METHOD
(a) Assessment Centre Method:
Here an assessment center staff or a group evaluates a small group of
employees to determine their potential for promotion. The raters evaluate all the
employees individually and collectively on observation of their performances like
basket exercise, business games, role playing, etc.
(b) Appraisal by Result:
This method otherwise known as Management by Objectives (MBO) is based on
the listing of major performance objectives for coming period with target dates for
accomplishing them which is done by the employee and submitted to the
superior for his/her review. Then a joint discussion by the superior and
subordinate results in agreed upon set of goals. After the end of the stipulated
time period they meet again to evaluate employee performance and again set
goals for the next period. This method gives the employee an opportunity to
make his/her own evaluation.
(c) Human Asset Account Method:
This method refers to the devotion of activity to attaching money estimates to a
firm’s internal human organizational value and external customer goodwill.
(d) BehaviorallyAnchored Rating Scales (BARS)
Under this method, behaviors that are required in successfully performing a job is
assessed. In this technique a separate rating form is developed for each job and
each item of job behavior are rated on a scale from 1 to 7 or 1 to 9 indicates
 14

lowest level of job performance to highest level performance. It is a costly and

time consuming procedure.

PROBLEMS IN PERFORMANCE APPRAISAL

None of the methods given above are absolutely valid or reliable. Hence arises
the problem therein and some of which are as follows:-
(a) Halo Effect:
Sometimes appraisers like or dislike one or two actions of the appraise and
therefore tend to allow the assessment on one trait to influence assessment on
others. This arises only in the cases when traits are ill-defined, involve personal
reactions, etc.
(b) Biasness:
Under this method, behaviors that are required in successfully performing a job is
assessed. In this technique a separate rating form is developed for each job and
each item of job behavior are rated on a scale from 1 to 7 or 1 to 9 indicates
lowest level of job performance to highest level performance. It is a costly and
time consuming procedure.
(c) Central Tendency:
It is the most common error and it occurs when the rater is in doubt about the
subordinate or has no knowledge about the rating process or does not have
much time, etc.
(d) Leniency or Strictness:
Here the tendency of the rater is either to be very liberal or very strict in
appraising the performance of the individual.
(e) Similarity Error:
In this method the rater always evaluates other people in the same way he
perceives himself.
(f) Organizational Leadership:
The leadership style plays important role in determining an effective performance
appraisal system, since effective leadership motivates the entire organization for
better performance but in opposite conditions the appraisal system is considered
as an imposition.
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Performance appraisal techniques have failed to give a correct evaluation

of the employee because of the dual and conflicting role of supervisor, poor
communication, unpleasant feedback, considerable time gap between two
appraisal period, etc.

TERMS USED:
1. Key Performance Areas (KPAs)
KPAs refer to any job to be performed by the job holder. It enables the
employees to understand in a systematic way the capabilities they have or they
lack.
2. Self Evaluation:
It means the way in which an individual views himself – by commenting on his
own performance during the appraisal period.
3. Performance Analysis:
Performance Analysis is the overall rating of the employee for the assessment
period and hence it is an important tool to identify ‘facilitating factors’ and
‘hindering factors’ of any work accomplishment.
4. Appraisal Interview:
Appraisal interview helps in overcoming weaknesses, increasing mutual relation,
etc.
5. Performance Counseling:
Performance counseling helps the employee to overcome his/her weaknesses
and reinforce his/her strengths. It focuses on the actual performance and action
plan for future development.
6. Internal Task Force:
For effective implementation of any new system, a group of personnel of different
levels and departments, are constituted and known as Internal Task Force.

PERFORMANCE APPRAISAL PRACTICES IN INDIA

In Indian organization, the practice of appraisal system varies from ‘no appraisal’
to a ‘sophisticated scientific appraisal’ system. A suitable number of organizations in
India follow the trait based confidential format of appraisal system and on the other hand
they are also dis-satisfied with such appraisal system.
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Experiments on new system has already been started which focuses on the role
of appraisal as a developmental instrument of human resources. There is also creation
of a new organizational culture of openness, trust, self-evaluation, performance
counseling, objective setting, etc.

Organizations, now, are avoiding the use of the term “appraisal” and putting
emphasis on planning, analysis, review and development, etc.

The appraisal system is required to be well designed and properly implemented.

a new appraisal system can be introduced for some period on an experimental basis by
changing its appraisal system from control-oriented confidential report to a development
oriented open system. Internal Task Force should be constituted for effective
implementation of the new system. Further a good work culture having a link with HRD
Philosophy is also essential.
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CHAPTER – IV
Performance Appraisal System in Practice At
Hotel Shakti International, Puri

Evaluation of personnel by supervisors, later who knows about the performance

of the subordinate is done through performance appraisal. To appraise performance is
to assess a value for it and there is nothing as a universally accepted value, which are
also subjects of much controversy amongst managers and social scientists. However,
performance appraisal is indispensable since it is used for taking important
administrative decisions on salary increases, promotions, transfers, lay-off, training
needs, motivating employees, etc.

Hotel Shakti International, Puri, has a confidential reporting system of appraisals.

The staff performance appraisal system focuses on the appraisal of personnel on the job
performance related areas and on behavioral dimensions. The evaluation of staff
performance appraisal in Hotel Shakti International is conducted once a year, i.e. at the
beginning of the every financial year, and the assessment is done for the last financial
year.

In Hotel Shakti International there is a printed form for Staff Performance

Appraisal Report which contains certain employee characteristics that are to be
evaluated by the immediate superiors who are the departmental heads. Hence, the
departmental head of each department fills the Performance Appraisal Form for each of
those staff members who directly reports to him/her. The sources of information used to
measure actual performance are personal observation, oral and written
communications/reports. The salient feature of the appraisal form is given below:
1. Job Knowledge:
The adequacy of appraisee’s professional knowledge for the present position is
taken into consideration.

2. Quality of work:
In this aspect the thoroughness, accuracy etc. of the work is considered.
 18

3. Work Output:
The appraiser considers the extent to which the staff has been able to achieve
results.

4. Regularity & Punctuality:

Habit of punctuality and the regular attendance of the staff are taken into
consideration.

5. Conduct:
While rating the ‘Conduct’ aspect of the appraisee, the amenability to discipline is
considered.

6. Integrity and Loyalty:

Here the candidate’s honesty, sincerity, loyalty towards job and the corporation is
the factor for consideration.

7. Co-operation:
The appraiser here considers the degree of co-ordination working relationship
with subordinate, equals and superiors and ability to get along with them.

8. Initiative:
In this factor consideration is imparted on alertness on the job, ability to take
action without being told and whether the staff can do his/her work without undue
supervision.

9. Interest in Work:
The degree of interest, enthusiasm and effort the staff puts into the job are the
essential elements while evaluating this factor.

10. Dependability:
While rating Dependability, the rater considers ability of the staff to get
assignments completed on time in keeping with the quality of work done. Also,
reliability in assuming and carrying out commitments and obligations are
considered.
 19

11. Promotional Potential:

Capacities to handle jobs of higher responsibility are reflected here.

12. Areas of Strength and/or Weakness:

Here the employee’s areas of strength and areas of work requiring improvement
are enlisted. It is also indicated that if any disciplinary action has been initiated
against the appraisee; along with indication of misconduct in brief leading to the
disciplinary action and punishment awarded, if any.

Finally, the overall assessment is done by the Reviewing Officer who is the
General Manager of the Hotel. The Overall assessment is rated as either (i)
Outstanding, or (ii) Very Good, or (iii) Satisfactory, or (iv) Unsatisfactory. If the
assessment of any of the staff happens to be ‘Unsatisfactory’, i.e. his/her performance is
inadequate and well below acceptable standards, then the concerned staff is informed in
writing by the management about the areas of weaknesses so as to improve his/her
performance in those areas.
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CHAPTER – V
Performance Appraisal (Opinion Survey)
(Based On Primary Data)

This chapter is based on the empirical analysis of collected responses to study

the effectiveness of Staff Performance Appraisal System in Hotel Shakti International, as
perceived by the respondents. The opinions collected from the respondents on different
items like criteria of appraisal, performance counseling, satisfaction/dis-satisfaction with
the existing system, performance review, etc. are analyzed in this chapter. The analysis
of the responses on different aspects of appraisal system is based on primary data.

OPINION ABOUT THE ORGANIZATION

Top management attitude and commitment have important bearings on the

appraisal procedure. The appraisal system becomes confidential one where it is
believed that people do not work, if they are not closely supervised. Moreover on the
basis of working conditions, work relationship, understanding of human behaviour, etc.,
the employee develops knowledge about the management and the organization. Table
No.2.1 presents the opinion towards management and origination.
TABLE NO.2.1
OPINION ABOUT THE ORGANIZATION

Sl.
Opinion Yes No
No.
1. Your organisation believes in the 13 2
development of its human resources (86.66%) (13.34%)
2. Your organization creates and
provides reasonable opportunity to 9 6
everyone for improving his/her (60%) (40%)
performance.
3. At managerial level there is a
12
willingness to understand human 3
(80%)
behaviour and get along with (20%)
people.

It is clear from the Table No.2.1 that a majority of respondent (86.66%) feels that
their organization believes in the development of its human resources and 80% of them
 21

opined that there is a willingness of management to understand human behaviour.

Besides, 60% of the sample respondents were of view that their organization creates
and provides opportunity for every staff for their job improvement.

However, an analysis of the Table No.2.1 reveals that Hotel Shakti International
has a cordial atmosphere to maintain a growth oriented group.

OPINION ABOUT THE EXISTING APPRAISAL SYSTEM

Performance appraisal system being an important technique for developing
human resources, offers opportunities to induce collaborative working amongst people.
But the objectives may be different in practice than the theory. So, let us examine how
far the existing system is successful in achieving its means towards end.
TABLE NO.2.2
OPINION ABOUT THE EXISTING APPRAISAL SYSTEM

Sl.
Opinion Yes No
No.
1. The performance appraisal system
of your organization is development 9 6
oriented and up to the expectations (60%) (40%)
of your work environment.
2. Is the PAS of your organization is
sufficient to decide whether an 10 5
employee is deserving of a (66.66%) (33.34%)
promotion.
3. Does it take into considerations of
10 5
the problems of employees while
(66.66%) (33.34%)
performing the job?
4. Does the PAS of your organization
7 8
help the employees to weakness
(46.66%) (53.33%)
relating to his/her performance?

As per Table No.2.2, it is clear that 60% of the respondents feel that the existing
system is development oriented and up to their expectations. Majority (66.66%) of them
feels that the appraisal system is sufficient in deciding promotional aspects and there
was a positive response (66.66%) of management’s attitude while assessing
 22

performance. All types of difficulties/problems either job related or personal are taken
into consideration by the management while assessing performance. However, 46.66%
of respondent opined that the PAS of their organization is not helpful for them to
recognize their strength and weakness relating to performance.

SATISFACTION/DIS-SATISFACTION WITH THE EXISTING APPRAISAL SYSTEM

Under the conventional review procedure the superior is compelled to behave in
a negative manner (i.e. in a threatening, rejecting manner) with some proportion of
his/her staff and such type of relationship between the superior and subordinate besides
affecting the subordinate, also seriously affects the capacity of the superior to function
effectively.

In this connection opinions were collected as to satisfaction/dis-satisfaction with

the existing appraisal system and to which 53.33% of the respondents opined that they
are satisfied with the existing system.

When asked about the reason for dis-satisfaction, balance 53.33% respondents
opined in favour of several reasons as given in the Table No.2.3.
TABLE NO.2.3
REASONS OF DIS-SATISFACTION WITH THE EXISTING APPRAISAL SYSTEM
(Opinion On The Basis Of Balance 53.33% Of The Respondents) N = 10
Sl.
Reasons No. of Responses
No.
1. The system is not appropriate for your Organization 6 (40%)
2. The system of appraisal through confidential report encourages
3 (20%)
vindictive attitude of the Boss.
3. The system is not participative enough. 9 (60%)
4. Subjective or biasness on rating by the appraisal is not ignored. --
5. There is no scope for self-appraisal. 8 (53.33%)
6. Any other reason 1 (6.66%)

The analysis of the Table No.2.3 reveals that 60% have opined that this system
is not participative enough. 53.33% says that this system does not give any scope for
self-appraisal. 40% respondents believes in a change as the existing system is not
appropriate for their organization. Whereas 20% opined that the system through
confidential report encourages vindictive attitude of the appraiser. Moreover one
respondent opined that since the PAS of their organization is purely kept confidential,
 23

the person concerned (i.e. appraisee) is not aware about his/her mistakes (i.e.
weaknesses).

ACTION TAKEN AFTER APPRAISAL

Action taken after appraisal in identifying areas of strength and weakness of the
appraisee, is the best way for overall development. In this regard views were collected
to know how the organization takes immediate action to overcome the weakness of the
appraisee and the opinions thereof are presented in the Table No. 2.4.

TABLE NO.2.4
OPINION ABOUT THE TYPES OF ACTION TAKEN
AGAINST WEAKNESSES OF THE EMPLOYEE

Sl. No. of Responses

Actions
No. Yes No
1. Training 15
--
(100%)
2. Providing proper guidance for a period of time 9 6
(60%) (40%)
3. Job Rotation 3 12
(20%) (80%)

From the Table 2.4, it is clear that no training is provided to the employees to
overcome their weaknesses; whereas proper guidance is provided for a period of time in
this connection, as opined by 60% of respondents. 80% of them believed that the
management helped the employees to overcome their weakness through job rotation.

OPINION ON THE NATURE OF CHANGE IN PROCEDURE

Opinions were collected regarding nature of changes in the existing appraisal

system which the respondents would like the management to incorporate in the
Organization, since the organization which believes in the development and optimization
of its human resources, there is a need to have a development oriented appraisal
system.

REASONS FOR CHANGE IN APPRAISAL SYSTEM

 24

The reasons for change as opined by the respondents are analyzed in the Table
No. 2.5 and while analyzing this table it is clear that 80% of the respondents believe that
the change is desired as it will identify their strengths and weaknesses, while 60% of the
respondents are of opinion that as the existing system does not provide lot of scope for
self-development, hence a change is desired. Further 40% of them does not believe
that the change in the existing system would create more openness and trust and 40%
also viewed negatively that there would be increase in self-confidence of the appraisee.

TABLE NO.2.5
REASON FOR CHANGE IN APPRAISAL SYSTEM

Sl.
No Reason for change No. of Responses
.

1. Create more openness & trust 6 40%

Identify strengths and weaknesses of the

2. 12 80%
appraisee

3. Provide lot of scope for self-development. 9 60%

4. Increase self-confidence of appraisee. 6 40%

NATURE OF CHANGE
Table No. 2.6 reflects the opinion of the respondents on the nature of change in
the existing Performance Appraisal System.

TABLE NO.2.6
REASON FOR CHANGE IN APPRAISAL SYSTEM

Sl.
No Changes No. of Responses
.
 25

1. Change in appraisal period 1 6.66%

2. Provision for pre & Post Appraisal Interview 7 46.66%

3. Change in appraisal system (Format) 6 40%

4. Introduction of evaluation by committee 12 80%

As per the multiple responses collected from the respondents reveal that 80%
desired to introduce evaluation by committee rather than by individuals; 46.66% opined
to make provision for pre & post appraisal interview and only 6.66% desired change in
appraisal period. Then 40% of them sought to change in the appraisal format.

OPINION FOR SEPARATE EATING SYSTEM FOR DIFFERENT PURPOSES

An opinion poll was conducted to find out whether the staff wanted to have a
separate appraisal rating system for Training, Rewards, Transfer, etc., since generally
organizations use one type of appraisal format for all the entries.

In this regard 80% and 60% of respondents agreed with the idea of a separate
rating system for promotion and training, respectively; whereas 60% of them voted for a
separate rating system for Rewards and only 40% suggested for Transfer. Table No.2.7
reflects the above factor.

TABLE NO.2.7
OPINION OF DIFFERENT APPRAISAL
PROCEDURE FOR DIFFERENT PURPOSE

Sl. No. of Responses

Purpose
No. Yes No
 26

9 6
1. Training
(60%) (40%)
9 6
2. Rewards
(60%) (40%)
12 3
3. Promotion
(80%) (20%)
6 9
4. Transfer
(40%) (60%)

CRITERIA FOR APPRAISAL

The criteria for appraisal determine the outcome of the evaluation. Many
considerations like performance, personality traits, seniority, experience, etc., are to be
kept in mind while appraising.
The Table No.2.8 reflects views of all (100%) respondents that priority should be
given to performance only. Only 20% viewed that personality should be one criteria, so
also 13.33% viewed in favour of seniority and experience.
TABLE NO.2.8
CRITERIA FOR APPRAISAL

Sl.
No Items No. of Responses
.
1. Performance only 15 100%
2. Personality only 3 20%
3. Seniority & Experience 2 13.33%
4. Social status - -
5. Any other - -

OPINION ON THE OBJECTIVITY OF THE APPRAISAL SYSTEM

When the Performance Appraisal System is in practice, then it brings serious
limitations with it. For its effectiveness in organization, this system should be designed
accordingly. A detailed analysis of the opinion of the respondents on a better PAS and
its effectiveness is reflected in the Table No. 2.9.

TABLE NO.2.9
 27

OPINION ON THE OBJECTIVITY

OF THE APPRAISAL SYSTEM

Sl. No. of Responses

Objectives
No. Yes No
Performance analysis gives a better understanding
15
1. about the appraisee, his/her role, requirements and the 0
(100%)
situation in which he/she is working.
Performance analysis is an important component for
15
2. identifying the developmental needs of employees for 0
(100%)
their better performance
Performance counselling should be introduced for an 15
3. 0
effective appraisal system (100%)

MODIFICATION IN THE PRESENT STYLE

After collecting views of the respondents on the existing system and analyzing
the same, opinions were sought to bring some modifications therein which was also
analyzed.

The Table No. 2.10 reflects their opinion about the modifications and the analysis
of which reveals that the employees are in the need of a constructive changes in the
present appraisal system.

TABLE NO.2.10
DESIRABLE CHANGES IN APPRAISAL SYSTEM

Sl. No. of Responses

Item
No. Yes No

Every employee should be given an opportunity to rate 12 8

1.
his/her own performance. (80%) (20%)
 28

15
2. Appraisal rating should be known to the appraisee. --
100%

Committee system in reviewing the performance should 15

3. --
be introduced. (100%)

Departmental task force should be formed to monitor 12 8

4.
effective implementation of system. (80%) (20%)

Asked about who should make the appraisal, all the respondents preferred to
have a committee system evaluation than the individual evaluation. Then 80% of them
opined to have a departmental task force to monitor effective implementation of the
system. 100% of the respondents desired that the appraisal rating should be known to
the employees. 80% of them suggested that every employee should be given an
opportunity to rate his/her own performance (self-appraisal). However, 20% of
respondents were not in favour of this.

OPINION ON THE COMPOSITION OF APPRAISAL COMMITTEE

In connection with constitution of an appraisal committee, it is revealed from the
Table No. 2.11 that 60% of the respondents are in favour of having Superiors and Peers
in the committee. While 40% of them suggested that Superiors, Peers and Subordinates
should form the committee.

TABLE NO.2.11
COMPOSITION OF APPRAISAL COMMITTEE

Sl.
No Items No. of Responses
.

1. Superiors only 3 20%

 29

2. Superiors and Peers 9 60%

3. Superiors, Peers and Subordinates 6 40%

4. Peers only -- --

OPINIONS ON THE FRACTORS OF IMPLEMENTATION OF NEW APPRAISAL

SYSTEM
In order to eliminate the prevailing shortcomings of the Appraisal System, new
development oriented Performance Appraisal System is required to be implemented.
Hence, for successful implementation of the new system in the sample organization,
opinions were collected through a question that ‘whether the new development
oriented performance appraisal system would create any problems for its
implementation or not.’
In replying to the above question, majority of respondents, i.e. 80% of the
respondents, did not see any creation of problems, if the new appraisal system is
implemented.

*****

CHAPTER – VI

Summary, Conclusion and Suggestions

In this chapter, on the basis of the findings of the study, effort has been
made to put stress on those areas of Performance Appraisal System of the Hotel,
 30

where the weaknesses or loopholes lie. The present survey which was confined
to the different departments of the Hotel Shakti International was based only on
the Staff Performance Appraisal System with a desire to have a new
development oriented appraisal system at the Hotel. The range of the enquiry in
this study starts with the perception of the staff members about their
organizational philosophy to the problems expected on account of introduction of
a new development oriented appraisal system in their organization.

This survey includes 15 employees working in different departments of the

Hotel, wherein required data / information for this study have been collected
through a questionnaire.

In this study the opinions of the respondents with regard to the existing
Appraisal System, their satisfaction/dis-satisfaction with the system, the nature of
change to be incorporated or the desire for the new Appraisal System, etc., are
analyzed statistically and have been presented in a systematic way.

In view of the objectives of the present study, importance has been put on
the following aspects:-
1) To assess the existing appraisal system and to examine its effectiveness
in fulfilling its objectives.
2) To suggest changes required for a development oriented appraisal
system.
This study reveals that a majority of respondents are in the age group of
32-36 years and most of them are having maximum experience of 11 years and
above.
A majority of the employees were of opinion that their organization
believes in the development of its human resources and their management has
willingness to have an understanding of their human resources and to
incorporate such policies which are effective for their betterment.
 31

The opinion regarding their satisfaction with the existing appraisal system
reveals happiness of the sample respondents about the existing system; except
only in one case where 53.33% of respondents opined negatively that this
system of their organization is not helpful for them to recognize their strengths
and weaknesses relating to job performance.
However, the above indicates that in the Hotel, the appraisal system is
development oriented; it is a deciding factor for promotion; it considers problems
of the employees in their job performance. Further a majority of respondents
opined that the appraisal system meet the needs of administrative purpose.
Reasons for implementation of a new system in the organization, reveals
that if the new system is introduced, then there can be identification of their
strengths and weaknesses and it would help by providing them adequate scope
for self-development through self-appraisal.
Respondents’ opinion regarding the nature of change in the Performance
Appraisal System is that a majority of them desired the introduction of the
evaluation committee. Whereas only 46.66% of them desired for pre and post
appraisal interview to be done.
A majority of the respondents believed that a separate rating system is
required for determining training and promotional aspects. From this opinion it is
clear that for effective appraisal system, appraisal report is one of the important
determinants.
With regard to the criteria of appraisal, the opinion so derived from the
respondents show that only an overwhelming majority of them like performance
to be taken into consideration while making evaluation. Only 20% of them
favoured personality and a few desired seniority and experience to be taken into
consideration for performance appraisal.
Analyzing views of the respondents about modification in the present
system, all the respondents wanted that a committee should review their
performance instead of individual reviewing, while some of them (80%) desired to
have the self-appraisal system. Majority of them also suggested forming a task
 32

force for monitoring effective implementation of the system whereas 100%

respondents expressed that the ratings should be made known to the appraisee.
In connection with the system of having a appraisal committee, a majority
of the respondents desired that the committee should include only Superiors and
Peers.
On analysis of data collected, a few suggestions are submitted here-under
for an effective and development oriented system:
1) While appraising, the purpose of appraisal should be duly taken into
consideration. Hence, there should be a separate appraisal system for
deciding training needs and promotions.
2) Necessary action should be taken to make arrangements for imparting
training in order to overcome the areas of weaknesses, for overall
development.
3) Committee system should be implemented for assessing the performance
rather than assessing by an individual.
4) The performance review feedback is the most important part of appraisal
procedure as it enables the employees to be aware of their strengths and
weaknesses. So care in the this regard should be taken.
5) Performance counseling should be introduced, since proper counseling
leads to overcome the weak areas of the employee and to reinforce his
strengths. In this connection as a developmental process the superior /
Departmental Head and the subordinate staff should discuss the past
performance for the purpose of helping the concerned staff to improve and
become more effective in future.
Though on the whole the respondents expressed their satisfaction with e
existing system but the appraisal system in this organization can be made more
development oriented, if the above changes are taken into consideration by the
management with an open mind.

*****
 33

References
 34

(BOOKS)

1. Mamoria,C.B., “Personnel Management”’ 9th Edition, Himalay Publishing House,

Bombay,1991.
2. Monappa,Arun&Saiyadain, Mirza S., “Personnel Management”’ 2nd Edition, Tata
McGraw Hill Publishing Company Limited, New Delhi,1996.
3. Monappa, Arun&Saiyadain, MirzaS., “Personnel management”, 2nd Edition, Tata
McGraw Hill Publishing Company Limited, New Delhi, 1996, P-207.
4. Mamoria,C.B., “Personnel Management”, 9th Edition, Himalaya Publishing House,
Bombay, 1991, P-403.
5. Mamoria, C.B., Ibid, P-405
6. Mamoria, C.B., Idid, P-412

Appendix

Questionnaire

PERSONAL DATA

1. NAME (May not be disclosed, if

Confidentiality is desired) :

2. DESIGNATION :
 35

3. AGE :

4. DEPARTMENT :

5. QUALIFICATIONS :

6. EXPERIENCE :

Questions:

1) Your organization believes in the development of its human resources. (YES/NO)

2) Your organization creates and provides reasonable opportunity to everyone for

improving his/her performance. (YES/NO)

3) At managerial level there is a willingness to understand human behaviour and

get along with people. (YES/NO)

4) The performance appraisal system of your organization is development oriented

and up to the expectations of your work environment. (YES/NO)

5) Is the PAS of your organization is sufficient to decide whether an employee is

deserving of a promotion. (YES/NO)

6) Does it take into considerations of the problems of employees while performing

the job? (YES/NO)

7) Does the Performance Appraisal System of your organization help the

employees to weakness relating to his/her performance? (YES/NO)

8) The purpose of the appraisal in your organization is:

(a) administrative only
(b) to evaluate goal achievement
(c) to motivate its people
(d) All of the above.
9) Are you satisfied with the existing Performance Appraisal System? (YES/NO)
ifNO, the reasons are:

(a) The system is not appropriate for your organization.

(b) The system of appraisal through confidential report encourages vindictive
attitude of the Boss.
 36

(c) The system is not participative enough.

(d) Subjective or biasness on rating by the appraisal is not ignored.
(e) There is no scope for self-appraisal.
(f) Any other reason (Please specify).

10) Your organization takes immediate action to overcome the weakness by:

(a) Training
(b) Providing proper guidance for a period of time.
(c) Job Rotation.

OPINION ABOUT THE CHANGE OF THE EXISTING PERFORMANCE APPRAISAL

SYSTEM.
11) A new system should be implemented because it will :

(a) Create more openness and trust.

(b) Identify strengths & weakness of the appraisee.
(c) Provide lot of scope for self-development.
(d) Increase self-confidence of appraisee.

12) Every employee should be given an opportunity to rate his/her own performance.
(YES/NO)
13) Your opinion about the nature of change in procedure should be:

(a) Change in appraisal period.

(b) Provision for pre & post appraisal interview.
(c) Change in appraisal system.
(d) Introduction of evaluation by committee.

14) Performance analysis gives better understanding about the appriasee, his/role,
requirements and the situation in which he/she is working. (YES/NO)

15) Performance Analysis is an important component for identifying the

developmental needs of employees for their better performance. (YES/NO)

16) Appraisal rating should be known to the appraisee. (YES/NO)

17) Should there be different rating system for

(a) Training (YES/NO)

(b) Rewards (YES/NO)

 37

(c) Promotion (YES/NO)

(d) Transfer (YES/NO)

18) Your opinion on the criteria for appraisal

(a) is performance only

(b) is personality only

(c) is seniority only

(d) is social status

(e) any other

19) Performance counseling should be introduced for an effective Performance

Appraisal System. (YES/NO)

20) Committee system in reviewing the performance should be introduced.(YES/NO)

21) Your opinion on the composition of appraisal committee

(a) Superiors only (YES/NO)

(b) Superiors & Peers (YES/NO)

(c) Superiors, Peers and Subordinates (YES/NO)

(d) Peers only (YES/NO)

(e) Any other (YES/NO)

22) Departmental task force should be formed to motor effective implementation of

the system. (YES/NO)

23) Do you think that the new development oriented Performance Appraisal System
create problems for its implementation? (YES/NO)

If YES, what are the reasons?

(a) Organization culture should be changed before is implementation.

(b) There should be more commitment from top management
(c) Nobody admits his/her weakness, so open system of appraisal may fail to
develop people.
(d) Self-appraisal is self-glorification.
(e) Training needs are not met by the organization in spite of doing serious
exercise in identifying them.
 38

********