A PROJECT REPORT ON Impact of Performance Appraisal on employee motivation SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF BANGALORE UNIVERSITY FOR

THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY SWETA SINGH REGNO: 09SKCMA078 UNDER THE GUIDANCE OF Prof. Ranganathan

EMPOWERING MIND ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 1st Cross, 1st Stage, Peenya, Bangalore 560058. 2009-11
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DECLARATION

I hereby declare that this project entitled Impact of Performance Appraisal on employee motivation submitted in partial fulfillment of the requirement of Masters of Business Administration (MBA) of Acharya Institute of Management and Sciences is based on Primary and Secondary data found by me in various departments, books, magazines and websites and collected by me under the guidance of Prof Ranganathan.

Date

SWETA SINGH

CERTIFICATE

Certified that this Project Report titled Impact of Performance Appraisal on employee motivation is conducted by SWETA SINGH of 1V semester MBA under the guidance of PROF.RANGANATHAN. This Project Report is based on the training under gone by the student and has not formed the basis for the award of any other degree/diploma by Bangalore University or any other university.

Prof. RANGANATHAN REDDY) (PROGRAM DIRECTOR)

(Prof. KERRON

(CEO& Principal)

CERTIFICATE FROM THE GUIDE

This is to certify that the Project titled Impact of Performance Appraisal on employee motivation submitted by Miss SWETA SINGH for the award of degree in Master of Business Administration has been completed under my supervision & guidance. It is an original piece of work based on primary as well as secondary data. This work is satisfactory and complete in every respect. I wish her all the success for his future Endeavour

Place: Bangalore Date: RANGANATHAN (PROJECT GUIDE) PROF.

ACKNOWLEDGEMENT

I, SWETA SINGH, would like to convey my deep gratitude to my guide PROF. RANGANATHAN, for hir valuable guidance imparted, which has enabled me to complete this report in accordance with Bangalore University norms.

I feel highly delighted with the way my dissertation report on topic Impact of Performance Appraisal on employee motivation has been completed.

I would also like to express grateful thank to all the respondents who helped me to proceed at every step of a perfect destined life and favoured me with their valuable feedback about the survey and cooperation

I am thankful to Prof. Kerron Reddy, Principal and CEO of A.I.M.S., who had provided all the required facilities to carry out the report work and nurturing my skills to execute the requirement.

Last but not least, my gratitude goes to my family members and friends, who showered upon me their best of good wishes and help, towards successful completion of this report.

TABLE OF CONTENTS

CHAPTER NO. 1

NAME OF THE CHAPTER Introduction 1.1 Meaning of performance appraisal 1.2 Performance appraisal and competitive advantage 1.3 Organizational strategy and performance appraisal 1.4 Appraisal process 1.5 Meaning of motivation 1.6 Definition of motivation 1.7 Significance of motivation 1.8 Types of motivation 1.9 Process of motivation 1.10 Intrinsic and extrinsic motivation 1.11 Effects of motivation 1.12 Benefits of motivation 1.13 Theories of motivation 1.14 Appraisals as employee motivation mechanism Research methodology 2.1 Meaning of research methodology 2.2 Introduction 2.3 Statement of the problem 2.4 Objective of the study 2.5 Scope of the study 2.6 Limitations of the study 2.7 Research Methodology 2.8 Sampling design 2.9 Data Collection 2.10 Tool of analysis Company profile 3.1 Introduction 3.2 Financial highlights 3.3 Key people 3.4 Board of directors 3.5Top competitors 3.6 Codes of conduct 3.7 Global alliances 3.8 Business value for TCS clients 3.9 TCS alliance partner advantage

PAGE NO. 1-39 1 2-3 4-5 5-21 21 22 23 23-24 25 25-26 26 27 28-38 38-39 40-42 40 40 41 41 41 41 42 42 42 42 43-49 43 43 43 43-44 44 44-45 45 45 46
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4 5 6

3.10 TCS alliance framework 3.11 Intellectual power 3.12 Sponsorships Analysis and Interpretation Findings and Suggestions Conclusion Bibliography Annexure

46 46 47-49 50-72 73-76 77

LIST OF TABLES Table No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 418 4.19 4.20 4.21 4.22 Description Gender of the employees Age of the respondents department to which the employee belongs to working experience of the respondents in the current organization satisfaction from the support of the hr department performance appraisal method followed in the organization satisfaction with the existing performance appraisal system performance appraisal done and assessed by performance appraisal is done periodically performance appraisal help the organization in the following ways performance appraisal is done by company to performance appraisal system transparent to the employees ways performance appraisal discussed with the employees performance appraisal activities are helpful to get motivated management is interested in motivating the employees performance appraisal motivates the employees in the following ways factor which motivates the employees type of incentive which motivates more training provided to employees if rated low training helped employees to build confidence and get motivated motivation help in improving productivity how motivation impact employees productivity Page No. 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

LIST OF CHARTS Chart No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 Description Gender of the employees Age of the respondents department to which the employee belongs to working experience of the respondents in the current organization satisfaction from the support of the hr department performance appraisal method followed in the organization satisfaction with the existing performance appraisal system performance appraisal done and assessed by performance appraisal is done periodically performance appraisal help the organization in the following ways performance appraisal is done by company to performance appraisal system transparent to the employees ways performance appraisal discussed with the employees performance appraisal activities are helpful to get motivated management is interested in motivating the employees Page No. 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65
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4.16 4.17 4.18 4.19 4.20 4.21 4.22

performance appraisal motivates the employees in the following 66 ways factor which motivates the employees type of incentive which motivates more training provided to employees if rated low training helped employees to build confidence and get motivated motivation help in improving productivity how motivation impact employees productivity 67 68 69 70 71 72

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CHAPTER

INTRODUCTION

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An organizations goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his or her best performance on a given job? The answer is performance appraisal. Employee assessment is one of the fundamental jobs of HRM. But not an easy one though. This chapter is devoted to a detailed discussion of the nature and process of conducting performance appraisal. 1.1 Meaning and Definition of performance appraisal In simple terms, performance appraisal may be understood as the assessment of an individual's performance in a systematic way, the performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed. A formal definition of performance appraisal is: It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. A more comprehensive definition is: Performance' appraisal is a formal structured system of measuring and evaluating an employees job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee organization and society all benefit. The second definition includes employees behavior as part of the assessment. Behavior can be active or passive--do something or do nothing. Either way behavior affects job results. The other terms used for performance appraisal arc: performance rating, employee assessment. Employees performance review, personnel appraisal, performance evaluation employee evaluation and

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(perhaps the oldest of the terms used) merit rating. Job analysis sets out requirements, which are translated into performance standards, which in turn from the basis for performance appraisal.

1.2 PERFORMANCE APPRAISAL AND COMPETITIVE ADVANTAGE The objectives of performance appraisal, listed above, point out the purpose which such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firm's competitive strength. Besides encouraging high levels of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employee's need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following ways (see Fig below)

Improving Strategy and Behavior Competitive Advantage Performance Making correct decisions

Values and Behavior

Minimizing dissatisfaction and turnover

Ensuring Legal Compliance

Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage? 1.2.1 Improving Performance

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An effective appraisal system can contribute to competitive advantage by improving employee job performance in two ways-by directing employee behavior towards organizational goals, as was done by the second beekeeper (see opening case), and by monitoring that behavior to ensure that the goals are met.

1.2.2 Making Correct Decisions As stated above, appraisal is a critical input in making decisions on such issues as pay raise, promotion, transfer, training, discharges and completion of probationary periods. Right decision on each of these can contribute to competitive strength of an organization. 1.2.3 Ensuring Legal Compliance Promotions made on factors other than performance might land up a firm in a legal battle, thus diverting its focus on non-productive areas, as it happened to Williamson Magar. Organizations can minimize costly performance-related litigation by using appraisal systems that give fair and accurate ratings. 1.2.4 Minimizing Job Dissatisfaction and Turnover Employees tend to become emotional and frustrated if they perceive that the ratings they get are unfair and inaccurate. Such employees find that the efforts they had put in became futile and obviously get de-motivated. Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair and accurate appraisal results in high motivation and increased job satisfaction. An organization having satisfied and motivated employees will have an edge over its competitors. 1.2.5 Consistency between Organizational Strategy and Behavior An organization needs a strategy consistent with the behavior of its employees if it were to realize its goals. A truism of organizational life is that people engage themselves in behaviors that they perceive will be rewarded. As employees want to be rewarded, they tend to occupy
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themselves more with those activities on which the organization emphasizes. For example, if the focus is on service, employees will behave in ways that will help them in gaining rewards associated with service delivery. If the focus is on cost control, employees will seek to control cost and thus be recongnised and rewarded. If the focus is on rewarding productivity, employees will strive for productivity. The performance appraisal becomes not only a means of knowing if the employees' behaviour is consistent with the overall strategic focus, but also a way of bringing to the fore any negative consequence of the strategy- behavior fit. 1.3 Organizational Strategy and Performance Appraisal The performance appraisal system serves many organizational objectives and goals. Besides encouraging high level of performance, the evaluation system is useful in identifying employees with potential, rewarding performance equitably and determining employees' needs for development. These are all the activities that should support the organizations strategic orientation. Although these activities are clearly instrumental in achieving corporate plans and long-term growth, typical appraisal systems in most organizations have been focused on shortterm goals. From the strategic management point of view, organizations can be grouped into three categories defenders, prospectors and analyzers. Performance appraisal has definite roles in all the three strategies. Organizations with a prospector strategy continuously search for different product and market opportunities. In addition, these organizations regularly experiment with potential responses to new and emerging environmental trends. Prospectors are often the harbingers of change. Because of the emphasis on skills identification and acquisition of human resources from external sources, as opposed to skills building with the organization, prospectors often use the performance appraisal as a means of identifying staffing needs. The emphasis is on results. Finally, the focus is on division and corporate performance evaluation as they compare with other companies during the same evaluation period. Organizations with an analyzer strategy operate in two types of product-.market domains. One domain is stable while the other is changing. In their more innovative areas, managers watch their competitors closely and rapidly adopt the ideas that appear promising. In general, analyzers
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use cost effective technologies for stable products and project or matrix technologies for new product. Thus, these organizations attempt to identify both training as well as staffing needs. The appraisal systems are considered at the individual, group and divisional levels. Finally, successful analyzers have a tendency to examine current performance with past performance within the organization. Cross-sectional comparisons (comparisons among 'companies) may also occur. Whatever the category, a performance appraisal system has strategic importance to a firm in three ways: 1. Feedback mechanism, 2. Consistency between organizational strategy and job behaviour, and 3. Consistency between organizational values and job behaviour.

1.4 APPRAISAL PROCESS Figure below outlines the performance- appraisal process. Each step in the process is crucial and is arranged logically. The process as shown in Fig. Below is somewhat idea1ised. Many organizations make every effort to approximate the ideal process, resulting in first-rate appraisal systems. Unfortunately, many others fail to consider one or more of the steps and, therefore, have less-effective appraisal system.

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Objective of performance oo appraisal Establish job Expectation

Design an appraisal programme Appraise Performance

Performance interview

Archive appraisal data

Use appraisal data for appropriate purposes

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The performance appraisal process

1.4.1

Objectives of Appraisal

Objectives of appraisal as stated above include effecting promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct problems. These objectives are appropriate as long as the approach in appraisal is individual. Appraisal in future, would assume systems orientations. In the systems approach, the objectives of appraisal stretch beyond the traditional ones. In the systems approach, appraisal aims at improving the performance, instead of merely assessing it. Towards this end, an appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance and social processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how work the work system affects an individuals. 1.4.2. Establish Job Expectations The second step in the appraisal process is to establish job expectations. This includes informing the employee what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the major duties contained in the job place of formal performance evaluation. 1.4.3. Design Appraisal Programme Designing an appraisal programme poses several questions which we need to answers. They are: 1. 2. 3. Formals versus informal appraisal Whose performance is to be assessed? Who are the raters?
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4. 5. 6. 7. 8.

What problems are encountered? How to solve the problems? What should be evaluated? When to evaluate? What methods of appraisal are to be used?

1. Whose performance should be rated? To the question as to whose performance should be rated, the answer is obviousemployees, is it individual or teams? Specifically the rate may be defined as the individual, work group, division, or organizations. It is also possible to define the rate at multiple levels.

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2. Formal V/s informal appraisal: - the first step in designing an appraisal programme is to decide whether the appraisal should be formal or informal. Formal appraisal usually occurs at specified time periodsonce or twice year. Formal appraisals are most often required by the organizations for the purposes of employee evaluation. Informal performance appraisal can occur whenever the superior feels the need for communication. 3. Who are Raters? Raters can be immediate supervisors, specialist from the HR department, subordinates. Peers, committees, clients, self appraisal, or a combination of several. a. Immediate supervisor is the fit candidate to appraise the performance of his or her subordinate. There are 3 reasons in support of this choice. No one is familiar with the subordinates performance than his or her superior. Another reason is that the superior has the responsibility of managing a particular unit. When the tasks of evaluating a subordinate is given to another person, the superior authority may be undermined seriously. Finally, training and development of subordinate is am portent element in every mangers job. b.Subordinate can assess the performance of their superiors. The use of this choice may be useful in assessing an employee ability to communicate, delegate work, allocate resources, disseminate information, resolve intra-personal conflict, and deal with employees on a fair basis. But the problem with the subordinate evaluation is that supervisors tend to become popular, not by effective leadership, but by mere gimmicks. c. Peers are in better position to evaluate certain facts of job performance which the subordinates or supervisors cannot do. Such facts include contribution skills, reliability and initiative. Closeness of the working relationships and the amount of personal contacts place peers in a better position to make accurate assessments. Unfortunately friendship or animosity may result in distortion of evaluation. Further when reward allocation is based on peer evaluation, series conflicts among co-workers may develop. d. Although clients are seldom used for rating employee performance, nothing prevents an organization from using this source. Clients may be members within the organization who have direct contact with the rate and make use of an output (goods or services) this employee provides. Interest, courtesy, dependability and innovativeness are but a few of the qualities for which clients can offer rating information. Clients, external to the organization can also offer
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similar kinds of information. Where appraisal is made by the superior, peers, subordinates and clients, it is called the 360-degree system of appraisal. e. In self appraisal employee himself or herself evaluates his or her own performance. Indian Telephone Industries has been following the self-appraisal system for executives in grade I to IV. Hewlett-Packard and Texas Instruments too ask their performance to prepare their own appraisal. On the positive side it may be stated that in self-appraisal there is an opportunity to participate in evaluation particularly if it is combine with goal setti9ng and this should be improve the mangers motivation. Managers are less defensive in self-evaluation than when supervisors tell them what they are. 4. Problems of rating: Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as rating errors. These errors occur in the raters observations, judgment, and information processing, and can seriously affect assessment results. The most common rating errors are leniency or severity, central tendency, halo effect, primacy and recency effects, perceptual set, performance dimension behavior, spillover effect, and status effect. 5. Solving raters problem: The best way to overcome the problems is to provide training to the raters. 6. What should be rated: The seven criteria for assessing performance are: a) Quality: The degree to which the process or result of carrying out an activity approaches perfection in terms of their conforming to some ideal way of performing the activity, or fulfilling the activitys intended purpose. b) Quantity: The amount produced, expressed in monetary terms, number of units, or number of completed activity cycles. c) Timeliness: The degree to which an activity is completed or a result produced, at the earliest time desirable from the standpoints of both co-ordinating with the outputs of others and of maximizing the time available for other activities.

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d) Cost effectiveness: The degree to which the use of the organizations resources is maximized in the sense of getting the highest gain or reduction in loss from each unit or instance of use of a resource. e) Need for supervision: The degree to which a job performer can carry out a job function without either having to request supervisory assistance or requiring supervisory intervention to prevent an adverse outcome. f) Interpersonal impact: The degree to which a performer promotes feeling of self-esteem, goodwill and co-operation among co-workers and subordinates g) Community service: Firms are increasingly emphasizing on employees community involvement. This is particularly true in educational institutions. One of the criteria for accreditation by National Assessment and Accreditation Council (NAAC) of any college or university is the involvement of staff in social activities. 7. Timing of evaluation: Performance appraisal can be conducted once in three months, six months or once in a year. Majority of the firms, however, conduct appraisal once in a year. 8. METHODS OF PERFORMANCE APPRAISAL The performance appraisal methods may be classified into three categories, as shown in Figure below. PERFORMANCE APPRAISAL TECHNIQUE

Individual evaluation methods tests Essay evaluation Critical incidents Checklists Confidential report

Multiple- person evaluation methods Ranking

Other Methods Performance

Paired comparison method Forced distribution

Field review technique

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Graphic rating scale BARS Forced choice method MBO

Individual Evaluation Methods Under the individual evaluation methods of merit rating, employees are evaluated one at a time without comparing them with other employees in the organization. (a) Confidential report: It is mostly used in government organizations. It is a descriptive report prepared, generally at the end of every year, by the employees immediate superior. The report highlights the strengths and weaknesses of the subordinate. The report is not databased. The impressions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee. The appraisee is not very sure about why his ratings have fallen despite his best efforts, why others are rated high when compared to him, how to rectify his mistakes, if any; on what basis he is going to be evaluated next year, etc. Since the report is generally not made public and hence no feedback is available, the subjective analysis of the superior is likely to be hotly contested. In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraisee. (b) Essay evaluation: Under this method, the rater is asked to express the strong as well as weak points of the employees behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating. While preparing the essay on the employee, the rater considers the following factors: (i) Job knowledge and potential of the employee; (ii) Employees understanding of the companys programmes, policies, objectives, etc.; (iii) The employees relations with co-workers and superiors; (iv) The employees general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general. Essay evaluation is a non-quantitative technique. This method is advantageous in at least one sense, i.e., the essay provides a good deal of information about the employee and also reveals
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more about the evaluator. The essay evaluation method however, suffers from the following limitations: It is highly subjective; the supervisor may write a biased essay. The employees who are sycophants will be evaluated more favorably then other employees. Some evaluators may be poor in writing essays on employee performance. Others may be superficial in explanation and use flowery language which may not reflect the actual performance of the employee. It is very difficult to find effective writers nowadays. The appraiser is required to find time to prepare the essay. A busy appraiser may write the essay hurriedly without properly assessing the actual performance of the worker. On the other hand, appraiser takes a long time, this becomes uneconomical from the view point of the firm, because the time of the evaluator (supervisor) is costly. (c) Critical incident technique: Under this method, the manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers performance. An example of a good critical incident of a sales assistant is the following: July 20 The sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers problem. On the other hand the bad critical incident may appear as under: July 20 The sales assistant stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store managers call thrice. He is lazy, negligent, stubborn and uninterested in work. This method provides an objective basis for conducting a thorough discussion of an employees performance. This method avoids recency bias (most recent incidents get too much emphasis). This method suffers however from the following limitations:

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Negative incidents may be more noticeable than positive incidents. The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session.It results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it. Most frequently, the critical incidents technique of evaluation is applied to evaluate the performance of superiors rather than of peers of subordinates. (d) Checklists and weighted checklists: Another simple type of individual evaluation method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist. l l l l l Is the employee really interested in the task assigned? Yes/No Is he respected by his colleagues (co-workers) Does he give respect to his superiors? Does he follow instructions properly? Does he make mistakes frequently? Yes/No Yes/No Yes/No Yes/No

A rating score from the checklist helps the manager in evaluation of the performance of the employee. The checklist method has a serious limitation. The rater may be biased in distinguishing the positive and negative questions. He may assign biased weights to the questions. Another limitation could be that this method is expensive and time consuming. Finally, it becomes difficult for the manager to assemble, analyze and weigh a number of statements about the employees characteristics, contributions and behaviors. In spite of these

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limitations, the checklist method is most frequently used in the employees performance evaluation. (e) Graphic rating scale: Perhaps the most commonly used method of performance evaluation is the graphic rating scale. Of course, it is also one of the oldest methods of evaluation in use. Under this method, a printed form, as shown below, is used to evaluate the performance of an employee. A variety of traits may be used in these types of rating devices, the most common being the quantity and quality of work. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job. The rating scale is the most common method of evaluation of an employees performance today. One positive point in favor of the rating scale is that it is easy to understand, easy to use and permits a statistical tabulation of scores of employees. When ratings are objective in nature they can be effectively used as evaluators. The graphic rating scale may however suffer from a long standing disadvantage, i.e., it may be arbitrary and the rating may be subjective. Another pitfall is that each characteristic is equally important in evaluation of the employees performance and so on. (f) Behaviorally anchored rating scales: Also known as the behavioral expectations scale, this method represents the latest innovation in performance appraisal. It is a combination of the rating scale and critical incident techniques of employee performance evaluation. The critical incidents serve as anchor statements on a scale and the rating form usually contains six to eight specifically defined performance dimensions. The following chart represents an example of a sales trainees competence and a behaviorally anchored rating scale. How to construct BARS? Developing a BARS follows a general format which combines techniques employed in the critical incident method and weighted checklist ratings scales. Emphasis is pinpointed on pooling the thinking of people who will use the scales as both evaluators and evaluees. Step 1: Collect critical incidents: People with knowledge of the job to be probed, such as job holders and supervisors, describe specific examples of effective and ineffective behavior related to job performance.

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Step 2: Identify performance dimensions: The people assigned the task of developing the instrument cluster the incidents into a small set of key performance dimensions. Generally between five and ten dimensions account for most of the performance. Examples of performance dimensions include technical competence, relationships with customers, handling of paper work and meeting day-to-day deadlines. While developing varying levels of performance for each dimension (anchors), specific examples of behavior should be used, which could later be scaled in terms of good, average or below average performance. Step 3: Reclassification of incidents: Another group of participants who are knowledgeable about the job is instructed to retranslate or reclassify the critical incidents generated (in Step II) previously. They are given the definition of job dimension and told to assign each critical incident to the dimension that it best describes. At this stage, incidents for which there is not 75 per cent agreement are discarded as being too subjective. Step 4: Assigning scale values to the incidents: Each incident is then rated on a one-to-seven or one-to-nine scale with respect of how well it represents performance on the appropriate dimension. A rating of one represents ineffective performance; the top scale value indicates very effective performance. The second group of participants usually assigns the scale values. Means and standard deviations are then calculated for the scale values assigned to each incident. Typically incidents that have standard deviations of 1.50 or less (on a 7-point scale) are retained. Step 5: Producing the final instrument: About six or seven incidents for each performance dimension all having met both the retranslating and standard deviation criteria will be used as behavioral anchors. The final BARS instrument consists of a series of vertical scales (one for each dimension) anchored (or measured) by the final incidents. Each incident is positioned on the scale according to its mean value. Because the above process typically requires considerable employee participation, its acceptance by both supervisors and their subordinates may be greater. Proponents of BARS also claim that such a system differentiates among behavior, performance and results and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job-specific and identifies observable and measurable behavior, it is a more reliable and valid method for performance appraisal.
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Researchers, after surveying several studies on BARS, concluded that despite the intuitive appeal of BARS, findings from research have not been encouraging. It has not proved to be superior to other methods in overcoming rater errors or in achieving psychometric soundness. A specific deficiency is that the behaviors used are activity oriented rather than results oriented. This creates a potential problem for supervisors doing the evaluation, who may be forced to deal with employees who are performing the activity but not accomplishing the desired goals. Further, it is time consuming and expensive to create BARS. They also demand several appraisal forms to accommodate different types of jobs in an organization. In a college, lecturers, office clerks, library staff, technical staff and gardening staff all have different jobs; separate BARS forms would need to be developed for each. In view of the lack of compelling evidence demonstrating the superiority of BARS over traditional techniques such as graphic rating scales. Decotis concluded that: It may be time to quit hedging about the efficacy of behavioral scaling strategies and conclude that this method has no clear-cut advantages over more traditional and easier methods of performance evaluation. (g) Forced choice method: This method was developed to eliminate bias and the preponderance of high ratings that might occur in some organizations. The primary purpose of the forced choice method is to correct the tendency of a rater to give consistently high or low ratings to all the employees. This method makes use of several sets of pair phrases, two of which may be positive and two negative and the rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker. Actually, the statement items are grounded in such a way that the rater cannot easily judge which statements apply to the most effective employee. They overall objectivity is increased by using this method in evaluation of employees performance, because the rater does not know how high or low he is evaluating the individual as he has no access to the scoring key. This method, however, has a strong limitation. In the preparation of sets of phrases trained technicians are needed and as such the method becomes very expensive. Further, managers may feel frustrated rating the employees in the dark. Finally, the results of the forced choice method may not be useful for training employees because the rater himself does not know how he is evaluating the worker. In spite of these limitations, the forced choice techniques is quite popular.

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(h) Management by Objectives (MBO): MBO represents a modern method of evaluating the performance of personnel. Thoughtful managers have become increasingly aware that the traditional performance evaluation systems are characterized by somewhat antagonistic judgments on the part of the rater. There is a growing feeling nowadays that it is better to make the superior work with subordinates in fixing goals. This would inevitably enable subordinates to exercise self-control over their performance behaviors. The concept of management by objectives is actually the outcome of the pioneering works of Drucker, McGregor and Odiorne in management science. 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 individuals 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. MBO thus represents more than an evaluation programme and process. Practicing management scientists and pedagogues view it as a philosophy of managerial practice; it is a method by which managers and subordinates plan, organize, control, communicate and debate. Features MBO emphasizes participatively set goals that are tangible, verifiable and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods). MBO, by concentrating on key result areas translates the abstract philosophy of management into concrete phraseology. The technique can be put to general use (nonspecialist technique). Further it is a dynamic system which seeks to integrate the companys need to clarify and achieve its profit and growth targets with the managers need to contribute and develop himself. MBO is a systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals. It allows the subordinate plenty of room to make creative decisions on his own. MULTIPLE PERSON EVALUATION METHODS

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a) Ranking method: In this, the superior ranks his or her subordinates in the order of their merit, starting from the best to the worst. All that the HR department knows is that A is better than B. The how and why are not questioned, nor answered. No attempt is made to fractionalise what is being appraised into component elements. This method is subject to the halo and recency effects, although rankings by two or more raters can be averaged to help reduce biases. Its advantage include ease of administration and explanation. b) Paired-comparison method: Under this method, the appraiser compares each employee with every other employee, one at a time. For example, there are five employees named A,B,C,D and E. The performance of A is first compared with the performance of B and a decision is made about whose performance is better. Then A is compared with C,D and E in that order. The same procedure is repeated for other employees. The number of comparisons may be calculated with the help of a formula which reads thus: N(N-1) 2 After the completion of comparison, the results can be tabulated, and a rank is created from the number of times each person is considered to be superior. c) Forced distribution method: According to a forced distribution performance appraisal, an employee is judged on his own accomplishments. This is rewarding for an employee who values individual achievements over teamwork and team-based goals.The method by which the employee is ranked may include "management by objectives" or MBOs, which are goals and objectives the employee and her manager identify at the beginning of the evaluation year. At the conclusion of the evaluation year, the objectives completed are ticked off, and the employee is rewarded for the amount and quality of work performed to reach those goals. OTHER METHODS a) Performance tests: With a limited number of jobs, employee assessment may be based upon a test of knowledge or skills. The test may be of the paper-and-pencil variety or an actual demonstration of skills. The test must be reliable and validated to be useful. Even then, performance tests are apt to measure potential more than actual performance. In order for the
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where N stands for the number of employees to be compared.

test to be job related, observations should be made under circumstances likely to be encountered. Practicality may suffer if costs of test development or administration b) Field review method: This is an appraisal by someone outside the, assessors own department. Usually someone from the corporate office or the HR department. The outsider reviews Employee records and holds interviews with the ratee and his or her superior. This method is primarily used for making promotional decision at the managerial level. Field reviews are also useful when comparable information is needed from employees in different units or locations. Two disadvantage of this method are: An outsider is usually not familiar with conditions in an employees work environment which may affect the employees ability or motivation to perform. An outsider review does not have the opportunity to observe employee behavior of performance over a period of time and in a variety of situations. But only in an artificially structured interview situation which extends over a very short period of time. 1.4.4. Appraise the performance: The next step in the appraisal process is to measure the performance. What then is performance? Performance is essentially what an employee does or does not do. Employee performance common to most jobs include the following elements: Quality of output Quantity of output Timeliness of output Presence at work Cooperativeness

In addition to these, other elements that deserve assessment, are job knowledge, leadership abilities, judgement, supervisors, versatility, and health. Assessment should also include ones potential to perform and not just actual performance.
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1.4.5. Performance Management: Performance appraisal provides feedback about employee job performance. Getting feedback is not enough.Three more activities need to be undertaken to complete the process: performance interview, archiving performance data and use of appraisal data. These three activities constitute the core of performance management. Performance interview: Performance interview is another step in the appraisal process. Once appraisal has been made of employees, the raters should discuss and review the performance with the ratees, so that they will receive feedback about where they stand in the eye of superiors. Feedback is necessary to effect improvement in performance, specially when it is inadequate. Speciafically, performance interview has three goals: (i) to change behaviour of employees whose performance does not meet organizational requirements or their own personal goals, (ii) to maintain the behaviour of employees who perform in an acceptable manner, and (iii) to recognise superior performance behaviours so that they will be continues. 1.4.6. Archiving Performance Data: Organization need to archive or store the appraisal data so that at any point in future, the information can be retrieved and used. For example, if an employee has been told that he or she was not promoted because of below average performance and he or she would consider favorably for a jump in status and remuneration provided the performance improves. The HR manager should have those details to convince the employee concerned when he or she joins issue with the management on matters relating to promotion. Other issues such as pay hale, confirmation of probationary services, affirmative action and the like deserve reference to the past information. Archiving appraisal data is not just desirable but essential too. 1.4.7. Use of Appraisal Data: The final step in the evaluation process is the use of evaluation data. The data and information generated through performance evaluation must be used by the HR department. 1.5 MEANING OF MOTIVATION To the behavioral scientists, the word motivation is something stemming from within a person. According to them, motivation refers to a dynamic driving force, which stems from within. It is an inner striving condition, which activates or moves individual into action and continues him in the course of action enthusiastically. Thus, motivation is defined as an inner state that
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activates, energizes or moves behaviour towards goals. And, the forces inside the individual that inspire him to continue work are variously called as wishes, drives, needs etc. According to Rensis Likert motivation is the core of management. Motivation is an important function performed by manager for actuating the people to work for the accomplishment of organizational objectives. Issuance of well-conceived instructions and orders does not mean that they will be followed. A manager has to make appropriate use of various techniques of motivation to enthuse the employees to follow them. Effective motivation succeeds not only in having an order accepted but also in gaining a determination to see that it is executed efficiently and effectively. Motivation is an effective and dynamic instrument in the hands of a manager for inspiring the workforce and creating confidence in them. Through the motivation of the workforce, management creates will to work which is necessary for the achievement of organisational goals and objectives. Motivation is the process of getting the members or the group to pull weight effectively, to give their loyalty to the group and to carry out properly the purpose of the organization. 1.6 Meaning and definition of motivation The term motivation has its origin in the Latin word mover which means to move. Thus, motivation stands for movement. One can get a donkey to move by using a carrot or a stick, with people one can use incentives, or threats or reprimands. However, these only have a limited effect. These work for a while and then need to be repeated, increased or reinforced to secure further movement. The term motivation may be defined as the managerial function of ascertaining the motives of subordinates and helping them to realize those motives. According to Dubin motivation could be defined as the complex of forces starting and keeping a person at work in an organization. Motivation is something that moves the person to action, and continues him in the course of action already initiated. Motivation refers to the way a person is enthused at work to intensify his/her desire and willingness to use and channelize his/her energy for the achievement of organizational objectives. It is something that moves a person into action wand continue him in the course of action enthusiastically. The role of

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motivation is to develop and intensify the desire in every member of the organization to work effectively and efficiently in his position. In the words of Dalton E. McFarland, motivation is the way in which urges, desires, aspiration, striving or needs direct, control or explain the behavior of human being. Motivation has very close relationship with the behavior. It explains how and way the human behavior is caused. According to McFarland motivation is a form of tension occurring within individual, with resulting behavior aimed at reducing, eliminating or diverting the tension. Understanding the needs and drives and their resulting tensions helps to explain and predict human behavior ultimately providing a sound basis for managerial decision and action. Thus, motivation is the term, which applies to the entire class of urges, drives, desires, needs and similar forces.

1.7 Significance of Motivation Motivation involves getting the members of the group to pull weight effectively, to give their loyalty to the group, to carry out properly the purpose of the organization. The following results may be expected if the employees are properly motivated. 1. The workforce will be better satisfied if the management provides them with opportunities to fulfill their physiological and psychological needs. The workers will cooperate voluntarily with the management and will contribute their maximum towards the goals of the enterprise. 2. Workers will tend to be as efficient as possible by improving upon their skills and knowledge so that they are able to contribute to the progress of the organization. This will also result in increased productivity. 3. The rates of labors turnover and absenteeism among the workers will be low. 4. There will be good human relations in the organization as friction among the workers themselves and between the workers and the management will decrease. 5. The number of complaints and grievances will come down. Accident will also be low.
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6. There will be increase in the quantity and quality of products. Wastage and scrap will be less. Better quality of products will also increase the public image of the business. 1.8 TYPES OF MOTIVATION 1.8.1 Achievement Motivation It is the drive to pursue and attain goals. An individual with achievement motivation wishes to achieve objectives and advance up on the ladder of success. Here, accomplishment is important for its own shake and not for the rewards that accompany it. It is similar to Kaizen approach of Japanese Management. 1.8.2 Affiliation Motivation It is a drive to relate to people on a social basis. Persons with affiliation motivation perform work better when they are complimented for their favorable attitudes and co-operation. 1.8.3 Competence Motivation It is the drive to be good at something, allowing the individual to perform high quality work. Competence motivated people seek job mastery, take pride in developing and using their problem-solving skills and strive to be creative when confronted with obstacles. They learn from their experience. 1.8.4 Power Motivation It is the drive to influence people and change situations. Power motivated people wish to create an impact on their organization and are willing to take risks to do so. 1.8.5 Attitude Motivation Attitude motivation is how people think and feel. It is their self confidence, their belief in them, their attitude to life. It is how they feel about the future and how they react to the past. 1.8.6 Incentive Motivation It is where a person or a team reaps a reward from an activity. It is You do this and you get that, attitude. It is the types of awards and prizes that drive people to work a little harder.
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1.8.7 Fear Motivation Fear motivation coercions a person to act against will. It is instantaneous and gets the job done quickly. It is helpful in the short run.

1.9

1.10 INTRINSIC AND EXTRINSIC MOTIVATION Motivation may be intrinsic when one is involved in an activity without any external help. A very good example of intrinsic motivation is a hobby. Presently there are no theories that determine the source or origin of intrinsic motivation.

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Since the 1970s, intrinsic motivation has been dealt with by educational psychologists who have found out it is essentially associated with high educational achievement and is therefore enjoyed by students at large. Combining Bernard Weiner's attribution theory, Bandura's work on selfefficacy and other studies, it has been found out that students are likely to be intrinsically motivated if they Feel that their results have an important bearing on internal factors that they can control like the amount of effort they put in Believe that they themselves are the primary agents to reach their goals and no other factors like luck has any role to play in it Think that it is more important to have an in-depth understanding of a subject rather than engage in simple rote-learning to achieve good grades. Altruistic reasons often serve as the motivation for people while participating in knowledgesharing communities and other organizations. Such reasons may include sentiments like contribution for a good cause, a moral obligation or simply giving back to society. In work environments, however, extrinsic motivation is more powerful than intrinsic motivation. Here the external motivating factor is, of course money. Coercion or force is seen as the most obvious form of motivation as escaping pain or negative consequences is a common human instinctive action, which leads to immediate effects. Successful coercion, supposedly can take priority over other types of motivation at times. However, when coercion is used in its extreme form leads to slavery, which is rejected by many philosophies. It is in use for prisoners, students in mandatory schooling, on children in a nuclear family unit and in the form of conscription. Although many capitalists such as Ayn Rand have raised their voice against coercion, critics argue that wage slavery is unavoidable in the absence of proper social safety networks. 1.11 EFFECTS OF MOTIVATION There can be several effects of motivation and one of the most significant efforts is the direct behavior toward particular goals that at the same time can lead to increased effort and energy as
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well as increase initiation of, and persistence in, activities and also enhance cognitive processing. At the same time this can also determine what consequences are reinforcing and hence lead to improved performance. A fact that should be kept in mind is that the students are not always internally motivated. This fact has been clearly proved by both Abraham Maslow's theory of motivation and Douglas McGregor's Theory. A recent research done of Maslow theory clearly shows that he has placed money at the lowest level of the hierarchy while at the same time he has shown other needs are better motivators to staff. Similarly the other experts on motivation McGregor places money in his Theory X category while he places praise and recognition on the Theory Y category. As a consequence it can be hence determined that these are the people who need situated motivation. This often is found in environmental conditions that the teacher creates. In fact there can be several kinds of motivation and one of the prime among them is the intrinsic motivation, which occurs when people are internally motivated to do something. This is because such a form of motivation either brings them pleasure, they think it is important, or they feel that what they are learning is morally significant and hence it is much different from extrinsic motivation that comes into play when a student is compelled to do something or act a certain way because of factors external to him or her. Money is also a great motivator that allows people to drive themselves to the limit. What sets this apart if that the motivating effect of money that lasts only for a short period and in fact in higher levels of the hierarchy, praise, recognition, and a sense of belonging are far more powerful motivators than money. 1.12 BENEFITS OF MOTIVATION A basic benefit of motivation is that the motivated employees always look for better ways to do a job and at the same time they are more quality oriented, apart from being more productive. What is significant is that the workplace is about midway between the extremes of high threat and high opportunity. Motivation by threat is a dead-end strategy. This thus basically makes the staff more attracted to the opportunity side of the motivation curve than the threat side. A good manager understands the need for motivation and for this it is a must for them to comprehend how company employees see them. This thus helps them to manage the impression they make, not just their intentions. Many researchers however agree that a worker's motivation is solely determined by pay thus making it must for the management to take care of
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psychological or social aspects of work. Thus to sum up the scientific research clearly ensures that human motivation is based completely on extrinsic rewards; nonetheless many still believe that workers could not be motivated by the mere need for money, though money could be used as an indicator of success for various motives. Other researchers have emphasized that the social contacts a worker has at the workplace are very important and that boredom and repetitiveness of tasks lead to reduced motivation; thus leading many to believe that workers could be motivated by acknowledging their social needs . This at the same time made them feel important and hence when employees were given freedom to make decisions on the job and greater attention was paid to informal work groups the productivity was more; this model was later named as the Hawthorne effect. However this model has a basic drawback and that is that the model places is undue reliance on social contacts at work situations for motivating employees. [Motivation, thus is a must and it has been well established that a learned behavior will not occur unless it is energized. Over the ages the psychologists have tried to find out if changes in behavior better explained by principles of environmental/ecological influences, perception, memory among other factors 1.13 THEORIES OF MOTIVATION 1.13.1 Contribution of Robert Owen: Though Owen is considered to be paternalistic in his view, his contribution is of a considerable significance in the theories of Motivation. During the early years of the nineteenth century, Owens textile mill at New Lanark in Scotland was the scene of some novel ways of treating people. His view was that people were similar to machines. A machine that is looked after properly, cared for and maintained well, performs efficiently, reliably and lastingly, similarly people are likely to be more efficient if they are taken care of. Robert Owen practiced what he preached and introduced such things as employee housing and company shop. His ideas on this and other matters were considered to be too revolutionary for that time. 1.13.2 Jeremy Benthams The Carrot and the Stick Approach: Possibly the essence of the traditional view of people at work can be best appreciated by a brief look at the work of this English philosopher, whose ideas were also developed in the early years of the Industrial Revolution, around 1800. Benthams view was that all people are self-interested
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and are motivated by the desire to avoid pain and find pleasure. Any worker will work only if the reward is big enough, or the punishment sufficiently unpleasant. This view - the carrot and stick approach - was built into the philosophies of the age and is still to be found, especially in the older, more traditional sectors of industry. The various leading theories of motivation and motivators seldom make reference to the carrot and the stick. This metaphor relates, of course, to the use of rewards and penalties in order to induce desired behavior. It comes from the old story that to make a donkey move, one must put a carrot in front of him or dab him with a stick from behind. Despite all the research on the theories of motivation, reward and punishment are still considered strong motivators. For centuries, however, they were too often thought of as the only forces that could motivate people. At the same time, in all theories of motivation, the inducements of some kind of carrot are recognized. Often this is money in the form of pay or bonuses. Even though money is not the only motivating force, it has been and will continue to be an important one. The trouble with the money carrot approach is that too often everyone gets a carrot, regardless of performance through such practices as salary increase and promotion by seniority, automatic merit increases, and executive bonuses not based on individual manager performance. It is as simple as this : If a person put a donkey in a pen full of carrots and then stood outside with a carrot, would the donkey be encouraged to come out of the pen ? The stick, in the form of fearfear of loss of job, loss of income, reduction of bonus, demotion, or some other penaltyhas been and continues to be a strong motivator. Yet it is admittedly not the best kind. It often gives rise to defensive or retaliatory behavior, such as union organization, poor-quality work, executive indifference, failure of a manager to take any risks in decision making or even dishonesty. But fear of penalty cannot be overlooked. Whether managers are first-level supervisors or chief executives, the power of their position to give or with hold rewards or impose penalties of various kinds gives them an ability to control, to a very great extent, the economic and social well-being of their subordinates. 1.13.3 Abraham Maslows Need Hierarchy Theory: One of the most widely mentioned theories of motivation is the hierarchy of needs theory put forth by psychologist Abraham Maslow. Maslow saw human needs in the form of a hierarchy,
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ascending from the lowest to the highest, and he concluded that when one set of needs is satisfied, this kind of need ceases to be a motivator. As per his theory this needs are : (i) Physiological needs: These are important needs for sustaining the human life. Food, water, warmth, shelter, sleep, medicine and education are the basic physiological needs which fall in the primary list of need satisfaction. Maslow was of an opinion that until these needs were satisfied to a degree to maintain life, no other motivating factors can work. (ii) Security or Safety needs: These are the needs to be free of physical danger and of the fear of losing a job, property, food or shelter. It also includes protection against any emotional harm. (iii) Social needs: Since people are social beings, they need to belong and be accepted by others. People try to satisfy their need for affection, acceptance and friendship. (iv) Esteem needs: According to Maslow, once people begin to satisfy their need to belong, they tend to want to be held in esteem both by themselves and by others. This kind of need produces such satisfaction as power, prestige status and self-confidence. It includes both internal esteem factors like selfrespect, autonomy and achievements and external esteem factors such as states, recognition and attention. (v) Need for self-actualization: Maslow regards this as the highest need in his hierarchy. It is the drive to become what one is capable of becoming, it includes growth, achieving ones potential and self-fulfillment. It is to maximize ones potential and to accomplish something.

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As each of these needs is substantially satisfied, the next need becomes dominant. From the standpoint of motivation, the theory would say that although no need is ever fully gratified, a substantially satisfied need no longer motivates. So if you want to motivate someone, you need to understand what level of the hierarchy that person is on and focus on satisfying those needs or needs above that level. Maslows need theory has received wide recognition, particularly among practicing managers. This can be attributed to the theorys intuitive logic and ease of understanding. However, research does not validate this theory. Maslow provided no empirical evidence and other several studies that sought to validate the theory found no support for it. 1.13.4 Theory X and Theory Y of Douglas McGregor: McGregor, in his book The Human side of Enterprise states that people inside the organization can be managed in two ways. The first is basically negative, which falls under the category X and the other is basically positive, which falls under the category Y. After viewing the way in which the manager dealt with employees, McGregor concluded that a managers view of the nature of human beings is based on a certain grouping of assumptions and that he or she tends to mold his or her behavior towards subordinates according to these assumptions. Under the assumptions of theory X: Employees inherently do not like work and whenever possible, will attempt to avoid it.

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Because employees dislike work, they have to be forced, coerced or threatened with punishment to achieve goals. Employees avoid responsibilities and do not work fill formal directions are issued. Most workers place a greater importance on security over all other factors and display little ambition. In contrast under the assumptions of theory Y: Physical and mental effort at work is as natural as rest or play. People do exercise self-control and self-direction and if they are committed to those goals. Average human beings are willing to take responsibility and exercise imagination, ingenuity and creativity in solving the problems of the organization. That the way the things are organized, the average human beings brainpower is only partly used. On analysis of the assumptions it can be detected that theory X assumes that lower-order needs dominate individuals and theory Y assumes that higher-order needs dominate individuals. An organization that is run on Theory X lines tends to be authoritarian in nature, the word authoritarian suggests such ideas as the power to enforce obedience and the right to command. In contrast Theory Y organizations can be described as participative, where the aims of the organization and of the individuals in it are integrated; individuals can achieve their own goals best by directing their efforts towards the success of the organization. However, this theory has been criticized widely for generalization of work and human behavior. 1.13.5 Contribution of Rensis Likert : Likert developed a refined classification, breaking down organizations into four management systems. 1st System Primitive authoritarian 2nd System Benevolent authoritarian
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3rd System Consultative 4th System Participative As per the opinion of Likert, the 4th system is the best, not only for profit organizations, but also for non-profit firms. 1.13.6 Frederick Herzbergs motivation-hygiene theory: Frederick has tried to modify Maslows need Hierarchy theory. His theory is also known as twofactor theory or Hygiene theory. He stated that there are certain satisfiers and dissatisfiers for employees at work. In- trinsic factors are related to job satisfaction, while extrinsic factors are associated with dissatisfaction. He devised his theory on the question : What do people want from their jobs ? He asked people to describe in detail, such situations when they felt exceptionally good or exceptionally bad. From the responses that he received, he concluded that opposite of satisfaction is not dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily make the job satisfying. He states that presence of certain factors in the organization is natural and the presence of the same does not lead to motivation. However, their nonpresence leads to demotivation. In similar manner there are certain factors, the absence of which causes no dissatisfaction, but their presence has motivational impact.

Examples of Hygiene factors are:

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Security, status, relationship with subordinates, personal life, salary, work conditions, relationship with supervisor and company policy and administration. Examples of Motivational factors are : Growth prospectus job advancement, responsibility, challenges, recognition and achievements. 1.13.7 Contributions of Elton Mayo: The work of Elton Mayo is famously known as Hawthorne Experiments. He conducted behavioral experiments at the Hawthorne Works of the American Western Electric Company in Chicago. He made some illumination experiments, introduced breaks in between the work performance and also introduced refreshments during the pauses. On the basis of this he drew the conclusions that motivation was a very complex subject. It was not only about pay, work condition and morale but also included psychological and social factors. Although this research has been criticized from many angles, the central conclusions drawn were : People are motivated by more than pay and conditions. The need for recognition and a sense of belonging are very important. Attitudes towards work are strongly influenced by the group. 1.13.8 Vrooms Valence x Expectancy theory: The most widely accepted explanations of motivation have been propounded by Victor Vroom. His theory is commonly known as expectancy theory. The theory argues that the strength of a tendency to act in a specific way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual to make this simple, expectancy theory says that an employee can be motivated to perform better when their is a belief that the better performance will lead to good performance appraisal and that this shall result into realization of personal goal in form of some reward. Therefore an employee is : Motivation = Valence x Expectancy. The theory focuses on three things :

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Efforts and performance relationship Performance and reward relationship Rewards and personal goal relationship This leads us to a conclusion that :

1.13.9 The Porter and Lawler Model: Lyman W. Porter and Edward E. Lawler developed a more complete version of motivation depending upon expectancy theory.

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Actual performance in a job is primarily determined by the effort spent. But it is also affected by the persons ability to do the job and also by individuals perception of what the required task is. So performance is the responsible factor that leads to intrinsic as well as extrinsic rewards. These rewards, along with the equity of individual leads to satisfaction. Hence, satisfaction of the individual depends upon the fairness of the reward. 1.13.10 Clayton Alderfers ERG Theory: Alderfer has tried to rebuild the hierarchy of needs of Maslow into another model named ERG i.e. Existence Relatedness Growth. According to him there are 3 groups of core needs as mentioned above. The existence group is concerned mainly with providing basic material existence. The second group is the individuals need to maintain interpersonal relationship with other members in the group. The final group is the intrinsic desire to grow and develop personally. The major conclusions of this theory are : 1. In an individual, more than one need may be operative at the same time. 2. If a higher need goes unsatisfied than the desire to satisfy a lower need intensifies. 3. It also contains the frustration-regression dimension. 1.13.11 McClellands Theory of Needs :
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David McClelland has developed a theory on three types of motivating needs: Need for Power Need for Affiliation Need for Achievement Basically people for high need for power are inclined towards influence and control. They like to be at the center and are good orators. They are demanding in nature, forceful in manners and ambitious in life. They can be motivated to perform if they are given key positions or power positions. In the second category are the people who are social in nature. They try to affiliate themselves with individuals and groups. They are driven by love and faith. They like to build a friendly environment around themselves. Social recognition and affiliation with others provides them motivation. People in the third area are driven by the challenge of success and the fear of failure. Their need for achievement is moderate and they set for themselves moderately difficult tasks. They are analytical in nature and take calculated risks. Such people are motivated to perform when they see atleast some chances of success. McClelland observed that with the advancement in hierarchy the need for power and achievement increased rather than Affiliation. He also observed that people who were at the top, later ceased to be motivated by this drives.

1.13.12 Equity Theory: As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about the reward structure as being fair or unfair, relative to the inputs. People have a tendency to use
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subjective judgment to balance the outcomes and inputs in the relationship for comparisons between different individuals. Accordingly:

If people feel that they are not equally rewarded they either reduce the quantity or quality of work or migrate to some other organization. However, if people perceive that they are rewarded higher, they may be motivated to work harder. 1.13.13 Reinforcement Theory: B.F. Skinner, who propounded the reinforcement theory, holds that by designing the environment properly, individuals can be motivated. Instead of considering internal factors like impressions, feelings, attitudes and other cognitive behavior, individuals are directed by what happens in the environment external to them. Skinner states that work environment should be made suitable to the individuals and that punishment actually leads to frustration and demotivation. Hence, the only way to motivate is to keep on making positive changes in the external environment of the organization. 1.13.14 Goal Setting Theory of Edwin Locke:

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Instead of giving vague tasks to people, specific and pronounced objectives, help in achieving them faster. As the clarity is high, a goal orientation also avoids any misunderstandings in the work of the employees. The goal setting theory states that when the goals to be achieved are set at a higher standard than in that case employees are motivated to perform better and put in maximum effort. It revolves around the concept of Self-efficacy i.e. individuals belief that he or she is capable of performing a hard task. 1.13.15 Cognitive Evaluation Theory: As per this theory a shift from external rewards to internal rewards results into motivation. It believes that even after the stoppage of external stimulus, internal stimulus survives. It relates to the pay structure in the organization. Instead of treating external factors like pay, incentives, promotion etc and internal factors like interests, drives, responsibility etc, separately, they should be treated as contemporary to each other. The cognition is to be such that even when external motivators are not there the internal motivation continues. However, practically extrinsic rewards are given much more weight age. 1.14 APPRAISALS AS EMPLOYEE MOTIVATION MECHANISM Keeping in mind the growing attrition rates and the employee dissatisfaction among the employees, the HR professionals are approaching and using the performance appraisal as a fuel to motivate employees. The latest trend being followed by the HR professionals is to use the performance appraisal and review process as a motivating mechanism. Various surveys and studies have testified the relationship between performance review, pay and motivation. Other than the traditional goal of accessing the performance of the employees, Performance appraisals and reviews can be used as a tool to reinforce the desired behaviour and competent performance of the employees. One of the most motivating factors for the employees, in the Performance appraisal processes is to receive a fair an accurate assessment of their performance. Inaccurate evaluation is one reason because of which most employees dread going through performance appraisals. An employee always expects his appraiser to recognize and appreciate his achievements, support him to overcome the problems and failures.
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The discrepancies and the inaccuracies in the performance review can demotivate the employees, even if there has been an increase in the salary. Such inaccuracies can kill the innovating and risk taking enthusiasm and spirit in the employees. Similarly, inaccurate reviews with no hike in compensation can increase the attrition rate in the organisation, forcing the employees to look out for other options. An employee prefers an accurate performance review with no increase in the salary over inaccurate performance review with an increase in salary. Employees, who receive both accuracy and a pay increase during their performance review, are likely to be the most motivated. Therefore, performance appraisal (review and its consequence in the form of compensation adjustments) has the potential of motivating employees and increasing their job satisfaction.

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CHAPTER 2 RESEARCH METHODOLOGY

2.1 Research Methodology Research Methodology in common parlance refers to a search for knowledge. One can also define also research as a scientific and systematic research for pertinent information a specific topic. Research is an art of systematic investigation. Some people consider research as a movement, a movement to the known to the unknown.

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According to Clifford Woody: - Research comprises defining and redefining problems, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, making deductions mil reaching conclusion, and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis. According to Clover and Basley, it is the process of systematically obtaining accurate answers to significant pertinent questions by the use of scientific method gathering and interpreting information. Marketing research is defined as a systematic gathering and analysis of the data concern with an objective. The whole activity is divided into various parts and after compilation of that we reach at certain findings, which enable us to marketing decision. It involves the diagnosis of information needed and the selection of the relevant and inter-related variables. 2.2 INTRODUCTION An organizations goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his or her best performance on a given job? The answer is performance appraisal. In simple terms, performance appraisal may be understood as the assessment of an individual's performance in a systematic way, the performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.

2.3 STATEMENT OF THE PROBLEM This study investigates the methods of performance appraisal and its impact on employee motivation. Thus a research titled Impact of performance appraisal on employee motivation was carried on. 2.4 OBJECTIVE OF THE STUDY
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i.. To examine the method of performance appraisal used in the organization ii.. To analyze the significance and benefits of having a strong performance management iii. To understand the concept in detail of how a good performance appraisal leads to employee motivation iv. To analyze the impact of motivation on employee productivity 2.5 SCOPE OF THE STUDY It will help the company in understanding its employees. It will help in understanding that which method of performance appraisal is effective It will help in understanding to know as to how to motivate its employees through Performance appraisal. 2.6 LIMITATIONS OF THE STUDY rough estimates. Survey will be limited in particular area The sample size is small hence arriving at an overall opinion is difficult Sample size is small because of the time constraint Respondent may provide data from their memory recall, there may only be through

2.7 RESEARCH METHODOLOGY Research design Research design is a detailed blue print used to guide the research study towards its objectives. Descriptive research is used for this study. The major purpose of descriptive research is
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description of the state of affairs, as it exists as present. Which means asking questions to people who are believed to possess the desired information. 2.8 SAMPLING DESIGN SAMPLING TECHNIQUE Stratified random sampling Under this sampling design item has an equal chance of inclusion in the sample. All choices being independent of one another. It gives each possible sample combination an equal probability of being chosen. In this technique the population is stratified in to a number of non overlapping sub population or strata and sample items are selected from each stratum. Items selected from each stratum are based on simple random sampling. First stratification and then simple random sampling is known as stratified random sampling. Sample size 100 Respondents 2.9 SOURCE OF DATA COLLECTION Primary Data: Primary data was collected through questionnaire administration Secondary Data: Secondary data were collected from company resources, internet resources, books. 2.10 TOOLS OF ANALYSIS Data collected were analyzed by using quantitative tools and techniques

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CHAPTER 3 COMPANY PROFILE

3.1 INTRODUCTION Tata Consultancy Services (TCS) is a leading IT services, consulting and business solutions organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. We offer a consulting-led, integrated portfolio of IT and IT-enabled services
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delivered through our unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata group, Indias largest industrial conglomerate, TCS has over 186,500 of the worlds best-trained IT consultants in 42 countries. The company generated consolidated revenues of over US $6.3 billion for fiscal year ended March 31, 2010 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. 3.2 FINANCIAL HIGHLIGHTS Fiscal Year End: March 2010 Revenue (2010): 6669.40 M Revenue Growth (1 yr): 25.10% 3.3 KEY PEOPLE Chairman: Ratan N. Tata CEO and Managing Director: N. (Chandra) Chandrasekaran CFO and Executive Director: Seturaman (Maha) Mahalingam

3.4 BOARD OF DIRECTORS Non-Executive Board Members Ratan N Tata, Chairman S Ramadorai, Vice Chairman Laura Cha, Director Prof. Clayton M Christensen, Director Aman Mehta, Director

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Dr. Ron Sommer, Director Venkatraman Thyagarajan, Director Dr. Vijay Kelkar, Director Ishaat Hussain, Director Executive Board Members N Chandrasekaran, Chief Executive Officer and Managing Director S Mahalingam, Chief Financial Officer and Executive Director Phiroz A Vandrevala, Executive Director and Head, Global Corporate Affairs 3.5 TOP COMPETITORS IBM Global Services Infosys Technologies Limited (infy) Wipro Technologies

3.6 TATA CODES OF CONDUCT Code of Conduct for Non-Executive Directors Non-Executive Directors of a company will always act in the interest of the company and ensure that any other business or personal association which they may have, does not involve any conflict of interest with the operations of the company and his role therein. Non-Executive directors will comply with all applicable laws and regulations of all the relevant regulatory and other authorities as may be applicable to such Directors in their individual capacities. Non-Executive directors will safeguard the confidentiality of all information received by them by virtue of their position. 3.7 GLOBAL ALLIANCES
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TCS have a strong network of partners with a joint objective of helping thier customers become high-performance businesses by maximizing the value of their technology investments. Their partner programs are specifically designed to jointly work on partner tools and receive the necessary training, support and resources on partner technology products. This enables their customers to advance their businesses. TCS global alliance mission in partnering with various organizations is to ensure that both TCS and the partner organizations derive the maximum benefits of their relationship, in terms of growth of services and products. 3.8 BUSINESS VALUE FOR TCS CLIENTS Reduced risks and costs associated with the technology procurement process and technology ownership Competitive advantage by leveraging TCS industry, product and service expertise and the partners technology products and services Reduced IT costs with cost-effective solutions at scale Reduced risks through end-to-end solutions Ability to leverage training resources to help you plan and build solutions using Partner products

3.9 THE TCS-ALLIANCE PARTNER ADVANTAGE Partner organizations and TCS work together to create new offerings Privileged access to development software, architectural expertise, sizing and configuration assistance Key benefits and resources for building and selling solutions supporting Partner systems

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 Joint go-to-market initiatives 3.10 TCS ALLIANCE FRAMEWORK Strategic Partnership includes partnership with major technology players Solution Partnership- includes partnership with niche players 3.11 INTELLECTUAL POWER TCS has a team of over 70,000 professionals, representing one of the strongest human resource pools in the world. The company has skills and expertise across the entire spectrum of technologies and industries. Its locally-recruited employees in the EU provide an understanding of the business environment in the region. The companys continuous and rigorous training programmes enable it to deliver best-in-class services to the customers in the EU.This is reflected by the fact that 95 per cent of its business comes from satisfied customers who reward it with repeat business. Best Human Resource Practices TCS is known for its human resource practices in India as well as globally. In the EU, it continues to be the employer of choice and has the lowest attrition rate of 9.9 per cent. The company lays emphasis on the overall development of its employees and also offers multi-lingual capability training modules.TCS enables its employees to meet their career objectives through rotation across projects, functions and locations globally. It also helps employees in building new skills and competencies, and promotes knowledge sharing and team building.

3.12 SPONSORSHIPS FERRARI Tata Consultancy Services is the first Indian company to have its logo featured on the scarlet Ferrari raced by the legendary Michael Schumacher. Building on the existing long-term relationship of over four years, TCS entered into an historic agreement with Ferrari in December

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2008, for an enhanced technology and marketing partnership. As part of the deal, the Tata logo was displayed on the Ferrari F1 car for the 2009 Formula 1 season. TCS was the first Indian company to enter the F1 arena when it became Ferraris technology partner in 2005. As its technology partner, TCS provides technical support services across Ferraris major product lifecycle processes. The advantages of the offshore leverage for development of software tools, engineering projects and PLM customization; cost efficiency and the time-zone benefits have been highly appreciated by Ferrari. One of the key reasons for Ferrari to nurture a relationship with TCS is to utilize our vast technical expertise and knowledge acquired by serving global clients. The services are now customized further to develop and support Ferraris IT applications. GARMIN-CERVLO Team Garmin-Cervlo is a top-ranked powerhouse in professional cycling with 39 male and female riders from Europe, North America and Australia. Tata Consultancy Services (TCS) is the teams official technology partner for the racing season 2011. This partnership adds to TCS significant portfolio of sports partnerships, which include tie-ups with leading sports brands including Formula 1 racing team Ferrari, Ducati and several major marathons worldwide. These brands share the same values that drive TCS: a passion for excellence, success through teamwork and a commitment to world-class quality. MUMBAI MARATHON The Mumbai Marathon is an event sponsored by Standard Chartered Bank (title sponsor) and Tata Consultancy Services (associate sponsor). In 2010, the event was honored with the Gold Label by the IAAG, the highest recognition of organizational excellence for a road race. We have been associated with the Mumbai Marathon for three consecutive years (2008, 2009 and 2010) and will continue to sponsor and support it in 2011 as well. The Marathon represents the indomitable spirit of the city. The event ambassadors include sporting legends like Michael Johnson, Mike Powell, Paul Tergat, Richard Nerurkar, Linford Christie, Kapil Dev, Javagal Srinath, Steve Ovett, Anju Bobby George, Dame Kelly Holmes, Aravinda de Silva and Rahul Bose, to name a few.
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We believe that the Mumbai Marathon, with its unifying nature, is a great platform for employee engagement, corporate social responsibility activities, and reaching out to the wider community. TCS has been supporting the SRCC Centre for Child Development, a society which provides facilities for the diagnosis, care and treatment of children with special needs, and children in need of other support. In the past, we have had many TCS associates running for this cause in the Mumbai Marathon. RAJASTHAN ROYALS Rajasthan Royals is the Jaipur franchise cricket team that represents the state of Rajasthan in the Indian Premier League. Tata Consultancy Services pioneered the entry of Information Technology in cricket. Under the terms of the agreement, TCS will be the technology partner of the Rajasthan Royals for an initial duration of three years. This deal marks a historic moment for the IPL as it is the first time an IPL team has inducted a technology partner on board to help the team stay on the championship track. The teams championship status as well as the importance and priority that they give to technology were some of the reasons they were preferred from among the eight IPL teams. TCS provides expertise in the form of information technology solutions to the team, on and off the field, in an effort to enhance their efficiency and performance. We closely work with the professionals engaged with the team to improve the performance of the players on the field and to enhance the viewing experience for the fans. We help the team analyze the players' performance, simulation and other areas. The TCS-Rajasthan Royals deal enables TCS to enjoy more visibility among the cricketing fans of the world, with the players sporting the TCS logo. TCS IT WIZ TCS IT Wiz is Indias biggest IT quiz for schools. Launched in Bangalore in August 1999, and eventually extended to other cities in the South in 2000, the quiz, in the last decade, has become

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a benchmark in the inter-school quizzing circuit for the level of research, the intensity with which teams compete and the sheer participation numbers it draws. The quiz has earned an entry in the LIMCA book of records as the nation's first IT quiz. This year, TCS IT Wiz will be conducted in 12 cities - Ahmedabad, Bangalore, Bhubaneswar, Chennai, Coimbatore, Delhi, Hyderabad, Kolkata, Kochi, Lucknow, Pune and Mumbai. TCS IT Wiz strives to enhance IT awareness among students, keeping them abreast of the latest developments in the world of IT, as it plays an integral role in todays society and economy. COMMITMENT TO HEALTH AND FITNESS FOR DIABETES PREVENTION In sponsoring these events, TCS will engage with runners, friends and family, and the broader community to share their commitment to health and fitness, specifically in support of the education and prevention of diabetes. Diabetes afflicts over 220 million people worldwide and nearly eight percent of the American population. India has over 40 million people afflicted with type-2 diabetes, a number that is increasing at an alarming rate; and since diabetes is the leading cause of heart disease, India also faces an epidemic of heart problems. Studies indicate that diabetes can be caused by a sedentary lifestyle, little physical activity, obesity, stress, and a diet rich in fat, sugar and calories. Regular exercise helps individuals reduce their risk of contracting diabetes and helps diabetic patients keep the disease in check. This message of maintaining a healthy lifestyle comes from the very top. TCS CEO, N Chandrasekaran began running in 2007. Since then, he has run marathons in Mumbai, Prague, New York and Stockholm. His commitment inspires the TCS employees and all those who aspire for excellence in their personal health and fitness programs

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CHAPTER 4 DATA ANALYSIS AND INTERPRETATION

Introduction
Data collection is the systematic recording of information; data analysis involves working to uncover patterns and trends in data sets; data interpretation involves explaining those patterns and trends. The literature review was done to get better knowledge about the topic and minimize the mistakes.

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The research was of descriptive type which included questionnaire. The sampling technique used was convenience sampling with 100 respondents. The primary data collected, was from questionnaires which was tabulated and presented on graphs in the following pages. The data is then scrutinized and relevant interpretations are drawn. The soft ware packages used for presentation and interpretation is MS- Excel and MS- Word. The data collection plan, including procedures, instruments, and forms, was designed and pretesting of questionnaire was done to maximize accuracy. All data collection activities were monitored to ensure adherence to the data collection protocol and to prompt actions to minimize and resolve missing and questionable data. Monitoring procedures were instituted at the outset and maintained throughout the study, since the faster irregularities can be detected; the greater the likelihood that they can be resolved in a satisfactory manner and the sooner preventive measures can be instituted.

DATA ANALYSIS Q1) Gender of the employees Table 4.1 showing respondents gender Gender Female No. of respondents 34 % of response 34
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Male Total

66 100

66 100

Graph 4.1 showing respondents gender

Interpretation: It can be inferred from the above graph that 66% of the respondents working in the organization are male and 34% of the respondents are female. Thus, majority of the employees working in the organization are male.

2) Age of the respondents Table 4.2 showing respondents age Age 20-30 years 31-40 years 41-50 years Above 50 years Total No. of respondents 78 22 0 0 100 % of response 78 22 0 0 100
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Figure 4.2 showing respondents age

Interpretation: It can be inferred from the above graph that majority of the respondents are young and belong to the age group 20-30 years followed by the age group of 30-40 years. It is to be noted that none of the respondents belong to above 40 years of age group.

3) Which department do you work for? Table 4.3 showing department to which the employee belongs to Department Production HR R&D Accounts Marketing Others(IT) Total No. of respondents 5 0 11 5 0 79 100 % of response 5 0 11 5 0 79 100
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Figure 4.3 showing department to which the employee belongs to

Interpretation It can be inferred from the above graph that 79% of the respondents belongs to the IT department, 11% of respondents belong to R&D department and 5% of respondents belongs to both production and marketing department. Thus, majority of the respondents are working in the IT department and none of the respondents are in the HR department.

4) How long you have been working for the current organization? Table 4.4 showing working experience of the respondents in the current organization Years Less than 2 years 2-6 years 6-10 years More than 10 years Total No. of respondents 17 83 0 0 100 % of response 17 83 0 0 100

Figure 4.4 showing working experience of the respondents in the current organization

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Interpretation It can be inferred from the above graph that 83% of the respondents have a working experience between 2-6 years in the current organization followed by the respondents having experience of less than 2 years, and none of the respondents have working experience in the current organization for more than 6 years. 5) Are you satisfied with the support from the HR department? Table 4.5 showing satisfaction from the support of the hr department Satisfaction level Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied Total No. of respondents 0 29 33 29 9 100 % of response 0 29 33 29 9 100

Figure 4.5 showing satisfaction from the support of the hr department

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Interpretation It can be inferred from the above graph that 33% of the respondents show neutral response towards their satisfaction from the HR department followed by 29% of respondents each who are dissatisfied and satisfied from the support of the HR department. Thus, majority of respondent gives neutral response towards their satisfaction from the HR department and very few say that they are highly dissatisfied.

6) Which kind of performance appraisal method is most frequently followed in your organization? Table 4.6 showing performance appraisal method followed in the organization Method Rating scale 360 degree appraisal Ranking method Checklist Others Total No. of respondents 100 0 0 0 0 100 % of response 100 0 0 0 0 100

Figure 4.6 showing performance appraisal method followed in the organization

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Interpretation It can be inferred from the above graph that rating scale is the only method used in the organization. The organization does not use any other performance appraisal method.

7) Are you satisfied with the existing performance appraisal system? Table 4.7 showing satisfaction with the existing performance appraisal system Satisfaction level Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied Total No. of respondents 0 13 39 35 13 100 % of response 0 13 39 35 13 100

Figure 4.7 showing satisfaction with the existing performance appraisal system

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Interpretation It can be inferred from the above graph that 39% of the respondents show neutral response towards their satisfaction to the existing performance appraisal system, 35% respondents say that they are dissatisfied with the existing performance appraisal system. None of the respondents are highly satisfied with existing performance appraisal system.

8) The Performance appraisal is done and assessed by Table 4.8 showing performance appraisal done and assessed by No. of respondents 28 0 56 16 100 % of response 28 0 56 16 100

HR department External consultant Top management Others Total

Figure 4.8 showing performance appraisal done and assessed by

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Interpretation It can be inferred from the above graph that for 56% of the respondents the performance is assessed by the top management and for 28% it is assessed by the HR department and for 16% of respondents the performance is assessed by their project leaders. Thus, majority of respondents performance is assessed by the top management.

9) Performance appraisal is done periodically. Table 4.9 showing performance appraisal is done periodically Satisfaction level Strongly agree Agree Disagree Strongly disagree Total No. of respondents 13 75 12 0 100 % of response 12 75 12 0 100

Figure 4.9 showing performance appraisal is done periodically

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Interpretation It can be inferred from the above graph that 75% of the respondents agree that performance appraisal is done periodically, followed by 13% of respondents who strongly agree that performance is done periodically but none of the respondents strongly disagrees that performance appraisal is done periodically.

10) Performance appraisal helps the organization in the following ways Table 4.10 showing performance appraisal help the organization in the following ways Ways Reduces absentism Reduces employee turnover Improves employee efficiency Increases employee productivity Others Total No. of respondents 0 17 42 29 12 100 % of response 0 16 41 29 12 100

Figure 4.10 performance appraisal helps the organization in the following ways

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Interpretation It can be inferred from the above graph that 42% of the respondents say that performance appraisal helps the organization to improve employee efficiency, followed by 29% of respondents who say that it increases employee productivity, 17% says that it reduces employee turnover and 12 %says that it creates dissatisfaction within the employees, but none of the respondents say that it reduces absentism. 11) why does the company do performance appraisal? Table 4.11 showing performance appraisal is done by company to No. of respondent 29 8 59 4 100 % of response 29 8 59 4 100

To assess the employee To assess the training needs of employee To decide upon pay rise For promotion Total

Figure 4.11 showing performance appraisal is done by company to

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Interpretation It can be inferred from the above graph that 59% of the respondent agrees that performance appraisal is done by the company to decide upon the pay rise, followed by 29% who say that it is done to assess the employee 8% of respondents say that that it is done to assess the training needs of the employees and very few say that it is done for promotion. 12) The Performance appraisal system transparent to you: Table 4.12 showing performance appraisal system transparent to the employees Satisfaction level Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied Total No. of respondents 0 4 50 38 8 100 % of response 0 4 50 37 8 100

Figure 4.12 showing performance appraisal system transparent to the employees

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Interpretation It can be inferred from the above graph that 50% of the respondent show neutral response towards the transparency of the performance appraisal system, while 38% are dissatisfied with that performance appraisal system,8% of the respondents are highly dissatisfied with the transparency of the performance appraisal system and very few respondents are satisfied but none of the respondents are highly satisfied with the transparency of the performance appraisal system. 13) The performance appraisal discussed with you: Table 4.13 showing ways performance appraisal discussed with the employees Ways of discussing Face to face Goes directly to top management Not at all discussed Others Total No. of respondents 46 29 12 13 100 % of response 46 29 12 13 100

Figure 4.13 showing ways performance appraisal discussed with the employees

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Interpretation It can be inferred from the above graph that Performance appraisal is mostly discussed face to face with 46% of the respondents, while for 29% it goes directly to the top management, for 13% of the respondents it first goes to the top management then comes to them and for 12% of respondents it is not at all discussed. Thus, for majority of the respondents it is discussed face to face. 14) Performance appraisal activities are helpful to get motivated. Table 4.14 showing performance appraisal activities are helpful to get motivated Satisfaction level Highly agree agree Neutral Disagree Highly dissatisfied Total No. of respondents 12 25 38 25 0 100 % of response 12 25 38 25 0 100

Figure 4.14 showing performance appraisal activities are helpful to get motivated

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Interpretation It can be inferred from the above graph that 38% of the respondents show neutral response to that performance appraisal activities are helpful to get motivated, followed by 25% who are satisfied with that performance appraisal activities and 25% who are dissatisfied with the performance appraisal activities. None of the respondents are highly dissatisfied with that performance appraisal activities are helpful to get motivated. 15) Management is really interested in motivating the employees. .Table 4.15 showing management is interested in motivating the employees Satisfaction level Strongly agree Agree Neutral Disagree Highly disagree Total No. of respondents 0 33 29 38 0 100 % of response 0 33 29 38 0 100

Figure 4.15 showing management is interested in motivating the employees

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Interpretation It can be inferred from the above graph that 38% of the respondents disagree with that management is interested in motivating the employees, followed by 33% who agree with that management is interested in motivating the employees and 29% of respondents gave neutral response. None of the respondents highly agree or highly disagree with that management is really interested in motivating the employees. 16) How does Performance appraisal motivate you? Table 4.16 showing performance appraisal motivates the employees in the following ways Ways of motivation Builds confidence Helps to improve performance Handling more challenging tasks Others Total No. of respondents 22 48 30 0 100 % of response 22 48 30 0 100

Figure 4.16 showing performance appraisal motivates the employees in the following ways

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Interpretation It can be inferred from the above graph that 48% of the respondents say that performance appraisal helps them to improve their performance followed by 30% of respondents who say that it motivates them to handle more challenging tasks and 22% of the respondents say that it builds their confidence.

17) Factors which motivate you the most. Table 4.17 showing factor which motivates the employees Factors Salary increase Promotion Motivational walk Incentives Others Total No. of respondents 50 8 30 8 4 100 % of response 50 8 30 8 4 100

Figure 4.17 showing factor which motivates the employees

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Interpretation It can be inferred from the above graph that 50% of the respondents gets motivated by increase in their salary, 30% gets motivated by motivational walk, 8% of the respondents gets motivated by incentives and promotion and 4% gets motivated by recognition for their work. This, most of the employees gets motivated by increase in their salary.

18) Which type of incentive motivates you more? Table 4.18 showing type of incentive which motivates more Type of incentive Financial Non financial Both Total No. of respondents 37 0 63 100 % of response 37 0 63 100

Figure 4.18 showing type of incentive which motivates more

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Interpretation It can be inferred from the above graph that majority of the employees gets motivated by both financial as well as non financial incentives followed by employees who get motivated by financial incentives. None of the employees get motivated by non financial incentive alone.

19) Are you satisfied with the training provided if you were rated low on any aspect? Table 4.19 showing training provided to employees if rated low Satisfaction level Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied Total No. of respondents 0 8 21 50 21 100 % of response 0 8 21 50 21 100

Figure 4.19 showing training provided to employees if rated low

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Interpretation It can be inferred from the above graph that 50% of the respondents are dissatisfied that the company provides training if they are rated low, followed by 21% who gives neutral response and are highly dissatisfied that training is being provided to them if they are rated low and 8% of employees are satisfied that training is being provided if rated low. None of the employee is highly satisfied that training is being provided if rated low. 20) Training helped me to build confidence and get motivated. Table 4.20 showing training helped employees to build confidence and get motivated Satisfaction level Highly satisfied Satisfied Neutral Dissatisfied Highly dissatisfied Total No. of respondents 8 46 38 8 0 100 % of response 8 46 38 8 0 100

Figure 4.20 showing training helped employees to build confidence and get motivated

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Interpretation It can be inferred from the above graph that 46% of the employees are satisfied that training help them build confidence and get motivated followed by 38% of respondents who gave neutral response that training helped them to build confidence and get motivated and 8% of respondents are highly satisfied and dissatisfied that training help them build confidence and get motivated. 21) Did motivation help you in improving productivity? Table 4.21 showing motivation help in improving productivity Response Yes No Total No. of respondents 82 18 100 % of response 82 18 100

Figure 4.21 showing motivation help in improving productivity

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Interpretation It can be inferred from the above graph that 82 respondents say that motivation help in improving productivity and 18 respondents say that motivation does not help them in improving productivity.

22) How do you think it impacts your productivity? Table 4.21 showing how motivation impact employees productivity Impact Aware of my talent Committed towards organization Helped me in good congruity Others Total No. of respondents 56 9 0 35 100 % of response 56 9 0 35 100
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Figure 4.21 showing how motivation impact employees productivity

Interpretation It can be inferred from the above graph that 56% of respondents say that motivation impacts their productivity by making them aware of their talents and 35% of respondents say that motivation helped them overcome depression and become more attentive.

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CHAPTER 5 FINDINGS AND SUGGESTIONS

5.1 FINDINGS As per the data analysis of questionnaire following are the findings Most of the employees working in the organization are male and less percentage are female. Most of the employees are between the age of 20-30 years. Majority of the employees working are working in the I.T department.

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 Majority of the employees have a working experience between 2-6 years in the current organization. Majority of employees show neutral response for the support from the HR department. Recalling objective 1 To examine the method of performance appraisal in the organization The company follows rating scale method for performance appraisal. For majority of the performance is assessed by the top management and for some it is assessed by the HR department and their project leaders. Majority of the employees gave neutral response towards their satisfaction for the existing performance appraisal system Majority of the employees agree that performance appraisal is done periodically. Recalling objective 2 analyze the significance and benefits of having a strong performance management Majority of the employees say that performance appraisal helps the organization to improve employee efficiency and some of them say that it increases employee productivity. Majority of the employee agrees that performance appraisal is done by the company to decide upon the pay rise. Majority of the employees show neutral response towards the transparency of the performance appraisal system. Performance appraisal is mostly discussed face to face to the employees, while for some it goes directly to the top management. Majority of the employees show neutral response to that performance appraisal activity are helpful to get motivated. Majority of the employees are dissatisfied with that management is interested in motivating the employees.

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Recalling objective 3 To understand the concept of how a good performance appraisal leads to employee motivation Majority of the employees say that performance appraisal helps them to improve their performance. Majority of employees get motivated by increase in their salary Majority of the employees gets motivated by both financial as well as non financial incentives. Majority of the employees disagree that the company provides training if they are rated low. The company should undertake training and development activities to improve the performance of the employees. Majority of the employees are satisfied that training help them build confidence and get motivated. Recalling objective 4to analyze the impact of motivation on employee productivity Many employees said they became aware of their talents which help them in becoming more effective employees. Many said motivation helped them overcome depression and be more attentive. It helps employees overcome personal problems and make their work life better.

5.2 SUGGESTIONS The companies should encourage more female employees to join the work force. It will help in creating a diversified workforce.. HR department should be more interactive with the employees which will make the employees feel comfortable in doing their tasks.

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 Since the employees gave neutral response towards their satisfaction with the existing performance appraisal system and none of the employees are satisfied or highly satisfied, so the company should undertake measures to improve its performance appraisal system and make the employees feel satisfied. The company should communicate the benefits of an effective performance appraisal system to the employees which will help them in participating. The company should make the performance appraisal more transparent to the employees. The company should discuss the performance appraisal face to face deeply with all the employees to make them understand where they are lacking and need to improve. The actions taken by the management after the performance appraisal should be such that it makes the employee feel motivated. Like if they are rated high then they should be given rewards and recognition and if rated low then necessary training should be provided. Performance appraisal should be improves as many of the employees are dissatisfied with the current performance appraisal system which creates dissatisfaction among them The company should provide mentoring facility to its employees where they can discuss with their problem and get solution. The company should arrange for get together, gathering etc. in order to feel the employees relaxed and to fresh up their minds from daily activities. The company should devise policies that help employees recognize talents. The company should hold regular meetings with employees and find out their problems,

solving which will enable them to become more committed towards organization goals.

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CHAPTER 6 CONCLUSION

CONCLUSION The study concludes that the employees of the company are not at all satisfied with the current performance appraisal system followed in the company. The study, impact of performance appraisal on employee motivation highlighted many factors which will motivate the employees. The study helped to find areas where the company needs to concentrate more and make necessary amendments.

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The performance appraisal activities really play a major role in motivating the employees of the organization. It is a major factor that makes an employee feels good in his work and results in his satisfaction too. The organization can still concentrate on specific areas which are evolved from this study in order to make the motivational programs more effective. Only if the employees are properly motivated- they work well and only if they work well the organization is going to benefit out of it. Steps should be taken to improve the performance appraisal system and motivational programs procedure in the future. The suggestions of this report may help in this direction. Performance appraisal system helps organizations to find out where the employees lack when it comes to motivation. A proper management of the motivation will help employees become more productive in the long run. Every organization should take measure to ensure that employees are constantly motivated for the betterment of the organization.

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BIBLIOGRAPHY

BIBLIOGRAPHY www.laynetworks.com www.mbaknol.com www.psychologyandsociety.com

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www.tcs.com Human Resource Management (fifth edition) - K. Aswathappa- the McGraw-Hill companies

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ANNEXURE

Dear Respondent, I am a student of MBA conducting a survey to collect information for my dissertation project IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATION. I request you to spare few minutes of your time to answer the following questionnaire. The responses you
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give form an important data for my dissertation project which will be used for academic purpose. Please be assured of the confidentiality. Sweta Singh QUESTIONNAIRE Name (Optional): ______________________________________________ Gender: Age : Female 20-30 years Male 31-40 years 41-50 years above 50 years

1)Which department do you work for? Production Marketing HR R&D Accounts

Others (specify)___________________________________________

2) How long you have been working for the current organization? Less than 2 years 2-6 years 6-10 years more than 10 years

3) Are you satisfied with the support from the HR department? Highly satisfied Neutral Highly Dissatisfied Satisfied Dissatisfied

4) Which kind of performance appraisal method is most frequently followed in your organization? Rating scale Ranking Method 360- Degree Feed back Checklist
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Others (specify) ________________________________________ 5) Are you satisfied with the existing performance appraisal system? Highly satisfied Neutral Highly Dissatisfied 6) The Performance appraisal is done and assessed by HR Department Top Management 7) Performance appraisal is done periodically. Strongly agree Disagree Agree Strongly disagree External consultant Others (specify) ___________________ Satisfied Dissatisfied

8) Performance appraisal helps the organization in the following ways. Reduced absentees Improves employee efficiency Reduces employee turnover more productivity

9) Why does the company do performance appraisal? To assess the employee To decide upon pay rise to assess the training needs of employees for promotion

10) The Performance appraisal system transparent to you. Strongly agree Neutral Strongly disagree
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agree Disagree

11) The performance appraisal discussed with you: Face to face Not at all discussed Others (specify) ________________________________________ 12) Performance appraisal activities are helpful to get motivated. Strongly agree Neutral Disagree 13) Management is really interested in motivating the employees. Strongly agree Neutral Disagree 14) How does Performance appraisal motivate you? Builds confidence Handling more challenging tasks Others (specify) ________________________________________ helps to improve performance agree strongly disagree agree strongly disagree goes directly to top management

15) Factors which motivate you the most. Salary increase Motivational walk Incentives
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promotion recognition

Others (specify) ________________________________________ 16) Which type of incentive motivates you more? Financial Both 17) Training was provided if you were rated low on any aspect. Strongly agree Neutral Disagree 18) Training helped me to build confidence and get motivated. Strongly agree Neutral Disagree 19) Did motivation help you in improving productivity? Yes No agree strongly disagree agree strongly disagree Non financial

20) How do you think it impacts your productivity? Aware of my talent Helped me in good congruity 20) Suggestions if any: Committed towards organization others

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