INTRODUCTION The history of performance appraisal is quite brief.

Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War -not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is, says Dulewicz (1989), "... a basic human tendency to make judgments about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self- esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. Modern Appraisal Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations -but not all -appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.) Whether this is an appropriate use of performance appraisal -the assignment and justification of rewards and penalties -is a very uncertain and contentious matter. Controversy, Controversy Few issues in management stir up more controversy than performance appraisal. There are many reputable sources -researchers, management commentators, and

psychometricians -who have expressed doubts about the validity and reliability of the

performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (see Derven, 1990, for example). At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990). Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it, There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes -such as pay rises and promotions. This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward- linked process isperceived as judgmental, punitive and harrowing. For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, in that situation, many people would deny or downplay their weaknesses. Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner. Such reluctance is not difficult to understand. Appraisers often know their appraises well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines. On the other hand, there is a strong rival argument which claims that performance appraisal must unequivocally be linked to reward outcomes. The advocates of this approach say that organizations must have a process by which rewards -which are not an unlimited resource -may be openly and fairly distributed to those most deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance appraisal -whatever its practical flaws -is the only process available to help achieve fair, decent and consistent reward outcomes. It has also been claimed that appraises themselves are inclined to believe that appraisal results should be linked directly to reward outcomes -and are suspicious and disappointed when told this is not the case. Rather than feeling relieved; appraises may suspect that they are not being told the whole truth, or that the appraisal process is a sham and waste of time. The Link to Rewards Recent research (Bannister & Balkin, 1990) has reported that appraises seem to have greater acceptance of the appraisal process, and feel more satisfied with it, when the process is directly linked to rewards. Such findings are a serious challenge to those who feel that appraisal results and reward outcomes must be strictly isolated from each other. There is also a group who argues that the evaluation of employees for reward purposes, and frank communication with them about their performance, are part of the basic responsibilities of management. The practice of not discussing reward issues while appraising performance is, say critics, based on inconsistent and muddled ideas of motivation. In many organizations, this inconsistency is aggravated by the practice of having separate wage and salary reviews, in which merit rises and bonuses are decided arbitrarily, and often secretly, by supervisors and managers. There are basically three purposes to which performance appraisal can be put. First, it can be used as a basis for reward allocation. Decision as to who gets salary increase, promotion, and other rewards are determined by their performance evaluation. Second, these appraisals can be used for identifying areas where development efforts are needed. The performance appraisal is a major tool for identifying deficiencies in individuals. Finally it can be used as a criterion against which selection devices and development programs are validated. As a key input into management's reward and punishment decision, performance appraisals can motivate or demotivate employees. Three different approaches exist for doing appraisals. Employees can be appraised against 1. Absolute standards 2. Relative standards 3. Objectives

PERFORMANCE MANAGEMENT Since organizations exits to achieve goals, the degree of success that individual employees have in reaching their individual goals is important in determining organization effectiveness. Performance system is fundamentally, a feedback process, which requires sustained commitment. The cost of failure to provide such feedback may result in a loss of key professional employees, the continued poor performance of employees who are not meeting performance standards and a loss of commitment by employees, in sum, the myth that the employee knows what. They are doing without adequate feedback from management can be an expensive fantasy. THE APPRAISAL PROCESS 1. Establishing Performance Standard 2. Communicate Performance expectations to employees 3. Measure actual performance 4. Compare actual performance with standards 5. Discussion with the employees and identification development programs to bridge the gap. 6. Initiate action

THE PURPOSE OF APPRAISING PERFORMANCE In general the appraisal systems serve a twofold purpose 1. To improve the work performance of employees by helping them realize and use their full potential in carrying out their firms mission. 2. To provide information to employees and managers for use in making, work related decisions. More specifically appraisals serve the following purposes. a) Appraisals provide feedback to employees and help the. "' management identify the areas where development efforts are "' needed to bridge the gaps thereby serving as vehicles for personal and career development. b) It helps management spot individuals who have specific skills so that their promotions/transfer is in line with organizational requirements. c) Appraisal serves as a key input for administering a formal organisation reward and punishment system.

d) The performance system can be used as a criterion against which selection devices and development programs are validated.

History The story of Dabur goes back to 1884, to a young doctor armed with a degree in medicine and a burning desire to serve mankind. This young man, Dr. S. K. Burman, laid the foundations of what is today known as Dabur India Limited. From those humble beginnings, the company has grown into India's leading manufacturer of consumer healthcare, personal care and food products. This phenomenal progress has seen many milestones, some of which are mentioned below: 1884 -Dr. S K Burman lays the foundation of what is today known as Dabur India Limited. Starting from a small shop in Calcutta, he began a direct mailing system to send his medicines to even the smallest of villages in Bengal. The brand name Dabur is derived from the words'Da' for Daktar or doctor and 'bur' from Burman. 1896 -As the demand for Dabur products grows Dr. Burman feels the need for mass production of some of his medicines. He sets up a small manufacturing plant at Garhia near Calcutta. Early 1900s -The next generation of Burmans take a conscious decision to enter the Ayurvedic medicines market, as they believe that it is only through Ayurveda that the healthcare needs of poor Indians can be met. 1919 -The search for processes to suit mass production of Ayurvedic medicines without compromising on basic Ayurvedic principles leads to the setting up of the first Research & Development laboratory at Dabur. This initiates a painstaking study of Ayurvedic medicines as mentioned in age-old scriptures, their manufacturing processes and how to utilize modern equipment to manufacture these medicines without reducing the efficacy of these drugs. 19208 -A manufacturing facility for Ayurvedic Medicines is set up at Narendrapur and Daburgram. Dabur expands its distribution network to Bihar and the northeast. 1936 -Dabur India (Dr. S K Burman) Pvt. Ltd. is incorporated.

 1940 -Dabur diversifies into personal care products with the launch of its Dabur Amla Hair Oil. This perfumed heavy hair oil catches the imagination of the common man and film stars alike and becomes the largest hair oil brand in India. 1949 -Dabur Chyawanprash is launched in a tin pack and becomes the first branded Chyawanprash of India. 1956 -Dabur buys its first computer. Accounts and stock keeping are one of first operations to be computerized. 1970 -Dabur expands its personal care portfolio by adding oral careproducts. Dabur Lal Dant Manjan is launched and captures the Indian rural market. 1972 -Dabur shifts base to Delhi from Calcutta. Starts production from a hired manufacturing facility at Faridabad. 1993 -Dabur sets up the oncology formulation plant at Baddi, Himachal Pradesh. 1994 -Dabur India Limited comes out with its first public issue. The Rs.10 share is issued at a premium of Rs.85 per share. The issue is oversubscribed 21 times. 1994 -Dabur reorganizes its business with sales and marketing operations being divided into 3 separate divisions. 1994 -Dabur enters the oncology (anti-cancer) market with the launch of Intaxel (Paclitaxel). Dabur becomes only the second company in the world to launch this product. The Dabur Research Foundation develops the unique eco-friendly process of extracting the drug from the leaves of the Asian Yew tree. PERFORMANCE APPRAISAL Since organisation exist to achieve goals, the degree of success that individual employees have in reaching their individuals goals is important in determining organizational effectiveness. The assessment of how successful employees have been at meeting their individual goals, therefore, becomes a critical part of HRM. This leads us to the topic of performance appraisal. PURPOSE There are basically three purposes to which performance appraisal can be put. First, it can be used as a basis for reward allocations. Decisions as to whom get salary increases, promotions, and other rewards are determined by their performance evaluation.

Second, these appraisals can be used for identifying areas where development efforts are needed. Management needs to spot those individuals who have specific skill or knowledge deficiencies. The performance appraisals are a major tool for identifying these deficiencies. Finally the performance appraisal can be used as a criterion against which selection devices and development programs are validated. It is one thing to say, for example, that our selection process is successful in differentiating satisfactory performers from unsatisfactory performers. THE APPRAISAL PROCESS Established performance standard Communicate performance expectations to employee Measure actual performance compare actual performance with standards. Discuss the appraisal with the employees. If necessary, initiate the corrective action The appraisal process begins with the establishment of performance standards. These should have evolved out of job analysis and the job description discussed under human resource planning. These performance standards should also be clear and objective enough to be understood and measured. Too often, these standards are articulated in some such phrase as "a full day's work" or "a good job". Communication only takes place when the transference has taken place and has been received and understood by the subordinate. Therefore feedback is necessary from the subordinate to the manager. Satisfactory feedback censures that the information communicated by the manager has been received and understood in the way it was intended. The third step in the appraisal in the measurement of performance. To determine what actual performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. What we measure is probably more critical to the evaluation process than how we measure, since the selection of the wrong criteria can result in serious dysfunctional consequences. And what we measure determines, to a great extent, what people in the organization will attempt to excel at. One of the most challenging tasks facing managers is to present an. accurate appraisal to the subordinate and then have the subordinate accept the appraisal in a constructive manner. Appraising performance touches on one of the most emotionally charged activities the assessment of another individual's contribution and ability. The impression that subordinates

receive about their assessment has a strong impact on their self-esteem and, very important, on their subsequent performance. The final step in the appraisal is the initiation of corrective action when necessary. Corrective action can, be of two types. One is immediate and deals predominantly with symptoms. The other is basic and delves into causes. Immediate corrective action often described as "putting out fires," whereas basic corrective action gets to the source of deviation and seeks to adjust the difference permanently. Immediate action corrects something right now and gets things back on track.

PERFORMANCE APPRAISAL SYSTEM IN DABUR INDIA LIMITED PERFORMANCE APPRAISAL SYSTEM IN DABUR INDIA LIMITED In Dabur India Limited they have the system of performance appraisal of their employees. The main objective of this performance appraisal system is to evaluate the performance, promote their employees and to arrange for their various training programmers if they require for enhancing their skills in their respective areas and in contribution enhancement.. Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of their job. This approach is frequently referred to as. Management by objectives. Management by objectives is a process that converts organizational objectives into individual objectives. It can be thought of as consisting of four steps: goal setting, action planning, self- control, and periodic reviews. In goal setting, the organization's overall objectives are used as guidelines from which departmental and individual objectives are set. In action planning, the means are determined for achieving the ends established in goal setting. That is, realistic plans are developed to attain the objectives. Selfcontrol refers to the systematic monitoring and measuring of performance. Finally, with periodic progress reviews, corrective action is initiated when behaviour deviates from the standards established in the goal-setting phase. Dabur uses very constructive performance appraisal process while evaluating its employees. Its evaluation is based on quantitative wise and objective wise.

Company set goals to its employee by properly reporting with its employees and then evaluating them up to what extent it has been achieved and if there is failure in reaching the target what are the causes or reasons behind it. Every evaluator has his or her own value system which acts as a standard against which appraisals are made. Relative to the true or actual performance an individual exhibits, some evaluator mark high and others low. The former is referred to as positive leniency error and the latter as negative leniency error. When evaluators are positively lenient in their appraisal, an individual's performance becomes over- stated; that is, rated higher than it actually should. Similarly, a negative leniency error understates performance, giving the individual a lower appraisal. As such there is no scope of error as far as the Dabur Company is concerned, but sometimes over estimation of target brings about a description in the evaluating criteria. Thus, though chances are less, positive leniency errors have been stated to be committed. Outcome of Performance Appraisal As far as Dabur Company is concerned, there are four outcomes possible: a. Outstanding -If the performance evaluated by the management turns out to be outstanding. If the employee performs in such a way as to collect 3 consecutive outstanding performances into his/her credit) he / she get promoted. b.Excellent -If the performance evaluated by the management turns out to be excellent. If the employee performs in such a way as to collect 3 consecutive excellent performances into his/her credit, he/she gets promoted. c. Good -If the performance evaluated by the management turns out to be good. The management sends the employee to the training programmed to improve his/.her skill to perform form. d. Below average -If the performance evaluated by the management turns out to be below average. And, if the employee collects 3 below average to his/her credit, then he/she dismissed Duration of Appraisal System The time constraints enables the employee to show or project his/her capabilities in term of performance as per the duration allowed. In Dabur India Limited, the performance appraisal system is carried out annually.

Feedback The company provides the annual feedback to its employees and thus, in term brings out the highlights of the self assessment programmed. This enables the better communication between the management and employees ad thus, helps in promoting the business future. Response There are mixed responses from the feedback by the employees. It has helped some of the employees in motivating themselves while those who felt bad were thoroughly communicated and all the confusion and failure part were discussed with employees

CONCLUSIONS & SUGGESTIONS The analysis and interpretation of data on study of performance appraisal and its effectiveness in an organization led to the following conclusions:

The promotion rules though defined need to be communicated to every employee before appraisal process is done and also justifies the promotion as a result of the appraisal. That the promotion policy followed differs at different position and category. A uniformity has to be there in the implementation of promotion policy at all levels

The process of performance appraisal followed in Dabur India Ltd. at the supervisory and above level IS to say not well but of satisfactory level. The employees do not rate it very good

The appraisal outcome has to be used frequently for the purpose of reward on performing well together with the feedback on the performance. Also when performance goes down employee has to be given feedback and motivated to do better.

The organization at present doesn't lay career planning and career suggestion plans. In Dabur India Ltd. feedback is being provided to the employee though on a few occasion. Performance appraisal in Dabur India Ltd is done on an annual basis. More emphasis on training and job rotation as remedial measures.

The mechanism of counseling pre-performance and post performance is not in practice at the organization in strict term. During. the course of study suggestion came from the employee side for the need of counseling.

Suggestions The study undertaken brings some interesting result. Training the Appraiser: It is proposed that appraiser be trained for clear understanding of the system and its objective and also counseled to be honest, fair, just, unbiased in appraising the appraisal.

Factors/traits of evaluation: It is proposed that appraisal evaluated on above factors/traits be given suitable remark or justification for being given different quantitative grade. Greater clarity has to be has to there in terms of job responsibility. This is possible when the appraisal is done on the basis of the description. In the organization, performance appraisal is done on an annual basis which should be done Quarterly to make it more effective. Consistency is demanded in the promotional policy. It should not change every year. Monetary difference between two grades should not be large; it should be motivating in nature. Performance appraisal system should be made more transparent and rationale. Performance feedback: The performance feedback sessions should be improved which would results in increasing employee motivation to improve performance. The following could be incorporated.

Pin point the problem behaviors and make sure the employee is aware of it Make sure the employee understands the consequences of the problem behaviors. Get employee's commitment to change and make sure he cares about the change .Assistance should be provided to improve poor performance. Make a realistic plan appropriate to the behaviour and set a time frame for improvement.

To make sure to review performance time to time The other change which has to be incorporated at the supervisor and the level above are: These should be listing down of task undertaken during the last one year and the result achieved.

In some areas of performance there should be self appraisal and more and more counseling so that employee improves upon weak area and understands what is expected of him/her at the organization level.

Based on the above an open appraisal system is suggested.

In an open appraisal the employee would come together to set the targets, to understand the mutual expectations and support to be provided by the appraiser to the employee for achieving mutually accepted goals/targets. Through this process of setting targets the interpersonal relationship between the appraiser and the employee would improve. The open appraisal system reduces the whims and fancies of the appraiser. It promotes result-orientation as it is based on performance rather than on personality based appraisal.