Vishnu.docx

SUMMER TRAINING REPORT ON

“IMPACT OF PERFORMANCE APPRAISAL” AT

“ABB INDUSTRIES LIMITED” Submitted in partial fulfillment of the requirement of degree in MASTER OF BUSINESS ADMINISTRATION OF

YMCA UNIVERSITY SESSION : 2017 – 2019

Submitted to:

Submitted by:

Controller of Examination

VISHANU PRAKASH

YMCA University

Reg. No.: __________ Roll No.: __________

ADVANCE INSTITUTE OF TECHNOLOGY AND MANAGEMENT PALWAL

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ACKNOWLEDGEMENT I express my sense of profound gratitude to the Management of “ABB Industries Limited”. For giving me this opportunity to conduct a study on Impact of Performance Appraisal in their esteemed organization. My sincere thanks to Mr. Vijya K. Mathews (Human resource Manager), ABB Industries Limited. For permitting me to pursue this project. I would like to express my gratitude to Mr. Rahul Shrivastava (Sales Manager), ABB Industries Limited.

For providing his valuable time, suggestions and

support for completing my project work successfully. I am extremely grateful to Mr. Rajul Gupta, Lecturer, Advance Institute of Technology and Management. For his/her support during the preparation of the project report. His/her patience and invaluable guidance have proved to be very precious without which project would not be completed. Lastly, I am indebted to the friends and will-wishers who have extended their support to me during the project.

VISHANU PRAKASH

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10th August, 2018

TO WHOMSOEVER IT MAY CONCERN This is to certify that Mr VISHANU PRAKASH student of MBA final year, Advance Institute of Technology and Management, Palwal has successfully undergone his eight weeks summer training with us from 11th June to 10 August, 2018 and submitted the report.

He has completed his training successfully with full dedication.

We wish him all the best in his future assignments.

For ABB INDUSTRIES LIMITED

Auth. Signatory

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DECLARATION I, VISHANU PRAKASH student of MBA of Advance Institute of Technology and Management, Palwal hereby declare that the training report entitled “Impact of Performance Appraisal” at ABB Industries Limited is an original work and it has not been submitted for any other degree. The feasible suggestions have been duly incorporated in consultation with supervisor.

(Student’s Signature) Date:

Faculty Mentor’s Signature Date:

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TABLE OF CONTENTS

Chapter 1

:

Company profile

Chapter 2

:

Review of Literature

Chapter 3

:

Research Methodology

Chapter 4

:

Swot Analysis

Chapter 5

:

Synopsis

Chapter 6

:

Conclusion

Chapter 7

:

Limitation

Chapter 8

:

Suggestions

Chapter 9

:

Annexure Bibliography Questionnaire

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CHAPTER-1

COMPANY PROFILE

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COMPANY PROFILE ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in power grids, electrification products, industrial automation and robotics and motion, serving customers in utilities, industry and transport & infrastructure globally. Continuing a history of innovation spanning more than 130 years, ABB today is writing the future of industrial digitalization with two clear value propositions: bringing electricity from any power plant to any plug and automating industries from natural resources to finished products. As title partner in ABB Formula E, the fully electric international FIA motorsport class, ABB is pushing the boundaries of e-mobility to contribute to a sustainable future. ABB operates in more than 100 countries with about 147,000 employees. www.abb.com

Who we are – Group structure ABB is organized into four divisions according to the customers and industries we serve. These are described in more detail in the section entitled Our businesses. 

Power Grids Electrification Products Industrial Automation Robotics and Motion

Below are links to listings of key personnel, with biographical information for members of the Board of Directors and for members of the Executive Committee.

Why do we need a code of conduct? ABB is a global leader in power and automation technologies. Our company in its current form was created in 1988, but our history spans over 120 years. Since our inception, our reputation has been built on certain qualities and values, one of the most important of which is integrity. A culture of integrity is a prerequisite for a world-class business. Many valuable customers choose to do business with us in part because they know ABB behaves in a responsible and ethical way, and that we respect the needs of individuals, society, and the environment. The Code of Conduct defines how we conduct ourselves at ABB, and it has played a critical role in helping us earn our reputation. Every ABB employee, in every location, and at every level, including board

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members, directors, and officers alike, is bound to live up to the letter and the spirit of the Code even if it means losing an important contract or missing a business target. The Code of Conduct is more than an acknowledgment of the rules. It reflects a personal commitment to take responsibility for our actions and always to work with integrity. At ABB, performance is measured not only by the results achieved, but also how these results were achieved. This is why our stakeholders can rely on the fact that our services, operations, and daily business are based on ethical behavior. ABB strives for a culture of mutual respect that encourages the exchange of views at all levels of the organization. By fostering open dialogue and playing an active role in our community, every ABB employee can make a difference. Why do we need a Code of Conduct? Code of Conduct 5 ABB’s strength and future success depends on its reputation as a trusted and reliable business partner. We all have a role to play in safeguarding that reputation. If you are ever in doubt about how to behave in any situation, please ask your manager, human resources representative, or local integrity officer for guidance. Confidentiality and non-retaliation are our commitments to you. I expect that you will take the time to read through the Code of Conduct and do your part to exemplify our high standard of integrity at ABB. Ulrich Spiesshofer CEO ABB Ltd

Tone from the Top Don’t Look the Other Way - “A culture of integrity is a prerequisite for a world-class business. Many valuable customers choose to do business with us in part because they know ABB behaves in a responsible and ethical way, and that we respect the needs of individuals, society, and the environment. At ABB, performance is measured not only by the results achieved, but also how these results were achieved. This is why our stakeholders can rely on the fact that our services, operations, and daily business are based on ethical behavior.” CEO Ulrich Spiesshofer

ABB’s commitment to integrity – ABB sets high standards of integrity and compliance which are expected of every employee and in every country where it does business – ABB uses a systematic approach, designed to foster a culture of integrity and compliance – This is done through leadership and business accountability, supported by strong tools and processes, and a zero tolerance policy for violations

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Program fundamentals: prevent, detect and resolve March 26, 2018 Slide 4 The fundamentals of the ABB integrity program are designed to PREVENT, DETECT and RESOLVE any potential concerns

Preventing integrity concerns: key employee messages – ABB must not, should not, and will not break the law – We compete and win only by playing by the rules – There is no place in ABB for anyone who breaks the rules. We have a zero tolerance policy which is rigorously enforced – We are proactive about integrity and compliance through ongoing training, internal surveys and resources such as the Business Ethics Hotline

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Commitment We are committed to a high standard of integrity which is expected of every employee and in every country where we do business. With hard work and a clear commitment from ABB's top management at headquarters and across our regions and divisions, ABB has seen the positive impact that a robust compliance and integrity program and a strong culture of integrity can have on the long-term success and sustainability of our company. Integrity is a top priority at ABB We have developed and implemented a systematic approach designed to prevent, detect, and resolve any potential integrity concerns. This is supported by tools and processes and a zero tolerance policy for any violations. Our integrity program has created an environment where all of our employees can be open about identifying risks, asking questions, and raising concerns.

Integrity leadership involves every dimension at ABB At ABB, integrity begins with leadership, responsibility and accountability. The tone from the top is clear: we are committed to integrity and we walk away from non-compliant business. Recurring integrity messages from our CEO and other senior leaders in videos, articles and letters, serve to reinforce our commitment to doing business without breaking the rules.

But integrity leadership does not stop at the top. Our integrity program relies on local management to lead by example. All local business unit managers have to regularly lead discussions about integrity issues to ensure that the ethics message comes from the same person that sets the business targets: integrity is the business of the business.

With support from top leadership, local leadership, committed integrity resources, and partner resources (like Human Resources and Sustainability Affairs) throughout the company, we are able to foster a strong and sincere culture of integrity.

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Standards ABB is committed to fostering a culture where integrity is woven into the fabric of everything we do. We want integrity embedded in our people, our businesses and processes. This means acting responsibly as individuals and as a company.

When you work with integrity, non-compliant behavior is simply not an option.

We want integrity embedded in our people, our business, and our processes. In the following sections, learn more about the standards of behavior that we expect of our employees and our business partners.

Multiple reporting channels Employees are not just encouraged, but are required to speak up and to report any suspected or observed violations of the law, the ABB Code of Conduct, or if they are asked to do something that might be a violation.

Reports may be made to a supervisor, a regional or country integrity officer, the chief integrity officer, or the ABB Business Ethics Hotline.

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Training and communications Our integrity program has, as one of its key components, a strong training and communications component. Here you will learn more about our e-learnings, our face-toface trainings, communications activities, and the key messages in those communications. Additionally, you will find the link to the ABB Integrity Culture and Risk Survey performed by KPMG.

Resolving issues ABB applies zero tolerance and takes the appropriate disciplinary action ABB is focused on preventing, detecting and remediating integrity concerns. We enforce a strict zero tolerance policy for violations of the law or the ABB Code of Conduct, and we will take the appropriate disciplinary action – including termination of employment – against employees who violate them.

Anti-bribery reviews of business units and countries globally are conducted frequently throughout the year. Each review includes examination of business processes, accounts and balances, and tests transactions to assess robustness of controls and identify possible violations. The anti-fraud program is also monitored by internal audit who regularly evaluates fraud risk exposure and developing trends. This is a cross functional analysis of 21 program elements and the response plan to prevent and detect potential fraud.

The event was hosted by our CEO Ulrich Spiesshofer and CFO Eric Elzvik as well as other members of the senior executive team. On this page you will find all the material from the event which was made available during the course of the day.

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Contact centers Do you have an inquiry but do not know where to turn? Then contact one of our centers by the web inquiry form, online chat, telephone or email listed below.

FARIDABAD BRANCH : Local name

Regional Office North

Street address

14 Mathura Road

Additional address information

Plot No - 14 , Mathura Road

Postal address

P.O. Amar Nagar

City

Faridabad

Zip/Postal Code

121003

State/Province

Haryana

Country

India

Fax Fax

+91 129 227 9692, +91 129 227 5019

To find out more information about a specific country contact center simply click on the country name. Contact Center

Local phone number

International number

E-mail address

Argentina

0800 222 6700

+54 11 4229 5800

[email protected]

Australia

1800 222 435

+61 2 9738 2277

[email protected]

Belgium

0800 85169

+32 800 85 169

[email protected]

Brazil

0800 014 9111 (toll-free)

+55 11 36 889 004

[email protected]

Canada

1-800-435-7365 (1-800-HELP-365)

+1 44 05 857 804

[email protected]

Chile

800 487 300 (toll free)

+56 22 471 4378

[email protected]

China

800-8209696, 400-8209696

+86 21 33 18 4688

[email protected]

Colombia

01 8000 522 226

+57 1 378 9349

[email protected]

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Czech Republic

800312222 (toll free)

+420 59 74 68940

[email protected]

Denmark

44504450

+45 4450 4450

[email protected]

Ecuador

1800 222 328 (1800 ABB 328)

+593 2 399 4191

[email protected]

Egypt

19290

+20 2 2625 1774

[email protected]

Estonia

5680 1800

+372 5680 1800

[email protected]

Finland

0102221999

+358 10 22 219 99

[email protected]

France

0 810 020 000

+33 1 34 40 2581

[email protected]

Germany

(0621) 381-3333

+49 621 381 3333

[email protected]

Indonesia

21 255 955 99

+62 21 255 955 99

[email protected]

India

1800 420 0707

+91 80 67 143 000

[email protected]

Italy

02 2415 0000

+39 02 24 150 000

[email protected]

Japan

03-4523-6170

+81 34 523 6170

[email protected]

Kuwait

22282337

+44 203 788 2825

[email protected]

Luxembourg

8002 2211

+35 249 3116

[email protected]

Malaysia

1800 222 2273 (1800-ABB-CARE)

+60 356 284 235

[email protected]

Mexico

01-800-5222 365 (01-800-5ABB 365)

+52 44 48 707 590

[email protected]

Netherlands

0800 9103

+31 800 9103

[email protected]

New Zealand

0800 464 222

+64 7 850 2721

[email protected]

Norway

22 87 2000

+47 22 87 2000

[email protected]

Oman

80074115

+44 203 788 2823

[email protected]

Panama

8002223

+507 395-8698

[email protected]

Peru

0 800 20004

+51 1 415 5212

[email protected]

Poland

2222 3 7777

+48 2222 3 7777

[email protected]

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Qatar

8000034

+44 203 788 2824

[email protected]

Russia

88005002220

+7 495 777 0013

[email protected]

Saudi Arabia

920010301

+966 92 001 0301

[email protected]

Singapore

62 22 7778

+65 62 22 7778

[email protected]

Slovakia

0800 700 101

+420 597 468 940

[email protected]

South Africa

010 202 6995

+27 10 202 6995

[email protected]

South Korea

1588 9907

+82 1588 9907

[email protected]

Spain

901 760 762

+34 90 17 607 62

[email protected]

Sweden

021-325000

+46 21 32 5000

[email protected]

Switzerland

0844 845 845

+41 84 48 458 45

[email protected]

Taiwan

07 335 5066

+886 7 335 5066

[email protected]

Turkey

0850 333 1 222 (0850 333 1ABB)

+90 850 333 1 222

[email protected]

Unites Arab Emirates

800 0444 7658

+44 203 788 2822

[email protected]

United States

1-800-435-7365 (1-800-HELP-365)

+1 44 05 857 804

[email protected]

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CHAPTER-2

REVIEW OF LITERATURE

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REVIEW OF LITERATURE Introduction: This chapter will discuss the critical importance and understanding of performance appraisal systems in the banking industry of Pakistan. Moreover, this chapter will highlight the need of the study, aims and objectives of the study and also introduction to the key terms that has significant importance throughout the research paper.

Understanding Performance Appraisal: In the past few decades, organizations were very concerned about the development and orientation of their employees and also pondering on performance management (Murphy & Cleveland, 1991). Now, Organizations are following the new patterns of working and doing jobs to adhere the aims and mission of it. To fulfil this new modernized concept of fast and technological

revolution,

they

are

realizing

the

importance

and

implementation of new methods of performance management (Cardy & Dobbins, 1994). Organizations have indentified the importance of performance appraisal and it has been found in the cases of all big multinational companies that they have implemented the performance appraisal systems to enhance the productivity of their employees. There are varieties of different perspectives that evident the importance of performance management and its measurement (Whitney, 1994). Organization should present true and fair views of performance appraisal to gain trust of the employees, their loyalty and job satisfaction are the main core of any organizational success (Robinson & Rousseau, 1994). Through rational performance measurement, Organization's management can get the maximum reliance of employees.

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This research papers aims to explore the performance appraisal system within the banking sector of Pakistan and its comparative study with JS (Jahangir Siddqui) bank. This research study will also explore the effects of performance appraisal on the employees considering motivation, job satisfaction and employee loyalty as key factors in HR functions.

The Research Topic: To explore the role of performance appraisal system in HR function within the banking sector of Pakistan. Aim: This research aims to investigate the role of performance appraisal system and its effect on employees considering motivation, job satisfaction and employee loyalty as the key factors in HR function within the banking sector of Pakistan and comparative study with JS Bank. Objectives: 

What is performance appraisal?



What are different performance appraisal systems?



How appraisal system interlinked with motivation and employee loyalty within banking sector of Pakistan?



What are different problems with performance appraisal system?



What are different strategies in HR department to enhance productivity?

Rational of Study: The system that identifies the Performance evaluation and review is called Performance Appraisal system. Performance appraisal system highlights the individual and group performance over the period of time and reviews for the promotion and raise in monetary funds.

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To get the real meaning of performance appraisal system can be elaborated to the concept of performance management. Performance Management can be defined as: “An approach to create shared vision of the purpose and aims of the organization, helping each individual employee understand and recognise their in contribution to them, and in so doing manage and enhance the performance of both individuals and the organization.” (Fletcher, 1992)

Performance management is a process where it describes the performance of individuals that shapes a group and become the collective success of the organization with the set of objectives, time period, reviewing the performance and recognition of the performance with rewards (Connock, 1991). The main objective of performance management is to show the real picture of the employees performance over a period of time and this can be achieved through framed standards (Beaumont, 1993).

In the Performance management, the appraisal system is the most significant part where it defines a structural and formal system that helps the manager and subordinate to interact with each other to evaluate performance. This interaction usually comes into process annually of semi-annually in shape of some structured interview or questionnaire. In this process, supervisor examines the performance of subordinate where supervisor identifies strengths and weaknesses and also highlights the area of improvements (Connock, 1991).

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Importance of Performance Appraisal: The managers are aware of the importance and criticality of performance appraisal, and its ultimate affect on the motivation, loyalty, job satisfaction plus its has a big affect on the growth and success of the organization, so while documenting, communicating, and describing the job particulars, they are more concerned. It has been noticed that in the current time, job performance systems have improved a lot, but still the outcome shows that it has a negative impact on the job satisfaction and motivation of the employees if it is not appraised systematically (Robert, 2002). So, it results in counter of an organization that employees are demoralized and also lose their loyalty, which affects the organizational aims and objectives. Human resource officials use performance appraisal for decision making such as planning payments and salary scale of the employees, they also determine what professional developments are needed to equip their employees with a proper feedback. Performance appraisal can also help the officers to decide what are the factors that can be employed to increase the productivity of employees (Natalie & Ann 2005).

As performance appraisal encourages the good performers, on the same hand performance appraisal also highlights the poor performers and tells about their weak areas and it helps the management to remove the leaning hurdles and makes them to achieve the set objectives and aims. This system also identifies the employee who needs guidance and counselling from management to improve their performance at work. Organization believes that performance appraisal is the best tool to see the level of employees and their performances and making the decision about their rise in salary, promotions, demotions and penalties (March, 1982).

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Factors of Performance Appraisal: There are many factors influencing performance appraisals systems at work. Internal and external factors always play an important role in appraising the employees. Internal factors could be labour unions, management's attitude, the employee's behaviour and their stance in the direction of work. External factors are legislations in relation to the employees. Labour union always get into the matters of employees well being at work and also in their personal lives so that they can give their full at work. But some time it has a negative impact on performance appraisal and the management to give promotion or rise in the salary on the bases of seniority (Isaac, 2001). Internal factors can also affect the performance appraisal in shape of bad corporate culture that can be a big hurdle in the performance management. The main objective is to set specific goals and make framework of getting those objectives. For all this, management should inform the employees that what is expected from their jobs and what should they do to make hundred percent out of it. At the end management sees and evaluates on the whole performance and also communicates these efforts to employees. This communication also develops relationship between employees and supervisors (Isaac, 2001).

There are different techniques and methods used for the performance appraisal and it gives an outline to measure the performances that are in use of different organizational and it also varies from industry to industry. There is no hard and fast rule to use specific performance appraisal system, but it is always suggested to use the same performance criteria within one organizational and it applies to all of the employees. These models and techniques include, Six Sigma, Balance Scorecard, 360 degree feedback, etc. These models and techniques to measure the performance is widely in use of

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many MNC's and local organizations, in the banking industry of Pakistan and in JS bank. While designing performance appraisal, management should keep in view the nature and type of the business to conduct these performance management techniques. In the performance management, 360 Degree is common and Six sigma is the operational management technique; both leads to performance appraisal measurement where the HR function is able to appraise and it involves the motivational factors, employee loyalty, and job satisfaction aspects. Extensive and appropriate use of these techniques will make the appraisal much unbiased (Natalie & Ann 2005). Employee's motivation and job satisfaction can never push aside, as these are elementary aspects of any Job. In the process of appraisal system, an employee always expect some feedback from other employees which gives him motivation and the satisfaction from the job done, so these are the complementary part of any job. When any employee is appraised, then he always get the communication and feedback of that appraisal and it actually indicates the level of satisfaction of job the employee has plus the loyalty he has for the organization (Robert, 2002). In the banking industry, as the recession hits and many of the employees being fired, so at the time of performance appraisal, employees are so dissatisfied as they don't know when they are going to be part of sacked list of employees, keeping in this view, the performance appraisal system plays role in the Hr department to indicate the key factors such as motivation, job satisfaction and loyalty (Caruth and John 2008).

Performance Appraisal: The process in which human resource management department obtains, analysis and makes decisions on the performance of an employee over a period of time is called Performance Appraisal Process and the methods which

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are used to appraise the employees are called Performance Appraisal Systems (Yee 2009). The main objective of performance appraisal system is to focus on the performance, key attributes of the job, what is the improvement in the performance and the proportion of the performance that the employee will make in future in the productivity of the organization. It aims towards the employee and it's his performance over the period of time (Dobbins, 1994). In the field of human resource management a prominent name of Flippo (1999) says that

"Performance appraisal is the systematic, periodic and an impartial rating of an employee's excellence in the matters pertaining to his present job and his potential for a better job." (Flippo, 1999)

This systematic process allows the management to look into employee's activities in last fiscal year or the performance time periods and analyse where it is falling, what improvement has he made and what is the future planning regarding job and activities.

Management should educate the employees about their individual goals and share the aims and objectives with the organization. Employees should have the knowledge and freedom to participate in the decision making process. Here, if the management has the full corporation of the employees and on the same hand if employees coordinate with management then this performance and participation can actually helps in the appraisal for the next period. In all this, the right of expressing of opinion will certainly adds to their performance (Beach, 1995).

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Performance appraisal systems are the powerful tool to measure the performance of an employee and to issue or offer the rewards on that quality performed job. This process allows the management to evaluate the achievements and contribution to the success and productivity of the organization to get the overall organizational aims and objectives (Dobbins, 1994). Moreover these systems are standardising for all the employees.

Performance appraisal is a system in which HR managers measures the performance of the employee, either he is performing his job rightly, is he achieving what organization wants from his job, what is his behaviour and attitude towards his job, either he is showing positivity towards his job, is he the right employee for the right job, as all this comes under the HR function of an organization (Randhawa 2007). The main objective of performance appraisal is to make sure that employee‘s performance is up to the mark, to communicate this job performance measurement makes the employee enable to enhance his productivity and cover his loopholes where he is lagging behind. The main idea behind performance appraisal is to insure that organizational goals are being met, because meeting organizational objective is an individual as well collective effort. Strategic objectives on banking sector and any financial institution are to multiply their profits by gaining the top performance from its employees. By monitoring employee's performance, they actually see what the criticality of the importance is and the effect that job is making on the organizational objectives. An effective performance appraisal must have collaboration between the management and the subordinates. An employee should work according to the job description, which is decided by the immediate manager. By doing this, there will be no conflict between the management and the employees (Propper, & Wilson, 2003).

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The objective of performance appraisal is to influence the employee's job performance with a systematic process appraisal, what are the major impacts on the employees to get the certain level of motivation to improve the productivity of the organization as well as the job satisfaction (Natalie & Ann 2005). In the past, the sole purpose of performance appraisal was just to calculate the financial position of the company, either it has made some progress in terms of monetary growth, what influence it has made on the department growth and what are the affects of performance on organizational objectives. But now, things have changed. Now researchers are seeing beyond the monetary terms, they are not discussing the financial aspect but they are measuring the job performance in terms of employee's job satisfaction and his level of motivation, because ultimately the manpower of an organization is its labour force. If this labour force is getting what they want, then they will perform according to the job description they have with them within their departments.

History of Performance Appraisal: Performance appraisal has a brief history starting from earth 20th century where the need of performance appraisal was felt and some measures developed. This history shows that Taylor (1964) who is the revolutionary person in times and motion studies brought the real sense of performance appraisal and performance measurement. But in the modern human resource management it can be seen that the thread of performance measurement is linked with the Second World War. This tells the history that it is not more than sixty years ago. Yet the guru of human recourses says that the art and procedures of performance measurement and appraisal is very ancient art and people of old times had some tools to appraise their employees on the basis of

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activities and job they performed. On these historical felt notes it can be said that performance appraisal management is the world's second oldest profession too. Here Dulewicz (1989) says that “It is a basic human tendency to make judgements about those one is working with, as well as about oneself." If the management has a concept that performance and its appraisal is inevitable then it will be wrong that performance of an employee cannot be judge in advance. In the absence of a structured appraisal system then it will ultimately affects the performance of employees, the productivity of the organization and moreover the reputation of the organization in the industry. It will de-motivate the employees, they will lose satisfaction from their jobs and loyalty with the organization will be most likely finished and labour turn over will increase. One serious offence can be seen in the absence of appraisal system that organization can go unlawful, harassing the employee and unfair judgement on their performance. Consequently, it helps the management and employees to go lawful, fair and accurate with the performance over the period of time (Murphy, 1989).

Benefits of Performance Appraisal: Where performance appraisal allows the employees to get the monetary and non monetary rewards from the management, here it also give the most significant benefit for employees that it gives the chance to get reasonable time for one to one discussion on the performance over the period of time. This discussion between employee and supervisor allows discussing the main issues that are hurdle in the performance and work concerns addressed. It can observe from all over the world organizations, the feedback of performance appraisal says that it creates a strong bond between subordinate and supervisor only if the appraisal is conducted properly and fairly. This process

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also gives the opportunity to employees to review their performances and discuss the issues and difficulties they are facing in the work and also it gives the path to gain the aims and objectives in the future time. This interaction of subordinates and supervisors give the opportunity to help the future goals. Therefore it enhances the productivity. So, this process gives the best time to employees to have chat with the supervisors without any hindrance and instruction (Orpen, 1997). The importance of this process should not be underestimated as this is the integral part of performance appraisal system. Moreover this process allows the supervisors and employees to discuss the future targets and, training and rotation need orientation and development, if needed. In this discussion, the supervisors and the subordinates discuss the various problems about the present as well as the absent working skills, career development and what is to be done in the future (DYCK, 1997). Here, supervisor highlights the key skills of the subordinate and makes or arranges for the future career inspirations. This discussion can be useful to measure the productivity of the organization, for the recruitment and orientation process. For example, the feedback can indentify how employees are performing those who hired in the past two years and so. Appraisal data can also tell how well the recruiting strategies are working, what developmental process are good enough and what the effectiveness of employees is. Performance appraisal process could be a data sheet highlighting the overall performance of all employees; telling has productivity improved, remains same or fall. Evaluation is the ongoing process and its run throughout the year but some clash can be noted in the evaluations and developmental process but in a nutshell it's a process of evaluating, analysing and giving feedback of that process (THOMPSON & DALTON, 1970).

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Basic purpose of Performance Appraisal: Performance appraisal systems have the two main elements in it; one is evolution of the performance and the feedback of the evaluated performance. The main objective of performance evaluation is to define the gaps in the actual job and job performed. This gap creates when the employee is not working on the standard level and doesn't meet the expectation of the organization (ANTHONY, 1986). The main objective of feedback is to inform the employee about his performance and the quality work he is producing but this feedback doesn't flow in a one direction and the supervisor of the appraiser also gets the feedback from the employee to resolve the job issues, if have. To get the real sense of performance appraisal system is to look at the whole process on different angles so that it can create a meaningful difference in the organization. These different angles could be: from employees point of view and organization's point of view (ANTHONY, 1986).

From employee's point of view it can be unfold as: i. What does the organization want me to do? ii. What are my loopholes? And what I have done remarkably well? iii. What help will be given by the organization for my own improvements? iv. What is the reward of my good performance?

Performance appraisal system has always an integral part of HRM and this research will highlight the main issues within the systems and the rating of employees. Rating the performance appraisal and giving the feedback is not an easy task for the HR department, as the criteria of apprising is a complex job. There are certain strategies underlying to make the traditional methods accurate than it had been in the past and therefore the likelihood of correct

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and affective appraisal will be increased (TOWNLEY, 1997). These strategies can be considered as a practical training to the HR officials. New learning techniques and methods should be true n fair for all set of employees, transparent and should be computerized so there are no chances on intermingled results which will remove the chances of favouritism. The main tactics and objective of the performance appraisal is that it should be conducted for the motivation of the employees with no negative aspect associated with it, as it will decrease the morale of the employees. There should be some reward or bonus announced so that this will be stimulation for other employees and they will try to excel their performance too. Proper communication and feedback session should be introduced so that the employees come to know their loopholes (Natalie & Ann 2005).

Objective of Performance Appraisal: Followings are the main objectives of performance appraisal. 

To review the performance of employees over the period of time.



This review of performance, evaluator judges the actual performance with the targeted performance standards and benchmarks.



It also helps the management to control the organization targets depending upon the performance of employees.



It also creates healthy environment between employees and supervisors.



It indentifies the strengths and weaknesses of employees and also suggests the various improvement plans by the management after performance appraisal process.



This process also allows the employees to get the proper training and orientation of skills where they are lacking.

29



To communicate the feedback with the employees.



Give all information regarding the tasks and job responsibilities and also clarifies all the tasks which are required from the employees.



One of the objectives of performance appraisal is to judge the HR function within the organization for smooth running of business.



It also tries to removes the complaints of employees about the function of organization, if have any.

Performance Appraisal &Employee Motivation and loyalty: In the growing age of business and markets, human resource is the big asset of the organization; if the organization is not keeping well with its labour work force then it might get into trouble. As the employees are the main features of the progress of the organization. In order to have productivity, employee should be motivated and should be satisfied with their job and have loyalty with the organization (EPstein,1992). HR professionals are making it possible to motivate the employees with the performance appraisal systems by giving them fair appraisals as per their performance over a period of time. It has been noticed that there is a strong relationship between performance appraisal and motivation, job satisfaction and loyalty (bonnie, 2002). Keeping aside the main objectives of performance appraisal, it can be use as a mechanism to create a completion between employees to get the job done with all the linked targets and benchmarks (Robert, 1984).

It is also mandatory that employees gets the accurate performance appraisal results to get motivate, if the feedback of appraisal is according to their performance over the period of time that will be a great source of motivation to them. Inaccurate performance can create dissatisfaction from job and

30

ultimately can affect the loyalty with organization. One employee always expects that evaluator recognise his efforts and achievement in the professional life and also support him to overcome on his failure and allows the opportunity to make improvements in his performance in future (bonnie, 2002). If the performance appraisal has some shortcoming in it and is actually creating some discrepancy in the process, then it will affect the motivational level of the employees and ultimately it will affect their efforts and the risk taking ideas for the betterment of the organization. Also they will lose interest in the affairs of the organization (Robert & Kim, 2007). Plus this de-motivation leads the employees to the lack of loyalty and they will look other options of good job and hikes in the rewards (bonnie, 2002).

Different performance appraisal systems: There are different systems and methods for measuring performance and appraising the employees. These methods and systems are categorised as the traditional methods and the modern methods. Traditional Methods: In the traditional methods there are various systems to measure the performance employees. In the traditional method of measurement Behaviourally Anchored Rating Scale is widely used by many organizations across the globe. In this system it focuses on specific behaviours, either affective or ineffective performance is given by the employee. It involves critical incident technique (CIT) and different combinations of rating scale. However, in Graphic Rating Scale supervisor or evaluator simples checks the different blocks in the appraisal form to measure the performance. Though this a old technique to appraise the employees but broadly used method. Unlike

31

scaling system, in Essay Evaluation Method asks the managers, supervisor and evaluators to write an essay or a descriptive narration about the strength and weakness of the employees and also the overall behaviour towards the job. This is a qualitative measure to appraise the employees. Another ranking system is Performance ranking Method in which evaluator or supervisor rank the performance of employee from best to worst. This method differs from other methods as it compares the employee to employee but not with the standards and benchmarks for performance measurement. In Critical Incident Method (CIT), evaluators appraise the performance depending upon the critical incident and the positives and negatives behaviours occur in the period of time to measure the performance (Dessler, 2000).

Modern Methods: There are different methods of performance measurement in the modern times, 360 Feedback System and Management By Objectives (MBO). 360 degree feedback. 360 Feedback is a systematic technique which also known as the multi-rater feedback system. In this method evaluator or the appraiser takes feedback from all the people who are inter-linked with the person to be appraised. The 360 Feedback can be defined as:

“The systematic collection and feedback of performance data on an individual or group derived from a number of the shareholders on their performance.” (Ward , 1997)

This method of performance appraisal is detailed and comprehensive where evaluator asks from all sources about the performance of the employee. In this 32

method all the sources are involved as: customers, suppliers/ vendors, team member and colleagues, superiors, juniors, subordinates and all the other parties who has link with the particular employee. These sources provide all the information that is significant in the performance appraisal process (Anderson, 1987).

There are four main parts of 360 feedback appraisal system: a. Self appraisal b. Superior's appraisal c. Subordinate's appraisal d. Colleagues' appraisal The 360 Feedback systems can be an ongoing process throughout the year to keep an eye on the performance and other's perception about the employees and also it can be measured that how well employee is keeping with its required tasks and responsibilities (Natalie & Ann, 2005). 360 Feedback is also helpful for the managers and leaders to insight of their leadership and managerial styles.

Management by Objectives' (MBO): Performance appraisal's history can be trace from the guru of organizational management, Peter Drucker on 1954. He has given the different theories of management and introduced the main theme of Management by Objectives (MBO). A process whereby the superior and subordinate managers of an organization jointly indentify their common goals, define each individual's major areas of responsibility in terms of the result expected of him and use the measures as guide for operating the unit and assessing the contribution of each of its members.

33

Process of Performance Appraisal: Performance appraisal follows the systematic method to appraise the employee so that it becomes a rationalize and fair process for employee (Caruth & John 2008). It has six main areas to look on, which are: 

Performance standard



Communicating the standards and expectations



Measuring the actual performance



Comparing the actual performance with benchmarks



Discussion on results



Decision making.

Performance Standard: This is the first step in performance evaluation process. It is mandatory to make or set some standards and targets for the employees so that performance can be measured and compared with the standards. This step allows the supervisor and performance evaluator to make the criteria's to judge the employees and keep an eye on the qualifying factors for those set standards. Setting up performance standards is also mandatory to look on the organization goals and objectives for the productivity of business (Caruth & John 2008).

Communicating the standards and expectations: After setting the performance standards and expected outcomes, the next integral part of the Performance Appraisal process is to communicate those standards to employees and educate them as to how to achieve the bench marks. It is mandatory that employees should know the standards clearly and 34

have the idea on how to meet those. These standards will educate the employee about their main responsibilities and job roles and what is expected out of them. These standards should be communicated at the start of the year so that employees should know what to do in future. Management can modify or edit some of standards from the time to enhance the productivity but employees consent will be taken by the management to do so (Caruth & John 2008).

Measuring the actual performance: After communicating the bench marks and required performance standards to the employee, the most important step is to measure the performance according to the set standards over the period of time. However, this is a difficult task for the evaluator but it has to be done. Measuring performance is a ongoing process throughout the year and the supervisors evaluates the performance and also keep an eye on the tasks and job responsibility. By defining performance in terms of desired results is how managers and supervisors make their work assignments operational. Here, it is mandatory that choice of measuring performance method or technique should be appropriate that personal grudge does not affect the outcome of the process and help the employees rather than creating problems for them (Caruth & John 2008).

Comparing the actual performance with benchmarks: Here, the next step is comparison of actual measured performance with the standards and benchmarks. This step is sensitive as it is dealing with the yardsticks to compare each task with the set targets, here the employee and supervisors should agree with the process. Comparison shows how employees

35

have achieved the set targets and what divergence has been made to the benchmarks. This comparison tells either the performance is according to standards, above standards or below the standards. Measuring performance, evaluation, comparison and analysis are integral part of this step (Caruth & John 2008).

Discussion on results: As in process, management sets up standards and communicates those benchmarks to employees similarly after getting the performance appraisal, results should be communicated to the employees and they should be briefed about the standards and the actual performance they have give. There should be a One to One discussion on the results. The purpose of this feedback or discussion is to make the employees aware of his performance, achievements and short falls over a period of time but with a positive attitude. This step also contains the notion of motivation and encouragement to employees so that are loyal to organization and satisfied with the job as well (Caruth & John 2008).

Decision Making: The last step of performance appraisal process is making the decision on the bases of results taken from the evaluation step. This decision is about the improvement of employees, training on different tasks which are lagging behind, corrective actions, promotions and rise in salary, rewards, transfers and demotions (Caruth & John 2008).

Selection of Performance Appraisal systems is the main part of the performance management and measurement. The literature shows that

36

motivation, job satisfaction and employee loyalty with organization is directly linked with the Performance Appraisal systems. In the chapter, research has thrown light on performance appraisal and its different methods widely used across the globe, performance appraisal process and linked strategies. By the side it has also heighted the different performance appraisal problems that often occur in the process or performance measurement.

Research Question: To explore the role of performance appraisal system in HR function within the banking sector of Pakistan.

Objectives: 

What is performance appraisal?



What are different performance appraisal systems?



How appraisal system interlinked with motivation and employee loyalty within banking sector of Pakistan?



What are different problems with performance appraisal system?



What are different strategies in HR department to enhance productivity?

Research Paradigm: A paradigm is a structure that helps the researcher to construct a frame work of study. This frame work tells how to see the world and create a link within the perspective and shape the different elements together to conduct a research (Guba & Lincoln, 1994). Research paradigm has three types into it. a. Ontological question (form and nature of reality) b. Epistemological question (basic belief about knowledge and relationship) c. Methodological question (how to go about finding the beliefs)

37

Ontology describes the reality that researcher wants to investigate in the study and also it takes some assumption based on the reality and develops research study. Epistemology describes the linkage and a strong relationship in between the reality and the research study moreover epistemology has some set of assumptions where it tells the different techniques and methods to enquire about the reality in the real world (Guba & Lincoln, 1994).

Here researcher has defined the ontology of the conducted research as: “In reality, performance Appraisal systems and it feedback and results has effect on the job satisfaction, employee loyalty and motivation towards the job.”

Here researcher is going to describe the whole methodology for the research study through the help of research onion. This research onion tells the research philosophy (phenomenology, systems thinking and positivism) Research approach (Deductive and Inductive) Research strategy (Experiment, survey, ground theory, case study, ethnography, action research and exploratory research) Time horizon (longitudinal and cross sectional) date collection method (literature review, interview, questionnaire, survey, focus group and reflective diary).

Research Philosophy: In the research philosophy, there are different types of philosophies: phenomenology, systems thinking and positivism. Research philosophy can be describe as “All research is interpretive; guided by set of beliefs and feelings” (Denzin and Lincoln, 2000). It tells the different sets of assumptions and believes that are linked to the world, i.e. how the researcher understands the

38

different aspects of the study and what the perspective of the research conducted is. This approach philosophy helps the researcher to study the different small elements in to details and filter the information into a different angle. Research philosophy also helps the researcher to understand the real meanings of the research study (Klein and Myers, 1999).

Case Study Approach: A number of approaches are undertaken by a researcher to make the research work more accurate and practical. One could use various research approaches available like the: Action Research, Case study, Ethnography and Grounded theory Project approach.

The researcher feels that case study approach is most applicable as connection between texts and information collected can be easily obtained. It would focus on understanding in depth the research question and at the same end it conceptualises the various links present inside a particular frame work. Case study approach also takes up use of entrenched designs such that various studies can be used within a single research (Strauss and Corbin, 1990).

The approach would highly correlate with the research carried as it would allow predicting the approach performance appraisal systems in JS Bank and at the same time allow the researcher to understand the job satisfaction of employees in the bank. Specific information related to the bank could be gathered using the said approach as compared to the overall working of the bank. A single case study was deemed suitable for research as the research question surrounds the single notion of performance appraisal system in JS Bank. Even the time frame associated with the research would work well with

39

a single case study in hand, thereby making the researcher to understand in depth the research topic at the same time provide a more efficient and well build framework (Strauss and Corbin, 1990).

Case study of banking industry of Pakistan: Every country has a main financial regulatory body to cycle all financial institutions; like the State Bank of Pakistan (SBP) is the regulatory body and integral part of financial services.

Vision Statement: “Our vision is to develop the SBP BSC (Bank) into a strong and dynamic institution, equipped with an efficient and professional human resource base, having the requisite technology and fully capable of providing quality service to stakeholders, while complementing the State Bank of Pakistan in achieving its objective”. (SBP, 2011)

Mission Statement: “To provide reliable banking services to the Government, financial institutions, public and to act as an operational arm of the State Bank of Pakistan”. (SBP, 2011) The State Bank of Pakistan is taking effective supervision of all financial institutions. This sector comprises of different categories like; commercial banks, non commercial banks, scheduled and non scheduled banks, micro and macro finance banks, development financial institutions, leasing and investment banks, agro-finance institutions, brokers and discount houses, venture capital companies, mudaraba and musharaka companies (Islamic

40

banking), stock exchange and insurance companies. Thus, SBP is carrying all the financial services within its umbrella (SBP, 2011).

Insight to SBP's Human Resource Department: The State Bank of Pakistan always give confidence to fresh banking graduates to be a part of its operations to get wide knowledge of banking sector. It also offers its employees the chance of endorsement and rotation within the bank by posting internal jobs. This opportunity enables the employees to meet their personal aims and objectives in their banking career (SBP, 2011). Quite few units are working under the HR department of SBP.

The Performance Management Unit (PMU) is the main authority for carrying performance measurement and appraisal process and suggests the employees to increase their annual goals that will definitely smoothen their progress to get promotional objectives and also rise in their salaries (SBP, 2011).

JahangirSiddiqui Bank Limited (JSBL): Jahangir Siddiqui is the merger of two giant banks of Pakistani banking industry; Jahangir Siddiqui Investment Bank Limited and American Express Bank Limited of Pakistan (JSBL, 2011). Vision Statement: “To provide quality and innovative range of banking services and products to our customers by a highly motivated team of professionals whilst maintaining high ethical and regulatory standards thereby, generating sustainable returns to our shareholders.” (JSBL, 2011)

41

Mission Statement “To be a preferred partner of our customers by providing complete financial solutions exceeding service expectations, though a single relationship via conventional and non - conventional, conveniently accessible distribution channels.” (JSBL, 2011) JSBL is a big wing of Jahangir Siddiqui investment and securities and an association of two banks. It had started its operation as a scheduled bank with SBP on December 2006 with an innovated investment practices. The JS bank is one of the premiers in the brokering and discounting license from the State Bank of Pakistan. Besides the banking services, the primary objective of JS bank is to provide quality financial solutions to all common customers of the bank. They are issuing new and innovative products for the customers to give them maximum ease in modernised banking (JSBL, 2011). The JS bank is performing multiple services and activities which can be categorized as follows: 

Retail and Consumer Banking



Treasury - Securities



Corporate & Commercial Banking



Investment Banking (JSBL, 2011)

These departments are providing innovative solutions with technological ease to final customer. JSBL is also opening its branches all over the country and will be international in the next few years (JSBL, 2011).

Insight to JSBL's Human Resource Department: JSBL is one of the renowned banks within the banking industry of Pakistan. It is famous for the modern technologies, customarily services and retaining of employees. HR department is very efficient and working according to the need

42

of the organization and also fulfilling needs of employees. Below part will discuss the HR department, its processes, developments and also the performance appraisal systems of the bank(JSBL, 2011).

Human Resource Planning: For the purpose of decision making about the human resource JSBL has categories its planning into three main steps:

Step 1. On the first place it indentifies its main organizational needs and then tries to make activities about it, what are the different possibilities to achieve those targets and solution to all problems about work force.

Step 2. In the step two JSBL tries to remove all the huddles in the processes and motivates the employees to achieve those targets and gives them maximum reward in return of their efforts. Here, it makes the targets according to their job responsibilities and requirements.

Step 3. It makes reasonable linkages between the employee goals and targets and organizational aims and objectives (JSBL, 2011).

Job Description A Job description document refers to a form where all of the job requirement and responsibilities are stated. This document also contains the future perspective job activities also. Here the sequence of job description form is mentioned below: 

Job identification and job details



Job summary

43



Duties to be performed



Immediate manager and supervision & received (JSBL, 2011)

Recruitment and Selection JSBL is recruiting main five categories of employees for the services: i.

Higher management

ii.

Middle management

iii.

Trainee and internees

iv.

MTO's

v.

Clerical staff

Impact of Performance Appraisal Impact of Performance Appraisal & orientation to all process and activities are always an important part of any HR department and JSBL is investing huge capital amount on work force. This Impact of Performance Appraisal consist of different steps as follows:

Training: In the first step of training, it has different activities in it: a. After the performance appraisal, the evaluation chart shows the different areas of employee's performance and it also indicates the areas where employees need Impact of Performance Appraisal. This step makes improvements in the employees performance in the future time period (JSBL, 2011). b. Each time management reviews the performance of employees and suggests the training n development HRD department for the training of employees. It also tries to make their employees capable enough to

44

pursue the activities in the future time and enhances their abilities. These reviews are normally on quarterly basis. c. Operation support division always make it assure that what type of training and orientation is needed for the employees and also whether this training will be given by the internal staff or that have to hire external bodies for developmental activists(JSBL, 2011).

Development: a. Management training orientation b. special training for new projects and improvement plans

Performance Appraisal: Performance appraisal is structural framework allows the management to measure the performance off the employees and suggest the improvement plans for next time period. It's a relationship between the evaluator and employee. It's a opportunity for the employee to shows it's all abilities in this process and if the management and supervisor is recognising the effort then he will tend to receive the monetary and non monetary rewards from the organization. This rewards and recognition increases the moral and job satisfaction and good relation with organization (JSBL, 2011). Here JSBL management makes job targets and aims and employees try and make efforts to achieve those targets. In the performance appraisal process JSBL have different approaches as follows:

Traditional Approach: The traditional approach concerned with the past performance and overall organizational development. In the main head office all the performance at

45

local and regional branches is being reviewed. Every branch has its own targets and object set by the main branch and liable to perform on those notes (JSBL, 2011).

Expansion Approach: Under the expansion and developmental approach, every employee is asked to make a Performa of his tasks and objective during the performance appraisal time. This approach viewed the goal setting. Every employee is liable to work on those targets and all the performance targets are reviewed on annual bases in December (JSBL, 2011).

Performance Appraisal Process: Performance appraisal process of JSBL consists of four main parts. Step 1. Create mutual understanding of organizational goals and individual aims & objectives between employees and the evaluator. What are the targets for the following periods, how to accomplish them and how the work will be evaluated? Step 2. Ongoing employee performance assessment throughout the year. Step 3. In this step evaluators measures the actual performance. Step 4. After measuring the actual performance, evaluator compares this performance with the bench marks. Step 5. After comparison, management allows employees to discuss this performance appraisal with the evaluators to removes the doubts, if any. Here final decision is made by the evaluators about the appraisal and also sets the reward systems based upon performance made throughout the year (JSBL, 2011).

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Methods for Data Collection: The researcher inclined the research to make use of both primary and secondary form of data. Primary data such as structured and unstructured interviews would be used clubbed with questionnaires, focus groups, surveys etc. Use of both structured and unstructured interviews would be obvious, however unstructured interviews would be taken up primarily as they would further pave way for structured interviews to take place (Miles & Huberman, 1994). However the criticality of primary data would make it mandatory on the researcher to focus heavily on it. On the other hand Hakim (1994) describes secondary data as an “reanalysis of data collected by another researcher including the analysis of data sets from varied sources to create area based data sets”. Thus such an data would refer to data or information generally gathered from previously available information such as published works, books, journal articles, organizational related document's, web based documents etc. The researcher would strongly focus on such kind of data, collected from documents or information published by the organization in consideration, journals, web based information, books etc which would eventually aid in forming a strong base for the overall research (Hakim, 1994).

"Performance management can be defined as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors."

Performance

management

is

all

about

improvement-synchronizing

improvement to create value for and from customers with the result of economic value creation to stockholders and owners. The scope of

47

performance management is obviously very broad because performance management must be viewed at an enterprise - wide level.

RESEARCH QUESTIONS AND OBJECTIVES The objectives of a research project summarise what is to be achieved by the study. Objectives should be closely related to the statement of the problem. Properly formulated, specific objectives will facilitate the development of the research methodology and will help to orient the collection, analysis and utilisation of data. For example, realizing the two keywords performance management and organization success, it is important for this research study to have a particular organization that will focus in determining impact of performance management on McDonald's success. The research objectives are the goals to be achieved through the research.

The Research should always be based on pre-decided questions. These questions help to focus on the research objectives. The first step in any research is defining the problems to be studied and the questions to be asked. (Campbell et al, 1982)

A good research question defines the focus of your research project. It helps readers to know the specific subject matter you will be addressing. It can set boundaries to help you figure out where to go next and defines which data you need to collect and which methods you will use to access and analyse your documents (Hung & Popp, 2009).

Research question needs to be answerable by the kind of study researcher could actually conduct. The researcher doesn't want to pose a question that no

48

feasible study could answer, either because the data that might answer them could not be obtained. (Maxwell, 2005)

LITERATURE REVIEW Literature reviews or searches are essential steps in any research project. They often focus on articles in academic journals although textbooks may also be consulted. Performance management is a term, which is widely used in organizations and in particular by human resource professionals. A generic definition is that it is about applying processes, techniques and systems which maintain and improve individuals' performance whilst simultaneously aiming to improve the performance of the organization. ( Hale & Whitlam, 2000) From the HR field Armstrong and Baron highlight the importance of performance management being strategic, integrated (vertical, functional, HR integration and integration of

individual needs),

concerned

with performance

improvement and development.

The principle of setting goals for individuals which are linked to organizational goals has a long history, evolving from merit - rating to management-byobjectives ('MBO'- first coined by Peter Drucker in 1955), through Locke's Goal setting Theory of 1968 (Greenberg & Baron, 2000) and finally to performance management, which became a recognised process in the 1980's (Armstrong & Baron, 2002).

Philpott and Sheppard (1992): "The fundamental goal of performance management is to establish a culture in which individuals and groups take responsibility for the continuous improvement of business processes and for their own skills and contributions."

49

As stated by Hartle (1995), "Performance management should be integrated into the way the performance of the business is managed and it should link with the other key processes such as business strategy, employee development and total quality management." Performance staff members are at all times faced with the test of building agreement as to which workloads are supposed to be treated the best, and categorizing which workloads should be acceptable to experience a constrained setting. Once agreement is attained, the essential tools and measurements have got to be in place to decide if the prioritized workloads are meeting definite goals.

PERFORMANCE MANAGEMENT A BRIEF OVERVIEW Performance Management is a method for creating a collective understanding regarding what is to be accomplished and how it is to be accomplished. It is an approach to supervising people that raise the likelihood of reaching success. The performance management process helps the managers and supervisors to provide feedback to the employees regarding their current performance at job and expected level of performance (Covey 1991). It provides clear direction to the employees about management expectations regarding their performance. The compensation and rewarding system is also established based on the performance of the employees over the period of time. It also assists the organizational leadership to identify the training needs of the organization and resolve the performance related issues. It provides opportunity to the managers to set the performance expectations and keep proper tracking of the employee's performance (Doorewaard and Benschop 2003). The supervisors and managers can measure the performance outcomes by comparing it with the performance expectation and performance appraisal can be done on the basis of this exercise. However, it is important that management should adopt

50

the performance management practices that are consistent with the business operation requirements and objectives of the organization (Drumm 1999). An effective performance management process starts with defining the performance objectives which includes tasks and results which needs to be accomplished. It is important for the management to communicate the objectives to the employees in order to get the desired results (Francis 2003). Planning is also an important part of the performance management process. Planning includes making clear to the employee how they assist the organization to accomplish its objectives. Work together with the employees to clarify the performance standards and make sure that there is accountability at every stage. Employees should be made to comprehend the accountabilities and expectations regarding their job. Clarify the behaviours which are required from them and why. Explain them that they are accountable for taking an active role in running and judging their performance all through the year.

Effective communication methods could be adopted for this purpose because if the objectives and tasks have not been communicated to the employees, they will not be able to perform according to the expectations. Once the tasks has been communicated and employees have started putting efforts in order to achieve those tasks then continuous performance reviews are very essential to advise employees about their ongoing performance and management expectations. Feedback is considered to be the most critical step in performance management process (Gibb 2001). Give frequent informal coaching. It involves acknowledging the good work that the employee is doing and helping out the employee to perform up to the mark. Discover ways through which the employee can grow and improve, and work together to generate development plans. Rapidly communicate novel opportunities and

51

adjustments that affect the employee's job. Name clear actions that the employee can implement so that suggestions offered are concrete. Formulate informal observation notes (perhaps on a calendar) whenever the employee performs a good job, make and implement development plan. These observations will assist supervisor while reviewing the performance of employee and filling the performance appraisal form. The supervisor can also note down praise or complaints from consumers concerning an employee's work (Hale 2000). The manager and supervisor can use all saved notes regarding the employee's performance and evaluate their performance on accountabilities and behaviours. The supervisor can invite the employee for feedback with reference to how they performed throughout the year. They may perhaps remind the supervisor of particular occasions of good performance or troubles outside their control that harm their capability to do their job well. After completion of the performance appraisal forms talk to employee about ratings and remarks.

THEORIES OF PERFORMANCE MANAGEMENT The fundamental structure of performance management is drawn from basic principles of well-established motivational and learning theories. These theories are underpinning of performance management in this research proposal. Goal theory was developed by Latham and Locke (1979) who highlights four mechanisms that connect goals to performance outcomes: They direct attention to priorities; They stimulate effort; They challenge people to bring their knowledge and skills to bear to increase their chances of success; The more challenging the goal, the more people will draw on their repertoire of skill. This theory underpins the emphasis in performance management on

52

setting and agreeing objectives against which performance can be measured and managed.

Control theory focuses attention on feedback as a means of shaping behaviour. As people receive feedback on their behaviour they appreciate the discrepancy between what they are doing and what they are expected to do and take corrective action to overcome the discrepancy. Feedback is recognized as a crucial part of performance management processes.

Social cognitive theory was developed by Bandura (1986). It is based on his central concept of self-efficiency. This suggests that what people believe they can or cannot do powerfully impacts on their performance. Developing and strengthening positive self-belief in employees is therefore an important performance management objective.

Clayton P. Alderfer (1972) devised ERG theory of human needs that explained three primary categories: Existence: This is akin to physiology and security needs in Maslow's hierarchy of needs. It is concerned with fulfilment of basic requirements like food, shelter and clothing.

Relatedness: It is related to needs like interpersonal relationships, acceptance as a member in a group/society and family relationships. Growth: This need involves people finding the opportunities 'to be what they are most fully and to become what they can.' Expectancy theory developed by Porter and Lawler (1968) and it states that motivation will be high when people know what they have to do to get a

53

reward, expect that they will be able to get the reward and expect that the reward will be worthwhile. So this theory leads to the performance management.

INTERVIEWS: Interviews are an important research method. Interviews are basically qualitative but they can become more quantitative by the use of content analysis. The advantages of interviews are that they obtain information directly from the people involved in the area that is being researched and can provide insights into attitudes and perspectives. It gives opportunity to give information of research to interviewee so he/she can give relevant information (Zikmund, 2003). The interviewer is an integral part of the investigation. (Smith, 1983)

SURVEYS: Surveys obtain information from a defined population of people. They provide more powerful data than other methods by using a combination of questionnaires and interviews and possibly focus groups. (Zikmund, 2006) states that the main purpose of survey in research is to collect primary data, which is assembled specifically for the research.

54

CHAPTER-3

RESEARCH METHODOLOGY

55

RESEARCH METHODOLOGY This study will now treat performance appraisals and Impact of Performance Appraisal needs as a progressive cycle towards attaining shared human resource and business goals. Examining the human resource environment at IBM, the expected benefit outcomes of these practices are:

Enhanced job satisfaction and improved morale of the workforce. This is achieved through the deployment of a formal and well-structured system that evaluates the employee performances and provides then with rewards, recognition and appropriate feedback for improvements. Further on the work force is also motivated and develop itself according to the current and future needs and challenges of the organisation.

Performance appraisal system and subsequent Impact of Performance Appraisal programmes direct the valuable organisational resources to be invested in the right directions. Translating the right directions into benefits outcomes, the company can anticipate increased capacity and inclination of the workforce towards adapting innovation and new technologies that will subsequently result in financial gains; increased revenues, increased profit margin.

The management should also expect reduced employee turnover, improved business

reputation,

improved

and

innovative

products,

increased

stakeholders' motivation levels.

"Methodology usually refers to the general approaches to research, while method refers to techniques for gathering evidence" (Gancian 1992).

56

Therefore "Methodology is a theory and analysis of how research does or should proceed" (Harding 1987). Methodology is that how to apply the methods in the research. In my research, the methodology will be based on both, qualitative and quantitative data collection techniques. The qualitative research aims to generate insights into situations and behaviour so that the meaning of what is happening can be understood and it is often a useful tool to discover research questions. Quantitative research is empirical-based on the collection of factual data that is measured and quantified and in other words it is the link between "cause and effect". The proposed methodology will include both primary and secondary data collection techniques. Data collection techniques will include comprehensive database research, highlighted data, surveys, supplemental interviews. By using the case study in research, the concept will be better understand. The analysis of this research is qualitative which is used to highlight the different patterns and make it easier to understand. In this research, the case study will be on McDonalds. The structure of research is based on literature review. (Saunders et al 2008).

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CHAPTER-4

SWOT ANALYSIS

58

SWOT ANALYSIS OF ABB INDUSTRIES LIMITED STRENGTHS  Superior machine vis-à-vis competition with AI Modules and latest technology.  The strength of ABB INDUSTRIES LIMITED lies in its strong network, it has nationwide dealer network of above 40,000 dealers and has overseas. It has also 12 business centres located at all strategic point. It has the widest distribution network in world more than 100 countries around the globe.

 Their product of high quality developed with latest and imported technology. ABB INDUSTRIES LIMITED has tie up with a number of reputed companies.

 Their product range is also very large in Pick ‘n’ Carry smart cranes. And they are the new entrant in Backhoe loader which manufactured and assembled with the latest technology.

 ABB INDUSTRIES LIMITED is backed by a strong and reputed ABB Group. This has got its own brand image.

 ABB INDUSTRIES LIMITED has entered in the field of material handling equipment over 100 years then they have got experience of around a century. ABB INDUSTRIES LIMITED has since emerged as the world largest manufacturer of Pick ‘n’ Carry hydraulic mobile cranes and many more technological vehicles as well as robotics.

 It also has good man power with Experienced & talented professionals.

WEAKNESSES  ABB INDUSTRIES LIMITED had not entered into whole construction equipment industry. Their main focus is in Cranes, Compactors, Loaders & Forklifts.

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 According to the customer survey, ABB INDUSTRIES LIMITED customers are not happy with after sales service. From their point of view, servicing doesn’t happen on time.

OPPORTUNITIES  Scope of increase in market share due to emergence of new markets.

 Potential of increase in sale because of increasing concern an environment safely among the organisation.

THREATS  At any level ABB has no thereat other than labour unions of the companies who are dealing with local goons etc.  The industry is quite fragmented, in which small player play a very important role. The built customized products with cheaper quality techniques. They are eating up the market share of bigger players.

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CHAPTER-5

SYNOPSIS

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SYNOPSIS Prior to identifying the benefit outcomes of the performance appraisal system, it has been strongly suggested that the following outcomes can only be possible if the performance appraisal system is effective and continuously monitored for its developmental needs. As a brief guideline for developing an effective performance appraisal system, the identified critical success factors are: a- strategic approach towards management of people and their performances, b- effective communication of human resource values and objectives across the organisation, c- deployment of Impact of Performance Appraisal programmes / initiatives as an integral part of performance appraisal system, d- continued investments made in the review and monitoring of human resource management practices and their reformation as appropriate (Zairi and Sinclair 1995), e- clearly defined performance levels and their interpretive explanation of these levels to the employees and most importantly f- central placement of competency based performance evaluation within a performance appraisal system. The potential benefit outcomes of an effective and effectively implemented performance appraisal as suggested by Ahmed (1999) are:

Employees are able to gain a better understanding of their job role and performance expectations

1.

Understand the job role within the wider context of the organisation.

2.

Employees can understand how their performances are perceived by the management and finding ways of improving their performance levels.

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3.

Employees can develop an understanding of how performances are appraised, reviewed and monitored by the management.

4.

Employees can also identify their weakness and strengths and selfevaluate that what further needs to be developed. In so doing employees also find an opportunity to formally discuss their role, opportunities for further progression.

5.

Through performance appraisals the management can gain agreement of the employees about their understanding of their job roles and objectives for the following year.

6.

From a business / organisational perspective, the current level of employee and his potential can be assessed. This further forms the basis of succession planning of each employee.

7.

The management can update the employee information such as his achievements, new skill, knowledge, ability and competencies.

8.

The benefit outcomes of Impact of Performance Appraisal practices are: a) Impact of Performance Appraisal practices provide the employees with challenges that need to be addressed for meeting performance standards as defined by the management. Challenging job role is one of the many motivational factors for employees. b) Impact of Performance Appraisal practices can further ensure the employees that they are being valued by the company that is the reason the company is making investments in their development.

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9.

Successful Impact of Performance Appraisal provides the employees with sense of ownership of their job role while taking pride in their performance. The results are higher productivity, efficiency and satisfaction rates.

Critically evaluate these practices at the examined company, it has been assessed that these practices can only be effective if they follow a continued process where performance of the system i.e. performance appraisal is also reviewed, monitored and evaluated for its performance outcomes. The recommendation is important because unless that management can't review the performance, it can't be evaluated whether or not the system is meeting its objectives. Furthermore, user training of the performance appraisal system is equally important so that full benefits of the business system can be experienced. It is further suggested that any further developments of the performance appraisal system should involve the end user opinions and comments so that the objectives are completely and satisfactorily met. These recommendations gain their importance from the fact that any investments made into the development of the systems should be done so that valuable organisational resources are optimised and stakeholders' interest remains intact.

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CHAPTER-6

CONCLUSION

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CONCLUSION The prime purpose of human resource management function is to manage employees at any organisation. Management of employees is a complex task and requires extensive and perspective strategic approach to be adapted so that the employees that come from different social, educational etc. backgrounds are effectively productive and managed in the organisation. It is therefore management's responsibility to make best use of employee skills, knowledge and abilities so that they are competent enough to perform the designated tasks. Performance appraisal is a human resource practice that is concerned with management of employee performances. Management of employee performance is also crucial because people are the source of competitive advantage for an organisation (Cook and Crossman 2004). Thus one of many benefit outcomes of effective performance appraisal is being a business enabler for earning the competitive advantage. Other benefits of performance appraisal are enhanced employee performances, enhanced employee behaviour and identification of future prospects for individual employees etc. The critiques of performance appraisal system question the validity of the practices because these practices are believed to lay negative or destructive affects rather than laying constructive affects on the employees' performances. Different studies however suggested different implications. Another human resource practice that finds its foundations in the performance appraisal system is Impact of Performance Appraisal. Impact of Performance Appraisal needs of employee are learnt through periodic performance appraisal of an employee. These needs further signify towards the gap between the current and future levels of employee performance levels that should be filled by appropriate Impact of Performance Appraisal programmes

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to attain the desired levels of skills, knowledge and attributes. The examination of performance appraisal and Impact of Performance Appraisal practices at IBM has also been critically evaluated in this study in context of their rationality and benefit outcomes. As a result of these practices the organisation can expect enhanced job satisfaction and improved morale of the workforce in addition to reduced employee turnover, improved business reputation and improved satisfaction levels of stakeholders (Adamson and Caple 1996). Out of effective Impact of Performance Appraisal practices the organisation can expect employees' better understanding about the organisation, its objectives and functionality. The employees will be more competent and accountable while performing their job through keeping a better understanding of their job role. Employees feel more valued and show their commitment towards showing high performances at work.

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CHAPTER-7

LIMITATIONS

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LIMITATIONS

A case study is a description or history of an event or sequence of events in a real life setting. Case study protocol sets out the objectives of the research, how the case study will support the achievement of those objectives, including the evidence required and how the work of producing the case study will be conducted. This methodology covers sources of evidence such as interviews, observations, documents and records. The use of multiple source of evidence, each with its strengths and weaknesses, is a key characteristics of case study research.

The data collected through interviews, surveys and case studies will be continuously analysed. Doing data collection and data analysis, according to Merriam (1998) is "the right way" to do it in qualitative research. It is helpful, as it enables the researcher to "focus and shape the study as it proceeds," through consistent reflection on the data and attention to what the data are saying.

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CHAPTER-8

SUGGESTIONS

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SUGGESSIONS & RECOMMENDATION GENERAL ISSUES: 

ABBs must have provisions to have meeting with dealers & potential customers once in every six months.



All the dealers need to be monitored by the company.



A pick ‘n’ carry smart crane model with AI module which will be equivalent to ACE in terms of price need to be introduced in market.



ABBs have to distribute complimentary gifts on certain occasion to promote its products.



ABBs service team have to meet customer on time to time basis to gain customer confidence.



Spare parts availability should be there with all dealers.

TECHNICAL ISSUES: 

ABB INDUSTRIES LIMITED have to do something to increase the crane speed on road.



TRX OR F-15- There were no provision for cradle if company provide differential lock then it increase customer utility.



Rear and front tyres should be heavy duty according to customers



Stabilizer pressure is less in Backhoe loader.



Customer is facing problem in valve leakage in Backhoe loader.



At the time of loading, temperature shown by machine will be high.

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CHAPTER-9

ANNEXURE

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SURVEY QUESTIONNAIRE SURVEY OF CUSTOMERS

NAME:- _________________________________________________________________ LOCATION:- _____________________________________________________________ BUSINESS PROFILE:- _______________________________________________________ 1. When you have requirement of construction equipment then how you generally search for product which will fulfil your requirement? a) Company websites

b) Suggestions from friends & colleagues

c) Print & visual media

d) Past experience

2. What you generally look into a product before finalising a deal? a) Quality

b) Features & working

d) Price

e) After sales service

c) Brand image

3. Please tick the product you have purchased from ABBs in last 5 years? a) Backhoe loader

b) Mobile pick & carry crane

c) Vibratory rollers

d) Fork lift trucks

e) Others (Please mention)

4. When have you purchased the product of ABBs? a) 0-1 years

b) 2-4 years

c) 4-6 years

d) 6 or more

5. Are you satisfied with the product? a) Yes

b) No

6. Are you satisfied with after sales service provided? a) Yes

b) No

7. What was the lead time of the problem to get rectified? a) 1-2 days

b) Less than a week

c) 15 days

d) 1 month

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8. If you want some changes in the product then those changes will be in:a) Quality

b) Usage & Application

c) Appearance

d) Other

9. How often a dealer contact you after delivering a product? a) Once in a week

b) Once in 15 days

c) Once in a month

d) More than a month

10. Do you think ABBs prices are competitive in market? a) Yes

b) No

11. Please tick marks the products of ABBs which you are not aware off? a) Backhoe loader (Digmax)

b) Hydraulic mobile pick & carry crane

c) Vibratory rollers

d) Forklift truck

e) Motor grader

f) Wheel loader

g) Slew crane

h) Truck mounted crane

i) Tower crane

j) Articulated boom crane

12. Do you think ABBs need to increase its promotion tools to create awareness of its products? a) Yes

b) No

13. Please tick mark which you feel can be an effective media for promotion of ABBs products:a) Printed

b) Banners & posters

d) Visual

e) Sales approach

c) Radio

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BIBLOGRAPHY Website :  www.abb.com  www.google.com  www.khoj.com  www.wikipedia.com

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