Performance Appraisel 1

A Project Report
on
“PERFORMANCE APPRAISAL”
Bangalore University
MASTER OF BUSINESS ADMINISTRATION
By
M. HANUMA KISHORE
Registration No: 09CQCMA033
Under The Guidance of
Ms. Asra Ahmed

Professor, Dept of Management
DAYANANDA SAGAR COLLEGE OF MANAGEMENT
AND INFORMATION TECHNOLOGY
Shavige Malleshwara Hills, Kumaraswamy Layout,

Bangalore – 560078.
(2009-2011)
1
CERTIFICATE
This is to certify that the Dissertation/Project titled
‘_________________________________________’, submitted in partial fulfillment
of the requirements for the award of degree of Master of Business Administration to
Bangalore University, is a record of original work carried out by ________________
(Reg.No._________________) under the guidance of ______________ during the
academic year 2009-2011.
This has not been submitted to any other university or institution for the award of any degree/
diploma/ certificate.
Dr. MARUTHI RAM.R Dr. M.S.RAMACHANDRA
Head-MBA, DSCMIT Director - DSCMIT
2
STUDENT DECLARATION
I hereby declare that the Project Report titled “PERFORMANCE APPRAISAL
at JSW Steel Limited, Vijayanagar Works, BELLARY” is an original work done
by me, submitted in partial fulfillment of the requirement for the award of the
degree of Master of Business Administration to Bangalore University, under the
guidance of Ms. SHASIKALA This has not been submitted for the award of any
other degree/ diploma/ certificate.
Place: Bangalore M.HANUMA KISHORE
Date: (Reg.No.09CQCMA033)
3
GUIDE CERTIFICATE
This is to certify that the Internship report titled “PERFORMANCE APPRAISAL at JSW
Steel Limited, Vijayanagar Works, BELLARY” submitted in partial fulfillment of the
requirement for the award of the degree of Master of Business Administration to Bangalore
University is a record of original work carried out by MR. M.HANUMA KISHORE
(Reg.No.09CQCMA033) under my supervision and guidance and that no part of this report
has been submitted for the award of any other degree/diploma/certificate.
Place: Bangalore Ms. Asra Ahmed

Date
Professor, Dept of Management
4
ACKNOWLEDGEMENT
I would like to take this opportunity to express my sincere gratitude to all

those who guided me in the right direction to complete this project.
I would like to thank Dr Ramachandra for his support and also to thank our
Head of the Department Mr.M Maruthy Ram and my guide Ms.Shasikala,
Professor Dept of Management, for his guidance and support for making this
project a success.
I would also thank my Parents & Friends for supporting me during the
project.
Place: Bangalore
Date: (M.HANUMA KISHORE)
5
PAGE
NO Contents NO
1 Introduction 8 - 11
2 Design of the study 12-15
2.1 Literature Review
2.2 Research Methodology
2.2.1 Statement of problem
2.2.2 objectives of the study
2.2.3 Scope of the study
3 Company Profile 16-31
4 32-58
Data Analysis And Interpretation
5
Finding & Suggestion 59-61
6 62
Conclusion
8 Bibliography
6
63
EXECUTIVE SUMMARY
7
This summer project “A study on PERFORMANCE APPRAISAL in Jindal South West Steel
Ltd. Vijayanagara Works”. Deal to ascertain this efficiency of work in HR management of the
company.
The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the
same may be said about almost everything in the field of modern human resources
management. As a distinct and formal management procedure used in the evaluation of work
performance, appraisal really dates from the time of the Second World War - not more than
60 years ago.
In many organizations - but not all - appraisal results are used, either directly or directly, to
help determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses
and promotions.
The purpose of this study has been to determine whether the performance appraisal was used
for employee development and whether the appraisal was emphasized as an important part of
the performance appraisal process in steel industry. Also whether the performance appraisal
helps in increasing industry’s profitability.
Our study suggested that the performance appraisal has helped in increasing the profitability
of industry. Certain loop holes has been determined and suggestions were made.
“ a wage incentive scheme is essentially a managerial device of increasing a

worker productivity”.
8
CHAPTER 1
INTRODUCTION
Introduction:
9
The Indian steel industry is almost 100 year old now, till 1990 the Indian steel
industry operated under regulated environment with insulated market and large scale
capacities reserved for the public sector. Production and price were determined and
regulated by the government, while SAIL and TATA STEEL were the main producers
the latter being the only private player. In 1920, the Indian steel industry had a
production capacity of 23mt.1992 saw the on set of liberalization and the Indian
economy was opened to the world. Indian steel sector also witnessed the entry of several
domestic private players and large private investments flowed into the sector to add
fresh capacities.
The last decade saw the India steel industry integrating with the global economy
and evolving considerably to adopt world class production technology to produce high
quality steel, the total investment in the Indian steel since 1990 is over Rs 19000 crores
mostly in plant equipments, which have been installed after 1990
With a current capacity of 35mt the Indian steel industry is today the 8 th largest
producer of steel in the world. Today, India produces international standard steel of
almost all grades and had been a net exporter for the past few years, underlining the
growing acceptability of its products in the global markets. Steel is high capital-intensive
industry and cyclic in nature. Its growth is intertwined with the consuming industries
such as manufacturing, housing and infrastructure. Steel, given its backward and
forward linkages, has a large multiplier effect.
The Indian steel industry currently provides direct/indirect employment to over

2 million people. As India moves ahead in the new millennium, the steel industry will
play a critical role in transforming India into an economic superpower.
The steel industry is a dynamic, innovative sector, which is constantly adapting

and refining itself to become more competitive in the market. The industry does this by
developing new, improved steel grades and production procedures that produce better
and more cost-effective product lines for the changing marketplace. Today developing
countries lead the growth in world steel demand.
Steel is a product of a capital intensive and complex industry that requires

national attention for its development. The demand of steel is basically a derived
demand; growth in the industry is dependent on the level of activity of the steel
consuming industries specifically the construction, automotive, appliances and other
consumer durable. The industry in a course of development and that has been endless
opportunities also at the same time stiff challenges and a terrain of uncertainty to
10
improve its strength and competitive edge to product good quality products at lower
prices.
The steel industry being a core sector, tracks the overall economic growth in the
long term. Also, the growth of the steel industry is dependent on the development of steel
consuming industries like automobiles, consumer durable and infrastructure and realty
development in the country the past few years have witnessed an increase in steel
consumption and in order to match the even the steel industries have geared up with
capacity expansions to meet this growing demand.
Steel is crucial to the development of any modern economy and is considered to
be the backbone of human civilization. The level of per capita consumption of steel is
treated as an important index of the level of socioeconomic development and living
standards of the people in any country. It is a product of a large and technologically
complex industry having strong forward and backward linkages in terms of material
flows and income generation.
All major industrial economies are characterized by the existence of a strong

steel industry and the growth of many of these economies has been largely shaped by the
strength of their steel industries in their initial stages of development. Steel industry was
in the vanguard in the liberalization of the industrial sector and has made rapid strides
since then. The new Greenfield plants represent the latest in technology. Output has
increased, the industry has moved up in the value chain and exports have risen...
Global Environment
The international steel industry is on the path of recovery from recession of the recent
past. Steel industry also enjoy a fairly good growth in production of crude steel , while
consumption if finished steel grow at a slight more modest rate.
In European Union ( EU ) there was a slowdown in the output of rolled steel. The down
swing in the prices is hoped to recover as also the demand for steel and raw material for
steel making. The current global steel industry is in best position in comparing to last
decades.
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Contribution Of Countries To Global Steel Industry.
The country like china, Japan, South Koera are in the tpo of above in steel production
in Asian countries. China accounts for one third of total production i.e. 419m ton, Japan
account for 10% i.e. 115m ton, India account for 53m ton and south korea is account for
49m ton , which all totally become more than 50% of global production. Apart from this
USA, BRAZIL,UK account for the major chunk of the whole growth.
Country wise crude steel production.
Country Crude steel production (mtpa).
CHINA 272.5
JAPAN 112.7
US 98.9
RUSSIA 65.6
SOUTH KOREA 47.3
F.R. GERMANY 46.3
BRAZIL 32.9
INDIA 32.6
ITALY 28.4
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Serveral important polices changes have been insitituted since 1991 to encourage steel
these are:
 Removal of iron and steel industry from the list of industries reserve for the
public sector.
 Exemption of iron and steel industry from provision of compulsory licensing.
Inclusion of iron and steel in the high priority industries for
The purpose of foreign investment.
 Deregulation of pricing and distribution of iron and steel.
 Reduction of duty on import of capital good.
 Liberalization of EXIM policy.
13
CHAPTER 2
DESIGN OF THE STUDY
14
2 Design Of The Study
PERFORMANCE APPRAISAL
Almost every organization in one way or another goes through a periodic ritual,
formally or informally, known as performance appraisal. Performance appraisal has been
called many things. The formal performance appraisal has been called a tool of management,
a control process, an activity and a critical element in human resources allocation. Uses for
performance appraisal have included equal employment opportunity considerations,
promotions, transfer and salary increases. Primarily performance appraisal has been
considered an overall system for controlling an organization. Performance appraisal has also
been called an audit function of an organization regarding the performance of individuals,
groups and entire divisions.
Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview (annual or
semi-annual), in which the work performance of the subordinate is examined and discussed,
with a view to identifying weaknesses and strengths as well as opportunities for improvement
and skills development.
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a control process, an activity and a critical element in human resources allocation.
And since people differ in their abilities and aptitudes. These differences are natural to a great
extent and cannot be eliminated even by giving the same basic education and training to them.
There will be some differences in the quality and quantity of work done by different
employees even on the same job. Thus, there is a great need to have suitable performance
appraisal system to measure the relative merit of each employee.
The basic purpose of performance appraisal is to facilitate orderly determination of
an employee’s worth to the organization of which he is a part. However, a fair determination
of the worth of an employee can take place only by appraising numerous factors some of
which are highly subjective, as for instant, attendance, while others are highly subjective, as
for instant, attitude and personality. The objective factor can be assessed accurately on the
basis of records maintained by the Human resource or personnel Department, but there is no
device to measure the subjective factor precisely. Notwithstanding this, appraisal of these
factors must be done to achieve the full appreciation of every employee merit.
Therefore, it can be said that, performance appraisal means systematic evaluation
of the personality and performance of each employee by his supervisor or some other person
trained in the techniques of merit rating. It employs various rating techniques for comparing
individual employees in a work group, in term of personal qualities or deficiencies and the
requirements of their respective jobs. To quote dale Yoder,” performance appraisal includes
all formal procedures used to evaluate personalities and contribution and potential of group
members in a working organization. It is a continuous process to secure information necessary
16
for making correct and objective decisions on employees.” The comparison of performance
with job requirements helps in finding out the merit of individual employees in a week group.
Supervisor or an independent appraiser may do rating.
Performance appraisal is a formal program in an organization, which is
concerned with not only the contribution of the members who form part of the organization,
but aims at spotting the potential also. The satisfactory performance is only a part of the
system as a whole and the management needs more information than mere performance
ratings of the subordinates. There are no two opinions about the necessity of performance
appraisal, which can meet requirements of the management to achieve the organizational
goals.
2.2 RESERCH METHODOLOGY
2.2.1STATEMENT OF THE PROBLEM:-
The performance appraisal of the employee in the organization should be an effective tool for
measuring the employee’s performance .If the performance not measured in a real manner it
will be a critical issue . A study on impact of performance appraisal was undertaken to study
the reason and way to improve the condition
2.2.2 OBJECTIVE OF PERFORMANCE APPRAISAL
There are mainly two purposes for which performance appraisal is used by an organization:
(1) To improve the work performance of employees by helping them realize and use their full
potential in carrying out the firm’s missions; and
(2) To provide information to employees for use in making work related decisions,
More specifically, appraisals serve the following purposes.
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1) Appraisals generate information to support administrative decisions. Promotions transfers
and reassignments, demotions and termination’s are action based at least in part on
performance.
2) Appraisals provide feedback to employees and thereby serve as vehicle for personal or
career development because feedback provides:
• Reassurance that they are contributing and doing the right thing
• Awareness of the impact on the desired results
• A measure of the adequacy of performance (quality, quantity, speed etc.)
• Recognition of the importance and value of their performance.
3) Once the development needs of employees are identified appraisals can help establish
objectives for training programmes. Thus evaluations provide a basis for changing
performance plans, including objectives and standards of behaviors as business plans and
conditions change.
4) As a result of proper specifications of performance levels, appraisals can help diagnose
organizational problems. They do so by identifying training needs and the knowledge,
abilities, and other characteristics to consider in hiring, and they also provide a basis for
distinguishing between, effective and ineffective performers.
2.2.3 SCOPE OF THE STUDY:-
The study was conducted in tornagallu .Due to time and money constraint the research is
limited to only this area.
 A descriptive research design was used for present study.
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 The result of every research depends on the information collected, and the accuracy of
the information depends on the method used to collect the information
HYPOTHESIS
Hypothesis testing is done with the help of increment / promotion given to the
Managers.
For this random sampling by asking few questions to the concerned Managers method
will be adopted and it will be compared.
CHAPTER 3
COMPANY PROFILE
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COMPANY PROFILE:
A Background and inception of the company
In the 15th century, Krishnadevaraya (1509-29) ruled the royal Vijayanagara dynasty
located in Southern India, famous for its peace and prosperity, Reminiscing the past glory and
grandeur of Vijayanagara, JSW (JINDAL SOUTH WEST) the mega steel plant has come up
at Toranagallu, 29km form Bellary. The principal promoter of JSW is JISCO; both belong to
Om Parkas Jindal group with 50 years of experience in steel industry.
JVSL has an interesting History; Mrs. INDIRA GANDHI inaugurated this site in
1971, for an integrated steel plant which was to be named Vijayanagara Steel Plant. In 1994,
20
Govt. of Karnataka approached Jindal who succeeded in setting up of JSW, largely because
they dared to choose not so commercially but most environment friendly for iron making,
Corex as against conventional process of blast furnace. The company was promoted by Jindal
group with participation from Karnataka Steel investment and Development Corporation Ltd.
JVSL was renamed JSW in the year of 2005. Its ranked 4th amongst the top Indian
business houses in terms of sales and profit with a Turnover of over 19000 Crores. JSW
organization is faster growing group with enviable business trend record and a strong market
presence in India today. JSW has recognition in India, Asia pacific region Europe & USA. It
is the 4th largest sales turnover in the private sector after RELIENCE, TATAS & ADITYA
BIRLA GROUPS.
JSW plant is located at Tornagallu in the Bellary-Hospet area the heart of high grade
iron-ore belt; spread over around 10000 acres of land. The plant is 340 kms from Bangalore
and well connected to Goa and Chennai ports.
The steel industry brings them on the threshold of adopting new technology we took a
lead in adopting the latest technology of steel making as COREX TECHNOLOGY developed
by voest alpine of Austria. The JSW was the first Greenfield project to save COREX as a
mainstream facility.
The other who had it as a part of brown field expansion was ISCOR of South Africa
and POSCO of South Korea.
Mining of iron ore to the manufacturing of value added steel products JSW has a pre-
eminent position in the flat steel segment in India as is on its way to be a major global player,
with its overseas manufacturing and marketing alliances with other world leaders.
“Where there is a challenge there is Jindal”
“If it is Jindal, it must be first class”
Registered office:
Po: vidyanagar (toranagallu)
Taluk: sandur
Dist: Bellary
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Corporate office:
Mumbai:[head office]
Jindal mansion,
5A, dr.g.deshmukh marg;
Mumbai 400 026
BOARD OF DIRECTORS:
Mrs. Savitri Mr. Sajjan Jindal

Devi Jindal Chairperson
Vice Chairman & Managing
Director
Mr. Seshagiri Dr. Vinod Nowal

Rao M.V.S. Director & CEO (Vijayanagar
Jt. Managing Director & Works)
Group CFO
22
Mr. Jayant Mrs. Zarin
Acharya Daruwala
Director (Sales & Nominee Director of ICICI
Marketing) Bank Limited
Mrs. Vandita Mr. B Babu Rao

Sharma, IAS Nominee Director of The
Nominee Director of KSIIDC Administrator of the
Undertaking of Unit Trust of
India.
Dr. S.K. Gupta Mr. Uday M.

Director Chitale
Director
Mr. Anthony poul Mr. Vijayraghavan

Director Director
Mr. Sudipto
Sarkar
Director
23
Breakthrough in Jindal
Ferro-Chrome an essential ingredient in manufacture of stainless Ferro-Chrome an

essential ingredient in manufacture of stainless steel was, until recently was imported from
other countries. In 1987, Jindal Ferro Alloys Ltd; at Vishakhapatnam was the first to
manufacture Ferro-Chrome 100% In house technology, which was conceived marginalize the
monopoly of outside suppliers. To establish a synchrony and to develop a market base,
JFAAL has been recently merged with JSL as autonomous division, INDIA’S ONLY
INTEGRATED GREEN FIELD STEEL PROJECT.
JSW, a green field integrated steel plant with a capacity of 1.60 million ton per annum
of hot rolled coils. JSW has collaborated with VOEST ALPINE of Austria, which will
provide a unique advantage in manufacturing and technology.
JSW have also pioneered India’s first continuous slab casting machine and India’s first
hot stickle mill to produce hot rolled stainless steel coils.
JSW are the people to have developed the Indian private sectors, first DD (deep
drawing) and EDD (extra deep drawing) grade mill steel wide strips. The process of DD and
EDD grades of steel involves a consistent adeptness and knowledge; it calls for a technology
of higher order.
JSW are also pioneers in India to use the newly introduced process of COREX c-2000
module, developed by VOEST ALPINE AUSTRALIA to manufacturing pig iron. Jindal
breakthroughs are almost limitless;
Nature of business carried:
A$ 2.5 billion jindal organization has expanded and diversified into core business
areas ensuring synergy amongst its various business ventures, spreading over 13 plants at 10
pivotal locations in India and two plants in USA. The jindal team embodies one of the most
coveted talent pools of technological acumen available in the country today. With experience
that has enabled the organization to put up large scale projects in record time.
The Group of JSW companies are:
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• STEEL :
• ENERGY:
• ALUMINIUM:
• CEMENT:
• INFRASTURACTURE:
• NATURAL RESOURCES:
• SERVICES:
1. JINDAL STAINLESS LIMITED:

India’s largest integrated manufacturer of stainless steel is JSW. This is catering to
about 40% of Indian demand. The plant is located at hissar, Haryana with a maximum
capacity of 500,000tpa.
2. JINDAL IRON AND STEEL COMPANY LIMITED:

India’s largest integrated galvanizing facilities in private sector accounting for 25%
of total galvanizing production in the country. Engaged in HR, CR and galvanizing
business. It exports 75% of production to over 45 countries. The plant is located at vasind
and tarapur, Maharashtra.
3. SAW PIPES LIMITED:

Manufacture of large diameter U-O-E submerged arc welded pipes. Also has
protective coating application facilities viz. polyethylene, polypropylene, fusion bond
epoxy. Coal tar enamel or bitumen and concrete coating. The plant located at kosikalan-
utter Pradesh.
4. JINDAL VIJAYNAGAR STEEL LIMITED:

An environment friendly integrated steel plant manufacturing HR coils using the re-
voluntary corex technology for iron making supplies HR coils to group company
JISCO for value addition and to south India only HR coil manufacturer in south India.
Tie up with world steel leaders gives unique advantage in manufacturing and
technology. The plant is located at Toranagallu, Karnataka with a maximum capacity
of 1.6 tons per annum.
5. JINDAL STEEL AND POWER LIMITED:

Asia’s largest and world’s second largest coal based sponge iron plant and also it
manufactures rails, blooms and generates power. The plant is located at raigarh, Madhya
25
Pradesh. A 150 MW power plant at raigarh, iron ore mining in Orissa and coal mining in
Madhya Pradesh ensure quality raw material at an lower cost.
6. SAW PIPES USA inc:

Manufactures large diameter DSAW pipes using the U-O-E process .the plant is
located at bay town, Texas, USA.
7. JINDAL UNITED STEEL CORPORATION:

Manufactures steel plates for using in large diameter pipes, construction and
fabrication industries. The plant is located at bay town, Texas, USA.
8. JINDAL THERMAL POWER COMPANY LIMITED:

Produces power from both coal and corex gas of JSW steel plant. The plant is located at
Toranagallu KARNATAKA
9. JINDAL PRAXAIR OXYGEN COMPANY LIMITED:

Joint venture wit Praxair inc. world’s largest air separation plant. It Supplies necessary
oxygen for JSW plant from both iron and steel making. The plant is located at
Toranagallu, Karnataka.
10. VIJAYNAGAR MINARALS PRIVATE LIMITED:

A joint venture for mining of iron ore. The plant is located at 20km of JSW plant
STEEL:
Steel:
Steel is an iron based alloy containing Carbon, Silicon, Manganese etc.
Steel making:
Steel making is the process of selective oxidation of impurities presents the charge
material (Hot metal/Scrap/DRI) in the presence of suitable fluxes in the Steel Melting Shops
(SMS).
Iron:
26
Iron is a base metal extracted from iron ore. Pure iron has melting point of1530
Degree Centigrade and density of 7.86 gm/cc.
Iron Making:
Iron making is the process of Reduction of iron ore using the relevant reducing agent
(Reductant).
Hot Metal (Liquid Iron):
It is the hot, liquid, metallic iron product obtained upon reduction of iron ore
(normally in Blast Furnace or in Corex Furnace). It contains about 93-94% Iron (Fe) and
other elements/impurities like Carbon (4%), Silicon (~1%), Manganese (+1%) Sulphur,
Phosphorus etc. Hot metal is the primary input for production of steel in the Integrated Steel
Plants.
Pig Iron:
A product in solid (lumpy) form obtained upon solidification of Hot Metal in Pig
Casting Machine. It is called Pig or Pig Iron because of its typical humpy shape.
VISION, MISSION, & QUALITY POLICY
VISION;
“It is said that in the journey of life, more important than where you are, is where you
are heading to.” - Sajjan Jindal, Vice Chairman & MD, JSW Steel Ltd.,
“TRANSFORM THROUGH INNOVATION”
To be a respected world-class corporation and the leader in India steel business in quality,
productivity, profitability and customer satisfaction.
• groom people for innovating the future

• continuous improvement in the value chain for cost stewardship
• nurture lasting customer relationship by anticipating their needs and delivering
beyond expectation
• Marketing of value added branded products for both domestic and global
markets
• Catalyst for growth amongst the nation’s steel industries
MISSION:
JSW corporate mission guide the approach to the work and environment, which
transforms the way we deliver our products and services.
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“MAXIMIZE CUSTOMER SATISFACTION AND SHAREHOLDERS VALUE
THROUGH HRD.”
With our young thinking, we promise to innovate the future by driving with leadership and a
crystal clear focus while differentiating the benefit of our deliverables to all stakeholders .
VALUES:
It is a collective belief organization wide. It determines norms or standards of

acceptable behavior as to how to approach your work. Belief about how to serve our stake
holders.
1. TRANSPARENCY
Openness and transparency above all else. Be it in our transactions, our operations or
our interactions with our stakeholders. Practicing fair, highly transparent management,
we seek to develop relations of mutual trust with our stakeholders.
2. STRIVE FOR EXCELLENCE
We strive for our performance to exceed the expectation of everyone we deal with in our
jobs, both internally and externally. We take initiative to work independently and
together to seize opportunities, seek solutions and take challenges.
3. DYNAMISM
We constantly assess and refine our systems and process to improve performance with
leadership, resilience and coherence in our actions and determinations. Dynamism for
28
us means the courage to shape a better future, empowerment of employees to take
action/decision. We also have commitment to set standards for teams. We have a system
of creating, capturing and processing the ideas.
To innovate, to benchmark, and to deliver value beyond expectations. To improve in the

face of all sorts of pressures and constraints. Even at the time of turbulence, JSW had
excelled beating the challenges. The biggest achievement for it was the commissioning of
Blast Furnace III.
4. PASSION FOR LEARNING
We are passionate about advancing our learning goal of bringing innovative products to
the market place. The robust knowledge sharing culture in the company helps us to
create value to organization. We have a can do attitude and believe in making
possibilities to realities.
MCKINSEY’S 7S FRAMEWORK WITH SPECIAL REFERENCE

TO ORGANISATION UNDER STUDY
29
The Mckinsey’s 7S model was named after a consulting company, Mckinsey and
company, which has conducted applied research in Business and Industry. The
Mckinsey’s 7S framework was created as a recognizable and easily remembered
model in business. These 7 variables includes structure, strategy, systems, skills,
style, staff and shared values.
• Structure: Is defined as the skeleton of the organization or the organizational

chart.
• Strategy: As the plan or course of action in allocating resource to achieve

identified goals over time.
• Systems: The systems are the routine processes and procedures followed with in
the organization.
• Staffs: Staffs are described in terms of personnel categories with in the

organization (Ex. Engineers)
• Skills: variable refers to the capabilities of the staff within the organization as a
whole.
• Style : The way in which key managers behave in achieving organizational goals
is considered to be the style variable; this variable is thought to encompass the cultural
style of the organization.
• Shared Values: The Shared values variable, originally termed super ordinate
goals, refers to the significant meanings or guiding concepts that organizational
members share.
Structure
30
Organizational chart of JSW
VC AND MD & MD
JMD AND CEO
HOD NON WORKS

HOD WORKS HOD PROJECT
HOD RAW
HOD RAW
MATERIALS
MATERIALS HOD CIVIL WORKS
PROJECTS
HOD COMMERCIAL
HOD IRON MAKING
HOD IRON ZONE PROJECTS
HOD HR & ADMIN
HOD FIRE & SAFETY

HOD STEEL ZONE HOD STEEL MAKING
HOD LOGISTICS PROJECTS
31
Awards and recognitions
2010-11
 JSW Energy Wins Business Leadership Award: JSW Energy has

received the NDTV Profit Business Leadership Awards 2010 under the 'Power
'Industry vertical Vice chairman of JSW Energy N K Jain received the award
from the Union Finance Minister Pranab Mukherjee on September 1, 2010 at the
Trident Hotel in Mumbai.
2009-10
 Karnataka Chapter Safety Award 2009: Unnatha Suraksha Puraskara, a

trophy and certificate was presented for outstanding safety performance and
management systems in Metals category of industries during 2006-08, by
National Safety Council, Karnataka Chapter, on 09-09-2009.at Bengaluru.
32
 Greentech Environment Excellence Award 2009: Gold award in metal
and mining sector for outstanding achievement in Environment Management
(10th Oct 2009, Kovalam).
 ISO-14001:2004 Certification: Vidyanagar Township was recommended

for certification of ISO-14001:2004 for environmental management practices, on
23-09-2009, by TUV Rheinland Group.
 National Award for Excellence in Energy Management 2009: Excellent

Energy Efficient Unit Award 2009 for Best Energy Management Practices (19,
20 Nov 2009, Chennai), by CII-Godrej Green Business Centre.
 PM’s Trophy 2007-08: Runner-Up of the best performing Integrated

Steel Plant in the country, known as Steel Minister’s Trophy (declared on 13-
Nov-2009).
 CII-EXIM Award 2009: “Commendation Certificate for Significant

Achievement” for Business Excellence by Confederation of Indian Industries, on
17-Dec-2009 at New Delhi.
 IMC Ramakrishna Bajaj National Quality Award:”Performance

Excellence Trophy in the Manufacturing Category” by Indian Merchant
Chambers Quality Cell, on 19-Mar-2010 at Mumbai.
33
SWOT Analysis
Strengths
• We are a major player in the steel sector and have a diversified client base. We have
adequate experience and expertise as an integrated steel producer and have withstood
the cyclic fluctuations that have characterized the steel industry in the past.
We are one of the low cost producers of Hot Rolled coils, which forms a key input for
our CRM project. We also use the Corex-BOF route for making steel, which requires
less amount of coke.
• We have sourcing arrangements with suppliers of power and oxygen which reduces
our vulnerability to fluctuations in the prices of these raw materials.
Weaknesses
• Our debt / equity ratio or gearing is relatively high compared to some of the other
integrated steel producers in India. We are actively taking steps to rationalize further
our high cost debt to reduce our interest burden.
• The profitability of our Company is dependent on prices of key inputs such as iron
ore, coal and zinc. Though our Company mitigates these risks by entering into
34
strategic tie-ups / sourcing contracts with raw material suppliers, any adverse
fluctuations in the input costs would affect the margins of the Company.
Opportunities
• Compared to the global per capita steel consumption average and the steel
consumption average for developed world, India’s per capita consumption of steel is
extremely low. To address this low consumption of steel the National Steel Policy
2005 envisages steel production to grow at 7.3% CAGR to 110 Mtpa from the present
levels of finished steel production at 38 Mtpa. It also envisages steel imports growing
at 7.1% CAGR from the present level of 2 Mtpa to 6 Mtpa and steel exports to grow at
13.3% CAGR from the prevailing 4 Mtpa to 26 Mtpa leading to a healthy apparent
steel consumption of 90 Mtpa by the F.Y. 2019-20, a 6.9% CAGR growth. Several
initiatives taken by the Government of India in the form of infrastructural
development programs such as the National Highway Development Programme, the
Indira Awas Yojna and the National Urban Renewal Programme are expected to have
a beneficial impact on the demand for steel.
Demand for Hot Rolled, Cold Rolled and Hot Dipped Galvanized Steel products –
forming the steel-valuechain for our Company is expected to substantially benefit
from the positive impact of these initiatives.
• Our Cold rolled products are used in the automobile sector. There is a major
opportunity for us to market our products on a large scale to the automobile sector
resulting from robust growth in the demand for automobiles combined with stringent
regulations on pollution control pertaining to old vehicles.
• India is perceived to be one of the manufacturing destinations for steel making

globally and this may propel us to meet the demand not only domestically but also
internationally.
Threats
• The steel industry is characterized by cyclical fluctuations in prices of finished steel
products as well as those of the key inputs. Any downward cyclical movement in the
steel sector could reduce the demand for steel and reduce our profitability.
• Our operating margins could come under pressure if there is a fall in the demand for
steel and increase in our input costs. However, since we are one of the lowest cost
producers in the market, we may still be able to maintain reasonable operating margins
for our products.
• The Indian steel industry is highly competitive. We face substantial competition in

the steel industry, both from Indian and international companies. Domestic as well as
35
international steel majors like Tata Steel,POSCO and Mittal Steel have announced
plans to set up manufacturing facilities in India. This could lead to excess capacity and
consequently downward pressure on the prices of finished steel products
QUALITY POLICY
Quality is the way of life at Jindal. JSW follows strict norms of quality when it comes
to resource management, production, services, commitment and working environment. JSW
believes the quality consciousness is a panacea for all economic and social ills. It may be
quality of life or quality of business. The trust that is vested on company by their clients and
customers stems from company’s consistent adherence to quality standards. JSW shall
achieve it through:
 Participation of all concerned in an atmosphere of cooperation and oneness.

 Imparting training and enhancing development of all employees in the organization.
 Delivering quality products and services at a competitive price and to achieve
customer satisfaction on time.
 Adopting environmental friendly technologies and to nurture a clean and healthy
surrounding.
 Achieving and sustaining leadership through concerted effort towards creativity and
innovation.
Promoting team based culture, which encompasses human value and ethics.
JSW – Human Resource Verticals :
- Manpower Planning
- Recruitment and Selection
- Joining
- Organisation Development Interventions
- Payroll Administration
- Training & Development
- Statutory Compliances
- Employee Recognition
36
- Employee Communication
- Separation
37
CHAPTER 4
DATA ANALYSIS AND INTERPRETTION
4. Data Analysis and Interpretation
PERFORMANCE APPRAISAL
a control process, an activity and a critical element in human resources allocation. Uses for
performance appraisal have included equal employment opportunity considerations,
promotions, transfer and salary increases. Primarily performance appraisal has been
38
considered an overall system for controlling an organization. Performance appraisal has also
been called an audit function of an organization regarding the performance of individuals,
groups and entire divisions.
Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview (annual or
semi-annual), in which the work performance of the subordinate is examined and discussed,
with a view to identifying weaknesses and strengths as well as opportunities for improvement
and skills development.
a control process, an activity and a critical element in human resources allocation.
And since people differ in their abilities and aptitudes. These differences are natural to a great
extent and cannot be eliminated even by giving the same basic education and training to them.
There will be some differences in the quality and quantity of work done by different
employees even on the same job. Thus, there is a great need to have suitable performance
appraisal system to measure the relative merit of each employee.
The basic purpose of performance appraisal is to facilitate orderly determination of
an employee’s worth to the organization of which he is a part. However, a fair determination
of the worth of an employee can take place only by appraising numerous factors some of
which are highly subjective, as for instant, attendance, while others are highly subjective, as
for instant, attitude and personality. The objective factor can be assessed accurately on the
basis of records maintained by the Human resource or personnel Department, but there is no
39
device to measure the subjective factor precisely. Notwithstanding this, appraisal of these
factors must be done to achieve the full appreciation of every employee merit.
Therefore, it can be said that, performance appraisal means systematic evaluation
of the personality and performance of each employee by his supervisor or some other person
trained in the techniques of merit rating. It employs various rating techniques for comparing
individual employees in a work group, in term of personal qualities or deficiencies and the
requirements of their respective jobs. To quote dale Yoder,” performance appraisal includes
all formal procedures used to evaluate personalities and contribution and potential of group
members in a working organization. It is a continuous process to secure information necessary
for making correct and objective decisions on employees.” The comparison of performance
with job requirements helps in finding out the merit of individual employees in a week group.
Supervisor or an independent appraiser may do rating.
Performance appraisal is a formal program in an organization, which is
concerned with not only the contribution of the members who form part of the organization,
but aims at spotting the potential also. The satisfactory performance is only a part of the
system as a whole and the management needs more information than mere performance
ratings of the subordinates. There are no two opinions about the necessity of performance
appraisal, which can meet requirements of the management to achieve the organizational
goals.
Performance appraisal is the systematic evaluation of the individual with respect to
his performance on the job and his potential for development. Performance appraisal is
concerned with determining the differences among the employees working in the
organization. Generally, the individual’s immediate superior in the organization and whose
40
performance is reviewed in turn by his superior does the evaluation. Thus, everyone in
Performance appraisal employs rating techniques for comparing individual employees in the
work group, in terms of personal qualities or deficiencies and the requirements of their
respective jobs.
More Abruptly it can be said that, Performance management can be defined as a
strategic and integrated approach to delivering sustained success to organizations by
improving the performance of the human capital and by developing the capabilities of teams
and individuals within that organization (Armstrong and Baron, 2000). The process of
performance management therefore focuses not only with ‘WHAT’ is produced but, also
‘HOW’ it is produced. It seeks to ensure that what has been produced is in line with the
organization’s needs and these products have been produced in line with the organization’s
way of doing things.
Performance management can be achieved through many different ways. These
include performance appraisal system and coaching. Performance appraisal system can be
described as a fairly old system of measuring employees’ performance that has been in use in
many organizations. However, Performance appraisal has not brought in the amount of
positive results that was expected of it. Armstrong and Mulis (1994:86) quoted one manager
describing performance appraisal as “a dishonest annual ritual”. The question that arises then
is: “If Managers (the custodians of the system) do not have confidence in their own system,
what more employees (who happen to be victims of the system)?”
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The meaning of the word “appraisal” is “to fix a price or value for something”.
This is used in finance in terms such as project appraisal or financial appraisal where a value
is attached to a project. Similarly performance appraisal is a process in which one values the
employee contribution and worth to the organization.
Performance appraisal can be defined as a system of measuring employee’s
performance relative to the assigned or agreed objectives. The process starts with
the supervisor and or with the subordinate agreeing on specific objectives that
need to be met on an agreed time period. The objectives that are used in the
Performance appraisal stem from the main organizational objectives that are
reduced to Departmental goals and now to individual goals.
The performance appraisal system has to be transparent and the employee should
be taken into full confidence. In many cases employees themselves are given a chance to
conduct a self-appraisal. Performance appraisal is a case of joint problem solving by the
organization and the employee. However the organization must also take care of future
potential and not get bogged down by current performance.
Normally the immediate supervisor does the appraisal. Some organizations also
have a peer group performance appraisal where colleagues rate the performance.
The HR person must also ensure that line managers are properly trained for
carrying out the appraisal including interviewing techniques and on how to give feedback.
The managers must also be trained to look at the cases objectively outside of their personal
opinion of the candidate.
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Therefore at end it would be right to say that, Performance appraisal is the
process of obtaining, analyzing and recording information about the relative worth of an
employee. The focus of the performance appraisal is measuring and improving the actual
performance of the employee and also the future potential of the employee. Its aim is to
measure what an employee does.
According to Flippo, a prominent personality in the field of Human resources,
"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."
Performance appraisal is a systematic way of reviewing and assessing the performance of an
employee during a given period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the
employee. It helps to analyze his achievements and evaluate his contribution towards the
achievements of the overall organizational goals.
Organizations exists to achieve goals. Goals are only met when individual
employees efforts matches with policy of the organization and thus bringing out success and
effectiveness. The assessment of how unsuccessful employees have been at meeting their
individual goals therefore becomes a critical part of HRM and here comes Performance
Appraisal System.
Performance Appraisal is an important component of the information and control
system. In today’s flexible organizations, performance evaluations provide an effective way
for managers to clarify performance goals and standards to enhance future individual
performance. Thus, the purpose of performance appraisal is to improve the organization’s
performance through the enhanced performance of individuals.
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The performance appraisal system:
 Is an organizational necessity.
 Is based on well defined objective criteria.
 Is based on careful job analysis.
 Uses only job related criteria.
 Is supported by adequate studies.
 Is applied by trained qualified raters.
 Is applied objectively throughout the organization.
 Can be shown non discriminatory as defined by law.
By focusing the attention on performance, performance appraisal goes to the heart
of personnel management and reflects the management's interest in the progress of the
employees.
STATEMENT OF THE PROBLEM:-
The performance appraisal of the employee in the organization should be an effective tool for
measuring the employee’s performance .If the performance not measured in a real manner it
will be a critical issue . A study on impact of performance appraisal was undertaken to study
the reason and way to improve the condition
OBJECTIVE OF PERFORMANCE APPRAISAL
There are mainly two purposes for which performance appraisal is used by an organization:
44
(3) To improve the work performance of employees by helping them realize and use their full
potential in carrying out the firm’s missions; and
(4) To provide information to employees for use in making work related decisions,
More specifically, appraisals serve the following purposes.
3) Appraisals generate information to support administrative decisions. Promotions transfers
and reassignments, demotions and termination’s are action based at least in part on
performance.
4) Appraisals provide feedback to employees and thereby serve as vehicle for personal or
career development because feedback provides:
• Reassurance that they are contributing and doing the right thing
• Awareness of the impact on the desired results
• A measure of the adequacy of performance (quality, quantity, speed etc.)
• Recognition of the importance and value of their performance.
3) Once the development needs of employees are identified appraisals can help establish
objectives for training programmes. Thus evaluations provide a basis for changing
performance plans, including objectives and standards of behaviors as business plans and
conditions change.
4) As a result of proper specifications of performance levels, appraisals can help diagnose
organizational problems. They do so by identifying training needs and the knowledge,
abilities, and other characteristics to consider in hiring, and they also provide a basis for
distinguishing between, effective and ineffective performers.
SCOPE OF THE STUDY:-
45
The study was conducted in tornagallu .Due to time and money constraint the research is
limited to only this area.
 A descriptive research design was used for present study.

 The result of every research depends on the information collected, and the accuracy of
the information depends on the method used to collect the information
HYPOTHESIS
Hypothesis testing is done with the help of increment / promotion given to the
Managers.
For this random sampling by asking few questions to the concerned Managers method
will be adopted and it will be compared.
PERFORMANCE APPRAISAL - PROCESS MAP
46
TRENDS IN PERFORMANCE APPRAISAL SYSTEM
47
Performance appraisal in its traditional from known as ACR-Annual Confidential Report is
often misused than used. Performance appraisal has now been recognized as a HRD function.
In the last decade many organizations have reviewed and changed their managerial appraisal
systems.
1) There is a trend away from the composite appraisals with multiple objectives (e.g.
performance planning, development rewards and promotions)to separate systems for
different systems for different clusters of objectives.
2) There is a move away from isolated appraisal system to the business linked one .
3) There is shift away from closed confidential type to open dialogue and discussions
based system.
4) There is a movement quantitative (pseudo objective) to qualitative (interactive,
improvement and process oriented) system.
5) There is a movement away from boss assessed feedback to 360-degrees feedback
involving customers, peers, team members, subordinates etc. in addition to supervisors.
6) There is also a trend away from elaborate systems to simple ones.
7) There is a shift from standard systems to flexible and group specific ones.
8) There is a movement from result oriented systems to process oriented system.
9) There is a movement from the assessment of individual performance to the development
of team performance.
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10) There is also a movement from complacency to experimentation through continuous
research change.
Performance appraisal refers to the assessment of an employee’s actual performance, behavior
on jobs, and his or her potential for future performance. Appraisal has several objectives but
the main purposes are to assess training needs, to effect promotions, and to give pay increases.
Appraisal of performance proceeds in a set pattern. The steps involved are –defining appraisal
objectives, establishing job expectations, designing the appraisal programme, conducting
performance interview, and using appraisal data for different HR activities.
Two important contemporary techniques of performance appraisal include 360º appraisal and
goal setting approach to appraisal also known as ‘Managing by Objectives’.
However, performance appraisal system also serves to be the backbone of any industry in the
corporate world and since the project report focuses on the role played by performance
appraisal in industrial establishment so review of research is done by also analyzing following
secondary data.
The data source: Secondary Data.
The research approach: Survey Method.
The research instrument: Journals , Books , Newspaper Articles.
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EVOLUTION OF PERFORMANCE APPRAISALS IN INDIA
First Phase of Performance appraisals began in the early sixties were prepared in the form of
Annual Confidential Reports (ACR0, also known as Employee Service Records (ESR) in
some organizations. Negative remarks in the ACT or ESR were considered damaging for
career growth. It was thus important to keep the boss in good humor so that the ACR or ESR
did not get spoiled. The ESR was largely trait based and the traits used were sincerity,
punctuality, dynamism, job-knowledge, loyalty, initiative, leadership etc. The ACR and it was
this strict confidentiality that was supposed to serve as the motivating force for them. This
may be considered as Phase 1 of the performance appraisal systems in India.
In the Second Phase that spanned late sixties and early seventies, the main change was in
communication of adverse remarks to the employees. It was felt that unless this system of
communicating to the employees in writing any quality or trait on which they got a rating of
33 per cent or less. Even though the communication was sent to the employer by the
personnel department or the establishment section in a routine manner, the employees took it
very seriously because it required office played a key role in moderating the assessment, and
he normally had all the powers to overrule the ratings of the reporting officer of the employee.
In the Third Phase of appraisals, the employee was given a scope to state his own
accomplishments in the confidential report form. The term annual confidential report was
replaced during this period by Performance Appraisal. The appraisal process began at the end
of the year with a statement by the appraise about his significant accomplishments during that
year. Some organizations later turned this “opportunity given to the appraisee to express his
significant achievements as self-appraisal”. However, this term was a misnomer as there was
no scope for the appraisee to appraise himself. A few organizations subsequently developed
this part of the appraisal by adding other questions about difficulties faced, plans for
50
improvement next year etc. Everything else remained the same. The formats became a little
more elaborate and in few cases, the appraisal included the details of the actual work done,
largest achieved etc. The confidentiality, however, was maintained as before. In most cases,
there was no communication to the appraisee about the performance assessment. In a few of
them, a column of training needs was introduced. The appraisals continued to be control
oriented and not developmental.
It was really in the he Fourth Phase that the system of performance appraisals underwent a
quantum leap. This phase began in the mid-seventies and in a way was initiated in India by
Larsen & Turbo Limited, followed by the State Bank of India , Bharat Earth Movers and few
other organizations. This phase witnessed a shift from control to development, appraisal to
analysis, strong links to training, confidentiality to openness and traits to quantifiable tasks
and targets.
The movement towards open and development oriented appraisal systems was initiated by
L&T when it adopted a system making appraisal more performance based, participative
(dialogic and interactive), open and developmental. It required the employee and his reporting
officer to plan the performance (the term key performance areas or KPAs was introduced) or
the appraisee in the beginning of the year, review it after six months with the boss, analyze
the factors affecting performance, discuss developmental needs, have performance counseling
and share the ratings with the appraisee. The system required active participation of the
appraisee and was intended to be a performance planning, performance reviewing. And
performance developing system. In the late seventies and early eighties, most organizations
wee fascinated by this open and development oriented system. Some of them even started
new HRD departments by appointing HRD managers having the skills to design, monitor and
implement the system. While a few organizations switched over to this system, it took about
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10 years of experience to fully understand its intricacies and dynamics. The change process
was slow largely because the employees were not used to the openness introduced by the new
system, the HRD managers did not have enough skill base to monitor it, and the top
management lacked patience and perspective about its potential advantages. Several
organizations could not get out of the mindset created by earlier confidential report system.
They continued to use it for promotions, which were considered as the most important
indicators of development. It is only by the mid eighties that organizations started setting
down and feeling comfortable with the open appraisal systems.
Phase Fifth has started only in last three years with organizations showing some maturity and
growth in terms of their understanding of appraisals. This phase is characterized by a
movement towards development in spirit and form. This is symbolized by the substitution of
the term performance appraisal by performance review system, performance development
system, performance analysis and development to rewards and from comparative assessment
to assessment in relation to plans. There is a movement from rewards and controls to culture
building and development and the new phase also indicates a shift towards appraisal by
multiple sources rather than by only the reporting officer.
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METHODS OF PERFORMANCE APPRAISAL
Currently most of the companies are using one of the following Performance Appraisal
Methods:
1). 360 Degree Appraisal Method
2). Rating Scale Method
3). Management by Objective Method
Under the 360 Degree appraisal method the employee is rated from all angles i.e., by the
superiors, subordinates, peers, suppliers, distributors, customers and clients. Under the
Management by Objective method the employee goals are set mutually by the employee's
and the management. And the employees are rated based on the accomplishment of these
goals. Under the Rating Scale method each employee trait or characteristic is rated on a scale
that usually has several points ranging from "poor" to "excellent" (or some similar
arrangement).The traits assessed on these scales include employee attributes such as work
quality, cooperation, initiative, punctuality and technical competence, etc. The selected traits
should be in some way relevant to the appraisee's job.
360º APPRAISAL AND FEEDBACK
The 360 degree appraisal involves rating of an employee or manager by everyone above,
alongside and below him. Corporates are using this tool to find out truths about their
53
managers. Although deployed mostly as a fact-finding technique, 360 º appraisals are also
used to design promotion and reward system in the organization.
Concept of 360º Appraisal
According to Milliman and others, “360-degree appraisal is the process of systematically
gathering data on a person’s skills, abilities and behaviors from a variety of sources –the
manager, peers, subordinates and even customers and clients”. Thus, appraisal of an employee
is done by his superior, his peers, his subordinates and clients or outsiders with whom he
interacts in the course of his job performance. In 360-degree appraisal, besides appraising the
performance of the assesses, his other attributes such as talents, behavior, values, and
technical capabilities are also appraised.
Besides the employee himself, superior, subordinates and peers play an important role in the
appraisal. Structured questionnaires are used to collect responses about the employee from his
superiors, peers and subordinates. Several parameters relating to performance and behavior
are used in the questionnaires. Each manager is assessed by a minimum of fifteen colleagues,
at least two of them being his bosses, four of them peer, and six of them subordinates. Even
the important customers or clients of the firm may also be requested to give their assessment
of the concerned employee. The responses are presented collectively to the assesses in the
form of charts and graphs. Comments and interpretations are presented later. Counseling
sessions are arranged with the employee to remove the weaknesses identified in the 360
degree assessment.
Merits of 360º Appraisal
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The merits of 360º appraisal are as under:
(i) The 360 degree appraisal leads to greater self-awareness of those appraised. It reveals
strengths and weaknesses in their working styles.
(ii) The gap between self assessment and the views of one’s colleagues of peer group in
reduced.
(iii) It facilitates empowerment of subordinates who get a say in the appraisal of their
bosses.
(iv) Inflexible managers are forced to initiate self-change.
(v) Facts about organizational culture and ambience are brought to light by the multiple
appraisals.
Limitations of 360º Appraisal
The system of 360º appraisal suffers from the following limitations:
(i) The 360 degree appraisal system ignores performance in terms of goals.
(ii) The candidate being appraised may not accept negative feedback from the
subordinates and peers. He might feel humiliated.
(iii) Responses from colleagues often tend to be biased.
(iv) Linking rewards to findings under 360 degree appraisal can prove to be unfair.
(v) The subordinates and peers might not be fully competent in appraisal.
Guidelines for Better Use of 360º Appraisal
The use of multisource appraisal can be effective if the following guidelines are followed:
55
(i) Involve people. Ask them who should serve as raters, and give them an
opportunity to review and interpret the results. This will strengthen their commitment
to both the overall process and the specific decisions.
(ii) Ensure that relevant data are being collected. Focus on behaviors and outcomes
that raters are capable of observing and are competent to evaluate.
(iii) Ensure that no single rater can dramatically affect the outcome. Use a large
enough sample or eliminate the highest and lowest scores to ensure that no one rater
can skew the data.
(iv)Train raters in what and how to observe. The better people understand what they
look for and how to record”critical incidents” (specific things the person said and did
that can be used as examples to support their ratings, and better the quality of the
information that will be collected.
(v) Ask raters to support their evaluations. Whenever possible, raters should discuss
their observations and evaluations with other raters. These discussions should trigger
thoughts and combat selective memory. Raters should also be required to provide a
rationale for their rating to other raters. This would prevent people from using the
process to act on personal grudges.
(vi)Move slowly and start small. Any organization considering using 360 º feedbacks
in the appraisal process should begin by using it for development purpose only and
then gradually to make it a part of appraisal system. Even then, the focus should be on
the goal-setting portion of the appraisal. People need to get comfortable with the idea
of multisource feedback as a development tool before they can accept it as part of the
formal performance management process.
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A lot of organizations seem to be hurrying to integrate 360º feedback into the human
resource management system. Multisource feedback really does have the potential to
enhance human resource management system. However, 360º feedback won’t fix a
system that does not work.
(vii) Develop a culture that supports open feedback. Not surprisingly, 360º feedback
works best in companies where the environment is participatory rather than
authoritarian, where giving and receiving feedback are the norm and are seen as
valuable sources of information. If the current system (where only the supervisor does
the appraisal) is not working due to lack of straight talk and hesitancy to give direct
feedback, it is essential to introduce openness in the organization.
(viii) Clear and agreed on performance measures and behaviors. When 360º
feedback is used for development only, the organization may be able to settle the list
of behaviors and skills that have reasonable face validity and general support:
“coaching” or “team building”, for instance. However, when the feedback is being
used to determine performance ratings, the result and behavior for which people are
held accountable must be clear, unambiguous and specific.
(ix)The users must support the system and be willing to invest the time required to
make it work. The introduction of 360º feedback makes an already time-intensive
appraisal process even more demanding. It means more data to collect and more
information to process for the additional feedback.
(x) Sound feedback process. While the way the data are collected and presented are
always important, two aspects of sound 360º feedback procedure are particularly
relevant when the data are used for appraisal purpose: the validity and reliability of the
practices for which people will be measured and the confidentiality of the raters.
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Elements of 360º Appraisal Program
The elements of 360º appraisal program are as follows:
(i) Appraisal by Superior/ Boss. This is the most important element of the 360 degree
appraisal. Here the focus is to provide constructive feedback on employee’s
performance and his development needs. It is the responsibility of the superior to
ensure that employee sets goals not only in the area of business performance but also
in the areas that are vital to the organization. These are called corporate thrust areas
and may include relationship management, safety and quality development. If the
working style of the employee is a concern area and needs improvement for enhancing
effectiveness then goal may be set for “style of functioning” such as, from short-term
to long-term orientation.
It is expected of the superior to put career aspirations of the employee in proper
perspective. Firstly, superior must communicate to the employee in a clear way what
the organization plans for the employee. Secondly, if the employee has unrealistic
aspirations, then also it is superior’s responsibility to share with the employee the
realistic picture given his/ her strengths, development areas, experience, qualifications,
and the organization’s ability to provide growth. This is how the superior’s appraisal
has a very significant role to play.
(ii) Appraisal by the Peer Group. The peers play an important role in the life of an
employee in the organization. The can also provide a deep insight into the personality
make up, attitude and style of working of the employee. For better results, it is
essential to select the right peers for the purpose of appraisal. They must include peers
58
both from within the department as well as from the other departments, which are
directly connected with the working of employee’s department. The concept of
internal customers comes handy here. Three to five internal customers should
normally be chosen for peer appraisal.
In order to achieve the purpose of 360º appraisal, the peer group appraisal must strive
to get the feedback on (a) employee’s working style, (b) sensitivity towards others, (c)
spirit of co-operation and collaboration, and (d) ability to work as a team member.
(iii) Appraisal by the Subordinates. Another distinctive feature of 360º appraisal is
the role of subordinates in appraisal. It signifies two things. Firstly, it is a clear
expression from the organization that it encourages openness and that feedback is a
two-way process. Secondly, it is a systemic recognition of the fact that an employee’s
subordinates do play a vital role in his appraisal. Thus, the purpose of subordinate’s
appraisal is to get first hand assessment of how the subordinates perceive their
superior to be in terms of: (a) delegation of authority, (b) guiding and training of
subordinate, (c) motivation of subordinates, (d) team building, etc.
Upward appraisal provides an opportunity to the subordinates to give feedback to their
superior on the kind of things they would like him/ her to continue doing (status quo),
things they would like him/ her to stop doing (areas for corrective action), things they
would like him/ her to start doing (areas for new initiatives).
(iv)Self Appraisal. Any program of 360º appraisal would not be complete without self
appraisal by the employee whose performance is being appraised. Self appraisal
facilitates the employee to identify his/ her strengths and weaknesses and provides an
opportunity to assess the performance. In a well established system, employees use the
self appraisal very effectively and organizations also find that employees often are
59
their own strongest critics and display very high degree of objectivity. Self appraisal
also provides an opportunity to the employee to express his career moves for the
future. However, this is only for gathering information and that under the given
organizational constraints, it may not be possible to provide the career progression
desired by the employee. Nevertheless, it is in the organization’s interest to at least
know on a first hand basis the aspirations of its employees.
(v) Understanding of Apprasiee’s Job

From this it is clearly seen that according to appraiser there is a clear and joint understanding
of the appraisee’s job
RESEARCH METHODOLOGY
The formidable problem that follows the task of defining the research problem is the
preparation the design of the research project, popularly known as the “research design”.
Decisions regarding what, where, when, how much, by what means concerning an inquiry or
a research study constitute a research design. “A research design is the arrangement of
conditions for collection and analysis data in a manner that aims to combine relevance to the
research purpose with economy in procedure.” In fact, the research design is the conceptual
structure within which research is conducted; it constitutes the blueprint for the collection,
measurement and analysis of data. As such the design includes outline of what the researcher
will do from writing the hypothesis and its operational implications the final analysis of data.
Therefore, this study outline following designing decisions:-
60
(i) What is the study about?
The study comprises critical analysis of various functions, methods and scope of performance
appraisal in different companies prevailing in steel industry.
(ii) Why is the study being made?
The main purpose of study is to help in understanding various functions, role and importance
of performance appraisal system and identify the developmental needs of employees in steel
industry. It also focus on the impact of performance appraisal system on industrial relations
and help in finding out various tools for bridging the communication gap between employees
and supervisors.
(iii) What type of data is required?
Data comprising the impact of performance appraisal system on steel industry is required for
the study. Therefore, journal articles and news article from leading business magazines and
news papers did the needful.
(iv) Where can the required data be found?
Since data is secondary therefore most of the review was done with help of internet, journals,
newspaper articles and various books .
(v) What periods of time will the study include?
This study is the result of 2 – 3 months of research.
(vi) What techniques of data collection will be used?
61
To accomplish the objectives of the study secondary data is used.
(vii) How will the data be analyzed?
Data is analyzed on the basis of journal, newspaper articles and the core knowledge gained on
performance appraisal system from few books and steel industry. A complete review has been
done on role of performance appraisal system on steel industry and its impact in gaining
competitive advantages. Therefore, for this purpose role of performance appraisal has been
studied in few companies prevailing in the steel industry.
(vii) In what style will the report be prepared?
Report is distributed in Chapters completing all the requirements of the research.
LITERATURE REVIEW
Performance appraisal is a process of assessing, summarizing and developing the work
performance of an employee. In order to be effective and constructive, the performance
manager should make every effort to obtain as much objective information about the
employee's performance as possible. Low performance can push the organization back in
today’s tough competition scenario. The project is aimed at analyzing the performance
appraisal and it’s role in steel industry. Therefore, to start with this critical analysis it is
important to know about steel industry at it’s contribution in economy.
ORGANIZATION STRUCTURE AND DESIGN
Jindal brothers
Jindal Brothers is a young, dynamic organization and is going strong on the stock market.
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1- The company is well aware of the dynamic environment of software, it is operating
and in order to keep it with the pace of the environment it believes in constant up
gradation of courses. Organization structure and design of the company is such that it
supports this change.
2- Jindal Brothers has a matrix kind of a structure wherein it takes the form of
combination of structures. Matrix structures are adopted became there is more than
one factor around which the structure can be built.
3- This matrix structure at Jindal Brothers improves the quality of decision-making
where interest conflicts arise and direct contacts replaces bureaucracy
4- . This increases the motivation of the managers and development of wider
involvement in strategies. Although at times the company faces high risk of dilution of
priorities became e people do not know who is responsible for what.
5- An organization is a network of authority, responsibility and relationships. Different
organization structure consists of different type of relationships.
Performance Appraisal at Jindal Brothers
While on the job, performance reviews of every employee are done every quarter. The
reviews are done with a view to helping the individual excel at his/her workplace. In case
there are any training requirements, these are noted and acted upon in the coming quarter.
Also, the goals and objectives for the employee are re-visited for
The performance appraisal mechanism is carried out at Jindal Brothers for promotional
purposes.
These are done so as to motivate the employee and improve his performance level. The
method is as follows:
63
a) Establishment of performance standards with the employees
b) The goals are set mutually as per measurable standards.
c) The actual performance is hence measured.
d) After measuring of the actual performance, the same is compared with the standards
set
e) The appraisal is then discussed with the employees.
f) And finally, if need arises corrective action is initiated. For this purpose the corrective
action is actually identified through brainstorming exercises initiated by the
departmental heads at all the Jindal Brothers. It is then measured as a tool to evaluate
the past performances of the employees.
Some of the methods used at Jindal Brothers are:
1. Key Performance Index
2. 360 Degree Feedback
3. Paired Comparisons
4. Behaviorally Anchored Rating Scale
1. KPI-Key Performance Index
It is based on the performance level of the employee generally classified on the basis of:
• Targets achieved
• Ratings through students’ feedback forms
• Punctuality and regularity
• Day to day performance
64
This is given after every module at the centers.
Thus we can observe that the appraisal system is not a biased one but based on performance
and productivity basis. All the respective heads of the employee together with the senior
persons at the center brainstorm and then give the promotion.
2. 360 Degree Feedback
This feedback system involves the participation of:
• Coworkers – 40%
• Subordinates - 20%
• Superior - 40%
Thus the feedback given by these members at Jindal Brothers is considered under a holistic
view and then the employee is given a performance appraisal. This evaluation method
involves 40% feedback from the coworkers which says that the employee should not only
maintain good rapport with the senior or junior but majorly with the coworkers also.
3. Paired Comparisons
The evaluator compares all possible pairs of subordinates on their overall ability to do the job.
Due to the subjectivity of evaluating overall performance some managers me e a number of
different job related dimensions when comparing.
4. Behaviorally Anchored Rating Scale (BARS)
It is a sophisticated method of evaluating the employee based on the employee behavior. It is
a numerical scale that is anchored by the seniors of the organization at various centers. This is
highly confidential and the information is sent in sealed envelopes and opened only at the
65
time of the final evaluation. There is no further discussion regarding this scaling, thus it is not
given enough weightage.
CHAPTER 5
66
FINDINGS & SUGGESTIONS
5 Finding & Suggestions
FINDINGS
In this section, basic data for the number companies constituting steel in industry is presented
on various attributes of performance appraisal.
Frequency and frequency percent scores were computed for each company and thus it
enlighten the following points :-
 Promotions were and known to most of the top and senior management while middle
and lower management were a bit not clear about it. This could be attributed to the
fact that senior and top management were more involved in decision making and
policy formulation than are the middle and lower management.
 At the lower levels of the organization, performance can be quantified, and the
managers are made accountable at the higher echelons the tasks are too complex and
therefore cannot be assessed on the basis of quantified performance
 Most of the managers feel that the mechanism for potential appraisal is not adequate.
67
 The industry believed that self appraisal is the best for managers and above.
 To improve interpersonal communication and behavior assessment by peers and
subordinates is essential.
 The performance of the employees is not regularly monitor and the required feedback
is provided to the subordinates from time to time. The appraisals are conducted at
fixed intervals. The industry believes in using appraisal for rewarding and increments.
 It would not be wrong to say that interpersonal relations and personal biases (i.e.
liking and disliking) influence the appraisals in the industry.
Suggestions
1. The economic indicators are all favorable for Growth, temporally slump is ephemeral.
2. Indian steel industry exudes optimism , thus, more stress relieving packages should be
offered to the mentally stressed staff.
3. Investment in infrastructure is crucial to step up demand for steel , therefore, in this
respect the HR Dept should attempt to obtain the maximum agreement of Managers in
respect of needs and objectives and purpose of the systems.
4. New technologies to use indigenous natural resources would have to be developed
thorough expert person performing their roles efficiently in personnel management.
68
5. The industry should try to avoid employee resistance, which is associated with change
worlds true change follows instance. This for all kinds of systems be it Performance
Appraisal.
6. Overtime should be taken care of at time of performance appraisal, which would
motivate the employees to perform better for longer hours.
7. Performance appraisal should be after at proper span of time .
LIMITATIONS
The project report carries with it few limitations, on which the accuracy of the text written
will depend. This study is cross-sectional and data were collected over two time periods but
are still perceptive. Cross-sectional data might create problems with respect to causality.
 The first and foremost limitation is regarding the sources of information. The
information contained has been obtained from sources believed to be reliable and in
good faith, but which may not be verified independently.
 Using several statistical tools derives the estimates. Hence the findings obviously
carry all the limitations of the statistical tools used.
 Same sets of data from different sources are different. Since not all the data are
available from a single source, an attempt has been made to standardize the data
wherever required, which is essential to maintain uniformity through out the project.
 Many of the US studies have used multiple criteria for performance, although it is not
sure how well those would transfer to the Asian context. Not using multiple
performance measures may create further limitation in the study.
69
Finally, this study did not find evidence of the configuration argument and did not test the
contingency argument, but could find evidence in the universalistic or the best practice
perspective. One way of explaining this might be that due to the turbulent and hyper-
competitive environment, firms are primarily supportive of innovative, adaptive nature of
high-involvement work systems. In other words, there may be some restriction in range with
regard to organizational environments that somehow undercut this study’s ability to provide a
full test of the contingency perspective.
CHAPTER 6
CONCLUSIONS
70
6. CONCLUSIONS
1. This industry proves that a major amount of work towards developing an effective and
efficient performance appraisal system has not been accomplished to the fullest.
2. It seems that the industry is genuinely interested in improving the efficiency and
utility of performance appraisal system to succeed in today’s dynamic environment;
3. Systems of innovative HRM practices have large effects on production workers'
performance, while changes in individual employment practices have little or no
effect.
Outward Orientation Performance Appraisal System
The appraisal system should be more sensitive and responsive to current competitive
environment. This is possible through making the industry :
• Quality conscious in products and services to match international standards.
• Customer oriented (internally as well as externally)
• Cost effective
71
• Technology oriented
• Focused towards collaboration and teamwork
• People oriented
• Focused towards performance standards
CHAPTER 8
BIBLOGRAPHY
72
8. BIBLOGRAPHY
WEBSITES
1. www.jsw.in
2. www.scribd.com
3. www.wikipedia.org
4. www.sailindia.co.in
5. www.performance-appraisal.com/intro.html
73
JOURNALS
1. A New Framework for Selection of the Best Performance Appraisal Method
2. Function of performance appraisal in career development
3. Innovative human resource management and corporate performance in the context of
economic liberalization in India.
4. The Effects of Human Resource Management Practices on Productivity: A Study of Steel
Finishing Lines
74

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A Project Report

MASTER OF BUSINESS ADMINISTRATION

Under The Guidance of

Ms. Asra Ahmed

DAYANANDA SAGAR COLLEGE OF MANAGEMENT

AND INFORMATION TECHNOLOGY

Shavige Malleshwara Hills, Kumaraswamy Layout,

This is to certify that the Dissertation/Project titled

‘_________________________________________’, submitted in partial fulfillment

of the requirements for the award of degree of Master of Business Administration to

Bangalore University, is a record of original work carried out by ________________

(Reg.No._________________) under the guidance of ______________ during the

academic year 2009-2011.

Dr. MARUTHI RAM.R Dr. M.S.RAMACHANDRA

Head-MBA, DSCMIT Director - DSCMIT

I hereby declare that the Project Report titled “PERFORMANCE APPRAISAL

at JSW Steel Limited, Vijayanagar Works, BELLARY” is an original work done

degree of Master of Business Administration to Bangalore University, under the

other degree/ diploma/ certificate.

Place: Bangalore M.HANUMA KISHORE

Steel Limited, Vijayanagar Works, BELLARY” submitted in partial fulfillment of the

University is a record of original work carried out by MR. M.HANUMA KISHORE

has been submitted for the award of any other degree/diploma/certificate.

Place: Bangalore Ms. Asra Ahmed

I would like to take this opportunity to express my sincere gratitude to all

Date: (M.HANUMA KISHORE)

2 Design of the study 12-15

2.1 Literature Review

2.2 Research Methodology

2.2.1 Statement of problem

2.2.2 objectives of the study

2.2.3 Scope of the study

3 Company Profile 16-31

Data Analysis And Interpretation

helps in increasing industry’s profitability.

“ a wage incentive scheme is essentially a managerial device of increasing a

The Indian steel industry currently provides direct/indirect employment to over

The steel industry is a dynamic, innovative sector, which is constantly adapting

Steel is a product of a capital intensive and complex industry that requires

All major industrial economies are characterized by the existence of a strong

Country wise crude steel production.

Country Crude steel production (mtpa).

SOUTH KOREA 47.3

F.R. GERMANY 46.3

 Exemption of iron and steel industry from provision of compulsory licensing.

Inclusion of iron and steel in the high priority industries for

The purpose of foreign investment.

 Deregulation of pricing and distribution of iron and steel.

 Reduction of duty on import of capital good.

 Liberalization of EXIM policy.

DESIGN OF THE STUDY

formally or informally, known as performance appraisal. Performance appraisal has been

performance appraisal have included equal employment opportunity considerations,

been called an audit function of an organization regarding the performance of individuals,

groups and entire divisions.

Performance appraisal may be defined as a structured formal interaction between a

and skills development.

formally or informally, known as performance appraisal. Performance appraisal has been

a control process, an activity and a critical element in human resources allocation.

appraisal system to measure the relative merit of each employee.

(Reg.No.___) under the guidance of during the