Performance Appraisal of Employees at BAJAJ ALLIANZ

A PROJECT REPORT ON ‘PERFORMANCE APPRAISAL OF EMPLOYEES AT BAJAJ ALLIANZ ’
Submitted under the partial fulfillment for the award of Bachelor of Business Administration (B.B.A)

Submitted To: Dr. Ravi Shekhar Vishal Lecturer

Submitted By: Abhijeet Chandel BBA – 6th Sem. B/12/003

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DECLARATION

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DECLARATION
I ABHIJEET CHANDEL student of B.B.A -6th Sem. hereby declare that all the information collected for this report is collected through my own effort and correct to the best of my knowledge and belief.

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ABHIJEET CHANDEL BBA – 6th Sem.

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PREFACE

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PREFACE
This report has been conducted to know the “A PROJECT REPORT ON PERFORMANCE APPRAISAL OF EMPLOYEES AT BAJAJ ALLIANZ”. This research report is carried out under the partial fulfillment of BBA – 6th Sem., SCHOOL OF MANAGEMENT SCIENCES, VARANASI.

ABHIJEET CHANDEL BBA – 6th semester

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ACKNOWLEDGEMENT

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ACKNOWLEDGEMENT
Firstly, I am thankful to almighty GOD, who bestowed his choice of blessing on me through out my life. I ABHIJEET CHANDEL, student of BBA - 6th Sem. of “SCHOOL OF MANAGEMENT SCIENCES, VARANASI” feels a great pleasure in presenting this project report in the hand of report supervisor Dr. RAVI SHEKHAR VISHAL(LECTURER). It is really a great opportunity given by him to me. This report work is combined effort of many hearts, hand & brains. I am immensely grateful Director Prof. P. N. JHA, SMS VARANASI & again I would like to express by deep gratitude and devotion to Dr. RAVI SHEKHAR VISHAL (LECTURER), SMS Varanasi for their Personal involvement & support without which this project would have never been in the light of this day. I also want to thank my entire teachers, Staff member & Library member as they gave there valuable advise & guidance which helped me to conduct this report successfully. I specially wish to thank all my respondents and friends without their valuable support this report wouldn’t have been possible. THANK YOU ABHIJEET CHANDEL BBA – 6th Semester

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TABLE OF CONTENTS
1.INDRODUCTION

(A) (B) (C)

About the Bajaj Allianz…………………………10 About the Performance Appraisal………..26 About the Performance Appraisal in Bajaj Allianz…………………………………………………… 44

2. 3. 4. 5.

Research Objective……………………………………..46

Research Methodology……………………………….48

Benefits of Project…………………………………….50

Findings………………………………………………… ……..52

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6. 7.

Suggestions and Conclusions……………………..56

Bibliography…………………………………………… ……60

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INTRODUCTION

INTRODUCTION

Bajaj Allianz General Insurance Company

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and 10

strength. Incorporated on 19th September 2000 Bajaj Allianz General Insurance Company received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto Limited

Bajaj Auto Limited is the largest manufacturer of two-wheelers and three- wheelers in India and one of the largest in the world. Rated AAA by Crisis, Bajaj Auto has been in operation for over 55 years and has a strong brand image and brand loyalty synonymous with quality & customer focus. With over 15,000 employees, the company, a Rs. 4000 crore auto giant, is the largest 2/3-wheeler manufacturer in India and the 4th largest in the world. Rated AAA by Crisis, Bajaj Auto has been in operation for over 55 years. It has joined hands with Allianz to provide the Indian consumers a distinct option in terms of life insurance products.

Allianz Group

Founded in 1890 in Germany, the Allianz Group is one of the world's fastest growing insurance and financial service organizations. The Group employs more than 120,000 people and operates in over 70 countries.

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Allianz provides its 60 million clients with a broad range of services via an international network of subsidiaries. With assets under management of 670 billion euro’s the group is one of the largest investors in the world today. As one of the largest providers of international corporate insurance, the group provides insurance coverage to almost half of the FORTUNE 500 companies.

Bajaj Allianz Life Insurance Co. Ltd

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Bajaj Allianz Life Insurance Co Ltd is a unique joint venture among the global giants Allianz Group (AG) and Bajaj Auto. Allianz AG's world ranking establishes it among the top insurance companies in the world. Bajaj is the biggest two and three wheeler manufacturer in the world. Bajaj Allianz Life Insurance Company boasts of a nationwide presence with 876 offices and over 4 million satisfied customers. Today, Bajaj Allianz is one of India’s leading and fastest growing insurance companies. Currently, it has presence in more than 550 locations with over 60,000 Insurance Consultants. Bajaj Allianz Life hopes it's aligned with its clientele's life insurance needs. The company, which provides life insurance services to customers throughout India, is a joint venture between global insurance company Allianz and motorcycle maker Bajaj Auto. With more than 1,000 branches nationwide, Bajaj Allianz Life specializes in ban assurance (through partnership tie-ups with Standard Chartered Bank, Syndicate Bank, and other banks), corporate agency, and group business services. Allianz AG with over 110 years of experience in over 70 countries and Bajaj Auto, trusted for over 55 years in the Indian market, together are committed to offering you financial solutions that provide all the security you need for your family and yourself. Its product line caters to a wide spectrum of customers and needs, including companies, individuals, children, risk care, lifetime care, and term care.

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PRODUCT OF BAJAJ ALLIANZ LIFE INSURANCE
Individuals Plans
           

Unit Gain Insurances Term Care Plans Lifetime Care Insurance Policy Business Insurance Policies Savings And Security Policies For You And Your Family Rural Insurance Plan Healthcare Insurance Financial Insurance Pension Plus Retirement Plans Children's Policies Endowment Plans and many more.

Group Insurance Schemes
    

Insurance For Employee-Employer Groups Insurance For Non-Employer - Employee Groups Employees Deposit Linked Insurance New Group Superannuation Scheme New Group Gratuity Care Scheme 14

Unit Linked Insurance Plans (ULIP)
Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. (a) Regular Premium

Market linked insurance plans invest the premium in to the equity, debt and cash markets by the way of allocating units, which like any other mutual fund have a NAV and the customer is free to switch between one fund class to another depending of the risk factor he wishes to be in. ULIPs offer a better return than the traditional endowment plans and offer a great deal of flexibility along with great returns making them the finest product offering. Bajaj Allianz Life Insurance have developed a number of ULIP products which range from single premium to a regular premiums options along with investment funds ranging from index funds to mid-cap funds and debt market linked funds.

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1.New Unit Gain Super 2 Unit Gain Plus Gold 3 4 New Unit Gain Plus New Unit Gain Young Care Young Care Plus New Family Gain-R

. 5 . 6 . 7 .

(b) Single Premium Unit Linked Single Premium Plans require the premium to be paid only once. 1.New Unit Gain Premier SP 2.New Unit Gain Plus SP 15

PENSION
Bajaj Allianz Life Insurance offer Retirement Plans which will make sure that we are there to support you in every stage of your life and your savings today become your wealth and support for your future years to come.

(a) Annuity Immediate annuity Plans from Bajaj Allianz Life Insurance.

(b) Retirement Retirement is the beginning of the twilight of the journey of life when you have done all that you could to arrive at this point of time, and now left with time to reflect back on what was, and also what is to come. Our retirement plans help you to retire with laughter lines – not worry lines.

1.Future Income Generator 2.Swarna Vishranti 3.New Unit Gain Easy Pension Plus RP 4.New Unit Gain Easy Pension Plus SP 16

5.Future Secure 1

TERM PLANS
(A) Bajaj Allianz New Risk Care Term Assurance plan with Regular/Single Premium payment options to secure your life. 1. Life insurance cover at the lowest possible cost. 2. Additional Rider Benefits with regular premium plan. 3. Accidental Death Benefit and Accidental Permanent Total/Partial Disability 4. Benefit. 5. Critical Illness Benefit and Hospital Cash Benefit.

(B) Bajaj Allianz Term Car

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WOMEN INSURANCE

Today’s lady is an inspiration to her family. She takes important decisions in every household and at work. To cater to women's special needs we offer innovative women specific plans which provide investment benefits, savings, retirement solutions and medical insurance. Our special plans help mothers plans for their children’s education save for the future and take care of all medical emergencies in the family. Our Regular investment and savings plan, offer: 1. Investments along with critical illness benefits which provide good returns, long term saving and protection incase of a medical emergency 2. Investment plans with accidental coverage 3. Children's education planning 4. Specialized retirement income plans for homemakers to provide a secure and financial future.

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HEALTH

At Bajaj Allianz Life Insurance we offer unique hospitalization-cum-insurance plan that takes care of your hospitalization bills and also provides crucial financial support to your dependents in case of your unfortunate death. Our health insurance plans offer a sound protection to safe guard your family from any medical emergencies and will make sure that financial problems are least of your worries in trying to get yourself treat. We offer cash less Medic aim facility across 2000 hospitals in over 300 towns and provide best treatment in the finest hospitals with our health insurance products. (a) Bajaj Allianz Family CareFirst Bajaj Allianz Family CareFirst presents an innovative yet practical health care plan for everyone in Your family including children and parents. This unique hospitalization plan gives you health cover for your entire family. So no separate accounts, repetitive paperwork or payment adjustments for each member. Secure Your entire family in one shot.

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(b) Bajaj Allianz Health Care 1. Life Cover 2. Hospital Cash benefit 3. Surgical benefit 4. Post Hospitalization Benefit 5. Critical Illness Cover 6. Accidental Permanent Total / Partial Disability (APT/PD) along with a cash less card facility makes it an excellent product as the benefits under this plan can be taken in addition to any other health insurance plan.

CHILDREN PLAN

As a parent, you always dream the best for your child including marriage, higher education, or that hand holding for a start in life. Whether you are there to see your child grow up and settled or not, your child feels your love in the financial support arranged by you through our wide range of Children's insurance policies taking him from one milestone to another. Saving early and saving regularly for your child helps combat inflation and ensures higher yields. If you take an insurance policy for your child you can take advantage of lower premium rates and ensure that your children remain covered throughout adult hood, at a much lower rate. This also instills a saving-habit in your children at a young age developing them as and when the policy vests in them.

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TRADITIONAL
Saving Plans, which offer bonuses, are excellent long term saving instruments with complete safety. Our products offer additional benefits which include 4 times life cover at little extra costs, limited premium payment terms and compounded reversionary bonuses making it a very good long term investment. (a) Endowment Saving plan, which offer bonuses, are excellent long term plan with complete safety. Our products offer additional benefits which include 4 times life cover at a little extra cost, limited premium payment terms and compounded reversionary bonuses making it a very good long term investment.

1.InvestGain 2.SaveCare Economy SP 3.Life Time Care 4.Super Saver

(b) Money Back Money back plans are Traditional Insurance plans that provide the investor with returns at regular stages of life.

Endowment policy
An endowment policy covers risk for a specified period, at the end of which the sum assured is paid back to the policyholder, along with the bonus accumulated during the term of the policy. An endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Therefore, it is more of an investment than a whole life policy. Endowment life insurance pays the face value of the policy either at the insured's death or at a certain age or after a number of years of premium payment. Endowment policy is an instrument of accumulating capital for a specific purpose and protecting this savings program against the saver's premature death. Group insurance offers life insurance protection under group policies to various groups such as employers-employees, professionals, co-operatives, weaker sections of 21

society, etc. It also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost. Group insurance plans have low premiums. Such plans are particularly beneficial to those for whom other regular policies are a costlier proposition. Group insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. A number of group insurance schemes have been designed for various groups. These include employer-employee groups, associations of professionals (such as doctors, lawyers, chartered accountants etc.), and members of cooperative banks, welfare funds, credit societies and weaker sections of society.

Joint Life Insurance Policy
Joint life insurance policies are similar to endowment policies as they too offer maturity benefits to the policyholders, apart form covering risks like all life insurance policies. But joint life policies are categorized separately as they cover two lives simultaneously, thus offering a unique advantage in some cases, notably, for a married couple or for partners in a business firm. Under a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Vested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date. The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier.

Loan Cover Term Assurance Policy
Loan cover term assurance policy is an insurance policy, which covers a home loan. Such a policy covers the individual's home loan amount in case of an eventuality. The cover on such a policy keeps reducing with the passage of time as individuals keep paying their EMIs (equated monthly installments) regularly, which reduces the loan amount This plan provides a lump sum in case of death of the life assured during the term of the plan. The lump sum will be a decreasing percentage of the initial sum assured as per the policy schedule. Since this is a non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy. Various insurance companies offering loan repayment protection insurance policy are
• • • •

HDFC Standard Life Insurance Tata AIG ING Vysya LIC

Term life insurance policy covers risk only during the selected term period. If the policyholder survives the term, the risk cover comes to an end. Term life policies are 22

primarily designed to meet the needs of those people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy. No surrender, loan or paid-up values are granted under term life policies because reserves are not accumulated. If the premium is not paid within the grace period, the policy lapses without acquiring any paid-up value. Term Life Insurance Policy Term life insurance policy covers risk only during the selected term period. If the policyholder survives the term, the risk cover comes to an end. Term life policies are primarily designed to meet the needs of those people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy. No surrender, loan or paid-up values are granted under term life policies because reserves are not accumulated. If the premium is not paid within the grace period, the policy lapses without acquiring any paid-up value.

BOARD OF DIRECTORS
Head of Bajaj Group of Companies {Member of Parliament (Rajya Sabha)} Chairman Bajaj Auto Limited Akurdi, Pune

Rahul Bajaj

Rahul Bajaj (b. June 10, 1938) is an Honors Graduate in Economics and Law and did his MBA from Harvard Business School. He has been the Chief Executive Officer of Bajaj Auto since 1968, in which year the annual turnover was around Rs.72 million. In 2007-08, the Company's annual turnover was over Rs. 100 billion (US$ 2.45 billion). Bajaj Auto is India's premier Two & Three-wheeler Company. Bajaj Auto is part of the Bajaj Group, which employs over 20,000 people with a turnover of over US $ 3.20 billion. The Group manufactures and markets a range of products and services in India and abroad including 2 and 3wheelers, home appliances, lamps, wind energy, special alloy and stainless steel, castings, cranes, forgings, infrastructure development, material handling equipment, travel, general and life insurance and investment & financial services. Market capitalization of the group at present is over US $ 8 billion.

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For its performance, Bajaj Auto has received various awards including the 1977 Export Award from the Federation of Indian Chambers of Commerce and Industry (FICCI), the 1985 Economic Times & Harvard Business School Association Award for Corporate Performance, CII Award for Quality and Reliability in 1984 & 1988 and for Technology and Innovation in 1985. For 1994-95 Bajaj Auto received the Engineering Export Promotion Council’s award for the highest exports of consumer durables nationally and the highest exports of engineering goods in the Western Region. Bajaj Auto received Dalal Street Journal's Corporate Excellence Award for 1990 & 1995 (Rank I). In recognition of his contribution to the automotive industry, the Government of India appointed Mr. Bajaj as the Chairman of the Development Council for Automobiles and Allied Industries, 1975-77. In 1975, Mr. Bajaj received the “Man of the Year” Award from the National Institution of Quality Assurance. Mr. Bajaj was selected as Business India's Businessman of the Year 1985. In 1988, Mr. Bajaj was felicitated for his achievements in a public function by the Pune Municipal Corporation. Mr. Bajaj was Chairman of Indian Airlines between 1986-89. Mr. Bajaj received the Bombay Management Association Award for The Most Distinguished Services in the Field of Management - 1990. Mr. Bajaj was appointed by the Government of India as the Chairman of Technology Development Advisory Group on 'Technology Trends in Automobiles' - August 1991. Mr. Bajaj was appointed by His Royal Highness, The Prince of Wales as a Member of the Prince of Wales International Business Leaders Forum in February 1992. Mr. Bajaj was appointed by the Government of India as a Member of IndoGerman Consultative Group in August 1992. FIE Foundation awarded Mr. Bajaj the Rashtrabhushan Award in 1996. Lokmanya Tilak Smarak Trust awarded Mr. Bajaj the Tilak Award in 2000. 24

Mr. Bajaj was awarded the 'Padma Bhushan' by the President of India in March 2001. Mr. Bajaj was awarded the Jeevan Sadhana Gaurav Puraskar by the Pune University for 2002 and he was the first person to be inducted by the ICICI Bank and the leading automotive magazine, Overdrive, in the Indian Automotive Hall of Pride – 2003. President of India nominated Mr. Bajaj as the Chairman of the Board of Governors of the Indian Institute of Technology (IIT), Bombay on 12th May, 2003 for a period of 3 years. Mr. Bajaj was conferred four Doctorates (Honors Causa) by different Universities including IIT Roorkee. He was also conferred the Alumni Achievement Award by the Harvard Business School in September 2005. Mr. Bajaj was elected to the Upper House of Parliament (Rajya Sabha) from Maharashtra in June 2006. Mr. Bajaj was awarded the Marathwada Mitra Puraskar by Marathwada Lok Vikas Manch in June 2006. Mr. Bajaj was awarded the JRD Tata Corporate Leadership Award by All India Management Association in February 2007.

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OTHER DIRECTORS :
 Dr. Werner Zedelius  Sanjay Ashe  Heinz Dollberg  Craig Ellis  Sanjiv Bajaj  Suraj Mehta  Ranjit Gupta  S. H. Khan  Dr. P. S. Palande  Bruce Bowers (Alternate Director to Dr. Werner Zedelius)  Manu Tandon Additional Director

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PERFORMANCE APPRAISAL
Introduction:

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. 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. Performance appraisal is also known as employee appraisal. It is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development. 27

People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee’s abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across the world being – “get paid according to what you contribute” – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual’s per Performance appraisal takes into account the past performance of the performance. It helps to align the individual performances with the organizational goals . Employees and focuses on the improvement of the future performance of the employees

Concept:
Performance appraisal is the systematic, periodic and an impartial rating of an employee's excellence in matters pertaining to his present job and his potential for a better job. Merit rating measures what the person is (traits) whereas performance appraisal measures what the person does (performance).The main characteristic of performance appraisal are: 1. Performance appraisal is a process of obtaining, analyzing and recording information about employee. 2. It is systematic examination of an employee’s strengths and weaknesses in 28

terms of job 3. 4. 5. It is a scientific or objective study. It is a continuous process. It is for making correct decisions on employees.

Objectives:
Appraisal of employees serves several useful purposes: 1. 2. 3. Compensation decisions: It can serve as a basis for a pay raises. Promotion decisions: It can serve as a useful basis for job change or promotion. Training and development programme: It can serve as a guide for formulating a suitable training and development programme.

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4.

Feed back: Performance appraisal enables the employees to know how well he is doing on the job.

5.

Personal development: Performance appraisal can help reveal the causes of good and poor employee performance

PROCESS OF PERFORMANCE APPRAISAL

ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as 30

successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

COMPARING THE PERFORMANCE

ACTUAL

WITH

THE

DESIRED

The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.

DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on oneto-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the 31

meeting should be to solve the problems faced and motivate the employees to perform better.

DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

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PERFORMANCE APPRAISAL PROCESS

ESTABLISH PERFORMANCE STANDARDS

COMMUNIVATE THE STANDARDS

MEASURE ACTUAL PERFORMANCE

COMPARE ACTUAL PERFORMANCE WITH STANDARDS

TALKING CORRECTIVE ACTION

DISCUSS THE APPRAISAL

FINAL OUTCOMES

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BENEFITS OF PERFORMANCE APPRAISAL
If appraisal is to be effective, staff must see the process attempting to meet their needs; otherwise the system will not work. This means heads of department do not need to form an overview of the issues raised by their staff and if appropriate feed these into the planning process.

Appraisal should result in following benefits : Benefits for the individual:
• • • • • • • Gaining a better understanding of their role. Understanding more clearly how and where they fit in within the wider picture. A better understanding of how performance is assessed and monitored. Getting an insight into how their performance is perceived. Improving understanding of their strengths and weaknesses and developmental needs. Identifying ways in which they can improve performance. Providing an opportunity to discuss and clarify developmental and training needs. 34

Benefits to the line manager /supervisor/ team leader:
• • • • • • • • Opportunities to hear and exchange views and opinions away from the normal pressure of work. An opportunity to identify any potential difficulties and weaknesses. An improved understanding of the resources available. An opportunity to plan for and set objectives for the next period. An opportunity to think about and clarify their own role. An opportunity to plan for achieving improved performance. An opportunity to plan for further delegation and coaching. An opportunity to motivate members of the team.

• •

Understanding and agreeing their objectives for the next year. An opportunity to discuss career direction and prospects.

Benefits to the organization:
• • • • • • • • A structured means of identifying and assessing potential. Up-to-date information regarding the expectations and aspirations of employees. Information on which to base decisions about promotions and motivation. An opportunity to review succession planning Information about training needs which can act as a basis for developing training plans Updating of employee records (achievements, new competencies etc.) Career counseling Communication of information.

FUNDAMENTALS OF AN APPRAISAL SYSTEM.
In order to be effective, an appraisal system needs to be perceived by workers as: • Relevant and applicable to everyday work. • Acceptable and fair • A mutual collaboration between management and workers. A performance appraisal system that meets these criteria is likely to have the greatest impact on worker’s satisfaction with the appraisal process and their motivation to improve performance.

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THE APPRAISAL PROCESS IS A MUTUAL ACTIVITY OF PROBLEM SOLVING .IT’S NOT ABOUT BLAMING, IT’S ABOUT LOOKING FORWARD NOT BACKWARD.

APPROACHES TO PERFORMANCE APPRAISAL
Performance appraisal - Traditional approach
Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees. 36

This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development needs or career developmental possibilities. The primary concern of the traditional approach is to judge the performance of the organization as a whole by the past performances of its employees

Performance appraisal - Modern approach
The modern approach to performance development has made the performance appraisal process more formal and structured. Now, the performance appraisal is taken as a tool to identify better performing employees from others, employees’ training needs, career development paths, rewards and bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern approach to performance appraisals includes a feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization. The modern approach to Performance appraisal is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development

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METHODS OF PERFORMANCE APPRAISAL

Performance Appraisal

Traditional Methods 1. 2. 3. 4. 5. 6. 7. 8. 9. Confidential Report Free form or essay Straight Ranking Paired Comparisons Forced Distributions Graphic Rating Scales Checklist method Critical incidents Group Appraisal 1. 2. 3. 4.

Modern Methods Assessment Centre Human Resource Accounting Behaviorally Anchored rating Scales Appraisal through MBO

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10.

Field Review

MODERN METHODS OF PERFORMANCE APPRAISAL ASSESSMENT CENTRE
An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees

BEHAVIORALLY ANCHORED RATING SCALES
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for e.g. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employee’s actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge.

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HUMAN

RESOURCE

ACCOUNTING

METHOD

Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.

360 DEGREE PERFORMANCE APPRAISALS
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. 360 degree appraisal has four integral components: 1. Self appraisal 2. Superior appraisal 3. Subordinate’s appraisal 4. Peer appraisal.

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360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others’ perceptions about the employees.

MANAGEMENT BY OBJECTIVES
The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

LATEST TRENDS IN PERFORMANCE APPRAISAL
The performance appraisal process has become the heart of the human resource management system in the organizations. Performance appraisal defines and measures the performance of the employees and the organization as a whole. It is a tool for accessing the performance of the organization. The important issues and points concerning performance appraisal in the present world are: 1. The focus of the performance appraisals is turning towards career development relying on the dialogues and discussions with the superiors. 2. Performance measuring, rating and review systems have become more detailed, structured and person specific than before 3. Performance related pay is being incorporated in the strategies used by the organizations. 4. Trend towards a 360-degree feedback system

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5. The problems in the implementation of the performance appraisal processes are being anticipated and efforts are being made to overcome them. 6. In India, the performance appraisal processes are faced with a lot of obstacles, the most prominent being the lack of quantifiable indicators of the performance.

GLOBAL TRENDS
The emergence of following concepts and the following trends related to Performance appraisal can be seen in the global scenario:

360 Degree Appraisal

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. Organizations are increasingly using feedback from various sources such as peer input, customer feedback, and input from superiors. Different forms with different formats are being used to obtain the information regarding the employee performance.

Team Performance Appraisal
According to a wall street journal headline, “Teams have become commonplace in U.S. Companies”. Most of the performance appraisal techniques are formulated with 42

individuals in mind i.e. to measure and rate the performance of the individual employee. Therefore, with the number of teams increasing in the organizations, it becomes difficult to measure and appraise the performance of the team. The question is how to separate the performance of the team from the performance of the employees. A solution to this problem that is being adopted by the companies is to measure both the individual and the team performance. Sometimes, team based objectives are also included in the individual performance plans.

Rank and Yank Strategy
Also known as the “Up or out policy”, the rank and yank strategy refers to the performance appraisal model in which best-to-worst ranking methods are used to identify and separate the poor performers from the good performers. Then the action plans and the improvement opportunities of the poor performers are discussed and they are given to improve their performance in a given time period, after which the appropriate HR decisions are taken. Some of the organizations following this strategy are Ford, Microsoft and Sun Microsystems

Problems with Performance Appraisal:
There are some problems inherent in performance appraisal .Now we are going to discuss these problems one by one they are:

1. Judgment errors:
Biases and judgment errors of various kinds may spoil the whole system bias here refers to inaccurate distortion of measurement like:

a) b)

First impression: it is not always correct. Halo: The halo errors occurs when one aspect of the subordinates performance
effect the raters evaluation of other performance dimensions.

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c)

Horn effect: The rater’s bias is in other direction, where one negative quality of
the employee is being rated harshly.

d)

Leniency: Depending on raters own mental makeup at the time of appraisal
rater may be rated very strictly or very leniently.

e)

Central tendency: In this appraiser rate all employees as average
performers example, a professor, with a view to play it safe, might give a class grade nearly equal, regardless of the differences in individual performance.

f)

Stereotyping: In this a mental picture that an individual holds about a person
because of that person's sex, age, religion, caste, etc.

g)

Regency effect: In this case the rater gives greater weight age to recent
occurrences than earlier performance, which is not correct.

2. Poor appraisal forms:
Appraisal may influence by the following factors relating to the forms that are used by the raters: a) b) c) d) The rating scale may be quite vague and unclear. The rating form may ignore important aspects of job performance. The rating form may contain additional, relevant performance dimensions. The forms may be too long and complex.

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3. Lack of ratter preparedness:
The rater may not be adequately trained to carry out performance management activities .The rates may not have sufficient time to carry out appraisals systematically and conduct feed back sessions.

4. Ineffective organizational policies and practices:
Sometimes, low ratings given by raters are viewed negatively by management as a sign of failure on the part of rater as an indication of employee discontent.

PERFORMANCE APPRAISAL IN BAJAJ ALLIANZ LIFE INSURANCE
In the Bajaj Allianz life insurance the performance appraisal is called performance improvement process (PIP).

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THE PIP SHARED BY MBO IN BAJAJ ALLIANZ MBOManagement by objective has been defined as “a process where by the superior & subordinate managers of an organization jointly identify its common goals setting for each individuals & gives largely & use the measures as guides for operating the unit & assessing the contribution of each & its members.

GOAL SETTINGThe goals are defined in clear, precise & measurable terms. They should be challenging yet attainable. A through analysis of internal environment(strengths & improvement area) and (opportunities & threats)of the organization is made to made to set these goal. The goal is set for financial, customers, people, process etc.

PERFROMANCE TARGETOn the basis of organization goal, performance for each employee may be decided on the of organizational charts & job description. Every subordinate writes down his own performance goal which are work related & career oriented. His manager also writes down the goal he thinks the subordinate should stire for. The employee of all levels are involved in goal setting. Action plan required to achieve the goals are also decided through consultant among an employee & his superior. Joint goal setting & joint goal setting & joint action planning are essential elements of appraisal through MBO

PERFROMANCE REVIEWFrequent performance review meeting between the mangers & the subordinate are held Initially, monthly reviews may be used & then extended to quarterly reviews. In the reviews meeting, progress is assessed, improvement area & constraints are identified & steps to be taken to improve performance are decided. Subordinate actively participate in the process. The leads to self control by the employee.

GUIDELINES FORCONDUCTING YEARLY APPRAISAL REVIEW
performance.

SIX

MONTHLY

&

1. Objective of review is to help improve individual performance & thereby business

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2. Two hour workshops to be inducted each year one month before above reviews

(5th & 11th month of appraisal year). 3. HRD group to devote one month (each for half yearly &yearly focused to complete all reviews.
4. HRD facilitator to be present during review &fill up check list to help improve

review) fully

process in future. Initially recommended to slant for 1st 3rd 1-4th &l-v level. 5. HRD facilitator to be senior in level than appraise.

RESEARCH OBJECTIVE

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Research Objectives

•

To study the Performance Appraisal method in Bajaj Allianz. To study the process involved in Performance Appraisal. To know the Global Trends in Performance Appraisal. To find the frequency of Performance Appraisal in Bajaj Allianz. To know the problems associated with the Performance Appraisal.

•

•

•

•

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RESEARCH METHODLOGY

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RESEARCH METHODOLOGY

RESEARCH PROBLEM: - A Project Report on Performance Appraisal of employees at Bajaj Allianz.

DATA COLLECTION METHOD: All the data used here in Project is Secondary data.

RESEARCH DESIGN: Descriptive research and qualitative type of survey are conducted . The descriptive research is description of the state of affairs as it exists at present such a result we were required in analytical form.

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BENEFITS OF PROJECT

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BENEFIT OF PROJECT

1. To know increase motivation and job satisfaction among the employees. 2. To know clear understanding of what is expected and what needs to be done to meet expected. 3. To know improved working relationships with the superior. 4. To know opportunity to develop on overview of individual jobs. 5. To know opportunity to identify strength and weakness of appraises. 6. To know managers are better equipped to use their leadership skill and to develop their staff.

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FINDINGS

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Findings

 Every organization, irrespective of its size, has an appraisal system for its employees. This implies the performance appraisal has become an indispensable activity in Bajaj Allianz Life Insurance  The company has separate appraisal system for each level of employees. These appraisal systems differ on the factors on which a person is rated and the nature of duties handled by him.

 Even when a same appraisal system exists in different segment, the probability of its success is not the same. This can be attributed to the following factors: implementation problems, behavior of employees, and commitment from top management.
 In the company it is seen that the employees are not satisfied with the

way they are appraised or they haven’t been appraised properly. For this matter, the company has interview and discussion.
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 The frequency of appraisal in organization is yearly, where appraisal is based on Key Result Areas; a mid-term review is also undertaken. This data is then compiled and the final appraisal is conducted at the end of the year.  In most of the cases the immediate supervisors is the appraiser but some times it is also the HR department or the HOD.

 The organization have goal setting as part of appraisal. The performance is evaluated against these targets.  On an average 85% of the employees in an organization are motivated by performance appraisal.

 The company use the data that is maintained for every employee to compare the performance over a period of time. Some times company makes use of this data for retrenchment as proof of poor performance.  A good deal of respondents felt that appraisal is likely to be more successful when it is linked with financial and semi-financial incentives like promotion, bonus, and increments. This increases the commitment from the parties concerned the appraisal and the appraisee.
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 360o degree feedback system is not very popular in the Bajaj Allianz Life

Insurance This system can be adopted and is successful only in the presence of an open organizational climate.
 The company is satisfied with the current performance appraisal system

and do not require any changes. However some would like to provide more training to appraisers, weight age to few traits of employee need to be rewarded, if possible appraisal form should be standardized.

 Performance appraisal is surly a good indicator (about 80%) for the training and developmental need of the employees.  No monitoring is done to find out any loopholes in the performance appraisal system and if it exists, it is on informal basis (feedback every year).

 Awareness sessions about the performance appraisal (objectives and importance) are conducted some times in the organization. It is normally done for new employees.

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CONCLUSIONS AND SUGGESTIONS
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Conclusions and Suggestions
 Performance appraisal should not be perceived just as a regular

activity but its importance should be recognized and communicated down the line to all the employees.  There should be a review of job analysis, job design and work

environment based on the performance appraisal.



It should bring more clarity to the goal and vision of the

organization.  It should provide more empowerment to the employees.

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

New methods of appraisal should be adopted so that both

appraiser and the appraise take interest in the appraisal process.  better. The employees who have excellent performance should be used

as a mentor for other employees who would motivate others to perform

 

Employees should be given feedback regarding their appraisal. Financial and non-financial incentives should be linked to the

This will help them to improve on their weak areas. annual appraisal system so that employees would be motivated to perform better.  do this. New mechanisms should be evolved to educe the time factor

involved in the procedure of appraisal. Introducing online-appraisal can



The frequency of training program for the appraiser should be

increased and these sessions should be made interactive.


The awareness sessions for the employees/appraises should be

made more interactive and the views and opinion of the appraises regarding appraisal should be given due consideration.

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

Assistance should be sought from specialists for framing a

proper appraisal system that suits the organization climate. Constant monitoring of the appraisal system should be done through discussions, suggestions, interactions.


Combining the different methods of appraisal can minimize the

element of biasness in an appraisal. Like the Rating method combined with assessment center method would give an evidence of poor/unfavorable or outstanding behavior of the appraise, if any.



Use of modern appraisal techniques like 360o appraisal,

assessment centers which are more effective.  system. More transparency should be brought about in the appraisal



The appraisal system should cover all employees in the

organization both white collar and blue-collar jobs.


Recognizing the good performers i.e., appraises who have

accomplished the targets for the year can help in getting more commitment from the employees.

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

Information regarding the performance of the employees should

be kept in proper manner.


Some of the performance appraisals should be conducted by the

top management so that they can understand the employees and their needs, behavior better and to find out the loopholes.



Performance appraisal should be effectively link to the

performance management system of the organization.

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BIBLIOGRAPHY

Bibliography
1. Aswathappa K, Human Resource & Personnel Management, Tata McGrawHill Publishing Co. Ltd., New Delhi, Sixth edition 2001, 2. Kothari C.R., Research methodology methods & techniques, 3. Prakasan publishing Co. Ltd., New Delhi, Sixth edition 2001. 4. Human Resources Management by P. Subarea.

Search engines
1. www.google .com 2. www.bajaallainz.com 62

3. www.wikipedia .com

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