Performance Appraisal

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This is to certify that the project entitled “PERFOMANCE APPRASIAL AT BSNL” has been
carried out by CHANDA RANA under my guidance in partial fulfillment of the degree of”
UNIVERSITY, SHIMLA during the academic year 2010-2011(Semester-VI) at SCHOOL OF


Guide Head, School Of Business Studies

PRINCIPAL, Government College Dharamshala


I CHANDA RANA , Roll No : 4809 a student of BBA VI semester of post graduate government
collage dharamshala hereby declare that the report titled “RECRUITMENT AND SELECTION
PROCESS AT BSNL” is my original work and the same has not been submitted for the award of
any other diploma or degree.



I express my sincere thanks to my project guide. MISS –NAMRITA KALIA, SCHOOL OF
BUSINESS STUDIES for guiding me right from the inception till the successful completion of the
project. I sincerely acknowledge her for extending their valuable guidance, support for literature,
critical reviews of project and the report and above all the moral support she had provided to me
with all stages of this project.
I would also like to thank the supporting staff of SCHOOL OF BUSINESS STUDIES
Department, for their help and cooperation throughout our project.

(Signature of Student)
Name of the Students-CHANDA RANA
ROLL NO- 4809

Performance appraisal
A performance appraisal (PA), also referred to as a performance review, performance
evaluation, (career) development discussion or employee appraisal is a method by which the job
performance of an employee is documented and evaluated. Performance appraisals are a part
of career development and consist of regular reviews of employee performance within organizations.

Main features
A performance appraisal is a systematic and periodic process that assesses an individual employee’s
job performance and productivity in relation to certain pre-established criteria and organizational
objectives. Other aspects of individual employees are considered as well, such as organizational
citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses,
To collect PA data, there are three main methods: objective production, personnel, and judgmental
evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation
methods. Historically, PA has been conducted annually (long-cycle appraisals); however, many
companies are moving towards shorter cycles (every six months, every quarter), and some have been
moving into short-cycle (weekly, bi-weekly) PA . The interview could function as “providing feedback to
employees, counseling and developing employees, and conveying and discussing compensation, job
status, or disciplinary decisions”. PA is often included in performance management systems. PA helps
the subordinate answer two key questions: first, "What are your expectations of me?" second, "How
am I doing to meet your expectations?"
Performance management systems are employed “to manage and align" all of an organization's
resources in order to achieve highest possible performance. “How performance is managed in an
organization determines to a large extent the success or failure of the organization. Therefore,
improving PA for everyone should be among the highest priorities of contemporary” organizations.

Some applications of PA are compensation, performance improvement, promotions, termination, test
validation, and more. While there are many potential benefits of PA, there are also some potential
drawbacks. For example, PA can help facilitate management-employee communication; however, PA
may result in legal issues if not executed appropriately, as many employees tend to be unsatisfied with
the PA process. PAs created in and determined as useful in the United States are not necessarily able
to be transferable cross-culturally.
A study was conducted in India title "PERFORMANCE APPRAISAL:A CASE STUDY OF CPP
LALKUAN", shows that more than half of the sample of staff persons are benefited and improving their
knowledge and skills through performance appraisal techniques . The 2014 Performance Management
survey[2] found 42% of employees use the PA as an opportunity to improve performance.

Potential benefits
There are a number of potential benefits of organizational performance management conducting
formal performance appraisals (PAs). There has been a general consensus in the belief that PAs lead
to positive implications of organizations. Furthermore, PAs can benefit an organization’s
effectiveness. One way is PAs can often lead to giving individual workers feedback about their job
performance. From this may spawn several potential benefits such as the individual workers becoming
more productive.
Other potential benefits include:
 Facilitation of communication: communication in organizations is considered an essential function
of worker motivation. It has been proposed that feedback from PAs aid in minimizing
employees’ perceptions of uncertainty. Fundamentally, feedback and management-employee
communication can serve as a guide in job performance.
 Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues may
distract employees from their work, and trust issues may be among these distracting factors. Such
factors that consume psychological energy can lower job performance and cause workers to lose
sight of organizational goals. Properly constructed and utilized PAs have the ability to lower
distracting factors and encourage trust within the organization.
 Goal setting and desired performance reinforcement: organizations find it efficient to match
individual worker’s goals and performance with organizational goals. PAs provide room for
discussion in the collaboration of these individual and organizational goals. Collaboration can also
be advantageous by resulting in employee acceptance and satisfaction of appraisal results.
 Performance improvement: well constructed PAs can be valuable tools for communication with
employees as pertaining to how their job performance stands with organizational expectations. “At
the organizational level, numerous studies have reported positive relationships between human
resource management (HRM) practices" and performance improvement at both the individual and
organizational levels.
 Determination of training needs: “Employee training and development are crucial components in
helping an organization achieve strategic initiatives”. It has been argued that for PAs to truly be
effective, post-appraisal opportunities for training and development in problem areas, as
determined by the appraisal, must be offered. PAs can especially be instrumental for identifying
training needs of new employees. Finally, PAs can help in the establishment and supervision of
employees’ career goals.

Potential complications
Despite all the potential advantages of formal performance appraisals (PAs), there are also potential
drawbacks. It has been noted that determining the relationship between individual job performance
and organizational performance can be a difficult task. Generally, there are two overarching problems
from which several complications spawn. One of the problems with formal PAs is there can be
detrimental effects to the organization(s) involved if the appraisals are not used appropriately. The
second problem with formal PAs is they can be ineffective if the PA system does not correspond with
the organizational culture and system.
Complications stemming from these issues are:
 Detrimental to quality improvement: it has been proposed that the use of PA systems in
organizations adversely affect organizations’ pursuits of quality performance. It is believed by
some scholars and practitioners that the use of PAs is more than unnecessary if there is total
quality management.
 Subjective evaluations: Traditional performance appraisals are often based upon a manager's or
supervisor's perceptions of an employee's performance and employees are evaluated subjectively
rather than objectively. Therefore the review may be influenced by many non-performance factors
such as employee 'likeability', personal prejudices, ease of management, and/or previous
mistakes or successes. Reviews should instead be based on data-supported, measurable
behaviors and results within the performers control.
 Negative perceptions: “Quite often, individuals have negative perceptions of PAs”. Receiving
and/or the anticipation of receiving a PA can be uncomfortable and distressful

and potentially
cause “tension between supervisors and subordinates”. If the person being appraised does not
trust their employer, appraiser or believe that they will benefit from the process it may become a
"tick box" exercise.
 Errors: Performance appraisals should provide accurate and relevant ratings of an employee’s
performance as compared to pre-established criteria/goals (i.e. organizational
expectations). Nevertheless, supervisors will sometimes rate employees more favorably than that
of their true performance in order to please the employees and avoid conflict. “Inflated ratings are
a common malady associated with formal" PA.
 Legal issues: when PAs are not carried out appropriately, legal issues could result that place the
organization at risk. PAs are used in organizational disciplinary programs

as well as for
promotional decisions within the organization. The improper application and utilization of PAs can
affect employees negatively and lead to legal action against the organization.

 Performance goals: performance goals and PA systems are often used in association. Negative
outcomes concerning the organizations can result when goals are overly challenging or
overemphasized to the extent of affecting ethics, legal requirements, or quality. Moreover,
challenging performance goals can impede an employees’ abilities to acquire necessary
knowledge and skills. Especially in the early stages of training, it would be more beneficial to
instruct employees on outcome goals than on performance goals.
 Derail merit pay or performance-based pay: some researchers contend that the deficit in merit pay
and performance-based pay is linked to the fundamental issues stemming from PA systems.
Although performance appraisals can be so easily biased, there are certain steps that can be taken to
improve the evaluations and reduce the margin of errors through the following:
 Training - Creating an awareness and acceptance in the people conducting the appraisals
that within a group of workers, they will find a wide range in difference of skills and
 Providing Feedback to Raters - Trained raters provide managers who evaluated their
subordinates with feedback, including information on ratings from other managers. This
reduces leniency errors.
 Subordinate Participation - By allowing employee participation in the evaluation process,
there is employee-supervisor reciprocity in the discussion for any discrepancies between
self ratings and supervisor ratings, thus, increasing job satisfaction and motivation.
Not everyone is in favor of formal performance appraisal systems. Many employees,
especially those most affected by such ratings are not very enthusiastic about them.
There are many critics of these appraisals including labor unions and managers.
Labor Unions
Labor unions represent 11% (7% in the private sector) of the work force in the United
States. In some cases they may require that seniority be taken as one of the main criteria
for promotion. However, length of job experience may not always be a reliable indication
of the ability to perform a higher level job. That is why some employers give senior people
the first opportunity for promotion, but the employer may seek to further qualify the
employee for that promotion because of their abilities (not solely because of length of
service). Performance appraisals may provide a basis for assessment of employee merit
as a component of these decisions.

Managers who have had unsatisfactory experiences with inadequate or poorly designed
appraisal programs may be skeptical about their usefulness.
 Some managers may not like to play the role of a judge and be responsible for the
future of their subordinates.
 They may be uncomfortable about providing negative feedback to the employees.
 This tendency can lead them to inflate their assessments of the workers’ job
performance, giving higher ratings than deserved.
Who conducts them
Human resource management (HRM) conducts performance management. Performance
management systems consist of the activities and/or processes embraced by an
organization in anticipation of improving employee performance, and therefore,
organizational performance. Consequently, performance management is conducted at the
organizational level and the individual level. At the organizational level, performance
management oversees organizational performance and compares present performance
with organizational performance goals. The achievement of these organizational
performance goals depends on the performance of the individual organizational
members.Therefore, measuring individual employee performance can prove to be a
valuable performance management process for the purposes of HRM and for the
organization. Many researchers would argue that “performance appraisal is one of the
most important processes in Human Resource Management”.
The performance management process begins with leadership within the organization
creating a performance management policy. Primarily, management governs performance
by influencing employee performance input (e.g. training programs) and by providing
feedback via output (i.e. performance assessment and appraisal). “The ultimate objective
of a performance management process is to align individual performance with
organizational performance”. A very common and central process of performance
management systems is performance appraisal (PA). The PA process should be able to
inform employees about the “organization's goals, priorities, and expectations and how
well they are contributing to them”.
When are they conducted
Performance appraisals (PAs) are conducted at least annually and annual employee
performance reviews appear to be the standard in most American organizations.
However, “it has been acknowledged that appraisals conducted more frequently (more

than once a year) may have positive implications for both the organization and
employee.” It is suggested that regular performance feedback provided to employees may
quell any unexpected and/or surprising feedback to year-end discussions.
In a recent
research study concerning the timeliness of PAs, “one of the respondents even suggested
that the performance review should be done formally and more frequently, perhaps once a
month, and recorded twice a year.”
Other researchers propose that the purpose of PAs and the frequency of their feedback
are contingent upon the nature of the job and characteristics of the employee. For
example, employees of routine jobs where performance maintenance is the goal would
benefit sufficiently from annual PA feedback. On the other hand, employees of more
discretionary and non-routine jobs, where goal-setting is appropriate and there is room for
development, would benefit from more frequent PA feedback. Non formal performance
appraisals may be done more often, to prevent the element of surprise from the formal
Methods of collecting data
There are three main methods used to collect performance appraisal (PA) data: objective
production, personnel, and judgmental evaluation. Judgmental evaluations are the most
commonly used with a large variety of evaluation methods.
Objective production
The objective production method consists of direct, but limited, measures such as sales
figures, production numbers, the electronic performance monitoring of data entry workers,
etc. The measures used to appraise performance would depend on the job and its duties.
Although these measures deal with unambiguous criteria, they are usually incomplete
because of criterion contamination and criterion deficiency. Criterion contamination refers
to the part of the actual criteria that is unrelated to the conceptual criteria. In other words,
the variability in performance can be due to factors outside of the employee’s control.
Criterion deficiency refers to the part of the conceptual criteria that is not measured by the
actual criteria.In other words, the quantity of production does not necessarily indicate the
quality of the products. Both types of criterion inadequacies result in reduced validity of
the measure. Regardless of the fact that objective production data is not a complete
reflection upon job performance, such data is relevant to job performance.
Happy-productive worker hypothesis
The happy-productive worker hypothesis states that the happiest workers are the most
productive performers, and the most productive performers are the happiest workers. Yet,
after decades of research, the relationship between job satisfaction and job performance

produces only a weak positive correlation. Published in 2001 by Psychological Bulletin, a
meta-analysis of 312 research studies produced an uncorrected correlation of 0.18. This
correlation is much weaker than what the happy-productive worker hypothesis would
The personnel method is the recording of withdrawal behaviors (i.e. absenteeism,
accidents). Most organizations consider unexcused absences to be indicators of poor job
performance, even with all other factors being equal; however, this is subject to criterion
deficiency. The quantity of an employee’s absences does not reflect how dedicated
he/she may be to the job and its duties. Especially for blue-collar jobs, accidents can often
be a useful indicator of poor job performance, but this is also subject to criterion
contamination because situational factors also contribute to accidents. Once again, both
types of criterion inadequacies result in reduced validity of the measure. Although
excessive absenteeism and/or accidents often indicate poor job performance rather than
good performance, such personnel data is not a comprehensive reflection of an
employee’s performance.
Judgmental evaluation
Judgmental evaluation appears to be a collection of methods, and as such, could be
considered a methodology. A common approach to obtaining PAs is by means of
Because the raters are human, some error will always be present in the data. The
most common types of error are leniency errors, central tendency errors, and errors
resulting from the halo effect. Halo effect is characterized by the tendency to rate a person
who is exceptionally strong in one area higher than deserved in other areas. It is the
opposite of the Horns effect, where a person is rated as lower than deserved in other
areas due to an extreme deficiency in a single discipline. These errors arise
predominantly from social cognition and the theory in that how we judge and evaluate
other individuals in various contexts is associated with how we “acquire, process, and
categorize information”.
An essential piece of this method is rater training. Rater training is the “process of
educating raters to make more accurate assessments of performance, typically achieved
by reducing the frequency of halo, leniency, and central-tendency errors”.
Rater training
also helps the raters “develop a common frame of reference for evaluation” of individual
Many researchers and survey respondents support the ambition of
effectual rater training.
However, it is noted that such training is expensive, time
consuming, and only truly functional for behavioral assessments.

Another piece to keep in mind is the effects of rater motivation on judgmental evaluations.
It is not uncommon for rating inflation to occur due to rater motivation (i.e.
“organizationally induced pressures that compel raters to evaluate rates
Typically, raters are motivated to give higher ratings because of the lack of
organizational sanction concerning accurate/inaccurate appraisals, the rater's desire to
guarantee promotions, salary increases, etc., the rater's inclination to avoid negative
reactions from subordinates, and the observation that higher ratings of the rates reflect
favorably upon the rater.
The main methods used in judgmental performance appraisal are:
 Graphic Rating Scale: graphic rating scales (see scale (social sciences)) are the most
commonly used system in PA. On several different factors, subordinates are judged
on 'how much' of that factor or trait they possess. Typically, the raters use a 5- or 7-
point scale; however, there are as many as 20-point scales.
 Employee-Comparison Methods: rather than subordinates being judged against pre-
established criteria, they are compared with one another. This method eliminates
central tendency and leniency errors but still allows for halo effect errors to occur. The
rank-order method has raters ranking subordinates from “best” to “worst”, but how
truly good or bad one is on a performance dimension would be unknown. The paired-
comparison method requires the rater to select the two "best" subordinates out of a
group on each dimension then rank individuals according to the number of times each
subordinate was selected as one of the "best". The forced-distribution method is good
for large groups of rates. The raters evaluate each subordinate on one or more
dimensions and then place (or”force-fit”, if you will) each subordinate in a 5 to 7
category normal distribution. The method of top-grading can be applied to the forced
distribution method. This method identifies the 10% lowest performing subordinates,
as according to the forced distribution, and dismisses them leaving the 90% higher
performing subordinates.
 Behavioral Checklists and Scales: behaviors are more definite than traits. The critical
incidents method (or critical incident technique) concerns “specific behaviors
indicative of good or bad job performance”.
Supervisors record behaviors of what
they judge to be job performance relevant, and they keep a running tally of good and
bad behaviors. A discussion on performance may then follow. The behaviorally
anchored rating scales (BARS) combine the critical incidents method with rating scale
methods by rating performance on a scale but with the scale points being anchored
by behavioral incidents.
Note that BARS are job specific. In the behavioral

observation scale(BOS)approach to performance appraisal, employees are also
evaluated in the terms of critical incidents. In that respect, it is similar to BARS.
However, the BOS appraisal rate subordinates on the frequency of the critical
incidents as they are observed to occur over a given period. The ratings are assigned
on a five-point scale. The behavioral incidents for the rating scale are developed in
the same way as for BARS through identification by supervisors or other subject
matter experts. Similarly, BOS techniques meet equal employment opportunity
because they are related to actual behavior required for successful job performance.
Peer and self assessments[edit]
While assessment can be performed along reporting relationships (usually top-down), net
assessment can include peer and self-assessment. Peer assessment is when
assessment is performed by colleagues along both horizontal (similar function) and
vertical (different function) relationship. Self-assessments are when individuals evaluate
There are three common methods of peer assessments. Peer
nomination involves each group member nominating who he/she believes to be the “best”
on a certain dimension of performance. Peer ratings has each group member rate each
other on a set of performance dimensions. Peer ranking requires each group member
rank all fellow members from “best” to “worst” on one or more dimensions of performance.
 Self-assessments: for self-assessments, individuals assess and evaluate their own
behavior and job performance.

 Peer assessments: members of a group evaluate and appraise the performance of
their fellow group members.
There It is common for a graphic rating scale to be used
for self-assessments. Positive leniency tends to be a problem with self-assessments.

 360-degree feedback: 360-degree feedback is multiple evaluations of employees
which often include assessments from superior(s), peers, and one’s self.

 Negotiated Performance Appraisal: The Negotiated Performance Appraisal (NPA)
is an emerging approach for improving communication between supervisors and
subordinates and for increasing employee productivity, and may also be adapted to
an alternate mediation model for supervisor-subordinate conflicts. A facilitator meets
separately with the supervisor and with the subordinate to prepare three lists. What
employees do well, where the employee has improved in recently, and areas where
the employee still needs to improve. Because the subordinate will present his or her
lists first during the joint session, this reduces defensive behaviors. Furthermore, the
subordinate comes to the joint session not only prepared to share areas of needed

improvement, but also brings concrete ideas as to how these improvements can be
made. The NPA also focuses very strongly on what employees are doing well, and
involves a minimum of twenty minutes of praise when discussing what the employee
does well. The role of the facilitator is that of a coach in the pre-caucuses, and in the
joint sessions the supervisor and subordinate mostly speak to each other with little
facilitator interference.

In general, optimal PA process involves a combination of multiple assessment modalities.
One common recommendation is that assessment flows from self-assessment, to peer-
assessment, to management assessment - in that order. Starting with self-assessment
facilitates avoidance of conflict. Peer feedback ensures peer accountability, which may
yield better results than accountability to management. Management assessment comes
last for need of recognition by authority and avoidance of conflict in case of
disagreements. It is generally recommended that PA is done in shorter cycles to avoid
high-stakes discussions, as is usually the case in long-cycle appraisals.
[citation needed]

Normalization of Performance Appraisal Score[edit]
Normalization is the process of review of the ratings each group as a whole to ensure the
ratings are as per the recommended norms and the percentages are generally decided by
Organizational citizenship behavior[edit]
Main article: Organizational citizenship behavior
Also referred to as contextual behavior, prosocial behavior, and extra-role behavior,
organizational citizenship behavior (OCB) consists of employee behavior that contributes
to the welfare of the organization but is beyond the scope of the employee’s job
These extra-role behaviors may help or hinder the attainment of
organizational goals. Research supports five dimensions of
OCB: altruism, conscientiousness, courtesy, sportsmanship, and civic
Researchers have found that the OCB dimensions of altruism and civic virtue can
have just as much of an impact on manager’s subjective evaluations of employees’
performances as employees’ objective productivity levels.
The degree to which OCB
can influence judgments of job performance is relatively high. Controversy exists as to
whether OCB should be formally considered as a part of performance appraisal (PA).
The performance appraisal (PA) interview is typically the final step of the appraisal
The interview is held between the subordinate and supervisor. The PA interview

can be considered of great significance to an organization’s PA system.
It is most
advantageous when both the superior and subordinate participate in the interview
discussion and establish goals together.
Three factors consistently contribute to effective
PA interviews: the supervisor’s knowledge of the subordinate’s job and performance in it,
the supervisor’s support of the subordinate, and a welcoming of the subordinate’s

Employee reactions[edit]
Numerous researchers have reported that many employees are not satisfied with their
performance appraisal (PA) systems.
Studies have shown that subjectivity as well as
appraiser bias is often a problem perceived by as many as half of employees.
bias, however, appears to be perceived as more of a problem in government and public
sector organizations.
Also, according to some studies, employees wished to see
changes in the PA system by making “the system more objective, improving the feedback
process, and increasing the frequency of review.”
In light of traditional PA operation
defects, “organizations are now increasingly incorporating practices that may improve the
system. These changes are particularly concerned with areas such as elimination of
subjectivity and bias, training of appraisers, improvement of the feedback process and the
performance review discussion.”

According to a meta-analysis of 27 field studies, general employee participation in his/her
own appraisal process was positively correlated with employee reactions to the PA
More specifically, employee participation in the appraisal process was most
strongly related to employee satisfaction with the PA system.
Concerning the reliability
of employee reaction measures, researchers have found employee reaction scales to be
sound with few concerns through using a confirmatory factor analysis that is
representative of employee reaction scales.

Researchers suggest that the study of employees’ reactions to PA is important because of
two main reasons: employee reactions symbolizes a criterion of interest to practitioners of
PAs and employee reactions have been associated through theory to determinants of
appraisal acceptance and success.
Researchers translate these reasons into the
context of the scientist-practitioner gap or the “lack of alignment between research and

[1] Schultz & Schultz notes that opposition to performance appraisals generally don't
receive positive ratings from anyone involved. "So employees that will be directly affected
by the Performance Appraisals are less than enthusiastic about participating in them". [2]
When an employee knows that their work performance has been less than perfect it’s
nerve racking to be evaluated. Most workers just don’t appreciate constructive criticism or

any criticism. Employees tend to be hostile knowing they could be given bad news on their
performance. Schultz, Duane P. Schultz, Sydney Ellen (2009). Psychology and work
today (10th ed., International ed. ed.). Upper Saddle River, N.J.: Pearson Education.
pp. 108–109. ISBN 9780205705870. More than one of |author= and |last= specified
Schultz, Duane P. Schultz, Sydney Ellen (2009). Psychology and work today (10th ed.,
International ed. ed.). Upper Saddle River, N.J.: Pearson Education. p. 109. ISBN
9780205705870. More than one of |author= and |last= specified
Legal implications[edit]
There are federal laws addressing fair employment practices, and this also concerns
performance appraisal (PA). Discrimination can occur within predictions of performance
and evaluations of job behaviors.
The revision of many court cases has revealed the
involvement of alleged discrimination which was often linked to the assessment of the
employee’s job performance.
Some of the laws which protect individuals against
discrimination are “the Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities
Act (ADA).”
Lawsuits may also results from charges of an employer’s negligence,
defamation, and/or misrepresentation.
A few appraisal criteria to keep in mind for a
legally sound PA is to keep the content of the appraisal objective, job-related, behavior-
based, within the control of the ratee, and related to specific functions rather than a global
Some appraisal procedure suggestions for a legally sound PA is to
standardize operations, communicate formally with employees, provide information of
performance deficits and give opportunities to employees to correct those deficits, give
employees access to appraisal results, provide written instructions for the training of
raters, and use multiple, diverse and unbiased raters.
These are valuable but not
exhaustive lists of recommendations for PAs. The Employment Opportunity Commission
(EEOC) guidelines apply to any selection procedure that is used for making employment
decisions, not only for hiring, but also for promotion, demotion, transfer, layoff, discharge,
or early retirement. Therefore, employment appraisal procedures must be validated like
tests or any other selection device. Employers who base their personnel decisions on the
results of a well-designed performance review program that includes formal appraisal
interviews are much more likely to be successful in defending themselves against claims
of discrimination.

Cross-cultural implications[edit]
Performance appraisal (PA) systems, and the premises of which they were based, that
have been formed and regarded as effective in the United States may not have the
transferability for effectual utilization in other countries or cultures, and vice

Performance “appraisal is thought to be deeply rooted in the norms, values, and
beliefs of asociety”.
“Appraisal reflects attitudes towards motivation and performance
(self) and relationships (e.g. peers, subordinates, supervisors, organization), all of which
vary from one country to the next”.
Therefore, appraisal should be in conjunction with
cultural norms, values, and beliefs in order to be operative.
The deep-seated norms,
values and beliefs in different cultures affect employee motivation and perception of
organizational equity and justice. In effect, a PA system created and considered effectual
in one country may not be an appropriate assessment in another cultural region.

For example, some countries and cultures value the trait of assertiveness and personal
accomplishment while others instead place more merit on cooperation and interpersonal
connection. Countries scoring high on assertiveness consider PA to be a way of assuring
equity among employees so that higher performing employees receive greater rewards or
higher salaries.
Countries scoring low on assertiveness but higher in interpersonal
relations may not like the social separation and pay inequity of higher/lower performing
employees; employees from this more cooperative rather than individualistic culture place
more concern on interpersonal relationships with other employees rather than on
individual interests.
High assertive countries value performance feedback for self-
management and effectiveness purposes while countries low in assertiveness view
performance feedback as “threatening and obtrusive”.
In this case, the PA of the high
assertive countries would likely not be beneficial for countries scoring lower in
assertiveness to employ. However, countries scoring lower in assertiveness could employ
PA for purposes of improving long-term communication development within the
organization such as clarifying job objectives, guide training and development plans, and
lessen the gap between job performance and organizational expectations.

Developments in information technology[edit]
Computers have been playing an increasing role in PA for some time (Sulsky & Keown,
1998). There are two main aspects to this. The first is in relation to the electronic
monitoring of performance, which affords the ability to record a huge amount of data on
multiple dimensions of work performance (Stanton, 2000). Not only does it facilitate a
more continuous and detailed collection of performance data in some jobs, e.g. call
centres, but it has the capacity to do so in a non-obvious, covert manner. The second
aspect is in mediating the feedback process, by recording and aggregating performance
ratings and written observations and making the information available on-line; many
software packages are available for this. The use of IT in these ways undoubtedly helps in
making the appraisal process more manageable, especially where multiple rating sources
are involved, but it also raises many questions about appraisees' reactions and possible
effects on PA outcomes. Mostly, the evidence so far is positive.

Rater errors[edit]
Mistakes made by raters is a major source of problems in performance appraisal. There is
no simple way to completely eliminate these errors, but making raters aware of them
through training is helpful. Ratter errors are based on the feelings and it has
consequences at the time of appraisal.

Varying standards

 Problem: When a manager appraises (evaluates) his or her employees and the manager
uses different standards and expectations for employees who are performing similar jobs.
 Example: A professor do not grade the exams of all students in the same standards,
sometimes it depends on the affection that the professor has towards others. This affection
will make professor give students higher or lower grades.
 Solution: The rater must use the same standards and weights for every employee. The
manager should be able to show coherent arguments in order to explain the difference.
Therefore, it would be easier to know if it is done, because the employee has done a good
performance, or if it because the manager perception is distorted.
Recency Effects
 Problem: When the manager, according only to the last performance, that has been quite
good, rates higher.
 Example: When a professor gives the course grade based just in the performance of the
student, only in the last week.
 Solution: In order to avoid that, the manager should use some methods as documenting
both in positive and negative aspects.
Primacy Effects
 Problem: When the person who evaluates gives more weight according to information the
manager has received first.
 Example: It could be a silly example. When we are watching a TV quiz and conquest have
to remember a list of things, they only remember the first ones. This is apply also in
remembering human performance.
 Solution: performance. When manager has to take some decision, is better not to do it
according to what he or she remembers. It is better to based on real actions that has
happened and are recorded.
Central Tendency
 Problem: When the manager evaluate every employees within a narrow range, as the
average because he or she is dismissing the differences in the performance that
employees have done.
 Example: When a professor because the average of the class tends to grade harder.
Therefore, if the performance of the class average is quite high, the professor will evaluate
them more high. In the contrary, if the average of the class is lower, he or she would
appraise lower.

 Problem: Rating of all employees are at the high end of the scale.
 Example: When the professor tends to grade harder, because the average of the class.
 Problem: When a manager uses only the lower part of the scale to rate employees.
 Example: When the professor tends to grade lower, because the average of the class.
 Solution: try to focus more on the individual performance of every employee regardless the
average results.
Rater Bias

 Problem: Rater’s when the manager rates according to his or her values and prejudices
which at the same time distort (distorsionar) the rating. Those differentiations can be made
due to the ethnic group, gender, age, religion, sex, appearance...
 Example: Sometimes happen that a manager treats someone different, because he or she
thinks that the employee is homosexual.
 Solution: If then, the examination is done by higher-level managers, this kind of appraising
can be corrected, because they are supposed to be more partial.
Halo Effect
 Problem: When a manager rates an employee high on all items because of one
characteristic that he or she likes.
 Example: If a worker has few absence but the supervisor has a good relationship with that
employee, the supervisor might give to the employee a high rating in all other areas of
work, in order to balance the rating. Sometimes it happens due to the emotional
dependability based on the good relationship they have.
 Solution: Training raters to recognize the problem and differentiating the person with the
performance they do.
Horns Effect
 Problem: This is the opposite to the Halo effect and Horns effect occurs when a manager
rates an employee low on all items because of one characteristic that he or she dislikes.
 Example: If a worker does a good performance and in some resting times he or she loves
telling jokes, but his or her supervisor hates jokes, the supervisor might give to the
employee a lower rating in all other areas of work, because they do not have that
conexion. Sometimes it happens when they do not have a close relationship and manager
do not like the person her/him-self.
 Solution: Is the same as in the Halo Effect. Training raters to recognize the problem and
differentiating the person with the performance they do.
 Problem: The tendency to rate people relative to other people rather than to the individual
performance he or her is doing.
 Example: At school, if you are sat down where all the chatty people are and you are silent
but you do not pay attention and you do not do your homework, because you are drawing;
when teacher gets angry with the group, you might be excluded of the bad behavior they
have just because you are silent; but not because you are doing a good performance.
Therefore, according to the group, you are not that chatty, but you are either doing the

proper performance. However the rater will only get the idea that your behavior is not as
bad as other, thus, you will be rate higher.
 Solution: The rating should reflect the task requirement performance, not according to
other people attitude.
Similar-to-Me / Different-from-Me
 Problem: Sometimes, ratters are influenced by some of the characteristics that people
show. Depending if those characteristics are similar or different to ratters' one, they would
be evaluated differently.
 Example: A manager with higher education degree might give subordinates with higher
education degree a higher appraisal than those with only bachelor’s degrees.
 Solution: Try to focus on the performance the employee is doing regardless the common
characteristic that you have
 Problem: When the rater evaluates the performance of an employee relying only on a
small percentage of the amount of work done.
 Example: An employee has to do 100 reports. Then, the manager take five of them to
check how has the work been made, and the manager finds mistakes in those five reports.
Therefore the manager will appraised the work of the employee as a "poor" one, without
having into account the other 95 reports that the manager has not seen, that have been
made correctly.
 Solution: To follow the entire track of the performance, not just a little part of it.



Introduction to BSNL:
Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-
owned telecommunications company headquartered in New Delhi, India. It was incorporated on 15
September 2000. It took over the business of providing of telecom services and network
management from the erstwhile Central Government Departments of Telecom Services (DTS) and
Telecom Operations (DTO), with effect from 1 October 2000 on going concern basis. It is the
largest provider of fixed telephone and fourth largest mobile telephone provider in India, and is
also a provider of broadband services. However, in recent years the company's revenue and market
share plunged into heavy losses due to intense competition in the Indian telecommunications
BSNL is India's oldest and largest communication service provider (CSP). It had a customer base
of 117 million as of Jan 2014. It has footprints throughout India except for the metropolitan cities
of Mumbai and New Delhi, which are managed by Mahanagar Telephone Nigam (MTNL).

BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL has a
customer base of 64.8 million (Basic & Mobile telephony). It has footprints throughout India
except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on
March 31, 2007 BSNL commanded a customer base of 33.7 million Wire line, 3.6 million CDMA-
WLL and 27.5 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending
March 31, 2006 stood at INR 401.8b (US$ 9.09 b) with net profit of INR 89.4b (US$ 2.02 billion).
Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking of the
country with authorized share capital of US$ 3.95 billion (INR 17,500 Crores) and net worth of
US$ 14.32 billion.


The foundation of Telecom Network in India was laid by the British sometime in 19
century. The
history of BSNL is linked with the beginning of Telecom in India. In 19th century and for almost
entire 20th century, the Telecom in India was operated as a Government of India wing. Earlier it
was part of erstwhile Post & Telegraph Department (P&T). In 1975 the Department of Telecom
(Dot) was separated from P&T. Dot was responsible for running of Telecom services in entire
country until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out of Dot to
run the telecom services of Delhi and Mumbai. It is a well known fact that BSNL was carved out
of Department of Telecom to provide level playing field to private telecoms. Subsequently in
1990s the telecom sector was opened up by the Government for Private investment, therefore it
became necessary to separate the Government's policy wing from Operations wing. The
Government of India corporatized the operations wing of Dot on October 01, 2000 and named it as
Bharat Sanchar Nigam Limited (BSNL).BSNL operates as a public sector.
BSNL provides almost every telecom service, however following are the main
Telecom Services being provided by BSNL in India:-
1. UNIVERSAL TELECOM SERVICES: Fixed wire line services & Wireless in Local
loop (WLL) using CDMA Technology called bfone and Tarang respectively. BSNL is
dominant operator in fixed line. As on March 31, 2007 (end of financial year) BSNL had
76% share of fixed and WLL phones.


2.CELLULAR MOBILE TELEPHONE SERVICES: BSNL is major provider of Cellular
Mobile Telephone services using GSM platform under brandname Cellone. Pre-paid Cellular
services of BSNL are know as Excel. As on March 31, 2007 BSNL had 17% share of mobile
telephony in the country.

BSNL Broadband

 3. INTERNET:BSNL has around 50% market share in broadband in India. BSNL has planned
aggressive rollout in broadband for current financial year. BSNL provides Internet
access services through dial-up connection (as Sancharnet through 2009
) as Prepaid,
NetOne as Postpaid and ADSL broadband as BSNL Broadband BSNL held 55.76% of the
market share with reported subscriber base of 9.19 million Internet subscribers with 7.79% of
growth at the end of March 2010. Top 12 Dial-up Service providers, based on the subscriber
base, It Also Provides Online Games via its Games on Demand (GOD)

4. Intelligent Network (IN): BSNL is providing IN services like televoting, toll free calling,
premium calling etc. Presently there is an intense competition in Indian Telecom sector and
various Telco‟s are rolling out attractive schemes
BSNL provides almost every telecom service in India. Following are the main telecom services
provided by BSNL:
 Optical Infrastructure and DWDM : BSNL owns the biggest OFC network in India. Also
the DWDM network is one of the biggest in the world. The DWDM equipments purchased in
open tender at BSNL are mainly of United Telecoms Limited ( UTL) ) make, which was
declared lowest cost in competitive bidding. Rest DWDM equipments are from Huawei. The
SDH equipments are mainly from Tejas Networks, Huawei, ZTE, ECI, UT STAR etc.
 Market Share : As of 30 November 2013, BSNL had 12.9% marketshare in India and stands
as 5th Telecom Operator in India and 67% market share in ADSL Services.
 Managed Network Services : BSNL is providing complete Telecom Services Solution to the
Enterprise Customers i.e. MPLS Connectivity, Point to Point Leased Lines and Internet
Leased Lines .
 Universal Telecom Services : Fixed wireline services and landline in local loop (WLL) using
CDMA Technology called bfone andTarang respectively. As of 30 June 2010, BSNL had
75% marketshare of fixed lines.
 Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone
services using GSM platform under the brand name Cellone & Excel (BSNL Mobile). As of
30 June 2010 BSNL has 13.50% share of mobile telephony in the country.
It has 95.54
million customers using BSNL mobile.

 WLL-CDMA Telephone Services: BSNL's WLL (Wireless in Local Loop) service is a
service giving both fixed line telephony & Mobile telephony.

 Internet: Intelligent Network (IN): BSNL offers value-added services, such as Free
Service (FPH), India Telephone Card (Prepaid card), Account Card Calling (ACC),
Virtual Private Network (VPN), Tele-voting, Premium Rae Service (PRM), Universal Access
Number (UAN).
 3G:BSNL offers the '3G' or the'3rd Generation' services which includes facilities like video
calling, mobile broadband, live TV, 3G Video portal, streaming services like online full length
movies and video on demand etc.
 IPTV:BSNL also offers the 'Internet Protocol Television' facility which enables customers to
watch television through internet.
 FTTH:Fibre To The Home facility that offers a higher bandwidth for data transfer. This idea
was proposed on post-December 2009
 Helpdesk: BSNL's Helpdesk (Helpdesk) provide help desk support to their customers for their
 VVoIP: BSNL, along with Sai Infosystem - an Information and Communication Technologies
(ICTs) provider - has launched Voice and Video Over Internet Protocol (VVoIP). This will
allow to make audio as well as video calls to any landline, mobile, or IP phone anywhere in the
world, provided that the requisite video phone equipment is available at both ends.

 WiMax: BSNL has introduced India's first 4th Generation High-Speed Wireless Broadband
Access Technology with the minimum speed of 256kbit/s. The focus of this service is mainly
rural customer where the wired broadband facility is not available.

Since its corporatisation in October 2000, BSNL has been actively providing Connections in both
Urban and Rural areas and the efficiency of the company has drastically improved from the days
when one had to wait for years to get a phone connection to now when one can get a connection in
even hours. Pre-activated Mobile connections are available at many places across India. BSNL has
alsounveiled very cost-effective Broadband internet access plans (DataOne) targetedat homes and
small businesses. At present BSNL enjoy's 47% of market share of ISP services.

Year of Broadband 2007
Former Indian Communications Minister Thiru Dayanidhi Maran had declared year 2007 as "Year
of Broadband" in India and BSNL is gearing up to provide 5 million Broadband connectivity by
the end of 2007. BSNL has upgraded existing Dataone (Broadband) connections for a speed of up

to 2 Mbit/s without any extra cost. This 2 Mbit/s broadband service is being provided by BSNL at
a cost of just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadband services to
Triple play (telecommunications) in 2007.
BSNL has been asked to add 108 million customers by 2010 by Former Indian Communications
Minister Thiru Dayanidhi Maran. With the frantic activity in the communication sector in India,
the target appears achievable, however due to intense competition in Indian Telecom sector in
recent past BSNL's growth has slowed down.
BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% of US$ 580 m
(INR 2,500 crores) Rural Telephony project of Government of India.

During Financial Year 2007-2008 (From April 01, 2006 to March 31, 2007) BSNL has added 9.6
million new customers in various telephone services taking its customer base to 64.8 million.
BSNL's nearest competitor Bharti Airtel is standing at a customer base of 39 million. However,
despite impressive growth shown by BSNL in recent times, the fixed line customer base of BSNL
is declining. In order to woo back its fixed-line customers BSNL has brought down long distance
calling rate under One India plan, however, the success of the scheme is not known. However,
BSNL faces bleak fiscal 2006-2007 as users flee, which has been accepted by the CMD BSNL.
nd are providing good customer services. However, BSNL being legacy operator and its
conversion from a Government Department earns lot of criticism for its poor customer service.
Although in recent past there have been tremendous improvement in working of BSNL but still it
is much below the Industry's Expectations. A large aging (average age 49 years (appx)) workforce
(300,000 strong), which is mostly semiliterate or illiterate is the main reason for the poor customer
service. Further, the Top management of BSNL is still working in BSNL on deputation basis
holding Government employee status thus having little commitment to the organisation. Although
in coming years the retirement profile of the workforce is very fast and around 25% of existing
workforce will retire by 2010, however, still the workforce will be quite large by the industry
standards. Quality of the workforce will also remain an issue.

Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide
service in non-lucrative areas especially rural areas) has been slashed by 37% by TRAI, w.e.f.
April 01, 2007. The reduction in ADC may hit the bottom-line of BSNL.


• To become the largest telecom Service Provider.

 To provide world class State-of-art technology telecom services to its
 Customers on demand at competitive prices.
 To Provide world class telecom infrastructure in its area of operation and to
Contribute to the growth.

 MP Telecom looks over the management, control and operation of the telecom
 network with the following aims and objective
 To build a high degree of customer confidence by sustaining quality and
reliability in service.
 To upgrade the quality of telecom service to international level.
 Provision of telephone connections on demand in all the villages of M.P.
 Expansion of new services like Internet, Intelligent Network, ISDN, Internet
Telephony, Video Conferencing, Broadband etc.
 Popularize Broadband Services and to be on-demand in the whole State.
 Expansion of Cellular Mobile Telephone to all towns.
 To open Internet Kiosks (Cafe's) at all Block Head Quarters.
 To improve the quality of present services being given to the subscribers.
 To open more Customer Service Centers and upgrade the existing Customer
Service Centers for better and friendly Customer care.
 Modernize PSTN network by making RSUs & AN-RAX.
 Plantation of Trees to make environment Clean & Green.
 To raise necessary financial resources for its developmental needs.
 To increase accessibility of services, by providing a large number of Local and
NSD/ISD Public Call Offices (PCOs) so as to reach out to the masses.







Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every manager‟s responsibility, but many organizations find it advantageous
to establish a specialist division to provide an expert service dedicated to ensuring that the human
resource function is performed efficiently.

“People are our most valuable asset” is a cliché, which no member of any senior management team
would disagree with. Yet, the reality for many organizations are that their people remain under
valued, under trained and underutilized.
Performance Appraisal is the process of assessing the performance and progress of an employee or
a group of employees on a given job and his / their potential for future development. It consists of
all formal procedures used in the working organizations to evaluate personalities, contributions and
potentials of employees.


Managing human resources in today‟s dynamic environment is becoming more and more complex
as well as important. Recognition of people as a valuable resource in the organization has led to
increases trends in employee maintenance, job security, etc
My research project deals with “Performance Appraisal as carried out at Bhart Sanchar Nigam Ltd.
(BSNLK)”. In this report, I have studied &evaluated the performance appraisal process as it is
carried out in the company.
The first section of my report deals with a detailed company profile. It includes the company‟s
history: its activities and operations, organizational structure, etc. this section attempts to give
detailed information about the company and the nature of it‟s functioning.
The second section deals with performance appraisal. In this section, I have given a brief
conceptual explanation to performance appraisal. It contains the definition, process and
significance of performance appraisal.

In the third section of my report, I have conducted a research study to evaluate the process of
performance appraisal at Bharat Sanchar Nigam Ltd.; this section also contains my findings,
conclusions, suggestions and feedback.
The forth and final section of this report consists of extra information that I related to the main
contents of the report. These annexure include some graphs and diagrams relating to the company,
graphs relating to the research study and important documents upon which the project is based.

Performance Appraisal is the important aspect in the organization to evaluate the employees
performance. It helps in understanding the employees work culture, involvement, and satisfaction.
It helps the organization in deciding employees promotion, transfer, incentives, pay increase.

Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every manager‟s responsibility, but many organizations find it advantageous
to establish a specialist division to provide an expert service dedicated to ensuring that the human
resource function is performed efficiently.
“People are our most valuable asset” is a cliché, which no member of any senior management team
would disagree with. Yet, the reality for many organizations are that their people remain under
valued, under trained and under utilized.
The market place for talented, skilled people is competitive and expensive. Taking on new staff
can be disruptive to existing employees. Also, it takes time to develop „cultural awareness‟,
product / process / organization knowledge and experience for new staff members.

Following are the various functions of Human Resource Management that are essential for the
effective functioning of the organization:
1. Recruitment
2. Selection
3. Induction
4. Performance Appraisal
5. Training & Development

The process of recruitment begins after manpower requirements are determined in terms of quality
through job analysis and quantity through forecasting and planning.
The selection is the process of ascertaining whether or not candidates possess the requisite
qualifications, training and experience required.
a) Induction is the technique by which a new employee is rehabilitated into the changed
surroundings and introduced to the practices, policies and purposes of the organization.
Performance Appraisal is defined as the process of assessing the performance and progress of an
employee or a group of employees on a given job and his / their potential for future development.
It consists of all formal procedures used in working organizations and potential of employees.
According to Flippo, “Performance Appraisal is the systematic, periodic and an important rating of
an employee‟s excellence in matters pertaining to his present job and his potential for a better job.”
1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an employee in terms of
his job.
3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are arranged periodically
according to a definite plan.
5. The main purpose of Performance Appraisal is to secure information necessary for
making objective and correct decision an employee.

The process of performance appraisal:
1. Establishing performance standards
2. Communicating the Standards
3. Measuring Performance
4. Comparing the actual with the standards
5. Discussing the appraisal
6.Taking Corrective Action
1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge

The foregoing list of major program pitfalls represents a formidable challenge, even considering
the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing away
with appraisals themselves is like trying to solve the problems of life by committing suicide. The
more logical task is to identify those appraisal practices that are (a) most likely to achieve a
particular objective and (b) least vulnerable to the obstacles already discussed.
Before relating the specific techniques to the goals of performance appraisal stated at the outset of
the article, I shall briefly review each, taking them more or less in an order of increasing
The best-known techniques will be treated most briefly.
In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly
those involving professional, sales, or managerial positions, essay appraisals from former
employers, teachers, or associates carry significant weight.
This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable.
Typically, a graphic scale assesses a person on the quality and quantity of his work (is he
outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary
with the job but usually include personal traits like reliability and cooperation. It may also include
specific performance items like oral and written communication.
The field review is one of several techniques for doing this. A member of the personnel or central
administrative staff meets with small groups of raters from each supervisory unit and goes over
each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the
group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. .

Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a third
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set - or help set - their own performance goals.
Within the past five or six years, MBO has become something of a fad and is so familiar to most
managers that I will not dwell on it here.
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly useful.
Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to
which a host of additional facts and impressions must somehow be added. There is no single form
or way to do this.
The best approach appears to be a ranking technique involving pooled judgment.
The two most effective methods are alternation ranking and paired comparison ranking.
1. “Alternation ranking”:
Ranking of employees from best to worst on a trait or traits is another method for evaluating
employees. Since it is usually easier to distinguish between the worst and the best employees than
to rank them, an alternation ranking method is most popular. Here subordinates to be rated are
listed and the names of those not well enough to rank are crossed. Then on a form as shown below,
the employee who is highest on the characteristic being measured and the one who is the lowest
are indicated. Then chose the next highest and the next lowest, alternating between highest and
lowest until all the employees to be rated have been ranked.
2. “Paired-comparison ranking”:
This technique is probably just as accurate as alternation ranking and might be more so. But with
large numbers of employees it becomes extremely time consuming and cumbersome.

Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or
more people are asked to make independent rankings of the same work group and their lists are
averaged), are among the best available for generating valid order-of-merit rankings for salary
administration purposes.
So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? In any placement decision and even more so in promotion
decisions, some prediction of future performance is necessary. How can this kind of prediction be
made most validly and most fairly?
Many firms have expanded the idea of upward feedback into what the call 360-degree feedback.
The feedback is generally used for training and development, rather than for pay increases.
Most 360 Degree Feedback system contains several common features. Appropriate parties – peers,
supervisors, subordinates and customers, for instance – complete survey, questionnaires on an
individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings are not
given just by the next manager up in the organizational hierarchy, but also by peers and
subordinates. Appropriates customer ratings are also included, along with the element of self
appraisal. Once gathered in, the assessment from the various quarters are compared with one
another and the results communicated to the manager concerned.
Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to "play God."
Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee
meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job
performance. Employees are judged according to real outcomes, and not on their potential for
success, or on someone's subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed easily. The MBO
method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements
that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be broken up into so many
constituent parts, but to put all the parts together and the performance may be directly observed
and measured.

This approach can lead to unrealistic expectations about what can and cannot be reasonably
accomplished. Supervisors and subordinates must have very good "reality checking" skills to use
MBO appraisal methods. They will need these skills during the initial stage of objective setting,
and for the purposes of self-auditing and self-monitoring.
Variable objectives may cause employee confusion. It is also possible that fluid objectives may be
distorted to disguise or justify failures in performance.
Benefits of Performance Appraisals
 Measures an employee‟s performance.
 Helps in clarifying, defining, redefining priorities and objectives.
 Motivates the employee through achievement and feedback.
 Facilitates assessment and agreement of training needs.
 Helps in identification of personal strengths and weaknesses.
 Plays an important role in Personal career and succession planning.
 Clarifies team roles and facilitates team building.
 Plays major role in organizational training needs assessment and analysis.
 Improves understanding and relationship between the employee and the reporting manager
and also helps in resolving confusions and misunderstandings.
 Plays an important tool for communicating the organization‟s philosophies, values, aims,
strategies, priorities, etc among its employees.
 Helps in counseling and feedback.
Rating Errors in Performance Appraisals

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -
Leniency or severity: - Leniency or severity on the part of the rater makes the assessment
subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are
lenient for the following reasons:
a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavorably will reflect poorly on his or her own worthiness.
b) He/She may feel that a derogatory rating will be revealed to the rate to detriment
the relations between the rater and the ratee.
c) He/She may rate leniently in order to win promotions for the subordinates and
therefore, indirectly increase his/her hold over him.
Central tendency: - This occurs when employees are incorrectly rated near the average or middle
of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain
doubts and anxieties, which the raters have been assessing the rates.
Halo error: - A halo error takes place when one aspect of an individual's performance influences
the evaluation of the entire performance of the individual. The halo error occurs when an employee
who works late constantly might be rated high on productivity and quality of output as well ax on
motivation. Similarly, an attractive or popular personality might be given a high overall rating.
Rating employees separately on each of the performance measures and encouraging raters to guard
against the halo effect are the two ways to reduce the halo effect.
Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or low score
are given only to certain individuals or groups based on the rater's attitude towards them and not
on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of
Primacy and Regency effects: - The rater's rating is heavily influenced either by behavior
exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes, or
behavior exhibited by the ratee near the end of the review period (regency). For example, if a
salesperson captures an important contract/sale just before the completion of the appraisal, the

timing of the incident may inflate his or her standing, even though the overall performance of the
sales person may not have been encouraging. One way of guarding against such an error is to ask
the rater to consider the composite performance of the rate and not to be influenced by one incident
or an achievement.
Performance dimension order: - Two or more dimensions on a performance instrument follow
each other and both describe or rotate to a similar quality. The rater rates the first dimensions
accurately and then rates the second dimension to the first because of the proximity. If the
dimensions had been arranged in a significantly different order, the ratings might have been
Spillover effect: - This refers lo allowing past performance appraisal rating lo unjustifiably
influence current ratings. Past ratings, good or bad, result in similar rating for current period
although the demonstrated behavior docs not deserve the rating, good or bad.


a) Reporting Manager
Ø Provide feedback to the reviewer / HOD on the employees‟ behavioral traits
indicated in the PMS Policy Manual
Ø Ensures that employee is aware of the normalization / performance appraisal
Ø Address employee concerns / queries on performance rating, in consultation
with the reviewer
b) Reviewer (Reporting Manager’s Reporting Manager)
Ø Discuss with the reporting managers on the behavioral traits of all the
employees for whom he / she is the reviewer
Ø Where required, independently assess employees for the said behavioral traits;
such assessments might require collecting data directly from other relevant

c) HOD (In some cases, a reviewer may not be a HOD)
Ø Presents the proposed Performance Rating for every employee of his / her
function to the Normalization committee.
Ø HOD also plays the role of a normalization committee member
Ø Owns the performance rating of every employee in the department
d) HR Head
Ø Secretary to the normalization committee
Ø Assists HOD‟s / Reporting Managers in communicating the performance
rating of all the employees
e) Normalization Committee
Ø Decides on the final bell curve for each function in the respective Business
Unit / Circle
Ø Reviews the performance ratings proposed by the HOD‟s, specifically on the
upward / downward shift in ratings, to ensure an unbiased relative ranking of
employees on overall performance, and thus finalize the performance rating of
each employee

In order to understand the Performance Management System at BHARTI, some concepts need to
be explained which play a very important role in using the PMS successfully. They are:
Ø KRA’S (KEY RESULT AREAS): The performance of an employee is largely
dependent on the KRA score achieved by the employee during that particular year. Thus, it
is necessary to answer a few basic questions i.e.
o What are the guidelines for setting the KRA‟s for an employee?
o How does an employee write down his KRA‟s for a particular financial year?
o KRA‟s: The Four Perspectives.

o How is the KRA score calculated for an employee on the basis of the targets sets
and targets achieved?
Ø BEHAVIORAL TRAITS: Some of the qualitative aspects of an employees‟
performance combined with the general behavioral traits displayed by the employee during
a year constitutes his behavior traits. An employee is assigned the rating on the basis of the
intensity of the behavior displayed by him. They play a very important role in the deciding
the final performance rating for an employee as is even capable of shifting the rating one
level upwards/downwards.
framework is a simple and structured way to describe the elements of behaviors required to
perform a role effectively. This framework also tries to assess the performance of an
employee objectively.
Ø THE PERFORMANCE RATING PROCESS: The rating process tries to explain the
four different types of rating that an employee can achieve i.e. EC, SC, C and PC. It also
explains the criteria, which is considered for awarding any of these ratings to the employee.
and normal distribution guidelines provide the framework within which the performance
appraisal process has to work. It is very important that the HR department pays due
attention to these guidelines while preparing the bell curves for various functions and the
consolidated bell curve for all the functions. These guidelines also help in deciding upon
the promotion cases in a year.



· Performs consistently and
substantially above expectations in all
· Achieves a final score greater than
or equal to 115%
· Consistently delivers on stretch
· Is proactive
· Spots and anticipates problems,
implements solutions
· Sees and exploits opportunities
· Delivers ahead of time
· Sees the wider picture-impacts
across business
· Focuses on what‟s good for the
· Seen as role model by others

· Performs above expectations in
all areas
· Achieves final score between
 Versatile in his/ her area of
 Develops creative solutions and
require little / minimal supervision
 Sets examples for others
 Take ownership of own
 Coaches others
 Demonstrates business initiative
 Is self motivated
 Supportive team player
 Leads own team very effectively

· Recognized as exceptional by other
functions as well
· Motivates others to solve problems
· Develops others
· Provides open and honest feedback

· Able to establish and lead cross-
functional teams

 Demonstrate functional initiative
To carry out the study of BSNL, we framed the following objectives
1. Identification of the technique of performance appraisal followed in BSNL.
2. Employee attitude towards the present appraisal system.
3. Review of the current appraisal system in order to
i. Enhance productivity
ii. Attain global standards
4. To provide suggestions & recommendations from the study conducted.


The research design of this project is exploratory. Though each research study has its own specific
purpose but the research design of this project on BSNL is exploratory in nature as the objective is
the development of the hypothesis rather than their testing. The research designs methods of
financial analysis. Through of comparative balance sheet in comparative statement, I am studying
on balance sheet of BSNL of five year. So taking comparative statement, I am going to analyzed of
five years balance sheet of BSNL

Every project work is based on certain methodology, which is a way to systematically solve the
problem or attain its objectives. It is a very important guideline and lead to completion of any
project work through observation, data collection and data analysis. “Research Methodology
comprises of defining & redefining problems, collecting, organizing & evaluating data, making
deductions & researching to conclusions.”
According to Clifford Woody
Research Design refers to "framework or plan for a study that guides the collection and analysis of
data". A typical research design of a company basically tries to resolve the following issues:
a) Determining Data Collection Design

b) Determining Data Methods
c) Determining Data Sources
d) Determining Primary Data Collection Methods
e) Developing Questionnaires
f) Determining Sampling Plan
Explorative studies are undertaken with a view to know more about the problem. These studies
help in a proper definition of the problem, and development of specific hypothesis is to be tested
later by more conclusive research designs. Its basic purpose is to identify factors underlying a
problem and to determine which one of them need to be further researched by using rigorous
conclusive research designs.
Conclusive Research Studies are more formal in nature and are conducted with a view to eliciting
more precise information for purpose of making marketing decisions.
These studies can be either:
a) Descriptive or
b) Experimental
Thus, it was mix of both the tools of Research Design that is, Explorative as well as Conclusive.

Sample Size = 50 Employees
Sample Area = BSNL Dharamshala,
Himachal Pradesh

Duration = Two (1) Month.

Data Sources:
i. Secondary Data through Internet
ii. Primary Data through Questionnaire


Employees Opinion as to the Purpose of Performance Appraisal
Performance standards / yardsticks

Options Response
Yes 84
No 16

Awareness of technique of Performance Appraisal being followed at BSNL among

Options Response
Yes 72
No 28

Number of Employees being appraised during their service period
Options Response
Yes 68
No 32

Employees’ opinion as to the present appraisal system

Options Responses (in %)
Fully Satisfied 2
Satisfied 24
Can‟t Say 44
Dissatisfied 30

Employee perception as to the frequency of appraisal
Options Response (in %)
Once During The
Service Period
Continuous 92
Never 0
Can‟t Say 6

If continuous appraisal – what should be the gap between two appraisal period

Options Response (in %)
Quarterly 20
Half Yearly 44
Yearly 36

How Performance Appraisal affects the productivity of the employees

Motivated Indifferent Demotivated
+ Feedback



- Feedback








Who should do the appraisal?
Options Response ( in % )
Superior 24
Peer 0
Subordinate 0
Self Appraisal 8
Consultant 4
All of the above 48
Superior + Peer 16

.Does appraisal help in polishing skills and performance area?

Options Response ( in % )
Yes 74
No 10
Somewhat 16

If the process of appraisal does not lead to the improvement of the skills and
proficiency of the employees, the very purpose of appraisal becomes illogical. In
the survey conducted it was observed that nearly 74 % of the respondents agree that
Performance Appraisal does leads to polishing the skills of the employees. Nearly
10 % of the respondents view that it does not serve this purpose and around 16 %
were not able to respond as to whether it serve any such purposes or not.

Does personal bias creeps-in while appraising an employee?

Options Response ( in % )
Yes 82
No 18

In the process of appraising, both the parties are human being, that is, the one who
is being apprised and the other who is appraising. Thus, there bound to be
subjectivity involved, be it an objective way of appraising.
Thus, when asked from among the sample size of 50 respondents, as huge as 82 %
respondended that personal bias do creep in while appraising an individual. Hence,
it is inevitable to say that personal likings do not come in the process of appraisal. It
is the extent to which the appraiser manages it so that it does not become very
partial and bias.

If given a chance, would employees like to review the current appraisal
Technique ?

Response ( in % )
Yes 72
No 4
Can‟t Say 24

Appropriate method of conducting the performance appraisal

Options Response ( in % )
Ranking Method 12
Paired Comparison 0
Critical Incidents 20
MBO 58
Assessment Centre 4
360 degree 6

Does performance appraisal leads to identification of hidden potential
Options Response ( in % )
Yes 96
No 4


A few limitations and constraints came in way of conducting the present study, under which the
researcher had to work are as follows:
Ø Although all attempts were made to make this an objective study, biases on
the part of respondents might have resulted in some subjectivity.
Ø Though, no effort was spared to make the study most accurate and useful, the
“sample Size” selected for the same may not be the true representative of the
Company, resulting in biased results.
Ø This being the maiden experience of the researcher of conducting study such
as this, the possibility of better results, using deeper statistical techniques in
analyzing and interpreting data may not be ruled out.


After having analyzed the data, it was observed that practically there was no appraisal in
the organization. To be an effective tool, it has to be on the continuous basis. This is the
thing that has been mentioned time and again in the report, as, in the absence of
continuity, it becomes a redundant exercise. Before actually deciding drafting what
should be the kind of appraisal the following things should be taken care of:
1. The very concept of performance appraisal should be marketed throughout the
organization. Unless this is done, people would not accept it, be it how important to
the organization.
2. To market such a concept, it should not start at bottom, instead it should be started by
the initiative of the top management. This would help in percolating down the
concept to the advantage of all, which includes the top management as well as those
below them. This means that the top management has to take a welcoming and
positive approach towards the change that is intended to be brought.
3. Further, at the time of confirmation also, the appraisal form should not lead to
duplication of any information. Instead, detailed appraisal of the employee‟s work
must be done – which must incorporates both the work related as well as the other
personal attributes that are important for work performance.
4. It should be noted that the appraisal form for each job position should be different as
each job has different knowledge and skill requirements. There should not be a
common appraisal form for every job position in the organization.

5. The job and role expected from the employees should be decided well in advance
and that too with the consensus with them.
6. A neutral panel of people should do the appraisal and to avoid subjectivity to a
marked extent, objective methods should be employed having quantifiable data.
7. The time period for conducting the appraisal should be revised, so that the exercise
becomes a continuous phenomenon.
8. Transparency into the system should be ensured through the discussion about the
employee‟s performance with the employee concerned and trying to find out the grey
areas so that training can be implemented to improve on that.
Ideally in the present day scenario, appraisal should be done, taking the views of all
the concerned parties who have some bearing on the employee. But, since a change in
the system is required, it cannot be a drastic one. It ought to be gradual and a change
in the mindset of both the employees and the head is required.


1. Suggestions and views…………………………………...............................

Thank you, Date --/--/--

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