PERFORMANCE APPRAISAL PROCESS AND PRACTICES AT OCTOKHAN CHARTERED ACCOUNTANTS

CHAPTER NO 1 INTRODUCTION

INTRODUCTION TO THE TOPIC The service industry forms a backbone of social and economic development of a

region. It has emerged as the largest and fastest-growing sectors in the world economy, making higher contributions to the global output and employment. Its growth rate has been higher than that of agriculture and manufacturing sectors. It is a large and most dynamic part of the Indian economy both in terms of employment potential and contribution to national income. It covers a wide range of activities, such as trading, transportation and communication, financial, real estate and business services, as well as community, social and personal services. Service sector is the lifeline for the social economic growth of a country. It is today the largest and fastest growing sector globally contributing more to the global output and employing more people than any other sector. The real reason for the growth of the service sector is due to the increase in urbanization, privatization and more demand for intermediate and final consumer services. Availability of quality services is vital for the well being of the economy. In alignment with the global trends, Bangladeshi service sector has witnessed a major boom and is one of the major contributors to both employment and national income in recent times. The activities under the purview of the service sector are quite diverse. Trading, transportation and communication, financial, real estate and business services, community, social and personal services come within the gambit of the service industry. An industry comprised of companies that primarily earn revenue through providing intangible products and services. Service industry companies are involved in retail, transport, distribution, food services, as well as other service-dominated businesses. Human Resource (or personnel) management, in the sense of getting things done through people, is an essential part of every managers 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 clich, 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. 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. Background of the Study: This project aims at studying the system of performance appraisal and its effectiveness in an organization. Performance appraisal is the most significant and indispensable tool for the management as it provide useful information for decision making in area of promotion and compensation reviews. Thus the study includes: 1. To develop my understanding of the subject. Performance Appraisal System implemented in various Organizations varies

PERFORMANCE APPRAISAL PROCESS AND PRACTICES AT OCTOKHAN CHARTERED ACCOUNTANTS

according to the need and suitability. Through my research, I have tried to study the kind of Appraisal used in the Organization and the various pros and cons of this type of system. 2. To conduct a study on social behavior. Social behavior is a very unpredictable aspect of human life but social research is an attempt to acquire knowledge and to use the same for social development. 3. To enhance the welfare of employees. The Appraisal system is conceived by the Management but mostly does not take into consideration the opinion of the employees. This can lead to adverse problems in the Organization. Therefore by this study I have attempted to put forth the opinion of the employee with respect to the acceptability of the Performance Appraisal System. 4. To exercise social control and predict changes in behavior. The ultimate object of my research is to make it possible to predict the behavior of individuals by studying the factors that govern and guide them. Rationale Of The Study 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. Objectives of the Study: To study Performance Appraisal System. To understand and evaluate performance appraisal mechanism in operation. To evaluate the effectiveness and satisfaction level of the employees towards performance appraisal system in Octokhan Chartered Accountants.

Scope of the Study: The study covers employees of Octokhan. Survey was conducted on the method of performance appraisal system that was used in Octokhan. The study focuses on evaluation of design, implementation, feedback, participation, parameters of the appraisal system only. To help management plan for development and growth. The target sample of 50 technical employees were selected at random from the same level. Duration of the Study: An internship semester is provided to get attachment with an organization and study the inter report. As a result 2 to 3 month is provided for the study duration.

Methodology of the project: The project work has been carried out in three stages, a structured questionnaire with objective and question was communicated tested and finalize. During the second stage, the questionnaire was administered to the employees at Octokhan Chartered Accountants by contacting them. The work relating to data entry compilation, data analysis and report writing constituted the third stage. Interview index was also used at some places to get information on the project subject. The details of the methodology adopted are presented below: The Questionnaire: Keeping in view the objective of the study, questionnaire was designed and tested on few employees. After getting the proper response and sanction from the concerned department the questionnaire was finalized. Response to Questionnaire In all questionnaires which were given to employees falling in the category of trainee, supervisors and above. Out of which 48 could be collected back duly completed. I individually contacted the employees to get response on the questionnaire. Data entry and analysis It has been an uphill task to enter the enormous data received through the questionnaire which consisted nearly 20 questions. Response to the descriptive questions though very few but was valuable for the purpose of study. Hence these were further structured in time with the system adopted for compilation and data analysis. LIMITATIONS 1. The study is confined to Octokhan only. 2. The interpretations and recommendations applicable only to this cooperative. 3. The study was conducted on the assumptions that the information is given by respondents all are correct. 4. Sample size is restricted to 50 respondents 5. Time constraints There are other limitations, such as: Errors in Rating Lack of reliability Negative approach Multiple objectives Lack of knowledge

PERFORMANCE APPRAISAL PROCESS AND PRACTICES AT OCTOKHAN CHARTERED ACCOUNTANTS

CHAPTER NO 2 COMPANY PROFILE COMPANY PROFILE

2.1 Organisation Background of the Octokhan Chartered Accountants: Octokhan, was formed as a firm of Chartered Accountants and Management Consultants in April 1995. The practice focuses on core chartered accountancy business, and management consultancy. Although an international company, Octokhan essentially operates out of two main offices, the first is based in London, UK and the other has more recently been set up in Dakha, Bangladesh. The Home office is based at London, United Kingdom. The Dhaka office started for Business in 2004 and entered the core chartered accountancy Business, management consultancy, and outsourced support services business in 2005. Octokhan is member firm of ICAEW and ICAB and thus can provide a cost effective solution for a UK business operating in Bangladesh and a Bangladeshi Business operating in UK. Since its inception, Octokhan has striven to produce unsurpassed levels of quality in its service offerings. The effort expended in the achievement of this objective has been reflected by the rapid and sustainable growth of the organization in both the public and private sector. Name of the firm and style Octokhan Chartered Accountants

Status of the firm: Partnership firm Date of formation: 10 April 1995 in London, UK. 15 December 2004 in Dhaka, Bangladesh. Contact information: Phone: 8411367-9, Fax: 8411371 E-mail: fkhan@octokhan.co.uk Function of Octokhan Chartered Accountants: Octokhan as a partnership firm of chartered accounts and management consultants provides a comprehensive audit, tax, consultancy, advisory, corporate finance, outsourcing support and related services. It is the only training office for the Institute of Chartered Accounts in England and Wales (ICAEW) in Bangladesh. Octokhan regularly carries out special audit, feasibility studies, business valuations, cost benefit analysis, forensic audit/investigations, project evaluations/pre-investment studies and performance audit/reviews. The firms experience in developing MIS, particularly financial reporting systems, budgeting mechanisms and performance evaluation is at the leading edge in Bangladesh. Since commencement of its operations in Bangladesh in 2004 Octokhan has acted as lead consultant in a number of financial restructuring projects, including the first ever securitization in the country. The functions of Octokhan Chartered Accountants are summarized below: 1. Accountancy services 2. Taxation 3. Financial Consultancy 4. Business Planning 5. Valuation 6. Business Start Ups 7. Computerized Systems 8. Implementation 9. Management Consultancy

PERFORMANCE APPRAISAL PROCESS AND PRACTICES AT OCTOKHAN CHARTERED ACCOUNTANTS

10.And other Accounting and Financial services. Organizations Structure and Management: Octokhan is a partnership firm. There are 2 partners in Octokhan Chartered Accountants. Partners are: Ferdous Ahmed Khan and Faroque Ahmed Khan To perform the business performance the partnership firm is divided into 7 departments, which are provided below: Departments in Octokhan Chartered Accountants: 1. 2. 3. 4. 5. 6. 7. HR & Administration Audit and Assurance (Services) Accounting and Finance (Services) Finance Sales & Marketing Network and IT Legal and Corporate Affairs

1 HR & Administration: Major jobs of HRM Department: Strategic Human Resource Planning HR Auditing and Needs Assessments Workforce Planning Change Management Performance Management Total Compensation, Benefits & Rewards Industrial & employee Relation Recruitment Secretariat: Concern for overall design and accomplishment of personnel recruitment policy and criterion. Personnel Admin Section: Concern for personnel selection, retention, promotion, termination and disciplinary action. Planning & Record Section: Concern to upkeep and update personnel record with strict confidence and manpower planning for forthcoming telecom project Training & Vehicle Section: Concern for periodic education and training management. It is also concern for vehicle operation, maintenance and distribution. Mgmt Development & General Admin Section: Concern to deal staff benefit, trade union activity, building upkeep and sanitation.

Performance Appraisal Section: Concern for maintaining the record of personnel performance appraisal 2. Services Department: Audit and Assurance The function of this department is to provide the Audit and Assurance services for the clients of Octokhan Chartered Accountants. 3. Services Department: Accounting and Finance The function of this department is to provide the Accounting and Finance services for the clients of Octokhan Chartered Accountants. 4. Finance Major jobs of Finance Department: Financial planning & control Treasury management Budget preparation and budgetary control Revenue, inter administration and sharing accounting Preparing annual and quarterly financial statement Reporting to statutory and regulatory authority Fixed assets recording and management Inter branch accounting administration Corporate tax and vat filing Employees welfare management Procurement

Finance department consist of five sections: 1. 2. 3. 4. 5. Procurement Section Expenditure Section Cash & Bank Section Welfare Section Internal Audit section

Revenue Department: Treasury Management Section Inter administration Accounting Section Revenue Section Central Accounts Department: Financial Statement Section Branch Accounts Section Fixed Assets Section VAT & Tax Section

5. Sales & Marketing

PERFORMANCE APPRAISAL PROCESS AND PRACTICES AT OCTOKHAN CHARTERED ACCOUNTANTS

To look into the sales To increase the revenue. To design the services. To look into the advertising activities.

6. Network and IT To support the organization with network and software To support the organization with IT hardware. 7. Legal & Corporate Affairs Concern for all legal issues and corporate affairs of the company and perform the legal advisory role and advocacy. Achievement of Octokhan Chartered Accountants: SWOT Analysis: The SWOT analysis of Octokhan Chartered Accountant is conducted as under: Strengths: Has a good team for Audit Has a good team for income estimation Good infrastructure