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Employees want direction, freedom to get their work done and encouragement. They dont want their managers to control them. In fact they expect support from the management on continuous basis through coaching and counseling and by providing the facilities and resources necessary to meet their expectations. The biggest danger faced by any organization today is designing or redesigning the performance management system to produce lengthy and over elaborate forms, the only effect of which will be to convince appraisee that, this is a bureaucratic burden imposed upon them by top management or the HR department or both. In most of the organizations the review is partly a stock-taking exercise answering the questions where have we got to? and how did we get here? But there is much more to it than that .It is not just a historical exercise, dwelling on the past and conducting post mortems. The true purpose of the review is to look forward to what needs to be done by people to achieve the overall purpose of their jobs, to meet new challenges, to make even better use of their skills, knowledge and abilities, competencies in their career and increase their employability, within and outside the organization.


Why is performance management relevant to operations personnel as well as to the executive team? It is because operating managers and employee teams toil daily, making choices involving natural tension, conflicts and trade-offs within their organization. An example is how to improve customer service levels and costsaving process efficiencies while restricted to fixed contract-like budget constraints and profit targets. The classic conflict in product companies is that the sales force wants lots of inventories to prevent missed sales from stock-out shortages, whereas the production folks want low in-process and finished goods inventories so they can apply the more proven just-in-time production methods rather than continue with the less-effective batch-and-queue production methods of the 1980s. Managers acknowledge that the impact from their decisions may adversely affect their coworkers elsewhere in their organization - but they don't know who, where and to what extent. Performance management resolves the uncertainty of estimating impacts and predicting outcomes. Performance management study is a strategic and integrated approach for delivering sustained success to the organization by improving the performance of the people who work and there by developing the capabilities of teams and individual contributors. Thus performance management study is crucial to the present age organization. The above factors prompted investigator to take up this topic for the project study.


The investigator has framed the following objectives to conduct this study in an organized manner: To know how organization is approaching and managing the task of performance management processes. To identify and explore the new realities of performance management in the organizational practice. To know how organization, its employees, teams, team leaders and managers do (and could do) better to manage their performance in order to achieve success. To analyze the attitude of both appraisers and appraisees about performance management system. To create an understanding about the role of performance management and its relationship with other management activities. To communicate what is expected of the employees and how best this can be achieved by allowing employees to develop themselves and their contribution to the organization. To bring out the performance management practices of the organization. To suggest on the development of performance process, that will help in realizing organizational objectives. To suggest ways and means if necessary, to make performance management effective.



The survey was carried out in the early winter of 2004. The main aim was to establish current practices in performance management in The Himalaya Drug Company and as a consequence, the survey questionnaire was structured to ascertain firstly, what respondents understood to be the meaning of the term performance management and secondly, what activities were carried out in their organization under that umbrella heading. The questionnaire also attempted to gather data to enable the use of various tools of performance management to be tested against a number of measures of organizational effectiveness such as quality, innovation and efficiency. Further the aim of the survey was also to identify the extent to which performance management was integrated with other people-management processes, such as those concerned with career management, development and reward.

The methodology adopted is to first study the existing systems in place and meet people from different departments to gather feedback about the existing policies and practices. The day-to-day functioning of the organization was observed closely to identify the problem areas so as to help in making recommendations and developing the policies. Frequent discussions were also held with the H.R.manager and executives and time-to-time clarification were seeked. To assist in capturing the current policies and practices accurately, the investigator joined the company as a management trainee for a period of one


month during which she has been sensitive to the happenings in the working environment. The questionnaire was distributed to a total of 35 personnel in the Company. Two sets of questionnaire were designed, one set (15 copies) to know the attitude of appraiser and another set (20 copies) to know the attitude of appraisee. Various books of records of the organization and other relevant books were looked into to understand the policies and procedures in performance management system. Thus the investigator has followed the questionnaire method here. The discussion and observation techniques were also partly employed in research. The attitude survey was of course conducted in a small number and the views expressed by the participants cannot assume to be the representative. But the impression from this limited sample is certainly that the people involved, did not think that performance management was a dishonest annual ritual. Many people in the organization believe that attending appraisal is worthwhile.

The necessary input of information for analysis was from both primary as well as secondary data. Discussions with managerial personnel and also with some staff of HR department were made primarily. A feedback was drawn from distributing two sets of questionnaire to the respondents. Secondary data in the form of documents, books of records, files, companys website etc were made available for compilation. Also some periodicals, text, published and unpublished records and newspapers from library and internet site were referred wherever additional data was required.



The study was done for The Himalaya Drug Company. It is a leading and outstanding herbal products manufacturing company. The purview of the topic is restricted to only one unit and hence the study is micro in nature. However it provides detail coverage of the vast and complex Performance management policies and practices in the company. It reflects the impact of polices and traces the need for change in the policy and practices that are currently required. In this way, an empirical study on the recent policies has been made and a comprehensive view of the Performance Management System is developed. A very practical approach to the study has facilitated in having a clear picture of the actual performance management practices in the organization. A diagnosis of the concrete problems is made to appraise the working of H.R.department. This study is made for the sole purpose of academic study only. The questionnaires were distributed only to executives. Hence dissertation explains only executives views on performance management. Performance management covers wider area and due to time constraint performance appraisal, career development, coaching, monitoring, follow-up action, potential appraisal and training and development aspects were discussed in the dissertation.

In order to give a quantitative touch to the data collected percentages have been used to analyze the questionnaires and to draw meaningful conclusions on the questions asked.



As this is a study undertaken to fulfill the academic requirements it is bound to have certain limitations. Most prominent among these are: This project confined only to The Performance Appraisal aspect of the performance management system. Sample size has been taken up only from the executive level and from the divisional heads. Hence the survey is limited only to executive and divisional head level. Direct interaction with employees in many divisions was restricted. So the needed liberty was not given to choose respondents. One month duration is very small to work on the performance management system topic. If time could have been extended more data could have been collected. Comparative study with other organizations in the area of performance management system cannot be done due to the time constraint. Owing to these, the study is not extensive as it should be. However the investigator has tried her best to present the data in an effective manner.


At this point, investigator has given a road map to enable the readers to proceed through the report. This dissertation has been broken into five chapters to present a vivid picture and ensure clarity. A chronological list of sub titles of these along with a brief summary is given below.


Chapter I:


This chapter deals with statement of the problem, objectives of the study, methodology adopted, sources of data, statistical analysis, nature and scope of the study and also the limitations of the project work. Chapter II: THE CONCEPTUAL FRAMEWORK

In this chapter an in depth study of the performance management concepts and practices in the organizations and its relevance in the present scenario is presented. Chapter III: ABOUT THE ORGANISATION

This chapter covers Organizational history, its objectives through mission statement, its departments, product ranges, organizational charts and performance management background. Chapter IV: EVALUATION OF THE DATA

In this chapter an analysis of the questionnaires completed by respondents is made through tables and diagrams. An assessment of the impact of the performance management derived from an analysis of completed questionnaires was also made here. Chapter V: MAJOR FINDINGS, SUGGESTIONS & CONCLUSION

This is the concluding chapter which summarizes the findings and suggestions obtained through the data evaluation.



Performance management is about learning at the organizational, team and individual levels. For individuals, learning is concerned with self-knowledge, understanding and development and what needs to be known and how things can best be done to improve effectiveness and potential. But individual and team learning takes place within the context of the organization and the concept of the learning organization underpins much of the developmental aspects of performance management. Performance management is a natural process of management, not a system or technique. It concerns everyone in the business not just managers. It rejects the cultural assumption that only managers are accountable for the performance of their teams and replaces it with the belief that responsibility is shared between managers and team members. It covers below stated areas. Performance Appraisal Feed back Counseling Communication Career development Coaching Monitoring Follow- up action Potential appraisal Training and development



Performance Appraisal Performance appraisal or merit rating is one of the systematic evaluations of the individual with respect to his performance on the job and his potential for development. It is concerned with determining the difference among the employees working in the organization. The term merit rating is used in modern management terminology. In past the emphasis was on evaluating the worth as a person .The emphasis was on the evaluation of personnel traits as initiative, dependability, personality etc. Today the emphasis is on measuring the results of the employees performance. Feedback Giving feedback based on fact, not on subjective judgments, is an important part of a performance and development discussion. In this respect at least performance meetings provide information, to be presented (feedback) to people on their performance, which helps them to understand how well they have been doing and how effective that behavior has been. The aim is to promote this understanding so that appropriate action can be taken. This may be corrective action, where the feedback has indicated that something has gone wrong or more positive action may be taken to make the best use of the opportunities the feedback has revealed. In the latter case, feedback acts as a reinforcement and positive feedback can be a powerful motivator, because it is a recognition of achievement



Counseling Counseling is the central for the management and development of people. Managers frequently engage in some activity during their normal working life that could be termed as counseling. It is therefore a natural component of managing everyday activity that can arise from immediate feedback during a performance and development review. The most important aim is to encourage people to accept much of the responsibility for their own performance and development. What people feel and find out for them, with some guidance as necessary, is likely to make much more impact on their behavior than anything handed down to them by their manager. Communication Communication is a natural instinct of all living creatures. It is the basic need of all human beings. It plays all the more significant role in the present day organizations which are complex, dynamic and socially oriented. Effective communication keeps the organization vibrant, vital and smooth sailing. In India, in almost all the enterprises in the public sector and in the private sector, only a secondary place has been given to communication. It was found that very few upward communications were made on vital matters as poor work performance, unfavorable reactions to others, unfavorable opinions and attitudes of workers and breach of procedure in doing a job.



Career development It has usually come to mean the progress of an individual in a field of work throughout the employable years of his life. Sometimes it means devotion to a speciality.The term has also been used to mean a series of employment that are related to each other and are of increasing importance. It carries with it connotations of some degree of success. The recent trend in the organization is to have a career system for the employees in which young persons are carefully selected and work at various levels in the organization throughout their working life. This will be possible only if the career system provides satisfying opportunities of advancement to the employees. Coaching Coaching is a person to person technique designed to develop individual knowledge/skills and attitudes. It is most effective if it takes place informally as a part of the normal process of management or team leadership. It helps people to become aware of how well they are doing, where they need to improve and what they need to learn. It makes managers and individuals to use whatever situations arise as learning opportunities. It guides how progress should be monitored and reviewed. Monitoring Monitoring the employees performance is significant. Through monitoring immediate actions can be taken to correct the deviation from the set standards. In



performance management, continuous monitoring backed by employee guidance and feedback on the performance occupies an important place. Follow - up action Through performance appraisal an employees performance can be evaluated. Once they get the ranking next work of the HR department is to deal with the follow up actions. This can be taken in the following forms: Employee with excellent ranking Employee with poor performance -Career development and guidance -Counseling, mentoring, coaching, training and development etc Potential appraisal Potential appraisal mainly helps in identifying the areas of strengths and weaknesses. With its help proper employee development planning can be framed and implemented. Training and development After the employee has been selected, placed and inducted, he must be trained. Training is the act of increasing the knowledge and skill of a worker for doing a certain job. Individuals should develop and progress simultaneously for their survival and attainment of mutual goals. Training is the organized procedure by which people acquire knowledge or skill for a definite purpose. No business has a choice of whether to train or not, but the only choice is the method of training. At present training of workers is necessary because many jobs have assumed a highly technological character and under automation we require highly skilled operatives.

Employee with average performance -Training and development



Development is the systematic process of growth and development by which employees can develop their abilities to perform. It is the result of not only participation in formal courses of instruction but also of actual job experience. It is concerned with improving the performance of the employees by giving them opportunities for growth and development. SCOPE OF THE PERFORMANCE MANAGEMENT PROCESSES For the organization 1. Align corporate, individual and team objectives 2. Improve performance 3. Motivate employees 4. Increase commitment 5. Underpin core values 6. Improve training and development processes 7. Help to develop a learning organization 8. Enlarge the skill base 9. Provide for continuous improvement and development 10.Provide the basis for career planning 11.Help to retain skilled employees 12.Support total quality and customer service initiatives 13.Support culture-change programs For managers

1. Provide the basis for clarifying performance and behavior expectations

2. Afford a frame work for reviewing performance and competence levels



3. Improve team and individual performance 4. Support leadership, motivating and teambuilding processes 5. Provide the basis for helping underperformer 6. May be used to develop or coach individuals 7. Offer the opportunity to spend structured quality time with teams and team members 8. Provide the basis for providing non-financial rewards to staff For individuals 1. Greater clarity of roles and objectives 2. Encouragement and support to perform well 3. The provision of guidance and help in developing abilities and performance 4. Opportunities to spend quality time with their managers 5. Opportunities to contribute to the formulation of objectives and plans and to improvements in the way work is managed and carried out. This concept is nebulous unless backed up with an understanding of the following processes




Organizations can be described (Harrison 1992) as continuous learning systems. The contribution of performance management to the development of organizations and people can be enhanced in the light of a better understanding of how organizations and people learn. This understanding will also help to make practical use of the learning organizational concept. Organizational learning has been defined by Marsick (1994, quoted in Harrison 1997) as a process of: Co-ordinated systems change, with mechanisms built in for individuals and groups to access, build and use organizational memory, structure and culture to develop long-term organizational capacity. HARRISON (1997) S FIVE PRINCIPLES FOR ORGANIZATIONAL LEARNING: 1. Need for a powerful and cohering vision of the organization is to be communicated and maintained across the workforce in order to promote awareness of the need for strategic thinking at all levels. 2. The need to develop strategy in the context of a vision that is not only powerful but also open-ended and unambiguous .This will encourage a search for a wide, rather than narrow, range of strategic options, will promote lateral thinking and will orient the knowledge-creating activities of Employees. 3. Within the framework of vision and goals, frequent dialogue, communication and conversations are major facilitators of organizational learning. 4. It is essential continuously to challenge people to re-examine what they take



for granted.
5. It is essential to develop a conducive learning and innovation climate.

These principles could be applied equally well to performance management, as one of the processes that can help to promote organizational learning. This will be the case if the focus is on strategy, vision, communication and challenge. If it is understood as an important concept, then the aim of performance management is to help in the development of a learning culture.


Argyris (1993) suggests that learning occurs under two conditions: When an organization achieves what is intended and When a mismatch between intentions and outcomes is identified and corrected. But organizations do not perform the actions that produce the learning. It is individual members of the organization who behave in ways that lead to it, although organizations can create conditions that facilitate such learning. Argyris distinguishes between single-loop and double loop learning. Single-loop learning organizations define the governing variablesi.e. what they expect to achieve in terms of targets and standards. They then monitor and review achievements and take corrective action as necessary, thus completing the loop. Double-loop learning occurs when the monitoring process initiates action to redefine the governing variables to meet the new situation, which may be



imposed by the external environment. The organization has learned something new about what has to be achieved in the light of changed circumstances and can then decide how this should be achieved.


Define expectations

Take action

Decide on corrective action as necessary

Monitor and review

Single-loop learning

Re-define expectations as necessary

Double-loop learning

Individuals learn for themselves and from other people. They learn as members of teams and by interaction with their managers, co-workers and people outside the organization. KOLBS FOUR STAGES OF CONTINUOUS LEARNING CYCLE
1. CONCRETE EXPERIENCE - This can be planned or accidental


116123260.doc 2. REFLECTIVE OBSERVATION - This involves actively thinking about the experience and its significance 3. ABSTRACT CONCEPTUALIZING - Generalizing from experience and ideas that can be applied when similar situations are encountered. 4. ACTIVE EXPERIMENTATION - Testing the concepts or ideas in new situations. This gives rise to a new concrete experience and the cycle begins again.


Concrete experience

Testing implications of Concepts in new situations

Observations and reflections

Formation of abstract concepts and generalizations

The key to Kolbs model is that it is a simple description of how experience is translated into concepts, which are then used to guide individuals on how to deal with new experiences. Performance management can enhance the learning process by providing people with opportunities to reflect on their experiences, to learn from them and to develop their capacity to handle new experiences.



Honey and Mumford (1986) have identified four styles:

1. ACTIVITIES - Who involve themselves fully without bias in new experiences and revel
in new challenges

2. REFLECTOR - Who stand back and observe new experiences form different angles-they
collect data, reflect on it and then come to a conclusion.

3. THEORISTS - Who adapt and apply their observations in the form of logical theories-they
tend to be perfectionists.

4. PRAGMATISTS - Who are keen to try out new ideas, approaches and concepts to see
whether they work.

However, none of these four learning styles is exclusive. It is quite possible, for example, that one person could be both a reflector and a theorist and that someone else could be an activist/pragmatist or a reflector/pragmatist.


Self- managed or self-directed learning means that individuals take responsibility for satisfying their own learning needs to improve performance, to support the achievement of career aspirations or to enhance their employability, within and beyond their present organization. It can be based on processes that enable individuals to identify what need to learn by reflecting on their experience and analyzing what they need to know, so that they can perform better and progress their careers. It has been argued by Knowles (1998) as reported by Tamkin (1995) that all individuals are naturally self-directed learners, even if they may need some help initially to get sarted.As Harrison (1997) has noted, No new learning will occur unless there is a stimulus to activate the learning process.




1. SELF-ASSESSMENT based on analysis by individuals of their work and life situations. 2. DIAGNOSIS derived from the analysis of learning needs and priorities. 3. ACTION- PLANNING to identify objectives, helps and hindrances, resources required
(including people) and timescales.

4. MONITORING AND REVIEW to assess progress in achieving action plans.

Mumford (1994) suggests that self-managed learning can be carried out as follows:
Identify the individuals learning styles. Review how far their learning is encouraged or restricted by their learning styles. Review their core learning skills of observation and reflection, analysis, creativity, decision-making and evaluation and consider how to use them more effectively. Review the work and their experiences in which they are involved in terms of the kind of learning opportunities they offer. Look for potential helpers in the self-development process: managers, colleagues, trainers or mentors (i.e. individuals other than the manager or a trainer who provide guidance and advice). Draw up learning objectives and plan of action- a personal development plan or learning contract. Set aside some time each day to answer the question, what did you learn today?




As Harrison (1997) comments: In organizational life, everyday experience the most fundamental influence on learning. This experience consists not simply from the work that people do, but of the way they interact with others in the organization and the behavior, attitudes and values. It follows that, when work is continuous, development can be continuous as people reflect on and learn from their experience. But this is more likely to happen if reflection and learning are encouraged and to a reasonable degree, structured within a performance and development framework. The IPM commented as follows in its code of practice on continuous development: As far as practicable, learning and work must be integrated. This means that encouragement must be given to all employees to learn from the problems, challenges and successes inherent in their day-to-day activities. Again, the reflective, analytical and diagnostic aspects of performance management, in it contribute to continuous development. This is achieved in two ways: PERFORMANCE AND DEVELOPMENT REVIEWS AND PERSONAL DEVELOPMENT PLANNING




Performance and development reviews, whether conducted formally or informally, can be regarded as learning events. Learning opportunities are provided before, during and after formal meetings.

1. Individuals can be encouraged to think about their work experiences and their futures 2. They can be asked to marshal their thoughts about what they feel they want to learn and the direction in which they want to develop. 3. They can also be asked to think about any specific training from which they believe they could benefit. This could be described as a process of reflection.


1. Individuals can present to the reviewer their views about what they have

learned and what they need to learn. 2. A dialogue between the reviewer and the reviewee can take place in which learning needs can be analyzed and a diagnosis agreed in priority areas. 3. Review meetings may also provide an opportunity for counseling.


1. Performance management goes on after the formal review. This is when

coaching by the reviewees manager and further counseling can take place.



2. Learning also continues informally when a manager asks an individual or team to do something, a discussion can take place on how it should be done and what help, in the form of guidance or training, may be required. 3. After the event, an informal analysis can take place of what went well or not so well and this can identify further learning needs.


Defined Personal development planning is carried out by individuals with guidance, encouragement and help from their managers as required. A personal development plan (PDP) sets out the actions, people propose to take responsibility for formulating and implementing the plan, but they may receive support from the organization and their managers in doing so. Purpose Personal development planning aims to promote learning and to provide people with the knowledge and portfolio of transferable skills that will help to progress their careers. Focus PDPs were most commonly focused on job or career development or some mix of both. Less frequently, the emphasis was on the whole person. Tamkin (1995) comment: Personal development plans which focus solely on skill development for the current job which will not be welcomed by many employees. Those which take a broader view of the individual and their future may



be more effective for encouraging flexibility and have a higher impact on employees.

Personal development planning-the overall process

PDPs can be created as an outcome of a development or assessment centre. But these may make only a limited impact and most of the IES research contacts extended the planning process to all their staff or were intending to do so. Personal development planning has become a well-established feature of performance and development management. As described by BP chemicals, the four stages in preparing a personal development plan are to: 1. Assess current position 2. Set goals 3. Plan action 4. Implement These planning stages are in line with those proposed by Gannon (1995) 1. Analyze current situation and development needs. 2. Set goals under such heading as improving performance in the current job, improving or acquiring skills, extending relevant knowledge, developing specified areas of competence, moving across or upwards in the organization, preparing for changes in the current role. 3. Prepare action plan




Assess current position


Set goals

Plan action


Development needs and wants are identified in performance management processes by individuals on their own or working in conjunction with their managers. This will include:
Reviewing performance against agreed plans and assessing competence

requirements and the capacity of people to achieve them. The analysis is based on an understanding of what people do, what they have achieved, what knowledge and skills they have and what knowledge and skills they need. The analysis is always related to work and capacity to carry it out effectively. Individuals can make their own assessment of their personal development needs to get more satisfaction from their work, to advance their careers and to increase their employability.




Training courses may form the part of the development plan, but only a minor part; other learning activities were much more important. As Royal Mail Anglia state in their guidance notes on personal development planning: Development needs can be met using a wide variety of activities. Do not assume that a conventional training course is the only option. In many instances, activity more finely tuned to the specific need can be more rewarding and appropriate than a generalized training course. The examples of development activities listed by Royal Mail Anglia include: Seeing what others do (best practice) Project work Adopting a role model (mentor) Involvement in other work areas Planned use of internal training media (interactive video programmes/learning library) Input to policy formulation Increased professionalism on the job Involvement in the community Coaching others Training courses Other learning activities, which could be mentioned but are not on this list, include guided reading, special assignments, action learning and distance learning.



The action plan sets out what needs to be done and how it will be done, under such headings as: Development needs

Outcomes expected (learning objectives) Development activities to meet the needs Responsibility for development- what individuals will do and what support they
will require from their manager, the HR department or other people

Timing-when the learning activity is expected to start and be completed Outcome-what development activities have taken place and how effective they were?


Achievement and performance





Identify learning needs Identify learning-style profile Review options available



Note down learning needs under the headings knowledge, skill attitude and experience (the advice is think about what, specifically, need to know and do differently) Against each need, note down the specific action chosen, who is responsible for effecting the action and by what date Ensure that personal learning plan is implemented, reviewed and updated as necessary Ensure that a formal review with manager takes place at least once a year, preferably twice, to establish that all is going according to plan or to adapt the plan to meet new needs.


Support the individual in his or her efforts to develop Offer feedback at appropriate stages Provide information on company activities and requirements Help produce action plans that are practical and achievable Assist in implementation




From antibiotics to cardiac medications, the pharmaceutical industry has produced many life-saving therapies. In recent years, however, drug companies are increasingly investing their resources in more lucrative lifestyle drugs like Viagra and allergy medications. But The Himalaya Drug Company situated in Bangalore focuses on developing safe, natural and innovative remedies. Because in Himalaya, the ideal healthcare system lies in the synergy between Ayurveda and Modern science. The Himalaya Drug Company in Bangalore was incorporated with a mission to excel in the strategic areas of pharmaceutical, animal health care, consumer health care and personal health care. It has established itself on the principles of integrity and dedication to total customer satisfaction. With clear focus on developing herbal products, it has successfully implemented several products to the existing product line.


Seventy-five years ago, on a visit to Burma, Himalayas founder Mr. .Manal saw restless elephants being fed with a root to pacify them. The plant from which this was taken is Rauwolfia Serpenitna.Fascinated by the plants effect on elephants, he had it scientifically evaluated. After extensive research Serpina, the worlds first anti-hypertensive drug, was launched in 1934.



This legacy of researching nature forms the foundation of Himalayas operations. Himalaya makes use of modern science to create pharmaceutical-grade ayurvedic products. They have pioneered research that has converted Ayurvedas herbal tradition into a complete range of proprietary formulations dedicated to healthy living and longevity. Today these products have found acceptance with medical fraternities which serve the health and personal care needs of consumers in over 60 countries and have been endorsed by over 250,000 doctors around the globe.


It all began in 1930 with his mothers pawned bangles. Young man with a very curious mind pondered the idea of presenting herbal medicine in a contemporary form. He spent his days riding his bicycle through the forests and learning about herbs from local healers. He knew he must scientifically prove that herbal medicines do work. He also wondered how to make an herbal tablet. He was advised to add kerosene to the powdered herb to help the tablet keep its form. And he tried it too, only to quickly realize that he had been tricked! He continued his efforts on his hand-operated tablet-compressing machines. At night his shoulders would ache after struggling to manually to produce a few hundred tablets, one tablet at a time. Simple as it may sound, the reality was that in his time this had never been done. Mr. Mohammed Manal, with Rs.100 in the kitty, a bicycle and a dream, opened his first shop and began Himalaya.

Starting off operation in Dehradun way back in the 1930s, the company later spread its wings to Mumbai and across the country. In 1975, the company set up an advanced manufacturing facility in Makali; Bangalore, India which today houses the corporate headquater.In 1999 company relocated its R&D facility to Bangalore.



The manufacturing facility at Makali has the largest tablet-coating unit in the country. Over one crore tablets are punched every day.


The Himalaya drug company has come into existence as a family-owned partnership firm with Mr.M.Manal as founder. The day- to- day affairs are vested in the hands of Divisional Heads headed by Chairman.Thus, the organization structure comprises of the chairman Mr. Meraj Manal, vice chairman Mr. Nabeel Manal, President & CEO and Executive Director R&D .The top management also includes the various Divisional Heads and Senior Managers of the various departments. For the purpose of smooth and efficient administration the organization has been divided into seven departments namely, Research and Development, Manufacturing and Quality assurance, Administration, Human Resource Management, Industrial Relations, Engineering Division, and Corporate Communication.


1930 - Mr. Mohammed Manal found The Himalaya Drug Company. His Vision: Put Ayurveda on par with modern medicine 1934 - Launch of Serpina, the worlds first anti hypertensive drug derived from Rauwolfia Serpentina. Mr.M.Manal discovered it on a trip to Burma. 1950 - Dr.Roshan M. Captain, joins the company and spearheads Research and Development 1955 - Liv.52 a hepatoprotective is launched and goes on to become one of the worlds top selling drugs. 1964 - Mr. Meraj Manal, the founders son joins the company. 1965 - Mr.Karstein, a German pharmaceutical consultant, directs the companys focus towards allopathic medical practitioners.



1975 - An advanced manufacturing facility is set up in Bangalore. The facility grows to become the corporate headquarters. 1991 - The companys R&D center moves to Bangalore. Research and development becomes a very important aspect of the companys focus. 1998 - The Animal Health Product Range for commercial livestock is launched. 1999 - Ayurvedic concepts launch its Personal Healthcare Products in India. 2001 - The company adopts a new unified brand identity Himalaya Herbal Healthcare. 2003 - Launch of Consumer Health Division for Chyavanaprasha, Forest honey & pure herbs. 2005 Himalaya celebrates seventy five years

Himalayas products can broadly be categorized into four main ranges, viz: Pharmaceutical Personal Care Well-being Animal Health PHARMACEUTICAL RANGE:

The medical range of products carry the Himalayan hallmark of researching ayurveda and capturing its benefits in formulations. Using modern research



methodology and manufacturing practice, Himalaya has made available to people all over the world, an alternate method of treatment, which has no known side effects. The medical range comprises over 35 products and is broadly classified into four categories viz: Childrens Health Mens Health Womens Health General Health Liv.52, Bonnison, Himcold, Mentat, Tentex Royal Prominent among Himalaya brands is Liv.52, a liver formulation, which is also the flagship brand of the company. Every one-third of a second, one unit of Lv.52 is bought somewhere in the world. It is ranked number one in the world in the hepatoprotective-lipotropic segment and number four among all pharmaceutical products in India (ORG Marg, July2003). In 1972, continuing its tradition of introducing safe and natural remedies, Himalaya launched Bonnison, a natural pediatric digestive tonic. A formulation based on years of research and clinical testing, the product found wide acceptance among doctors and mothers alike. The sweet tasting tonic became a trusted part of a babys growing up. After extensive work on the formulation and related clinical research, Himalaya introduced Himcocid an herbal natural acid neutralizing agent in 2000.It was very well received by customers and broke all ORG (Organization Research Group, a national market survey forum) records in the year of its launch. With introduction



of Himcocid, Himalaya shattered the notion that ayurvedic products are slow acting and work best for chronic ailments. Some of the other well known products are:Abana, Cyst one, Gasex, Geri forte, Rumalaya,Diabecon,Mentat,Koflet,Himcolin,Septilin,Pilex,etc. PERSONAL CARE PRODUCTS

Himalaya has used its wealth of knowledge and research, in natural herbal remedies, to formulate a range of personal care products that cater to daily health needs. This range offers the goodness of natural solutions for daily use by the complete family. The use off natural ingredients in personal care products has been practiced since time immemorial leading to increased use of herbs with a curative value. Modern research proves that herbs while being effective are also mild and soothing. Launched in 1999, Himalaya Herbal is a range of natural herbal personal care products spanning Health Care, Oral Care, Hair Care and Skin Care. The range comprises of Fairness Cream, Soap-free washes, Facial Cleansers, Face Toners,Moisturizers,Soap-free Shampoos,Conditioners,Hair-loss control, Weight control, Pimple control, Foot care,Multi purpose creams, Skin nutrients, Dandruff



control,Anti-stress,Digestive health, Pain relievers, Cough &cold relievers and Oral Care products.


Himalaya pure herbs are a range of individual herb extracts. Each herb is the result of strict monitoring from the farm to the lab. At the lab, Himalyas proprietary techniques are used to extract the optimum value of each herb. This is followed by rigorous tests by R&D team for potency and consistency. The actins of these extracts benefit the body, irrespective of the individuals body constitution, state of health and metabolic functions. Every one can benefit from the goodness of these herbs, irrespective of age, sex, body type or other health related factors. The Pure Range comprises of the following Amalaki: Useful in treating cough, cold, sore throat and respiratory tract infections. It protects cells from free radical damage and is an excellent anti oxidant. Arjuna: This herb improves blood circulation and is used as s tonic fir the heart. Ashvaganda: Commonly known as winter cherry, this herb acts as an anti-stress agent that imparts a sense of well-being and helps in coping with lifes daily stresses. Brahmi: a well-known herb that helps in improving general alertness.



Karela: Commonly known as Bitter Gourd. It is known to aid in the metabolism of carbohydrates Lasuna: Commonly referred as Garlic.Lasuna helps in controlling the excess conversion of lipids and cholesterol Neem: A popular herb, neem has anti-bacterial and blood-fungal and blood purifying properties. It is very useful in skin disorder and helps maintain a healthy, beautiful and glowing skin Shudda Guggulu: It regulates fat metabolism and helps remove excess cholesterol from the body. Shallki: This herb treats joint problems. Tagara: It has mild sedative properties, which are useful for insomnia and sleep disorders Triphala: A digestive aid compound and a bowel cleanser. Tulasi: It has anti-microbial and anti-inflammatory properties and is useful in respiratory tract infections like dry or wet cough, cold and sore throat.

The Himalaya legacy extends to Animal Health also. The company offers wellresearched, safe, animal health products, harnessed from natures wealth to alleviate the suffering of animals, to improve their health and to increase their productivity. World-wide there is a growing concern about the presence of chemical contamination in dairy, meat and poultry products. Taking a cue, the Himalaya drug company has extended its expertise to create ayurvedic drugs and therapies for animal health care.



Concern for animal welfare prompted Himalaya to launch the animal health range of products for Commercial Livestock in July 1998.the products in this rang alleviate the suffering of animals and improve their health. This results in healthy livestock whose animal products are safe for human consumption. Realizing the importance of companion animal in todays life, Himalaya launched the companion care range of products in 2000. Live Stock: We have Appetonic Vet, Appetoni forte Vet, Diarex Vet, Galactin Vet, Himpyrin Vet, Himrop Vet, Inflaming Vet, Speman forte Vet, Styplon Vet, Tentex forte Vet. Poultry: Diarex PFS,Geriforte Vet,Liv.52 Protec,Nefrotec Vet,Speman Vet, Speman forte Vet, Tentex forte Vet are prominent products. Aquaculture :Gerroforte Aqua,Himmune,Liv.52 Protec. Companion :Anxocare, Canisep, Digyton, Erina, Erina EP ,Erina Plus, Himpyrin, Immunol, Liv.52 Vet, Nefrotec, Regurin, Scavon are important items.

There are 84 franchisee stores located across the country. All the products are made available less than one roof for the customers. Product catalogues and information booklet are available for the customers to choose the right product available for the customers.



Himalaya produces quality polyherbal formulations. To monitor quality, many endangered herbs are grown by the company on its farmland. The principles of Good Manufacturing Practices (GMP) are rigorously followed in the plant and the company prides itself on being environmental friendly. As a part of the environment control system, it had installed a modern effluent treatment plant long before regulations mandated it. A high stress on quality, several quality circles and special project teams working on Total Quality Management (TQM) projects make quality a way of life in Himalaya. The manufacturing plant uses automatic, high speed punching, coating and filling machines. The tablet coating facility is one of the largest in India. The plant can produce nearly 5 billion tablets and 60 million bottles of liquids annually. This enables Himalaya to produce phytophamaceuticals with uniform levels of batch-to batch consistency. This ensures that the customer gets the same high quality product regardless of where it is purchased.


The Himalaya brand has much in common with the mountain range, from which it draws its name. For centuries, the Himalaya has been an icon of inspiration, of mans quest to unlock Natures secrets. The Himalaya represents purity and lofty ideals and is the source of many herbs they use.



Their logo is a visual definition of their brand identity. The leaf that forms the crossbar of the letter H evokes their focus on herbal healthcare. The teal green of their logotype represents their proximity to nature, while the orange is evocative of warmth, vibrancy and their commitment to caring. Every thing that carries their logo is accompanied by high quality that has always been their hallmark. The Himalaya brand carries with it the promise of good health and well-being. Their endeavor is to ensure that their logo becomes the symbol of promise delivered.

Seventy years later, Himalaya has spread its wings to several parts of the globe. With offices in Bangalore, Dubai, Singapore and Houston and soon in Jersey (British Isles) and Chile in South America, they are on a roll. Their vision is to make Himalaya a household name. Indeed, brand Himalaya has increased its visibility in several important markets globally and they will continue to build on this foundation. Their commitment to core values will remain strong. They will continue to operate their business with the highest ethical standards set by their founder. They will be honest and truthful with their entire customer. Each person



who comes in touch with Himalaya must be delighted with his or her experience. Nothing less is acceptable.

QUALITY POLICY Researching Nature - Enriching Life - Since 1930

Developing safe and proven pharmaceutical-grade herbal health and personal care products. Maintain international quality standards and secure Indias rightful place in the global economy by consistently meeting or exceeding customer expectations. Quality performance is a commitment to excellence by each Himalaya employee. It is achieved by teamwork and a process of continual improvement. Our attachment to Himalaya is total; our commitment to its values, complete. Each person who comes in touch with Himalaya must be pleased with his or her experience, nothing less is acceptable.

We will satisfy each customers health needs through well researched, effective and safe remedies harnessed from natures wealth. We will consider the world our market and make international quality standards our obsession. We will maintain customer- friendly prices and proudly participate in securing Indias rightful place in the global economy, all through the total commitment of each member of the Himalaya family.



Mr. Mohammed Manal began the experimental herb farm in the 1930s to grow rare herbs. Himalayas strength has been in their rich herb heritage. An agrotech division in south India grows geographically compatible endangered herbs. Currently, Himalaya has a database of more than 200+herbs, 30+minerals that are studied intensively.

AWARDS AND RECOGNISITION 1. In 2003, awarded ISO 9001:2000 Certification for design, manufacture &
marketing of herbal health care products from National Quality Assurance, UK.

2. In 2001, granted Good Manufacturing Practices (GMP) Certificate, by

Licensing Authority, Directorate of Indian System of Medicine, Bangalore.

3. Recognized as Research Center by Rajiv Gandhi University of Health

Sciences, Karnataka.

4. The WHO has sponsored a project, through the Ministry of Health in

India, to standardize medically useful herbs. Himalaya is one of the companies chosen for the project.

Dedicated employees are the valuable assets of The Himalaya Drug Company. Friendly work environment can be experienced throughout the organization. They are the people who took Himalaya to its peak and they are the people who made the organization so competitive in the market that no other company is ever daring to venture into its many product lines. As per 30th November the human resource



total was 2192 comprising management staff (385), field staff (1016) and workmen (791). Human Resource for the year 2004-2005 Management Staff Field Staff Workmen Total 385 1016 791 2192

The below diagram shows the distribution of human resources in various functional classification as on 30th November, 2004.
Manpower as on 30th Nov,2004
Mgt Staff, 385 Workm en, 791

Field Staff, 1016

Mgt Staff

Field Staff





BRIEF HISTORY Performance Management System has been in place from long years in The Himalaya Drug Company. This system aims to review individual performance on the basis of mutually agreed objectives, for a particular period, thus ensuring goal clarity on a continuing basis. Also it analyses and provides counsel and training to the appraisee, on areas of concern, with respect to self-development, achievement of business objectives and future growth in the organization. However, changes have been brought into the system according to the changing requirements and developments in the H.R.system. The present Performance Management System has been formulated by B M Nagaraj and K G Umesh in the year 1995 and it is the development of the old system. Initially ranking system was followed to appraise the performance, which was not that systematic. Now the company is following grading system.

Operational guidelines
1. The human resource head carries out the performance planning exercise whenever the need arises to modify the existing Key Result Areas and identify new dimensions. 2. The concerned departmental head does appraisal for a period of six months (for probationers) and annually (for all) on the overall performance of the employees based on the various potentials, skills and competencies. The



appraiser gives the performance feedback of his subordinates to the human resource department by recording the same in the appraisal form at the end of every six months and annually. 3. On receipt of appraisal, the human resource department carries out a detailed rating analysis based on the weight age and the same will be compared vis-vis with their superiors ratings. In case there is noticeable difference in the employee rating the same will be referred back to the concerned superiors for justifications.


Senior H.R.manager
(B M Nagaraj)

H.R. Manager
(K G Umesh)


Industrial Relations




(Miss. Usha)

Peons & Office Boys




Once in a year the performance of employees are evaluated by the HR department and by Divisional Heads. The following employees performances are evaluated. Employee Grades & Designations

M1 M2 &M3 M4 & M5 E1, E2 &E3


CRITICAL PARAMETERS To arrive at an unbiased conclusion about the employee performance various factors are considered as critical parameters. The extent an employee is capable of proving his/her efficiency he/she will be rated as A, B, C and D. Rating scale A B C D JOB KNOWLEDGE Here knowledge of concepts and techniques relevant to the job, awareness of the current trends and development in the job areas and applying knowledge effectively to carry out the job are considered. PLANNING & ORGANISING ABILITY Ability to plan ahead routine and non-routine tasks, set targets and developing strategies to achieve the targets with minimum resource utilization fetch more marks to the appraisee. Outstanding Very Good Good Average



LEADERSHIP & DECISION-MAKING Ability to motivate subordinate in working towards common goal, ability to delegate authority and guide them in their work and helping them to develop themselves are important points under this segment COMMITMENT AND DEDICATION Dedication to work and companys objectives, reliability in completing assigned tasks in time, with minimum request of follow-up from superior are crucial determinants. INITIATIVE AND INNOVATIVENESS Ability to determine and initiate actions that result in improved handling of the job without waiting to be hold, ability to think of new and better ways of doing things that results in introduction of new ideas or improvements of the systems and operations are considered to be essential factors here. COMMUNICATION Ability to express and present thoughts clearly and precisely both written and oral is important here. INTERPERSONAL AND TEAM RELATIONSHIP Ability to interact effectively with people at all levels to gain their confidence and respect for subordinates; associating superiors to work in a collaborative and participative manner are significant constituents. RESPONSIVENESS TO CHANGE Ability to quickly interpret, adjust and manage new situations gains due weight age.



COST AND TIME CONSCIOUSNESS Optimum utilization of resources and contribution to savings in cost fetch more points. ANALYSIS OF PERFORMANCE After analyzing the critical parameters appraiser along with HR department arrive at a mutual conclusion. This conclusion on the review serves as an effective tool in implementing all follow up actions taken. 1. List of employees strength giving supporting examples which serve as an indicator of the direction in which employee development could be planned. 2. The areas in which employee performance can and should be improved, which assist in improving employee performance. 3. Summarizing the employee improvement and developmental needs, wherever practicable by indicating specific work experience, training measure or other improvements and development plans. 4. If the employee is promotable, making career plan by indicating specific position. This appears to be the next step ahead of him.

Along with performance review employees are asked to assess their self. Based upon self-assessment the rating scale is decided. Important factors were appraisee is asked assess himself are as follows. The targets (KRAs) agreed for the appraisal period. The work done during the period under review The major achievements



Factors hindering the performance. Training needs. Assignments/jobs appraisee would like to be involved in. 3.INTERFACE SESSION In interface session both appraiser and appraisee sit together and have a face-toface discussion regarding below stated things. Areas of improvement agreed upon in current area of work Targets agreed upon for the coming year with objectives and target areas.


(For trainees / probationers )

Here various performance criteria are evaluated before rating the performance of the trainee. Based upon trainee job knowledge, quality of work (includes accuracy, reliability, meeting targets), adaptability to the company (culture, work system & procedures), Communication (oral/written/presentation), Co-operativeness (with subordinates/ colleagues/ peers/ superiors), initiative and innovativeness, Commitment & dedication, Traits in quality consciousness, time consciousness, system consciousness, cost consciousness along with attendance performance is reviewed and following ratings will be given. Rating scale A B C D E Outstanding Very Good Good Average Poor




To know the future potentiality of an appraisee during the performance review, the HR department will do potential evaluation. Following are the important evaluating factors considered for potential appraisal. PERFORMANCE Here completion of tasks on time, achievements of results, TQM and house keeping, technical and functional ability are considered. MANAGEMENT/SUPERVISORY SKILLS Organizing skills/abilities, resourcefulness, planning ability, crisis management, delegation and development, control and counter measures and communication skills constitute the core issues for reviewing. DEPENDABILITY Perseverance and commitment to task, adherence to culture /system/standards, professional integrity, loyalty to the organization etc are measured. INITIATIVE Innovating new ideas/concepts, Drive/killer instinct to achieve, Originating counter measures occupies significant place. LEADERSHIP Here team building /group dymamics, fairness, development of subordinates are observed. ENERGY Stamina-physical and mental, stress management and health of the appraisee assist appraiser in evaluation.




After through evaluation of the critical factors and discussion with the appraisee the rating scale is determined. To make it more specific and systematic for each factor certain weightage has been given. Total points will ultimately decide about the appraisee rating by the HR department.

Weightage taken for potential for each category

FACTORS Performance Management/ Supervisory skills Dependability Initiative Leadership Energy M1
0.15 0.30 0.10 0.15 0.15 0.15

M2, M3&M4
0.20 0.25 0.15 0.15 0.10 0.15

0.25 0.20 0.20 0.15 0.10 0.10

0.40 0.15 0.20 0.10 0.05 0.10

The results of performance management are used for the following purposes by the HR department and by superiors. Identification of Training needs Career planning and development Setting individual performance standards (KRAs) Individual development



Evaluation of the Data

In this chapter survey questioners have been analyzed to arrive at meaningful findings and conclusions. For the purpose of beautification and easy understanding of the analyzed data pie diagrams, bar charts are extensively used wherever felt necessary by the investigator.

How appraisee feels about performance management system in the organization

1. Understanding performance management
Below table shows what appraisee understood by the term performance management. Table 4.1
Performance appraisal or review Personal developmental plans Assessment of training and development Regular meetings with supervisor to review progress Setting objectives Pay based on performance ratings Periodical evaluation of realistic objectives 50% 40% 30% 30% 25% 20% 5%




50% Percentage of Understanding 40% 30% 30% 25% 20%









Perform ance Managem ent System s

Analysis: The general understanding conforms to most appraisees views about performance management, with a strong emphasis on performance review and development plans. The perception of pay as a key element was much less evident.

2. Completion of requirements
Ninety-five percentage of the respondents claimed that, they have undergone performance management evaluation carried out in the last year. In answer to this question why they had not undergone performance management evaluation? 5 percent said that it was irrelevant to the current job-the usual excuse. QUESTIONS Yes No PERCENTAGE 95% 5%



Respondents who undergone Performance Evaluation





a. Actions following the review meeting Actions following the review meeting are shown in the table 4.2. Table 4.2 Sl.no.
1 2 3 4 5

Received a pay rise Identified career development opportunities Realized improvements in the work done Attended training program Implemented a program on selfdevelopment

45% 25% 20% 10% 5%




20% 10%


Actions after Review Meeting



Analysis: Forty five percent respondents voted for the pay hike and twenty five percent respondents have identified career development opportunities by attending review meeting. Need for training programs and self-development programs have been strongly felt by the respondents.

3.Feelings about the organization and colleagues

Table 4.3 sets out views of respondents about their organization and colleagues Table 4.3 Statements
My organization is a good employer. My organization is committed to my training and development. My organization communicates well. The people in my work group are committed to the organization. My colleagues and I have respect for each other. Strongly Agree agree 40% 55% 5% 25% 20% 35% 35% 35% 50% 60% Neutral 5% 25% 40% 15% Strongly disagree 45% 5% 5%

1.Organisations commitment for training and development The respondents opinion about organisations commitment for their training and development has been illustrated through the following table and bar cart. Table 4.3(1) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. of respondents 5 25 25 45 Percentage 5% 25% 25% 45%



Organisations' commitment for training & development


40 20 0 Stg.Agr Neutral

2.Communication by the organization The respondents have strangely questioned communication aspect of the organization by remaining neutral (40 percent). This evidently draws organisations attention for improved communication practices in the system. Table 4.3(2) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 20 35 40 5 Percentage 20% 35% 40% 5%

Communication by Organisation


20 0



40 5
Neutral Response Stg.Disagr



Analysis: On the whole, respondents felt that they have good employer. But organization didnt communicate all that well (40% + 5%) and is not committed to their employee training and development (25% + 45%). Relationships with colleagues are good. A.Opinions about objectives, work and feedback Below table clearly highlights the employee opinion about objectives, work and feedback. Table 4.4 Statements
I fully understand my organizations goals and objectives. I know what is expected from me by my organization. My work objectives are difficult to achieve. I have authority to determine my work and to discuss the same with my superior. I find it difficult to discuss work problems with my line manager. I feel I am constantly being compared with my colleagues. Strongly Agree agree 30% 35% 30% 5% 20% 5% 55% 5% 55% 10% 25% Neutral 30% 15% 25% 10% 25% 25% Strongly No disagree response 5% 65% 10% 65% 45% 5% _ _

1.Understanding organisations goals and objectives Seventy five percent of respondents have agreed that they understand the organisations goals and objectives. Sl.no. 1 2 3 4 Table 4.4(1) Response No. Of respondents Strongly agree 30 Agree 35 Neutral 30 Strongly disagree 5 Percentage 30% 35% 30% 5%



Understanding Objectives,work and policies

40 Percentage 20 0 30


30 5
Neutral Stg.Disgr


2. Authority to determine the work Considerable authority has been given to determine the work and to discuss the same with the superiors. This can be comprehend more clearly from the below table. Table 4.4(2) Sl.no. 1 2 3 4 5 Response Strongly agree Agree Neutral Strongly disagree No Response No. Of respondents 20 55 10 10 5 Percentage 20% 55% 10% 10% 5%

Authority to determine work

10% 10% 5% 20%

55% Stg.Agr Agree Neutral Stg.Disag No.Resp



Analysis: Opinions about objectives, work and feedback as shown in the table 4, indicate a strong measure of belief that objectives and expectations are understood and that respondents have authority to determine their work objectives, which themselves are not unrealistic. They feel they have a reasonable degree of autonomy and have little difficulty in discussing work problems with their manager. They are happy about the feedback. B. Views on pay Table 4.5 Statements
The most important thing about my job is the pay. The people who get the best pay rises are those who ask for them. My organization values my contribution. Hard work is not necessarily recognized or rewarded. Strongly Agree agree 5% 15% 5% 15% 5% 65% 15% Neutral 40% 80% 30% 45% Strongly disagree 40% 10% 5% 25%

Analysis: Views on pay, as shown in the table 5, are mixed. A majority of respondents did not wholly agree that the pay is the most important part of their jobs. Most people felt that hard work is not necessarily recognized or rewarded. Majority (80 percent) remained neutral for the question people who get best pay are those who ask for them.



4. Attitudes to performance management

Table 4.6 Statements
Strongly Agree agree is about 20% 60% long-term 30% 35% 50% 5% 25% 35% 60% 50% 35% 15% 50% 45% Neutral 10% 5% 10% 10% 55% 20% 10% Strongly disagree 10% 5% 5% 5% 25% 5% 10%

Performance management individuals and their developments. Performance management helps people to improve work performance. Performance management provides platform to discuss progress openly and honestly. Performance management is a two way process with both appraiser and appraisee expressing their views. Performance management is about making people to work hard. Performance management values the contribution of the team. Performance management motivates people and makes them feel as a part of the organization.

1.Performance management is a two way process Responses from the respondents were quite satisfactory. They had shown moderate acceptance for two-way performance approach where both appraiser and appraisee express their views. Table 4.6(1) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 50 35 10 5 Percentage 50% 35% 10% 5%



Performance management is a two way praocess 50 40 30 Percentage 20 10 0

50 35 10
Stg.Agr Agree Neutral



Analysis: Attitudes to performance management are set out in the table 6, answer to the questions, revealed a strong measure of agreement with most of the fundamental precepts of performance management. There is no evidence of any hostility or even indifferences here.

A. Negative questions about attitudes to performance management Table 4.7

Strongly Agree agree Performance management is about manager 5% controlling people. Performance management doesnt help to 10% develop careers. Performance management is about deciding 10% 10% how much to pay for employees. Performance management is beneficial only for the organization and not for individuals.


Neutral 45% 20% 65% 25%

Strongly disagree 50% 70% 15% 75%

1.Performance management doesnt help to develop careers Through answering this question respondents have openly stated that career development aspects are not neglected.



Table 4.7(1) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 10 20 70 Percentage 10% 20% 70%

Performance management doesn't help for career development 0% 10% 20% 70%
Stg.Agr Agree Neutral Stg.Disagr

Analysis: On the whole the replies were fairly positive. Even the statement that performance management is about controlling people was agreed by only 5 percent of respondents.

5. Views of respondents on performance management

Table 4.8
Strongly Agree agree Performance management helps me to do my 20% 50% job better. Performance management helps me to develop 20% 50% my skill and potential. The performance standards agreed with my 30% 25% manager are realistic. I get useful feedback from my performance 10% 55% management review.


Neutral 20% 20% 35% 30%

Strongly disagree 10% 10% 10% 5%



Strongly Agree agree I am not satisfied with the way my 10% 15% manager/team leader conducts my performance review. Assessments of my performance are consistent, 15% 20% fair and unbiased. I feel motivated after a review meeting. 10% 40% I do not understand how my manager/team 5% 20% leader decides my rating. Managers/team leaders give the best 5% 20% ratings/assessment to people they like. I fully understand how my performance 5% 5% standards relate to the business needs of the organization. I have received adequate training in 5% 40% performance management. The system of performance management used 10% here works well and doesnt need to change. Time spent on performance management is 10% 45% worthwhile. The information disclosed in review is 5% 20% sensitively and productively used by the organization.


Neutral 40% 60% 50% 70% 50% 55% 50% 45% 40% 70%

Strongly disagree 35% 5% 5% 25% 35% 5% 45% 5% 5%

1. Performance management helps in developing skills and potential Seventy percent of respondents are enjoying the benefits of performance management by increasing their skills and potential. Table 4.8(1) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 20 50 20 10 Percentage 20% 50% 20% 10%



Performance management is helpful in developing skills and potential 50 50

40 30 Percentage 20 10 0


20 10






2.Satisfied with the way manager/team leader conducts performance review The obtained data somehow went against the above statement. Majority is not happy with the way superior conducts the review. Table 4.8(2) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 10 15 40 35 Percentage 10% 15% 40% 35%

Satisfied with present review system 10% 35% 15%

Stg.Agr Agr Neutral Stg.Disagr



1. There is a reasonable degree of support for the statements that performance

management helps me to do my job better and helps me to develop my skill and potential. 2. Quite a large proportion felt that they got useful feedback and people were reasonably satisfied with the way the review was conducted. 3. Assessments were felt to be quite fair and while answering this, majority (70 percent) remained neutral. 4. 50% respondents agreed that they felt motivated after a review meeting (although a substantial majority of 50 percent remained neutral). 5. Majority respondents (55 percent) remained neutral regarding understanding how assessments are made. 6. Many remained neutral (50 percent) and believed (25 percent) that the best ratings are given by managers to the people they like. 7. A large proportion believe that time spent on performance management is worthwhile. 8. 45 percent of employees feel the need to change the system. 9. Only 45 percent of respondents agree with the statement that they had received adequate training in performance management.



How appraiser feels about performance management system in the organization?

This questionnaire is mainly designed even to know the views of appraiser who conducts the review. Given below data analysis mainly provides information in the area of appraiser approach for performance management.

1. Appraiser attitude for performance management

Table 4.9 Statements
Important aspect of performance management is, setting of challenging and stretching goals. Performance management will succeed, if it integrates the individual goals with organizational goals. Performance related pay is an essential part of performance management. Line manager own the performance management system. The focus of performance management should be developmental. Performance management should be a continuous and integrated part of the employee-management relationship. The main objective of performance management is to motivate individuals. Performance management is an essential tool in the management of organizational culture. Everyone must be trained in performance management techniques. Performance management distracts people from most important activity. Performance management must be accompanied by extensive communication. Performance management should be distanced from payment system as for as possible. Strongly Agree agree 73% 27% 67% 47% 60% 73% 47% 33% 47% 33% 7% 27% 33% 27% 40% 27% 47% 47% 47% 40% 27% Neutral 6% 20% 46% 6% 20% 6% 20% 27% 27% Strongly disagree 27% 80% 39%



1.Line manager own the performance management system. Forty-five percent respondents remained neutral and twenty seven percent agreed the statement.HR department must strive hard in this area by giving ownership to the appraisee who undergoes this process. Table 4.9(1) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 27 46 27 Percentage 27% 46% 27%

Line managers owning the performance system

50 40 30 percentage 20 10 0 46 27 27

0 Stg.Agr Neutral Resopnses





2. The focus must be developmental All respondents unanimously gave their consent for focusing performance management results for the development of individual personality and there by increasing their work quality. Table 4.9(2) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 60 40 Percentage 60% 40% -



Focus must be developmental








3.Performance management should be a continuous and integrated part of the employee-management relationship. For this statement also appraiser gave positive response. It shows that they are clear about the growing concept of performance management. Table 4.9(3) Sl.no. 1 2 3 4 Response Strongly agree Agree Neutral Strongly disagree No. Of respondents 73 27 Percentage 73% 27% -

Process must be continuous&integrated with organisational culture

80 70 60 50 Percentage 40 30 20 10 0 Stg.Agr

73 27
Agree Neutral





Analysis: Appraisers have positive opinions regarding performance management most of the questions were answered positively. This shows that appraiser understood the performance management concept fairly well.

2. Features of performance management

The main features of performance management processes used by the respondents are shown below Table 4.10
Annual appraisal Self appraisal Performance related pay Objective setting and review Twice-yearly(bi- annual)appraisal Continuous assessment Competence assessment 360-degree appraisal Personal development plans Subordinate feedback Career development or/and succession Planning Counseling Coaching 93% 67% 67% 60% 47% 40% 40% 40% 40% 40% 40% 33% 27% 14%


Features of Performance Management


14% 27% 33% 40% 40% 40% 40% 40% 47% 60% 67% 67% 93% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Features of PM



Analysis: As might be expected, the most common features are annual appraisal, self-appraisal, performance related pay and objective setting and review. Half-yearly appraisal, continuous assessment, competence assessment, 360-degree appraisal, personal development plans and subordinate feedback are also used up to a high proportion. Importance of counseling and coaching are yet to be realized by the organization. A. Effectiveness of key features Table 4.11 provides important instincts regarding the effectiveness of organizational performance management practices. Table 4.11 Statements
Annual appraisal Very Partly effective effective 13% 80% Failure Dont know 7%



Performance-related pay Self- appraisal Objective setting and review Twice yearly (bi-annual) appraisal Continuous assessment Competence assessment 360-degree appraisal Subordinate feedback

Very effective 27% 20% 27% 27% 20% 20% 20% 33%

Partly effective 40% 47% 33% 20% 20% 20% 20% 7%

Failure Dont know 20% 20% 27% 7% 33% 33% 40% 53% 40% 40% 33% 53%

Analysis: Annual appraisal, performance related pay, self-appraisal and objective-setting and review are all strongly endorsed. There were a substantial number of people who dont know about the effectiveness of half yearly appraisal (53percentage), continuous assessment (40percentage), competence assessment (40percentage), and subordinate feedback (53percentage).

4.Setting the performance requirements

Performance requirements in the organization are decided jointly. This aspect is clearly evident from the below table 4.12 Table 4.12
Individual him/herself Superior Jointly(individual & superior) 13% 87%



Setting Performance Requirements

1 0.8


0.6 0.4 0.2 0 0% IDL 13% SUP JOINT

Person w ho set requirem ents

Analysis: 87 percent respondents stated that the performance requirements are set jointly (individual & superior).A few respondents (13 percent) viewed that superior sets the performance requirement.

4.Receiving training in performance management techniques

Analyzed data (table 4.13) makes it clear that training aspects are strangely neglected by the management. Table 4.13
No one All staff Appraisers Heads of department Personnel staff 53% 33% 7% 7% -



Receiving PM Training
7% 7% 0%






H of D

P Staf

Analysis: Major (53 percent) respondents felt that no one in the organization receives training in performance management techniques.

4.Statements about performance management

Positive statements The majority of respondents either fully agreed or partly agreed with the following statements about performance management. Table 4.14 Statements
It is an integrated part of employee management relationship. The focus of performance management is developmental. Performance management motivates individuals. Performance-related pay is an essential part of performance management. The aims and objectives of performance management are well communicated and fully understood. Performance management is used to manage organizational culture. Performance management sets stretching and challenging goals.

100% 100% 100% 80% 73% 63% 63%

Negative statements Respondents views on gave performance statements can be clearly comprehend through below table



Table 4.15 Statements

Performance management is bureaucratic and time consuming. Line managers operate the performance management process.

93% 40%

Analysis: Respondents were particularly positive about integrating, motivating and developmental aspects of performance management. Majority (93 percent) did not feel that performance management is bureaucratic and time consuming.

6. Criteria of measuring performance

Following table shows the order in which performance measurements were ranked as very important and important by the respondents.
Criteria of Measuring Performance
Business Aw arness Financial Aw arness Flexibility ALG P obj w ith ORG obj Personal Productivity

53% 67% 80% 80% 87% 87% 93% 93% 93% 93% 100% 100% 20% 40% 60% 80% 100% 120%


Custom er Care AHT of Objectives CTN to Team Working Relationship Quality Skills Com petence





Analysis: 100 percent respondents felt competence, skills/learning targets are important criteria for measuring performance. Quality, working relationship, contribution to team, achievement of objectives along with customer care and personal productivity were considered as important criteria for measuring.

6.Changes to performance management

Equal opinion has been extracted from the above stated question. Table 4.16 makes this point clear. Table 4.16
YES NO DONT KNOW 40% 40% 20%

Desire to bring changes to Performance Management 20% 40%

Yes No Don't Know

Analysis: Quite a large proportion of respondents (40 percent) are proposing to make changes to their performance arrangements over the following 12 months.20 percent of respondents dont know regarding bringing changes.



8. Key factors to determine performance management effectiveness

Following are the factors which are in the order in which they were ranked by the respondents. 1. Achievement of targets/goals set by the organization. 2. Changes in attitude. 3. Development of competence. 4. Improved quality. 5. Development of skill. 6. Setting of targets. 7. Improving personal productivity. 8. Motivation. 9. To identify potential employee for taking up higher responsibilities. 10.To decide rewards and recognition. 11.Establishing two-way communication. 12.Improved customer care. 13.Changes in behavior. 14.Reduced labour turnover. 15.Working in given time frame. Analysis: Achievement of targets/goals, changes in attitude, development of competence, improved quality and development of skill occupied the first 5 ranks.



9. Rating the overall performance of the organization against the

rest of organization
Company stand in the competitive world is encouraging and outstanding.
Rating in the industry



14% 10% 29% 7%

Market share Cost

Quality of w orkforce Innovative capacity

Efficiency Quality of goods or services

Analysis: The performance of the organization is in top position especially in delivering quality goods (top 60 percent) and in innovative capacity (53 percent). Organization must look at the best practices in other areas (cost, efficiency, quality of workforce and market share) which are failed to fetch top ratings and which are affecting the performance of the organization.



The present study was undertaken with an objective of evaluating how well the performance management systems are designed and put into action in The Himalaya Drug Company. The investigator keeping in view the objectives of the study, gathered the data and analyzed to arrive at conclusions. The following are the principle findings of the study and are based on the empirical evidences. 1. Organization recognizes performance management as a joint process, which requires managers and team leaders to identify in discussion with individual team members (or their teams as a whole) what support they need, to do their work well. 2. The use of 360-degree feedback is still fairly small (20 percent).But interest is growing as the value of obtaining feedback from a number of different sources is becoming recognized. 3. The need for rating is often justified by the need to have a basis for Performance Related Pay decisions. Survey revealed considerable hostility to ratings shared by people at all levels in the organizations concerned. 4. Performance is recognized as a means of identifying training needs. But the developmental aspects of the process were, strangely neglected. 5. Organization appreciated that the greatest to be derived from performance management is the role it can play in continuous Personal Development Plans (PDPs).But supports and actions for its implementation are merely ignored.



6. Organization follows the performance appraisal scheme, in which the appraisal meeting is an annual event or bi-annual event, involving top-down and unilateral judgments by superiors of their subordinates. Perceiving it as a continuous process, which focuses on the future rather than the past through shared understanding, mutual agreement and mutual commitments are yet to be perceived. 7. Survey makes it clear that performance management is a way of enhancing individual performance. The setting of performance targets is inevitably agreed by all as a successful strategy. 8. Organization has not made any special arrangements to promote team performance



The foregone discussion has led the investigator to put forth the following suggestions as guided by the project study. 1. During performance review, not only KRAs but also the quality of departmental activities of the entire year should be given priority and prominence. 2. Team alignments / knowledge transfers shall be arranged at least once in a year as it helps in the overall personality development of the employees, resulting in increased productivity. 3. Proper and adequate resources are to be provided to the employee in order to achieve targets on time 4. Job rotation (periodically) and cross functional activities are to be encouraged 5. Regular and continuous reviews on performance 6. 360 degree appraisal at all level 7. A separate counselor or employee who is good in counseling has to be appointed as a counselor to solve appraisees problem, which affect their performance in the organization.
8. Performance management should address both the aspect of performance -

what people achieve and how they achieve it. This enables performance expectations to be defined and managed and provides the basis for taking



steps to improve performance by changing behavior or developing skills and competences. It should be focused on the things that matter in organizations mainly the critical success factors and core competences.

9. Managers, team leaders, individuals and their representatives should be involved in the design of performance management processes to ensure that they meet their needs. The use of a range of communication channels is desirable to ensure that everyone understands what performance management means, how it will affect them and the part they will be expected to play. 10.Ownership should be given to those who experience the process. People have got to feel that this is their process, which will help them as well as the organization. 11.More interaction with managers during appraisal 12.The role of managers during the meetings is not only to provide constructive feedback but also to listen to what individual have to say about their performance and development needs.
13. To reduce the subjectivity of performance management systems and to

increase the focus on continuous improvements, organization has to move from ranking system to summary statements which are behavior oriented and more focused on future improvements. 14. A separate performance review form has been suggested by the investigator. (See annexure -3 given in the last part of this project)




1. Performance appraisal should be unbiased. It should be restricted only to official things and personal matters should not be involved in the discussion. 2. The review, to a greater extent depends on the influence of the boss or the head of the department in the organization. This should be eliminated.
3. The organizations goals and vision needs to be clearly communicated to

everyone so that industrial goals can be analyzed in the same direction 4. Employees working in different divisions should be treated equally. Disparity and discrimination should be condemned/discouraged.



Finally, the investigator hopes that if the company implements the above suggestions, it would enhance the growth further. The job ahead in this vital area of performance management is clearly a difficult and challenging one. The H.R. department will need more technical competence and better professional training to make all employees contribute to the success of the organization in an ethical and socially responsible way. The focus in the coming years must be on peoplesensitive management styles and practices. With it, not only corporate welfare but also the well-being of the individual will be insured. You can buy a mans time. You can buy a mans physical presence in a given place. You can even buy a measured number of skilled muscular motions per hour or per day .But you cannot buy devotion of hearts, minds and souls. You have to earn those things.