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Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the managements interest in the progress of the employees. People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employees abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. Here at naukrihub, we attempt to provide an insight into the concept of performance appraisal, the methods and approaches of performance appraisal, sample performance appraisal forms and the appraisal softwares available etc. An attempt has been made to study the current global trends in performance appraisal. 1 1.1.1 EMPLOYEE PERFORMANCE If employee performance is found to be less than the expected level of performance then this must be investigated and, if appropriate, a formal appraisal should be carried out including 360-degree feedback. The root causes of performance must be identified as these

will determine future actions. Root causes for less than expected performance may include: Personal issues that are impacting performance such as bereavement, close family member sickness, financial or relationship worries Workplace issues that are impacting performance such as helping other colleagues to meet their objectives before own objectives, issues with the work environment such as an excessively noisy office or frequent interruptions Overloaded with too many objectives or conflicting priorities, especially in a matrix management environment Team issues such as working relationship with other team members, dependencies on others to complete their objectives first, access to needed tools, experts or thirdparty suppliers Employee development issues such as lack of training, experience or expertise to complete the required objective, or lack of people skills to work and deal effectively with others in the situations the employee is in. Taking into account of these factors, this project aims at providing an insight to the concepts, need and methods of performance appraisal and ways to improve performance of employees with reference to Arya Vaidya Pharmacy,Coimbatore.

STATEMENT OF THE PROBLEM Performance appraisal sytems plays a vital role in evaluating the performance of the employees. Though the company is one of the leading ayurvedic medicine distributors there is lack of proper performance appraisal system. As the company follow the 360 degree performance appraisal system for the past few years, the firm is now in search of a new method that could be applied in their industry. SCOPE This study helps the organisation to know about the need of frequent performance appraisal ,to evaluate the effectiveness of existing performance appraisal system and explore new method for improving the performance appraisal system. By analyzing results and taking advantage of both best practices in areas where employees are performing well and opportunities for improvement in areas where they're not,

organizations can receive maximum value from their performance appraisal efforts and achieve organizational goals.

OBJECTIVE To study performance appraisal system prevalent in avp To evaluate effectiveness and satisfaction level of employees towards performance appraisal system in AVP To understand and evaluate performance appraisal mechanism and help management plan for development and growth To suggest a new PA sytem