CERTIFICATE

It is certified the project work customer satisfaction towards online shopping done by
Dimpal to submitted to USBS TALWANDI SABO in partial fulfillment of requirement of the
award of the degree of MASTER BUSINESS MANAGEMENT (Marketing) has been carried
out under my guidance and supervision.

Dr. Amandeep singh

USBS, TalwandiSabo

ACKNOWLEDGMENT
Endeavors have borne fruit and as t prepare to get ahead I stop for a moment in the track to
acknowledge my sincere gratitude for the assistance, efforts and patronage I have received in
course of completing the project report.
I would gracefully acknowledge the inspiration , encouragement and valuable suggestions that I
had got from my project guide Dr. Dyal Bhattnagr for completing our research.
Also I would like to thank the entire employees of different banks in Mansa for extending their
full cooperation in research project and complete my work successfully. Last but not the least I
would like to thank the almighty that gave me the courage and endurance to complete the
endeavor.

Navpreet Kaur

DECLARATION
Certified that I, Navpreet Kaur , student of the master of business administration (MBA) have
prepared report titled Performance Appraisal System in Government Banks under the guidance
of Dr. Dayl Bhattnagr in the partial fulfillment of the requirements for the degree of master of
business administration. There by I certify that no part of this report has submitted for any other
degree.

Navpreet Kaur
Roll no. 2714
MBA 2nd year
Human Resource

TABLE CONTENTS
Sr.No
1.
2.
3.
4.
5.
6.
7.
8
9.
10.
11.
12.

CONTENTS
INTRODUCTION OF THE COMPANY
INTRODUCTION OF THE TOPIC
LITERATURE REVIEW
OBJECTIVE OF THE STUDY
RESEARCH METHODOLOGY
DATA ANALYSIS AND INTERPRETATION
FINDINGS
RECOMMENDATIONS
LIMITATION
CONCLUSION
REFERENCES
QUESTIONNAIRE

Company profile
State Bank of Patiala, founded in 1917, is associate bank of the State Bank Group. Presently,
State Bank of Patiala has a network of 1445 service outlets, including 1314 branches, in all major
cities

of

India,

but

most

of

the

branches

are

located

in

the

Indian

states

of Punjab, Haryana,Himachal Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh, Jammu &
Kashmir, Delhi,Gujaratand Maharashtra.
History
His Highness Bhupinder Singh, Maharaja of Patiala State, founded the Patiala State Bank on 17
November 1917 to foster growth of agriculture, trade and industry. The bank combined the

functions of a commercial bank and those of a central bank for the princely state of Patiala. The
bank had one branch at Chowk Fort, Patiala, Undivided India.
The formation of the Patiala and East Punjab States Union in 1948 led to the bank being
reorganized, being brought under the control of the Reserve Bank of India, and being renamed
Bank of Patiala. On 1 April 1960 Bank of Patiala became a subsidiary of State Bank of India and
was renamed State Bank of Patiala.
Logo and slogan

The logo of the State Bank of Patiala is a blue circle with a small cut in the bottom that
depicts perfection and the small man the common man - being the center of the bank's
business. The logo came from National Institute of Design(NID), Ahmedabad and it was
inspired by Kankaria Lake, Ahmedabad.[3]

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A
BANK OF THE COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE
NATION BANKS ON US", "GRAHAK DEVO BHAV"

Major competitors
Some of the major competitors for SBI in the banking sector are Axis Bank, ICICI Bank, HDFC
Bank, Punjab National Bank, Bank of Baroda, Canara Bankand Bank of India. However, in
terms of average market share, SBI is by far the largest player in the market.[4]
Branches And ATM Services
The State Bank of Patiala has more than 1300 branches, spread across the major cities of India.
The majority ofits branches are located in Punjab, Haryana, Himachal Pradesh, Uttar Pradesh,
Rajasthan, Jammu & Kashmir, Delhi, and Chandigarh. The Bank provides easy access to money
to its customers through its ATMs spread over 16 states of India.
It was the first bank in India to go on CORE 100%.

Punjab National Bank is an Indian multinational banking and financial services company. It is
a state-owned corporation based in New Delhi, India. Founded in 1894, the bank has over 6,300
branches and over 7,900ATMs across 764 cities. It serves over 80 million customers.[3]
Punjab National Bank is one of the Big Four banks of India, along with Bank of Baroda, ICICI
Bank and State Bank of India.[5] It has a banking subsidiary in the UK (PNB International Bank,
with seven branches in the UK), as well as branches in Hong Kong, Kowloon, Dubai and Kabul.
It

has

representative

offices

in Almaty(Kazakhstan), Dubai (United

Arab

Emirates), Shanghai (China), Oslo (Norway) and Sydney (Australia). In Bhutan it owns 51% of
Druk PNB Bank, which has five branches. PNB owns 20% of Everest Bank Limited, which has
50 branches in Nepal. Lastly, PNB owns 84% of JSC (SB) PNB Bank in Kazakhstan, which has
four branches.
History
Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act, with its
office in Anarkali Bazaar, Lahore. The founding board was drawn from different parts of India
professing different faiths and a varied back-ground with, however, the common objective of
providing country with a truly national bank which would further the economic interest of the
country.[1] PNB's founders included several leaders of the Swadeshi movement such as Dyal
Singh Majithia and Lala Harkishan Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C.
Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. [6][7] Lala Lajpat
Rai was actively associated with the management of the Bank in its early years. The board first
met on 23 May 1894.[1] The bank opened for business on 12 April 1895 in Lahore.
PNB has the distinction of being the first Indian bank to have been started solely with Indian
capital that has survived to the present. (The first entirely Indian bank, Oudh Commercial Bank,
was established in 1881 in Faizabad, but failed in 1958.)
PNB has had the privilege of maintaining accounts of national leaders such as Mahatma
Gandhi, Jawahar Lal Nehru, Lal Bahadur Shastri, Indira Gandhi, as well as the account of the
famous Jalianwala Bagh Committee.[1]

Timeline
In 1900, PNB established its first branch outside Lahore in Rawalpindi. Branches
in Karachi and Peshawar followed. The next major event occurred in 1940 when PNB absorbed
Bhagwan (or Bhugwan) Dass Bank, which had its head office in Dehra Dun.
At the Partition of India and the commencement of Pakistani independence, PNB lost its
premises in Lahore, but continued to operate in Pakistan. Partition forced PNB to close 92 offices
in West Pakistan, one-third of its total number of branches, and which held 40% of the total
deposits. PNB still maintained a few caretaker branches. On 31 March 1947, even before
Partition, PNB had decided to leave Lahore and transfer its registered office to India; it received
permission from the Lahore High Court on 20 June 1947, at which time it established a new head
office at Under Hill Road, Civil Lines in New Delhi. Lala Yodh Raj was the Chairman of the
Bank.
In 1951, PNB acquired the 39 branches of Bharat Bank (est. 1942). Bharat Bank became Bharat
Nidhi Ltd. In 1960, PNB again shifted its head office, this time from Calcutta to Delhi. In 1961,
PNB acquired Universal Bank of India, which Ramakrishna Jain had established in 1938
in Dalmianagar, Bihar. PNB also amalgamated Indo Commercial Bank (est. 1932 by S. N. N.
Sankaralinga Iyer) in a rescue. In 1963, The Burmese revolutionary government nationalized
PNB's branch in Rangoon (Yangon). This became People's Bank No. 7.[8] After the Indo-Pak war,
in September 1965 the government of Pakistan seized all the offices in Pakistan of Indian banks.
PNB also had one or more branches in East Pakistan (Bangladesh).
The Government of India (GOI) nationalized PNB and 13 other major commercial banks, on 19
July 1969. In 1976 or 1978, PNB opened a branch in London. some ten years later, in 1986,
the Reserve Bank of India required PNB to transfer its London branch to State Bank of
India after the branch was involved in a fraud scandal. That same year, 1986, PNB acquired
Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition added Hindustan's 142
branches to PNB's network. In 1993, PNB acquired New Bank of India, which the GOI had
nationalized in 1980. In 1998 PNB set up a representative office in Almaty, Kazakhstan.

In 2003 PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. At the time of
the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its
shareholders received no payment for their shares. PNB also opened a representative office in
London. In 2004, PNB established a branch in Kabul, Afghanistan, a representative office in
Shanghai, and another in Dubai. PNB also established an alliance with Everest Bank Limited in
Nepal that permits migrants to transfer funds easily between India and Everest Bank's 12
branches in Nepal. Currently, PNB owns 20% of Everest Bank. Two years later, PNB established
PNBIL Punjab National Bank (International) in the UK, with two offices, one in London, and
one in Southall. Since then it has opened more branches, this time in Leicester, Birmingham,
Ilford, Wembley, and Wolverhampton. PNB also opened a branch in Hong Kong. In January
2009, PNB established a representative office in Oslo, Norway. PNB hopes to upgrade this to a
branch in due course. In January 2010, PNB established a subsidiary in Bhutan. PNB owns 51%
of Druk PNB Bank, which has branches in Thimpu, Phuentsholing, and Wangdue. Local
investors own the remaining shares. Then on 1 May, PNB opened its branch in Dubai's financial
center. PNB purchased a small minority stake in Kazakhstan-based JSC Dena Bank. Within the
year PNB increased its ownership and now PNB owns 84% of what has become JSC (SB) PNB.
The subsidiary has branches in Almaty,Astana, Karaganda, and Pavlodar. Dena Bank was
established on 20 October 1992 in Pavlodar. September 2011: PNB opened a representative
office inSydney, Australia. December 2012: PNB signed an agreement with US based life
Insurance company Metlife to acquire a 30% stake in MetLife's Indian affiliate MetLife India
Limited. The company would be renamed PNB MetLife India Limited and PNB would sell
MetLife's products in its branches.[9]

Financial performance

FY 2008- FY 2009- FY 2010- FY 2011- FY 2012-

Particulars[3]

09

10

11

12

13

246,919

296,633

378,325

458,192

478,877

5,690

7,326

9,056

10,614

10,907

F Net Profit

3,091

3,905

4,433

4,884

4,748

G Business/Employee

655

808

1,018

1,132

1,165

5.64

7.31

8.35

8.42

8.06

D Total Assets (' INR crores)

Operating

Profit ('

INR

crores)

Profit/Employee
lakhs)

('

INR

Return on assets (%)

1.39

1.44

1.34

1.19

1.00

Gross NPAs (%)

1.60

1.71

1.79

2.93

4.27

K Net NPAs (%)

0.17

0.53

0.85

1.52

2.35

L Total Branches

4,665

4,997

5,189

5,670

5,874

Listings and shareholding

PNB's equity shares are listed on Bombay Stock Exchange and the National Stock Exchange of
India.[10][11] It is a constituent of the CNX Nifty at the NSE.[12]

Shareholders (as on 31-Dec-2013)

Shareholding[13]

Promoter Group (Govt. of India)

58.87%

Foreign Institutional Investors (FII)

17.51%

Insurance Companies

15.46%

Individual shareholders

04.05%

Banks/Financial Institutions/Mutual Funds/UTI

03.02%

Others

01.09%

Total

100.0%

Employees

PNB office in Lucknow

As on 31 March 2015, the bank had 68,290 employees. As of 31 March 2013, it also had 919
employees withdisabilities on the same date (1.45%).[3] The average age of bank employees on
the same date was 46 years.[3] The bank reported business of INR 11.65 crores per employee and
net profit of INR 8.06 lakhs per employee during the FY 2012-13. [3] The company incurred INR
5,751 crores towards employee benefit expenses during the same financial year.[3]

Introduction of topic
Introduction to Performance Appraisal
Performance Appraisal may be defined as a structured formal Interaction between a subordinate
and supervisor, that usually take the form of periodic interview in which the work performance
of the subordinate is examined and discussed, with a view of Identifying weakness and strengths
as well as opportunities for improvement and skills development. Performance appraisal (PA)
systems consist of the same note, an ineffective performance appraisal system processes of
setting standards, application, managing can jeopardize the efforts of an organization by creating
and informing the incidents related to employees dissatisfaction and confusion which then leads
to performance appraisal. Once the employee has been selected, trained and motivated, he is then
appraised for his performance. Performance Appraisal is the step where the Management finds
out how effective it has been at hiring and placing employees. If any problems are identified,
steps are taken to communicate with the employee and remedy them. Performance Appraisal is a
process of evaluating an employees performance in terms of its requirements.
Performance Appraisal can also be defined as the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is employed,
for purposes of administration including placement, selection for promotions, providing financial
rewards and other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.

Importance and Purpose

Performance Appraisal has been considered as the most significant an indispensable tool for an
organization, for an organization, for the information it provides is highly useful in making
decisions regarding various personnel aspects such as promotion and merit increases.
Performance measures also link information gathering and decision making processes which
provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,
selection, training and compensation. Accurate information plays a vital role in the organization
as a whole. They help in finding out the weaknesses in the primary areas. Formal Performance
Appraisal plans are designed to meet three needs, one of the organization and the other two of
the individual namely:
1. They provide systematic judgments to back up salary increases, transfers, demotions or
terminations.
2. They are the means of telling a subordinate how he is doing and suggesting needed
changes in his behavior, attitudes, skills or job knowledge. They let him know where he
stands with the Boss.
3. Superior uses them as a base for coaching and counseling the individual.
Objectives
1. To enable an organization to maintain an inventory of the number and quality of all
managers and to identify and meet their training needs and aspirations.
2. To determine increment rewards and to provide reliable index for promotions and
transfers to positions of greater responsibility.
3. To suggest ways of improving the employee s performance when he is not found to be
up to the mark during the review period.
4. To identify training and development needs and to evaluate effectiveness of training and
development programmes.
5. To plan career development, human resource planning based potentials.
Performance Appraisal Methods: Traditional and Modern Methods!

Each method of performance appraisal has its strengths and weaknesses may be suitable for one
organisation and non-suitable for another one. As such, there is no single appraisal method
accepted and used by all organisations to measure their employees performance.
All the methods of appraisal devised so far have been classified differently by different authors.
While DeCenzo and Robbins^ have classified appraisal methods into three categories: absolute
methods, relative methods and objective methods; Aswathappa has classified these into two
categories past-oriented and future-oriented.
Michael R Carrell et. al. have classified all appraisal methods into as many as six categories:
rating scales, comparative methods, critical incidents, 6ssay, MBO and combination methods.
Rock and Levis have classified the methods into two broad categories: narrow interpretation
and broad interpretation. Beatty and Schneier have categorised various methods of appraisal into
four groups: comparative methods, absolute methods, goal setting, and direct indices.
Traditional Methods:
Ranking Method:
It is the oldest and simplest formal systematic method of performance appraisal in which
employee is compared with all others for the purpose of placing order of worth. The employees
are ranked from the highest to the lowest or from the best to the worst.
In doing this the employee who is the highest on the characteristic being measured and also the
one who is L lowest, are indicated. Then, the next highest and the next lowest between next
highest and lowest until all the employees to be rated have been ranked. Thus, if there are ten
employees to be appraised, there will be ten ranks from 1 to 10.
However, the greatest limitations of this appraisal method are that:
(i) It does not tell that how much better or worse one is than another,
(ii) The task of ranking individuals is difficult when a large number of employees are rated, and

(iii) It is very difficult to compare one individual with others having varying behavioural traits.
To remedy these defects, the paired comparison method of performance appraisal has been
evolved.
Paired Comparison:
In this method, each employee is compared with other employees on one- on one basis, usually
based on one trait only. The rater is provided with a bunch of slips each coining pair of names,
the rater puts a tick mark against the employee whom he insiders the better of the two. The
number of times this employee is compared as better with others determines his or her final
ranking.
The number of possible pairs for a given number of employees is ascertained by the
following formula:
N (N-1)/2
Where N = the total number of employees to be evaluated. Let this be exemplified with an
imaginary example.
Grading Method:
In this method, certain categories of worth are established in advance and carefully defined.
There can be three categories established for employees: outstanding, satisfactory and
unsatisfactory. There can be more than three grades. Employee performance is compared with
grade definitions. The employee is, then, allocated to the grade that best describes his or her
performance.
Such type of grading is done is Semester pattern of examinations and in the selection of a
candidate in the public service sector. One of the major drawbacks of this method is that the rater
may rate most of the employees on the higher side of their performance.
Forced Distribution Method:

This method was evolved by Tiffen to eliminate the central tendency of rating most of the
employees at a higher end of the scale. The method assumes that employees performance level
confirms to a normal statistical distribution i.e., 10,20,40,20 and 10 per cent. This is useful for
rating a large number of employees job performance and promo ability. It tends to eliminate or
reduce bias.
It is also highly simple to understand and easy to apply in appraising the performance of
employees in organisations. It suffer from the drawback that improve similarly, no single grade
would rise in a ratings.
Forced-Choice Method:
The forced-choice method is developed by J. P. Guilford. It contains a series of groups of
statements, and rater rates how effectively a statement describes each individual being evaluated.
Common method of forced-choice method contains two statements, both positive and negative.
Examples of positive statements are:
1. Gives good and clear instructions to the subordinates.
2. Can be depended upon to complete any job assigned.
A pair of negative statements may be as follows:
1. Makes promises beyond his limit to keep these.
2. Inclines to favour some employees.
Each statement carries a score or weight, which is not made known to the rater. The human
resource section does rating for all sets of statements both positive and negative. The final
rating is done on the basis of all sets of statements. Thus, employee rating in this manner makes
the method more objective. The only problem associated with this method is that the actual
constructing of several evaluative statements also called forced-choice scales, takes a lot of
time and effort.

Check-List Method:
The basic purpose of utilizing check-list method is to ease the evaluation burden upon the rater.
In this method, a series of statements, i.e., questions with their answers in yes or no are
prepared by the HR The check-list is, then, presented to the rater to tick appropriate answers
relevant to the appraisee. Each question carries a weight-age in relationship to their
importance.When the check-list is completed, it is sent to the HR department to prepare the final
scores for all appraises based on all questions. While preparing questions an attempt is made to
determine the degree of consistency of the rater by asking the same question twice but in a
different manner .
However, one of the disadvantages of the check-list method is that it is difficult to assemble,
analyse and weigh a number of statements about employee characteristics and contributions
From a cost stand point also, this method may be inefficient particularly if there are a number of
job categories in the organisation, because a check-list of questions must be prepared for each
category of job. It will involve a lot of money, time and efforts.
Critical Incidents Method:
In this method, the rater focuses his or her attention on those key or critical behaviours that make
the difference between performing a job in a noteworthy manner (effectively or ineffectively).
There are three steps involved in appraising employees using this method.
First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents is prepared.
Second, a group of experts then assigns weightage or score to these incidents, depending upon
their degree of desirability to perform a job. Third, finally a check-list indicating incidents that
describe workers as good or bad is constructed. Then, the check-list is given to the rater for
evaluating the workers.
The basic idea behind this rating is to apprise the workers who can perform their jobs effectively
in critical situations. This is so because most people work alike in normal situation. The strength
of critical incident method is that it focuses on behaviours and, thus, judges performance rather
than personalities. Its drawbacks are to regularly write down the critical incidents which become

time-consuming and burdensome for evaluators, i.e., managers. Generally, negative incidents
positive ones. It is raters inference that determines which incidents are critical to job
performance. Hence, the method is subject to all the limitations relating to subjective judgments.
Graphic Rating Scale Method:
The graphic rating scale is one of the most popular and simplest techniques for appraising
performance. It is also known as linear rating scale. In this method, the printed appraisal form is
used to appraise each employee.
The form lists traits (such as quality and reliability) and a range of job performance
characteristics (from unsatisfactory to outstanding) for each trait. The rating is done on the basis
of points on the continuum. The common practice is to follow five points scale.
The rater rates each appraisee by checking the score that best describes his or her performance
for each trait all assigned values for the traits are then totaled. Figure 28-3 shows a typical
graphic rating scale.

This method is good for measuring various job behaviours of an employee. However, it is also
subjected to raters bias while rating employees behaviour at job. Occurrence of ambiguity in
design- mg the graphic scale results in bias in appraising employees performance.
Essay Method:
Essay method is the simplest one among various appraisal methods available. In this method, the
rater writes a narrative description on an employees strengths, weaknesses, past performance,
potential and suggestions for improvement. Its positive point is that it is simple in use. It does not
require complex formats and extensive/specific training to complete it.
However, essay method, like other methods, is not free from drawbacks. In the absence of any
prescribed structure, the essays are likely to vary widely in terms of length and content. And, of
course, the quality of appraisal depends more upon raters writing skill than the appraisers actual
level of performance.
Moreover, because the essays are descriptive, the method provides only qualitative information
about the employee. In the absence of quantitative data, the evaluation suffers from subjectivity

problem. Nonetheless, the essay method is a good start and is beneficial also if used in
conjunction with other appraisal methods.
Field Review Method:
When there is a reason to suspect raters biasedness or his or her rating appears to be quite higher
than others, these are neutralised with the help of a review process. The review process is usually
conducted by the personnel officer in the HR department.
The review process involves the following activities:
(a) Identify areas of inter-rater disagreement.
(b) Help the group arrive at a consensus.
(c) Ensure that each rater conceives of the standard similarity.
However, the process is a time-consuming one. The supervisors generally resent what they
consider the staff interference. Hence, the method is not widely used.
Confidential Report:
It is the traditional way of appraising employees mainly in the Government Departments.
Evaluation is made by the immediate boss or supervisor for giving effect to promotion and
transfer. Usually a structured format is devised to collect information on employees strength
weakness, intelligence, attitude, character, attendance, discipline, etc. report.
Modern Methods:
Management by Objectives (MBO):
Most of the traditional methods of performance appraisal are subject to the antagonistic
judgments of the raters. It was to overcome this problem; Peter F. Drucker propounded a new
concept, namely, management by objectives (MBO) way back in 1954 in his book.

The Practice of management. The concept of MBO as was conceived by Drucker, can be
described as a process whereby the superior and subordinate managers of an organization
jointly identify its common goals, define each individuals major areas of responsibility in terms
of results expected of him and use these measures as guides for operating the unit and assessing
the contribution of each its members.
In other words, stripped to its essentials, MBO requires the manager to goals with each employee
and then periodically discuss his or her progress toward these goals.
In fact, MBO is not only a method of performance evaluation. It is viewed by the Practicing
managers and pedagogues as a philosophy of managerial practice because .t .s a method by
wh.ch managers and subordinates plan, organise, communicate, control and debate.
An MBO programme consists of four main steps: goal setting, performance standard, comparison, and periodic review. In goal-setting, goals are set which each individual, s to attain. The
superior and subordinate jointly establish these goals. The goals refer to the desired outcome to
be achieved by each individual employee.
In performance standards, the standards are set for the employees as per the previously arranged
time period. When the employees start performing their jobs, they come to know what is to be
done, what has been done, and what remains to be done.
In the third step the actual level of goals attained are compared with the goals agreed upon. This
enables the evaluator to find out the reasons variation between the actual and standard
performance of the employees. Such a comparison helps devise training needs for increasing
employees performance it can also explore the conditions having their bearings on employees
performance but over which the employees have no control.
Finally, in the periodic review step, corrective measure is initiated when actual performance
deviates from the slandered established in the first step-goal-setting stage. Consistent with the
MBO philosophy periodic progress reviews are conducted in a constructive rather than punitive
manner.

The purpose of conducting reviews is not to degrade the performer but to aid in his/her future
performance. From a motivational point of view, this would be representative of McGregors
theories.
Figure 28.4 present the MBO method of performance appraisal presently used by an engineering
giant i.e., Larsen and Turbro Limited.
Limitation of MBO:
MBO is not a panacea, cure for all organisational problems.
As with other methods, it also suffers from some limitations as catalogued below:
(i) Setting Un-measurable Objectives:
One of the problems MBO suffers from is unclear and un-measurable objectives set for
attainment. An objective such as will do a better job of training is useless as it is unmeasurable. Instead, well have four subordinates promoted during the year is a clear and
measurable objective.
(ii) Time-consuming:
The activities involved in an MBO programme such as setting goals, measuring progress, and
providing feedback can take a great deal of time.
(iii) Tug of War:
Setting objectives with the subordinates sometimes turns into a tug of war in the sense that the
manager pushes for higher quotas and the subordinates push for lower ones. As such, goals so set
are likely to be unrealistic.
(iv) Lack of Trust:

MBO is likely to be ineffective in an environment where management has little trust in its
employees. Or say, management makes decisions autocratically and relies heavily on external
controls.
Behaviourally Anchored Rating Scales (BARS):
The problem of judgmental performance evaluation inherent in the traditional methods of
performance evaluation led to some organisations to go for objective evaluation by developing a
technique known as Behaviourally Anchored Rating Scales (BARS) around 1960s. BARS are
descriptions of various degrees of behaviour with regard to a specific performance dimension.
It combines the benefits of narratives, critical incidents, and quantified ratings by anchoring a
quantified scale with specific behavioural examples of good or poor performance. The
proponents of BARS claim that it offers better and more equitable appraisals than do the other
techniques of performance appraisal we discussed so far.
Developing BARS typically involves five steps:
1. Generating Critical Incidents:
Critical incidents (or say, behaviours) are those which are essential for the performance of the job
effectively Persons who are knowledgeable of the job in question (jobholders and/or supervisors)
are asked to describe specific critical incidents of effective and ineffective performance. These
critical incidents may be described in a few short sentences or phrases using the terminology.
2. Developing Performance Dimensions:
The critical incidents are then clustered into a smaller set of performance dimensions, usually
five to ten. Each cluster, or say, dimension is then defined.
3. Reallocating Incidents:
Various critical incidents are reallocated dimensions by another group of people who also know
the job in question. Various critical incidents so reallocated to original dimensions are clustered

into various categories, with each cluster showing similar critical incidents. Those critical
incidents are retained which meet 50 to 80% of agreement with the cluster as classified in step 2.
4. Scaling Incidents:
The same second group as in step 3 rates the behaviour described in each incident in terms of
effectiveness or ineffectiveness on the appropriate dimension by using seven to nine points scale.
Then, average effectiveness ratings for each incident are determined to decide which incidents
will be included in the final anchored scales.
5. Developing Final BARS Instrument:
A subset of the incidents (usually six or seven per cluster) is used as a behavioural anchor for the
final performance dimensions. Finally, a BARS instrument with vertical scales is drawn to be
used for performance appraisal, as in Figure 27-5.
How BARS is developed can be exemplified with an example of grocery checkout clerks
working in a large grocery chain.
A number of critical incidents involved in checking out of grocery can be clustered into
seven performance dimensions:
1. Knowledge and Judgment
2. Conscientiousness
3. Skill in Human Relations
4. Skill in Operation of Register
5. Skill in Bagging
6. Organisational Ability of Check stand Work
7. Skill in Monetary Transactions

8. Observational Ability
Now, a BARS for one of these performance dimensions, namely, knowledge and judgment can
be developed, as in Figure 28-5. Notice how the typical BARS is behaviourally anchored with
specific critical incidents.
BARS method of performance appraisal is considered better than the traditional ones because it
provides advantages like a more accurate gauge, clearer standards, better feedback, and
consistency in evaluation. However, BARS is not free from limitations.
The research on BARS indicates that it too suffers from distortions inherent in most rating scales.
The research study concluded that it is clear that research on BARS to date does not support the
high promise regarding scale independence In short, while BARS may outperform conventional
rating techniques, it is clear that they are not a panacea for obtaining high interrater reliability
Assessment Centres:
The introduction of the concept of assessment centres as a method of performance method is
traced back in 1930s in the Germany used to appraise its army officers. The concept gradually
spread to the US and the UK in 1940s and to the Britain in 1960s.
The concept, then, traversed from the army to business arena during 1960s. The concept of
assessment centre is, of course, of a recent origin in India. In India, Crompton Greaves, Eicher,
Hindustan Lever and Modi Xerox have adopted this technique of performance evaluation.
In business field, assessment centres are mainly used for evaluating executive or supervisory
potential. By definition, an assessment centre is a central location where managers come together
to participate in well-designed simulated exercises. They are assessed by senior managers
supplemented by the psychologists and the HR specialists for 2-3 days.
Assessee is asked to participate in in-basket exercises, work groups, simulations, and role
playing which are essential for successful performance of actual job. Having recorded the
assessees behaviour the raters meet to discuss their pooled information and observations and,

based on it, they give their assessment about the assesee. At the end of the process, feedback in
terms of strengths and weaknesses is also provided to the assesees.
The distinct advantages the assessment centres provide include more accurate evaluation, minimum biasedness, right selection and promotion of executives, and so on. Nonetheless, the
technique of assessment centres is also plagued by certain limitations and problems. The
technique is relatively costly and time consuming, causes suffocation to the solid performers,
discourages to the poor performers (rejected), breeds unhealthy competition among the
assessees, and bears adverse effects on those not selected for assessment.
360 Degree Appraisal:
Yet another method used to appraise the employees performance is 360 degree appraisal. This
method was first developed and formally used by General Electric Company of USA in 1992.
Then, it travelled to other countries including India. In India, companies like Reliance Industries,
Wipro Corporation, Infosys Technologies, Thermax, Thomas Cook etc., have been using this
method for appraising the performance of their employees. This feedback based method is
generally used for ascertaining training and development requirements, rather than for pay
increases.
Under 360 degree appraisal, performance information such as employees skills, abilities and
behaviours, is collected all around an employee, i.e., from his/her supervisors, subordinates,
peers and even customers and clients.
In other worlds, in 360-degree feedback appraisal system, an employee is appraised by his
supervisor, subordinates, peers, and customers with whom he interacts in the course of his job
performance. All these appraisers provide information or feedback on an employee by
completing survey questionnaires designed for this purpose.
All information so gathered is then compiled through the computerized system to prepare
individualized reports. These reports are presented to me employees being rated. They then meet

me appraiserbe it ones superior, subordinates or peersand share the information they feel as
pertinent and useful for developing a self-improvement plan.
In 360 degree feedback, performance appraisal being based on feedback all around, an employee is likely to be more correct and realistic. Nonetheless, like other traditional methods, this
method is also subject to suffer from the subjectivity on the part of the appraiser. For example,
while supervisor may penalise the employee by providing negative feedback, a peer, being
influenced by give and take feeling may give a rave review on his/her colleague.
Cost Accounting Method:
This method evaluates an employees performance from the monetary benefits the employee
yields to his/her organisation. This is ascertained by establishing a relationship between the costs
involved in retaining the employee, and the benefits an organisation derives from Him/her.
While evaluating an employees performance under this method, the following factors are
also taken into consideration:
1. Unit wise average value of production or service.
2. Quality of product produced or service rendered.
3. Overhead cost incurred.
4. Accidents, damages, errors, spoilage, wastage caused through unusual wear and tear.
5. Human relationship with others.
6. Cost of the time supervisor spent in appraising the employee
Summary of the Performance Analysis System
Setting performance standards, observing and providing feedback, and conducting
appraisals enables the Team Leader to achieve the best results through managing
employee performance.
To begin the process, the Team Leader and the employee collaborates on the

development of performance standards. The Team Leader then develops a performance

plan that directs the employee's efforts toward achieving specific results, to support
organizational growth as well as the employee's professional growth. Discussion of goals
and objectives throughout the year provides a framework to ensure that employees
achieve results through One on One and mutual feedback. At the end of the rating period,
the Team Leader appraises the employee's performance against existing standards, and
establishes new goals together for the next rating period.
As the immediate supervisor, the Team Leader plays an important role; his closest
interaction with the employee occurs at this level.
There are four key elements in the appraisal system:
1. Set objectives - Decide what the Team Leader wants from the employees and agree these
objectives with them.
2. Manage performance - Give employees the tools, resources and training they need to
perform well.
3. Carry out the appraisal - monitor and assess the employees' performance, discuss those
assessments with them and agree on future objectives.
4. Provide rewards/remedies - Consider pay awards and/or promotion based on the appraisal
and decide how to tackle poor performance.
sAdvantages of Performance Appraisal
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.
1. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.

2. Employees Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
3. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.
4. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.ss
5. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a persons efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the organization.

Review of literature
(Kalsicas, 2009) According to Bobko&Collela

(1990)

the standards of performance

evaluation are very external to the organization and the evaluative purpose for the employees of
the organization is to be considered for the performance appraisal management system. The
goals of employees and organization are interrelated to the organization. In the performance
appraisal system, there are several aspects of employee reaction and performance of employees
(Aryee, 2001) which can hamper the overall system of performance management system.
According to Bobko & Collela (1990) the standards of performance evaluation are very
external to the organization and the evaluative purpose for the employees of the organization is
to be considered for the performance appraisal management system. The goals of employees and
organization are interrelated to the organization. In the performance appraisal system, there are
several aspects of employee reaction and performance of employees (Aryee, 2001) which can
hamper the overall system of performance management system . Brown and Heywood (2005)
state that the expected tenure of the workforce may influence the probability of adopting a
formal system of performance appraisal. In particular, the authors argue that the proportion of
casual workers, women and long-tenured employees, as well as the turnover rate of the
establishment, are related to the use of a formal system of evaluation.
According to Murphy and Cleveland (1995), the immediate superior is well-suited to rate
general performance, whereas a supervisor at a higher level is able to determine the particular
dimensions of performance that are most important to the organisation and the behaviours
required to improve worker performance. The performance appraising systems, used a century

ago were in primitive condi-tions for contemporary management. Within the last century,
improved systems were developed so as to evaluate performance of the employees fairly and
correctly. Today, most of the organizations have relied upon some forms of performance appraisal systems to decide the pay raises, promotions, training needs and individual improvement
of the employees (Landy and Farr, 1980; Wexley and Latham, 1981; Cleveland, Murphy and
Williams, 1989).

Spriegel(1962) and Weise and Buckley(1998) affirm that by the early 1950s, 61 per cent of
organizations regularly used performance appraisals, compared with only 15 per cent
immediately after World War II. DeVries et al. (1981) pointed out the primary tool to be the traitrating system, which focused on past actions, using a standard, numerical scoring system to
appraise people on the basis of a previously established set of dimensions. The main tool, used
under here was trait rating system.

Eichel and Bender (1984) stated that performance appraisal can also be called as the
Achilles heel ofmanagement.Although leaders ofmany public organizations strive to be
employee
focused or employee centered, a lack of emphasis is given to a process intended to assist the
employee in achieving both personal and organizational goals.

Cascio (1998) defined performance appraisal as a process to improve employees

work performance by helping them realize and use their full potential in carrying out the
organizations missions and to provide information to employees and managers for use in
making work related decisions. He goes on to define effective performance appraisal system as
an exercise in observation and judgment, a feedback process and an organizational intervention.
It is a measurement process as well as an intensely emotional process.Above all, Cascio stated,
it is an inexact, human process that is utilized differently in almost every organization regardless
of industry.

Dr. Shambhu Nath Chowdhury (2008), banking services is one sector where a great
degree of attention is being paid to Performance Appraisal Systems. Several of the public sector
banks (PSBs) have changed their PAS or are in the process of changing .Chinese state-owned
banking industry, employees perception of justice has a positive relationship to their overall
satisfactionwith both the performance appraisal process and its outcomes. However, statistically
significant differences were found in relation to whether employees had received training in
performance appraisal or not.
Ekta Bhatia (2010) The performance appraisal or reviewis essentially an opportunity for
the individual and those concerned with their performance in the bank , most usually their line
manager - to get together to engage in a dialogue about the individuals performance,
development and the support required from the manager. It should not be a top down process or
an opportunity for one person to ask questions and the other to reply. It should be a free flowing
conversation in which a range of views are exchanged.
A. Shrivastava and P. Purang (2011) studied the differences between public and
private sector banks with respect to perception of fairness of the performance appraisal system
and performance appraisal satisfaction. Perception of fairness of the performance appraisal
system has been studied through nine factors. The study used independent samples t-test and
qualitative analysis to study the mean differences between the two banks. Results indicated that
private sector bank employees perceive greater fairness and satisfaction with their performance
appraisal system as compared to public sector bank employees.

OBJECTIVES OF THE STUDY

To study the performance appraisal system in banks.

To study the employees are satisfied with existing appraisal system.
To analyze the effectiveness of performance appraisal system in bank.

Research Methodology
The process used to collect information and data for the purpose of making business decisions. It
is way to found out the result of given problem on a specific problem that is also referred as
research problem. In methodology , researcher uses different criteria for solving the given
problem. The methodology include publication research , interviews, surveys and other research
techniques and could include both present and historical information.
Research design
Explorative research design was used to find out the performance appraisal system in banks.
Explorative research design in primarily that give a idea about problem in hand.
Questionnaire Design
To analyze the performance appraisal in banks in Mansa, questionnaire will be prepared with the
set of questions for collecting of data. All the questions will be self administer.
Sampling Procedure
The study will be on sample of 50 respondents. Sampling unit will consist employees of banks in
Mansa. Random sampling will be used to identify the sample.
Sampling Frame
A sampling frame is the source material or device from which a sample is drawn. It is a last of all
those within a population who can be sampled, and may include employees of banks. The
sample was chosen from banks namely State Bank of Patiala, Punjab National Bank.

Sample size: The sample size was 50 respondents.

Sample size is the number of persons that helps in collecting the primary data.

Total 50 Respondents.
Data Collection:Primary data:The primary sources of data used in the making of
this project are information from the employees of the organization.
Secondary data :Annual reports, websites,data from various
department,publications,relevant diagrams and charts to give pictorial presentation of
data collected for better understanding.

Research Instruments
Research instruments is that with the help of which we collect the data from respondents. The
questionnaire is the research instrument in the project. Questionnaire were distributed to the
employees.
Tools of analysis
The data so collected was analyzed with the help of SPSS software .

DATA ANALYSIS AND ITRPRETATION

SUGGESTIONS

New methods of appraisal should be adopted so that both appraiser and the appraise take
interest in the appraisal process.

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

It should provide more empowerment to the employees.

.

The employees who have excellent performance should be used as a mentor for other
employees who would motivate others to perform better.

Employees should be given feedback regarding their appraisal. This will help them to
improve on their weak areas.

Financial and non-financial incentive should be linked to the annual appraisal system so
that employees would be motivated to perform better.
.

The frequency of training program for the appraiser should be increased and these sessions
should be made interactive.

The awareness sessions for the employees/appraises should be made more interactive and
the views and opinion of the appraises regarding appraisal should be given due
consideration.

Combing the different methods of appraisal can minimize the element of biasness in an
appraisal. Like the rating method combined with assessment center method would give an
evidence of poor /unfavorable or outstanding behavior of the appraise if any.

Use of modern appraisal techniques like 360 degree appraisal, assessment centers which are
more effective.
.

Recognizing the good performers i.e., appraises who have accomplished the targets for the
year can help in getting more commitment from the employees.

Information regarding the performance of the employees should be kept in proper manner.

Limitation of the Study:

The study has tried to cover all kinds and Performance appraisal Programme and its effects
on the organization. But it was greatly limited because of the unavailability of sufficient data

about pasts records as many

This study was conducted in two public organization. The findings from the study should be

viewed cautiously due to the limited sample size.

Little co-operations of some person due to conservative mind.

Some people have no time to give answer.
Sometimes people do not tell truth and fill it just for fun sake.

CONCLUSION

From the research it has been concluded that most of the executives who are not
satisfied with the present performance appraisal system. Appraisers give proper feedback to their
appraises on day today basis and proper training or challenging tasks are given to improve their
performance. mainly the formal training is given at the time of joining the organization but if the
employees face any problem later at the time of their job, their superiors help them in resolving
their problems at the same time. But some appraises feel that they are not given proper feedback
and even they dont want any feedback as they think that they know their work very well.
Government must invest in human capital and provide more opportunities

for further human resource development. Motivated people are central to the operation of any
agency that wishes to function well in the new age. A decade of organizational restructuring,
reinventing, and reengineering has produced employees who are more exhausted than
empowered, more cynical than self-renewed. Many agencies managerial attention is only
marginally focused on the problems of employee capability and motivation. Somewhere
between theory and practice, precious human capital is being misused, wasted or lost these
days .Therefore, management needs to develop the engaging and motivating culture necessary to
attract, excite and retain well-performing employees in government.

BIBLIOGRAPHY

http://appraisals.naurihub.com
http://hr.rpi.edu/update.com
http://www.performance-appraisal.com
http://managementhelp.org/plan_dec/mbo/htm
http://performance appraisal.org/experts/perffeedback.htm
www.nhpc.nic.in
www.nhpcindia.co.in
www.nhpc.com
www.hrclub.nic

From the research it has been concluded that most of the executives who are not satisfied
with the present performance appraisal system. Appraisers give proper feedback to their
appraises on day today basis and proper training or challenging tasks are given to improve their
performance. mainly the formal training is given at the time of joining the organization but if the
employees face any problem later at the time of their job, their superiors help them in resolving
their problems at the same time. But some appraises feel that they are not given proper feedback
and even they dont want any feedback as they think that they know their work very well.
Government must invest in human capital and provide more opportunities
for further human resource development. Motivated people are central to the operation of any
agency that wishes to function well in the new age. A decade of organizational restructuring,
reinventing, and reengineering has produced employees who are more exhausted than
empowered, more cynical than self-renewed. Many agencies managerial attention is only
marginally focused on the problems of employee capability and motivation. Somewhere
between theory and practice, precious human capital is being misused, wasted or lost these
days .Therefore, management needs to develop the engaging and motivating culture necessary to
attract, excite and retain well-performing employees in government.