RESEARCH REPORT

A study on Performance Appraisal in hospitality sector

SUBMITTED IN PARTIAL FULFILLMENT

TOWARDS THE AWARD OF
MASTER OF BUSINESS ADMINISTRATION
(2016 17)

SUBMITTED BY:
SHALINI DASHARIA (1512470121)

MBA II YEAR (VI TRIMESTER)

Under the supervision of:
Mr. Abhishek Singh SIR

INSTITUTE OF COOPERATIVE AND CORPORATE MANAGEMENT

RESEARCH AND TRAINING

STUDENT DECLARATION
This is to certify that reported entitled To A study on Performance Appraisal in hospitality

sectorwhich is submitted by us towards partial fulfillment for the requirement of the award of

degree Master of Business Administration From Institute of co-operative and corporate research

and training, comprises only our original work and due acknowledgement has been made in the

text to all other material used.

Date:
 ACKNOWLEDGEMENT

This project entitled, A study on Performance Appraisal in hospitality sector demanded a lot of

research and proper methodology to be followed for the matter it needed a proper guidance and

support to be able to come up with true picture of the company performance We take the privilege

of conveying our heartiest gratitude to all those , who directly or indirectly enable us to complete

our project .

In the first place we would like to record our gratitude to our mentor Mr. Abhishek for his
supervision , advice and guidance at every stage of this research . Above all and the most needed,
He provided unflinching encouragement and support in various ways . His truly knowledge and
skill has made her a constant basis of ideas and passion in commerce with exceptionally inspire to
her more than she knows.

THANKING YOU,
 PREFACE

Master of business administration is a stepping stone to the management career. In order to achieve
practical, positive and concrete result, the class room learning needs to be effectively collaborated
with the realities of the situation existing in the real corporate world.

Research report project is an integral part of curriculum and its purpose is to provide the student

with the practical exposure of the todays changing scenario. It helps in the development of

practical skills and analytical thinking process .it provide with basis skills required to perform the

survey and statistical tool needed to analyses the data .thus it help in modeling the student to the

requirement of actual world. This research project makes the A study on Performance Appraisal

in hospitality sector

 TABLE OF CONTENT

S.NO PARTICULARS PAGE NO.

Cover Page
Certificate by Supervisor
Declaration
Acknowledgement
Preface
6-12
1. INTRODUCTION

13-18
2. REVIEW OF LITERATURE
19-24
3. OBJECTIVE
25-43
4. LIMITATION
44-47
5. RESEARCH METHODOLOGY
48-49
6. DATA ANALYSIS AND
INTERPRETATION
50-54
7. FINDINGS AND SUGGETIONS

8. CONCLUSION

9. BIBLIOGRAPHY
 CHAPTER :1

INTRODUCTION

A study on Performance Appraisal in hospitality sector

 PERFORMANCE:
What does the term performance actually mean? Employees are performing well when they are
productive. Productivity implies both concern for effectiveness and efficiency, effectiveness
refers to goal accomplishment. However it does not speak of the costs incurred in reaching the
goal. That is where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to
outputs achieved. The greater the output for a given input, the greater is the efficiency. It is not
desirable to have objective measures of productivity such as hard data on effectiveness, number
of units produced, or percent of crimes solved etc. and hard data on efficiency (average cost per
unit or ratio of sales volume to number of calls made etc.).In addition to productivity as
measured in terms of effectiveness and efficiency, performance also includes personnel data such
as measures of accidents, turnover, absences, and tardiness. That is a good employee is one who
not only performs well in terms of productivity but also minimizes problems for the Organization
by being to work on time, by not missing days, and by minimizing the number of workrelated
accidents.

APPRAISAL:
Appraisals are judgments of the characteristics, traits and performance of others. On the basis of
these judgments we assess the worth or value of others and identify what is good or bad. In
industry performance appraisal is a systematic evaluation of employees by supervisors.
Employees also wish to know their position in the organization. Appraisals are essential for
making many administrative decisions: selection, training, promotion, transfer, wage and salary
administration etc. Besides they aid in personnel research.

PERFORMANCE APPRSAISAL:
Performance Appraisal thus is a systematic and objective way of judging the relative worth of
ability of an employee in performing his task. Performance appraisal helps to identify those who
are performing their assigned tasks well and those who are not and the reasons for such
performance.

In todays competitive business world, it is well recognized that organizations can only compete
with their rivals by innovating. Organizations can be innovative if they manage their human
resources well. In this respect performance appraisal (PA) serves a good role. Performance
appraisal is a formal and systematic process of identifying, observing, measuring, recording and
developing the job-relevant strengths and weaknesses of employees. Performance appraisal is a
systematic way of evaluating the standard of a worker performance on his job and the potential for
development. There arises a critical basic need for any organization to evaluate its employs
performance continually to ascertain their improvement and to know their situation in the Vol-2
Issue-2 2016 IJARIIE-ISSN (O)-2395-4396 1738 www.ijariie.com 290 organization. Performance
appraisal is a valuable tool that can be used to a) make employment decisions viz., determining pay
and promotions, b) identify professional development needs, and c) identify factors in the work
environment that help or hinder performance effectiveness. Dessler, G. (1997)1 , defines
performance appraisal as any procedure that involves setting work standards, assessing the
employees actual performance relative to these standards, and providing feedback to the
employees with the aim of motivating that person to eliminate performance deficiencies or to
continue to perform above par. The principles behind performance management are (a) career
management and (b) better performance. The line managers should recognise that performance
management is a useful contribution to their team management and not an ordeal. Performance
management is an ongoing and continuous process of communicating and clarifying job
responsibilities, priorities, and performance expectations to ensure an understanding between
supervisor and employee. Hatry, Harry P. (2006).2 observe that "an important aspect of
performance management involves designing specific measurable indicators as a means of gauging
progress. Outcome indicators are not to be confused with actual outcomes, although both are
pertinent to measuring progress. Outcome indicators are assigned a specific numerical
measurement that indicates progress toward achieving an outcome," but are not the outcomes
themselves. Performance appraisal is variously named as a performance review, performance
evaluation, career development discussion, or employee appraisal. It is a method by which the job
performance of an employee is documented and evaluated. It is a systematic and periodic process
that assesses an individual employee's job performance and productivity in relation to certain pre-
established criteria and organizational objectives. Performance appraisal is the process of
measuring quantitatively and qualitatively an employees' past or present performance against the
background of his expected role performance, the background of his work environment, and about
his future potential for an organisation. Performance appraisals are reckoned as a part of career
development and consist of regular reviews of employee performance within organizations.
Boswell and Boudreau, (2002)3 consider performance appraisal as a vital and most important HR
practice. Fletcher (2002)4 considers it the most extensively researched topic in work psychology.
Performance appraisal is a process within the overall system of performance management.
Performance-management system has three objectives: i) to address poor performance; ii) to sustain
good performance; and iii) to improve performance. Jafari, Bourouni, and Amiri, (2009)5 maintain
that "performance appraisal is one of the most important processes in human resource management,
because it has a great effect on both the financial, and program components of any organization.
There is a verity of methods for the appraisal of employees' performance. Obviously, no method
can claim that it has an integrated approach in performance appraisal. Therefore, human resource
managers should select an appraisal method which is most efficient in their organizations."
Fletcher, (2001)6 maintains that, "Performance appraisal has increasingly become part of a more
strategic approach to integrating HR activities and business policies and may now be seen as a
generic term covering a variety of activities through which organizations seek to assess employees
and develop their competence, enhance performance and distribute rewards. Thus, both practice
and research have moved away from a narrow focus on psychometric and evaluation issues to
developmental performance appraisal." Human resource management practices and organizational
commitment are directly related. HRM practices particularly address six dimensions: 1. reward; 2.
compensation; 3. selection; 4. training; 5. information sharing and 6. performance appraisal. All
these dimension can be better addressed with prior performance appraisal. This epitomises the
critical importance of performance appraisal system.
 CHAPTER:II
REVIEW OF LITERATURE
Cascio Wayne F, (1995)
Performance Appraisal has many facets. It is an exercise in observation and judgment, it is a
feedback process, and it is an organizational interventions. It is a measurement process as well as
an intensely emotional process. While it is fairly easy to prescribe how the process should work,
description of how it actually works in practice are rather discouraging.

Yoder, Dale, (1980)

Performance appraisal includes all formal procedures used to evaluate personalities and
contributions and potentials of group members in a working organisation. It is a continuous
process to secure information necessary for making correct and objective decisions on employees

Herbert and Doverspike (1990)

state that a literature review leads to a model for using performance appraisal information in the
process of analyzing training needs. The model identifies performance discrepancies, determines
causes, and chooses interventions based on internal (employee) and external (work environment)
factors

Winston and Creamer, (1997)

There are various methods of conducting employee performance appraisals, however not all
methods are suitable for every organisation. An effective performance appraisal system should be
fair and open, should clearly identify the strengths and weaknesses and also highlight the
productivity of employees

Basu, Mihir K.,(1978

Performance Appraisal may be defined as a structured formal Interaction between a subordinate
and supervisor, that usually take the form of periodic interview (annual or semi annual), 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
Yukl and Lepsinger (1995)
also explain that this (360 degree feedback) is an approach which relies on feedback from an
employees superiors, subordinates, colleagues and sometimes customers. The 360 degree
feedback approach allows the organisation to have good insight of an employee from various
perspectives and from number of sources.

Mondy and Noe (2005)

The 360 degree feedback appraisal method is one of the most popular approaches to performance
appraisal. This method involves evaluation input from various levels of the organisation for an
employee. Gathering feedback from multiple sources can avoid various discrepancies involved in
performance appraisal systems
CHAPTER: III

OBJECTIVES
A.To provide basis for promotion/transfer/termination.

b. To identify the subordinates that deserve promotion or lateralshifting.

c. To help the employee properly identify his strength and weakness, and to inform him
the type and level of performance expected from him. This will help him to properly
understand his role. That will lend him job effectiveness. The feedback will reinforces
good performance and discourage the poor one.

d. To identify training and development needs of the employee and to prepare him for
meeting challenge in his current and future employment.

e. To counsel and correct employee's misconceptions, that might results in work

alienation.

f. To help employees to internalize the norms and values of the organization.

g. To identify and remove factors of worker's discontent and to motivate himfor better
performance.

h. To create a positive and healthy work climate in the organization

i. To make the organization a preferred place to work.

 CHAPTER : IV

LIMITATIONS OF THE
STUDY
Central tendency :-

In this case the superior gives an appraisal by giving central values. This prevents a really
talented employee from getting promotions he deserves and some employees who do not
deserve any thing may get promotion.

Leniency and strictness :-

Some bosses are lenient in grading their employees while some are very strict. Employee
who really deserves promotions may loose the opportunity due to strict bosses while those
who may not deserve may get benefits due to lenient boss.

Spill over effect :-

In this case the employee is judged +vely or vely by the boss depending upon the past
performance. Therefore although the employee may have improved performance, he may still
not get the benefit.

Fear of loosing subordinates and spoiling relations :-

Many bosses do not wish to spoil their relations with their subordinates. Therefore when they
appraise the employee they may end up giving higher grades which are not required. This is a
n injustice to really deserving employees.
 CHAPTER: V

RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY

Research methodology is a systematic method of discovering new facts or verifying old facts,
their sequence, inter relationship, causal explanation and the natural laws which govern them.
Research methodology explained by Redman and Morayare systemized effort to gain new
knowledge research methodology is original contribution to the existing stock of knowledge
making for its advancement. In short, it also covers the systematic approach concerning
generalization and formulating of the theory. Different stages involved in research consist of
enacting the problem, formulating a hypothesis, collecting the facts or data, analyzing the facts
and reaching certain conclusion either in the form of solution towards the con cerned problem or
in the form of generalization for some theoretical formulation.

RESEARCH DESIGN

The research problem having been formulated in clear cut terms, the researcher will be required
to prepare a research design i.e., he will have to state the conceptual structure with in which
research would be conducted. The preparation of such design facilitates research to be as
efficient as possible yielding maximal information. But how all there can be achieved depends
mainly on the research purpose

EXPLORATORY RESEARCH

Exploratory research seek to discover new relationship, emphasis on discovery of ideas. A

research design specifies the methods and procedures for conducting a particular study. It is a
map or blue print to which the research is to be conducted.

It was exploratory research in nature in nature and which which was subjected to the basic
information required by research objectives. A preliminary study and finding was further
consolidated, after detailed conclusion study has been carried out.
DESCRIPTIVE RESEARCH

The research design adopted for this is DESCRIPTIVE RESEARCH DESIGN. Descriptive
research studies are those studies which are concerned with describing the characteristics of a
particular individual, or a group. In this study the researcher must be able to define clearly, what
he wants measure and must find adequate method for measuring the effect of celebrity credibility
in respect to consumer purchase intention with clear cut definition of credibility endorsement he
want to study. The design in such study must be rigid and flexible and must focus on the
following:-

Formulating the objetive of the study.

Designing the methods of data collection.

Selecting the sample.

Processing and analyzing the data.

Reporting the findings.

PRIMARY DATA: is the data, which is collected directly by direct personal interaction, oral
investigation, drafting a schedule a questionnaire.

SECONDARY DATA: is the data, which is collected from the various books, journals, reports,
etc. The various information is taken out regarding the subject as well as other subject from
various sources and stored.

TOOLS FOR DATA COLLECTION: QUESTIONNAIRE

In dealing with any real life problem it is often found that data at hand are inadequate, and hence,
it becomes necessary to collect the data that are appropriate. There are several ways of collecting
the appropriate data, which differ considerably in context of money, cost, time, and other
resources at disposal of the researcher. In this research, questionnaire was used to collect the
appropriate data for the research.

Data Used: Primary data & secondary data.

Research design: Descriptive research design

Sample design: Convenience Sampling

Sample size: 100

CONCLUSION AND
RECOMMENDATION
CONCLUSIONS AND RECOMMENDATIONS
Peter Drucker, remarked that an organization is like a tune. It is not constituted by individual
sounds but by their synthesis. The success of an organization, therefore, depends on its ability to
accurately measure the performance of its members and use it objectively to optimize them as
vital resources. Performance appraisal is a vital process by which an employee's contribution to
the organization during a specified period of time is assessed. Performance appraisal is a tool that
helps management to better know the quality of its human resource and how good they convert
their qualities into performance. Performance appraisal, when used correctly can provide
management with valuable information that may provide basis for important decisions. However
in the hands of an incompetent manager this tool can be a devastating weapon, and all potential
benefits may turn in reverse direction.

Hotel industry business is fragile in nature. Attracting the tourists is highly expensive and a
cumbersome job, but losing them is extremely easy. Hotel industry is a labour intensive industry
and human resources play a crucial role in guest-customer satisfaction. No matter how much
investment has been made on physical facilities, like building, equipment, furniture, etc., to
provide the tourist with a comfortable stay, poor service may wipe out all the positive
impressions created by the physical facilities.

In this paper, performance appraisal has been explored and its application at the hospitality
industry in Lucknow has been evaluated. The results of the study indicate that the importance of
human resources and the role of performance appraisals in hospitality organizations needs to be
better appreciated. In the light of the findings of the research at the hospitality organizations, the
following recommendations are made regarding performance appraisal practices at these
organizations:

1. Job related criteria should be used to evaluate performances of employees, including

managers. Use of non-performance criteria be avoided.

2. The industry is found mainly using in a routinistic manner old and unrevised performance
appraisal methods. They need to be replaced by more contemporary techniques, but before
opting the new technique first of all the purpose of the appraisals should be defined by the
establishments.

3. It is better to customise and use different appraisal methods for different groups in the
organization. Employees be conveniently categorised into groups - managerial and non-
managerial, or as employees with high customer contact and those relatively less in contact.

4. A good job description is the prerequisite of a good performance appraisal system. The job
descriptions should be properly revised and improved. Every employee should know exactly
what is expected from him. The job descriptions should describe the tasks, duties,
responsibilities, results to be achieved and the behavioural requirements.

5. Performance standards should be developed so that the performances of employees can be

compared and good performer and poor performer can be differentiated. Each employee should
clearly know the standards and dimensions on which their performances will be evaluated. It will
also help self evaluation of performance by the employee, which will lead to self satisfaction and
appreciation of their performance results.

6. The employees should know who is going to evaluate their performances. Under the current
practice multiple raters are involved in the process. This may be acceptable, as it reduces the
disturbing results of the prejudiced appraisals.

7. The survey found that the managers did not favour customer appraisals.

8. However, the comments of the customers on the quality of the service can be used as an input
to the appraisals.

9. The current practice of yearly appraisals may be continued. However, instead of keeping
calender year as an year end, 'the end of the tourism season' may be better. Each employee
should be provided with knowledge about their strengths and weaknesses right after the tourism
season completion. This will help to improve themselves for the coming season.

10. However, yearly evaluations, must be supported by daily coaching and counselling. This is
because as the time between the performance/behaviour increases the defensive reactions to the
appraisals will also increase.

11. The performance appraisal results should not be kept secret. The appraisal results must be
communicated to the employee.

12. The managers should be trained in the interview techniques. The interviews should be carried
out in a friendly atmosphere. Ways of improving the employee performance should be explored.

13. The most important part of any performance appraisal system is the use of the results of the
appraisal. The good performer should be rewarded.
14. Regarding the poor performer, find out the reasons underlying the failure and try to
eliminate those factors. If the employee lacks the necessary skills and abilities to perform the job
he should be provided training and development

15. If the poor performance is found due to motivational problem ways of motivating the
employee should be explored.