Performance Appraisal System in Airports Authority of India

PERFORMANCE APPRAISAL SYSTEM
IN AIRPORTS AUTHORITY OF INDIA
Project Submitted to the ALAGAPPA UNIVERSITY in partial

fulfilment of the requirements for the award of the Degree of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY :
HARISH KUMAR
(ENROLLMENT NO.043176287)
RESEARCH GUIDE :
DR. VED PRAKASH
DIRECTORATE OF DISTANCE EDUCATION
ALAGAPPA UNIVERSITY
KARAIKUDI – 630003
JUNE – 2004
CERTIFICATE
This is to certify that the Project titled ‘Performance Appraisal
System in Airports Authority of India’ is a bonafide research work
carried out by Ms. Meenakshi Dutt (Roll No. 834), regular Student of Delhi
Productivity Council Institute of Management(DPCIM) in partial fulfilment of
the requirements for the award of the Post Graduation Diploma in
Management(PGDM) and that the project has not formed the basis for the
award previously of any degree, diploma, associateship, fellowship or any
other similar title.
Dated : { Signature of the Guide }
i
ACKNOWLEDGEMENT
I express my sincere and profound gratitude to Dr. Ved Prakash, Ph.D.(OR),

Asstt. General Manager, Engineers India Ltd., New Delhi for his valuable guidance
and supervision in the preparation of this dissertation work. I am deeply indebted to
him for his encouragement and help.
I also express my sincere thanks to all officers and staff of Airports Authority of
India who were kind enough to co-operate by spending their valuable time in filling up
the questionnaire used in this study and I also express my sincere thanks to all those
who directly or indirectly extended their help in completing this work.
NEW DELHI {HARISH KUMAR}
ii
DECLARATION
I hereby declare that the project entitled “PERFORMANCE APPRAISAL
SYSTEM IN AIRPORTS AUTHORITY OF INDIA” submitted for M.B.A Degree is my
original work and the dissertation has not formed the basis for the award of any degree,
associate-ship, fellowship or any other similar titles.
Place : (HARISH KUMAR)

Signature of the Student
Date :
iii
SYNOPSIS
OBJECTIVE OF THE STUDY
The main objectives of the study are :
i.) To discuss conceptual framework of Performance Appraisal System
ii.) To review the Performance Appraisal System of AAI
iii.) To measure officers attitude towards Performance Appraisal System
iv.) To measure effectiveness of present Performance Appraisal System of AAI
RESEARCH METHODOLOGY
I have used both primary data and secondary data for my project. Under this
research the questionnaire method of interviewing officers was used as primary data.
The questionnaire was divided into two parts as under:
Part I – This was designed mainly to judge officer’s attitude towards

Performance Appraisal System.
Part II – This was designed to measure effectiveness of Performance

Appraisal System of AAI. All the questions were designed as
close ended.
Apart from these questions, open ended questions were asked from the
respondents.
Under this project study, stratified sampling method was used as secondary
data.
iv
INFERENCE
The subject of the Project has been found effective in the following areas :
a) Identification of strengths and weaknesses of the employees.
b) Identification of training needs.
c) Setting operational objectives.
d) Improvement over previous system of confidential reports.
e) The success of the Performance Appraisal System.
v
SUBMISSION FORM
Name of the Candidate : HARISH KUMAR
Enrollment No. : 043176287
Course : M.B.A
Period of Study : September, 2004 to June, 2006
Mode of Registration : Directly with the university
If through Study Centre, state :

The Name and Address of
The Study Centre
Address of the Candidate : 40/5, FIRST FLOOR,

ASHOK NAGAR, NEW DELHI
PIN – 110 018
Name of the Guide : Dr. Ved Prakash
i) Academic Qualification : Ph.D (OR)
ii) Designation : Asstt. General Manager
iii) Years of Experience : 30 Years in Industry
iv) Institute where working : Engineers India Limited, New Delhi
v) Contact Address : 1, Bhikaiji Cama Place, R K Puram,

New Delhi – 110 066
Date of Submission : 31st July, 2006
Signature of the Guide Signature of the Candidate
Director,
DDE, Alagappa University
CONTENTS
TOPICS PAGE NO.
Certificate i
Acknowledgement ii
Declaration iii
Synopsis iv - v
Chapter I 1
Airports Authority of India : An Introduction
Chapter II 5
Objectives of the Study
Chapter III 7
Research Methodology
Chapter IV 9
Conceptual Framework : Performance Appraisal System
Chapter V 36
A review of Performance Appraisal System in
Airports Authority of India
Chapter VI 43
Research Analysis
Chapter VII 50
Conclusion
Bibliography 53
Annexure
CHAPTER – I
AIRPORTS AUTHORITY OF INDIA

(OVERVIEW)
Under this chapter we will discuss :
• Introduction of Airports Authority of India (AAI)

• Organisation structure of AAI
• National Airports Division (Wing – I)
• International Airports Division (Wing-II)
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INTRODUCTION
A Profile
Airports Authority of India came into being by merging erstwhile National Airports
Authority and International Airports Authority of India. The merger brought into
existence a single organization entrusted with the responsibility of creating, upgrading,
maintaining and managing the Civil Aviation infrastructure both on the ground and air
space in the country. Aviation Sector in a vast country like India plays a pivotal role in
meeting the fast growing needs of the country. The Civil Aviation Sector in our country
is witnessing boom in terms of traffic growth. The estimated traffic growth of about 8 to
10 percent in the domestic as well as international market is in itself an indication of the
potential of this sector and its likely impact on the socio-economic development of India.
The opening up of Civil Aviation Sector and the revival of the tourism industry over the
past few years has added new dimensions and challenges to the AIRPORTS
AUTHORITY OF INDIA in handling growing air-traffic and providing better facilities to
users.
AIRPORTS AUTHORITY OF INDIA (AAI) was formed on 1st April, 1995 by an Act of
Parliament. It manages 127 airports which include;
- 15 International Airports (including Delhi & Mumbai)

- 7 Custom Airports
- 25 Civil Enclaves
- 80 Domestic Airports
Mission of AAI
“PROGRESS THROUGH EXCELLENCE AND CUSTOMER SATISFACTION WITH

WORLD CLASS AIRPORT AND AIR TRAFFIC SERVICES FOSTERING ECONOMIC
DEVELOPMENT
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Main Functions of AAI
• Control and management of the Indian air space

• Provision of communication, navigational and surveillance aids
• Operation, maintenance and upgradation of operational areas viz. runways,
aprons, taxiways etc.
• Design, development, operation and maintenance of passengers terminals
• Development and management of cargo terminals.
ORGANISTION STRUCTURE
Airports Authority of India headed by a Chairman and supported by four Members,

namely, Member (Operations), Member (Planning), Member (P&A) and Member
(Finance) all selected through Bureau of Public Enterprises, Government of India. AAI
consists of two divisions, namely, National Airports Division and International Airports
Division. The Chairman and the Board Members look after all the requirements and
functioning of both these divisions. AAI is having its Corporate Headquarters at New
Delhi.
NATIONAL AIRPORTS DIVISION (WING-I)
The Apex body of National Airports Division consists of Chairman and four Board
Members who decide and formulate all corporate policies of the Authority and ensure
proper implementation of the same. Further, there are several Executive Directors who
are looking after various departments headed by four Board Members and providing all
necessary help and information in the process of decision making.
National Airports Division is also having its five regional headquarters, namely Eastern,
Western, Northern, Southern and North-East. Each of these Regions is headed by
Regional Executive Director. The Regional Headquarters are situated at Kolkatta,
Mumbai, Delhi, Chennai and Guwahati respectively.
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There is also a Civil Aviation Training College at Allahabad headed by a ‘Principal’ who
is at par with Regional Executive Director. All the training needs of Executives and
Non-executives are fulfilled at this Civil Aviation Training College.
INTERNATIONAL AIRPORTS DIVISION (WING-II)
The Apex body of International Airports Division are also Chairman and four Board
Members (who are of National Airports Division also) who decide and formulate all
corporate policies and ensure proper implementation of the same. Further, there are
several Executive Directors who are looking after various departments headed by four
Board Members and providing all necessary help and information in the process of
decision making.
International Airports Division is also having its five regional headquarters situated at
Kolkatta, Mumbai, Delhi, Chennai and Thiruvanthapuram. These regional headquarters
are headed by Airport Directors who are at par with Regional Executive Directors.
The executive class of both these divisions consists of following cadre :
Assistant Manager
Manager
Senior Manager
Deputy General Manager
Additional General Manager
General Manager
Regional Executive Director / Airport Director / Principal
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CHAPTER – II
OBJECTIVES OF THE STUDY
Under this chapter we will study :
• Introduction of the Study
• Objectives of the Study
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INTRODUCTION OF THE STUDY
Manpower Management is a most crucial job because “managing people is the heart &
essence of being a manager”. Human Resource Management is concerned with HRD
mechanisms such as Selection, Training, Wage & Salary Admn., Performance
Appraisal and Welfare Activities. Performance Appraisal is an important tool in Human
Resource Development. The Performance Appraisal System not only helps in career
growth of employees but also helps in taking care of their training needs, skill
development and overall development of the personality. No doubt, the organizations
who develop their people on a continuous basis are bound to be having a competitive
edge over other organizations.
In the wake of fast track development in the Aviation Industry, the AAI needs to give
more emphasis on service aspect because as per its mission “Progress through
Excellence and Customer Satisfaction with World Class Airport and Air Traffic Services
fostering economic development” employees of AAI need to feel motivated to provide
efficient service to the airlines and air travellers. In AAI five types of Performance
Appraisal Reports have been evolved which are as under :
1. Form (PA)-4 - Executive Director / Equivalent

(Below Board Members)
2. Form (PA)-3 - Officers of the level of Sr. Manager
To General Manager
3. Form (PA)-2 - Officers of the level of Sr. Suptd. To
Manager
4. Form (PA)-1 - Employees of the level of Jr. Assistant
To Sr. Assistant
5. Form (PA)-1A- Group ‘D’ Employees
In the study of Performance Appraisal System of AAI, it has been tried to review and
analyse this system in respect of National Airports Division officers in the categories of
Assistant Manager, Manager, Senior Manager. Since the study has been done at
zonal level in New Delhi, these three classes of officers are chosen. An attempt has
also been made to discuss conceptual framework of Performance Appraisal System.
OBJECTIVES OF THE STUDY
The main objectives of the study are :
v.) To discuss conceptual framework of Performance Appraisal System

vi.) To review the Performance Appraisal System of AAI
vii.) To measure officers attitude towards Performance Appraisal System
viii.) To measure effectiveness of present Performance Appraisal System of AAI
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CHAPTER - III
• Methods used in the Research

• Sampling used in the Research
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Under this research, the questionnaire method of interviewing officers was used. The
questionnaire was divided into two parts. Part I was designed mainly to judge officer’s
attitude towards Performance Appraisal System. Part II was designed to measure
effectiveness of Performance Appraisal System of AAI. All the questions were
designed as close ended. Apart from these questions, open ended questions were
asked from the respondents.
SAMPLING
Under this project study, stratified sampling method was used. A total of fifty officers
were chosen as sample out of seventy five officers at New Delhi office. The officers in
different cadres were chosen as follows :
No. of Samples
Senior Manager - 30
Manager - 15
Assistant Manager - 5
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CHAPTER - IV
CONCEPTUAL FRAMEWORK :
PERFORMANCE APPRAISAL SYSTEM
• Concept of Performance Appraisal

• Objectives of Performance Appraisal : Past & Future
• Benefits of Performance Appraisal
• Elements of Performance Appraisal
• Performance Appraisal Challenges
• Techniques of Performance Appraisal
o Past Oriented Methods
o Future Oriented Methods
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CONCEPT OF PERFORMANCE APPRAISAL
Performance Appraisal is the process by which organizations evaluate job performance.

When done correctly, their supervisors, the human resource department and ultimately
the organizations all benefit.
Employees seek feedback on their performance as a guide to future behaviour. This

need for guidance is most obvious among newcomers who are trying to understand
their jobs and the work setting. Longer service workers want positive feedback on the
good things they do, although they may resent corrective feedback like criticism.
Supervisors and Managers need to evaluate performance in order to know what actions
to take. Detailed and specific feedback enables them to better guide employee
performance and needed training. Specific feedback also enables members of the
management to make comparative judgments about pay increases; promotions and
other placement decisions. Performance feedback is compared with standards,
prompting the leader to reinforce desired outcomes and take corrective action for poor
performance.
Human Resource departments also use the information gathered through Performance
Appraisals. Patterns of good or bad evaluation give feedback about the success of
recruitment, selection, orientation, placement, training and other activities. Although
informal and ongoing appraisals on a day to day basis are necessary to a smooth
operation, these methods are insufficient for the human resource department’s needs.
Formal appraisals are sought by the department to help the Supervisor with placement,
pay and other human resource decisions.
Components of Appraisal System
In view of the fact that there are a variety of reasons for performance evaluation viz.
Counselling, promotion, administration or a combination of these factors, it is necessary
to understand clearly the objectives of the evaluation process. Having done this, the
performance evaluation system should address the question in the respect of give W’s
i.e Who, What, When, Why, Where and How concept of Performance Appraisal.
Who : It is usually the immediate supervisor who is entrusted with the task of
rating the appraisee because he is most familiar with his work and is responsible for
recommending or for approving action based on Performance Appraisal and for
providing a feedback to the appraisee. Supervisor’s ratings are therefore, regarded the
best possible assessment and often considered as the HEART OF MOST OF THE
APPRAISAL SYSTEM.
What : This includes appraisal of current performance and future potential. It

also includes evaluation of human traits.
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Why :It is concerned with a) creating and maintaining a satisfactory level of
performance of employee in his present job, b) Highlighting employee needs and
opportunities for personal growth and development, c) Aiding in decision making for
promotions, transfers and discharges etc. d) Promoting understanding between the
supervisor and his subordinates, e) Providing a useful criterion for determining the
validity of selection and training methods and techniques.
When : It denotes the frequency of appraisal. It has been suggested that informal
counseling should occur continuously. The supervisor should use good work as an
opportunity to provide positive reinforcement and use poor work as a basis for training.
In most organization, employees are evaluated once in a year. However, evaluation
should not coincide with the date of increment for obvious reasons.
Where : It indicates the location where an employee may be evaluated and it is

usually done at the work place or office of the supervisor. Informal appraisals may
take place anywhere and everywhere, both on the job in work situations and off the job.
How :The organization must decide what are the methods available and which of these
can be used for Performance Appraisal. On the basis of comparative advantages and
disadvantages, it can be decided as to which method would suit the purpose best.
In any Performance Appraisal System, due consideration must be given to the ethics of
appraisal, failing which many organizational problems may crop up and the purpose of
appraisal may be defeated. In this connection, M.S. Kellog has suggested the
following do’s and don’ts :
Do not appraise without knowing why appraisal is needed.

Appraise on the basis of representative information.
Appraise on the basis of sufficient information.
Appraise on the basis of relevant information.
These ethical standards are most likely to be met if appraisal are based on information
both qualitative and quantitative as well as for each manpower group for example
health, education, communication power, transport and others.
OBJECTIVES OF PERFORMANCE APPRAISAL

{ Past & Future }
There is a great deal of unhappiness all around with Performance Appraisals. Rarely
does one come across supervisors who are happy with the Appraisal Systems in their
organizations. When such a great degree of unhappiness exists about them, why
should we continue to have them? But supervisors find it difficult to do without them
because in the absence of an appraisal mechanism, however weak it may be, it is
difficult to get work out of people. It is a good mechanism to control people.
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Employees want promotions, they want salary increments, they want good working
conditions, they would like to be placed in prestigious positions, and would like to be
transferred to places of their choice and like jobs giving them maximum satisfaction, and
so on. Therefore, if people get what they want, they should give what their bossed
want. And Performance Appraisal is one mechanism to make sure that people at
every level do things the way their bosses want them to do. Thus, the bosses at every
level strive for better ratings of their own performance by assessing the performance of
their subordinates and thus controlling their behaviour.
What is stated in the above paragraph is precisely the problem with our performance
appraisal. That is why they are under constant attack from every corner. The
subordinates complain that their bosses try to rate their performance without really
knowing what they are doing and the constraints under which they are working. They
are also not satisfied since given the same performance levels, different bosses rate the
performance differently. They are also not happy because their bosses rate their
performance confidentially rather than communicating and trying to help them improve.
The bosses are unhappy because the form filling has become a ritual. Year after year
they have to fill the same forms for employee after employee and there is no
improvement in their performance. They are also not happy because they really do not
know what happens to those forms which they rate and send them to the personnel
departments and don’t even come to know what happens to the various
recommendations they make for their subordinates’ training, promotions, increments,
transfers etc. The personnel departments are unhappy because mot of the forms are
never received on time. The personnel department is also not happy because
supervisors keep on making liberal recommendations and placing demands on the
personnel departments without looking into the organizational constraints. The top
managements are unhappy because inspite of their efforts the quality of personnel
seems to be declining day by day.
OBJECTIVES OF PERFORMANCE APPRAISAL – THE PAST
The situation exists today in most organizations because of lack of understanding of the
potential uses of performance appraisal systems by everyone and improper designing
of performance appraisals. The appraisals system in most organizations are designed
today to meet the following objectives:-
1) To control employee behaviour by using it as an instrument for rewards,

punishment and threats.
2) To make decisions regarding salary increases and promotions
3) To place people to do right kind of jobs.
4) To identify the training and developmental needs of the employees
These objectives though appearing very good suffer from a major disadvantage.
That is, they are all, at least giving the impression of having been framed from the
“management” point of view rather than the “employee” point of view. This is
because there seems to be the following assumptions made in these objectives:
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1. Employee’s behaviour needs to be controlled and monitored by their bosses.
2. Rewards, punishment and threats are mechanisms of controlling employee
behaviour.
3. Employees want mainly promotions and salary increments and therefore, by
using performance appraisals as a basis for them, employees can be motivated to give
their best as they need to get good appraisal ratings.
4. Their motivation levels are likely to be high when they do not know how their
boss has rated them, this enhances the control value of appraisals.
5. The boss is in good position to rate the appraisee and he does not need any
input from the appraisee. In fact the appraisee should not provide any inputs at the
time of appraisals because most employees would like to put themselves in the best
possible light and therefore may bias the ratings of their bosses.
6. The appraisers alone can generate objective data about employee for
placement and promotion decisions.
7. Training needs can be decided through confidentially rated appraisals.
8. The Reviewing Authority (normally two levels above the appraisee) is in a
good position to moderate the appraisals ratings and decisions of the appraiser by
virtue of his position and authority and therefore, may be able to bring in objectivity
through his review.
9. Assessment on a few standard dimension like honesty, sincerity, drive, job
knowledge, dependability, leadership, etc. is sufficient to know about an individual.
Organisation Philosphy on Human Resources
The nature of the Performance Appraisal and its effectiveness depend a great deal on
how Human Resources are viewed and treated in the organization. If the organization
believes that people do not work unless they are closely supervised and controlled, it
may tend to have a confidential report from of appraisal. If the organization believes
that every individual has potential and strengths and that human capabilities can be
sharpened, developed and utilized better by providing a healthy climate, then the
organization would have an appraisal system that attempts to identify, sharpen, develop
and utilize the potential and capabilities of its employees.
Every employee spends a major part of his working life for the organization. In some
organization supervisors spend as much as about 80 percent of their working life for the
organization (inclusive of the time they spend at home thinking about, planning,
discussing, etc. of things related to their work). An average manager of an average
organization is bound to spend at least 60 percent of his time for his work. If the
organization and its task form a major part of an employees life shouldn’t the
organization take upon itself the responsibility of making the work life an enjoyable life?
Generally, very top level manager agrees with this. However, the problem arises when
it comes to the question to operationalising this. The question is “How can you make
the work-life of an employee enjoyable? ”. To make the work life enjoyable, one must
have some understanding of human nature. The following are some of the insights
provided by behavioural science researches in the past. These should be kept in mind
while designing any appraisal systems.
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1) Employees would work hard when they feel they are “wanted” in the
organization.
2) Employees would work better when they are “clear” about what they are
expected to do and when they have some say periodically in dodifying these
expectations.
3) Employees would work better whey they start “experiencing” success in the
tasks they are performing.
4) Employees would work better when they feel that the organization provides
opportunities for their performance to be recognized and rewarded.
5) Employees would work better when they see that their organization is
providing them an opportunity to develop and utilizing their capabilities to a large extent.
6) Employees will have a high level of commitment when they see that their
organization is willing to invest time and other resources for the development of their
people.
7) Employees would work better when they are being trusted and treated with
dignity.
Performance Appraisal can serve very useful purpose if they recognize the above and
take them into consideration in their purposes and processes.
New Objective of Performance Appraisal
Performance appraisal systems can serve the following purposes, if designed properly:-
1. They can help each employee to understand more and more about his role
and become clear about his functions.
2. They can be instruments in helping each employee to understand his own
strengths and weaknesses with respect to his role and functions in the company.
3. They can help in identifying the developmental needs of each with respect to
his role and functions.
4. They can increase mutuality between each employee and his supervising
officer so that every employee feels happy to work with his supervisor and thereby
contributes maximum to the organization.
5. They can be mechanisms of increasing communication between the
employee and his supervising officer so that each employee gets to know the
expectations of his boss from him and each boss also gets to know the difficulties of his
subordinates and attempts to solve them, and thus they together accomplish the tasks.
6. They can be instruments to provide an opportunity for the employee for self
reflection and individual goal setting so that individually planned and monitored
development takes place.
7. They can play role in helping every employee internalize the culture, norms
and values of the organization so that an organizational identity and commitment is
developed throughout the organization.
8. They can help in preparing employees for performing higher level jobs by
continuously reinforcing the development of behaviours and qualities required for higher
level positions in the organizations.
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9. They can be instruments in the creation of a positive and healthy climate in
the organization that drives people to give their best and enjoy doing so.
10. In addition they can assist in a variety of personnel decisions by generating
data about each employee periodically.
BENEFITS OF PERFORMANCE APPRAISAL
Over the last 15 years, more and more organizations have introduced some form of
appraisal system. While appraisal may have its problems, and it is certainly arguable
that it is not successful or appropriate in all situations, this growing use of appraisal
suggests that many organizations find it a worthwhile process. Operating an appraisal
system certainly require quite an investment of resources by the organization and time
and effort by the appraising manager. These investments need to be justified in terms
of the benefits which ensue, and to be successful any system depends upon all those
involved having some appreciation of those returns.
The specific benefits of any appraisal system will, of course, depend on the objectives it
is intended to achieve and the extent to which the system is effectively designed and
operated to meet those objectives. Nonetheless, it is possible to talk at a general level
about the potential benefits which appraisals can bring. These can be classified under
three headings :
• the benefits to the appraisee
• the benefits to the appraiser and
• the benefits to the organization.
Clearly, there will be an overlap between the three. After all, anything which benefits
the individual employee should also benefit both his or her appraising manager and the
organization as the whole. As an appraising manager yourself, you will be concerned
not only for your own interests but also for those of your staff and the organization which
employs you.
{Benefit to the Appraisee}
Receiving Feedback
This first and perhaps most obvious benefit to the individual is the opportunity to receive
feedback on his performance. Everyone needs feedback. They need to know how
well they are doing, or if what they are doing is not right. Without feedback individuals
can feel vulnerable. Is my work really valued? , what does the boss really think of
me?
It might be argued that a good boss provides feedback on a day to day basis. This is
true. But such feedback tends to be unstructured and adhoc. It also tends to relate to
specific tasks in hand. Appraisals provides the individuals with the opportunity to have
his or her job and performance looked at as a whole in a balanced and thought through
way. If offers an occasion to have achievements formally recognized and documented,
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and the chance to bring certain achievements to the bosses notice which might
otherwise have been overlooked.
The fact that this feedback is documented also provides the appraisee with a certain
amount of protection. After all, if there is a written record showing that the appraisee is
doing a good job, the boss can hardly turn around shortly afterwards and say – “Your
performance isn’t upto scratch….”.
It also needs to be recognized that, where there is no appraisal system, this does not
mean that individual employee are not being appraised. It merely means that appraisal
is taking place in an unstructured way behind closed doors without the individual
knowing how he or she is bring assessed, and without having the opportunity to take
part actively in the process.
Opportunity of Feedback to Boss
Appraisees performances are affected not only by their own strengths and weaknesses
but also by the way they are managed. As an appraisee’s line manager you may be
acting as a block to his or her effective performance. The appraisee may feel that :
• You don’t give him or her enough attention;

• You don’t understand some of the particular problems involved in the job;
• You haven’t provided (or fought hard enough for) the necessary resources –
material, human or whatever
• You are constantly interrupting
• You don’t explain clearly enough what you want;
• You’re too willing to commit the department to do things it’s not able to do.
Opportunities do discuss such issues can be highly valued by appraisee’s, not merely
as a means of resolving specific problems but also because they provide them with a
sense of participating in their own management.
It might be argued that in a good working relationship, staff will feel free to provide such
feedback to their bosses anyway. It’s quite typical for supervisors to say : If anyone’s
ever got any problem or suggestions, they know they can always bring them to me. I’m
always available to my staff’. However, many bosses are not accessible or responsive
as they perceive themselves to be. The fact that appraisal system is a formal system
providing staff with little protection to say things they might not have been happy to say
otherwise. This often means that they can feedback to their bosses in a more candid
way than they would feel free to do so during the process of a day-to-day conversation.
Having Training Needs Identified
For appraisees, appraisal provides an opportunity to ensure that personal training

needs are examined so that they can develop their skills and perform more efficiently.
This in turn provides them with the benefits associated with doing a better job and
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increased job satisfaction. If you don’t provide individuals with the opportunity to have
their training needs formally assessed and discussed, they may feel that you and /or the
organization has no real commitment to or interest in them. This in turn can result in
demotivation and a lack of commitment to the job.
Opportunity to Discuss Career Prospects and Promotion
Understandably, many people are concerned about their future. ‘Am I likely to be in
line for promotion?’. ‘What are the prospects for me in this organization?’. These are
issued which you need to discuss with your staff and appraisal can provide an
opportunity for an individual to receive a frank assessment of his/her prospects.
If the organization has a formal system for recommending people for promotion (such
as promotion board), then individuals need to be told whether they are considered ready
for promotion. If they are not they have a right to know why, and to discuss with you
what action they need to make themselves promotable.
The discussion of promotional prospects is not always part and parcel of an appraisal
system. Indeed, many organization provide and establish separate systems for career
counseling, perhaps fearing that a discussion on future prospects during appraisal may
blur the focus on current performance. Nonetheless, the point here is that many
individuals do need to discuss their careers and that appraisal can provide an
opportunity, which might not otherwise be available.
Clarifying Objectives
A formal appraisal system provides your staff with the opportunity to discuss the
objectives of their jobs with you. It is surprising how often people are unclear as to
what these are. The result is that they find it very difficult to set priorities and
determine those tasks which are truly important to their role in the team and the
organization. Indeed, it is not uncommon for a member of staff to have a view of his or
her job that differs from the boss’s view perhaps her or she focuses on some aspects of
the job which was given particular emphasis during their original selection interview, yet
which was never intended to be most important part of the job. If people are to perform
well in their jobs, they need to jknow what it is they are supposed to achieve and also
what the criteria of effective performance are. Appraisal can help to iron out such
ambiguities.
Discussion of Job Design
The appraisal interview provides the opportunity to consider and discuss the issues of
job design :-
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• Is the job varied and interesting?
• Does it use the full talents of the appraisee?
• Could he or she take on more responsibility?
• Is the job too demanding – could certain elements of it be dropped, or is
there a need to bring in extra resource?
Appraisal thus provides appraisees with the chance to suggest ways in which their jobs
could be more fulfilling , efficient or easier. These are aspects of motivation and job
satisfaction.
Benefits of Performance Related Pay
Performance related pay can be contentious issue and if your organization operates
such a system, you need to be aware of some of the problems this may cause for
appraisal process. However, as well as involving difficulties, performance related pay
also provides benefits and opportunities for the individual : it allows good performers to
receive material recognition for their good performance. It follows that some system of
appraisal is necessary if individuals are to be assessed for such rewards and if they are
to be told what they need to do to improve performance to the level which will trigger the
higher discretionary award next time around.
Benefits to the Line Manager
As we have already noted, as a Line-Manager you will gain from any benefits, your staff
derives from an appraisal system. If the aim of appraisal is to improve the performance
of staff and this is achieved, appraisal will have helped you to meet your objective of
making the best use of the human resources for which you are responsible.
Feedback to the Appraisee
Appraisal provides you with a formal and structured opportunity to feed back to each
member of your staff on his or her performance as a whole. This allows you to show
that you have noticed what has been done well, and enables you to tackle any problems
or criticisms you may have. This is a benefit because, given the formality of the
process, you may feel more able to tackle certain contentious issues (which might
otherwise be swept under the carpet) and because any criticisms you make will be
within the context of, and (it is hoped) offer by the, appraisee’s performance in other
parts of the job.
The appraisal should not, of course, be regarded as the sole opportunity to express
your criticisms; it is wrong to store up criticisms until an annual appraisals interview.
Nonetheless, there may be downslides to an individual’s performance for which the
appraisal may provide the appropriate discussion forum. Without a formal appraisal
system there is a real possibility that particularly difficult performance issued may be
ignored.
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Setting and Clarifying Objectives
We saw in our earlier discussion of benefits to the appraisee that many people are
unclear about the objectives of their job. It is important for you to clarify these
objectives with staff so that they can set the right priorities and given their time to the
right sort of work, ensuring that efforts are directed towards achieving your departmental
goals. Appraisals also allow you to look forward and to plan work for the next period-
setting each individual objectives and targets which are achievable and motivating, and
with those of the department and organization.
Identification of Training Needs
Appraisal provides an opportunity for a structured analysis of the individual’s training

needs and a forum for a two way discussion, providing you with the opportunity to air
your own ideas and gather those of the appraisee. Training is not, however, the
solution to all performance problems, nor it is intended to be a reward for good
performance.
Audit of Team’s Strengths and Weaknesses
Appraisal allows you to take stock of skills and talents, strengths and weaknesses of
your team. This should help you to make more effective sue of team members. It
may help you to realize that the team has under exploited strengths which could enable
you to offer a new additional or better service to the organization or the customer. For
instance, if you run a clerical support unit you may discover that one of your staff has
the aptitude and the experience to take on desk-top publishing, thus enabling your
department to offer an in-house design and typesetting facility.
On the other hand, appraisal may help you to recognize that you don’t have the skills or
personnel which are needed to meet the remit of your department. It should thus help
you to decide what skills are needed and what type of people you should recruit to
complement your current team. More radically, you might even decide that certain of
your departmental objectives are unrealistic given the reality of the human resource
base available, and that consequently these objectives need to be redrawn to make
most of the resources you actually have at your disposal. As a result you may seek to
renegotiate the objectives laid down for your department.
Receiving Feedback on your own Management Style
We have already suggested that many people welcome the opportunity to feedback to
their supervisors in a formal way their views about how they are being managed. Such
a process (possibly painful) can be extremely valuable for you as a supervisor. After all
if the way you manage somebody affects your performance, you should be able to do
something to improve the situation and help your people to work more effective.
Although many supervisors regard themselves as approachable and responsive to
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criticism, individual employee may need to be encouraged to provide the feedback
supervisors need. An appraisal system can provide the necessary opportunity and
help staff members to clarify and articulate their view of your management style.
Exploring and Resolving Problems
The exploration and resolution of problems may be seen as a part of the feedback
process. However, all problems require a two-way discussion and commitment by all
parties concerned to the action necessary to resolve them. Appraisal can provide you
with the opportunity to talk through such problems and agree action accordingly. (It is
important though, to be sure to, appraise all aspects of performance and not to allow the
appraisal process to become hijacked by one or two thorny issues).
Reducing Staff Turnover
High levels of staff turnover can be extremely costly for a department. It causes
disruption and represents a loss of skills and experience. New Staff take time to be
trained, which is a cost your time, both directly as you have to give them a
disproportionate amount of attention, and indirectly new people take time to ‘com up to
speed’. People leave for a variety of reasons, but if appraisal provides a means for
tackling the issues behind some of these reasons, it can help to reduce turnover and its
associated costs, and make your job easier and more effective.
BENEFITS TO THE ORGANISATION
Improved Performance Through Commitment to the Staff
The organization should benefit in the same ways as the Line-Manager through having
staff who perform better. A well-operated appraisal system can be taken as one
indication of the organisation’s commitment to the welfare, rights and interests of each
individual employee. Studies show that successful organizations are those which show
commitment to, and concern for, their staff. Good appraisal system shows concern for
the individual’s career progress.
A Minimum Standard of Good Management
The point has already been made that good managers will communicate regularly with
their staff. However, not all managers are instinctively good managers. Many
managers often feel themselves to be under such pressures that they don’t give the
time they should to their staff. An appraisal system enables the organization to ensure
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that managers do give their staff at least a little time and consideration. It reminds
managers that staff management is a central responsibility of their jobs and ensures
that every individual gets at least some attention and formal feedback.
This is an important justification for operating an appraisal system. Getting the best out
of people cannot simply be a matter of designing good management systems. Good
management require the individual manager to do more than merely the requirement of
the system. As we have argued he or she has to be prepared to ‘go the extra mile’ to
make the system work effectively, Nonetheless a good appraisal system at least
establishes minimum standard of management.
Collation of Training Needs
Appraisal is often associated with the identification of training needs. One of the
benefits to the organization of operating an appraisal system is that it can allow
individual training needs to be collated as a means of developing the organisation’s
training plan. Thus, if a particular training need is identified in several individual’s
performance, there is obviously a need, and opportunity, for the organization to develop
in-house courses or means of dealing with it.
Manpower and Succession Planning
Appraisal not only allows for the collation of individual training needs but also allows the
organization to take a look at its manpower resources as a whole. Appraisal is a
source of information which can help to provide answer to questions such as :
• Have we got the right sort of people to match the needs of the organization as it
develops over the next five years.
• Do we have people whom we are going to be able to promote to fill the vacancies
which will occur naturally?
• Are the individuals we identified as likely to succeed to higher posts performing in
line with our expectations, and are they in fact suitable for such promotion?
Use appropriately, the appraisal system can help the personnel department to develop
the human resources strategies needed to meet the medium to long term goals of the
organization.
Test of Selection Process
One benefit of appraisal system which is often overlooked is the opportunity it provides
to assess the effectiveness of selection and recruitment methods. Every organization
needs to ask itself the key question: ‘Are The People We Have Recruited Performing As
Well As We Expected Them to?’
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If in general answer to this question is no, further questions should be asked about the
recruitment and selection process adopted. Continued these might include:
• Are we advertising in the right places?

• Do we need to adopt more stringent selection tests?
• Are we recruiting the right caliber of person?
• Do we need to offer more money?
• Do we need to review our induction programme?
Any changes in the recruitment process should be monitored through appraisal system
Has the introduction of psychometric testing lead to our selecting staff who performs
consistently better than those we selected previously?
The danger is that without an appraisal system some of these key personnel issues
might be overlooked.
ELEMENTS OF PERFORMANCE APPRAISAL
Figure 4.1 shows the elements of an effective appraisal system. The approach must
identify performance related standards, measure those criteria and then give feedback
to employees and to the human resources department. The end result, of course, is to
improve performance. If performance standards or measures are not job related, the
evaluation can lead to inaccurate or biased results. Without feedback, improvement in
human behaviour is not likely and the department lacks accurate records on its human
resource information system upon which to base other personnel decision ranging from
job design to compensation.
The department usually designs and administers the performance appraisal system for
employees in all departments. Centralization is done to ensure uniformity, which means
results are more likely to be comparable among employees. Although, the department
may develop different approaches for managers, professional, workers, and other
groups, uniformity within each group is needed to ensure useful results. Although the
department usually designs the appraisal system, it seldom evaluates actual
performance. Instead, according to one study, the employee immediate supervisor
performs the evaluation 92% of the time. Although others may rate performance, the
immediate supervisor is in the best position to make a appraisal. However, multiple
raters – including peers and even subordinates offer additional perspective.
The appraisal should create an accurate picture of an individual’s typical job

performance. Appraisals are not just to uncover poor performance; acceptable and
good performances also need to be identified. To achieve this goal, appraisal system
should be job related and practical, have standards, and use dependable measures.
Job related means that the system evaluates critical behaviours that constitute job
success. If the evaluation is not job related, it is invalid. Without validity and reliability,
the system may discriminate in the violation of equal opportunity laws. Even when
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discrimination does not occur, appraisal may be inaccurate and useless if they are not
job related.
FIGURE 4.1
Human Performance Employee

performance Appraisal Feedback
Performance
measures
Performance Related
Standards
Human Resources Employee

decisions Records
Key Elements of Performance Appraisal Systems
A practical system is understood by evaluators and employees. A complicated,

impractical approach may cause resentment, confusion and nonuse.
A standardized system is helpful because it allows uniform practices to be established.

Standardisation among firms across different industries does not exist.
Ideally dependable measures would allow others using the same measures applied
against the same standards to reach the same conclusions about performance. The
application of these measures to the standards takes place through a variety of
approaches. Before specific approaches can be examined, standards and measures
merit further discussion because the heart of the appraisal process is measuring
performance against the standards.
Performance Standards
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Performance evaluation requires performance standards which are the benchmarks
against which the performance is measured. To be effective they should relate to the
desired results of each job. They can not be set arbitrarily. Knowledge of these
standards is collected through job analysis. Job analysis uncovers specific
performance criteria by analyzing the performance of existing employees.
Perhaps no better example of detailed work standards exists then at United Parcel
Service (UPS). At UPS, more than thousand industrial engineers study and time every
aspect of work performance. In establishing standards for driven, consider this quote
from Wall Street Journal. Joseph Polise bounds from his brown delivery truck and
towards an office building …..A few paces behind him. Marjoire Susack, a UPS
industrial engineer, clutches a digital timer. ….She counts his steps and time, his
contact with customers, a traffic, detours, doorbells, stairways and coffee breaks. “We
don’t use the standards as hammers, but they do give accountability”, says Larry P.
Breakrion, the company’s Senior Vice-President for engineering. “Our ability to
manage labour and honour and hold it accountable is the key to our success”. As two
researchers observe:
“It is important that management carefully examine the characterstics of effective

performance. Job analysis coupled with a detailed performance analysis of existing
employees should begin to identity what characterstics are required by a job and which
of those are exhibited by “successful” employees. It is possible that such an
investigation may reveal that what management has used in the past to define
successful performance is inadequate or misleading. This should not deter
management from the task of defining the criteria, but should reinforce management
with an eye to what the performance criteria should be in the future, rather that what
criteria have been used in the past”.
From the duties and standards listed in the job description, the analyst can decide which
behaviour are critical and should be evaluated. When this information is lacking or
unclear, standards are developed from the observation of the discussions with the
immediate supervisors.
Performance Measures
Performance evaluation also requires dependable performance measures, the rating

used to evaluate performance. To be useful, they must be easy to use, and report on
critical behaviours that determine performance. For example, a telephone company
supervisor must observe each operators :-
• Use of company procedures – staying calm, applying tariff rates for telephone
calls, and following company rules and regulations.
• Pleasant phone manners-speaking clearly and courteously.
• Call-placement accuracy-placing operator assisted calls accurately.
These observations can be made either directly or indirectly. Direct observation occurs
when the rate actually sees the performance. Indirect observation occurs when the
rate can evaluate only substitutes for the actual performance. For example, a
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supervisor’s monitoring of an operator’s calls is direct observation : a written test for
telephone operators about company procedures for handling emergency calls is indirect
observation. Indirect observation are usually less accurate because they evaluate
substitutes or constructs. Since constructs are exactly not same as actual performance
they may lead to errors.
Another dimension of performance measures is whether they are objective or

subjective. Objective performance measures are those indications of job performance
that are verifiable by others. For example, if two supervisors monitor an operator’s
calls, they can count the number of misdialings. The results are objective and verifiable
since each supervisor gets the same call placement accuracy percentage. Objective
measures are usually quantitative. They typically include items such as units produced,
net units approved by quality control, scrap rates, number of complaints, or some other
mathematically precise measure of performance.
Subjective performance measures are those ratings that are based on personal
standards or opinions of those doing the evaluation. Generally, such ratings are not
verifiable by others. When subjective measures are also indirect accuracy becomes
even lower. For example, measurement of an operator’s phone manner is done
subjectively : supervisors must use their personal opinions of good or bad manners.
Since the evaluation is subjective, accuracy is usually low even if the supervisor directly
observe the operator, such as an essay test of phone manners. Whenever, possible,
specialists prefer objective and direct measure of performance. When objective and
direct measure are not available, inaccuracies and additional challenges can arise.
PERFORMANCE APPRAISAL CHALLENGES
The design of the Performance Appraisal system often contributes directly or indirectly
to the challenges facing human resource professionals. Important challenges include
legal constraints, rater biases, and appraisal acceptance.
Legal Constraints
Performance Appraisals must be free from discrimination. Whatever form of evaluation

department uses, it should be both reliable and valid otherwise placement decisions
may be challenged because they violate equal employment or other laws. Nowhere
are such suits more likely then in case of wrongful discharge which occurs when
someone is improperly fired. They also arise when decisions involve a layoff, demotion
or failure to promote.
Rater Biases
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The problem with subjective measures is the opportunity for bias. Bias is the inaccurate
distortion of a measurement. Although training in the conduct of performance
appraisals can help reduce bias, it is usually caused by raters who fail jto remain
emotionally detached while they evaluate employee performance. The most common
rater biases include :
• The Halo effect

• The Error of Central tendency
• The Leniency and Strictness biases
• Cross Cultural biases
• Personal Prejudice
• The Recency effect
The Halo Effect
The Halo effect occurs when the rater’s personal opinion of the employee sways the
raters measurement of performance for example, if a supervisor likes or dislikes an
employee, that opinion may distort estimates of the employees performance. This
problem is most severe when rates must evaluate personality traits, there friends or
those they strongly dislike.
The Error of Central Tendency
Some raters do not like to rate employees as effective or ineffective, and so ratings are
distorted to make each employee appear average. On rating forms, this distortion
causes evaluators to avoid checking extremes – very poor or excellent. Instead they
place their marks near the centre of the rating sheet. Thus the term of error of Central
Tendency has been applied to this bias. Human Resource departments sometimes
unintentionally encourage this behaviour by requiring rates to justify extremely high or
low ratings.
The Leniency and Strictness Bias
The leniency bias results when raters tend to be easy in evaluating the performance of
employees. Such raters see all employees performance as good and rate it favourably.
The strictness biases is just the opposite. It results from raters being too harsh in their
evaluation. Sometimes the strictness bias results because the raters want others to
think he/she a “touch judge” of people’s performance. Both of the above commonly
occur when performance standards are vague.
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Cross Cultural Biases
Every raters hold expectations about human behaviour based upon his/her culture.
When people are expected to evaluate others from different culture, they may apply
their cultural expectations to someone who has different set of beliefs. In many
Eastern Cultures, the elderly are treated with great respect and are held in higher
esteem then in many Western Cultures. Likewise, in some Arabic Cultures, women are
expected to play a very subservient role, especially in public. Assertive women may
receive biased ratings because of these cross-cultural differences. With the greater
cultural diversity and the movement of employees across international borders, this
potential source of bias becomes more likely.
Personal Prejudice
A raters’ dislike for a group of people may distort the ratings those people receive. For
example some human resource departments have noticed that male supervisors give
underservedly low ratings to women who hold traditionally male jobs. Sometimes refers
are unaware of their prejudice, which makes such biases more difficult to overcome.
Nevertheless, specialist should pay close attention to patterns in appraisals that
suggests prejudice. Such prejudice prevents effective evaluation and may violate anti
discrimination laws. Where the Halo bias affects once judgements of an individual,
prejudice affects entire groups. When prejudice affects the ratings the protected class
members,, this form of discrepancy can lead to equal employment violation.
THE RECENCY EFFECT :
While using subjective performance measures, ratings are affected strongly by the
employees most recent actions. Recent actions either good/bad are more likely to be
remembered by the rater.
Reducing Rater Biases
When subjective performance measures must be used, biases can be reduced through
training, feedback, and the proper selection of performance appraisal techniques.
Training for raters should involve three steps :
i) First, biases and their causes should be explained .

ii) Second, the role of performance appraisal in employees decisions should
stress the need for impartiality and objectivity.
iii) Third, if subjective measures are to be used, raters should be required to
apply them as part of their training.
For example classroom exercises may require that the trainer evaluate performance in
videotapes showing workers and various working situations. Mistakes uncovered
during simulated evaluation then can be corrected through additional training and
counseling. Once subjective performance measures move out of the classroom and
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into practice, raters get feedback about their previous ratings. When ratings prove
relatively accurate or inaccurate, feedback helps raters adjust their behaviour
accordingly. Human Resource Departments also can reduce distortion through the
careful selection of appraisal techniques. For ease of discussion these techniques are
presented in two groups – those that focuses on past and those that focus on future
performance.
TECHNIQUES OF PERFORMANCE APPRAISAL
Past Oriented Methods
The importance of performance evaluation has lead academicians and practitioners to

create many methods to appraise past performance. Most of these techniques are a
direct attempt to minimize particular problems found in other approaches. No one
technique is perfect each has advantages and disadvantages.
Past oriented approaches have the advantage of dealing with performance that has
already occurred and can, to some degree, be measured. The obvious disadvantage is
that past performance cannot be changed. But, by evaluating past permormance,
employees can get feedback that may lead to renewed efforts at improved performance.
The most widely used appraisal techniques that have a past orientation include:
• Rating scales.
• Checklist.
• Forced choice method.
• Critical Incident method
• Behaviourly anchored rating scales.
• Field review method.
• Performance Test and observations.
• Comparative evaluation approaches.
Rating Scales
Perhaps the oldest and most widely forms of performance appraisal is the rating scale,
which requires the rater to provide a subjective evaluation of an individuals performance
along a scale from low to high. The evaluation if solely bases on the opinion of the
rater. And in many cases, the criteria are not directly related to job performance.
Although subordinates may use it, the form is usually completed by the supervisor, who
checks the most appropriate response for each performance dimension. Responses
may be given numerical values to enable a average score to be computed and
compared for each employee. The number of points attained may be linked to salary
increases. Other advantage of this method is it is inexpensive to develop and
administer.
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Disadvantages are numerous. A rater biases are likely to be reflected in a subjective
instrument of this type. Specific criteria may be omitted to make the form applicable to
a variety of jobs. For example “Maintenance of Equipment” may be let off the form
because it applies only to a few workers, yet for some employees equipment
maintenance may be the most important part of the job. This and other omissions tend
to limit specific feedback. These evaluations also are subject to individual
interpretations. Furthermore, when specific performance criteria are hard to identify,
the form may rely on irrelevant personality traits that dilute the meaning of the
evaluation. Finally, like the subjective evaluation in General Motor’s case discussed
earlier, rating scale may be proved to be discriminatory.
Checklists
The checklist method requires the rater to select a word or statement that best
describes the employee’s performances and characterstics. Again, the rater is usually
the immediate supervisor. Without the raters knowledge, however, the Human
Resource Department may assign weights to different items on the checklists,
according to each items importance. The result is called a weighted checklist. The
weights also allow the rating to be quantified so that total scores can be determined.
The weights for each item are in parentheses but usually omitted from the rater use. If
the list contains enough items, it may provide an accurate picture of employee’s
performance. Although this method is practical and standardized, the use of general
statements reduces its job relatedness. The advantages of a checklist are economy,
ease of administration, limited training of raters, land standardization. The
disadvantages includes susceptibility to rater biases, use of personality criteria instead
of performance criteria, misinterpretation of checklist items, and the use of improper
weights by the Human Resource Department and also it does not allow the rater to give
relative ratings.
Forced Choice Method
The forced choice method requires the rater to choose the most descriptive statement in
each pair of statement about the employees being rated. Often both statements in pair
are positive or negative.
For example :
i) Learn quickly…..Works Hard

ii) Works is reliable….Performance is a good example for others
iii) Absent too often…Usually tardy
Sometimes the rater must select the best statement (or even pair of statements) from
four choices. However, the form is constructed, human resources specialists usually
quote the items on the form into the predetermined categories viz., learning ability,
performance, interpersonal relations and likewise. Then effectiveness can be
computed for each category by adding up the numbers of ties each category is selected
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by the rater. The results then show which areas need further improvement. Again the
supervisor is usually the rater, although subordinates may make the evaluation.
The Forced Choice method has advantages of reducing rater bias because employees
must be ranked relative to each other, preventing all employees from being rated
superior. This approach also is easy to administer, and fits a variety of jobs. Although
practical and easily standardized, the general statements may not be specifically job
related. Thus, it may have limited usefulness in helping employees improve their
performance. Even words, an employee may feel slighted when one statement is
checked in preference to another for example, if the rater checks, “learn quickly”, is
number 1 above, the worker may feel that his or her hard work is overlooked. This
method is seldom liked by either the rater or rated because it provides little useful
feedback.
Critical Incident Method
The Criticial Incident technique requires the rater to record statements that describe
extremely good or bad employee behaviour related to performance. The statements
are called Critical Incidents. These incidents are usually recorded by the evaluation
period for each subordinate. Recorded incidents include a brief explanation of what
happened, both positive and negative incidents are recorded and classified into
categories such as control of safety hazards, control of material scrap, and employee
development.
The critical incident technique is exteremely useful for giving employees job related
feedback. It also reduces thje recency bias, if raters record incidents throughout the
rating period. Of course, the main drawback is that supervisors often do not record
incidents as they occur. Many start out recording incidents faithfully, gradually lose
interest and then, just before the evaluation period ends, add new entries when this
happens, the recency bias is exaggerated, and employees may feel that the
supervisors are building a case to support their subjective opinions. Even when the
form is filled out the entire rating period, employees may feel that the supervisor is
unwilling to forget negative incidents that occurred months earlier.
Behaviourly anchored rating scales
Behaviourally anchored rating scales are a family of evaluation approaches that identify
and evaluate relevant job-related bahaviours. Specific, named behaviours are used to
give the rater reference points in making the evaluation. Since job related behaviours
are used, validity is more lkely than with bipolar rating scales forced choice methods.
The most popular approaches are called behavioural expectations scales and
bnehavioural obsercvation scales.
Behavioural expectation scales (BES) use specific, named behaviours as benchmarks

to help the rater. This method attempts to reduce some of then subjectivity and biases
found in other approaches to performance measurements . From description of good
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and bad performance provided by incumbents, peers, and supervisors, job analysts or
knowledgeable employees classify behaviours into major categories of job performance.
Behavioural expectation scales are expressed in terms with which the rater and the
employee are familiar. The rate, usually the supervisor, can review the identified
behavioural anchors and indicate those items that the b artender needs to improve.
Since these scales are anchored by specific bnehaviours within each category, the
supervisor, job analysts or knowledgeableemployees classify behaviours into major
categories of job performance.
The evaluation is apt to be more accurate and more legally defensible, and is likely to
be more effective counseling tool. One seriouslimitation is that reters only look at a
limited number of performance categories, such as, in the case of a bartender,
customer relation or drink mixing. And each of these categories has only a limited
number of specific behaviours. Like the critical incident technique, most supervisors
are reluctant to maintrain records of specific incidents, which reducwes the
effectiveness of this approach when it comes time to counsel the employee.
Behavioural observation scale ( BOS ) use specific, named behaviours as benchmarks

and require the rater to report the frequency of these behaviour. The behavioural
expectations scales discussed above are primarily concerned with defining poor to
superior performance; BOS ask the rater to indicate the frequency of identified
behavioural anchors, usually along a five point scale from “almost never” to “almost
always”
One pair of researcher found thatr ayear after BOS were implemented in company,
senior management reported satisfaction with this method. They believed it minimized
personality disputes, enabled reters to explain low ratings, lead to comprehensive
reviews, and improved feedback between raters and workers.
Behaviourally anchored rating scales are complex to administer and develop. Because
they address specific, job related behaviours, their validity is more defensible than
ratings based on subjective personality traits. However, this close job relatedness
makes them costly and time consuming to develop, they must be developed for each
job.
Field Review Method
Whenever subjective performance measures are used, differences in rater perceptions

cause bias. To provide greater standardisation in reviews some employers use the field
review method. In this method. A skilled representative of the human resource
department goes into the field an assists supervisors with their ratings. The personal
specialist solicits from the immediate supervisor specific information about the
employees’s performance, then the specialist prepares an evaluation based on this
information. The evaluation is sent to the supervisor for review, changes, approval and
discussion with the employee who was rated. The expert, the records, the rating, on
whatever specific type of rating the employee uses. Since a skilled professional is
completing the form evaluations are likely to be more reliable and comparable.
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However, the use of skilled professionals make this approach more expensive and
impracticable for may firms, and since the supervisor is primary source of information,
bias may still exist.
Performance Test and Observations
With a limited number of jobs, performance appraisals may be based upon a test of
knowledge or skills. The test may be of the paper and pencil variety or an actual
demonstration of skills. The test must be reliable and validated to be useful. Even then,
performance tests are apt to measure potential more than actual performance. In order
for the test to be job related, observations should be made under circumstances likely to
be encouraged. Practicality may suffer if costs of tests development or administration
are high.
Comparative Evaluation Approaches
Comparative evaluation approaches are a collection of different methods that compares

one workers performance with that of his/her co-workers. Comparative appraisals are
usually conducted by the supervisors because these appraisals can result in a ranking
of employees from best to worse, they are useful for pay increases, promotions and
rewards bases on merits. The most common form of comparative evaluation are the
Ranking method, Forced distribution, Point allocation method and Paired
comparisons all of which are described ahead. Although these methods are practical
and easily standardized, they too are subject to bias and offer little job related feedback.
Companies can lessen these advantages. ‘Florida Power and Light’ which uses an
Elaborate Group Evaluation Method, is a case in a point. Biases are reduced at this
utility by using multiple raters, and some feedback results from managers and
professionals learning how they compare with others on each critical factor. However,
many of the comparative examples described in this section offer employees little, if
any, feedback. Comparative results often are not shared with the employees in the
interest of creating an atmosphere of cooperation with employees. Sharing
comparative rankings may lead instead to internal competition. However, two
arguments in favour of comparative approach merit mention before discussing specific
methods.
Arguments for a comparative approach are simple and powerful. The simple argument
is that organizations do it anyway, all the time. Whenever personal decisions are
made, the performance of those being considered is ranked. People generally are
promoted not because they achieve their objective, but rather they achieve their
objective better than others.
The second reason for using comparative as opposed to non-comparative methods is

that they are more reliable because reliability is controlled by the rating process itself,
not by rules, policies, and other external constraints.
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Ranking Method : The ranking method has the rater place of all employees in order
from best to worse. All that the Human Resource Department learns from this method
is that certain employees are better than others. It does not know by how. The
employee ranked second may be as good as the first, or perhaps considerably worst.
The method is subject to Halo and Recency effects, although ranking by two or more
raters can be averaged to help reduce biases. Its advantages include ease of
administrations and explainations.
Forced Distribution : Forced Distributions require raters to sort employees into

different classifications. A certain proportion of employees must be put into each
category. Similar to ranking method specific differences are not defined, but this
method does not overcome the biases of the error of central tendency, leniency and
strictness. Some workers and supervisors at American Express, Western Regional
Operations Centre strongly dislike this method because some of the employees
received lower ratings than they or their supervisors thought were correct; however, the
Department Forced Distribution Method required that some employees be somehow
rated.
Point Allocation Method : The Point Allocation Method requires the rater to allocate
a fixed number of points among employees in the group. Good performers are given
more point than poor performers. The advantage of the Point Allocation Method is that
the rater can recognize the relative differences between employees although the Halo
effect and Recency bias remains.
Paired Comparisons : Paired comparisons force raters to compare one employee

with other employee who is being rated in the same group. The basis for comparison is
usually overall performance. The number of times each employee is rater superior to
another can be totaled to develop one index. The employee who is preferred the most
is the best employee on the criterion selected. Although subject to Halo and Recency
effects, this method overcomes the strictness, leniency, and central tendency errors
because some employees must be rated better than others.
Future Oriented Appraisals
The use of past oriented approaches is like driving a car by looking through the rear
view mirror : you only know where you have been, not where you are going. Future
oriented appraisals focus on future performance by evaluating employee potential or
setting future performance goals. In practice many past oriented approaches include a
section for the supervisor and employee to record future plans.
- 33 -
Four common approaches to future performance are :
Self Appraisals
Getting employees to conduct self appraisals can be a useful evaluation technique if the
goal of evaluation is to further self development. When employees evaluate
themselves, defensive behaviour is less likely to occur; self improvement is thus more
likely. When Self Appraisals are used to determine areas of needed improvements,
this method can help user set personal goals for the future. With any employee, there
is a risk that he/she will be too lenient or too critical of his or her performance. If Self
Appraisals are used among a diverse of international work force, home office human
resource specialist must be aware of cultural differences that may lead to evaluations
that over or understate performance and future plans. Obviously, Self Appraisals can
be used with any evaluative approach, past or future oriented. The important
dimension of Self Appraisals is the employees involvement and commitment to the
improvement process.
Management By Objective (MBO)
The heart of Management By Objective approach is that employee and superior jointly
establish performance goals for the future. Ideally, these goals are mutually agreed
upon and objectively measurable. If both of these conditions are met, the employees
are apt to be more motivated to achieve their goals since they participated in setting
them. Moreover, since they can measure their progress, employees can adjust their
behaviour to ensure attainment of the objectives. However, in order to adjust their
efforts, employees must receive performance feedback on a timely basis. When future
objectives are set, employees gain the motivated benefit of a specific target towards
which to organize and direct their efforts. Objectives also help the employee and
supervisor discuss the specific developmental needs of the employee. When done
correctly, performance discussions focus on the jobs objectives and not on personality
variables. Biases are reduced to the extent that goal attainment can be measured
objectively. In practice, MBO programmes have encountered difficulties. Objectives
are sometimes either too ambitious or too narrow. The result is frustrated employees
or overlooked areas of performance. For example, employees may set objectives that
are quantitatively measurable to the exclusion of subjectively measurable objectives
that may be equally important. The classic illustration is quantity versus quality of work.
Objectives may focus on quantity to the quality because quality is often more difficult to
measure. When employees and supervisor do focus on subjectively measured
objectives, special care is needed to ensure that biases do not distort the supervisor’s
evaluation.
Pschological Appraisals
Some organizations employ full-time industrial psychologists. They are used for
evaluations, they assess an individual’s future performance, not past performance.
The appraisal normally consists of an in depth interviews, psychological tests,
- 34 -
discussions with the supervisors and a review of others evaluation. Psychologist then
writes an evaluation of the employee’s intellectual, emotional, motivational and work
related characterstics that suggest individual potential and may predict future
performance. The evaluation is for specific job for which the person is being
considered, or it may be a global assessment of his or her future potential. From these
evaluations placements and development decisions are made to shape the bright young
managers who others think may have considerable potential within the organization.
Since the quality of these appraisals depends largely on the skills of the psychologists,
some employees object to this type of evaluation, especially if cross cultural differences
exists.
Assessment Centres
Assessment centres are another method of evaluating future potential, but they do not
rely on the conclusion of one psychologist. Assessment centres are a standardized
employee appraisal technique that relies on multiple types of evaluation and multiple
raters. The assessment centre method is usually applied to managers who appear to
have potential to perform more responsible jobs. The members of the assessment
groups often meet first at a hotel or training facility. During their stay they are
individually evaluated. The process puts selected employees through in-depth
interviews, psychological tests, personal background histories, peer rating by other
attendees, leaderless group discussions, rating by psychologists and managers, and
simulated work exercises, to evaluate future potential. The simulated work experience
usually include in-basket exercises, decision making exercises, computer based
business games, and other job like opportunities that tests the employee in realistic
ways. These activities usually are contracted during a few days at a location physically
removed from the job site. During this time, the psychologist and supervisors who do
the rating attempt to estimate the strengths, weaknesses of each attendee and arrive at
some conclusion about each member of the group after they have pooled their
estimates. Assessment centres are both, time consuming and costly. Not only are the
candidates away from their jobs while the company pays for travel and lodging, but the
evaluators are often company supervisors who are assignedto the assessment centres
for short duration. These supervisors are often supplemented by psychologist and
personnel professionals who run the centre and also make evaluation. Some critic
question whether the procedures used are objective and job related, especially since
rater biases may help form the subjective opinions of the attendees. Nevertheless,
Assessment centres have gained widespread use, and researchers are finding ways to
validate the process. The results of these sessions inform management development
and placement decisions from composite ratings and hence a report is prepared on
each attendee. This information goes into the human resource information system to
assist human resource planning (particularly the development of replacement charts)
and other human resource decisions.
- 35 -
CHAPTER V
A REVIEW OF PERFORMANCE APPRAISAL

SYSTEM OF NATIONAL AIRPORTS
Under this chapter, we will review the Performance Appraisal System of National
Airports Division under AAI..
- 36 -
In 1991 a new Performance Appraisal System was introduced in the National Airports
Division, Airports Authority of India (AAI) with the following objectives:
a) To use performance appraisal as a process for development.

b) To generate significant, relevant, open and valid information about the
employees performance based on Key Performance Areas (KPA’s).
c) To generate adequate feedback and guidelines from the immediate superior.
d) To motivate the employees towards better performance.
e) To identify training needs.
f) To provide inputs for rewards.
g) To create and foster performance oriented culture.
h) To bring out openness.
i) To improve the quality and extent of communication between the officer and
his subordinates.
The following detailed procedures were recommended in the new appraisal system.
PROCEDURE
For Officers:
All officers have to fill self appraisal form which is part I of this performance appraisal
system whose primary objective is to bring an element of openness. This form is
intended to provide information on personal data of the appraisee officer. This part
consists of the date, place, rank, qualification of the appraisee officer in the
organization. It also provides information regarding additional and specialized
qualifications acquired to date. Part I for all categories of officers in the same i.e. self
appraisal.
The Part II provides for the assessment in respect of critical attributes, personal traits of
the appraisee officers. The part II is dealing with self assessment, to be filled by the
appraisee it provides information for the task performed other than normal/routine jobs
performed. In this section the appraisee has to highlight the strength and actions
demonstrated by the appraisee. Furthermore the details of weaknesses and
shortcomings, which detracted from meeting targets and objectives, are given. Then
the comments of the reporting officer and report of counseling done by him are put
forward and countersigned.
Steps to be taken by Appraisee Officer
The appraisee officer will fill up Part II of the performance appraisal relating to self-
appraisal. He/She is expected to be frank, objective and honest in his/her own
appraisal. It needs to be clarified that the information given by the appraisee officer in
the self-appraisal would not form the basis of any adverse action against him/her. The
form duly completed by the appraisee officer should reach the concerned officer within
fifteen days. (The appraisal system shall begin from 1st January every year and end by
15th January, since based on the Part II of the appraisal system training needs,
promotions, transfers and placements have to be decided by the end of March).
- 37 -
The appraisee officer may find the following checklists helpful in filling the form and
preparing himself/herself for the subsequent appraisal interview:-
a) It would be helpful if the appraisee officer records in a diary a brief account of the
important items of work performed in the course of the year; this could facilitate filling up
of PartI;
b) A Checklist of points that the appraisee officer would like to discuss with the
reporting officer during the appraisal interview should be prepared;
c) A list of specific points on which the appraisee officer requires specific actions/help
from the reporting officer should be prepared.
d) The appraisal counseling should be used as an opportunity for suggesting any
changes that the appraisee officer thinks will improve the quality, efficiency and
effectiveness of his/her work; and
e) The appraisee officer should try to get maximum out of the appraisal counseling in
terms of his/her own development/improvement for the future.
f) He should perceive performance appraisal report not only as a measure for the
assessment of his work performance but also as a tool for self development.
g) He should write the dimensions of his work and responsibility briefly but precisely in
Part II and then judge his performance objectively keeping in view acceptable
performance standards;
h) Part II of the report should be completed without any inhibitions, particularly about
his strengths and weaknesses and his needs for development;
i) Discussions held with the reporting officer should be taken in the right spirit.
Deficiencies pointed out should not be taken merely as a criticism but should be looked
upon as a constructive suggestion for developing the appraisee the future
responsibilities.
Steps to be taken by Reporting Officer
Part III of the appraisal form consists of instructions and suggestions to be followed by
the reporting officer. A complete grade structure from ‘A’ to ‘E’ , starting from
‘Outstanding’ to ‘Inadequate’ , has been briefly explained for the use of reporting
officer.
The reporting officer must ensure that all appraisee officers under him/her submit their
performance appraisal forms duly filled in by the 15th January.
On receipt of the forms for the appraisee officers, the reporting officer will put down
his/her tentative grades on the appraisee officers self-appraisal.
The grading is done for the observed qualities and the intellect of the appraisee officer
consisting of Problem Analysis, Judgement, Creativity, Decisiveness and Over-all
Perseverance (Helicopter View).
The grading for the Communication skills would consist of written work, oral expression
and presentation.
The grading for the Inter-personal relationship would cover sensitivity, flexibility,
leadership and impact on each and every individual.
- 38 -
The grading for the Managerial skills would include panning, organizing, delegation and
control, development of sub-ordinates and self-management.
The grading for the Personality traits of the appraisee officer would consist of energy,
initiative, achievement orientation, and independence of thought and integrity.
The Part IV of the Appraisal form consists of development and training programme
attended by or suggested for the appraisee officer.
The following checklist may help the reporting officer in preparing himself/herself for the
appraisal interview:-
General Guidelines for the Reporting Officer
(i) The reporting officer should review the appraisee officers background,
education, training, experience and duration of service in the present position.
(ii) He/she should determine the weaknesses and strengths and identify the
development needs of the appraisee officer.
(iii) For each development need identified, the Reporting Officer should prepare a
possible development plan; and
(iv) The Reporting Officer should identify the KPA’s main dimensions of
work/responsibility where he/she would like the appraisee officer to concentrate during
the next review period.
During the Interview
a) The Reporting Officer should be relaxed, friendly and sincere so as to create a

congenial climate for the interview and should ensure that the interview is a two
way communication;
b) The appraisal interview is not intended to be a counseling session. The
Reporting Officer should also avoid making generalized and derogatory
statements such as “you are not good”, “You are useless”, “You are below
standards”, which would vitiate the congenial climate required to be maintained
during the interview;
c) The Reporting Officer should allot sufficient time and should not rush through the
interview, so that it is not perceived as mechanical and ritualistic;
d) The Appraisee Officer should be encouraged to be frank in expressing his/her
own views on performance.
e) The interview should begin with a discussion on the appraisee officers strengths
in order to put him at ease. Any significant achievement on part of the
Appraisee Officer should be highlighted and his/her attributes or strengths which
have contributed to such performance should be jointly identified. The officers
own opinion are areas of concern to him/her and which need improvement. The
Reporting Officer should identify the areas in which he/she feels the Appraisee
Officer would have to improve. In this context, it would be necessary for the
Reporting Officer to cite specific instances/observations made by him/her. It
would be important to relate the appraisee officers performance to specific
- 39 -
aspects of the job carried out during the review period and to highlight trends in
performance, rather than focus on individual acts of defaults;
f) The Reporting Officer and the Appraisee Officer should strive to reach mutual
understanding and acceptance of the comments and ratings on the role
performance of the appraisee;
g) The Appraisee Officer should be encouraged to discuss any development plans
that he/she has, and to identify the help and support required from the Reporting
Officer;
h) An agreement should be reached on the development plan clearly spelling out
what the Reporting Officer and the Appraisee Officer intend to do;
i) At the end of the discussion, it should be summarized by the Reporting Officer in
a positive manner thereby closing it on a friendly note; and
j) The Reporting Officer should record the development plans jointly identified,
particularly the points that would require follow-up and specific comments for
action on his/her part. Any important point of difference remaining unresolved
after the discussions with reasons therefore may be indicated by the Reporting
Officer at item XII in PART-I.
On completion of the interview, the Reporting Officer will record his assessment on
critical attributes/personal traits of the Appraisee Officers in Part-II applicable to the
grade of the concerned appraisee officer. Before filling this form, the Reporting Officer
should study carefully the key to critical attributes/personal traits which are given at the
end of each form. Performance Appraisal being one of the key factors which facilitate
decisions on the employees promotion, placement, training and development. It is of
the utmost importance that the appraisal should be given careful attention by the
Reporting and Reviewing Officers and that the assessment be fair and objective.
Extraneous factors and personal likes/dislikes should not be allowed to influence the
appraisal of performance of the appraisee. Also, the tendency to adopt a neutral and
non committal style of reporting should be avoided. There should be not hesitation on
the part of the Reporting Officer in positively and freely indicating his views on the
performance of the appraisee, highlighting areas of high performance or weakness of
the appriasee supported by the substantive data, and making appropriate
recommendation regarding training and placement and assessment of suitability of the
appraisee for shouldering higher responsibility. Any additional observations and
special features deserving commendation/reward or requiring medial action may be
mentioned under item VI, Part-II.
Integrity and loyalty are qualities which are expected to be taken for granted in the case
of employees of the Trust. However, if occasions arise when the integrity or loyalty of
an officer or other employee becomes questionable or if he/she commits a serious lapse
or act of misconduct, the matter should be reported separately by the officer incharge of
the department/zonal/branch office with full facts and recommendations as to follow up
action to the General Manager of the Personnel Department and should not be mixed
up with the Performance Appraisal System as such. The Performance appraisal forms
duly completed by the Reporting Officer in all aspects should reach the concerned
Reviewing Officer within 15 days from the date of receipt and as per the last date
defined.
- 40 -
Steps to be taken by the Reviewing Officer
The Reviewing Officer (i.e the officer to whom the Reporting officer reports) will review
the comments and ratings made by the Reporting Officer on the overall performance,
behavioural attitudes and training and development needs primarily to moderate the
ratings and comments of the Reporting Officer. The Reviewing Officer would have to
keep in mind the following :
a) Appropriateness of the ratings (in order to identify any tendency towards

excessive leniency or strictness)
b) Biases and prejudices of the Reporting Officer
c) Suitability of the development plans.
One of the important aspects of the role of the Reviewing Officer in relating to the
Performance Appraisal would be to identify a few high performance from amongst the
appraisee officers whose performance appraisals are reviewed and to set out the
development plans for job rotation, placement and training for such high performers. It
would also be the responsibility of the Reviewing Officer to set out the development
plans for a few of the low performers among the appraisee officers, whose performance
appraisal he reviews. In case the Reviewing officer considers it necessary, he should
have a discussion with the Reporting Officer about the Performance Appraisal. The
Reviewing Officer would have to ensure that the performance appraisal form is
complete in all respects and are returned to the Personnel Department at the Zonal
Offices or Corporate Offices (depending upon the rank and grade to which the
appraisee belongs) within ten days or last predefined date.
Steps to the taken by Zonal/Corporate Office
On receipt of the duly filled in Performance Appraisal Forms, the respective

sections/personnel department at Zonal Office/Corporate office will study the forms and
make available information on the training needs, etc. to HRD section of corporate
office.
General
The reports will normally be recorded by the immediate superior officer of the appraisee
and reviewed by the officer next in line above the Reporting Officer (i.e the officer to
whom the Reporting Officer reports). If the appraisee officer has been transferred from
one department / section / office to another, the manual report will be recorded/reviewed
by the officer under whom the appraisee officer has worked for major portion of the
year.
Time Schedule
1. For all officers in all grade : From 1 st January of every year to Fifteenth of the
same month
- 41 -
2. For officer on probation and officiating : 1st report on completion of first six
months, thereafter annually as at 1 above.
The practice of obtaining special confidential reports for crossing efficiency bar,
retention of services beyond the age of 55 years would be discontinued
Follow-up and Maintenance of Records
The reports of offices i.e Assistant Managers, Managers & Sr. Managers shall be
maintained at respective Regional Hqrs (in case of Delhi) and in case of Corporate
Office in the Department of Personnel. The reports, will than be forwarded to the
Executive Director (Department of Personnel) at the Corporate Office.
The reports of officers of the rank of Executive Director’s category shall be followed-up
and maintained by Chairman’s Secretariat.
For the purpose of issuing the letters of appreciation, etc. to deserving employees who
earn excellent rating in overall assessment consecutively for two years and who have
made valuable and outstanding contribution in specific and important tasks, zonal
offices may forward specific proposal to Personnel Department at Corporate Office.
Identification of Key Performance Areas and Setting of Performance
Every Appraisee Officer at the beginning of the appraisal period, jointly with his/her
reporting should identify Key Performance Areas (KPA’s) in relation to his/her role. The
number of KPA’s should be limited to four or five. The Appraisee Officer and the
Reporting Officer should then jointly agree upon one or two specific performance targets
in relation to each KPA. The Appraisee Officer performance would then be appraised
on these KPA’s and performance targets at the end of the appraisal period. The
performance target should have to be stated in quantitative terms. For objectives that
are not susceptible to quantitative measurement, as list of associated tasks/activities
with time schedules for completion should be jointly agreed upon. The purpose of
identifying the KPA’s and setting of performance target is to give sense of direction to
an officer’s work efforts so as to ensure that these efforts contribute towards the
achievement of the objectives of the higher organizational unit to which he/she belongs.
The KPA’s and performance target should correspond to the major areas of the
appraisee officer’s job/responsibilities. The identification of KPA’s and setting of
performance target shall be clarified in the workshop. The HRD section at Corporate
Office shall analyse the training needs and the feedback received shall also be utilized
for appreciation letters and counseling.
- 42 -
CHAPTER - VI
RESEARCH ANALYSIS
Under this Chapter we will discuss findings of the Research in respect of :
• Officer’s attitude towards Performance Appraisal System,
• Effectiveness of present Performance Appraisal System of Airports Authority of

India.
- 43 -
A questionnaire was designed to measure officer’s attitude towards Performance
Appraisal System and to measure effectiveness of the Performance Appraisal System
of National Airports Division of Airports Authority of India.
A sample of fifty officers was taken. All of them were given the questionnaire with
closed ended statements. In addition to this, they were asked open ended questions
as to why they agree to certain statements or otherwise.
The analysis of the research is being divided into the following points :-
a) General attitude of officers towards appraisal

b) Appraisal system of Airports Authority of India and officers perception
c) Effectiveness of appraisal system of Airports Authority of India
These points are discussed as follows :
• All the officers agreed that in an appraisal system employee should be given an
opportunity to rate his own performance. Consequent upon further questioning,
they said that the time has come that the employees must recognize their
potential and capabilities. “They must understand and perceive themselves to
the best of their ability”. One respondent said.
• All respondents agreed that a good performance system should take into
consideration the problems the employee faces in performing his job, they further
stated that performance appraisal gives the employee an opportunity to express
difficulty in performing the job.
• One of the respondents strongly felt that the employee should know the Boss’s
thinking and get an opportunity to have a dialogue with him. One of the Officer
stated clearly that every employee has a right to communicate regarding his own
performance.
• Officers felt that a good Performance Appraisal System is sufficient to decide

whether an employee should be promoted or not. Whereas 39% of the
respondents disagree to the statement, they felt that Bias, Rigidity, Cultural
difference do play a crucial role in promotions.
- 44 -
Response to certain statements by the officers is given as follows :
APPRAISAL SYSTEM THROUGH CONFIDENTIAL REPORT IS NOT USEFUL
12%
agree
46%
disagree
cant' say
42%
IT IS VERY DIFFICULT TO HAVE OBJECTIVE RATING
18%
36%
agree
disagree
can't say
46%
APPRAISAL RATINGS SHOULD BE KNOWN TO THE EMPLOYEE
3%
29%
agree
disagree
can't say
68%
- 45 -
APPRAISAL SYSTEM OF AIRPORTS AUTHORITY OF INDIA AND OFFICERS
PERCEPTIONS :
Respondents were asked specific close ended questions about the present
Performance Appraisal System of Airports Authority of India. First of all, they were
asked whether the present Performance Appraisal System will succeed. 60%
respondents were somewhat confident, 30% respondents said that it will not succeed
and 10% were very confident that the system will succeed.
Consequent upon further questioning; they emphasized the need of training and more
workshops for orientation of present Performance Appraisal System. “It is not enough
to introduce a new system and let it function on its own. Organisations must give a lot
of inputs to make this system a success”. One respondents said.
Some of the respondents felt pressure of time and too many jobs to do. “Who has got
the time to read it, it has become a formality”. One respondent said. Most of the
respondents express the need on the part of the organization to put more
developmental efforts to make this system a success.
Officers perception about the present Performance Appraisal System is diagrammed as

below :
COMPARISON WITH EARLIER SYSTEM
100%
80%
60%
40% series 1
20%
0%
1 2
OPINION REGARDING PRESENT PERFORMANCE APPRAISAL SYSTEM
3
series 1
2
0% 50% 100%
- 46 -
DO YOU THINK WE SHOULD CONTINUE WITH THIS SYSTEM?
2%
previous system was

better
42% review &make it
56% more open
continue with
modifications
Most of the respondents said that we should continue with present system with some
modifications like :
• Regular feedback from Reporting Officers with clear emphasis on performance

• Regular workshops on appraisal
• More emphasis on Self Appraisal
• Regular interviews
ARE YOU CLEAR ABOUT PROCEDURES INVOLVED IN

APPRAISAL SYSTEM ?
10%
11%
no
not sure
yes
79%
- 47 -
DO YOU FEEL CONFIDENT THAT YOU WILL BE ABLE TO BENEFIT
AS AN APPRAISEE FROM PERFORMANCE REVIEW AND
COUNSELLING SESSIONS ?
22%
can't say
no
10%
yes
68%
Effectiveness of Present Performance Appraisal System of Airports Authority of

India
When the new Performance Appraisal System was introduced in 1991, certain
objectives were laid down. Keeping those objectives, the respondents were asked
whether they have benefited from the present Performance Appraisal System. The
result is shown as follows :-
PERCENTAGE RESPONSE OF THE OFFICERS
To a great extent Some what Not at all
a) Identification of stren- 18% 50% 32%

gths & weaknesses
b) Identification of training 32% 32% 38%

needs.
c) Setting Operational 20% 50% 30%

objectives.
d) Growth & Development 10% 60% 30%

as an individual.
e) Removing differences with 20% 30% 50%

superiors and arriving at
consensus with regard
to own performance
- 48 -
f) Improving harmony, co- 24% 36% 40%
ordination and openness
g) Expressing difficulties and 20% 40% 40%

problems regarding your
job and KPA’s
h) Motivation towards better 10% 60% 30%

performance.
Reporting Officers were also asked about certain variables of Performance Appraisals.
The findings are as follows :
• 85% of Reporting Officers came to know about difficulties of their subordinates

through performance review discussions.
• 70% of the Reporting Officers found their subordinates receptive to feedback.
• 70% of the Reporting Officers said, they could communicate disappointment or
happiness with their subordinates work.
• 40% of the Reporting Officers said that they were satisfied with appraisal
discussions
• 50% of the Reporting Officers said that the interviews have improved the
relationships.
• 10% of the Reporting Officers said that there was great difference between their
assessment and the appraisee’s statement.
• 30% of the Reporting Officers said that they had difficulty in giving negative
feedback.
- 49 -
CHAPTER - VII
CONCLUSION
Under this Chapter we will discuss :
• Conclusion of the Research
• Recommendations
• Limitations of the Study
- 50 -
CONCLUSION OF THE RESEARCH
1. The attitude of the officers was found to be generally positive towards

Performance Appraisal System. They consider Performance Appraisal as an
important tool in growth and development.
2. The present Performance Appraisal System has been found effective by the
Airports Authority of India officers in the following areas :
a) Identification of strengths and weaknesses of the employees.

b) Identification of training needs.
c) Setting operational objectives.
3. Present Performance Appraisal System is an improvement over previous system

of confidential reports.
4. The success of this Performance Appraisal System largely depends upon how it
is implemented and in this context the role of personnel department become
crucial.
RECOMMENDATIONS
Appraisee and Reporting Officer need to be involved in interviews

more often. A Performance Appraisal System cannot be complete without interviewing
that offer an opportunity for the candidate to talk about his strengths, weaknesses,
problems, expectations and need.
Proper training must necessarily be given to the appraiser and

appraisee so as to ensure there is active participation with the necessary attitude and
skill for in-depth two way dialogue.
The Performance Appraisal System process must operate at least

twice or thrice in a year so that it can lead to the proper judgment of performance for the
complete appraisal period.
There is a need of active follow up after Performance Appraisal

reports reach personnel department.
- 51 -
LIMITATIONS OF THE STUDY
This study is based on interview, questionnaire method. The

response that so received is subject to accuracy. Some of the respondents did not
come forward to tell the facts as they feared it would affect their position in the
organization.
The research is done at a local level i.e at New Delhi. As such the
results cannot be generalized to the entire Airports Authority organization. The results
may vary in different organizations.
- 52 -
BIBLIOGRAPHY
1. Moon Philip, Appraising your staff (1993), Kogan Page

Pub.
2. Monnapa A.Saiyadain M., Personnel Management (1996), Tata McGraw

Hill Publisher
3. Pareek/Rao., Designing and Managing Human Resources Systems (1992)

Oxford & IBH Publishing Co. Pvt Limited
4. Rao T.V., Appraising and Developing Managerial Performance (1992),

Academy of Human Resource Development
5. Venkata Ratnam C.S., Personnel Management and Human Resources

(1991), Tata McGraw Hill
6. William/Werther & Davis, Human Resource and Personnel Management,

(1993), McGraw Hill Inc.
- 53 -
ANNEXURE
QUESTIONNAIRE (PART I)
Your Present Grade………………Age…………….Sex………(Male/Female)
1) In a good appraisal system every employee should be given an opportunity to

rate his/her own performance
a) Agree b) Disagree c) Can’t say
2) If an employee’s performance is appraised by his boss, the employee should

know his boss’s thinking and get an opportunity to have a dialogue with him
3) I would like to know from my boss more about his appraisal of my perform-
ance, my strengths, my weaknesses etc.
4) Any good appraisal system should take into consideration the problems the
Employee faces in performing his job.
5) The System of appraisal through confidential reports, serves no useful

Purpose.
6) A good Performance Appraisal System is sufficient to decide whether an

Employee deserves to be promoted.
7) Promotions should not be based on Performance Appraisal ratings as the

main Input.

8) Our Performance Appraisal System helps me understand my strengths and
weaknesses relating to my performance so that I can make efforts to
improve and grow.
9) It is very difficult to have objective ratings by any Officer (for himself or

for others) as human nature is such.
10) Appraisal ratings should be known to the employee.
11) My Reporting Officer generally communicates his perception of my

strengths and weaknesses to me.

QUESTIONNAIRE (PART - II)
1) Are you clear about the procedures involved in the Performance

Appraisal System?
a) Yes b) No c) Can’t say / Not Sure
2) Do you feel confident that you will be able to benefit as an appraisee

from the performance review and counseling sessions you will have with
your Reporting Officer
a) Yes b) No c) Can’t say / Not Sure
3) To what extent do you think you have benefited from present

Performance Appraisal System in relation to the following?
a) Identification of strengths and weaknesses.

b) Identification of Training needs.
c) Setting Operational objectives
d) Growth and development as an individual
e) Removing differences with superiors and arriving at consensus with regard to
own performance.
f) Improving harmony, co-ordination and openness.
g) Expressing difficulties and problems regarding your job and KPA’s.
h) Motivation towards better performance
4) As a Reporting Officer when you had discussion with your junior officer,
your findings are :- (Please tick the statements that are true with you).
a) I found my subordinates to be receptive to feedback

b) I am satisfied with the appraisal discussions I had with my subordinates
c) I could communicate my disappointment or unhappiness with their work.
d) There as a great difference between my assessment and the appraisee’s
statement.
e) Intended to over rate him to maintain good relation.
f) I had difficulty in giving negative feedback.
5. As a Reporting Officer if you had performance review discussions with

your subordinates, tick the statements true with you.
a) I came to know more about the difficulties and problems experienced by

my subordinates
b) Some of my appraisees have understood themselves
c) The interviews have improved our relationship.
d) The interviews have affected slightly our relationship
6. Given the existing situation in the company do you think the present Performance
Appraisal System will succeed?
a) I am confident that the present system will succeed

b) I am somewhat confident that the present system will succeed
c) I do not think this will succeed
7. All in all what do you think of the system?
a) Comparison with the earlier system
i) The previous system was better

ii) This is definitely an improvement over the previous system.
b) Present System
i) This is an excellent system

ii) This is good but depends on how it is implemented
iii) There are a few merits in this system and there will be problems
iv) There are no merits in this system and there will be problems
v) This system is not desirable for the company.
8. Do you think we should continue with this Performance Appraisal System.
a) I think this system is useful and we should definitely continue it

b) I think we should review the present system and make it more open
c) I think we should continue it with more modifications
d) I prefer the old system of Confidential Reports over this system.
**********

Performance Appraisal System in Airports Authority of India

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PERFORMANCE APPRAISAL SYSTEM

IN AIRPORTS AUTHORITY OF INDIA

Project Submitted to the ALAGAPPA UNIVERSITY in partial

MASTER OF BUSINESS ADMINISTRATION

DIRECTORATE OF DISTANCE EDUCATION

This is to certify that the Project titled ‘Performance Appraisal

System in Airports Authority of India’ is a bonafide research work

Productivity Council Institute of Management(DPCIM) in partial fulfilment of

the requirements for the award of the Post Graduation Diploma in

award previously of any degree, diploma, associateship, fellowship or any

other similar title.

Dated : { Signature of the Guide }

I express my sincere and profound gratitude to Dr. Ved Prakash, Ph.D.(OR),

NEW DELHI {HARISH KUMAR}

I hereby declare that the project entitled “PERFORMANCE APPRAISAL

SYSTEM IN AIRPORTS AUTHORITY OF INDIA” submitted for M.B.A Degree is my

associate-ship, fellowship or any other similar titles.

Place : (HARISH KUMAR)

OBJECTIVE OF THE STUDY

The main objectives of the study are :

i.) To discuss conceptual framework of Performance Appraisal System

ii.) To review the Performance Appraisal System of AAI

iii.) To measure officers attitude towards Performance Appraisal System

iv.) To measure effectiveness of present Performance Appraisal System of AAI

The questionnaire was divided into two parts as under:

Part I – This was designed mainly to judge officer’s attitude towards

Part II – This was designed to measure effectiveness of Performance

a) Identification of strengths and weaknesses of the employees.

b) Identification of training needs.

c) Setting operational objectives.

d) Improvement over previous system of confidential reports.

e) The success of the Performance Appraisal System.

Name of the Candidate : HARISH KUMAR

Enrollment No. : 043176287

Period of Study : September, 2004 to June, 2006

Mode of Registration : Directly with the university

If through Study Centre, state :

Address of the Candidate : 40/5, FIRST FLOOR,

Name of the Guide : Dr. Ved Prakash

i) Academic Qualification : Ph.D (OR)

ii) Designation : Asstt. General Manager

iii) Years of Experience : 30 Years in Industry

iv) Institute where working : Engineers India Limited, New Delhi

v) Contact Address : 1, Bhikaiji Cama Place, R K Puram,

Date of Submission : 31st July, 2006

Signature of the Guide Signature of the Candidate

TOPICS PAGE NO.

AIRPORTS AUTHORITY OF INDIA

Under this chapter we will discuss :

• Introduction of Airports Authority of India (AAI)

- 15 International Airports (including Delhi & Mumbai)

“PROGRESS THROUGH EXCELLENCE AND CUSTOMER SATISFACTION WITH

• Control and management of the Indian air space

Airports Authority of India headed by a Chairman and supported by four Members,

NATIONAL AIRPORTS DIVISION (WING-I)

INTERNATIONAL AIRPORTS DIVISION (WING-II)

The executive class of both these divisions consists of following cadre :

OBJECTIVES OF THE STUDY

Under this chapter we will study :

• Introduction of the Study

• Objectives of the Study

1. Form (PA)-4 - Executive Director / Equivalent