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DECLARATION
Im Preeti dwivedi, a student of Kali Charan Nigam Institute of technology, approved by
UPTU, Lucknow hereby declare that the project entitled ROLE OF PERFORMANCE
APPRAISAL ON TATA STEEL , is the original work done by me and the information
provided in the study is authentic to the best of my knowledge. This study report has not been
submitted to any other institution or university for the award or any other degree.
This report is based on my personal opinion hence cannot be referred to legal purpose.
(Preeti Dwivedi)
Date: -
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PREFACE
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PREFACE
The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same
may be said about almost everything in the field of modern human resources management. As a
distinct and formal management procedure used in the evaluation of work performance, appraisal
really dates from the time of the Second World War - not more than 60 years ago.
In many organizations - but not all - appraisal results are used, either directly or directly, to help
determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses and
promotions.
The purpose of this study has been to determine whether the performance appraisal was used for
employee development and whether the appraisal was emphasized as an important part of the
performance appraisal process in steel industry.Also whether the performance appraisal helps in
increasing industrys profitability.
My study suggested that the performance appraisal has helped in increasing the profitability of
industry. Certain loop holes has been determined and suggestions were made.
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ACKNOWLEDGEMENT
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ACKNOWLEDGEMENT
This project has been made possible through the direct and indirect co-operation of various
people for whom I wish to express my appreciation and gratitude. In the preparation of this
project report I have received help and encouragement from different sources.
I express my sincere thanks to Mr. Govind Mishra (Faculty of department), & other faculty
members of M.B.A. department including Dr. Purushottam Tripathi (Head of MBA deptt.
KCNIT, Banda), Mr. Rishi kanaujia, Dr. Sankalp Srivastava, Mr. Ravi Prasad, Mr. Abhishek
Srivastava, Mr. Jai Singh Yadav, Mr. Amit kumar Gupta, for the valuable suggestion and making
this project a real successful.
Last but not least, my sincere thanks to my parents and friends who directly or indirectly helped
me to bring this project into the final shape.
I once again thanks to all those who extended their support and co-operation in bringing out this
project work successfully.
Preeti Dwivedi
DATE:
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OBJECTIVE OF
STUDY
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OBJECTIVE OF THE STUDY
1. To examine why an appraisal system is important.
2. To study the effectiveness of the existing performance appraisal system in a Tata Steel.
3. On the basis of what company increase salary and provide training to its employees. And
what is basis of promotion in company.
4. To understand more and more about role of employee and become clear about his
functions.
5. To understand employees own strengths and weaknesses with respect to his role and
functions.
6. To analyze the role played by performance appraisal system in increasing the mutuality
between employee and his superiors.
7. What opportunities are provided by the performance appraisal system to the employees
for self reflection and individual goal setting.
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TABLE OF CONTENT
TITLE PAGE NO.
Title page
Certificate of college
Declaration
Preface
Acknowledgement
Objective of the study
Introduction 10
Steel industry in India 28
Introduction of Tata Steel 30
Major players of steel in India 40
Trends in performance appraisal 48
Research Methodology 53
Findings and Analysis 56
Survey Findings 62
Conclusion 65
Implication of the Project 69
Suggestions and recommendations 70
Limitations 72
Bibliography 75
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INTRODUCTION
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INTRODUCTION
Almost every organization in one way or another goes through a periodic ritual, formally or
informally, known as performance appraisal. Performance appraisal has been called many things.
The formal performance appraisal has been called a tool of management, a control process, an
activity and a critical element in human resources allocation. Uses for performance appraisal
have included equal employment opportunity considerations, promotions, transfer and salary
increases. Primarily performance appraisal has been considered an overall system for controlling
an organization. Performance appraisal has also been called an audit function of an organization
regarding the performance of individuals, groups and entire divisions.
Performance appraisal may be defined as a structured formal interaction between a subordinate
and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in
which the work performance of the subordinate is examined and discussed, with a view to
identifying weaknesses and strengths as well as opportunities for improvement and skills
development. Almost every organization in one way or another goes through a periodic ritual,
formally or informally, known as performance appraisal. Performance appraisal has been called
many things. The formal performance appraisal has been called a tool of management, a control
process, an activity and a critical element in human resources allocation.
And since people differ in their abilities and aptitudes. These differences are natural to a great
extent and cannot be eliminated even by giving the same basic education and training to them.
There will be some differences in the quality and quantity of work done by different employees
even on the same job. Thus, there is a great need to have suitable performance appraisal system
to measure the relative merit of each employee.
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The basic purpose of performance appraisal is to facilitate orderly determination of an
employees worth to the organization of which he is a part. However, a fair determination of the
worth of an employee can take place only by appraising numerous factors some of which are
highly subjective, as for instant, attendance, while others are highly subjective, as for instant,
attitude and personality. The objective factor can be assessed accurately on the basis of records
maintained by the Human resource or personnel Department, but there is no device to measure
the subjective factor precisely. Notwithstanding this, appraisal of these factors must be done to
achieve the full appreciation of every employee merit.
Therefore, it can be said that, performance appraisal means systematic evaluation of the
personality and performance of each employee by his supervisor or some other person trained in
the techniques of merit rating. It employs various rating techniques for comparing individual
employees in a work group, in term of personal qualities or deficiencies and the requirements of
their respective jobs. To quote dale Yoder, performance appraisal includes all formal
procedures used to evaluate personalities and contribution and potential of group members in a
working organization. It is a continuous process to secure information necessary for making
correct and objective decisions on employees. The comparison of performance with job
requirements helps in finding out the merit of individual employees in a week group. Supervisor
or an independent appraiser may do rating.
Performance appraisal is a formal program in an organization, which is concerned with not only
the contribution of the members who form part of the organization, but aims at spotting the
potential also. The satisfactory performance is only a part of the system as a whole and the
management needs more information than mere performance ratings of the subordinates. There
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are no two opinions about the necessity of performance appraisal, which can meet requirements
of the management to achieve the organizational goals.
Performance appraisal is the systematic evaluation of the individual with respect to his
performance on the job and his potential for development. Performance appraisal is concerned
with determining the differences among the employees working in the organization. Generally,
the individuals immediate superior in the organization and whose performance is reviewed in
turn by his superior does the evaluation. Thus, everyone in Performance appraisal employs rating
techniques for comparing individual employees in the work group, in terms of personal qualities
or deficiencies and the requirements of their respective jobs.
More abruptly it can be said that, Performance management can be defined as a strategic and
integrated approach to delivering sustained success to organizations by improving the
performance of the human capital and by developing the capabilities of teams and individuals
within that organization (Armstrong and Baron, 2000). The process of performance management
therefore focuses not only with WHAT is produced but, also HOW it is produced. It seeks to
ensure that what has been produced is in line with the organizations needs and these products
have been produced in line with the organizations way of doing things.
Performance management can be achieved through many different ways. These include
performance appraisal system and coaching. Performance appraisal system can be described as a
fairly old system of measuring employees performance that has been in use in many
organizations. However, Performance appraisal has not brought in the amount of positive results
that was expected of it. Armstrong and Mulis (1994:86) quoted one manager describing
performance appraisal as a dishonest annual ritual. The question that arises then is: If
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Managers (the custodians of the system) do not have confidence in their own system, what more
employees (who happen to be victims of the system)?
The meaning of the word appraisal is to fix a price or value for something. This is used in
finance in terms such as project appraisal or financial appraisal where a value is attached to a
project. Similarly performance appraisal is a process in which one values the employee
contribution and worth to the organization.
Performance appraisal can be defined as a system of measuring employees performance
relative to the assigned or agreed objectives. The process starts with the supervisor
and or with the subordinate agreeing on specific objectives that need to be met on an
agreed time period. The objectives that are used in the Performance appraisal stem
from the main organizational objectives that are reduced to Departmental goals and
now to individual goals.
The performance appraisal system has to be transparent and the employee should be taken into
full confidence. In many cases employees themselves are given a chance to conduct a self-
appraisal. Performance appraisal is a case of joint problem solving by the organization and the
employee. However the organization must also take care of future potential and not get bogged
down by current performance.
Normally the immediate supervisor does the appraisal. Some organizations also have a peer
group performance appraisal where colleagues rate the performance.
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The HR person must also ensure that line managers are properly trained for carrying out the
appraisal including interviewing techniques and on how to give feedback. The managers must
also be trained to look at the cases objectively outside of their personal opinion of the candidate.
Therefore at end it would be right to say that, Performance appraisal is the process of obtaining,
analyzing and recording information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of the employee and
also the future potential of the employee. Its aim is to measure what an employee does.
According to Flippo, a prominent personality in the field of Human resources, "performance
appraisal is the systematic, periodic and an impartial rating of an employees excellence in the
matters pertaining to his present job and his potential for a better job." Performance appraisal is a
systematic way of reviewing and assessing the performance of an employee during a given
period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to
analyze his achievements and evaluate his contribution towards the achievements of the overall
organizational goals.
Organizations exist to achieve goals. Goals are only met when individual employees efforts
matches with policy of the organization and thus bringing out success and effectiveness. The
assessment of how unsuccessful employees have been at meeting their individual goals therefore
becomes a critical part of HRM and here comes Performance Appraisal System.
Performance Appraisal is an important component of the information and control system. In
todays flexible organizations, performance evaluations provide an effective way for managers to
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clarify performance goals and standards to enhance future individual performance. Thus, the
purpose of performance appraisal is to improve the organizations performance through the
enhanced performance of individuals.
The performance appraisal system:
Is an organizational necessity.
Is based on well defined objective criteria.
Is based on careful job analysis.
Uses only job related criteria.
Is supported by adequate studies.
Is applied by trained qualified raters.
Is applied objectively throughout the organization.
Can be shown non discriminatory as defined by law.
By focusing the attention on performance, performance appraisal goes to the heart
ofpersonnel management and reflects the management's interest in the progress of the
employees.
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OBJECTIVE OF PERFORMANCE APPRAISAL
There are mainly two purposes for which performance appraisal is used by an organization:
(1) To improve the work performance of employees by helping them realize and use their full
potential in carrying out the firms missions; and
(2) To provide information to employees for use in making work related decisions,
More specifically, appraisals serve the following purposes.
a) Appraisals generate information to support administrative decisions. Promotions transfers
and reassignments, demotions and terminations are action based at least in part on
performance.
b) Appraisals provide feedback to employees and thereby serve as vehicle for personal or
career development because feedback provides:
Reassurance that they are contributing and doing the right thing
Awareness of the impact on the desired results
A measure of the adequacy of performance (quality, quantity, speed etc.)
Recognition of the importance and value of their performance.
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c) Once the development needs of employees are identified appraisals can help establish
objectives for training programmes. Thus evaluations provide a basis for changing
performance plans, including objectives and standards of behaviors as business plans and
conditions change.
d) As a result of proper specifications of performance levels, appraisals can help diagnose
organizational problems. They do so by identifying training needs and the knowledge,
abilities, and other characteristics to consider in hiring, and they also provide a basis for
distinguishing between, effective and ineffective performers.
e) Appraisals are used as criteria in test evaluations.The rationale for differential treatment of
employees needs to be consistent with companys values, philosophy and strategy. It also
needs to be balanced with the desire for collaboration, rather than competition and conflict,
sought in TQM.
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PERFORMANCE APPRAISAL - PROCESS MAP
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METHODS OF PERFORMANCE APPRAISAL
Currently most of the companies are using one of the following Performance Appraisal Methods:
1). 360 Degree Appraisal Method
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2). Rating Scale Method
3). Management by Objective Method
Under the 360 Degree appraisal method the employee is rated from all angles i.e., by the
superiors, subordinates, peers, suppliers, distributors, customers and clients. Under the
Management by Objective method the employee goals are set mutually by the employee's and
the management. And the employees are rated based on the accomplishment of these goals.
Under the Rating Scale method each employee trait or characteristic is rated on a scale that
usually has several points ranging from "poor" to "excellent" (or some similar arrangement).The
traits assessed on these scales include employee attributes such as work quality, cooperation,
initiative, punctuality and technical competence, etc. The selected traits should be in some way
relevant to the appraisee's job.
360 APPRAISAL AND FEEDBACK
The 360 degree appraisal involves rating of an employee or manager by everyone above,
alongside and below him. Corporates are using this tool to find out truths about their managers.
Although deployed mostly as a fact-finding technique, 360 appraisals are also used to design
promotion and reward system in the organization.
Concept of 360 Appraisal
According to Milliman and others, 360-degree appraisal is the process of systematically
gathering data on a persons skills, abilities and behaviors from a variety of sources the
manager, peers, subordinates and even customers and clients. Thus, appraisal of an employee is
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(i) The 360 degree appraisal leads to greater self-awareness of those appraised. It reveals
strengths and weaknesses in their working styles.
(ii) The gap between self assessment and the views of ones colleagues of peer group in
reduced.
(iii) It facilitates empowerment of subordinates who get a say in the appraisal of their bosses.
(iv) Inflexible managers are forced to initiate self-change.
(v) Facts about organizational culture and ambience are brought to light by the multiple
appraisals.
Limitations of 360 Appraisal
The system of 360 appraisal suffers from the following limitations:
(i) The 360 degree appraisal system ignores performance in terms of goals.
(ii) The candidate being appraised may not accept negative feedback from the subordinates
and peers. He might feel humiliated.
(iii) Responses from colleagues often tend to be biased.
(iv) Linking rewards to findings under 360 degree appraisal can prove to be unfair.
(v) The subordinates and peers might not be fully competent in appraisal.
Guidelines for Better Use of 360 Appraisal
The use of multisource appraisal can be effective if the following guidelines are followed:
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(i) Involve people. Ask them who should serve as raters, and give them an opportunity to
review and interpret the results. This will strengthen their commitment to both the overall
process and the specific decisions.
(ii) Ensure that relevant data are being collected. Focus on behaviors and outcomes that
raters are capable of observing and are competent to evaluate.
(iii) Ensure that no single rater can dramatically affect the outcome. Use a large
enough sample or eliminate the highest and lowest scores to ensure that no one rater can
skew the data.
(iv)Train raters in what and how to observe. The better people understand what they look
for and how to recordcritical incidents (specific things the person said and did that can
be used as examples to support their ratings, and better the quality of the information that
will be collected.
(v) Ask raters to support their evaluations. Whenever possible, raters should discuss their
observations and evaluations with other raters. These discussions should trigger thoughts
and combat selective memory. Raters should also be required to provide a rationale for
their rating to other raters. This would prevent people from using the process to act on
personal grudges.
(vi)Move slowly and start small. Any organization considering using 360 feedbacks in
the appraisal process should begin by using it for development purpose only and then
gradually to make it a part of appraisal system. Even then, the focus should be on the
goal-setting portion of the appraisal. People need to get comfortable with the idea of
multisource feedback as a development tool before they can accept it as part of the formal
performance management process.
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A lot of organizations seem to be hurrying to integrate 360 feedback into the human
resource management system. Multisource feedback really does have the potential to
enhance human resource management system. However, 360 feedback wont fix a
system that does not work.
(vii) Develop a culture that supports open feedback. Not surprisingly, 360 feedback
works best in companies where the environment is participatory rather than authoritarian,
where giving and receiving feedback are the norm and are seen as valuable sources of
information. If the current system (where only the supervisor does the appraisal) is not
working due to lack of straight talk and hesitancy to give direct feedback, it is essential to
introduce openness in the organization.
(viii) Clear and agreed on performance measures and behaviors. When 360 feedback is
used for development only, the organization may be able to settle the list of behaviors and
skills that have reasonable face validity and general support: coaching or team
building, for instance. However, when the feedback is being used to determine
performance ratings, the result and behavior for which people are held accountable must
be clear, unambiguous and specific.
(ix)The users must support the system and be willing to invest the time required to make
it work. The introduction of 360 feedback makes an already time-intensive appraisal
process even more demanding. It means more data to collect and more information to
process for the additional feedback.
(x) Sound feedback process. While the way the data are collected and presented are
always important, two aspects of sound 360 feedback procedure are particularly relevant
when the data are used for appraisal purpose: the validity and reliability of the practices
for which people will be measured and the confidentiality of the raters.
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Elements of 360 Appraisal Program
The elements of 360 appraisal program are as follows:
(i) Appraisal by Superior/ Boss. This is the most important element of the 360 degree
appraisal. Here the focus is to provide constructive feedback on employees performance
and his development needs. It is the responsibility of the superior to ensure that employee
sets goals not only in the area of business performance but also in the areas that are vital
to the organization. These are called corporate thrust areas and may include relationship
management, safety and quality development. If the working style of the employee is a
concern area and needs improvement for enhancing effectiveness then goal may be set
for style of functioning such as, from short-term to long-term orientation.
It is expected of the superior to put career aspirations of the employee in proper
perspective. Firstly, superior must communicate to the employee in a clear way what the
organization plans for the employee. Secondly, if the employee has unrealistic
aspirations, then also it is superiors responsibility to share with the employee the realistic
picture given his/ her strengths, development areas, experience, qualifications, and the
organizations ability to provide growth. This is how the superiors appraisal has a very
significant role to play.
(ii) Appraisal by the Peer Group. The peers play an important role in the life of an
employee in the organization. The can also provide a deep insight into the personality
make up, attitude and style of working of the employee. For better results, it is essential
to select the right peers for the purpose of appraisal. They must include peers both from
within the department as well as from the other departments, which are directly
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connected with the working of employees department. The concept of internal customers
comes handy here. Three to five internal customers should normally be chosen for peer
appraisal.
In order to achieve the purpose of 360 appraisal, the peer group appraisal must strive to
get the feedback on (a) employees working style, (b) sensitivity towards others, (c) spirit
of co-operation and collaboration, and (d) ability to work as a team member.
(iii) Appraisal by the Subordinates. Another distinctive feature of 360 appraisal is the
role of subordinates in appraisal. It signifies two things. Firstly, it is a clear expression
from the organization that it encourages openness and that feedback is a two-way
process. Secondly, it is a systemic recognition of the fact that an employees subordinates
do play a vital role in his appraisal. Thus, the purpose of subordinates appraisal is to get
first hand assessment of how the subordinates perceive their superior to be in terms of:
(a) delegation of authority, (b) guiding and training of subordinate, (c) motivation of
subordinates, (d) team building, etc.
Upward appraisal provides an opportunity to the subordinates to give feedback to their
superior on the kind of things they would like him/ her to continue doing (status quo),
things they would like him/ her to stop doing (areas for corrective action), things they
would like him/ her to start doing (areas for new initiatives).
(iv)Self Appraisal. Any program of 360 appraisal would not be complete without self
appraisal by the employee whose performance is being appraised. Self appraisal
facilitates the employee to identify his/ her strengths and weaknesses and provides an
opportunity to assess the performance. In a well established system, employees use the
self appraisal very effectively and organizations also find that employees often are their
own strongest critics and display very high degree of objectivity. Self appraisal also
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provides an opportunity to the employee to express his career moves for the future.
However, this is only for gathering information and that under the given organizational
constraints, it may not be possible to provide the career progression desired by the
employee. Nevertheless, it is in the organizations interest to at least know on a first hand
basis the aspirations of its employees.
STEEL INDUSTRY IN INDIA
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Steel has been the key material with which the world has reached to a developed position. All the
engineering machines, mechanical tools and most importantly building and construction
structures like bars, rods, channels, wires, angles etc are made of steel for its feature being hard
and adaptable. Earlier when the alloy of steel was not discovered, iron was used for the said
purposes but iron is usually prone to rust and is not so strong. Steel is a highly wanted alloy over
the world. All the countries need steel for the infrastructural development and overall growth.
Steel has a variety of grades i.e. above 2000 but is mainly categorized in divisions steel flat and
steel long, depending on the shape of steel manufactured. Steel flat includes steel products in flat,
plate, sheet or strip shapes. The plate shaped steel products are usually 10 to 200 mm and thin
rolled strip products are of 1 to 10 mm in dimension. Steel flat is mostly used in construction,
shipbuilding, pipes and boiler applications. Steel long Category includes steel products in long,
bar or rod shape like reinforced rods made of sponge iron. The steel long products are required to
produce concrete, blocks, bars, tools, gears and engineering products. After independence,
successive governments placed great emphasis on the development of an Indian steel industry. In
Financial Year 1991, the six major plants, of which five were in the public sector, produced 10
million tons. The rest of India steel production, 4.7 million tons, came from 180 small plants,
almost all of which were in the private sector. India's Steel production more than doubled during
the 1980s but still did not meet the demand in the mid-1990s, the government was seeking
private-sector investment in new steel plants.
Production was projected to increase substantially as the result of plans to set up a 1 million ton
steel plant and three pig-iron plants totalling 600,000 tons capacity in West Bengal, with Chinese
technical assistance and financial investment. The commissioning of Tata Iron & Steel
Company's production unit at Jamshedpur, Bihar in 1911-12 heralded the beginning of modern
steel industry in India. At the time of Independence in 1947 India's steel production was only
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INTRODUCTIONOF TATA STEEL
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all odds. Tata Steel`s Jamshedpur (India) Works has a crude steel production capacity of 6.8
MTPA which is slated to increase to 10 MTPA by 2010. The Company also has proposed three
Greenfield steel projects in the states of Jharkhand, Orissa and Chhattisgarh in India with
additional capacity of 23 MTPA and a Greenfield project in Vietnam.
The TATA Steel story is a classic example of synergy leveraged through the inorganic route. In
2005, Tata Steel acquired NatSteel Asia. This helped the company not only to establish a
beachhead in seven countries across the region, namely Singapore, Thailand, China, Malaysia,
Vietnam, the Philippines and Australia, but also provided it with a customer base for close to two
million tonnes of steel. As a brand, NatSteel's strong equity in the region was yet another
strategic gain for Tata Steel. The company's strong human resources and management
effectiveness is also an inheritance of immense value. Operationally, NatSteel's finishing
facilities across the region provided Tata Steel with the necessary support for upstream capacity
expansions in India, as well as access to knowledge and expertise in downstream processing of
bars and wire rods. The acquisition of Millennium Steel in 2005, Thailand's dominant steel
producer, still consolidated Tata Steel's gains from the NatSteel deal. Millennium's three
operating units gave the company a cumulative capacity to produce 1.2 million tonnes of steel
per annum through the electric arc furnace route along with a long products rolling capacity of
1.7 million tonnes a year. Geared towards the construction and automotive sector, Millennium
provided Tata Steel strategic space in the heart of the ASEAN region, enhancing its market
position in South East Asia. Apart from the existing backward integration with its own iron ore
mines and collieries, the company has enhanced its competitive advantage in raw materials
further, buying a five per cent interest in the Carborough Downs coal project located in
Queensland, Australia. Its backward and forward integration plans include the development of a
deep-sea port in Orissa. Through investments in Corus, Millennium Steel (renamed Tata Steel
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Thailand) and NatSteel Holdings, Singapore, Tata Steel has created a manufacturing and
marketing network in Europe, South East Asia and the pacific-rim countries. Corus, which
manufactured over 20 MTPA of steel in 2008, has operations in the UK, the Netherlands,
Germany, France, Norway and Belgium. Tata Steel Thailand is the largest producer of long steel
products in Thailand, with a manufacturing capacity of 1.7 MTPA. Tata Steel has proposed a 0.5
MTPA mini blast furnace project in Thailand. NatSteel Holdings produces about 2 MTPA of
steel products across its regional operations in seven countries. Tata Steel, through its joint
venture with Tata BlueScope Steel Limited, has also entered the steel building and construction
applications market. The iron ore mines and collieries in India give the Company a distinct
advantage in raw material sourcing. Tata Steel is also striving towards raw materials security
through joint ventures in Thailand, Australia, Mozambique, Ivory Coast (West Africa) and
Oman. Tata Steel has signed an agreement with Steel Authority of India Limited to establish a
50:50 joint venture company for coal mining in India. Also, Tata Steel has bought 19.9% stake in
New Millennium Capital Corporation, Canada for iron ore mining.
Exploration of opportunities in titanium dioxide business in Tamil Nadu, ferro-chrome plant in
South Africa and setting up of a deep-sea port in coastal Orissa are integral to the Growth and
Globalisation objective of Tata Steel.
. Tata Steel India is the first integrated steel company in the world, outside Japan, to be awarded
the Deming Application Prize 2008 for excellence in Total Quality Management. The Tata
Group made a huge acquisition in 2006 when it acquired the Dutch company Corus for more
than USD12 billion, making Tata-Corus one of the world's largest steelmakers.
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Vision
We aspire to be the global steel industry benchmarkfor
Value Creation and Corporate Citizenship
We make the difference through:
Ourpeople, by fostering team work, nurturing talent, enhancing leadership capability and acting
with pace, pride and passion.
Ouroffer, by becoming the supplier of choice, delivering premium products and services, and
creating value for our customers.
Our innovative approach, by developing leading edge solutions in technology, processes and
products.
Our conduct, by providing a safe working place, respecting the environment, caring for our
communities and demonstrating high ethical standards.
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Mission
Consistent with the vision and values of the founder Jamsetji Tata, Tata Steel strives to
strengthen Indias industrial base through the effective utilization of staff and materials. The
means envisaged to achieve this are high technology and productivity, consistent with modern
management practices.
Tata Steel recognizes that while honesty and integrity are the essential ingredients of a strong
and stable enterprise, profitability provides the main spark for economic activity.
Overall, the Company seeks to scale the heights of excellence in all that it does in an atmosphere
free from fear, and thereby reaffirms its faith in democratic values.
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MANAGEMENT AND BOARD OF DIRECTORS
The operations and successes of the Tata Steel Group are taken care of by its capable
management and Board of Directors. At the helm of affairs are the Companys Directors, whose
profiles offer a brief introduction and help get acquainted with them
Board of Directors
expand allcollapse all
Mr. Ratan Tata Chairman
Mr. Ratan N. Tata is presently Chairman of Tata Sons, the holding company of the Tata Group
and also Chairman of the major Tata companies including Tata Steel. It is under his leadership
that the Company has scaled new heights and established a presence as one of the leading steel
conglomerates in the world.
Mr. B. Muthuraman VIice Chairman
Mr. Muthuraman joined Tata Steel in 1966 as a Graduate Trainee. On completion of training, he
worked in the areas of Iron-making and Engineering Development for ten years and then moved
to the Marketing & Sales Division and spent nearly twenty years there, ultimately rising to the
position of Vice President.
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Mr. H.M. Nerurkar Managing Director
Hemant M. Nerurkar has been Executive Director of India and South East Asia of Tata Steel
Limited since April 9, 2009 and Managing Director since October 10, 2009. Mr. Nerurkar also
serves as the Vice President of Kalinganagar Project, Orissa.
Mr. Nusli Neville Wadia Independent, Non - Executive Director
A textile magnate and an important person in the real-estate business, Mr. Nusli Neville Wadiabelongs to an illustrious family of Indian Parsi entrepreneurs. He happens to be the grandson of
Muhammad Ali Jinnah, founder of Pakistan.
Mr. S. M. Palia Independent, Non - Executive Director
Mr. S M Palia, a B.Com., LL.B., CAIIB and AIB ( London ) is a Development Banker by
profession. He was with IDBI from 1964 to 1989 during which period he held various
responsible positions including that of an Executive Director to the Company.
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Mr. Subodh BhargavaIndependent, Non - Executive Director
Mr. Bhargava is a Mechanical Engineer from the University of Roorkee. He joined the Company
as a Director in 2006.
Mr. Jacobus Schraven Independent, Non - Executive Director
Jacobus Schraven (65) was appointed a non-executive director and Deputy Chairman of Corus in December 2004.
Mr. Andrew Robb Independent, Non - Executive Director
Mr. Andrew M. Robb is a Fellow of the Chartered Institute of Management Accountants and holds a Joint Diploma in
Management Accounting.
Mr. Kirby Adams Not Independent, Non - Executive Director
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MAJOR PLAYERS OF STEEL IN INDIA
PUBLIC SECTOR
1. STEEL AUTHORITY OF INDIA LIMITED (SAIL)
Steel Authority of India Limited (SAIL) is a company registered under the Indian Companies
Act, 1956 and is an enterprise of the Government of India. It has five integrated steel plants at
Bhilai (Chattisgarh), Rourkela (Orissa), Durgapur (West Bengal), Bokaro (Jharkhand) and
Burnpur (West Bengal). SAIL has three special and alloy steel plants viz. Alloy Steels Plant at
Durgapur (West Bengal), Salem Steel Plant at Salem (Tamilnadu) and Visvesvaraya Iron & Steel
Plant at Bhadravati (Karnataka). In addition, a Ferro Alloy producing plant Maharashtra
Elektrosmelt Ltd. At Chandrapur, is a subsidiary of SAIL. SAIL has Research & Development
Centre for Iron & Steel (RDCIS), Centre for Engineering & Technology (CET), SAIL Safety
Organisation (SSO) and Management Training Institute (MTI) all located at Ranchi; Central
Coal Supply Organisation (CCSO) at Dhanbad; Raw Materials Division (RMD), Environment
Management Division (EMD) and Growth Division (GD) at Kolkata. The Central Marketing
Organisation (CMO), with its head quarters at Kolkata, coordinates the country-wide marketing
and distribution network.
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2. RASHTRIYA ISPAT NIGAM LTD. (RINL)
RINL, the corporate entity of Visakhapatnmam Steel Plant (VSP) is the first shore based
integrated steel plant located at Visakhapatnam in Andhra Pradesh. The plant was commissioned
in August 1992 with a capacity to produce 3 million tonne per annum (mtpa) of liquid steel. The
plant has been built to match international standards in design
and engineering with state-of- the- art technology incorporating extensive energy saving and
pollution control measures. Right from the year of its integrated operation, VSP established its
presence both in the domestic and international markets with its superior quality of products. The
company has been awarded all the three Internationalstandards certificates, namely, ISO
9001:2000, ISO 14001: 1996 and OHSAS 18001: 1999. RINL was accorded the prestigious
Mini Ratna status by the Ministry of Steel, Govt. of India in the year 2006 and the company is
gearing up to complete the ambitious expansion works to increase the capacity to 6.3 mtpa by
2009. RINL has prepared a road map to expand the plants capacity up to 16 mtpa in phases.
3. HINDUSTAN STEELWORKS CONSTRUCTION LTD.(HSCL)
HSCL was incorporated in June 1964 with the primary objective of creating in the Public Sector
an organization capable of undertaking complete construction of modern integrated Steel Plants.
HSCL had done the construction work of Bokaro Steel Plant, Vizag Steel Plant and Salem Steel
Plant from the inception till commissioning and was associated with the expansion and
modernisation of Bhilai Steel Plant, Durgapur Steel Plant, IISCO (Burnpur) and also Bhadravati
Steel Plant. With the tapering of construction
activities in Steel Plants, the company intensified its activities in other sectors like Power, Coal,
Oil and Gas. Besides this, HSCL diversified in Infrastructure Sectors like Roads/Highways,
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Bridges, Dams, Underground Communication and Transport system and Industrial and
Township Complexes involving high degree of planning, coordination
and modern sophisticated techniques. The company has developed its expertise in the areas of
Piling, Soil investigation, Massive foundation work, High rise structures, Structural fabrication
and Erection, Refractory, Technological structures and Pipelines, Equipment erection,
Instrumentation including testing and commissioning. The company has also specialised in
carrying out Capital repairs and Rebuilding work including hot repairs of Coke Ovens and Blast
Furnaces and other allied areas of Integrated Steel Plants.
4. MECON LTD.
MECON is one of the leading multi-disciplinary design, engineering, consultancy and
contracting organization in the field of iron & steel, chemicals, refineries and petrochemicals,
power, roads & highways, railways, water management, ports and harbours, gas & oil, pipelines,
non ferrous, mining, general engineering, environmental
engineering and other related/ diversified areas with extensive overseas experience. MECON, an
ISO: 9001- 2000 accredited company, registered with World Bank (WB), Asian Development
Bank (ADB), European Bank for Reconstruction and Development (EBRD), African
Development Bank (AFDB), and United Nations Industrial Development Organisation
(UNIDO), has wide exposure and infrastructure for carrying out engineering, consultancy and
project management services for mega projects encompassing architecture & town planning,
civil works, structural works, electric, air conditioning & refrigeration, instrumentation, utilities,
material handling & storage, computerization etc. MECON has collaboration agreements with
leading firms from the USA, Germany, France, Italy, Russia, etc. in various fields. The
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authorized share capital of the company is Rs. 10,400 lakh (previous year Rs. 4,100 lakh) against
which the paid up capital is Rs. 10,313.84 lakh (previous year Rs. 4,013.84 lakh). All the shares
are held by the Government of India.
PRIVATE SECTOR
The private sector of the Steel Industry is currently playing an important and dominant role in
production and growth of steel industry in the country. Private sector steel playershave
contributed nearly 67% of total steel production of 38.08 million tonnes to the country during the
period April-December, 2007. The private sector units consist of bothmajor steel producers on
one hand and relatively smaller and medium units such as Sponge iron plants, Mini Blast
Furnace units, Electric Arc Furnaces, Induction Furnaces,Rerolling Mills, Cold-rolling Mills and
Coating units on the other. They not only play an important role in production of primary and
secondary steel, but also contribute substantial value addition in terms of quality, innovation and
cost effective.
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1. TATA STEEL LTD.
Tata Steel has an integrated steel plant, with an annual crude steel making capacity of 5 million
tonnes located at Jamshedpur, Jharkhand. Tata Steel has completed the first six months of fiscal
2007-08 with impressive increase in its hot metal production. The hot metal production at 2.76
million tonnes is 4.6%more compared to the corresponding period of the previous year. The
crude steel production during the period was 2.43 million tonnes which is marginally lower than
the production of 2.45 million tones last year. The saleable steel production was at a lower level
during the period April September, 2007 (2.34 million tonnes) compared to the corresponding
period of last year
(2.36 million tonnes). Tata Steel is continuing with its programme of expansion of steel making
capacity by 1.8 million tonnes to reach a rated capacity of 6.8 million tonnes. The Project is
reported to be moving ahead of schedule and is likely to be commissioned by May 2008 against
the original schedule of June 2008. The Company has planned to take the capacity to 10 million
tonnes by the fiscal year 2010. Tata Steels Greenfield projects in Orissa and Chattisgarh are
progressing on schedule with placement of equipment order for Kalinganagar Project in Orissa
and commencement of the land acquisition process. Jharkhand Project is awaiting announcement
of Relief & Rehabilitation policy of the State Government.
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2. ESSAR STEEL LTD. (ESL)
Essar Steel Holdings Ltd. (ESHL) is a global producer of steel with a footprint covering India,
Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturer
from iron ore to ready-to-market products. ESHL has a current global capacity of 8 million
tonnes per annum (MTPA). With its aggressive expansion plans in India and other parts of Asia
and North America, its capacity is likely to go up to 25 MTPA by 2012. Its products find wide
acceptance in highly discerning consumer sectors, such as automotive, white goods,
construction, engineering and shipbuilding. Essar Steel Ltd., the Indian Company of Essar Steel
Holdings Limited, is the largest steel producer in
western India, with a current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to increase this
to 8.5 MTPA. The Indian operations also include an 8 MTPA beneficiation plant at Bailadilla,
Chattisgarh which has worlds largest slurry pipeline of 267 km to transport beneficiated Iron
Slurry to the pellet plant, and an 8 MTPA pellet complex at Visakhapatnam. The Essar Steel
Complex at Hazira in Gujarat, India, houses the worlds largest gas-based single location sponge
iron plant, with a capacity of 4.6 MTPA. The complex also houses the steel plant and the 1.4
MTPA cold rolling complex. The steel complex has a complete infrastructure setup, including a
captive port, lime plant and oxygen plant. Essar Steel produces highly customized valueadded
products catering to a variety of product segments and is Indias largest exporter of flat products,
selling close to half of its production to the highly demanding US and European markets, and to
the growing markets of South East Asia and the Middle East. The companys products conform
to quality specifications of international quality certification agencies, like ABS, API, TUV
Rhine Land and Lloyds Register. Essar Steel is the first Indian steel company
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to receive an ISO 9001 and ISO 14001 certification for environment management practices.
Essar Steel utilizes Hot Briquetted Iron-Direct Reduced Iron (HBIDRI) technology supplied by
Midrex Technology, USA along with four 150 tonnes DC electric arc furnaces imported from
Clecim, France. The Hazira unit of Essar Steel is equipped with 5.5 million tonnes per annum
(MTPA) hot briquetted iron plant, 4.6 MTPA electric are furnace, 4.6 MTPA continuous caster,
3.6 MTPA hot strip mill and 1.4 MTPA Cold Rolling Mill. During the year 2007-08, Essar was
awarded costs ISO/TS 16949 and OHSAS 18000 certification.
3. JINDAL STEEL & POWER LTD. (JSPL)
Jindal Steel & Power Limited is one of the fast growing major steel units in the country. The
Raigarh plant of JSPL has a present capacity of 1.37 million tonne per annum (MTPA) sponge
iron plant, 2.40 MTPA Steel Melting Shop (SMS), 1.0 MTPA plant Mill, 2.30 sinter plant, 0.8
MTPA coke oven and a 330 Mega Watt captive power plant. During the year 2006-07, the
company produced 1.19 million tonnes of sponge iron, 0.8million tonnes of various steel
products, 0.57 million tones of hot metal and 0.21 million tonnes of rolled products. The
performance of JSPL during April-October 2007-08 was 0.68 million tonnes of sponge iron, 0.72
million tonnes of steel products (slabs/blooms/billets/rounds), 0.68 million tones of hot metal,
0.27 million tonnes of rolled products and 0.11 million tonnes of plates.
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MARKET SHARE OF LEADING PLAYERS IN IRON AND
STEEL INDUSTRY
COMPANY PRODUCTION OF STEEL
(IN MILLION TONNES)
MARKET SHARE
(IN PERCENTAGE
TERMS)
SAIL 13.5 32 %
TISCO (Tata Steel) 5.2 11 %
RNIL 3.5 8 %
ESSAR, ISPAT, JSWL 8.4 19 %
OTHERS 14.5 30 %
TOTAL 45.1 100 %
Therefore, it can rightly be concluded that the liberalization of industrial policy and other
initiatives taken by the Government have given a definite impetus for entry, participation and
growth of both private and public sector in the steel industry.
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TRENDS IN PERFORMANCE APPRAISAL SYSTEM
Performance appraisal in its traditional from known as ACR-Annual Confidential Report is often
misused than used. Performance appraisal has now been recognized as a HRD function. In the
last decade many organizations have reviewed and changed their managerial appraisal systems.
1) There is a trend away from the composite appraisals with multiple objectives (e.g.
performance planning, development rewards and promotions)to separate systems for
different systems for different clusters of objectives.
2) There is a move away from isolated appraisal system to the business linked one .
3) There is shift away from closed confidential type to open dialogue and discussions based
system.
4) There is a movement quantitative (pseudo objective) to qualitative (interactive,
improvement and process oriented) system.
5) There is a movement away from boss assessed feedback to 360-degrees feedback involving
customers, peers, team members, subordinates etc. in addition to supervisors.
6) There is also a trend away from elaborate systems to simple ones.
7) There is a shift from standard systems to flexible and group specific ones.
8) There is a movement from result oriented systems to process oriented system.
9) There is a movement from the assessment of individual performance to the development of
team performance.
10) There is also a movement from complacency to experimentation through continuous research
change.
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Performance appraisal refers to the assessment of an employees actual performance, behavior
on jobs, and his or her potential for future performance. Appraisal has several objectives but the
main purposes are to assess training needs, to effect promotions, and to give pay increases.
Appraisal of performance proceeds in a set pattern. The steps involved are defining appraisal
objectives, establishing job expectations, designing the appraisal programme, conducting
performance interview, and using appraisal data for different HR activities.
Two important contemporary techniques of performance appraisal include 360 appraisal and
goal setting approach to appraisal also known as Managing by Objectives.
However, performance appraisal system also serves to be the backbone of any industry in the
corporate world and since the project report focuses on the role played by performance appraisal
in industrial establishment so review of research is done by also analyzing following secondary
data.
The data source: Secondary Data.
The research approach: Survey Method.
The research instrument: Journals , Books , Newspaper Articles.
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JOURNAL ARTICLES
1. Title :- A New Framework for Selection of the Best Performance Appraisal Method
Author :- Mostafa Jafari , Atieh Bourouni , Roozbeh Hesam Amiri.
Abstract :- Performance appraisal is one of the most important processes in human resource
management, because it has a great effect on both the financial and program components of any
organization. There is a variety of methods for the appraisal of employees' performance.
Obviously, no method can claim that it has an integrated approach in performance appraisal.
Therefore, human resource managers should select an appraisal method which is most efficient
in their organizations. In this paper, we propose a framework for the selection of appraisal
methods and compare some performance appraisal methods in order to facilitate the selection
process for organizations. The value of this framework is that, with use of it, organisations can
evaluate their performance appraisal method with respect to the key features of it before
implementing any method as well as expending extra costs. This framework is theoretical in
nature, and is build based on a review of related literature.
2. Title:-Function of performance appraisal in career development
Authors :- Baldwin, Jennifer
Abstract :- The design of a performance appraisal system may be considered an unusual
topic in the field of career development. However, it is considered most relevant in the current
employment climate for graduates given the repeated emphasis on career development at various
stages of the employment process. There has been a growing emphasis since the mid-1970s on
employees' needs rather than just organizational needs, and a recognition of the strategic value of
employees being developed to their best potential. Organizations have become increasingly
aware that the effective development of their employees' skills and knowledge has benefits for
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the whole organization. Career development (or employee or professional development) is a
thread that runs through each stage of this discussion of the design of a performance appraisal
system. This issue of career development may also be observed in promotional brochures and
information sessions given by recruiters of graduates of tertiary institutions. Much is made of
training and development opportunities as organizations seek to attract the brightest and best
graduates to their graduate management trainee programs. Performance appraisal can be a crucial
factor in the setting of career goals and the perception of job satisfaction leading to increased
motivation and productivity.
3 Title:- Innovative human resource management and corporate performance
in the context of economic liberalization in India
Authors :- Ashok Som
Abstract :- The Indian economy was forced to adopt a structural adjustment programme at
the beginning of 1991. The structural adjustment programme or liberalization initiated the
process of the opening up of an otherwise closed economy of India. Liberalization created a
hypercompetitive environment and to respond to this turbulence, Indian organizations adopted
innovative changes in their HRM practices. Current research shows that HRM practices are
important for enhanced corporate performance but little has been reported on the effect of HRM
practices and corporate performance in the context of economic liberalization of India. This
study tries to understand the role of innovative HRM practices and specifically questions how
HRM practices, such as the role of HR department, recruitment, retraining and redeployment,
performance appraisal and compensation, enhance corporate performance during the change
process. A multiple-respondent survey of 69 Indian organizations was undertaken to study the
impact of innovative HRM practices on firm performance. The survey found that the innovative
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recruitment and compensation practices have a positive significant relationship with firm
performance. It was observed that recruitment, the role of the HR department and compensation
practices seem to be significantly changing within the Indian firms in the context of Indias
economic liberalization. The synergy between innovative HRM practices was not significant in
enhancing corporate performance during the liberalization process.
4 Title:- The Effects of Human Resource Management Practices on
Productivity: A Study of Steel Finishing Lines
Authors :- Casey Ichniowisky , Kathryn Shaw and Giovanna Prenushi
Abstract :- This study investigate the productivity effects of innovative employment
practices using data from a sample of 36 homogeneous steel production lines owned by 17
companies. The productivity regressions demonstrate that lines using a set of innovative work
practices, which include incentive pay, teams, jlexible job
assignments, employment security, and training, achieve substantially higher levels
of productivity than do lines with the more traditional approach, which includes
narrow job de$nitions, strict work rules, and hourly pay with close supervision. Our results are
consistent with recent theoretical models which stress the importance of complementarities
among work practices.
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RESEARCHMETHODOLOGY
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RESEARCH METHODOLOGY
The formidable problem that follows the task of defining the research problem is the preparation
the design of the research project, popularly known as the research design. Decisions regarding
what, where, when, how much, by what means concerning an inquiry or a research study
constitute a research design. A research design is the arrangement of conditions for collection
and analysis data in a manner that aims to combine relevance to the research purpose with
economy in procedure. In fact, the research design is the conceptual structure within which
research is conducted; it constitutes the blueprint for the collection, measurement and analysis of
data. As such the design includes outline of what the researcher will do from writing the
hypothesis and its operational implications the final analysis of data.
Therefore, this study outline following designing decisions:-
(i) What is the study about?
The study comprises critical analysis of various functions, methods and scope of performance
appraisal in different companies prevailing in steel industry.
(ii) Why is the study being made?
The main purpose of study is to help in understanding various functions, role and importance of
performance appraisal system and identify the developmental needs of employees in steel
industry. It also focus on the impact of performance appraisal system on industrial relations and
help in finding out various tools for bridging the communication gap between employees and
supervisors.
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(iii) What type of data is required?
Data comprising the impact of performance appraisal system on steel industry is required for the
study. Therefore, journal articles and news article from leading business magazines and news
papers did the needful.
(iv) Where can the required data be found?
Since data is secondary therefore most of the review was done with help of internet, journals,
newspaper articles and various books .
(v) What periods of time will the study include?
This study is the result of 2 3 months of research.
(vi) What techniques of data collection will be used?
To accomplish the objectives of the study secondary data is used.
(vii) How will the data be analyzed?
Data is analyzed on the basis of journal, newspaper articles and the core knowledge gained on
performance appraisal system from few books and steel industry. A complete review has been
done on role of performance appraisal system on steel industry and its impact in gaining
competitive advantages. Therefore, for this purpose role of performance appraisal has been
studied in few companies prevailing in the steel industry.
(vii) In what style will the report be prepared?
Report is distributed in Chapters completing all the requirements of the research.
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FINDINGS AND
ANALYSIS
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FINDINGS AND ANALYSIS
The main objective of this study is to analyse the role of performance appraisal and system
implementation in TATA Steel. Since the research is empirical in nature thats why following
aspects of various organization structure and design of the company have been covered.
ORGANIZATION STRUCTURE AND DESIGN
TATA STEEL
TATA STEEL is a young, dynamic organization and is going strong on the stock market.
1- The company is well aware of the dynamic environment of software, it is operating and
in order to keep it with the pace of the environment it believes in constant up gradation of
courses. Organization structure and design of the company is such that it supports this
change.
2- Tata steel has a matrix kind of a structure wherein it takes the form of combination of
structures. Matrix structures are adopted became there is more than one factor around
which the structure can be built.
3- This matrix structure at tata steel ltd. improves the quality of decision-making where
interest conflicts arise and direct contacts replaces bureaucracy
4- . This increases the motivation of the managers and development of wider involvement in
strategies. Although at times the company faces high risk of dilution of priorities became
e people do not know who is responsible for what.
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5- An organization is a network of authority, responsibility and relationships. Different
organization structure consists of different type of relationships.
Performance Appraisal at Tata Steel
While on the job, performance reviews of every employee are done every quarter. The reviews
are done with a view to helping the individual excel at his/her workplace. In case there are any
training requirements, these are noted and acted upon in the coming quarter. Also, the goals and
objectives for the employee are re-visited for
The performance appraisal mechanism is carried out at Tata steel for promotional purposes.
These are done so as to motivate the employee and improve his performance level. The method
is as follows:
a) Establishment of performance standards with the employees
b) The goals are set mutually as per measurable standards.
c) The actual performance is hence measured.
d) After measuring of the actual performance, the same is compared with the standards set
e) The appraisal is then discussed with the employees.
f) And finally, if need arises corrective action is initiated. For this purpose the corrective
action is actually identified through brainstorming exercises initiated by the departmental
heads at all the Tata Steel. It is then measured as a tool to evaluate the past performances
of the employees.
Some of the methods used at Tata Steel are:
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1. Key Performance Index
2. 360 Degree Feedback
3. Paired Comparisons
4. Behaviorally Anchored Rating Scale
1. KPI-Key Performance Index
It is based on the performance level of the employee generally classified on the basis of:
Targets achieved
Ratings through students feedback forms
Punctuality and regularity
Day to day performance
This is given after every module at the centers.
Thus we can observe that the appraisal system is not a biased one but based on performance and
productivity basis. All the respective heads of the employee together with the senior persons at
the center brainstorm and then give the promotion.
2. 360 Degree Feedback
This feedback system involves the participation of:
Coworkers 40%
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Subordinates - 20%
Superior - 40%
Thus the feedback given by these members at Tata Steel is considered under a holistic view and
then the employee is given a performance appraisal. This evaluation method involves 40%
feedback from the coworkers which says that the employee should not only maintain good
rapport with the senior or junior but majorly with the coworkers also.
3. Paired Comparisons
The evaluator compares all possible pairs of subordinates on their overall ability to do the job.
Due to the subjectivity of evaluating overall performance some managers me e a number of
different job related dimensions when comparing.
4. Behaviorally Anchored Rating Scale (BARS)
It is a sophisticated method of evaluating the employee based on the employee behavior. It is a
numerical scale that is anchored by the seniors of the organization at various centers. This is
highly confidential and the information is sent in sealed envelopes and opened only at the time of
the final evaluation. There is no further discussion regarding this scaling, thus it is not given
enough weightage.
Key Observations at TATA STEEL
In the present performance appraisal system of TATA STEEL we found the following
loop holes: If the appraisee has good terms with the reviewing officer and does not have a
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smooth relationship with the reporting officer, in such case the reporting officer is sometimes
forced by the reviewing officer to give better score to the appraisee.
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In this section, basic data of Tata Steel is presented on various attributes of performance
appraisal.
Frequency and frequency percent scores was computed for the company and thus it enlighten the
following points:-
Promotions were and known to most of the top and senior management while middle and
lower management were a bit not clear about it. This could be attributed to the fact that
senior and top management were more involved in decision making and policy
formulation than are the middle and lower management.
At the lower levels of the organization, performance can be quantified, and the managers
are made accountable at the higher echelons the tasks are too complex and therefore
cannot be assessed on the basis of quantified performance
Most of the managers feel that the mechanism for potential appraisal is not adequate.
The company believed that self appraisal is the best for managers and above.
To improve interpersonal communication and behavior assessment by peers and
subordinates is essential.
The performance of the employees is not regularly monitor and the required feedback is
provided to the subordinates from time to time. The appraisals are conducted at fixed
intervals. The company believes in using appraisal for rewarding and increments.
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It would not be wrong to say that interpersonal relations and personal biases (i.e. liking
and disliking) influence the appraisals in the company
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CONCLUSION
CONCLUSIONS
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1. Company proves that a major amount of work towards developing an effective and
efficient performance appraisal system has not been accomplished to the fullest.
2. It seems company is genuinely interested in improving the efficiency and utility of
performance appraisal system to succeed in todays dynamic environment;
3. Systems of innovative HRM practices have large effects on production workers'
performance, while changes in individual employment practices have little or no effect.
Outward Orientation Performance Appraisal System
The appraisal system should be more sensitive and responsive to current competitive
environment. This is possible through making the company :
Quality conscious in products and services to match international standards.
Customer oriented (internally as well as externally)
Cost effective
Technology oriented
Focused towards collaboration and teamwork
People oriented
Focused towards performance standards
Focused towards values and culture that would help unbottle hidden talent.
In achieving the above, the PA system have a catalytic role to play.
PERIODIC PERFORMANCE REVIEW AND PLANNING:
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There should be some aspect in the PA forms, which deals with the effect of Internal Influences,
organizational influences and external influences on performance of employee to make the PA
system more sensitive to changes.
Increase awareness of company goals in order to integrate company and individual
expectations.
Conducting training workshops for appraisers to remove biases and errors in appraisal.
Increasing transparency and open communication and minimizing confidentiality in
performance review discussions.
The work done towards modifying and developing performance appraisal systems, time to time
should be continued.
Integrating TQM into Performance Appraisal
Individual rewards should be declined with the PA system. The focus should shift to team
rewards. To recognize individual excellence, the team rewards. To recognize individual
excellence, the team should recommend rewards to tone up motivation levels in the entire
team.
Continuous feedback and transparency in every system
Focus on customer delight, both internal and external
Linkage with Rewards
Good performers should be recognized and rewarded, whereas weak performers need to be
encouraged to become better performers. PA systems when liked with individual rewards and
promotions create more problems than they help in motivating people. They encourage fewer
employees and discourage more. They do not develop the team spirit but rather enhance
interpersonal comparisons and power politics. The focus should be shifted from rewarding the
performance of few to development of performance of many.
However there is also a need for recognition and rewarding good work. Alternative systems of
rewarding with multiple reward/recognition mechanism are needed. But these systems should be
separated from other systems (like career planning).
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Role of HRD
HRD should develop relevant competencies and work through empowering the line
managers.
Development of subordinates and teams should be key function of line managers.
HRD should facilitate the development of behavioral, managerial and technical (multi
functional) competencies in line managers.
Role analysis should find a place in the company. Role directories should be published withkey functions for each role.
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IMPLICATION OF THE PROJECT
In a simple way performance appraisal is meant to be an exercise to value an estimate what a
person has done and how has he done. The nature of Performance appraisal and its effectiveness
depends a great deal on how human resources in the industry are viewed and treated. People are
to be treated as resources of the industry. Unlike the other resources, the human resources have
the capability of expanding to unlimited extents with proper investment in human capabilities.
Therefore, an organization interested in developing the capabilities of its employees, should
understand the nature and capabilities required to perform different functions as well as the
dynamics underlying the development of these capabilities in an organizational content.
These capabilities can be considered to fall under four categories. They are:-
(i) Technical capabilities
(ii) Managerial capabilities
(iii) Behavioral (human) capabilities
(iv) Conceptual capabilities
The extents to which the various capabilities are required for the performance of the job differ
from level to level in the organizational hierarchy.
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SUSSESTIONSAND
RECOMMENDATIONS
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RECOMMENDATIONS
1. The economic indicators are all favorable for Growth, temporally slump is ephemeral.
2. Company exudes optimism, thus, more stress relieving packages should be offered to the
mentally stressed staff.
3. Investment in infrastructure is crucial to step up demand for steel , therefore, in this
respect the HR Dept should attempt to obtain the maximum agreement of Managers in
respect of needs and objectives and purpose of the systems.
4. New technologies to use indigenous natural resources would have to be developed
thorough expert person performing their roles efficiently in personnel management.
5. Company should try to avoid employee resistance, which is associated with change
worlds true change follows instance. This for all kinds of systems be it Performance
Appraisal.
6. Overtime should be taken care of at time of performance appraisal, which would motivate
the employees to perform better for longer hours.
7. Performance appraisal should be after at proper span of time.
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LIMITATIONS
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LIMITATIONS
The project report carries with it few limitations, on which the accuracy of the text written will
depend. This study is cross-sectional and data were collected over two time periods but are still
perceptive. Cross-sectional data might create problems with respect to causality.
The first and foremost limitation is regarding the sources of information. The information
contained has been obtained from sources believed to be reliable and in good faith, but
which may not be verified independently.
Using several statistical tools derives the estimates. Hence the findings obviously carry
all the limitations of the statistical tools used.
Same sets of data from different sources are different. Since not all the data are available
from a single source, an attempt has been made to standardize the data wherever required,
which is essential to maintain uniformity through out the project.
The data set is restricted to observations on one very specific type of manufacturing
production process. This narrow focus eliminates many sources of heterogeneity that
confound productivity comparisons in more aggregate data and in more heterogeneous
samples.
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Finally, this study did not find evidence of the configuration argument and did not test the
contingency argument, but could find evidence in the universalistic or the best practice
perspective. One way of explaining this might be that due to the turbulent and hyper-competitive
environment, firms are primarily supportive of innovative, adaptive nature of high-involvement
work systems. In other words, there may be some restriction in range with regard to
organizational environments that somehow undercut this studys ability to provide a full test of
the contingency perspective.
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BIBLIOGRAPHY
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BOOK
1. Kothari,C.R.,Methods and Techniques,New Delhi,New Age International Pvt, Ltd., 2005
WEBSITES
1. www.google.com
2. www.wikipedia.org
3. www.sail india.co.in
4. www.performance-appraisal.com/intro.html
5. www.tata.com
JOURNALS
1. A New Framework for Selection of the Best Performance Appraisal Method
2. Function of performance appraisal in career development
3. Innovative human resource management and corporate performance in the context of
economic liberalization in India.
4. The Effects of Human Resource Management Practices on Productivity: A Study of Steel
Finishing Lines
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