SUMMER INTERNSHIP PROJECT

ON
PERFORMANCE APPRAISAL
EFFECTIVENESS
IN
HINDALCO FLAT ROLLED PRODUCT,
HIRAKUD

UNDER GUIDANCE OF:- SUBMITTED BY:-

MR. MRINAL SHANKAR SAHISHTA NAUSHAD

HINDALCO INDUSTRIES LIMITED ROLL NO-1416MBA52

FRP, HIRAKUD SAMBALPUR UNIVERSITY

BURLA

1
 ACKNOWLEDGEMENT
I would specially like to thanks Mr. Amit Sar (HR Head), Mr. Mrinal Shankar
(Section Head) of HINDALCO Industries Limited, FRP Plant, Hirakud,
Sambalpur, Odisha (Hirakud) for their time and knowledge and all the members
of HINDALCO for providing the relevant information. My special thanks to HR
section head Mr. Mrinal Shankar, for guiding me throughout the training period.

I am indebted to all those who have been helpful throughout the process of
writing this report but as the cliché goes, I am solely responsible for any errors or
facts or judgment.

It is great pleasure to express my heart & warm feeling and deepest thanks of
gratitude to Dr. Tushar Kanti Das , Reader, Department of Business
Administration, Sambalpur University, JyotiVihar, Burla, Sambalpur, for his tire
less efforts, keen interest and above all his through guidance in performing the
project work on ‘’PERFORMANCE APPRAISAL EFFECTIVENESS ” in
HINDALCO FRP’’.

Also, I am thankful to all other professors, readers and lectures of department for
their kind help rendered to me..

I am also grateful to all other officers and employees HINDALCO FRP for their
supportive response.

Thanks Everyone

Place-

Date- Signature:

2
 DECLARATION

I,Sahishta Naushad, declare that this piece of summer training report entitled
“PERFORMANCE APPRAISAL SATISFACTION AND EFFECTIVENESS in
HINDALCO” at HINDALCO FLAT ROLLED PRODUCT; BURLA submitted
by me is my own. It has never been submitted to any other institution or
university and has not been published before.

I hereby that, this report will fulfill the need of understudy training program, I has
undergone.

PLACE- SAHISHTA NAUSHAD

DATE- ROLLNO-1416MBA52

CONTENT
3
TOPIC
S
PAGE
NO.
1. ACKNOWLEDGMENT 2

2. DECLARATION 3

3. PREFACE 5

4. CHAPTER 1- 6-
21
-ABSTRACT 7
-INTRODUCTION 7
-REVIEW OF LITRETATURE 9
-OBJECTIVE OF THE STUDY 19
-RESEARCH METHODOLOGY 20
-LIMITATION OF THE STUDY 21

5. CHAPTER 2- 22-
39
-PERFORMANCE APPRAISAL 23
-BELL CURVE 35

6. COMPANY PROFILE
40-64

7. DATA ANALYSIS AND INTERPRETATION

65-85
-CHI SQUARE TEST 83

8. CONCLUSION 86

9. ANNUXE
87-89

10. BIBLOGRAPHY
90

4
 PREFACE

Managing human resources in today’s dynamic environment is becoming more

and more complex as well as important. Recognition of people as a valuable
resource in the organization has led to increases trends in employee maintenance,
job security, etc

My research project deals with “Performance Appraisal as carried out at

HINDALCO Flat Rolled Product. In this report, I have studied and evaluated the
performance appraisal satisfaction and its effectiveness in the company.

The first section of my report deals with the introduction of the report, literature
review, purpose of study, methodology used, and its limitation.

The second section deals with performance appraisal. In this section, I have given
a brief conceptual explanation to performance appraisal. It contains the definition,
process and significance of performance appraisal.

The third section of my report deals with a detailed company profile. It includes
the company’s history: its activities and operations, organizational structure, etc.
this section attempts to give detailed information about the company and the
nature of its functioning.

In the fourth section of my report, I have conducted a research study on

satisfaction and effectiveness of performance appraisal at HINDALCO FRP.; this
section also contains my findings, conclusions, suggestions and feedback.

The fifth and final section of this report consists of extra information that I related
to the main contents of the report. These annexure include some graphs and
diagrams relating to the company, graphs relating to the research study and
important documents upon which the project is based.

5
CHAPTER 1

6
 INTRODUCTION
. Human Resource (or personnel) management, in the sense of getting things
done through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division to
provide an expert service dedicated to ensuring that the human resource function
is performed efficiently.

In the business world investment is made in machinery, equipment and services.

Quitenaturally time and money is spent ensuring that they provide what their
suppliers claim. Inother words the performance is constantly appraised against the
results expected..When it comes to one of the most expensive resources
companies invest in, namely people the job appraising performance against results
is often carried out with the same objectivity.Each individual has a role to play
and management has to ensure that the individual’sobjectives translate into
overall corporate objectives of the company.PerformanceManagement includes
the performance appraisal process which in turn helps identifying thetraining
needs and provides a direction for career and succession planning.

“People are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet ,the reality for many organizations
are that their people remain undervalued, under trained and underutilized.

Performance Appraisal is the process of assessing the performance and progress

of an employee or a group of employees on a given job and his / their potential for
future development. It consists of all formal procedures used in the working
organizations to evaluate personalities, contributions and potentials of employees.

Performance appraisal means to evaluate the performance of employees that they

are performing their jobs up to the standard of the organizations or not. To
evaluate the performance of employees it is very important to establish a proper
performance appraisal system in the organization and to give the training to the

7
managers of the organization to appraise the performance of employees correctly.
This is a broad topic for research and many researchpers have done their
researches on performance appraisal to improve the performance appraisal system
of organization. In some organizations management has implemented poor system
of appraisal in these articles authors have discussed that the have found the
negative attitude of employees towards performance appraisal. The main purpose
of this project was to explore the appraisal system in work place and identifying
the importance of appraise and appraiser role to form a positive and effective
system. In these articles they have worked on to give the knowledge to healthcare
professionals about difficulties of implanting an appraisal system, including the
lack of guidelines on skills and knowledge required. Researchers have used DEA
data envelope analysis as a fair evaluating and sorting tool to support appraisal
system. This study supports the ideas that rating formats need reexamination with
a focus on computer based models as an alternative to traditional rating methods.
Another method has already been used (AHP) analytic hierarchy process to
evaluate the performance of employees based on the criteria. Quantity/quality of
thework,planning/organization,initiative/commitment,teamwork/cooperation,
communication and external factors. All these criteria have been divided into
three sub criteria to evaluate the employee.

8
 REVIEW OF LITERATURE
T. R. Manoharan (2002) has written In this article authors have discussed that
they have noticed that in many organizations appraisal systems are: (a) not
relevant to organizational objectives, (b) subject to personal bias, and (c) are often
influenced more heavily by personality than by performance. To eliminate these
negative things there is a attempt with a computer based tool called Data
Envelopment Analysis (DEA) which is used in the working place to evaluate the
performance of employees. Sample size is 23 employees. A DEA study provides
the following four properties (Paradi, Smith &Schaffnit-Chatterjee 2002).

A piecewise linear empirical envelopment surface to represent the best practice

frontier, consisting of units which exhibit the highest attainable outputs in relation
to all other in the population, for their given level of inputs

An efficiency metric to represent the maximal performance measure for each

DMU(Decision Making Units) measured by its distance to the frontier

Specific targets or efficient projections onto the frontier for each inefficient DMU

An efficient reference set or peer group for each DMU defined by the efficient
units closest to the DMU

Here regression analysis is used and correlation has been checked in between
these factors of DEA data set: Job knowledge, customer relation, work habit,
interpersonal relations, quality and quantity. Through this analysis they have
measured the efficiency and productivity of each employee.

9
Rafikul Islam(July 8-10, 2005) has discussed In this article scholars have
discussed that to evaluate the performance of organization that it is meeting its
goals or not, it is important to evaluate the performance of employees of the
organization and for this evaluation effective performance appraisal system
should be maintained. They have mentioned two main objectives of this study
first is to give rewards to those employees who have performed good in achieving
organizational goals and second is to identify those objectives which are not met
and make an action plan to ensure that they will achieved in future. In this paper
AHP (analytic hierarchy process) to evaluate employee performance. The criteria
is used for appraisal is: quantity/quality of the work, planning/organization,
initiative/commitment, teamwork/cooperation, communication and external
factors. Their sample size is 294 employees. There are many advantages of using
AHP i:e AHP can compare two decision elements at a time, it is easy and simple
to use, it can easily accommodate multiple decision makers to solve any specific
problem.

AHP can easily accommodate multiple decision makers to solve a particular

problem

AHP compares two decision elements (criteria/alternatives) at a time.

AHP is simple and easy to apply.

Graeme Redshaw (2008) has written in this article is about to improve the
performance appraisal system of nurses in organization. Author distributed
questionnaire to 8 nurses to know about the performance appraisal system of the
organization. 7 nurses were nervous before the appraisal and 1 was confident after
the appraisal all nurses were agreed with the outcomes of appraisal. If the
successful appraisal system is established so there will be clear aims and
objectives, and will be able to implement fairly. Proper training will be provided
to the managers to appraise the staff correctly.

Diane Shaffer(May 11, 2009) has written in his article writer has discussed that
motivation and performance appraisal are interrelated. Motivation is dependent on

10
performance management. Employees who are motivated and happy with their
jobs want to stay connected with the company for a long time. Many
organizations have not implemented correct performance appraisal system to
evaluate the performance of employees. Author has discussed here that they
should implement a successful appraisal method/system and also give reward to
employees who perform good in the organization. Through this practice employee
become motivated towards their jobs and improve their performance and
performance of organization as a whole will also improve.

Almuth McDowall (2009)has discussed in his article that due to the high level of
competition training and development has become very important. It’s an era of
globalization so it is playing a key role for the organization to get competitive
advantage. While selection of activities including coaching, 360 degree appraisal
and development centers (DCs) are become linked to development. In this article
360 degree appraisal has been discussed that it is very important to give the
feedback to the employees about their performances. Positive feedback motivates
the employees and they become more willing to work for further development
programs. The authors examine different development activities with the aim
being to provide a framework with which to assess each on effectiveness. They
compare the processes incorporating a range of significant factors and highlight
several important implications that arise for any aim to meet organizations.

Donald L. Caruth (2009)has discussed that the purpose of this paper is to

demonstrate the need for and propose a more aligned and integrated standard for
performance evaluation to enhance effective strategic control. The paper reviews
the various issues creating discontent with the performance appraisal systems
within many organizations and demonstrates how these problems inhibit
successful strategic control. It attempts to cogently incorporate the performance
appraisal characteristics needed for the exercise to function as a critical
organizational control metric and a useful feedback mechanism for strategic
management of the firm. The paper finds that, whereas performance evaluation
has received reasonably robust examination in the human resources literature,

11
explicit guidance toward the integration with strategic control is inadequate.
Without consistent alignment between these functions, however, performance
appraisal becomes an exercise in futility instead of a vital control measurement,
often resulting in not only personnel dissatisfaction, but also, more importantly,
an impediment to systematic strategy implementation.

H.C. Shiva Prasad(2010) in this research paper authers have done work to dheck
the performance of indian software professionals (SPs) Data were collected from
441 software and senior software engineers from eight Indian software firms. The
team leaders assessed the performance of software and senior software engineers
on 16 items. The exploratory and confirmatory factor analyses of scores on 16
items of the instrument suggest six dimensions of performance. They are work-
efficiency, personal resourcefulness, inter- and intra-personal sensitivity,
productivity orientation, timeliness, and business intelligence. The dimensions
have reliability and high convergent validity. SPs having more years of
experience, higher need for achievement, and higher need for social power are
high performers. Human resource managers can evaluate the performance of SPs
holistically on six dimensions for training, reward administration, job rotation,
and promotion decisions.

Performance Appraisal (PA) usually involves ―evaluating performance based on

the judgments and opinions of subordinates, peers, supervisors, other managers
and even workers themselves (Jackson & Schuler, 2003). Generally an appraisal,
performance review or a career development discussion is a method by which the
job performance of an employee is evaluated in terms of quality/quantity/
cost/time. The system of performance appraisals as regular reviews of employee
performance within organizations is being widely adopted. As a process,
performance appraisal is seen as a key contributor to successful human resource
management, as it is strongly related to organizational performance. (Erdogan,
2002).

According to Lardy and Robbins (1994), PA as a process of enhancing human

performance has attracted the attention of both academics and practitioners.
Historically information from performance appraisal has been used as a basis for

12
administrative decisions (Boleman et al, 2009). Several service institutions are
using a performance appraisal system that was developed at a time when
organizations were typically large and hierarchically arranged, as organizational
environments were relatively stable, when employees were homogeneous and
relatively well qualified and when long term employment was the norm.

Cleveland, Murphy, 1995, performance appraisal can be perceived, described and

implemented in different ways in organizations. With Performance Appraisals in
groups, the group is known to push each member to perform at his or her highest
level and thus members may be heavily motivated to participate in Performance
Appraisals. Research has shown that the Performance Appraisal must have a
positive purpose and employees must be participants in the Performance
Appraisal if they are to improve their job performance. (Vasset et al, 2012)

Job satisfaction is known to emerge from a variety of factors, including

characteristics of the organizational environment, specific features of the job,
human resource practices, PA and the personal characteristics of the employee.
Job satisfaction has been widely researched by the terms of its determinants, and
its predictive power. Important and recurring questions in organizational science
are why employees perform well in their jobs and why they are satisfied with their
jobs. Research suggests that employees’ job satisfaction depend on their goal
orientations. (Farr, Hoftmann and Renginbach, 1993).

Performance oriented individuals tend to believe that working hard does not lead
to performance improvement. In their view, working hard indicates low
competence, and those who perform poorly do not have the attributes necessary to
do well in their jobs. (Dweck, 1999). Job performance is a broad and complex
construct comprising two fundamentally different aspects, namely, in role job
performance mandated by an organization and more spontaneous innovative work
behaviors. (Katz, 1964).In role job performance can be defined as actions
specified and required by an employees’ job description and thus, mandated,
appraised and rewarded by an employing organization.

A performance goal reflects the desire to demonstrate superior competence to

others. As such, employees with performance orientation tend toperceive in role
job requirements as competitive standards that motivate them to exert effort in

13
order to outperform others and to obtain favorable competency judgments from
their organization’s appraisal and reward systems. Researchers have noted that
job satisfaction is directly related to employee turnover, retention rates,
absenteeism and indirectly to job performance and productivity. (Shore, Newton
et al, 1990). Higher job satisfaction has been linked with employees who are able
to exercise autonomy (Sekharan, 1989) and with those who have a higher level of
job involvement. The relationship between job satisfaction and job performance
has been the concern of many studies. Job satisfaction refers to the employee’s
pleasurable or positive emotional state as a result of appraisal of one’s job and job
experience. (Bartlett&Keng, 2004, Schmidt, 2007). For the long term
effectiveness of the organizational system employees’ satisfactory perceptions
towards PAs are important. (Largenecker&Nykodym ,1996). If employees are not
satisfied with PAs, they will not see the added value. (Beaty, 1984). Some other
studies suggested that appraisal satisfaction is a key factor leading to job
satisfaction. ( Murphy and Cleveland, 1995).Performance Appraisal satisfaction
deals with such issues as employees evaluating timeliness, accuracy, goal setting
procedures and feedback mechanisms. (Dobbins, Candy and Plat-Vieno, 1990).
Addressing the concern of the use a Performance Appraisal, Longenekar, Sims
and Gioiasummaries as ―the main concern is how best to use the appraisal
process to motivate and reward subordinates (1987, p 191).It is assumed that the
PA process involves a series of behaviors during which the appraiser observes,
stores and when necessary, recalls and integrates appraisebehavior. (Wexley,
Klimoxi, 1984).

Current PA practices tend to work better in terms of affective and behavior

outcome i.e people are more satisfied with PA events and PA behaviors are more
positive and functional when the job of the person being appraised has well
specified duties and priorities (Reznick and Mehrman, 1981)

The relationship between performance appraisal and satisfaction and work

performance was both mediated and moderated by employees’ intrinsic work
motivation.Performance appraisal is a disputed management practice. With so
much controversy in it, appraisal is continually used in the public sector around
the world as an instrument to oversee the performance of its personnel (Vallance,
1999).

14
 In spite of the controversy, performance appraisal remains to be a standard
practice in the public sector for the reason that personnel agencies find it useful in
advocating public accountability. Public sector organization may be considered as
a business relying on its human resources. The quality of its human resources as a
business determines the existence and buildup of the organization (Tyson, 2006).

Authors have contended that, to have an effective human resource system for
organizations the use of an appraisal system which is reliable and accurate is
needed (Armstrong, 2003; Bohlander&Snell, 2004; Desler, 2008).

Thus, performance appraisal is needed for a more responsive way of

evaluating the quality employees. An emphasis on an appraisal system that
effectively examines and evaluates work behavior of its employee in relation to
the standards set by organization, proper documentation of the results of the
evaluation, and using it for feedback purposes is a must to have an effective
human resource system for organizations, especially with the public sector. .

Authors Murphy and Cleveland (1991) and Cardy and Dobbins (1994) came
up with the traditional definition of performance appraisal as a formal process of
employee monitoring.

In the present paper, the term performance appraisal is defined as the

systematic evaluation of the performance of employees and the understanding of
the abilities of a person for further growth and development. The term
performance appraisal have been described in other terms such as, performance
management‘, performance evaluation‘, performance review‘, and performance
assessment‘. The meaning of the term performance appraisal‘ is universally
understood compared to the other terms abovementioned, though the other terms
have their own individual meanings on a variety of settings (Vallance, 1999).

DeNisi (2000) defines performance appraisal as ―the systems whereby an

organization assign some ―score‖ to indicate the level of performance of a target
person or group‘.

Fletcher (2001) defines performance appraisal more broadly as activities

through which organizations seek to assess employees and develop their
competence, enhance performance and distribute rewards‘. The focus was on

15
performance ratings and other limited and measured-focused issues, but more
recently has broadened and currently addressed social and motivational aspects of
appraisal. Fletcher‘s definition reflects this shift in focus.

Mondy et al. (2002) defines performance appraisal as a system of review and

evaluation of an individual‘s (or team) performance and the process of appraising
performance (who appraises and how is it done) within organizations. The
emphasis on the organizations signals a further evolution in the nature of
performance appraisal.

Jackson and Schuler (2003) describes it as evaluating performance based on

the judgments and opinions of subordinates, peers, supervisor, other managers
and even workers themselves, while, Bohlander and Snell (2007) sees
performance appraisal as an annual regular undertaking developed to assist
employees in understanding their roles, objectives, expectations and performance
success conducted by a supervisor to a subordinate.

Along the same line, Desler (2008) gives meaning to performance appraisal
as any procedure that involves setting of work standards, assessing the
employees‘ actual performance relative to those standards, and providing
feedback to employees with the aim of motivating him or her to eliminate
performance deficiencies or to continue to perform above average.

Vance (2006) explains that performance appraisal is intended to engage,

align, and coalesce individual and group effort to continually improve overall
organizational mission accomplishment. He stated that, it provides a basis for
identifying and correcting disparities in performance. Thus, it is according to him,
performance appraisal is activities oriented. He added that it also may provide the
basis for other personnel actions which typically include:

(1) performance pay

(2) training and career development

(3) promotion and placement

(4) recognition and rewards

(5) disciplinary actions

16
(6) identifying selection criteria.

Its success depends primarily on the

(1) system and measures (criteria)

(2) culture

(3) the perceived attitudes and needs of participants— i.e., their degree of
―engagement‖ with their jobs.

Abu-Doleh and Weir (2007) describes performance appraisal or performance

evaluation as a systematic and periodic process that assesses an individual
employee‘s job performance and productivity in relation to certain pre-established
criteria and organizational objectives.

Without question, authors are of the same opinion that performance appraisal
is a process of evaluating the performance of an individual (Bohlander& Snell,
2007; Cardy& Dobbins, 1994; Desler, 2008; Murphy & Cleveland, 1991;
Vallance, 1999).

Performance appraisal system pertains to the whole process and procedures

governing the performance appraisal in the entire organization as well (Jawahar,
2007). It is the primary human resource management function of an organization
(Dulebohn&Ferris, 1999). The significance of performance appraisal in an
organization is upheld by organizational researchers, for instance, (Bohlander&
Snell, 2007; Desler, 2008; GomezMejia, et al., 2010).

A distinction between a good and a poor performer at work is necessary for

an organization to run effectively (Ilgen& Feldman, 1983). According to Muczyk
and Gable (1987) the high degree of success or failure of any organization
depends on how performance is managed within it. It would be impossible for an
organization to achieve its goals, for instance, giving best employees a sizable pay
increase, spot individuals ready for promotion, justifiable grounds for termination
of poor performer, and undertaking successful human resource planning, if
managers do not give prime concern to make better the performance appraisal of
the organization. As to date, it is argued that every performance appraisal system

17
created by organizations contains deficiencies hindering it from successfully
attaining its goals in the organization.

An effective performance appraisal requires considerable time and effort of

managers and gathering of information and receiving employees feedback. Some
managers do not take the task seriously or do not have the skills needed to do a
good job of evaluating performance and providing feedback (Gomez-Mejia,
Balkin, &Cardy, 2010). For instance, some employees do not calmly accept the
feedback, and others may become frustrated with an ineffective performance
appraisal system and end-up believing that the system is unfair and does not
matter (Jackson & Schuler, 2006).

The main aim of performance appraisal system is evaluating personnel fairly.

But, because people operate these systems, total objectiveness cannot be
guaranteed. Many managers fail to comply with these systems in the organization
and employees perceive that their managers are not concerned about them and do
not appreciate their work. Perceptions are affected by the object being perceived.
One of the basic characteristics of human perception is selective organization.
Perception is selective or in other words, only some of the characteristics of an
object or event affect a given individual while others are ignored or are of no
effect (Reitz, 1977). Perceptions are organized in that individual stimuli are
perceived to be related to each other in recognizable or familiar pattern.
Youngcourt et al., (2007) contends that employees‘ perception about their
performance appraisal system forms part of a larger examination of the
effectiveness of the appraisal system of the organization.

In a study about employees‘ perception of a PAS, finding shows that the

perception is affected by subjectivity and influenced by some major errors. It
shows that the results have a serious managerial implication for training,
motivation and provision of resources for effective performance appraisal
(Boachie-Mensah and Seidu, 2012).

Along the same line, a study on the perceptions of civil servants regarding
various purposes of the performance appraisal system in the two public sector
departments in Pakistan obtained variety of results with regards to performance

18
appraisal‘s purpose. Respondents from the civil service had diverse responses as
to their performance appraisal system. The study found out that there is high
degree of perception from the civil servants that the performance appraisal system
of the organization is not used to record their performance accurately (Ikramullah,
Shah, Khan, ul Hassan, and Zaman‘s, 2012).

The finding of the study showed that, respondents who were civil service
employees were not fully aware of the purpose by which performance appraisal is
conducted in their organization, except that there is a high response when asked
about appraisal‘s purpose of supporting promotion of employees. Moreover, the
civil servants perception about the role of the performance appraisal system is not
clear, particularly with their performance feedback and appraisal rating feedback.
Additionally, the performance evaluation reports were not prepared regularly at
the end of each year to record employees‘ performance; therefore, the discrepancy
ultimately affects promotion discussions of civil servants (Ikramullah, et al.,
2012).

OBJECTIVE OF THE STUDY:

The objective or purpose of this study is-

 To know the performance appraisal process in HINDALCO FRP.

 What is employee perception regarding the process.
 Whether the performance appraisal is effective.
 What they mostly expect from it.
 What are their suggestions for improvement .
 Find out relation between

19
 RESEARCH METHODOLOGY:
Research is a scientific inquiry. It is a process leading to the discovery of facts,
how they are related what causes them and how. A scientific inquires leads to
growth of knowledge.

Methodology has an important bearing on the collection of reliable and pertinent

information as well as on the outcome of the study. The categorization of
proposed investigation into a certain type of research, a corresponding method or
methods designed for it and appropriate techniques for collecting and analyzing
data are together known as methodology of research.

Research design is a complete outline of the conduct of the proposed research

study. It is a comprehensive statement on the problem and scope of the study the
purpose of undertaking it, the population and location to be covered for collecting
information, the hypothesis formulated for the study and finally the methodology
to be employed. The methodology adopted in conducting this study is discussed
next.

QUESTIONNAIRE:
The data collected through questionnaire becomes primary data, which is used to
test hypothesis. The structured questionnaire consisted of close ended objective
question.

SECONADRY DATA:

Secondary data in the organization was collected from various secondary sources
like records, files, Journals documents and website of the organization.

INTERVIEW-

Unstructured Interview was conducted to get certain information about the

organization from some employees.

20
 LIMITATION OF THE STUDY

 Non willingness of the employee to fill up the form honestly.

 Non availability of the employee due to their shifts.
 The busy schedule of the employees was an obstacle in gathering
the required information. 

21
CHAPTER 2

22
 PERFORMANCE APPRAISAL
Performance appraisal is the process of obtaining, analyzing and recording
information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of the
employee and also the future potential of the employee. Its aim is to measure what
an employee does.It is a powerful tool to calibrate, refine and reward the
performance of the employee. It helps to analyze his achievements and evaluate
his contribution towards the achievements of the overall organizational goals.By
focusing the attention on performance, performance appraisal goes to the heart of
personnel management and reflects the management’s interest in the progress of
the employees. People differ in their abilities and their aptitudes. There is always
some difference between the quality and quantity of the same work on the same
job being done by twodifferent people. Therefore, performance management and
performance appraisal is necessary to understand each employee’s abilities,
competencies and relative merit and worth for the organization. Performance
appraisal rates the employees in terms of their performance. Performance
appraisal takes into account the past performance of the employees and focuses on
the improvement of the future performance of the employees.

The performance appraisal is the process of assessing employee performance by

way of comparing present performance with already established standards which
have been already communicated to employees, subsequently providing feedback
to employees about their performance level for the purpose of improving their
performance as needed by the organization.

As said above the very purpose of performance uprising is to know performance

of employee, subsequently to decide whether training is needed to particular
employee or to give promotion with additional pay hike. performance appraisal is
the tool for determining whether employee is to be promoted, demoted or sacked (
remove ) in case of very poor performance and no scope for improvement.

Every corporate sector uses performance appraisal as a tool for knowing about the
employee and take decisions about particular employee. for the purpose of
performance appraisal of employees there are different methods under the

23
category of traditional methods and modern methods which are discussed in
following chapters.

EMPLOYEE PERFORMANCE
If employee performance is found to be less than the expected level of
performancethen this must be investigated and, if appropriate, a formal appraisal
should be carried out including 360-degree feedback. The root causes of
performance must be identified as these will determine future actions. Root causes
for less than expected performance may include:

Personal issues that are impacting performance such as bereavement, close family
member sickness, financial or relationship worries

Workplace issues that are impacting performance such as helping other colleagues
to meet their objectives before own objectives, issues with the work environment
such as an excessively noisy office or frequent interruptions

Overloaded with too many objectives or conflicting priorities, especially in a

matrix management environment

Team issues such as working relationship with other team members, dependencies
on others to complete their objectives first, access to needed tools, experts or
third- party suppliers

Employee development issues such as lack of training, experience or expertise to

complete the required objective, or lack of people skills to work and deal
effectively with others in the situations the employee is in

OBJECTIVES OF PERFORMANCE APPRAISAL:

• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance.

• To help the management in exercising organizational control.

24
• Helps to strengthen the relationship and communication between superior –
subordinates and management – employees.

• To diagnose the strengths and weaknesses of the individuals so as to

identify the training and development needs of the future.

• To provide feedback to the employees regarding their past performance.

• Provide information to assist in the other personal decisions in the

organization.

• Provide clarity of the expectations and responsibilities of the functions to

be performed by the employees.

• To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees. If employee development is

required for performance improvement then solving these performance problems
should be straightforward with a clear understanding of root causes. Possible
approaches include changing the work environment, better prioritization of
conflicting priorities, time off, additional training, shadow or buddy system,
mentoring or coaching, changing team environment or set objectives and so on.

Understanding Performance Management

What is Performance?

Performance is synonymous with behavior; it is what people actually do.

Performance includes those actions that are relevant to the organizational growth
and can be measured in terms of each individual’s proficiency (level of
contribution). Effectiveness Performance.

Performance Appraisal is defined as the process of assessing the performance and

progress of an employee or a group of employees on a given job and his / their
potential for future development. It consists of all formal procedures used in
working organizations and potential of employees. According to Flippo,
“Performance Appraisal is the systematic, periodic and an important rating of an

25
employee’s excellence in matters pertaining to his present job and his potential for
a better job.”

What is Appraisal?

Appraisals are judgments of the characteristics, traits and performance of others.

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

Performance Appraisal thus is a systematic and objective way of judging the

relative worth of ability of an employee in performing his task. Performance
appraisal helps to identify those who are performing their assigned tasks well and
those who are not and the reasons for such performance.

Definitions:

Performance appraisal has been defined by different scholars in various ways.

Some of the important definitions are as follows:

Dale S. Beach, "Performance appraisal is systematic evaluation of the individual

with respect to his or her performance on the job and his or her potential for
development".

Randall S. Schuler, "Performance appraisal is a formal, structured system of

measuring and evaluating an employee’s job, related behavior and outcomes to
discover how and why the employee is presently perfuming on the job and how
the employee can perform more effectively in the future so that the employee,
organization, and society all benefit."

Heyel, "It is the process of evaluating the performance and qualifications of the
employees in terms of the requirements of the job for which he is employed, for

26
purposes of administration including placement, selection for promotions,
providing financial rewards and other actions which require differential treatment
among the members of a group as distinguished from actions affecting all
members equally."

Dale Yoder, ''Performance appraisal includes all formal procedures used to

evaluated personalities and contributions and potentials of group members in a
working organization. It is a continuous process to secure information necessary
for making correct and objective decisions on employees."

Characteristics of Performance Appraisal:-

1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an
employee in terms of his job.
3. It is scientific and objective study. Formal procedures are used in the study.
4. It is an ongoing and continuous process wherein the evaluations are
arranged periodically according to a definite plan.

Limitations:-

1. Errors in Rating

2. Lack of reliability

3. Negative approach

4. Multiple objectives

5. Lack of knowledge

27
Steps Involved in Process of Performance Appraisal:-

The six steps involved in process of performance appraisal are as follows: 1.

Establish Performance Standards 2. Communicate Performance Expectation to
Employee 3. Measure Actual Performance 4. Compare Actual Performance with
Standards 5. Discuss the Appraisal with the Employee 6. Initiate Corrective
Actions.

1. Establish Performance Standards:

The appraisal process begins with the establishment of performance standards.

The managers must determine what outputs, accomplishments and skills will be
evaluated. These standards should have evolved out of job analysis and job
descriptions.

These performance standards should also be clear and objective to be understood

and measured. Standards should not be expressed in an articulated or vague
manner such as “a good job” or “a full day’s work” as these vague phrases tells
nothing.

2. Communicate Performance Expectations to Employees:

Once the performance standards are established, this need to be communicated to

the respective employees so that they come to know what is expected of them.
Past experience indicates that not communicating standards to the employees
compounds the appraisal problem.

Here, it must be noted that mere transference of information (relating to

performance standards, for example) from the manager to the employees is not
communication It becomes communication only when the transference of
information has taken place and has been received and understood by the
employees’.

The feedback from the employees on the standards communicated to them must
be obtained. If required, the standards may be modified or revised in the light of

28
feedback obtained from the employees. It is important to note that communication
is a two-way street.

3. Measure Actual Performance:

This is the third step involved in the appraisal process. In this stage, the actual
performance of the employee is measured on the basis of information available
from various sources such as personal observation, statistical reports, oral reports,
and written reports.

Needless to mention, the evaluator’s feelings should not influence the

performance measurement of the employee. Measurement must be objective
based on facts and findings. This is because what we measure is more critical and
important to the evaluation process than how we measure.

4. Compare Actual Performance with Standards:

In this stage, the actual performance is compared with the predetermined

standards. Such a comparison may reveal the deviation between standard
performance and actual performance and will enable the evaluator to proceed to
the fifth step in the process, i.e., the discussion of the appraisal with the concerned
employees.

5. Discuss the Appraisal with the Employee:

The fifth step in the appraisal process is to communicate to and discuss with the
employees the results of the appraisal. This is, in fact, one of the most challenging
tasks the manager’s face to present an accurate appraisal to the employees and
then make them accept the appraisal in a constructive manner.

A discussion on appraisal enables employees to know their strengths and

weaknesses. This has, in turn, impact on their future performance. Yes, the impact
may be positive or negative depending upon how the appraisal is presented and
discussed with the employees.
29
6. Initiate Corrective Action:

The final step in the appraisal process is the initiation of corrective action when it
is necessary. The areas needing improvement are identified and then, the
measures to correct or improve the performance are identified and initiated.

Methods of Performance appraisal:-

The foregoing list of major program pitfalls represents a formidable challenge,

even considering the available battery of appraisal techniques. But attempting to
avoid these pitfalls by doing away with appraisals themselves is like trying to
solve the problems of life by committing suicide. The more logical task is to
identify those appraisal practices that are

(a) most likely to achieve a particular objective

(b) least vulnerable to the obstacles already discussed.

The best-known techniques will be treated most briefly.

Essay appraisal

In its simplest form, this technique asks the rater to write a paragraph or more
covering an individual's strengths, weaknesses, potential, and so on. In most
selection situations, particularly those involving professional, sales, or managerial
positions, essay appraisals from former employers, teachers, or associates carry
significant weight.

Graphic rating scale

This technique may not yield the depth of an essay appraisal, but it is more
consistent and reliable. Typically, a graphic scale assesses a person on the quality
and quantity of his work (is he outstanding, above average, average, or
unsatisfactory?) and on a variety of other factors that vary with the job but usually

30
include personal traits like reliability and cooperation. It may also include specific
performance items like oral and written communication.

Field review

The field review is one of several techniques for doing this. A member of the
personnel or central administrative staff meets with small groups of raters from
each supervisory unit and goes over each employee's rating with them to (a)
identify areas of inter-rater disagreement, (b) help the group arrive at a consensus,
and (c) determine that each rater conceives the standards similarly. .

Forced-choice rating

Like the field review, this technique was developed to reduce bias and establish
objective standards of comparison between individuals, but it does not involve the
intervention of a third party.

Management by objectives

To avoid, or to deal with, the feeling that they are being judged by unfairly high
standards, employees in some organizations are being asked to set - or help set -
their own performance goals. Within the past five or six years, MBO has become
something of a fad and is so familiar to most managers that I will not dwell on it
here.

Ranking methods

For comparative purposes, particularly when it is necessary to compare people

who work for different supervisors, individual statements, ratings, or appraisal
forms are not particularly useful. Instead, it is necessary to recognize that
comparisons involve an overall subjective judgment to which a host of additional

31
facts and impressions must somehow be added. There is no single form or way to
do this.

The best approach appears to be a ranking technique involving pooled judgment.

Assessment centers

So far, we have been talking about assessing past performance. What about the
assessment of future performance or potential? In any placement decision and
even more so in promotion decisions, some prediction of future performance is
necessary. How can this kind of prediction be made most validly and most fairly?

360 Degree Feedback

Many firms have expanded the idea of upward feedback into what the call 360-
degree feedback. The feedback is generally used for training and development,
rather than for pay increases.

Most 360 Degree Feedback system contains several common features.

Appropriate parties – peers, supervisors, subordinates and customers, for instance
– complete survey, questionnaires on an individual. 360 degree feedback is also
known as the multi-rater feedback, whereby ratings are not given just by the next
manager up in the organizational hierarchy, but also by peers and subordinates.
Appropriates customer ratings are also included, along with the element of self-
appraisal. Once gathered in, the assessment from the various quarters are
compared with one another and the results communicated to the manager
concerned.

Another technique that is useful for coaching purposes is, of course, MBO. Like
the critical incident method, it focuses on actual behavior and actual results,
which can be discussed objectively and constructively, with little or no need for a
supervisor to "play God."

32
Benefits of Performance Appraisals:-

•Measures an employee’s performance.

•Helps in clarifying, defining, redefining priorities and objectives.

•Motivates the employee through achievement and feedback.

•Facilitates assessment and agreement of training needs.

•Helps in identification of personal strengths and weaknesses.

•Plays an important role in Personal career and succession planning.

•Clarifies team roles and facilitates team building.

•Plays major role in organizational training needs assessment and analysis.

•Improves understanding and relationship between the employee and the reporting
manager and also helps in resolving confusions and misunderstandings.

•Plays an important tool for communicating the organization’s philosophies,

values, aims, strategies, priorities, etc among its employees.

•Helps in counseling and feedback.

ROLES IN THE PERFORMANCE APPRAISAL PROCESS:-

a) Reporting Manager

 Provide feedback to the reviewer / HOD on the employees’ behavioral

traits indicated in the PMS Policy Manual
 Ensures that employee is aware of the normalization / performance
appraisal process
 Address employee concerns / queries on performance rating, in
consultation with the reviewer

b) Reviewer (Reporting Manager’s Reporting Manager)

33
  Discuss with the reporting managers on the behavioral traits of all the
employees for whom he / she is the reviewer
 Where required, independently assess employees for the said behavioral
traits; such assessments might require collecting data directly from other
relevant employees

c) HOD (In some cases, a reviewer may not be a HOD)

 Presents the proposed Performance Rating for every employee of his / her
function to the Normalization committee.
 HOD also plays the role of a normalization committee member
 Owns the performance rating of every employee in the department

d) HR Head

 Secretary to the normalization committee

 Assists HOD’s / Reporting Managers in communicating the performance
rating of all the employees

e) Normalization Committee

 Decides on the final bell curve for each function in the respective Business
Unit / Circle
 Reviews the performance ratings proposed by the HOD’s, specifically on
the upward / downward shift in ratings, to ensure an unbiased relative
ranking of employees on overall performance, and thus finalize the
performance rating of each employee

34
 BELL CURVE APPRAISAL

A bell curve, or more specifically, a Gaussian Distribution, is a symmetric curve

that is pronounced in the middle, and tapered off at the edges (it really does look
like a bell). As such, the middle portion under the curve contains more area than
either of the ends. The Bell Curve appraisal system is better known as the Forced
Ranking Appraisal Systems of a company’s employees. Forced ranking has been
defined as “a workforce management tool based on the premise that in order to
develop and thrive, a company must identify its best and worst performers, then
nurture the former and rehabilitate and/ or discard the latter”. It categorizes people
based on their performance, rewards or penalizes them accordingly. Ranking
employees is everyday practice at companies like General Electric (GE),
Microsoft, Cisco Systems, Hewlett-Packard, and Sun Microsystems.

The entire workforce is segregated as the top performers, medium performers and
the poor performers. The percentage varies with the company policy; it could be
the top 10%, middle 80% and the bottom 10%.

35
Benefits:

• The workers, who are high performers, are motivated to keep improving
themselves with the incentive of stock options, higher pay etc.

• The majority of the workers, who are classified as average performers, are
provided with opportunities to enhance themselves with various training modules
and other tools of improvement. This increases the company’s competence level
as a whole.

• The low performers are warned that they need to get their act together and thus,
the productivity of the organization slowly improves

• Accountability, which is the purpose of performance appraisals, is enforced

across the organization by using Bell Curve.

Limitation:

• The problem with Bell Curve methodology begins with its application. The
distribution curve can only be applied to an organization with certain number of
employees as a threshold. With small number of employees, the categorization of
resources becomes too constrained, and more often, erroneous.

• Bell Curve method for performance appraisal always creates a doubt about the
fairness of the classification system. Many times employees show increased
activity in the time period approaching appraisals. Hence, the bias towards visible
performance as against actual performance may overshadow fair categorization.

• Distributing incentives based on Bell curve methodology cannot guarantee an

increase in the company’s overall performance. It happens only over a long period
of time.

• The Bell Curve system is too rigid a model to be followed, especially in a

country like India, where the work culture is dominated by an emotional
approach.

• Often, a manager is forced to classify people in the last gradient of the Bell
Curve, but, it might not reflect the manager’s actual perception about the worker.
36
• In certain circumstances, a high performer gets slotted as a mid-level performer
in order to normalize the distribution curve, which defeats the purpose of
performance appraisals.

• The Bell Curve has a cost to it – attrition. The bottom percent of people may be
there because of statistical compulsions, rather than the fact that their managers
think they deserve to be there. This ultimately leads to attrition and adds to hiring
costs of a company.

• The Bell Curve tries to push everyone into the best worker category, but, the
truth remains that organizations are more often run on the combined efforts of the
socalled ‘average’ work force.

Checkpoints BeforeImplementation of Bell Curve:

Before the implementation of the Bell Curve Appraisal System, Please ensure the
following –

• Use of objective parameters for the performance appraisal system.

• Determine the reason for poor performance of the employee if there is any.

• Let the employee take responsibility for improved and only offer your assistance
if needed.

• Document all the performance related discussions with the employee because
generally the bell curve system attracts a lot of law suits by fired employees in the
west and hence it’s better to have all the discussions documented for you and your
company's safety.

There are nine aspects to the current system –

1. Change of nomenclature – The present system is called the developmental

appraisal, not performance appraisal. This emphasizes the role of appraisal in
promoting individual learning and development.

2. Planning the job for the following year – This provides role clarity and builds a
common understanding between the individual and the team leader.

37
3. Counseling for development – Counseling is an integral part of the appraisal
system emphasizing openness and disclosure.

4. Team performance – The individual's contribution to team performance is of

major importance.

5. Process parameters – Process parameters with emphasis on quality, customer

focus and systems form the core of the appraisal.

6. Training – The appraisal system is used to identify the training needs for
individuals and teams.

7. Focus – The appraisal system has a single focus, namely development of

individual and teams.

8. Client-centered – The developmental appraisal system is exclusively client-

oriented. There is no complex web of procedures with perforated sheets and flow
charts maintained by the human resource department. The forms remain with the
team leaders and team members.

9. Label-free ratings – There is no overall rating with labels such as 'outstanding',

'good', and 'average'.

Organization also needs to develop a system of compensation for its managers

that promotes team effort. Based on the performance criteria of the business area,
the team members in that particular business area receive a percentage of the
basic pay and allowance as lump-sum payment. All members of the same grade
receive exactly the same percentage. Performance parameters include both
qualitative and quantitative indicators. Quantitative parameters include orders and
profits. Qualitative indicators include factors such as on-time delivery.

The company classifies individuals into three categories –

Group A includes those who perform far below expectations with special
counseling being provided to such individuals.

Group B consists of ideal performers with performance exceeding the

expectations of the organization. They are given non-financial rewards in addition
to flat equal increments.

38
Group C comprises individuals who perform strictly according to expectations.
All of them receive exactly the same amount of bonus and increments.

To summarize Bell curve by itself is strict no according to my opinion but a few

tweaks and this should be the best solution.

Application of Bell Curve for performance appraisal must be tweaked to yield

better results. Few tips are –

•Decoupling of lay-offs from the bell curve results.

•Customizing of the bell-curve methodology to suit the organization structure &

needs.

•Combining other performance appraisal methods with the Bell Curve approach.

39
COMPANY
PROFILE

40
The Aditya Birla Group: A Premium Global Corporation

ADITYA BIRLA GROUP OVERVIEW

GENESIS:

Aditya Birla Group traces its origin back to the tiny village of Pilani in
theRajasthan desert, where, late Shri Seth Shiv Narayan Birla started cotton-
trading operations in 1857. Then one visionary – the late Shri G.D Birla setup
India’s first integrated aluminum manufacturing unit at Renukoot, in1962, backed
by captive power plant at Renusagar in 1967.It further evolved under the dynamic
leadership of the late ShriAdityaVikram Birla – a prominent figure in the Indian
industry, under whose stewardshipHindalco attained its leadership position in
aluminum. Todayour Group chairman, Dr. Kumar Manglam Birla has put
together the building blocks to make Indian business a global force.

A US $41 billion (Rs. 2,50,000crore) corporation, the Aditya Birla Group is in the
League of Fortune 500. Anchored by an extraordinary force of over 120,000
employee, belonging to 42 nationalities. Over 50 per cent of its revenues flow
from its overseas operations spanning 36 countries.

The Aditya Birla Group has been ranked fourth in the world and first in Asia
Pacific in the ‘Top Companies for Leaders’ study 2011, conducted by Aon
Hewitt, Fortune Magazine and RBL (a strategic HR and leadership Advisory
firm). The Group has topped the Nielsen's Corporate Image Monitor 2014-15 and
emerged as the Number one corporate, the 'Best in Class', for the third
consecutive year.

Entry of Syt.Ghanshyam Das Birla:

1916 - First taste of industrial management – takeover of sick cotton million

Delhi.

1918 - First limited company – Birla Brothers Limited.The real industrial thrust in
1919 with Birla Jute in Calcutta

1921-Jiyajeerao Cotton – Gwalior Birla Jute was established in defiance of

Scottish monopoly.

41
1923 - Purchase of Kesoram Cotton.

1926 - Orient Paper Mills.

1931-33 - Bharat Sugar, Upper Ganges Sugar, New Swadeshi Sugar, NewDelhi
Sugar.

1947 -Assets worthRs. 25 crores in 20 companies.

1954-Durgapur Iron & Steel

1957-Gwalior Rayon, Nagda1962-Hindalco commencement of production

1966-Takeover of Indian Rayon.

ADITYA BIRLA GROUP

A truly multinational Indian GroupThe Aditya Birla Group was the first in Indian
to venture overseas, bystarting a joint venture in Ethiopia. Thereafter, over the last
quarter century,this group has started 20 very successful and diversified ventures
spreadthrough the Asian region. It has been declared by Euro money that this
isthe only truly multinational group of India.

At present, the group has more than 50 manufacturing units, producingexpanding

its activities in the field of telecom, oil refinery, power generation a diverserange
of products, financial service, trade and computer consultancy. It is also copper
smelter etc.

Globally, the Aditya Birla Group is:

A metals power house ,among the world's most cost-efficient aluminum and
copper producers. Hindalco-Novelis is the largest aluminum rolling company. It is
one of the three biggest producers of primary aluminum in Asia, with the largest
single location copper smelter

 No.1 in viscose staple fiber

 No.1 in carbon black

42
  The fourth-largest producer of insulators
 The fifth-largest producer of acrylic fibre
 Among the top 5 cement producers globally
 Among the best energy-efficient fertilizer plants
 The largest Indian MNC with manufacturing operations in the USA,
wherein 95 per cent of the workforce comprises of Americans

Aditya Birla Group – The Indian Scenario

 A top fashion (branded apparel) and lifestyle player

 The second-largest player in viscose filament yarn
 The largest producer in the chlor-alkali sector
 Among the top three mobile telephony companies
 A leading player in life insurance and asset management
 Among the top two supermarket chains in the retail business

Aditya Birla Group – Beyond Business

 Reaches out annually to7.5 million people through the Aditya Birla Centre
for Community Initiatives and Rural Development, spearheaded by Mrs.
Rajashree Birla.
 Works in 5,000 villages globally.
 Focuses on: health-care, education, the girl child, sustainable livelihood,
women empowerment projects, infrastructure and espousing social reform.
 Runs 42 schools which provide quality education to 45,000 children. Of
these 18,000 students belong to the underprivileged segment. Merit
Scholarships are given to 24,000 children from the interiors.
 Its 18 hospitals tend to more than a million villagers.
 Ongoing education, healthcare and sustainable livelihood projects in
Philippines, Thailand, Indonesia, Egypt, Korea and Brazil, lift thousands of
people out of poverty.
 Set up the Aditya Birla India Centre at the London Business School.

43
“The Aditya Birla Group transcends conventional barriers of business because we
care. We believe it is our duty to facilitate inclusive growth as well”.

Vision and Values

Our Vision

To be a premium global conglomerate, with a clear focus on each of the

businesses.

Our Mission

To deliver superior value to our customers, shareholders, employees and society

at large.

Our Values

Integrity: Acting and taking decisions in a manner that is fair and honest.
Following the highest standards of professionalism and being recognized for
doing so. Integrity for us means not only financial and intellectual integrity, but
encompasses all other forms as are generally understood.

Commitment: On the foundation of Integrity, doing all that is needed to deliver

value to all stakeholders. In the process, being accountable for our own actions
and decisions, those of our team and those in the part of the organization for
which we are responsible.

Passion: An energetic, intuitive zeal that arises from emotional engagement with
the organization that makes work joyful and inspires each one to give his or her
best. A voluntary, spontaneous and relentless pursuit of goals and objectives with
the highest level of energy and enthusiasm.

Seamlessness: Thinking and working together across functional groups,

hierarchies, businesses and geographies. Leveraging diverse competencies and
perspectives to garner the benefits of synergy while promoting organizational
unity through sharing and collaborative efforts.

44
Speed: Responding to internal and external customers with a sense of urgency.
Continuously striving to finish before deadlines and choosing the best rhythm to
optimiseorganisational efficiencies.

GROUP VISSION

“TO BECOME A PREMIUM CONGLOMERATE WITH CLEAR

BUSSINESSFOCUS AT EACH CORPORATE LEVEL”

GROUP MISSION

“TO DELIVER VALUE FOR OUR CUSTOMERS,

SHAREHOLDERS,EMPLOYEES AND SOCIETY AT LARGE”

Aditya Birla Management Corporation Ltd. (ABMCL)

In a strategic move to institutionalize its management process, the AdityaBirla

Group has set up Aditya Birla Management Corporation Limited(ABMCL) It is
headed by Board of Directors with Mr. Kumar MangalamBirlaas a Chairman.It is
a Group’s apex decision making body and provides strategic direction to the
companies.

Experience the 'Power of 5'

In 2014 we celebrated a decade of our Values. All our Businesses and all our
people have adopted these Values with understanding and enthusiasm. All of
them have made a consistent effort to make our Values, the heartbeat of our
existence. In doing so, not only the Values flourished but also our people and our
Businesses. As we look back, we have every reason to celebrate and every person
to salute.

The “Power of 5” is our unique way of saluting, celebrating and cheering the
inspirational act of integrity, commitment, passion, seamlessness and speed by
our people, over the last decade. Through this platform we bring to you 25
inspiring stories of our people who have exemplified living the values, which
whilst selected at random tell a powerful story of our voyage with Values.
45
Creating history in the Indian aluminium industry:

In the late 1950s, when India was giving shape to its economic vision, one
visionary leader, G. D. Birla took the bold step to set up the country's first
integrated aluminium facility at Renukoot, Uttar Pradesh. That vision gained
strength as Hindalco grew in size and scale under the dynamic leadership of the
late AdityaVikram Birla.

Under the leadership of the Aditya Birla Group’s Chairman, Mr. Kumar
Mangalam Birla, Hindalco acquired Indal and the Australian Nifty and Mt
Gordon copper mines, merging the Aditya Birla Group's copper division to create
a non-ferrous metals powerhouse.

In 2007, Hindalco created history in the Indian aluminium industry by acquiring

Novelis Inc., a global leader in aluminum rolling and can recycling.

Introduction to HINDALCO:

One of the largest integrated primary producer of aluminums in Asia. With a pan-
Indian presence that encompasses the entire gamut of operations, from bauxite
mining, alumina refining, aluminum smelting to downstream rolling, extrusions
and recycling, Hindalco enjoys a leadership position in aluminum and
downstream value-added products in India.

Our Indian aluminum operations are integrated and consist of bauxite mining,
alumina refining, smelting and converting primary metal into value-added
products. We have dedicated sources for critical raw materials such as bauxite,
power and coal. We also have committed supply sources for auxiliary chemicals.

Our finished products include alumina, primary aluminum in the form of ingots,
billets and wire rods, value-added products such as rolled products, extrusions and
foils. Metallurgical alumina is used for our own captive needs. Chemical alumina
and hydrates are used in range of industries including water treatment, fillers in
cables and plastics, refractories and ceramics, glass among others.

Our facilities are in regions close to raw material sources, low cost and available
labour and demand markets. This helps in reducing costs and improving profit

46
margins. The technology upgrade has resulted in higher utilization rates at our
plants and improved efficiency.

We believe implementation of superior technology not only reduces costs but also
provides superior and customized products, thus, improving our sales.

Hindalco’s integrated complex at Renukoot, in Uttar Pradesh, India, houses an

alumina refinery, an aluminum smelter and facilities for the production of semi-
fabricated products. Power is sourced from our Renusagar power plant, located
about 45km from Renukoot. Our facilities also include an aluminum smelter and
an aluminum FRP facility (for rolled products, extrusions products and wire rods)
at Hirakud (Odisha) with a captive power plant and coal mine, and alumina
refinery at Muri (Jharkhand). Our Chemical grade alumina plant is located at
Belagavi (Karnataka), and rolling mills at Belur (West Bengal), Taloja near
Mumbai and Mouda near Nagpur (Maharashtra). Foil rolling facilities are situated
at Mouda near Nagpur (Maharashtra) and Kollur (Telangana) and our extrusion
plant at Alupuram (Kerala).

Hindalco's new age smelters at Aditya (Odisha) and Mahan (Madhya Pradesh),
operating on state-of-the-art AP36 technology, have not only resulted in
expansion of our capacities but also improved cost-efficiency of our operations.
These smelters have their own captive power plants and source alumina from
Utkal, our 100% subsidiary.

Utkal Alumina (Odisha) is a world class refinery with one of the lowest cost
structure in the world. The bauxite for Utkal is sourced from Baphlimali mines by
a 18 kilometer long conveyor, one of its kind in the world.

All our units are ISO 9001, 14001 and OHSAS 18001 certified. Furthermore,
many of our units have adopted the Integrated Management System (IMS)
certification, reflecting a combined business excellence model. Apart from being
a dominant player in the domestic market, Hindalco's products are well-accepted
in the international markets.

Our strength in aluminum products differentiates us from our competition. A

significant portion of Hindalco’s sales come from value-added products. This is in
line with our ‘market-grower’ philosophy. Hindalco has introduced numerous

47
new products in the Indian market, including branded roofing sheets, branded
kitchen foils and input material for bicycles and railway wagons.
Hindalco’sAluminum Gallery is a platform for its small customers to showcase
their products to their consumers.

Some of our popular brands like Eternia Windows, Maxloader and Hindalco
Extrusions under the extrusions segment, EverlastRoofings under the flat rolled
products segment, Freshwrapp and Superwrap under the aluminum foil products
segment, as well as Birla Copper and Birla Balwan under the copper mainstream
products and co-products segment have garnered strong customer acceptance.

Hindalco, combined with Novelis, now ranks among global aluminum majors. As
an integrated producer with low-cost alumina and aluminum facilities combined
with high-end rolling capabilities, it is the world’s largest aluminum rolling
company. It stands among Asia's leading primary aluminum producers and is at
the forefront of India's non-ferrous metals sector.

Looking back at a brilliant journey:

2015 -Mahan and AdityaAluminum smelters and Utkal refinery come onstream.

2013 -First metal tapped at Mahan Aluminum.Utkal Alumina Refinery goes on

stream.

2011 –

 Refinance ofNovelis debt of US$4 billion to enable strategic flexibility for

growth. This was a landmark innovation in financing - not only did
Hindalco get back 50 per cent of the invested equity within four years, but
also opened up a novel funding avenue between Novelis and Hindalco.
 Achieved financial closure of two projects through debt financing - Utkal
Alumina for Rs.4,906crore and Mahan aluminum for Rs.7,875 crore.

2010 -Expansion of copper rod mill to 160 KTPA.

2009 -QIP: Raised US$600 million for projects, the largest straight QIP in India.

2008 -Alumina expansion at Muri.

48
Rights issue: Raised a total of Rs.4,426 crore for re-financing the bridge loan
taken for the acquisition of Novelis.

2007 –

 Successful acquisition of Novelis, making Hindalco the largest in

aluminium rolling and among the global top five metals majors, with a
presence in 12 countries outside India.
 Acquisition of Alcan’s 45 per cent equity stake in the Utkal Alumina
project, thereby making Hindalco the 100 per cent project owner.

2006 -

 Hindalco announces 10:1 stock split. Each share with face value of Rs.10
per share split into 10 shares of Rs.1 each.
 Hindalco completes largest rights issue in the history of Indian capital
markets with a total size of Rs.22,266 million.
 Equity offering and subsequent listing of Aditya Birla Minerals Limited on
the Australian Stock Exchange.
 MoU signed with the government of Madhya Pradesh for a
greenfieldaluminium smelter in the Siddhi district of the state.

2005 -

 All businesses of Indal, except for the Kollur foil plant in Andhra Pradesh,
merged with Hindalco Industries Limited.
 MoUs signed with the state governments of Odisha and Jharkhand for
setting up greenfield alumina refining, smelting and power plants.
 Commissioned Copper III expansion, taking total capacity to 500,000 TPA.

2004 -Copper smelter expansion to 250,000 TPA.

49
2003 -

 Hindalco acquires Nifty copper mine in March 2003, through Aditya Birla
Minerals Limited (ABML, formerly Birla Minerals Resources Pty. Ltd.).
 ABML acquires Mount Gordon copper mines in November 2003.
 Equity stake in Indal increased to 96.5 per cent through an open offer.
 Brownfield expansion of aluminium smelter at Renukoot to 345,000 TPA.

2002 -Amalgamation of Indo Gulf Corporation Limited’s copper business, Birla

Copper, with Hindalco, effective from April 1, 2002.

2000- Acquisition of controlling stake in Indian Aluminium Company Limited

(Indal) with 74.6 per cent equity holding.

1999 -

 Aluminium alloy wheels production commenced at Silvassa.

 Brownfield expansion of metal capacity at Renukoot to 242,000 TPA.

1998- Foil plant at Silvassa goes on stream. Hindalco attains ISO 14001 EMS
certification.

1995 -Mr. Kumar Mangalam Birla takes over as Chairman of the Hindalco Board.

1991 -Beginning of a major expansion programme.

1967 -Commissioning of Renusagar power plant – a strategic and far-sighted

move.

50
1965 -Downstream capacities commissioned (rolling and extrusion mills) at
Renukoot.

1962 -Commencement of production at Renukoot (Uttar Pradesh) with an initial

capacity of 20,000 MTPA of aluminium and 40,000 MTPA of alumina.

1958 -Incorporation of Hindalco Industries Limited.

Industries: Forging ahead

The Hindalco story dates back to the young Indian democracy of the 1950s.
Ready to take a giant leap, India was geared to make it big, especially in terms of
innovation and industrialization.

Hindalco embarked on its journey in 1958. Its first real contribution to the vision
of an industrial India occurred four years later, when the visionary late Mr. GD
Birla set up India's first integrated aluminium facility at Renukoot, in the eastern
fringe of Uttar Pradesh, India. It was backed by a captive thermal power plant at
Renusagar in 1967. Hindalco attained its leadership position in the aluminum
industry under the dynamic leadership of the late Mr.AdityaVikram Birla — a
formidable force in the Indian industry.

And it was through the vision and guidance of Mr. Kumar Mangalam Birla, the
Group Chairman that the business segments of aluminum and copper are
consolidated to make Hindalco the non-ferrous metals powerhouse it is today.
This was achieved in part by expansion through mergers and acquisitions with
companies such as Indal and Birla Copper. Hindalco also secured copper reserves
and amplified its operating base by acquiring Australian copper mines.

Over the years, Hindalco has grown into a major vertically integrated aluminum
company in the country and among the largest primary producers of aluminum in
Asia. Its copper smelter is today one of the world's largest custom smelter at a
single location.

51
In 2007, the landmark acquisition of Novelis Inc., the world's largest aluminum
rolling company, placed Hindalco's footprint across the globe, securing it a rank
amongst the top five global aluminum majors.

One of the largest integrated primary producer of aluminum in Asia. With a pan-
Indian presence that encompasses the entire gamut of operations, from bauxite
mining, alumina refining, aluminum smelting to downstream rolling, extrusions
and recycling, Hindalco enjoys a leadership position in aluminum and
downstream value-added products in India.

Our Indian aluminum operations are integrated and consist of bauxite mining,
alumina refining, smelting and converting primary metal into value-added
products. We have dedicated sources for critical raw materials such as bauxite,
power and coal. We also have committed supply sources for auxiliary chemicals.

Our finished products include alumina, primary aluminum in the form of ingots,
billets and wire rods, value-added products such as rolled products, extrusions and
foils. Metallurgical alumina is used for our own captive needs. Chemical alumina
and hydrates are used in range of industries including water treatment, fillers in
cables and plastics, refractories and ceramics, glass among others.

Our facilities are in regions close to raw material sources, low cost and available
labour and demand markets. This helps in reducing costs and improving profit
margins. The technology upgrade has resulted in higher utilization rates at our
plants and improved efficiency.

We believe implementation of superior technology not only reduces costs but also
provides superior and customized products, thus, improving our sales.

Hindalco’s integrated complex at Renukoot, in Uttar Pradesh, India, houses an

alumina refinery, an aluminum smelter and facilities for the production of semi-
fabricated products. Power is sourced from our Renusagar power plant, located
about 45km from Renukoot. Our facilities also include an aluminum smelter and
an aluminum FRP facility (for rolled products, extrusions products and wire rods)
at Hirakud (Odisha) with a captive power plant and coal mine, and alumina
refinery at Muri (Jharkhand). Our Chemical grade alumina plant is located at

52
Belagavi (Karnataka), and rolling mills at Belur (West Bengal), Taloja near
Mumbai and Mouda near Nagpur (Maharashtra). Foil rolling facilities are situated
at Mouda near Nagpur (Maharashtra) and Kollur (Telangana) and our extrusion
plant at Alupuram (Kerala).

Hindalco's new age smelters at Aditya (Odisha) and Mahan (Madhya Pradesh),
operating on state-of-the-art AP36 technology, have not only resulted in
expansion of our capacities but also improved cost-efficiency of our operations.
These smelters have their own captive power plants and source alumina from
Utkal, our 100% subsidiary.

Utkal Alumina (Odisha) is a world class refinery with one of the lowest cost
structure in the world. The bauxite for Utkal is sourced from Baphlimali mines by
a 18 kilometer long conveyor, one of its kind in the world.

All our units are ISO 9001, 14001 and OHSAS 18001 certified. Furthermore,
many of our units have adopted the Integrated Management System (IMS)
certification, reflecting a combined business excellence model. Apart from being
a dominant player in the domestic market, Hindalco's products are well-accepted
in the international markets.

Our strength in aluminum products differentiates us from our competition. A

significant portion of Hindalco’s sales come from value-added products. This is in
line with our ‘market-grower’ philosophy. Hindalco has introduced numerous
new products in the Indian market, including branded roofing sheets, branded
kitchen foils and input material for bicycles and railway wagons. Hindalco’s
Aluminum Gallery is a platform for its small customers to showcase their
products to their consumers.

Some of our popular brands like Eternia Windows, Maxloader and Hindalco
Extrusions under the extrusions segment, EverlastRoofings under the flat rolled
products segment, Freshwrapp and Superwrap under the aluminum foil products
segment, as well as Birla Copper and Birla Balwan under the copper mainstream
products and co-products segment have garnered strong customer acceptance.

53
With its acquisition of Novelis, the global leader in value-added high-end
aluminiumflat rolled products and aluminum can recycling, Hindalco is now the
world’s largest aluminum rolling company. We are India's largest manufacturer of
the entire range of flat rolled products. Our aluminum sheet is produced from our
own cast slabs or continuous cast coils, rolled down to customized thickness,
gauge and tolerances.

In India we enjoy a dominant market share. Our plants are equipped with
sophisticated rolling mills and finishing equipment. The plants are located at
Hirakud in Odisha, Belur near Kolkata, Mouda near Nagpur in Maharashtra,
Renukoot in Uttar Pradesh, and Taloja near Mumbai in Maharashtra.

Our commitment to quality and service and our extensive infrastructure has made
us a prime source for best-selling brands. We continuously strive to improve our
manufacturing processes, practices and systems to ensure that customers' needs
and expectations are fully met.

We ensure efficiency and product quality by using state-of-the-art equipment and

a strong research and development setup, supported by dedicated and motivated
employees and the Oracle ERP system. Wagstaff Air Slip™ slab casting
technology is used to guarantee consistent quality and surface finish of stock feed,
which in turn ensures quality finished products.

Hindalco'sEverlast Aluminum Roofing Sheets are an ideal solution for all roofing
and cladding needs that translate into durable, faster and economical
constructions. We also offer colour-coated and tiled roofing profiles.

Board of Directors

Mr. Kumar Mangalam Birla, Chairman

Mr. SatishPai, Managing Director

Mr. Praveen Maheshwari, Whole-time Director and CFO

54
Mr. Debnarayan Bhattacharya, Vice Chairman and Non-Executive Director

Mrs. Rajashree Birla

Mr. AK Agarwala

Mr. JagdishKhattar

Mr. KN Bhandari

Mr. MM Bhagat

Mr. Ram Charan

Mr. YP Dandiwala

Mr. Girish Dave

Company leadership team

Hindalco Industries Limited:

Mr. SatishPai, Managing Director

Mr. J. C. Laddha, Group Executive President, Copper

Mr. Praveen Maheshwari, Whole-time Director and CFO

Mr. SatishJajoo, Chief Operating Officer (Renukoot, Renusagar& Mahan Units)

Mr. SamikBasu, Chief Human Resource Officer

Mr. Devotosh Kumar Das, Chief Marketing Officer

Mr. BB Jha, Head, Corporate Projects and Procurement Cell

Mr. Sanjay Sehgal, President, Chemicals

Mr. Anil Malik, Company Secretary

55
NovelisInc:

Steve Fisher, President and Chief Executive Officer

Working at Hindalco

"As long as you are the last man standing and are adding value, you would
continue to grow. ...The last man standing has the best chance at being the first
man forward."

-- Kumar Mangalam Birla

This is the essence of Hindalco’s approach and commitment to people as we

strive to attract, energize, develop and retain a talented and diverse workforce. At
Hindalco, we are always looking for talent, driven by the commitment and
passion to achieve and excel. We offer our employees everything they need to
reach their full potential. At the core are the Group values of integrity,
commitment, passion, seamlessness and speed which combine with our vision to
be the best in our business area.

Hindalco's vertical and horizontal integration in the aluminum and copper

industries offers opportunities for a range of employment positions. Its presence
in multiple locations across geographies offers opportunities for employees to be
exposed to various nations and cultures.

We are one of the world's leading aluminum and copper producers, but there's
always room for improvement in an environment that is both demanding and
challenging. We are looking for employees who are motivated to meet challenges
and contribute to lead us further down the path of continual improvement.

56
Employee value proposition:

Hindalco is part of the multi-ethnic and multi-competency Aditya Birla Group

operating in 13 countries in diverse business functions. At the core of Hindalco’s
diversity policies is the recognition that teams comprising employees from
different cultures and backgrounds contribute valuable understanding of complex
international markets and deliver better results.

We provide equal and merit based employment opportunities to all employees and
applicants without regard to race, colour, religion, gender, age, disability or any
other protected status in recruitment, hiring, compensation, promotion, training,
assignment of work, performance evaluation and all other aspects of employment.

Our manufacturing locations have workers in the unionized cadre. Long term
settlements are signed with the workers at regular frequencies wherein the
management and union leaders sit across the table and negotiate the terms of the
settlement. The process is peaceful and productive across all locations.

Being a meritocracy, our attention in the people area remains unwavering. We

have successfully created a workplace environment that nurtures innovation and
encourages people to constantly learn and grow.

Different initiatives for professional development such as e-learning courses,

kaizen schemes, safety week competitions, kaizen competitions, quality month
competitions, value champion competition and various other competitions are
open to all employees. Management staff is provided with opportunities to
develop themselves through team-based projects and focused reviews.

57
Awards and recognitions

Hindalco has won several awards for community welfare, environment protection,
and also for quality and export performance:

2015-

 AdityaAluminium wins Kalinga Safety Award for Best Practices in Safety

& CSR, presented at the Odisha State Safety Conclave.
 Utkal Alumina International Limited wins the Think Media Best CSR Case
Study Award 2014 on the theme of “Access to Quality Health Care
Services”.
 Hirakud wins Greentech CSR Silver Award 2014 for its initiatives in
Sustainable Livelihood in and around the unit location.
 Hirakud Smelter wins CII Easter Region Quality Award 2014-15
(Certificate of Appreciation) in the large scale category.
 Birla Copper Dahej wins Greentech CSR Silver Award 2014 for Education
Upliftment in 85 surrounding Government schools.

2013-

 Renukoot Aluminum Complex wins Greentech HR Platinum Award, in the

Best Strategy category, the highest in this segment.
 Renusagar Power Division wins the Safety Innovation Award-2013 in
Power Plant category, presented by the Institute of Engineers (India) for its
outstanding innovative achievements in the fi eld of Occupational Health
and Safety.
 Renusagar Power Division Hospital wins the FICCI Healthcare Excellence
Award 2013’.
 Birla Copper, bagged the 3rd Annual Green Tech CSR Award in the silver
category for the year 2013 for their “Education for All” Project.
HindalcoLohardaga.
 CSR activities won recognition from the Indian Bureau of Mines during
21st Mines Environment and Mineral Conservation Week held in March,
2014, at R& D Centre, SAIL-Ranchi.

58
2012-

 Renukoot Complex is conferred the Golden Peacock National Quality

Award- 2012, in the Mining & Metals sector, presented by the Institute of
Directors, for its efforts towards “Quality”, meeting international
parameters.
 Renusagar Power Division wins the Safety Innovation Award-2012, in the
Power Sector category, for outstanding achievement in safety management,
presented by Institute of Directors.
 Dahej Copper Complex wins the Greentech Gold Environment Award-
2012, for its outstanding achievement in Environment Management.
 Hirakud Power Plant wins CII Odisha Award- 2012 (2nd Runners Up), for
Best Practices in Environment, Safety and Health.
 Taloja Rolling Plant wins the overall title for “Maharashtra Safety Awards-
2011”, competition organised by the National Safety Council - Maharashtra
Chapter, in the Heavy Engineering category for its commendable safety
performance, Scheme-I, Lowest Average Accident Frequency Rate.

2011-

 Hindalco bagged the prestigious CII – EXIM Bank Business Excellence

Award 2011 for its "strong commitment to excel on the journey towards
business excellence".
 Birla Copper, a division of Hindalco, won the IMC Ramkrishna Bajaj
Quality Award Commendation Certificate.
 HindalcoRenusagar won the Greentech Safety Gold Award 2011 in power
sector for outstanding achievement in safety management by Greentech
Foundation, New Delhi.

59
2010 -

 Renukoot
 NIPM Gold Award for Best HR Practices for the year 2010 by National
Institute of Personal Management (NIPM).
 Greentech Gold Safety Award 2010 for Occupational Health and Safety
Management in the mining and metals sector by Greentech Foundation,
New Delhi.
 Greentech Environment Excellence Gold Award 2010 in the metals sector
for its efforts towards environment management by Greentech Foundation,
New Delhi.
 The Golden Peacock Award for Corporate Social Responsibility for the
year 2010.
 Greentech HR Excellence Silver Award for 2010 for excellence in training.
 Best Exporter Award for 2010 by the Container Corporation of India for
contributing to India's economic progress through significant volume of
exports.
 National Energy Conservation Award (Second Prize) 2010, in the metals
sector presented by the Ministry of Energy, Government of India.
 Silver Certificate of Indian Manufacturing Excellence Award — 2010 by
Economic Times and Frost & Sullivan.

Birla Copper Dahej-

 Greentech Environment Excellence Gold Award — 2010 in the mining and

metals sector for its efforts towards environment management by Greentech
Foundation, New Delhi.
 Greentech Silver Safety Award 2010 for Occupational Health and Safety
Management in the mining and metals sector by Greentech Foundation,
New Delhi.

60
Renusagar-

 Greentech Gold Award 2010 in thermal power sector for outstanding

achievement in environment management by Greentech Foundation, New
Delhi.
 Commendation for Safety Innovation Award 2010 by the Institution of
Engineers (India).
 Special Commendation for the Golden Peacock Environment Management
Award 2010 by the Institute of Directors, New Delhi.

Hirakud-

 Hirakud Power Plant awarded third prize in the state-level CII Odisha
Award for Best Practices in Environment, Safety and Health 2010.
 Hirakud Power awarded the Greentech Environment Excellence Gold
Award 2010 in the thermal power sector category.

Muri–

National Award for Excellence in Water Management 2010 "Beyond the Fence"
category, for the indigenous work being done by the unit outside the fence as a
corporate citizen and for fulfilling its corporate responsibilities.

Quality Circle Awards

Gold Awards to four HindalcoRenukoot Quality Circle Teams — Kushal,

Vaibhav, Pragati and Nirantar — at the International Quality Circle Competition
(IQCC 2010) held at Hyderabad.

Silver and Bronze Awards to HindalcoHirakud Power Quality Circle Teams —

Aryan and Power — respectively at the International Convention on Quality
Concept Circle (ICQCC 2010) held at Hyderabad.

Quality Circle teams from Renukoot, Hirakud and Birla Copper Dahej units
excelled at the National QC Convention (NCQC 2010), winning Par Excellence,
Excellence, Distinguished and Runners-Up Awards.

61
2009-

HindalcoRenusagar's power division bagged the Golden Peacock Environment

Management Award during the Global Convention on Climate Security. The
convention was held at Palampur, Himachal Pradesh from 12 to 14 June 2009. Dr.
MadhavMehra, President ,WorldCouncil for Corporate Governance
honouredRenusagar's power division with the award in the services category.

2008-

 Greentech Safety Gold Award 2008 for outstanding achievement in safety

management in coal-based power sector.
 HindalcoHirakud Systems ranked runners-up at the state-level IT
Competition 2008 organized by CII in association with the department of
information technology, Government of Odisha.
 Hirakud smelter was awarded the state-level safety award for Best
Occupational Healthcare 2006 — presented in February 2008 at
Bhubaneswar.
 Talabira coal mines won a host of safety awards, namely, first in working
face and maintenance of Dozer and Payloader and second in dust
suppression at the Annual Coal Mines Safety Fortnight 2008 organized by
Directorate of Mines Safety, Bhubaneswar and Chaibasa region.

62
HINDALCO FRP, HIRAKUD:

The Hirakud FRP project is the first of its kind in India. This project, which
involved relocation of some equipment’s from a closed facility of Novelis, will be
the first and the only facility that will have the capability to produce can body
stock in India. This facility will take Hindalco’s FRP play on a higher plateau in
terms of capability and profitability in the coming years. It is expected to create a
formidable combination ofNovelis’ technology and Indian cost advantages
sourcing metal from Hirakud smelter. The capacity of this facility is 135KTPA
and it has started production.

As an active community player it focuses its CSR initiatives towards health care,
education, women’s empowerment and sustainable livelihood programs.

Cluster Head- Mr. Rajesh Gupta

Function Head Operation-Sumit Mukherjee

Function Head Maintenance-Harish Jalreja

Human Resource and Industrial Relation Head- Amit Sar

Finance and Accounts Head-Didyendu Adak

Materials Head- Vinay Ganapa

Management staff=198

Workmen=236

Total enrolled employee=434

Contract labours=370

63
ORGANISATION STRUCTURE OF HIRAKUD FRP:-

64
DATA ANANLYSIS
AND
INTERPRETATION

65
FUNCTION:-

Production/Operation 7.407%
Engineering/Maintenance 44.44%
Finance and commercial 11.11%
Quality control, R&D 14.814%
Projects 18.518%
Human resources 3.703%

AGE GROUP:-

25 years or less 3.703%

26-30 years 44.44%
31-35 years 22.22%
36-40 years 18.51%
41-45 years 3.703%
46-50 years 3.703%
51-55years 3.703%
Above 55 years 0%

EXPERIENCE:-

Less than 1 years 3.703%

2-3 years 7.407%
4-7 years 37.037%
Above 7 years 48.148%
No response 3.703%

1- I am aware of the method adopted for performance appraisal in my

organization.
66
Strongly agree 37.03704%
Agree 55.55556%
Neither agree nor disagree 0%
Strongly disagree 3.703704%
Disagree 0%
No response 3.703704%

60
50
40
30
20
10
0
ee e
agr re ee
g ee
gly A gr ee
n si a gr se
ro sa gr
St rd di sa on
no gly Di es
p
ee n r
gr ro No
ra St
e
ith
Ne

INTERPRETATION:-

From the above analysis it was found that 58.58% employee agreed that they are
aware of the method used for performance appraisal in the HINDALCO FRP
where as 3.70% disagree and rest 3.70% remain slient.

2-Appraisal system in Hindalco FRP clearly and accurately judges the knowledge
and performance of the individual.

Strongly agree 11.11111%

67
Agree 48.14815%
Neither agree nor disagree 37.03703704%
Strongly disagree 3.703704%
Disagree 0%
No response 0%

50
40
30
20
10
0
ee e
agr re ee
g ee
gly A gr ee
n si a gr se
ro sa gr
St rd di sa on
no gly Di es
p
ee n r
gr ro No
ra St
e
ith
Ne

INTERPRETATION:-

As from the above analysis it is found that 59.25% respondent agree that
HINDALCO FRP clearly and accurately judges the knowledge and performance
of the individuals, where 3.70% strongly disagree and 37.03% neither agree nor
disagree.

3-Performance appraisal helps to win co-operation and team work in the unit.

Strongly agree 7.4%

68
Agree 40.74%

Neither agree nor disagree 48.14%

Strongly disagree 0%

Disagree 3.70%

No response 0%

50
40
30
20
10
0
ee e
agr re ee
ly Ag gr ee
ng isa gr ee e
o si a gr ns
St
r rd d sa o
o
gly Di sp
een n re
ag
r ro No
St
er
eith
N

INTERPRETATION:-

From the above analysis it was found that48.14 % agreed and 3.70% disagreed
remaining 48.14% opt for neither agree nor disagree.

4-Present appraisal system facilitate the growth and learning for both appraiser
and appraise.

69
Strongly agree 7 .4%
Agree 48.14%
Neither agree nor disagree 37.03%
Strongly disagree 3.70%
Disagree 3.70%
No response 0%

50
45
40
35
30
25
20
15
10
5
0
ee e
gr re
a g ee
ly A gr ee
ng si a gr ee
se
r o
rd sa gr
St di sa on
no gly Di sp
r ee n re
g ro No
ra St
e
ith
Ne

INTERPRETATION:-

From the above analysis 55.54% agreed that performance appraisal system
facilitate the growth and learning for both appraiser and appraise where as 7.4%
disagreed rest 37.03% opt for neither agree nor disagree.

70
5-Performance appraisal gives constructive criticism in a friendly and positive
manner.

Strongly agree 14.81%

Agree 51.85%
Neither agree nor disagree 22.22%
Strongly disagree 0%
Disagree 7.40%
No response 3.70%

60
50
40
30
20
10
0
ee e
agr re ee
ly Ag gr ee
ng isa gr ee se
rt o sa gr
S o rd di si a on
lg y D p
en re
s
gr
e on
St
r No
era
ith
Ne

INTERPRETATION:-

From the above analysis 66.66% agreed that Performance appraisal gives
constructive criticism in a friendly and positive manner, whereas7.40% disagreed
with it, 22.22% opt for neither agree nor disagree where as 3.70% remain silent.

71
6-Performance appraisal improves motivation and job satisfaction.

Strongly agree 18.51%

Agree 37.03%
Neither agree nor disagree 40.74%
Strongly disagree 3.70%
Disagree 0%
No response 0%

45
40
35
30
25
20
15
10
5
0
ee e
agr re ee
ly Ag gr ee
ng isa gr ee e
o si a gr ns
St
r rd d sa o
o
gly Di sp
een n re
r o
ag St
r No
er
eith
N

INTERPRETATION:-

From the above analysis 55.54% agreed that performance appraisal improves
motivation and job satisfaction where 3.70% disagreed with it rest 40.74%
remaining opt for neither agree nor disagree.

72
7-My manager is partial in performance appraisal.

Strongly agree 3.70%

Agree 7.40%
Neither agree nor disagree 29.62%
Strongly disagree 22.22%
Disagree 29.62%
No response 7.40%

30
25
20
15
10
5
0
ee e
agr re ee
g ee
gly A gr ee
n si a gr se
ro sa gr
St rd di sa on
no gly Di es
p
ee n r
gr ro No
ra St
e
ith
Ne

INTERPRETATION:-

From the above analysis 11.1%agreed that my manager is partial in performance

appraisal, 29.62% neither agree nor disagree, 51.84% disagreed with this and
7.40% remain silent.

8-I am satisfied with the feedback mechanism for dissatisfaction regarding

performance appraisal process.
73
Strongly agree 14.81%
Agree 40.74%
Neither agree nor disagree 22.22%
Strongly disagree 14.81%
Disagree 7.40%
No response 0%

45
40
35
30
25
20
15
10
5
0
e
re

e
re
ag

...
Ag

en
ly

...
ng

isa

ee
re
ro

se
d

gr
ag
St

ly

on
sa
er

ng

Di

sp
ith

ro

re
Ne

St

No

INTERPRETATION:-

From the above analysis 55.55% agreed that they are satisfied with the feedback
mechanism for dissatisfaction regarding performance appraisal process, 22.22%
neither agree nor disagree, 22.21% disagreed with it.

9- What do you most expect from a performance appraisal?

74
Salary administration and benefits 33.33%
An insight into strength and weakness 22.22%
Promotion or transfer 11.11%
Recognition 25.92%

35
30
25
20
15
10
5
0
ts
nefi ss
be kne fe
r
d a ns
an we a on
n d tr niti
tio an or g
r a th on eco
ist ng oti R
in e
dm str om
ya to Pr
lar t in
Sa h
sig
in
An

INTERPRETATION:-

From the above analysis it is found that 33.33%expect salary administration and
benefits, then 25.9% expect recognition,22.22% expect insight into strength and
weakness whereas only 11.11% want promotion or transfer.

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10-Did you discuss goal for the year 2017-18 with your manager?

Yes 81.48%
No 14.81%
No response 3.70%

90
80
70
60
50
40
30
20
10
0
Yes
No
No response

INTERPRETATION:-

From the above analysis it is found that most of the respondents discuss their
goals with the manager. Around 81.48% opt for yes.

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11-Did you review on own development plan?

Yes 70.37%
No 29.62%
No response 0%

80
70
60
50
40
30
20
10
0
Yes
No
No response

INTERPRETATION:-

From the above analysis 70.37% said Yes that they review their own development
plan whereas only 29.62% said No.

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12-Did your manager used past performance record to evaluate current year
performance?

Yes 33.33%
No 62.96%
No response 3.70%

70

60

50

40

30

20

10

0
Yes
No
No response

INTERPRETATION:-

From the above analysis around 62.96% said No whereas 33.33% said Yes and
3.7% opt to be Silent.

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13- Did your manager use negative tone during the performance discussion?

Yes 11.11%
No 88.88%
No response 0%

90
80
70
60
50
40
30
20
10
0
Yes
No
No response

INTERPRETATION:-

From the above analysis around 11.11% said Yes and 88.89% said No .

79
14-Did your manger look at your whole year performance during review?

Yes 81.48%
No 18.51%
No response 0%

90
80
70
60
50
40
30
20
10
0
Yes
No
No response

INTERPRETATION:-

From the above analysis 81.48% said Yes while 18.51% said No.

15. What additional assistance from HR could have made the performance
discussion more meaningful?

80
Respondent 37.03%
Non respondent 62.96%

 A representative of HR should be present during the performance

appraisal.
 There should be monthly review of performance of each individuals in
order to recognize the impact of their performance.
 HR person involve themselves after they discussed with their manpower.
 Performance appraisal should be on the basis of exam.
 A discussion with manager will be really helpful which we missed due to
his transfer. HR could have done some better intervention to make it
fruitful
 May be presence of HR person during discussion.
 HR should remain associated during performance evaluation till the
appraisal process is justified properly through specific documentation.
 There should be specific discussion during appraisal with reporting boss.
 Ensure / verify either an employee getting adequate platform to perform
while executing his/her responsibilities.
 There should be some internal policy for unit transfer for the candidates
those have completed four years in same unit.

16.Is there any suggestion you want to give regarding performance appraisal in
your organization?

81
Respondent 40.74%
Non respondent 59.25%

 As mentioned above, a representative of the HR department should be

present during the performance appraisal.
 Goal setting should be done for grades of employee.
 Performance appraisal should be based upon level of in depth knowledge of
a candidate and his/her contribution to the organization.
 Appraisal should be in group discussion basis.
 System is good enough but result should be declared early (not in july).
 There’s need to be one to one discussion of the employees with their
managers before giving appraisal. Manager should give feedback and
discuss with the employee. It is not happening here.
 Things should be more appraisal if the appraisal process is made a bit
transparent.
 I don’t think bell curve is the ideal way of appraisal system.
 Would suggest to have a observe during review process for further
improvement.
 Elaborate the path forward for improvement on negative point.
 Salary increment should not calculate on percentage basis it should be
calculated by comparing highest paying candidate in same job.

CHI SQUARE TEST:-

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1) Experience and I am satisfied with the feedback mechanism for dissatisfaction
regarding performance appraisal process.

Null Hypothesis:- There is no significant relationship between experience and

satisfaction regarding feedback mechanism.

Alternative Hypothesis:-There is relationship between experience and satisfaction

regarding feedback mechanism.
less than 1 year 2-3 years 4-7 year above 7 years no response total percentage/100
strongly agree 0 0 1 3 1 5 0.185185185
agree 0 0 4 6 0 10 0.37037037
neither agree nor disagree 1 2 2 1 0 6 0.222222222
strongly disagree 0 0 1 3 0 4 0.148148148
disagree 0 0 2 0 0 2 0.074074074
total 1 2 10 13 1 27

E*0.185185 0.185185185 0.37037 1.851851852 2.407407407 0.185185185

E*0.37037 0.37037037 0.740741 3.703703704 4.814814815 0.37037037
E*0.222222 0.222222222 0.444444 2.222222222 2.888888889 0.222222222
E*148148 0.148148148 0.296296 1.481481481 1.925925926 0.148148148
E*0.074074 0.074074074 0.148148 0.740740741 0.962962963 0.074074074

Degree of freedom-16

Calculated value=18.3577

Table value=26.3

INTERPRETATION:-
As the calculated value is less than the tabulated value, null hypothesis accepted.
Thus, there is no significant relationship between the satisfaction regarding
feedback mechanism for dissatisfaction regarding performance appraisal process.

2) Relationship between Performance appraisal improves motivation and job

satisfaction and sampler age.

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Null Hypothesis:-There is no significant relationship between the improvement of
motivation and job satisfaction through performance appraisal and sampler age.

Alternative Hypothesis:-There is significant relationship between the

improvement of motivation and job satisfaction through performance appraisal
and sampler age.
strongly agree agree neither agree nor disagree strongly disagree total E*0.185185185 E*0.37037 E*0.444444444 E*0.37037037
25 years or less 0 1 0 0 1 0.185185185 0.37037037 0.444444444 0.037037037
26-30 years 2 5 6 0 13 2.407407407 4.814814815 5.777777778 0.481481481
31-35 years 2 1 3 0 6 1.111111111 2.222222222 2.666666667 0.222222222
36-40 years 0 1 2 0 3 0.555555556 1.111111111 1.333333333 0.111111111
41-45 years 1 2 0 0 3 0.555555556 1.111111111 1.333333333 0.111111111
46-50 years 0 0 1 1 2 0.37037037 0.740740741 0.888888889 0.074074074
5 10 12 1
percentage 0.185185185 0.37037 0.444444444 0.037037037

As age group 51-55 does not have any respondent so it is not included in chi
square test.

Calculated chi value=44.7239115

Degree of freedom= (6-1)(5-1)=24

Tabular value=25.0

INTERPRETATION:-

As the calculated value is more than the tabulated value, null hypothesis rejected
and alternative hypothesis is accepted. Thus, there is significant relationship
between the improvement of motivation and job satisfaction through performance
appraisal and sampler age.

3. Relationship between experience of the respondent and whether the

performance appraisal helps them to win cooperation and team work in the unit.

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 strongly agree agree neither agree nor disagree disagree strongly disagree total E*0.074074074 E*0.33333333 E*518518519 E*0.037037 E*0.037037037
less than 1 years 0 1 0 0 0 1 0.07407 0.33333 0.51851852 0.037037 0.037037037
2-3 years 0 1 1 0 0 2 0.14814 0.666666 1.03703702 0.074074 0.07406
4-7 years 1 4 5 0 0 10 0.7407 3.3333 5.18518 0.37037 0.3703
above 7 years 1 2 8 1 1 13 0.96296291 4.333329 6.74074075 0.481481 0.481481
no response 0 1 0 0 0 1 0.07407 0.33333 0.51851852 0.037037 0.037037037
total 2 9 14 1 1 27
percentage 0.074074074 0.33333333 0.518518519 0.037037 0.037037037 1

85
 SUGESSTIONS

 Performance appraisal should be based upon level of in depth knowledge of

a candidate and his/her contribution to the organization.
 There should be an observer during review process for further
improvement.
 Employees naturally like to know how they are performing relative to what
is expected from them. So feedback regarding performance should be
provided.
 There should be specific discussion during appraisal with reporting boss.
 Elaborate the path forward for improvement on negative point.

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 CONCULSION:-
The final result of assessment is a judgment that performance is adequate or good,
needs improvement, or has improved following efforts to alleviate problems or
realize a new vision for a community. An important value of performance
assessment is in promoting and structuring interactions among stakeholders that
lead to better understanding of community objectives and the role for
infrastructure in realizing those objectives. This understanding is the basis for
making good judgments on which decisions may be based. Even when a
consensus is not reached, a structured approach offers the benefits of providing a
framework for debate.

Debates arise because infrastructure services for any one user may be disruptive
to the services others receive, and performance of the system as a whole will
generally differ from what the individual user experiences. Because infrastructure
development typically draws on broad sources of funding, a central issue in many
decisions about infrastructure is the question of who benefits and who pays.
Sometimes decisions are based primarily on whether federal funds are available,
which may not support the best possible performance.

Achieving the balance that defines "good" infrastructure performance—between

the capability of the multifunctional system and the demands of its users—

87
 requires public motivation and broad input to decision making. Reducing the
demand or load on the system may be equally as effective as increasing the
system's ability to meet higher demand, or even more so. When infrastructure
professionals seek to make such judgments, there is potentially some tension
between public perception and opinion on the one hand and professionals acting
as experts on the other.

ANNXURE

QUESTIONNAIRE FOR
SURVEY ON PERFORMANCE APPRAISAL

 The purpose of this survey is to give you the opportunity to express

your current opinions about important aspects of Performance
Appraisal Process and its effectiveness and to provide us with
feedback on what we need to for improve.

 Please read each statement carefully and select the response that
best represents your opinion.

Please select the appropriate option

FUNCTION Production/Operation Quality Control, R&D
:
Engineering/Maintenance Projects
Finance and Commercial Human Resources

AGE 25 years or less 41-45 years

88
 GROUP:
26-30 years 46-50 years
31-35 years 51-55 years
36-40 years Above 55 years

Less than 1 year 4-7 years

EXPERIENCE:
2-3 years Above 7 years
S.NO FACTORS Strongly Agree Neither Strongly Disagree
Agree Agree nor Disagree
Disagree
1. I am aware of the method adopted for
performance appraisal in my organization

2. Appraisal System in Hindalco FRP clearly

and accurately judges the knowledge and
performance of the Individual
3. Performance appraisal helps to win co-
operation and team work in the unit

4. Present Appraisal system facilitate the

growth and learning for both appraiser and
appraise.

5. Performance appraisal gives constructive

criticism in a friendly and positive manner.

6. Performance appraisal improves motivation

and job satisfaction

7. My manageris partial in performance

appraisal

89
8. I am satisfied with the feedback mechanism
for dissatisfaction regarding performance
appraisal process.

90
9. What do you most expect from a performance appraisal?

 Salary Administration and Benefits

 An insight into strengths and weakness
 Promotion or transfer
 Recognition

10. Did you discuss goal for the year 2017- 18 with your manager?

a. Yes b. No

11.Did you review on own development plan?

a. Yes b. No

12. Did your manager used past performance record to evaluate current year
performance?

a. Yes b. No

13.Did your manager use negative tone during the performance discussion?

a. Yes b.No

14.Did your manager look atyour whole year performance during the review?

a. Yes b. No

15.What additional assistance from HR could have made the performance

discussion more meaningful?

16. Is there any suggestion you want to give regarding performance appraisal in
your organization

THANK YOU

DATE: PLACE:

91
 BIBLIOGRAPHY
BOOKS:

o Kothari.C.R, Research Methodology methods and Techniques,

Wishwaprakashan.
o Prof.Memoriya, Personnel management, Narayan Publications.
o RAO VSP, Human Resource Management, Anurag Jain.
o Tripathi.P.C, Human Resource Development, Sultan Chand and
Sons.

WEBSITES:

 http://www.hindalco.com/About-us/Awards-and-recognitions
 http://www.hindalco.com/

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