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Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 126
Performance Appraisal Practices In New Private Sector Banks: A Study With Reference
To Hdfc Bank And Axis Bank.
SUJITH AS
Research Scholar in Commerce, St.Thomas College Pala
(Mahatma Gandhi University, Kerala)
ABSTRACT
Banking sector is a fast growing sector of India. With swift expansion in the number of
branches and the new functions assigned to them, banks are beginning to feel a new pressure on
their organizational abilities i.e. the processes of recruitment, placement, training, promotion and
appraisal, in order to ensure that the right number of staff with the right capacities are available
at the right time and for the right places. Performance appraisal is the process of determining and
communicating to an employee how he / she is performing on the job and ideally, establishing a
plan of improvement. It is very much critical because it helps the managers to take the
administrative decisions effectively relating to promotions, fringes, payoffs and merit pay
increases of the employees. So, performance appraisal is a must for all organizations. This paper
aimed at critically evaluating the existing performance appraisal systems of HDFC Bank and
Axis Bank. The present study aims to know the opinion of bank employees of these two banks
on performance appraisal systems and criteria followed in their banks.
Introduction
Today’s manager one of the key
responsibilities is taking human resource
decisions. Indeed, the success and failure of
a human resource manager depends on how
effectively & efficiently he/she performs the
human resource management functions. In
the traditional approaches, the human
resource department is responsible for
setting and managing a performance
appraisal system. Managers conduct
performance appraisal as one of their
administrative duties. It is arguably that
performance appraisal is the most
contentious and least popular activities
performed by human resource managers
(Brtton and Gold, 2003). Often, managers
feel they do not know how to evaluate
employee performance effectively, and
employees feel they are excluded from the
process and their contributions are not
recognized (Noe, Hollenbeck, Gerhart, and
Page 2 of 8
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 127
Wright, 2004). Human resource managers
measure the performance of employees by
filling-out forms one or twice in a year and
present the information to their employees,
one by one. Appraisals include negative
information (areas needing improvement),
so the meetings for discussing performance
appraisals tend to be uncomfortable for
managers and employees, alike.
In many organizations, two
evaluation systems exist side by side: the
formal and the informal. Managers often
think about how well employees are doing;
this is informal system. Political and
interpersonal processes influence it, so those
employees who are linked better than others
have an edge. But managers cannot find out
the real/actual performance of employees
through this system because here managers
liking or disliking are material and
employee’s performances are immaterial.
By contrast, a formal performance
evaluation is a system set up by organization
to regularly and systematically evaluate
employees’ performance. Most of the
organizations follow formal evaluation
system because they think that performance
appraisal is the essential thing for the
organizational success. Managers must
maintain the visibility in the performance
evaluation program because it may
accelerate the authenticity of the program.
Introduction to Performance appraisal
Performance appraisal includes all
formal procedures used to evaluate
personalities, contributions & 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.
In simple words, performance
appraisal is the systematic evaluation of the
individual with respect to his performance
on the job and his potential for development.
The essentials of an effective performance
system are as follows:
Documentation: Means continuous
noting and documenting the
performance. It also helps the
evaluators to give a proof and the
basis of their ratings.
Standards /Goals: The standards set
should be clear, easy to understand,
achievable, motivating, time bound
and measurable.
Practical and simple format: - The
appraisal format should be simple,
clear, fair and objective. Long and
complicated formats are time
Page 3 of 8
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 128
consuming, difficult to understand,
and do not elicit much useful
information.
General Application Specific Purpose
Development Uses
Identification of individual needs
Performance feedback
Determining transfer and job assignment
Identifying of individuals strengths and
development needs
Administrative
Uses/Decisions
Salary
Promotion
Retention or termination
Recognition of individual performance
Lay-offs
Identification of poor performers
Organizational
Maintenance/
Objectives
HR Planning
Determining organizational training needs
Evaluation of organizational goal achievement
Information for goal identification
Evaluation of HR system
Reinforcement of organizational development
needs
Documentation
Criteria for validation research
Documentation for HR decisions
Helping to meet legal requirements
Literature Review
The objective of this literature
review is to establish the basis for this
research. Performance appraisal is one of the
most widely used methods for measuring the
value of employee performance. The success
of performance appraisal depends on how
effectively it is implemented. It also depends
on how well the employees have understood
the performance appraisal system and how
positively they are oriented towards their
system.
Performance Appraisal
Eichel and Bender (1984) stated
that performance appraisal can also be called
as the Achilles heel
ofmanagement.Although leaders ofmany
public organizations strive to be employee
focused or employee centered, a lack of
emphasis is given to a process intended to
assist the employee in achieving both
personal and organizational goals.
Cascio (1998) defined performance
appraisal as a process to improve
employee’s work performance by helping
them realize and use their full potential in
carrying out the organization’s missions and
to provide information to employees and
managers for use in making work related
