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SUMMER TRAINING PROJECT REPORT
ON
“A Study on Performance
Appraisal System at HDFC BANK
Lucknow”
Towards partial fulfilmen...
ACKNOWLEDGEMENT
The present work is an effort to throw some light on “A Study on Performance
Appraisal System at HDFC BANK...
Preface
The Training project program is the integral part of MBA curriculum during the
course of management; the research ...
Executive Summary
This project report is a review based on theory as well as the industry outlook of
performance appraisal...
Table of Content
Training Certificate ii
Certificate from the College iii
Acknowledgement iv
Preface v
Executive Summary v...
1
Introduction to
the Topic
2
INTRODUCTION TO THE TOPIC
Definition of performance appraisal
“Performance Appraisal is defined as the process of assess...
3
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine rewar...
4
for development and a solid sense of their relationship with their supervisor. Avoiding
performance issues ultimately de...
5
Techniques of performance Appraisal
1-Rating scale
2-Check list
3-Force distribution
4-Forced choice method
5-Critical i...
6
CONCEPT OF PERFORMANCE APPRAISAL
Performance appraisal may be defined as a structured formal interaction between a
subor...
7
performance appraisals enable management and monitoring of standards, agreeing
expectations and objectives, and delegati...
8
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Human Resource (or personnel) management, in the sense of getting things
done ...
9
RECRUITMENT
The process of recruitment begins after manpower requirements are determined in
terms of quality through job...
10
1. Establishing performance standards
2. Communicating the Standards
3. Measuring Performance
4. Comparing the actual w...
11
situations, particularly those involving professional, sales, or managerial positions,
essay appraisals from former emp...
12
MANAGEMENT BY OBJECTIVES
To avoid, or to deal with, the feeling that they are being judged by unfairly
high standards, ...
13
1. “Alternation ranking”:
Ranking of employees from best to worst on a trait or traits is another method for
evaluating...
14
360 DEGREE FEEDBACK
Many firms have expanded the idea of upward feedback into what the call
360-degree feedback. The fe...
15
The guiding principle of the MBO approach is that direct results can be observed
easily. The MBO method recognizes the ...
16
 Plays an important role in Personal career and succession planning.
 Clarifies team roles and facilitates team build...
17
c) He/She may rate leniently in order to win promotions for the
subordinates and therefore, indirectly increase his/her...
18
contract/sale just before the completion of the appraisal, the timing of the incident
may inflate his or her standing, ...
19
Ø Address employee concerns / queries on performance rating, in
consultation with the reviewer
b) REVIEWER (Reporting M...
20
Ø Reviews the performance ratings proposed by the HOD‟s,
specifically on the upward / downward shift in ratings, to ens...
21
of the behavior displayed by him. They play a very important role in the deciding the
final performance rating for an e...
22
PERFORMANCE RATING PROCESS
EXCEPTIONAL CONTRIBUTOR (EC)
 Performs consistently and
substantially above expectations in...
23
Human Resource (or personnel) management, in the sense of getting things
done through people, is an essential part of e...
24
their contribution towards the organizational goals. If the process of performance
appraisals is formal and properly st...
25
SELF APPRAISAL
Self appraisal is an important part of the Performance appraisal process where the
employee himself give...
26
achievements. Demonstrate enthusiasm to improve in future and take all his
suggestions calmly. Don‟t complain or demons...
27
"A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM FOUNDATION
WITH THE BRICKS OTHERS HAVE THROWN AT HIM."
Therefore, On the pa...
28
 The appraiser should not adopt a confrontational approach towards the meeting.
The goal is not to criticize the emplo...
29
3. Exchange of views - Ensuring that the discussion involves a full, free and
frank exchange of views about what has be...
30
How to Complete Performance Appraisal Form
Performance Appraisal form provides the basis for the performance review,
pr...
31
 Apart from the defined performance objectives and results, discuss the related
issues as well covering all the aspect...
32
three months during the year. These opportunities are important as they provide an
important chance for performance mon...
33
2. Be a good listener. Remember to be an active listener and to pick up on your
employee‟s verbal and nonverbal cues. L...
34
Performance Appraisal Feedback
Performance appraisal process is incomplete without the feedback given to the
employee a...
35
o The appraiser should make the receiver feel comfortable during the feedback
meeting.
o The appraiser should make it a...
36
Company
Profile
37
Company Profile
HDFC Bank
Type Public
Traded as
BSE: 500180
NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Co...
38
Finance and Insurance
Consumer Banking
Mortgages
Credit Cards
Revenue 743.7322 billion (US$11 billion) (2016)
Profit 12...
39
FORMATION OF THE COMPANY
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an...
40
BUSINESS FOCUS
HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build
sound customer franchi...
41
TIMES BANK AMALGAMATION
In a milestone transaction in the Indian banking industry, Times Bank Limited
(another new priv...
42
BOARD OF DIRECTORS
The Composition of the Board of Directors of the Bank is governed by the Companies
Act, 1956, the Ba...
43
The Bank has not entered into any materially significant transactions during the
year, which could have a potential con...
44
RATING
Credit rating
The Bank has its deposit programs rated by two rating agencies - Credit Analysis &
Research Limite...
45
Corporate governance rating
The bank was one of the first four companies, which subjected itself to a Corporate
Governa...
46
The products of the company are categorized into various sections which are as
follows:
 Accounts and deposits.
 Loan...
47
orientation, the Bank has made significant inroads into the banking consortia of a
number of leading Indian corporates ...
48
HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) an...
49
The following tables summarizes the products and services and customer segments
offered by HDFC Bank:.
Table 1: Persona...
50
Cards Payment Services Access To Bank
 Credit Card
 Debit Card
 Prepaid Card
--------------------------------
Forex ...
51
Table 2: Wholesale banking
Corporate Small and Medium
Enterprises
Government
Sector
Financial Institutions
and Trusts
L...
52
Table 3: NRI services
Accounts & Deposits Remittances
 Rupee Saving a/c
 Rupee Current a/c
 Rupee Fixed Deposits
 F...
53
 Gold Credit Card
Payment Services
Access To Bank
 NetSafe
 BillPay
 InstaPay
 DirectPay
 Visa Money
 Online Don...
54
standards, professional integrity, corporate governance and regulatory compliance.
Continue to develop new product and ...
55
RECENT DEVELOPMENT
The Reserve Bank of India had approved the scheme of amalgamation of Centurion
Bank of Punjab Ltd. w...
56
Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's
leading housing finance company, HDFC Bank ...
57
established a leadership 'position'. The bank is also a strong player in foreign
exchange services, personal loans, mor...
58
Awards In 2009
Table 4: Awards in 2009
Euromoney Awards 2009 'Best Bank in India'
Economic Times Brand
Equity & Nielsen...
59
Awards In 2008
Table 5: Awards in 2008
Finance Asia Country
Awards for Achievement
2008
'Best Bank and Best Cash Manage...
60
Business Today-Monitor
Group survey
One of India's "Most Innovative Companies"
Financial Express-Ernst &
Young Award
Be...
61
QUALITY POLICY OF HDFC BANK
 Security: The bank provides long term financial security to their policy. The bank
does t...
62
Research
Methodology
63
Research Objectives
 To study the existing appraisal system in the organization.
 To Study existing appraisal system ...
64
RESEARCH METHODOLOGY
Research Design
I have used Descriptive research design for this study.
SAMPLING DESIGN
Descriptiv...
65
DATA COLLECTION SOURCE: Two methods have been used to collect the
relevant data, which are essential for the study, the...
66
Limitations
67
LIMITATIONS OF STUDY
 Time and resource were the major constraints during the execution of the
project. Therefore only...
68
Contact for more
Shrikrishna Computer Chinhat
Lucknow
Mo no- 9554444951
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A study on performance appraisal system at hdfc bank lucknow

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A study on performance appraisal system at hdfc bank lucknow

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A study on performance appraisal system at hdfc bank lucknow

  1. 1. SUMMER TRAINING PROJECT REPORT ON “A Study on Performance Appraisal System at HDFC BANK Lucknow” Towards partial fulfilment of Master of Business Administration (MBA) (Affiliated to U. P. Technical University, Lucknow) Industry Guide: Faculty Guide: Mr. A. S. Yadav Ms. Meetu Pandey (Manager) (Asst. Professor) HDFC, Lucknow BBD NITM, Lucknow Submitted by: Jaya Rai Roll no: 1505470023 M.B.A.3rd Semester SESSION2016-2017 DEPARTMENTOFMANAGEMENT Babu Banarasi Das National Institute of Technology & Management Sector1,Akhilesh Dasnagar,FaizabadRoad,Lucknow(U.P.),India
  2. 2. ACKNOWLEDGEMENT The present work is an effort to throw some light on “A Study on Performance Appraisal System at HDFC BANK Lucknow. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledge the encouragement and guidance received by my Faculty Guide Ms. Meetu Pandey and other staff members. I convey my heart full affection to all those people who helped and supported me during the course, for completion of my Project Report. (Jaya Rai)
  3. 3. Preface The Training project program is the integral part of MBA curriculum during the course of management; the research is expected to use and apply their academic knowledge and gain a valuable insight into corporate culture with all its environment operational complexities. The summer training offers a valuable opportunity to the researcher to meet their academic knowledge to the real world situation. I have undertaken commercial department to study about the various activities done in this department in the details, as the result of that I came out with the project title “A Study on Performance Appraisal System at HDFC BANK Lucknow”. In this report I have put my finest efforts to compile the data with utmost accuracy and hope this report will give complete satisfaction regarding the various aspects of HR. (Jaya Rai)
  4. 4. Executive Summary This project report is a review based on theory as well as the industry outlook of performance appraisal system of the organization. The report starts with the Introduction and Literature Review of performance appraisal system that outlines its history, definitions, purposes, types, process, methods, appraiser, parameters of evaluation and the essentials of an effective appraisal system. Further the performance appraisal system of HDFC Bank, collected through various primary and secondary sources have been included in the report which gives a fair idea of the kind of appraisal system being followed across various corporate. Last, the conclusions and references have been mentioned.
  5. 5. Table of Content Training Certificate ii Certificate from the College iii Acknowledgement iv Preface v Executive Summary vii 1. Introduction to the Topic 1-35 2. Company Profile 36-61 3. Research Methodology 62-65 4. Limitations 66-67 5. Data Interpretation & Analysis 68-90 6. Findings 91-93 7. SWOT Analysis 94-98 8. Suggestion & Recommendations 99-100 9. Conclusion 101-102 10. Bibliography 103-104 Annexure 105-109
  6. 6. 1 Introduction to the Topic
  7. 7. 2 INTRODUCTION TO THE TOPIC Definition of performance appraisal “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 employee‟s excellence in matters pertaining to his present job and his potential for a better job.” According to Dulewicz (1989), "... A basic human tendency to make judgements about those one is working with, as well as about oneself." “Any system of determining how well an individual employee has performed during a period of time, frequently used as a basis for determining merit increases.” “Performance appraisal is a systematic review of a person’s work and achievements over a recent period, usually leading to plans for the future. “ In its most basic form, performance appraisal (or review) activities include documenting achieved results (hopefully, by also including use of examples to clarify documentation) and indicating if standards were met or not. The appraisal usually includes some form of a development plan to address insufficient performance.
  8. 8. 3 In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. This concept have get the recognition the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago, as a distinct and formal management procedure were used in the evaluation of the work performance. Later, the traditional emphasis on reward outcomes was progressively rejected as it took only into consideration the material outcome but not the morale, enthusiasm, attitude ability and self-esteem. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. Yearly performance reviews are critical. Organizations are hard pressed to find good reasons why they can't dedicate an hour-long meeting once a year to ensure the mutual needs of the employee and organization are being met. Performance reviews help supervisors feel more honest in their relationships with their subordinates and feel better about themselves in their supervisorial roles. Subordinates are assured clear understanding of what's expected from them, their own personal strengths and areas
  9. 9. 4 for development and a solid sense of their relationship with their supervisor. Avoiding performance issues ultimately decreases morale, decreases credibility of management, decreases the organization's overall effectiveness and wastes more of management's time to do what isn't being done properly. Few issues in management stir up more controversy than performance appraisal. There are many reputable sources - researchers, management commentators, and psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it. It is deemed as the critical tool for banking sector as for the banking sector the performance indicators are quit different and the overall structure of the banking sector is bit complex thus to use this concept effectively and efficiently is quit difficult for this sector. Thus, through this report the researcher had tried to find the problem emerging and to provide them suggestion so as for effective working.
  10. 10. 5 Techniques of performance Appraisal 1-Rating scale 2-Check list 3-Force distribution 4-Forced choice method 5-Critical incident method 6-Essay method 7-360 degree performance appraisal method Characteristics 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. 5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision of the employees.
  11. 11. 6 CONCEPT OF PERFORMANCE APPRAISAL Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.) Whether this is an appropriate use of performance appraisal - the assignment and justification of rewards and penalties - is a very uncertain and contentious matter. Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by his or her line manager (Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization). Annual
  12. 12. 7 performance appraisals enable management and monitoring of standards, agreeing expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and enable organizational training needs analysis and planning. Performance appraisals data feeds into organizational annual pay and grading reviews, and coincides with the business planning for the next trading year. Performance appraisals generally review each individual's performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals are also essential for career and succession planning. Performance appraisals are important for staff motivation, attitude and behavior development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development.
  13. 13. 8 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT 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. “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. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop „cultural awareness‟, product / process / organization knowledge and experience for new staff members. FUNCTIONS OF HUMAN RESOURCE MANAGEMENT Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization: 1. Recruitment 2. Selection 3. Induction 4. Performance Appraisal 5. Training & Development
  14. 14. 9 RECRUITMENT The process of recruitment begins after manpower requirements are determined in terms of quality through job analysis and quantity through forecasting and planning. SELECTION The selection is the process of ascertaining whether or not candidates possess the requisite qualifications, training and experience required. INDUCTION Induction is the technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the organization. WHAT IS “PERFORMANCE APPRAISAL”? 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 employee‟s excellence in matters pertaining to his present job and his potential for a better job.” CHARACTERISTICS 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. 5. The main purpose of Performance Appraisal is to secure information necessary for making objective and correct decision an employee. PROCESS The process of performance appraisal:
  15. 15. 10 1. Establishing performance standards 2. Communicating the Standards 3. Measuring Performance 4. Comparing the actual with the standards 5. Discussing the appraisal 6. 6.Taking Corrective Action LIMITATIONS 1. Errors in Rating 2. Lack of reliability 3. Negative approach 4. Multiple objectives 5. Lack of knowledge 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 and (b) least vulnerable to the obstacles already discussed. Before relating the specific techniques to the goals of performance appraisal stated at the outset of the article, I shall briefly review each, taking them more or less in an order of increasing complexity. 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
  16. 16. 11 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 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.
  17. 17. 12 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 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. The two most effective methods are alternation ranking and paired comparison ranking.
  18. 18. 13 1. “Alternation ranking”: Ranking of employees from best to worst on a trait or traits is another method for evaluating employees. Since it is usually easier to distinguish between the worst and the best employees than to rank them, an alternation ranking method is most popular. Here subordinates to be rated are listed and the names of those not well enough to rank are crossed. Then on a form as shown below, the employee who is highest on the characteristic being measured and the one who is the lowest are indicated. Then chose the next highest and the next lowest, alternating between highest and lowest until all the employees to be rated have been ranked. 2. “Paired-comparison ranking”: This technique is probably just as accurate as alternation ranking and might be more so. But with large numbers of employees it becomes extremely time consuming and cumbersome. Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people are asked to make independent rankings of the same work group and their lists are averaged), are among the best available for generating valid order-of-merit rankings for salary administration purposes. 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?
  19. 19. 14 360 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." ADVANTAGES Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job performance. Employees are judged according to real outcomes, and not on their potential for success, or on someone's subjective opinion of their abilities.
  20. 20. 15 The guiding principle of the MBO approach is that direct results can be observed easily. The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied elements that go to make up employee performance. MBO advocates claim that the performance of employees cannot be broken up into so many constituent parts, but to put all the parts together and the performance may be directly observed and measured. DISADVANTAGES This approach can lead to unrealistic expectations about what can and cannot be reasonably accomplished. Supervisors and subordinates must have very good "Reality Checking" skills to use MBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring. Variable objectives may cause employee confusion. It is also possible that fluid objectives may be distorted to disguise or justify failures in performance. 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.
  21. 21. 16  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. RATING ERRORS IN PERFORMANCE APPRAISALS Performance Appraisals are subject to a wide variety of inaccuracies and biases referred to as 'rating errors'. These errors can seriously affect assessment results. Some of the most common rating errors are: - LENIENCY OR SEVERITY: - Leniency or severity on the part of the rater makes the assessment subjective. Subjective assessment defeats the very purpose of performance appraisal. Ratings are lenient for the following reasons: a) The rater may feel that anyone under his or her jurisdiction who is rated unfavorably will reflect poorly on his or her own worthiness. b) He/She may feel that a derogatory rating will be revealed to the rate to detriment the relations between the rater and the ratee.
  22. 22. 17 c) He/She may rate leniently in order to win promotions for the subordinates and therefore, indirectly increase his/her hold over him. CENTRAL TENDENCY: - This occurs when employees are incorrectly rated near the average or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and anxieties, which the raters have been assessing the rates. HALO ERROR: - A halo error takes place when one aspect of an individual's performance influences the evaluation of the entire performance of the individual. The halo error occurs when an employee who works late constantly might be rated high on productivity and quality of output as well ax on motivation. Similarly, an attractive or popular personality might be given a high overall rating. Rating employees separately on each of the performance measures and encouraging raters to guard against the halo effect are the two ways to reduce the halo effect. RATER EFFECT: -This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only to certain individuals or groups based on the rater's attitude towards them and not on actual outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error. PRIMACY AND REGENCY EFFECTS: - The rater's rating is heavily influenced either by behavior exhibited by the ratee during his early stage of the review period (primacy) or by the outcomes, or behavior exhibited by the ratee near the end of the review period (regency). For example, if a salesperson captures an important
  23. 23. 18 contract/sale just before the completion of the appraisal, the timing of the incident may inflate his or her standing, even though the overall performance of the sales person may not have been encouraging. One way of guarding against such an error is to ask the rater to consider the composite performance of the rate and not to be influenced by one incident or an achievement. PERFORMANCE DIMENSION ORDER: - Two or more dimensions on a performance instrument follow each other and both describe or rotate to a similar quality. The rater rates the first dimensions accurately and then rates the second dimension to the first because of the proximity. If the dimensions had been arranged in a significantly different order, the ratings might have been different. SPILLOVER EFFECT: - This refers lo allowing past performance appraisal rating lo unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating for current period although the demonstrated behavior docs not deserve the rating, good or bad. ROLES IN THE PERFORMANCE APPRAISAL PROCESS a) REPORTING MANAGER Ø Provide feedback to the reviewer / HOD on the employees‟ behavioral traits indicated in the PMS Policy Manual Ø Ensures that employee is aware of the normalization / performance appraisal process
  24. 24. 19 Ø Address employee concerns / queries on performance rating, in consultation with the reviewer b) REVIEWER (Reporting Manager’s reporting Manager) Ø Discuss with the reporting managers on the behavioral traits of all the employees for whom he / she is the reviewer Ø 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) Ø Presents the proposed Performance Rating for every employee of his / her function to the Normalization committee. Ø HOD also plays the role of a normalization committee member. d) HR HEAD Ø Secretary to the normalization committee Ø Assists HOD‟s / Reporting Managers in communicating the performance rating of all the employees e) NORMALIZATION COMMITTEE Ø Decides on the final bell curve for each function in the respective Business Unit / Circle
  25. 25. 20 Ø 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 KEY CONCEPTS IN PMS In order to understand the Performance Management System, some concepts need to be explained which play a very important role in using the PMS successfully. They are: Ø KRA’S (KEY RESULT AREAS): The performance of an employee is largely dependent on the KRA score achieved by the employee during that particular year. Thus, it is necessary to answer a few basic questions i.e.  What are the guidelines for setting the KRA‟s for an employee?  How does an employee write down his KRA‟s for a particular financial year?  KRA‟s: The Four Perspectives.  How is the KRA score calculated for an employee on the basis of the targets sets and targets achieved? Ø BEHAVIORAL TRAITS: Some of the qualitative aspects of an employees‟ performance combined with the general behavioral traits displayed by the employee during a year constitutes his behavior traits. An employee is assigned the rating on the basis of the intensity
  26. 26. 21 of the behavior displayed by him. They play a very important role in the deciding the final performance rating for an employee as is even capable of shifting the rating one level upwards/downwards. Ø BHARTI 2010 LEADERSHIP COMPETENCY FRAMEWORK: This competency framework is a simple and structured way to describe the elements of behaviors required to perform a role effectively. This framework also tries to assess the performance of an employee objectively. Ø THE PERFORMANCE RATING PROCESS: The rating process tries to explain the four different types of rating that an employee can achieve i.e. EC, SC, C and PC. It also explains the criteria, which is considered for awarding any of these ratings to the employee. Ø PROMOTION AND RATING DISRTRIBUTION GUIDELINES: The promotion and normal distribution guidelines provide the framework within which the performance appraisal process has to work. It is very important that the HR department pays due attention to these guidelines while preparing the bell curves for various functions and the consolidated bell curve for all the functions. These guidelines also help in deciding upon the promotion cases in a year.
  27. 27. 22 PERFORMANCE RATING PROCESS EXCEPTIONAL CONTRIBUTOR (EC)  Performs consistently and substantially above expectations in all areas  Achieves a final score greater than or equal to 115%  Consistently delivers on stretch targets  Is proactive  Spots and anticipates problems, implements solutions  Sees and exploits opportunities  Delivers ahead of time  Sees the wider picture-impacts across business  Focuses on what‟s good for the business  Seen as role model by others  Recognized as exceptional by other functions as well  Motivates others to solve problems  Develops others  Provides open and honest SIGNIFICANT CONTRIBUTOR (SC)  Performs above expectations in all areas  Achieves final score between 100- 114%  Versatile in his/ her area of operation  Develops creative solutions and require little / minimal supervision  Sets examples for others  Take ownership of own development  Coaches others  Demonstrates business initiative  Is self motivated  Supportive team player  Leads own team very effectively  Demonstrate functional initiative ·
  28. 28. 23 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. “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 under valued, under trained and under utilized. Following are the various functions of Human Resource Management that are essential for the effective functioning of the organization: 1. Recruitment 2. Selection 3. Induction 4. Performance Appraisal 5. Training & Development Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across the world being – "get paid according to what you contribute" – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate
  29. 29. 24 their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual‟s performance. It helps to align the individual performances with the organizational goals and also review 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. PART OF SELF APPRAISAL Performance Review - Preparation Performance Review – The Meeting How to Complete a Performance Appraisal Form Analysis for Improving Performance Active performance appraisal conversation Performance appraisal feedback Performance Consulting: Moving Beyond Training Writing performance appraisal Performance Appraisal Training How to Measure Employee Performance
  30. 30. 25 SELF APPRAISAL Self appraisal is an important part of the Performance appraisal process where the employee himself gives the feedback or his views and points regarding his performance. Usually this is done with the help of a self appraisal form where the employee rates himself on various parameters, tells about his training needs, if any, talks about his accomplishments, strengths, weaknesses, problems faced etc. TIPS FOR SELF – APPRAISAL  BE HONEST Always be truthful and honest while telling your accomplishments or failures. Don‟t exaggerate your strengths and don‟t hide your weaknesses. Don‟t make personal judgments for anybody.  DO THE PREPARATION It‟s always better to prepare yourself before the meeting. Get all the lists in place; prepare all the evidences and references.  BE OBJECTIVE Objectivity is important in self – appraisal. Don‟t exaggerate or downplay your achievements or failures. Be specific and concise in your statements and if possible support them with examples or references or evidences with dates. For example: "I responded to all queries within 48 hours" is better than just saying "My customer service was good."  POSITIVE ATTITUDE Have a positive attitude towards the whole appraisal process. Be co-operative. Don‟t hesitate from taking the responsibility of your failures as well as the
  31. 31. 26 achievements. Demonstrate enthusiasm to improve in future and take all his suggestions calmly. Don‟t complain or demonstrate a negative attitude.  Cover all the aspects Apart from your strengths, weaknesses, accomplishments and failures, express the opportunities you would like have for your development and improvement. Suggest ways to overcome the problems faced. Assess your capabilities, behaviors‟ and skills and competence. SEEK FUTURE RESPONSIBILITIES According to the assessment of the KSA‟s according to your job description, plan the short term and long term for the next year. Try to look for tasks beyond your current job responsibilities. This will help in personal development as well as contributing to the organizational productivity. Self appraisal should ideally include the accomplishments, the goals achieved, the failures, and the personal growth (i.e. new skills acquired, preparation for the future etc.), the obstacles faced during the period, the efforts for removing them, the suggestions, and the areas of training and development felt by the employee. PERFORMANCE APPRAISAL FEEDBACK Performance appraisal process is incomplete without the feedback given to the employee about his appraisal and his performance. But the way of giving as well as receiving the feedback differs from person to person and their way of handling and their outlook towards the issue. According to a popular saying:
  32. 32. 27 "A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM FOUNDATION WITH THE BRICKS OTHERS HAVE THROWN AT HIM." Therefore, On the part of the person receiving the feedback, the following points are important to be taken care of: o The employee should have a positive attitude towards the feedback process  He should listen to the suggestions of the appraiser calmly and try to incorporate them in his plans.  He should not hesitate to ask for the help of his superiors.  Should have a co-operative attitude during the feedback meeting.  Don‟t judge the appraiser as a person.  Should take the feedback objectively.  Should not judge the appraiser as a person on the basis of the feedback. On the part of the appraiser or the manager / person giving the feedback, the following points are to be taken care of:  The appraiser should make the receiver feel comfortable during the feedback meeting.  The appraiser should make it a two – way conversation i.e. let the employee speak.  Listen to the employee and note his points, suggestions, problems etc.
  33. 33. 28  The appraiser should not adopt a confrontational approach towards the meeting. The goal is not to criticize the employee.  Provide a constructive feedback to the employee i.e. in a way which will motivate him to perform better.  Have a positive attitude towards the process  Try to understand the reasons of his failure. Make the appraisal feedback meeting useful and productive for the organization and the employee. PERFORMANCE REVIEW MEETING Today, Performance Review Meetings are regarded as conversation with a purpose. They are considered extremely important for the development and health of the organization. The purpose of the performance review meetings is to reach mutually agreed conclusions about the development of the individual and his performance and if applicable, any areas for improvement, including how such improvements are to be achieved. The purpose of Performance and Development reviews is to enable the employees to engage in a dialogue and get the support of the manager about the individual‟s performance and development. They should be more like free- flowing, open meetings in which views are exchanged so that agreed conclusions can be reached. The three key elements of performance review meetings are: 1. Feedback - Providing information on how a person has been doing. 2. Measurement – assessing results against agreed targets and standards.
  34. 34. 29 3. Exchange of views - Ensuring that the discussion involves a full, free and frank exchange of views about what has been achieved, what needs to be done to achieve more and what employees think about their work the way they are managed and their aspirations. Performance Appraisal review is the meeting when the employee can be motivated to perform better in future or reinforce his desirable behaviour. Review discussion meetings ideally should include the following:  Review of progress on tasks and activities in relation to the employee‟s performance plan,  The developmental initiatives taken by the employee himself and those planned by the management for the employee.  Identification of variances in terms of delays, requisite quality and shortfall in help planned for the employee, if any  Analyzing the causes of the delay, the problems faced and the solutions adopted.  Preparation of action steps for solving identified problems and contingency plans for anticipated problems. Periodic review meetings become meaningful only when they help pause, reflect, take stock and strategize in an otherwise active relationship.
  35. 35. 30 How to Complete Performance Appraisal Form Performance Appraisal form provides the basis for the performance review, providing the feedback to the employees and the final rating of the employee. It also facilitates various other HR decisions and career development plans and decisions of the employees. Therefore, performance appraisal from should be filled with utmost care and objectivity. The Performance appraisal form should be filled by the immediate supervisor or manager of the employee in order to ensure that the appraiser if fully acquainted with the performance, responsibilities, targets and standards of the employee. All the instructions and guidelines on the appraisal form should be read and followed carefully.  Be prepared with all the details of the performance, the standards, job description and the past appraisals of the employee.  Clear and unambiguous description of the employee performance should be given in terms of average, above average, good and excellent performance.  The focus should be on the employees‟ behaviour throughout the year and not just his recent performance.  Quantify the ratings, wherever possible, to ensure easy comparability.  Substantiate and support your rating, and attach all the necessary documents (if required).
  36. 36. 31  Apart from the defined performance objectives and results, discuss the related issues as well covering all the aspects of the performance. When filling the appraisal form, be honest and objective. ANALYSIS FOR IMPROVING PERFORMANCE Any performance review process is incomplete without the feedback to the employees. The feedback could be given in the review discussion. Review discussions are semi formal, scheduled, periodic interactions – usually bimonthly or quarterly – between a manager and his employee. The basic purpose of the review discussion is to analyze the performance of the employee in the past to improve the performance of the employee in future. A review discussion is an opportunity to coach, mentor, learn and understand. The manager encourages his/her employees to critically reflect over progress made on the Performance appraisal plan and to develop creative, yet feasible alternatives for problem areas.The manager uses this opportunity to:  Review the performance of the each employee individually.  Discuss the problems faced by the employees during the course of action.  The solutions tried, and the degree of success achieved in solving the problems faced.  Revisit with the employee, his/ her annual plan for the remaining time period and develop revised action plans, if necessary. Review discussions reassure the employees that each one of them has structured opportunities for one to one interaction with the manager once every two or
  37. 37. 32 three months during the year. These opportunities are important as they provide an important chance for performance monitoring or development mentoring. The aim of the performance review discussions is to share perceptions, solve the problem faced during the course of the action, decide on the new goals jointly and provide a feedback to the employee for the past performance i.e. to look at his strengths and weaknesses and also help to chart out a career plan for the employee. The focus of these performance review discussions should not bet o judge the employees‟ past performance; rather it should be to motivate the employee to improve his future performance and reinforce his good behaviour. Active Performance Appraisal Conversation 1. Active conversation plays an important part in the performance review meeting. The appraiser should ensure that the meeting has a two way conversation and that the employee should get a fair chance To speak. The "manner" of giving the feedback of the performance of the employee is very important. The conversation should have an optimistic and motivating tone. Some important points that should be taken care of in the active Performance Appraisal Conversation are: Make it a two-way conversation. An effective Performance appraisal review requires an interactive discussion with an open agenda. Try to formulate questions that seek the employee‟s ideas and input. This will help the employee feel you value his or her opinions. Give the employee a fair chance to put forward his ideas; let him speak.
  38. 38. 33 2. Be a good listener. Remember to be an active listener and to pick up on your employee‟s verbal and nonverbal cues. Listen to his ideas and problems. 3. Address what‟s important to the employee. Since job satisfaction is the most important factor affecting an employee‟s attitude (and therefore his or her level of performance and value to your company), an effective review should delve into areas that include issues most important to that employee. 4. Lead with the positive. It‟s important to reaffirm the employee‟s strengths at the beginning of the review. Since job security is the number one concern of most people, the performance review is a good time to tell an employee how much you value their contributions to your business. 5. Don‟t be confrontational. It‟s important not to criticize the employee in general terms. The goal is to evaluate job performance and not the person. A performance review that turns into a gripe session misses the opportunity to raise employee morale. 6. Positive reinforcement – emphasizing what has been done well so that it will be done even better in the future and making only constructive criticisms (i.e. those that point the way to improvement). 7. Exchange of views - Ensuring that the discussion involves a full, free and frank exchange of views about what has been achieved, what needs to be done to achieve more and what the appraiser think about their work the way they are managed and their aspirations. Agreement - jointly coming to an understanding about what has to be done by both parties to improve performance, knowledge and skills and overcome any work problems raised during the discussion
  39. 39. 34 Performance Appraisal Feedback Performance appraisal process is incomplete without the feedback given to the employee about his appraisal and his performance. But the way of giving as well as receiving the feedback differs from person to person and their way of handling and their outlook towards the issue. According to a popular saying: "A SUCCESSFUL MAN IS ONE WHO CAN LAY A FIRM FOUNDATION WITH THE BRICKS OTHERS HAVE THROWN AT HIM." Therefore, On the part of the person receiving the feedback, the following points are important to be taken care of: o The employee should have a positive attitude towards the feedback process o He should listen to the suggestions of the appraiser calmly and try to incorporate them in his plans. o He should not hesitate to ask for the help of his superiors. o Should have a co-operative attitude during the feedback meeting. o Don‟t judge the appraiser as a person. o Should take the feedback objectively. o Should not judge the appraiser as a person on the basis of the feedback. On the part of the appraiser or the manager / person giving the feedback, the following points are to be taken care of:
  40. 40. 35 o The appraiser should make the receiver feel comfortable during the feedback meeting. o The appraiser should make it a two – way conversation i.e. let the employee speak. o Listen to the employee and note his points, suggestions, problems etc. o The appraiser should not adopt a confrontational approach towards the meeting. The goal is not to criticize the employee. o Provide a constructive feedback to the employee i.e. in a way which will motivate him to perform better. o Have a positive attitude towards the process o Try to understand the reasons of his failure. o Be fair and objective o Prepare yourself for what to say and how to say.
  41. 41. 36 Company Profile
  42. 42. 37 Company Profile HDFC Bank Type Public Traded as BSE: 500180 NSE: HDFCBANK NYSE: HDB BSE SENSEX Constituent CNX Nifty Constituent Industry Banking, Financial services Founded August 1994 Headquarters Mumbai, Maharashtra, India Area served Worldwide Key people Aditya Puri (MD) Products Investment Banking Investment Management Wealth Management Private Banking Corporate Banking Private Equity
  43. 43. 38 Finance and Insurance Consumer Banking Mortgages Credit Cards Revenue 743.7322 billion (US$11 billion) (2016) Profit 128.1733 billion (US$1.9 billion) (2016) Total assets 6.87892 trillion (US$100 billion) (2015) Total equity 5.0564 billion (US$75 million) Number of employees 76,286 (March 2015) Website HDFCBank.com HDFC Bank is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It has about 76,286 employees including 12,680 women and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is the second largest private bank in India as measured by assets. It is the largest bank in India by market capitalization as of February 2016. It was ranked 58th among India‟s most trusted brands according to Brand Trust Report, 2015.
  44. 44. 39 FORMATION OF THE COMPANY The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. PROMOTER HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.
  45. 45. 40 BUSINESS FOCUS HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values – Operational Excellence, Customer Focus, Product Leadership and People. CAPITAL STRUCTURE As on 31st March, 2009 the authorised share capital of HDFC Bank is Rs. 550 crore. The paid-up capital as on the said date is Rs. 425,38,41,090/- ( 42,53,84,109 equity shares of Rs 10/- each). The HDFC Group holds 19.38% of the Bank's equity and about 17.70 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). 27.69 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 5,48,774 shareholders. The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.
  46. 46. 41 TIMES BANK AMALGAMATION In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The acquisition added significant value to HDFC Bank in terms of increased branch network, expanded geographic reach, enhanced customer base, skilled manpower and the opportunity to cross-sell and leverage alternative delivery channels. DISTRIBUTION NETWORK HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1229 branches spread over 444 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and active member base. The Bank also has a network of about over 2526 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.
  47. 47. 42 BOARD OF DIRECTORS The Composition of the Board of Directors of the Bank is governed by the Companies Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian Stock Exchanges where securities issued by the Bank are listed. The Board has strength of 12 Directors as on March 31, 2008. All Directors other than Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-executive directors. The Bank has five independent directors and six non-independent directors. The Board consists of eminent persons with considerable professional expertise and experience in banking, finance, agriculture, small scale industries and other related fields. None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees across all the companies in which he/she is a Director. All the Directors have made necessary disclosures regarding Committee positions occupied by them in other companies.  Mr. Jagdish Capoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-independent Directors on the Board.  Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan, Mr. C. M. Vasudev and Dr. Pandit Palande are independent directors on the Board.  Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Board of the Bank.
  48. 48. 43 The Bank has not entered into any materially significant transactions during the year, which could have a potential conflict of interest between the Bank and its promoters, directors, management and/or their relatives, etc. other than the transactions entered into in the normal course of business. The Senior Management have made disclosures to the Board confirming that there are no material, financial and/or commercial transactions between them and the Bank which could have potential conflict of interest with the Bank at large. TECHNOLOGY HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. The Bank has prioritized its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share.
  49. 49. 44 RATING Credit rating The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered to be "of the best quality, carrying negligible investment risk". CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA ( ind )" rating to the Bank's deposit programme, with the outlook on the rating as "stable". This rating indicates "highest credit quality" where "protection factors are very high". The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the subordinated Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as "stable". CARE has also assigned "CARE AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating "AAAStable" for the Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the cases referred to above, the ratings awarded were the highest assigned by the rating agency for those instruments?
  50. 50. 45 Corporate governance rating The bank was one of the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank has been assigned a 'CRISIL GVC Level 1' rating which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest. PRODUCT SCOPE HDFC Bank offers a bunch of products and services to meet the every need of the people. The company cares for both, individuals as well as corporate and small and medium enterprises. For individuals, the company has a range accounts, investment, and pension scheme, different types of loans and cards that assist the customers. The customers can choose the suitable one from a range of products which will suit their life-stage and needs. For organizations the company has a host of customized solutions that range from Funded services, Non-funded services, Value addition services, Mutual fund etc. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.
  51. 51. 46 The products of the company are categorized into various sections which are as follows:  Accounts and deposits.  Loans.  Investments and Insurance.  Forex and payment services.  Cards.  Customer center. BUSINESS SEGMENTS HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments: (i) Wholesale Banking Services The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporate and agro-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer
  52. 52. 47 orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporates including multinationals, companies from the domestic business houses and prime public sector companies. It is recognized as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks. (ii) Retail Banking Services The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to the customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form.
  53. 53. 48 HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched its credit card business in late 2001. By September 30, 2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leading players in the "merchant acquiring" business with over 50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. (iii) Treasury Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the liberalization of the financial markets in India, corporates need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.
  54. 54. 49 The following tables summarizes the products and services and customer segments offered by HDFC Bank:. Table 1: Personal banking Loan Product Deposit Product Investment & Insurance  Auto Loan  Loan Against Security  Loan Against Property  Personal loan  Credit card  2-wheeler loan  Commercial vehicles finance  Home loans  Retail business banking  Tractor loan  Working Capital Finance  Construction Equipment Finance  Health Care Finance  Education Loan  Gold Loan  Saving a/c  Current a/c  Fixed deposit  Demat a/c  Safe Deposit Lockers  Mutual Fund  Bonds  Knowledge Centre  Insurance  General and Health Insurance  Equity and Derivatives  Mudra Gold Bar
  55. 55. 50 Cards Payment Services Access To Bank  Credit Card  Debit Card  Prepaid Card -------------------------------- Forex Services --------------------------------  Product & Services  Trade Services  Forex service Branch Locater  RBI Guidelines  NetSafe  Merchant  Prepaid Refill  Billpay  Visa Billpay  InstaPay  DirectPay  VisaMoney Transfer  e–Monies Electronic Funds Transfer  Online Payment of Direct Tax  NetBanking  OneView  InstaAlert MobileBanking  ATM  Phone Banking  Email Statements  Branch Network Source: http://www.hdfcbank.com/personal/prd_glance.htm
  56. 56. 51 Table 2: Wholesale banking Corporate Small and Medium Enterprises Government Sector Financial Institutions and Trusts Large Corporates  Funded Services  Non Funded Services  Value Added Services  Internet Banking Supply Chain Partners  Dealer Financing  Vendor Financing Agricultural Lending  Funded Services  Non Funded Services  Specialized Services  Value added services  Internet Banking  Tax Collection  E- Ticketing  Booking of L/C‟s  Collection of Stamp Duty  Disbursement of Pension  Electronic Collection of fees  Collection of property tax  Financial Institutions  Mutual Funds  Stock Brokers  Insurance Companies  Commodities Business  Trusts Source : http://www.hdfcbank.com/wholesale/prd_glance.htm
  57. 57. 52 Table 3: NRI services Accounts & Deposits Remittances  Rupee Saving a/c  Rupee Current a/c  Rupee Fixed Deposits  Foreign Currency Deposits  Accounts for Returning Indians  North America  UK  Europe  South East Asia  Middle East  Africa  Others Quick remit IndiaLink Cheque LockBox Telegraphic/ Wire Transfer Funds Transfer Cheques/DDs/TCs Investment & Insurances Loans  Mutual Funds  Private Banking  Portfolio Investment Scheme  Home Loans  Loans Against Securities  Loans Against Deposits
  58. 58. 53  Gold Credit Card Payment Services Access To Bank  NetSafe  BillPay  InstaPay  DirectPay  Visa Money  Online Donation  NetBanking  OneView  InstaAlert  ATM  PhoneBanking  Email Statements  Branch Network Source: http://www.hdfcbank.com/nri/prd_glance.htm BUSINESS STRATEGY HDFC BANK mission is to be "a World Class Indian Bank", benchmarking themselves against international standards and best practices in terms of product offerings, technology, service levels, risk management and audit & compliance. The objective is to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk appetite. Bank is committed to do this while ensuring the highest levels of ethical
  59. 59. 54 standards, professional integrity, corporate governance and regulatory compliance. Continue to develop new product and technology is the main business strategy of the bank. Maintain good relation with the customers is the main and prime objective of the bank. HDFC BANK business strategy emphasizes the following:  Increase market share in India‟s expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service.  Leverage our technology platform and open scaleable systems to deliver more products to more customers and to control operating costs.  Maintain current high standards for asset quality through disciplined credit risk management.  Develop innovative products and services that attract the targeted customers and address inefficiencies in the Indian financial sector.  Continue to develop products and services that reduce bank‟s cost of funds.  Focus on high earnings growth with low volatility.
  60. 60. 55 RECENT DEVELOPMENT The Reserve Bank of India had approved the scheme of amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank Ltd. with effect from May 23, 2008. All the branches of Centurion Bank of Punjab will function as branches of HDFC Bank with effect from May 23, 2008. With RBI‟s approval, all requisite statutory and regulatory approvals for the merger have been obtained. The combined entity would have a nationwide network of 1167 branches; a strong deposit base of around Rs.1,22,000 crores and net advances of around Rs.89,000 crores. The balance sheet size of the combined entity would be over Rs.1, 63,000 crores. On March 27, 2008, the shareholders of the Bank accorded their consent to a scheme of amalgamation of Centurion Bank of Punjab Limited with HDFC Bank Limited. The shareholders of the Bank approved the issuance of one equity share of Rs.10/- each of HDFC Bank Limited for every 29 equity shares of Re. 1/- each held in Centurion Bank of Punjab Limited. This is subject to receipt of Approvals from the Reserve Bank of India, stock exchanges and other requisite statutory and regulatory authorities. The shareholders also accorded their consent to issue equity shares and/or warrants convertible into equity shares at the rate of Rs.1,530.13 each to HDFC Limited and/or other promoter group companies on preferential basis, subject to final regulatory approvals in this regard. The Shareholders of the Bank have also approved an increase in the authorized capital from Rs.450 crores to Rs.550 crores.
  61. 61. 56 Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services to its over 11 million customers across hundreds of Indian cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking. Within a relatively short span of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments. The bank's competitive strength clearly lies in the use of technology and the ability to deliver world-class service with rapid response time. Over the last 13 years, the bank has successfully gained market share in its target customer franchises while maintaining healthy profitability and asset quality. As on March 31, 2008, the Bank had a network of 761 branches and 1,977 ATMs in 327 cities. For the year ended March 31, 2008, the Bank reported a net profit of INR 15.90 billion (Rs.1590.2crore), up 39.3%, over the corresponding year ended March 31, 2007. As of March 31, 2008 total deposits were INR 1007.69 billion, (Rs.100,769 crore) up 47.5% over the corresponding year ended March 31, 2007. Total balance sheet size too grew by 46.0% to INR 1,331.77 billion (133177 crore). Leading Indian and international Publications have recognized the bank for its performance and quality. Centurion Bank of Punjab is one of the leading new generation private sector banks in India. The bank serves individual consumers, small and medium businesses and large corporations with a full range of financial products and services for investing, lending and advice on financial planning. The bank offers its customers an array of wealth management products such as mutual funds, life and general insurance and has
  62. 62. 57 established a leadership 'position'. The bank is also a strong player in foreign exchange services, personal loans, mortgages and agricultural loans. Additionally the bank offers a full suite of NRI banking products to Overseas Indians. On 29th August 2007, Centurion Bank of Punjab merged with Lord Krishna Bank (LKB), post obtaining all requisite statutory and regulator approvals. This merger has further strengthened the geographical reach of the Bank in major towns and cities across the country, especially in the State of Kerala, in addition to its existing dominance in the northern part of the country. Centurion Bank of Punjab now operates on a strong nationwide franchise of 404 branches and 452 ATMs in 190 locations across the country, supported by employee base of over 7,500 employees. In addition to being listed on the major Indian stock exchanges, the Bank‟s shares are also listed on the Luxembourg Stock Exchange. AWARDS AND ACHIEVEMENTS HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". We realized that only a single-minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. It is extremely gratifying that our efforts towards providing customer convenience have been appreciated both nationally and internationally.
  63. 63. 58 Awards In 2009 Table 4: Awards in 2009 Euromoney Awards 2009 'Best Bank in India' Economic Times Brand Equity & Nielsen Research annual survey 2009 Most Trusted Brand - Runner Up Asia Money 2009 Awards 'Best Domestic Bank in India' IBA Banking Technology Awards 2009 'Best IT Governance Award - Runner up' Global Finance Award 'Best Trade Finance Bank in India for 2009 IDRBT Banking Technology Excellence Award 2008 'Best IT Governance and Value Delivery' Asian Banker Excellence in Retail Financial Services 'Asian Banker Best Retail Bank in India Award 2009 ' Source: http://www.hdfcbank.com/aboutus/awards/default.htm
  64. 64. 59 Awards In 2008 Table 5: Awards in 2008 Finance Asia Country Awards for Achievement 2008 'Best Bank and Best Cash Management Bank' CNN-IBN 'Indian of the Year (Business)' Nasscom IT User Award 2008 'Best IT Adoption in the Banking Sector' Business India 'Best Bank 2008' Forbes Asia Fab 50 companies in Asia Pacific Asian Banker Excellence in Retail Financial Services Best Retail Bank 2008 Asiamoney Best local Cash Management Bank Award voted by Corporates Microsoft & Indian Express Group Security Strategist Award 2008 World Trade Center Award of honour For outstanding contribution to international trade services.
  65. 65. 60 Business Today-Monitor Group survey One of India's "Most Innovative Companies" Financial Express-Ernst & Young Award Best Bank Award in the Private Sector category Global HR Excellence Awards - Asia Pacific HRM Congress: 'Employer Brand of the Year 2007 -2008' Award - First Runner up, & many more Business Today 'Best Bank' Award Source: http://www.hdfcbank.com/aboutus/awards/default.htm
  66. 66. 61 QUALITY POLICY OF HDFC BANK  Security: The bank provides long term financial security to their policy. The bank does this by offering life insurance and pension products.  Trust: The bank appreciates the trust placed by their policy holders in the bank. Hence, it will aim to manage their investments very carefully and live up to this trust.  Innovation: Recognizing the different needs of our customers, the bank offers a range of innovative products to meet these needs.  Integrity  Customer centric  People care “one for all and all for one”  Team work  Joy and simplicity.
  67. 67. 62 Research Methodology
  68. 68. 63 Research Objectives  To study the existing appraisal system in the organization.  To Study existing appraisal system in the organization exactly measures the employee‟s performance  To study that there is any opportunities provided for the employees to improve their performance.  To Study the appraisal system assists in the employee‟s training and development.
  69. 69. 64 RESEARCH METHODOLOGY Research Design I have used Descriptive research design for this study. SAMPLING DESIGN Descriptive Research Design SAMPLE SIZE: A sample of minimum respondents was selected from HDFC Bank, Lucknow. An effort was made to select respondents evenly. The survey was carried out on 40 respondents. SAMPLE UNIT: In this project sampling unit consisted of the employees of HDFC Bank, Lucknow. SAMPLE AREA: HDFC Bank, Lucknow. SAMPLING TECHNIQUE: For the purpose of research convenient sampling technique was used. SAMPLING FRAME: It consisted of various sources from where information about the respondent is extracted. Mainly personal links and employees of HDFC Bank, Lucknow are used for getting information about the respondents.
  70. 70. 65 DATA COLLECTION SOURCE: Two methods have been used to collect the relevant data, which are essential for the study, they are: Primary Data: data is collected to obtain desired information through structured questionnaire. Secondary Data: it is compiled through books, magazines, newspapers and internet etc… TOOLS OF PRESENTATION: STATISTICAL TOOLS TO BE USED: A structured questionnaires is used to collect the data and data will be analyzed with the help of percentage table, respective graph, bar graph and pie charts.
  71. 71. 66 Limitations
  72. 72. 67 LIMITATIONS OF STUDY  Time and resource were the major constraints during the execution of the project. Therefore only a limited number of employees were included in the project.  The respondents were selected inside the organization only. So it cannot be generalized as a whole.  Some of the respondents were not even ready to spare time with the researcher.  There are many respondents who hesitated to answer the questionnaire.  The human behaviour is dynamic and hence the results may not hold good for a long time.  The results of the survey are totally dependent on the accuracy and authenticity of the information provided by the respondents.
  73. 73. 68 Contact for more Shrikrishna Computer Chinhat Lucknow Mo no- 9554444951

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