Analyse the following case and answer the questions given at the end.


‘Raka’ is a reputed Marketing Research organization having about 150 operative employees and 70 executives all over the country. The operative staff is mostly involved in data collection, while the executives at different levels usually do the research design, analysis and presentation.

The company has a performance rating system, which has been in existence for about 10 years and was designed at that time, by the head of administration, a clerk who had been promoted into that position over the years without any formal training. All employees are rated by their immediate superiors, by means of a rating scale. Then, the form is evaluated by a superior at the next level, which the employees are informed of his performance rating. The employee then signs a form indicating that he/she has been so informed. The employee’s signature does not necessary mean that he/she agrees with the ratings given.

The parameters considered are Quality of Work, Quantity of Work, Reliability, co-operativeness and Community Service. The employee is rated on a 5 point rating scale.

Rating of each year are maintained in the employee’s file in the HR Development. Ratings are supposed to be used as a basis for promotions and increments. In practice, however, little use is made of the ratings for anything. A small informal survey conducted a year ago showed that the superior spent on an average about 3 minutes filling up a form and less than 10 minutes discussing it with the subordinate. Employee feelings about the system range from indifferent to hostility. Most feel that community service is not a part of their job and should not influence their rating, while important criteria like leadership potential which indeed should be a part of the form are left out.

The system seems to be causing much dissatisfaction and hostility among the employees of the firm. The managing Director, Mr. Gandhi feels that it is becoming a dangerous source of friction and should be done away with all together.


1)      List the important facts of the case and explain the main problems of the existing Performance Appraisal System. (5 marks)

2)      Do you agree with the Managing Director that the system of Performance Appraisal should be discontinued altogether in this organization? Justify your view (5 marks)

3)      Keeping the executives in mind suggest some improvements in the Performance Appraisal system. Also suggest some additional techniques of appraisal that could be used (5 marks)

4)      Keeping the operative employees in mind suggest some improvements in the Performance Appraisal system. Also suggest some additional techniques of appraisal that could be used. (5 marks)

(Case Study of November 2001 Human Resource Management)

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