Performance (Craig, Beatty, Baird 1986). 2. Both

Performance appraisal system in Dabur
India limited

Dabur began
its streamlining efforts in April 1997, when consultants McKinsey & Co. were
hired. Their three-fold recommendations were:

to focus on a few business areas;

to improvise the supply chain and procurement
processes and

to restructure the appraisal and compensation
systems (HR Restructuring n.d).


appraisals at Dabur were made further objective by incorporating many measurable
criteria. New concepts were introduced as yardsticks for performance appraisals.
Some of these new yardsticks are customer satisfaction, increased sales and
reduced costs, cycle-time efficiency, return on investment and shareholder
value (Gibson, Harvey & Harris 2007).


A few key performance areas (KPAs) for each employee were
identified by HR managers to enhance employee satisfaction levels. Now, for
performance appraisal and compensation planning, KRAs became the base. A Balanced Scorecard based performance
management (Dabur India Ltd n.d) is followed by Dabur, which ensures balanced
performance by managers across manifold dimension including financial targets,
customer relationship management, internal business processes and research and
development. The variable pay plan of the company has modified key performance
indicators (KPIs) using the Balanced Scorecard, of. (Kaplan and Nortan 2001,
Malmi 2001).

How well the employees achieve a specific set of objectives that
have been determined to be significant in the successful completion of their
job, determines the basis of their evaluation. This approach is referred to as Management by objectives (Greenwood
1981, Lepak et. al 2006), which consists of setting goals, action planning,
self- control, and periodic reviews (Nayab 2009). In goal setting, the
organization’s overall objectives are used as guidelines from which
departmental and individual objectives are set. In action planning, the means
are determined for achieving the ends established in goal setting i.e.,
pragmatic plans are developed to attain the objectives.

Outcome of Performance Appraisal

There are three outcomes possible as far as Dabur Company is

• Outstanding -If the employee performs well, as to collect 3
consecutive outstanding performances into his/her credit, he / she gets

• Good -. If he/she is graded ‘good’, they are sent to training
programme to improve his/her skill to perform better.

• Below average -If the employee gains three below average to
his/her credit, then he/she is terminated from work.

Recommendations & feedback

Although, the review of performance appraisal system in Dabur
reveals that it does have an effective appraisal system, nevertheless, the
following recommendations have been made:

Basis the performance, job rotation and
training programme may be included in the remedial measures taken (Craig,
Beatty, Baird 1986).

Both from the individual and organizational
point of view, the frequency of feedback needs to be increased, to keep the
employee motivated towards attaining organizational goals.

Training the appraiser for better comprehension
of the system and counselling him/her to be honest, just and unbiased in the
appraisal process.

Providing the employee with suitable remark or
justification for being given a particular grade.

Better clarity of job descriptions need to be
provided to the employees.

Making the performance appraisal on quarterly basis
instead of the present system of annual basis to make it more effective.

More apparent and transparent Performance
Appraisal system (Carrie, Barton and James 2014).

Detailed performance feedback sessions to provide
the employee with details such as problem behaviour, consequences of the
problem behaviour and proposed changes.

Implementing Open appraisal system, wherein
the employees come together to set the targets, recognize the mutual potential
and the support to be provided by the appraiser to the employee towards
achieving these mutually accepted goals to promote outcome oriented


Performance Appraisals is the systematic appraisal of employee’s
and is a developmental tool employed for holistic development of the employee
and the organization as well. The process of performance appraisal in Dabur
India Ltd is done on an annual basis. Reports say that employees are moderately
satisfied with the system followed. Though feedback is a critical step in
performance appraisal, Dabur focus less on providing feedback to employees as
to what are their incompetence’s, what are the proposed remedial measures and
so on.


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