1. Public Sector Banks In India
Banking services is one sector where a great degree of attention is being paid to Performance
Appraisal Systems. Several of the public sector banks (PSBs) have changed their PAS or are
in the process of changing them. State Bank has recently adopted an open system of
appraisal. Its associate banks are likely to follow the same after detailed experiences of State
Bank of India are available. Several banks also have self-appraisal as a part of performance
appraisal, although mostly such self-appraisal is more of a communication of achievements.
Few of Public Sector Banks:
Allahabad Bank
It has introduced a system that aims in helping officers to identify their strengths and
weaknesses and encourage improvement of performance on the job.
Indian Overseas Bank
It has a system in which branch manager gives self appraisal on business growth, customer
service, internal administration and training requirements.
Union Bank of India
It has a appraisal system in which the reporting officer is required to assess each of his
appraise officers on technical, human skills and conceptual skills. All these are defined for
different categories of roles and the assessment has to be made on five-point scale.
Punjab National Bank
It has primarily, a development –oriented appraisal form. There are ten different formats
available for ten different categories of employees. The bank started the system with self-
appraisal by appraise.
Bank of Baroda
Employee performance management system
A new Performance Management system has been formulated and implemented for all
officers w.e.f. 2009-10 onwards. The new system enables a holistic approach to the issue of
managing performance and does not limit to only an appraisal. It starts from performance
planning and Goal-setting and takes it forward into performance review discussions, feedback
and development. The new system is business-linked, highly objective and fully transparent,
with individuals owning and managing their own performance themselves.

2. STATE BANK OF INDIA
Introduction to SBI
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.
The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was
the first ever joint-stock bank of the British India, established under the sponsorship of the
Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840)
and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These
three banks dominated the modern banking scenario in India, until when they were
amalgamated to form the Imperial Bank of India on 27th January 1921
An employee enters the bank after he qualifies the entrance exam and interview. The letter of
permanent employee is given only after successful completion of 6 months of service in the
bank. The person may start with a clerical post and move up the ladder based on his
performance. The position that comes after clerk cub be that of officer, Accountant, Branch
Manager, Chief Manager, Assistant General Manager, Deputy General Manager and General
Manager. The small branch of bank has 1 Branch Manager, 1 Officer and 3 clerks.
The number of clerks may group up to 78 in large branches.
If the work tenure of employee comes gender 1-12 years, he is called assistant or computer
operator. For 13-19 years, he is called Senior Assistant. Service tenure for more than 20 years
he is called special assistant. After 23 years of his service he is called special assistant. The
authority and decision making power increases as the employee moves up the ladder.
Performance Appraisal Process at SBI
In State Bank of India, performance appraisal is done on yearly basis. It is carried out to
judge the performance of employees in correlation with the fulfillment of goals, mission and
vision of the bank. The immediate supervisor starts the process of performance appraisal. His
observations regarding the employee are put in written and forwarded to the Branch Manager.
In many small branches, the branch manager may initiate the performance appraisal process.
Every year it is the branch manager’s duty to send a letter regarding performance of the
employees to the higher authorities like Deputy General Manager and general Manager. The
higher authorities then take appropriate decision regarding the service of the employees and
the amount of his contribution made towards the development of the business.
Every employee is given a fixed monthly salary along with Dearness Allowance, House Rent
Allowance. City Compensatory Allowance and increments. Generally an employee is given 1
increment annually. But if he is highly educated person in terms of his being a graduate or
has completed a professional course, then he is given 2 increments. The increment given may
vary from bank to bank as decided by the higher authority. The top management may also
have the right to stop the increment for an employee in case he does not perform
satisfactorily.
During the process of Performance Appraisal, the employee is judged on the following
aspects and given points out of a total of 100 points.

3.  Behavior: The behavior of employee towards customers, his subordinates, his
superiors and his peer group members is noted. The behavior of employee towards
minority customers is also kept in mind.
 Assistance and Implementation of Guidelines: The helping nature of employee is
stressed upon in this criterion. The help that he provides to his subordinates and peer
group is noted. Also the guidelines given to the employee by his senior members is
seen. The employee is required to implement the guidelines and improve his service
and performance.
 Critical Performances: The ability of an employee to perform outstandingly during
difficult and significant situation is noted.
 Work Analysis: The ability of an employee to achieve his target, the business
brought by him towards the organization is an important criterion that is observed
during performance appraisal process. The additional efforts made by employee by
moving out of his seat to develop the business are also noted.
 Responsibility and Risk Taking: The employee is marked for his performance and
his response towards the responsibility of special task assigned to him. Also the risk
taking ability of an employee is focused to take accurate decision in the future.
 Self Improvement and skills: the skills of an employee are given consideration in
performance appraisal process. Also his interest for self development in the field of
education and other courses are noted. Employee is always motivated to improve his
skills and qualification for his personal development and also for the development of
the organization as a whole. The employee who finds it difficult to perform is given
special training in the area where he lacks required skills.
 Lastly the performance appraisal process also considers the sincerity, integrity,
discipline, attendance and punctuality of the employee and his commitment towards
the development of the business. Also customer feedback is also taken into
consideration to judge the performance of the employee. The employees who do not
perform well are given warning for improvement and provided required training.
There is no demotion in SBI but the employee may not be given any additional
benefits if he does not meet the expectations of the top management by his
performance.
Rewards and Appreciation
The employees with outstanding performance are recognized in the meeting held by the top
management. Rewards like monetary benefits, promotional benefits, best employee
certificate, bronze, silver, or gold medal, and many more additional benefits are given to
motivate the employees and recognize his efforts.
To conclude, the current Performance Appraisal process in SBI uses a combination of
traditional and modern methods which includes straight ranking method, essay appraisal
method, confidential reporting, critical incidents method, assessment centers, behaviorally
anchored rating scales, human resources accounting method and 360 degree performance
appraisal method.
This performance appraisal is used as a reference by the top management to decide the
promotional worth of an employee. Generally for promotion purpose, the performance
appraisal letter for the past four years is referred from which the 3 best appraisals are chosen.
Around 10% of weight age is given to performance appraisal of an employee. The

4. employees are ranked based upon the points they acquire in performance appraisal process. A
minimum of 60% marks are required for promotion purpose in the performance appraisal
process. An employee who scores 90% or more is listed on merit basis. For those who score
between 60%-90% are given senior positions. The employees may be rated on a scale of
excellent, very good, good, poor depending upon the points they receive in the performance
appraisal process. Also the Branch Manager is given points for the excellent work done by
the employees and the branch under his guidance.
THE KEY FACTOR MISSING IN PUBLIC SECTOR BANKS
Most of the performance appraisal system are annually conducted which are historic in nature
and documents the past events. Study of the format of annual appraisal of many of the PSBs
reveal that they are basically uniform in character with emphasis in historical events and little
or no importance for future growth. In comparison with the new generation banks and
progressive organizations, the appraisal system in PSBs, thus, is basically dysfunctional. The
PAS, as an important component of Performance Management System, is yet to be conceive
and made operational. But developing and implementing a PAS seems overdue and vitally
important.