1

ACKNOWLEDGEMENT

I am highly indebted and grateful to the Chairman Mrs. Grace George, Managing
Director Ms. Suja George and Principal Dr. SELVAN, Alpha College of Engineering for
giving me the opportunity to undertake the project.

I wish to express my deep sense of gratitude to Mr.RAJA SINGH MBA - HOD,

Department of Management Studies, Alpha College of Engineering for providing valuable
suggestions during the course of study.

I am indeed grateful to my project guide Mr.SELVA KUMAR HOD, Alpha College

of Engineering for supporting me through proper direction and guidance with flexible manner to
bring out this project as successful one

My heartful gratitude and thanks to Mr. VIDYARAJU , Senior Executive – Human Resources
officer of AARATHY ENGINEERING PLASTICS PVT LTD who helped me to do this
project successfully.

Last but not least, I thank all my friends for their support and encouragement which gave
me the courage and spirit both for my academic and social life.
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AMBILI RAVINDRAN

Reg no: 22809631003

Department of Management Studies

Alpha College of Engineering

Thirumazhisai, Chennai – 602 107

STUDENT’S DECLARATION

I hereby declare that the project work entitled A STUDY ON QUALITY OF

PERFORMANCE APPRAISAL LEVEL OF EMPLOYEES” submitted in partial fulfillment

of the requirements for the award of the Master of Business Administration, to the Anna

University, Chennai is of my (Ms. AMBILI RAVINDRAN, Reg. no: 22809631003), original

work and not submitted for the award of any other Degree, Diploma or similar titles or prizes .

Station : Chennai
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Date :

AMBILI RAVINDRAN

PREFACE

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 realities for many organizations are that their people remain
undervalued, under trained and underutilized.

Performance Appraisal is 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 the working organizations to evaluate personalities,
contributions and potentials of employees.

CHAPTER 1
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1.1 INTRODUCTION

Performance Appraisal is the important aspect in the organization to evaluate the

employee’s performance. It helps in understanding the employees work culture, involvement,
and satisfaction. It helps the organization in deciding employees’ promotion, transfer, incentives,
pay increase.

1.2 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.”

1.3 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.

1.4 IMPORTANCE:

Performance appraisals provide employees and managers with opportunities to discuss areas in
which employees excel and those in which employees need improvement. Performance
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appraisals should be conducted on a regular basis, and they need not be directly attached to
promotion opportunities.

1.5 FACTORS AFFECTING PERFORMANCE APPRAISAL:

Performance appraisals are supposed to evaluate the performance of a worker, reward

good performance with promotions and pay raises and set goals to help employees continue to
improve. In reality, however, performance appraisals are affected by a wide range of
psychological factors. Even when supervisors are working with a well-defined guideline to
evaluate workplace performance, they can easily fall off track with results disadvantageous to
both the worker and the company.

1.5.1THE HALO AND THE HORNS

The Halo Effect, sometimes subdivided into the halo and the horns arises from the human
tendency to over generalize. A worker who is good or outstanding in one or two areas will
receive a "halo"; his supervisor will believe he is good in all areas because of a few noticeable
strong points. Similarly, a worker who is seen as weak in one or two area can get saddled with
"horns"; his supervisor will overlook his strong points in his performance appraisal and tend to
see everything he does as lacking.

1.5.2 THE MATTHEW EFFECT

The Matthew Effect is somewhat similar to the halo effect, but more permanent.
Sometimes, a worker is permanently judged based on an early performance evaluation. If she did
well on the early evaluation, she will be more trusted than other employees and all of her work
will be seen in a favorable light. If she did poorly, she will have a very hard time earning trust or
a positive evaluation from her boss, who will judge all her future actions in light of an early
impression.

1.5.3 STANDARDS OF EVALUATION

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One especially tricky performance appraisal factor is standards of evaluation. Many

companies use subjective terms like "excellent," "good" and "fair" to characterize performance,
but these terms may mean very different things to different people. If a company has two
different evaluators, this can lead to serious bias; a more or less average worker who performs all
of his job duties correctly may receive a "good" rating with one evaluator but only an "average"
or "fair" rating with the other.

1.6 PROCESS

The process of performance appraisal:

1. Establishing performance standards

2. Communicating the Standards

3. Measuring Performance

4. Comparing the actual with the standards

5. Discussing the appraisal

6. Taking Corrective Action

1.7 LIMITATIONS

1. Errors in Rating

2. Lack of reliability

3. Negative approach

4. Multiple objectives

5. Lack of knowledge

1.7 INDUSTRY PROFILE

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Plastic manufacturing industry ranks 3rd among all other manufacturing industries in the
United States of America. Employment opportunities, real earnings, shipments etc have grown
in the last 25 years of the plastic manufacturing industry. The period between 1980 through
2005, witnessed an increase in the plastic productivity by 2.1%. Growth rate was at par with the
growth manifested by other manufacturing sectors.

Large-scale industrialization has brought about a sea-change in the use of complex materials
such as wood, glass, metals and alloys. With new manufacturing technologies replacing older
ones and cost-effectiveness becoming the mantra of modern-day competitiveness, plastics were
quick to replace various metals such as aluminum. Plastics are almost 50% lighter than
aluminum. The automotive industry is one of the biggest consumers of plastics.

“A luxury car possesses around 500 different parts that are made out of plastics. It is also used
for light fittings, upholstery and interior body design of a modern car,” says a report by the Multi
Commodity Exchange (MCX). Some estimates point out that a small gear can be made out of a
suitable plastic for about 1% of the cost of a machined metal and one and half to two-thirds of a
cast metal one.

1.8 FACTS ABOUT PLASTIC MANUFACTURING INDUSTRY:

• Plastic manufacturing industry in United States of America provided employment to as

many as 1.1 million people.
• Shipments in the plastic manufacturing industry in America, accounted for USD$341
million. The above statistical date related to plastic manufacturing industry was observed
as in 2005.
• Rate of growth of employment in the plastic manufacturing industry grew at 1.1% every
year between 1980 through 2005.
• The same period (from 1980 through 2005), witnessed the plastic industry contribution to
the real earnings of 118% which ranged from USD$48 billion - USD$106 billion.

1.8 PLASTICS ARE BEING PREFERRED OVER METALS BECAUSE

THEY ARE:

- Cost-effective
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- Rust-resistant

- Have mechanical properties

- Have high production volume

- Lightweight

- Good insulation properties

- Decorative

- Do not corrode

1.9 WHAT ARE PLASTICS?

• According to the US Environmental Protection Agency, plastic is a material made from

petroleum that can be molded, extruded, or made into various shapes. There are many
different kinds of plastics made from different combinations of compounds. Alexander
Parkes, a British inventor, created the earliest form of plastic in 1855.
• Metals are being replaced by plastics because the latter is cost-effective, its volume-wise
production is high, it has mechanical properties, and it is abrasive and lightweight.
Besides the automotive industry, plastics are also being used in aviation. The use of
plastics makes planes lighter, safer and more economical.

1.9 PLASTIC FACTS

Engineering plastics are widely used in automobiles, aircrafts, fiberglass boats, electrical and
electronic items, medical equipment, and machinery.

Plastics are replacing metals in industries

On the sea front, fiberglass boats have gained popularity and are widely used by coastguards.
These boats are strong, rust-resistant and do not corrode.

1.10 NEED OF THE STUDY

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• To provide a feedback to the employee and there by suggesting changes in their attitude,
behavior and skills .
• To provide strength and weakness of an employee and it serve as a guide for formulation
of suitable training and development programmers to improve his quality of the
performance
• To serve as a basis for job change or promotion

1.11 OBJECTIVES OF THE STUDY

To study the effect of performance analysis in AARATHY, we framed the following objectives

1. Identification of the technique of performance appraisal followed in AARATHY.

2. Employee attitude towards the present appraisal system.

3. Review of the current appraisal system in order to

1. Enhance productivity

2. Attain global standards

4. To provide suggestions & recommendations from the study conducted.

1.12 SCOPE OF THE STUDY

• To set norms and targets of work performance as well as to monitor the work progress of
employees.
• To facilitate placement of employees in accordance with their suitability for different
types of assignment.
• To provide an objective basis for determination of merit, efficiency and suitability for the
purpose of the promotion.
CHAPTER 2

2.1 REVIEW OF LITERATURE

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In a landmark study, Locher & Teel (1977) found that the three most common appraisal
methods in general use are rating scales (56%), essay methods (25%) and results- oriented or
MBO methods (13%). Certain techniques in performance appraisal have been thoroughly
investigated, and some have been found to yield better results than others.

2.1.1 Encourage Discussion

Research studies show that employees are likely to feel more satisfied with their appraisal
result if they have the chance to talk freely and discuss their performance. It is also more likely
that such employees will be better able to meet future performance goals. (e.g., Nemeroff &
Wesley, 1979).

Employees are also more likely to feel that the appraisal process is fair if they are given a
chance to talk about their performance. This especially when they are permitted to challenge and
appeal against their evaluation (Greenberg, 1986)

2.1.2 Constructive Intention

It is very important that employees recognize that negative appraisal feedback is provided
with a constructive intention, i.e., to help them overcome present difficulties and to improve their
future performance. Employees will be less anxious about criticism, and more likely to find it
useful, when they believe that the appraiser's intentions are helpful and constructive. (Fetor et al.,
1989)

In contrast, other studies (e.g., Baron, 1988) have reported that "destructive criticism" -
which is vague, ill-informed, unfair or harshly presented - will lead to problems such as anger,
resentment, tension and workplace conflict, as well as increased resistance to improvement,
denial of problems, and poorer performance.

2.1.3 Set Performance Goals

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It has been shown in numerous studies that goal-setting is an important element in

employee motivation. Goals can stimulate employee effort, focus attention, increase persistence,
and encourage employees to find new and better ways to work. (e.g., Lockheed al., 1981).

The useful of goals as a stimulus to human motivation is one of the best supported
theories in management. It is also quite clear that goals which are "...specific, difficult and
accepted by employees will lead to higher levels of performance than easy, vague goals (such as
do your best) or no goals at all." (Harris & DiSimone, 1994)

2.1.4 Appraiser Credibility

It is important that the appraiser (usually the employee's supervisor) be well-informed

and credible. Appraisers should feel comfortable with the techniques of appraisal, and should be
knowledgeable about the employee's job and performance.

When these conditions exist, employees are more likely to view the appraisal process as
accurate and fair. They also express more acceptances of the appraiser's feedback and a greater
willingness to change. (Bannister, 1986).

Performance appraisal, also known as employee appraisal, is a method by which the job
performance of an employee is evaluated (generally in terms of quality, quantity, cost and time).
Performance appraisal is a part of career development. Performance appraisals are a regular review of
employee performance within organizations.

2.2 Generally, the aims of a scheme are:

• Give feedback on performance to employees.

• Identify employee training needs.
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• Document criteria used to allocate organizational rewards.

• Form a basis for personnel decisions: salary increases, promotions, disciplinary actions,
etc.
• Provide the opportunity for organizational diagnosis and development.
• Facilitate communication between employee and administrator.
• Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.

A common approach to assessing performance is to use a numerical or scalar rating system

whereby managers are asked to score an individual against a number of objectives/attributes. In
some companies, employees receive assessments from their manager, peers, subordinates and
customers while also performing a self assessment. This is known as 360° appraisal.

2.3 The most popular methods that are being used as performance appraisal process are:

• Management by objectives (MBO)

• 360 degree appraisal
• Behavioral Observation Scale (BOS)
• Behaviorally Anchored Rating Scale (BARS)

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
 13

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.

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

RECRUITMENT

The process of recruitment begins after manpower requirements are determined in terms of
quality through job analysis and quantity through forecasting and planning.
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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.

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.

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 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.
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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.

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.

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.
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The best approach appears to be a ranking technique involving pooled judgment.

The two most effective methods are alternation ranking and paired comparison ranking.

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

In assessing past performance, assessment of future performance or potential In any placement

decision and even more so in promotion decisions, some prediction of future performance is
necessary. This kind of prediction is made most validly and most fairly.

360 DEGREE FEEDBACKS

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.
 17

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.

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
 18

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.
• 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.

RATING ERRORS IN PERFORMANCE APPRAISALS

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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.

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.
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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 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

Ø Address employee concerns / queries on performance rating, in consultation

with the reviewer
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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

Ø Owns the performance rating of every employee in the department

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

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

CHAPTER 3
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RESEARCH METHODOLOGY

3.1 RESEARCH

John. W. Best has rightly said “The secret of our cultural developments has been
research, pushing back the areas of ignorance by discovering new truths, which in turn lead to
better ways of doing things and better products.”

3.2 RESEARCH METHODOLOGY

Research methodology is a method that can be used to solve the research problems.
It helps in studying how research is done scientifically. It provides various steps that can be
adopted by the researcher in studying his problems.

3.3 RESEARCH DESIGN:

The research design is the conceptual structure within which research is conducted. It is
constitutes for the blue print of the collection, measurement and analysis of data. It is aplan that
specifies the sources and type of information relevant to the research problem. A research
design is the arrangement of conditions for collection and analysis of data in a manner that aims
to combine relevance to the research purpose with economy on procedure Sampling design deals
with the method of selecting items to be observed for the given study A typical research design
of a company basically tries to resolve the following issues:

a) Determining Data Collection Design

b) Determining Data Methods

c) Determining Data Sources

d) Determining Primary Data Collection Methods

e) Developing Questionnaires

f) Determining Sampling Plan:

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3.4 EXPLORATORY DESIGN:

Exploratory research provides insights into and comprehension of an issue or situation. It should
draw definitive conclusions only with extreme caution. Exploratory research is a type of research
conducted because a problem has not been clearly defined. Exploratory research helps determine
the best research design, data collection method and selection of subjects. Given its fundamental
nature, exploratory research often concludes that a perceived problem does not actually exist.

3.5 DESCRIPTIVE RESEARCH

Descriptive research studies are those, which are concerned with describing the characteristics
of a particular individual, or of a group. The major purpose of this research is the description of
state of affairs, as it exists at the present

3.6 SOURCES OF DATA

3.6.1 PRIMARY DATA

Primary data refer to the information obtained first hand by the researcher on the
variables of interest for the specific purpose of study. In case of descriptive research primary data
can be obtained through observation or through direct communication with respondents in one
form or another or through personal interviews or through questionnaires. Here, Questionnaires
were employed to collect data.

3.6.2 SAMPLE:

Sample denotes only part of the universe, which are studied and conclusion are drawn on
this basis for the entire universe.

3.6.3 SAMPLE SIZE:

An important decision that has to be taken in adopting the sampling technique is about
the size of the sample. Size of the sample means the number of sampling units selected from the
 24

population for investigation. It answers “how many people should be surveyed”. Sample size of
the project is 100 from all the departments.

3.6.4 SAMPLING TECHINQUE:

Simple random sampling refers to the sampling technique in which each possible sample
combination in the whole population has an equal and independent chance of being included in
the sample.

3.7 TOOLS USED FOR DATA COLLECTION:

Data collection tool is used for securing responses from the selected respondents about
the problem. Here schedule is used for collecting the data from the employees of AARATHY.
Here the observer used a structured questionnaire data for collecting the responses. The question
is poised to the employee and their responses are recorded by the observer by him.

3.8TOOLS USED FOR DATA ANALYSIS

Analysis techniques are used to obtain finding and arrange information in logical
sequence from the raw data collected. After the tabulation of data the tools provide a scientific
and mathematical solution to complex problem.

• Percentage analysis
• Chi-square

3.8.1 PERCENTAGE ANALYSIS

In this proportion of an individual observation in a distribution is described. The most convention for
describing the position of an individual score in distribution of scores is a percentage method.

No of respondents

Percentage = × 100

Total No of respondents
 25

3.8.2 CHI SQUARE TEST

The chi- square test is one of the simplest and most widely used non parametric test in
statistical work. The quantity of chi square describes the magnitude of discrepancy between
theory and observation, i.e., with the help of chi square test we can know whether the given
discrepancy between theory and observation can be attributed to chance or whether it results
from the inadequacy of the theory to fit the observed and expected frequencies completely
coincide

Formula for computing chi square

∑ (O i – E i) 2

Ei

Where, O i = Observed frequency

Ei = Expected frequency.

3.9 LIMITATIONS OF THE STUDY:

1. This is the simplest method of separating the most efficient from the least efficient and

relatively easy to develop and use. In practice it is very difficult to compare a single

individual with human beings having various behavior traits

2. The method only tell us how a man stands in relation to the others in the group but does

not indicate how much better or worse he is than another

3. It is difficult task when large number of person are rated

4. Trained technicians are required prepare sets of series for each occupational group

5. Most of the raters become irritated with the test because they are not being trusted

6. The result of evaluation doesn’t prove useful for training purposes because the rater is

ignorant of how he is evaluating the individual.

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7. The sample size is limited to 60 samples

8. The respondents are collected through the schedule method so the collected data may be
biased by the respondent
9. The data collected from the executives are qualitative in nature ie view options
perception etc. may change from time to time and the observers suggestions and
conclusions may not be applied at all times.

DATA ANALYSIS AND INTERPRETATION

1. TABLE 4.1 OPINION ABOUT SATISFACTION LEVEL OF THE
EMPLOYEE
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Criteria No.of respondents Percentage

Highly satisfied 22 36.66

Satisfied 11 18.33

Partly satisfied 17 28.33

Dissatisfied 10 16.66

Total 60 100

INTERPRETATION:
The table highlights that 36.% of the employees are highly satisfied with the
performance appraisal, 18% are satisfied with performance appraisal and 28% are
partly satisfied and 16 % are highly dissatisfied with the system of performance
appraisal.

TABLE 4.2 SHOWING THE FACTORS MOTIVATING AT

WORKPLACE
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Criteria No. Of respondents Percentage

work itself 19 31.66

Work environment 15 25

Monetary incentives 16 26.66

Team of workers 10 16.66

total 60 100

INTERPRETATION:

The above table highlights that 31.66% of the employees were motivated by the work
itself whereas 25% of the workers were motivated by the work environment.26.66%
of the workers were motivated by the monetary incentives and 16.66% are motivated
by the team in which they are working.
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TABLE 4.3 OPINIONS ABOUT WHO SHOULD APPRAISE THE

EMPLOYEE

Criteria No of respondents percentage

Superior 11 18.33

Peer 14 23.33

Sub ordinates 10 16.66

Self appraisal 13 21.66

Consultant 12 20

All the above 0 0

total 60 100

INTERPRETATION
The above table highlights 18.% of employees want to be appraised by their
superior,23% of employees want to be appraised by their peers,16.% of employees
want to be appraised by their sub ordinates,21% of employees want to be appraised
by their self appraisal,20% of employees want to be appraised by their consultant
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TABLE 4.4 OPINIONS ABOUT JOB ROTATION

criteria No of respondents percentage

Yes 30 50

No 30 50

total 60 100

INTERPRETATION

The above shows that 50% of the employees like job rotation and 50% do not prefer
job rotation.
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TABLE 4.5 OPINIONS ABOUT FREEDOM OF DECISION

MAKING AT WORK PLACE

criteria No of respondents Percentage

Yes 35 58.33

No 25 41.66

total 60 100

INTERPRETATION
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The above table and chart shows that 58.33% likes to have the freedom of decision
making at work place. And 41.66% do not mind the freedom of decision making.

TABLE 4.6 OPINIONS ABOUT REWARDS PRACTICED

IN THE ORGANIZATION

criteria No of respondents Percentage

Yes 29 48.33

No 31 51.66

total 60 100
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INTERPRETATION

The above chart and table shows that 48% like the practise of giving rewards whereas
51.66% do not like the practise of giving rewards.

TABLE4.7 SHOWING THE APPROPRIATE PERFORMANCE

APPRAISAL METHOD PREFERRED BY THE EMPLOYEES

Criteria No. of respondents Percentage

Rating method 36 60%

Paired comparison method 20 33.34%

Merit basis 2 3.33%

Target achieving method 2 3.33%

Self appraisal method 0 0

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Total 60 100

INTERPRETATION

The above table and graph indicates that 60% of the employees preferred rating method of
appraisal whereas 33.34% of the employees preferred paired comparison. Another group of
3.33% preferred merit based appraisal and self appraisal method.

TABLE 4.8 SHOWING TIME PERIOD OF THE PERFORMANCE

APPRAISAL

Criteria No. Of respondents Percentage

Quarterly 11 18.3%

Half yearly 39 65%

annually 10 16.7%

total 60 100%
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INTERPRETATION

The above graph shows that 18.3% of employees like to have performance appraisal
quarterly, 65% of employees like to have appraisal half yearly. 16.7 % of employees
like to have performance appraisal once a year.

TABLE 4.9 SHOWING THE EDUCATIONAL QUALIFICATION

LEVEL OF THE EMPLOYEES

Criteria No. of respondents Percentage

12th 28 46.7%

Diploma 3 5%

Under graduate 21 35%

Post graduate 8 13.3%

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total 60 100

INTERPRETATION:

The above table shows that 46. % of the employees has studied up to 12th. 5% of the
employees have studied diploma. 35% of the employees are under graduates. 13.3%
of the employees are post graduates.

TABLE 4.10 SHOWING THE AGE GROUP OF EMPLOYEES

criteria No. Of respondents Percentage

20-30 6 10%

30-40 6 10%
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40-50 24 20%

Above 50 24 20%

total 60 100%

INTERPRETATION

The above table indicates that 10% of the employees are from the age group of 20-30.
10% of the employees are from the age group of 30-40. 20% of the employees are
from the age group of 40-50. 20% of the age group are above 50.

TABLE 4.11 SHOWING THE EXPERIENCE LEVEL OF THE

EMPLOYEES

Criteria No. Of respondents Percentage

0-10 16 26.7%
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10-20 17 28.3%
20-30 27 45%
Total 60 100

INTERPRETATION

The table shows that 26.7% have experience up to 10 yrs. 28.3% of them have 10-
20yrs of experience. a major 45% of the employees have experience have experience
of more than 30yrs.
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TABLE4.12 SHOWING SATISFACTION LEVEL OF THE

EMPLOYEES AT JOB

Criteria No. of respondents Percentage

Highly satisfied 17 28.3%

Satisfied 27 45%

dissatisfied 16 26.7%

total 60 100%

INTERPRETATION
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The above table shows that 28.3% are satisfied with their job.45% are satisfied and
26.7% of the employees are dissatisfied.

FINDINGS

FROM THE STUDY CONDUCTED, THE FOLLOWING ARE MY

MAJOR FINDINGS

1. 36.66% of the employees are highly satisfied with the performance appraisal.

2. 31.66% of the employees were motivated by the work.

3. 18.33% of employees want to be appraised by their superior.

4. 50% of the employees like job rotation

5. 58.33% likes to have the freedom of decision making at work place.

6. 60% of the employees preferred rating method of appraisal

7. 48% like the practise of giving rewards whereas 51.66% do not like the practise of giving
rewards.

8. 60% of the employees preferred rating method of appraisal

9. 46. % of the employees have studied up to 12th. .

10. 65% of employees like to have appraisal half yearly

11. 20% of the employees are from the age group of 40-50.

12. A major 45% of the employees have experience have experience of more than
30yrs.

13. .45% is satisfied with their job.

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SUGGESTIONS

 The management may give adequate training and coaching, regarding how to appraise
and to identify the employee’s job. Because the appraiser has an important role to
appraise the employee. So he must know 100% about employee’s job.

 Performance appraisal system should also helpful for the identification at employees
difficult in work place and the expectation, but most of respondents says fixing
compensation and incentives scheme. So the management may also concentrate the
employees point of view I.e. difficultly and expectation.

 The management may implement emerging concept of appraisal system like 360 degree
Performance appraisal, self appraisal and bottom up appraisal, for effective appraisal of
employee’s performance.
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 According to the respondents opinion the appraiser report is not in a supportive manner
with the employees. So the advisor may be encouraged and advised to become supportive
and co-operative with the employees which should help the advisor to appraise the
employees in a good manner.

CONCLUSION

Performance appraisal system is vital concept in every organization. In AARATHY

ENGINEERING PLASTICS also performance appraisal system was effectively functioning.
Even through as my finding is some of the defects are found through executives. That defect
must be overcome by taking necessary action taken by the management. I also suggest some
points relating to the defects

Management must concentrate and made some change in their existing Performance appraisal
system followed by them, which should help the employee’s improvement.
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BIBLIOGRAPHY

 C.R.Kothari, “Research Methodology”, New Age International Publishers, New Delhi 2006.
 Dalton E. McFarland, “Management Principles and practices”, Macmillan

New York 1974.

 L.M.Prasad, “Organizational behavior”, “Sultan Chand & Sons”, New

Delhi, 2000)
 Robert Dubin, “Human Relations in Administration”, Prentice-Hall of India. New Delhi
1974.
 V S P Rao, “Human Resource Management”, Excel Books, New Delhi 2000

Websites:
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1. www.google.com
2. www.themanger.org
3. www.wikipedia.com
4. www.motivationtheories .com
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