Case ABC Engineering Works on Performance Appraisal

ABC ENGINEERING WORKS LIMITED

In December 1971 Mr Anil Sachdeo, Factory Manager of ABC Engineering

Works, was reviewing the performance of Mr Saxena, Personnel Officer, in his
factory. Mr Saxena had joined in January 1971 and was completing his one year
probationary period on January 1, 1972.

ABC Engineering Works was set up in 1948 for the manufacture, sales and export of
Auto Components. In spite of a promising start, the growth of the company had been
slow, and in recent years, the unit had been besieged by acute financial and Labour
problems. This had resulted in losses during the period 1966-70. As a result, in April
1970 the previous Factory Manager had resigned, and Mr Anil Sachdeo a qualified
Mechanical Engineer with ten years line experience in shop floor production
management had been recruited as the new Factory Manager.
On joining, Mr Sachdeo reorganized the internal working of the unit and introduced
new reporting and control procedures. The production, commercial and
administrative functions were placed under the charge of three experienced
officers, all reporting to Mr Sachdeo, so that each could be given full responsibility
for the department under his control. As a result, the company had begun to turn the
corner by middle of 1971 and was now showing signs of recovery both in profits
and the internal working environment.
During the process of reorganization, Mr Sachedeo had noticed that a number of
changes were required in the administration and personnel work. The factory did not
have a personnel officer at all, and most of the personnel work of recruitment,
promotions, transfers, salary administration, etc., of workers and staff was being
shared between office superintendents in the production and commercial departments
and the Administrative Officer.

Since Mr Sachdeo wanted to introduce a more scientific and centralized system

of personnel management, a new post of Personnel Officer was created and Mr
M.K. Saxena, a young diploma-holder in personnel management was recruited. Mr
Rajesh Kumar, Senior Administrative Officer, was elevated to the position of
Administration Manager, with Personnel and Administrative Officers reporting to
him. A partial organisation chart of ABC Engineering Works as in December 1972 is
shown in Exhibit I.

During the course of one year that Mr Saxena had been working in ABC, he had
been in close touch with the Administration and Management. Since Mr Sachdeo
had been very busy looking after the production and financial problems, he had not
been able to give his full attention to personnel administration, and industrial relations
matters. His contact with Mr Saxena had, therefore, been somewhat infrequent.

_____________________________________________________________________
1
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

By the end of 1971 however, production problems had been overcame and Mr
Sachdeo began giving more attention to the commercial and administrative
functions. The previous wage agreement with over 1500 workers and 450 staff was
due to expire by March 1973 and there were already signs of growing unrest. The
number of complaints and grievances regarding partiality, injustice, nepotism,
etc. in the recruitment, promotions, transfers, incentive payments, pay scales, etc.
was again increasing. Mr Sachedeo expected that inter-union rivalries and the
resultant pressures on management would increase. He was, therefore, anxious that
the internal functioning of the personnel, industrial relations, and administrative
sections be geared up immediately to take care of the expected increase in workload.

In order to help in the review and streamlining of work being handled by the
Administration Manager, Mr Sachdeo requested that the personal files of officers
working under Mr. Kumar be sent to him, along with their duty lists. The first officer
whose case came up for review was Mr Saxena, Personnel Officer. Along with other
papers, Mr Saxena’s file contained his performance evaluation report for 1971. Mr
Sachdeo was surprised to find wide disparities between the self-appraisal report
submitted by Mr Saxena and the detailed assessment done by Mr Kumar (see details
given in Exhibit II,)

It appeared to Mr Sachdeo that the appraisal system and form used did not help him to
make an independent assessment of Mr Saxena’s work. He, therefore, sought the
“informal” opinion of the Administrative Officer, and Mr Saxena’s subordinate officers,
in order to get a clearer picture. The general comments of these four officers are given
in Exhibit IV.
Mr Sachdeo was keen on improving the appraisal system being used in ABC. He was
also wondering what action he should take on Mr. Saxena’s performance evaluation
report for 1971.

_____________________________________________________________________
2
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

Exhibit-II

ABC ENGINEERING WORKS LIMITED

Performance Evaluation Report - Commercial Officers

Part A-PERSONAL DATA (To be filled in by the Personnel Department)

1. Name : Mr M.K. Saxena

2. Age : 32 years

3. Qualifications : B.A., LL.B., Dip. Personnel

Management

4. Experience : 1965-68, Office Assistant, Attendance

and Pay Office, Prima Pvt. Ltd.,
Ghaziabad;
1969-70, Asstt.Personnel Officer Apolo
Industries, Faridabad,
January 1971 to date: Personnel
Officer,ABC Engineering Works
5. Date of joining : January 1, 1971

6. Designation : Personnel Officer

7.Reporting to : Mr Rajesh Kumar, Administration
Manager

Part B- SELF-APPRAISAL (to be filled in by the Officer being evaluated)

During the last one year as Personnel Officer, I have looked after the entire Labour
welfare, legal and industrial relations work in the factory. The work has been done as
per the list of duties assigned to me by the Administration Manager. The Inquiry
Officer, Labour Officer, Medical Officer, and Assistant Labour Officer, have been
reporting to me and I have also been in very close touch with the Administration
Manager and other senior officers in the factory. Direct contact with the Labour unions
has also been one of my important duties. I am happy that even though a new post of
Personnel Officer was created when I joined, I have fully established the personnel
department. At the time of joining, there was no coordination between officers looking
after the personnel work. As a result the Production and Commercial Managers had to
contact the Factory Manager directly for solving problems connected with workers and
staff. Now, however, all managers come to me with their problems, and I give them
_____________________________________________________________________
3
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

decisions. Because they know that I am incharge of the personnel department, and
listen to their problems, even the workers come to me when they have any problem
with their foreman. I give prompt attention, immediately ring up the foreman’s
manager and get the problems solved.
The Labour welfare activities (sports, recreation, canteen, fair price shop, credit
society, etc.) have also been improved and all workers are happy. As a result, the
discipline within the factory has improved and the number of charge sheets issued
every month has decreased. I have also started a suggestion scheme so that the
complaints and grievances of workers can be handled quickly.
The working of the legal department has been improved and the number of charge
sheets pending with the department has gone down from 40 in February 1971, to only
16 now. this prompt disposal of pending enquiries has given the workers a feeling that
justice will be promptly given to them in future also. I therefore expect that my close
contacts with union leaders will help the management to negotiate a suitable wage
agreement before March 1973.
I am extremely thankful to my manager, for his full guidance and encouragement in
my work. He has appreciated my work a number of times and this has helped me to
gain the cooperation of the Administrative Officer, Labour Officer and other officers in
the department. I am also thankful to the Factory Manager for his guidance at all
times.
I looking forward to increased responsibilities next year. At present, the personnel
work of recruitment, salary administration, promotions, incentives, etc., is being
handled either by the Administrative Officer, or within the commercial and production
departments, by respective office superintendents. Since this work should be the
prime responsibility of the personnel officer, I hope that the management will include
these functions as part of my regular duties. In that case an Assistant Labour Welfare
Officer recruited for the purpose can handle the routine work of Labour welfare.
I would like to again thank the Administration Manager and Factory Manager for their
guidance and encouragement at all times.

Signature : Sd/-

Name : M.K. Saxena

Designation : Personnel Officer

Date : November 15, 1972

_____________________________________________________________________
4
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

Part C - ASSESSMENT BY IMMEDIATE SUPERIOR

I. Personal Qualities
1. Integrity : Very good
2.Discipline : Very good
3. Punctuality : Very good
4.Attendance : Very good
5. Honesty : Very good
6.Initiative : Fair
7. Tact : Poor
8. Leadership : Average
9. Personality : Average
10.Health : Very good
11.Communication Oral : Very good
12. Realationship with Superiors : Verygood
Colleagues : Average
Subrodinates : Poor
13. Cost Consciousness : -
14. Ability to get work from others : Poor

II.Major Strengths
Mr Saxena is a good desk worker, and has good talking abilities. He also has
theoretical knowledge of labour welfare and personnel work.
III.Major Weaknesses
He needs to improve his relationships with people and his ability to get work from
others
IV.General Remarks
I am not at all satisfied with the work done by Mr Saxena. He gives opinion and advice
without proper study of the problem. His relationship with subordinates and colleagues
is poor and many officers have complained that he is impolite. The labour officer and
administrative officer who have been working in our factory for 15-20 years, have also
complained that he does not treat them respectfully.
A detailed list of duties had been given to Mr Saxena when he joined. My specific
comments against each of the duties assigned are given in the extra sheet attached as
exhibit III.

V. Overall Rating Below average

VI.Recommendations Not fit

Sd/-
Rajesh Kumar (Administration Manager)Date:November 30, 1972

_____________________________________________________________________
5
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

Exhibit III

Comments on Duties Assigned to Mr Saxena

Sr. No. Duties assigned to Mr Comments on performance

Saxena
A. Employee Benefit
programmes
1. Canteen The unions are not satisfied. I asked him to
get the workers involved in the management
of their canteen, so that there would be no
complaints against the running of the canteen.
This has not been done

2. Cooperative Society The previous manager of the fair-price shop

run by the Employees Cooperative Society
had resigned 2-3 months ago. No suitable
replacement has been found yet. The
employees are complaining
3. Employees Credit There were complaints that the elections were
Society not held properly
4. Medical Scheme The part-time doctor takes leave frequently
and no advance notice is put up for
employees. Sometimes complaints are
received that the doctor does not come in time
5. Sports Club The clerical staff was monopolizing the club
and workers were not able to participate. The
workers and clerks should both get equal
opportunities and should play together. Only
now a new constitution has been approved.
However, no proper entertainment functions
have been organized.
6. Library It opens for only two hours and has a peon
who gets additional Rs.25 for this work. Very
few books have been added
7. Printing House Journal This is a quarterly and was under his charge
for the first 6 months, but no issue was
published; Now this work has been given to
another officer in the Public Relations Section
B. Union Relations

1. Industrial Relations The unions complain that he delays the

answers to their letters. The union leaders do
not have faith in him and prefer to talk to the
Administrative Officer or to me directly, as they
were doing earlier.
2. Grievance Procedures The grievance procedure has not been made
till today. An ad hoc procedure is being
_____________________________________________________________________
6
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

followed.
3. Conciliation, Industrial he does not provide information to the
Tribunal, Labour Courts, Conciliation Officer, Industrial Tribunal, Labour
Arbitration, Payment of Courts and Arbitrator in time
Wages Inspector
4. Inquiries The work of inquiries and charge sheets has
been improved by the Inquiry Officer
5. Personnel Planning and
Evaluation

(a) Assessment of strengths He should make periodic assessment of

and weaknesses of the strengths and weaknesses of our personnel
company’s personnel policies and practices and assist in the
policies and practices formulation of better policies. This is not being
done.
(b) Conduct for morale
surveys
(c) Preparation of manuals He has also not conducted any morale survey
and organisation charts or prepared any manuals, organisation charts
with the detailed duties or job descriptions, or done job analysis, job
of officers evaluation, etc.
(d) Job analysis and job
evaluation
Complete guidance to all He has theoretical knowledge only
departments, regarding Since he has not done these tasks, question of
all Labour laws, assigning other duties does not arise
provident fund, gratuity
etc. Also preparation of
appeal cases and
subsequent follow
through. Any other
duties allotted

Sd/-
Rajesh Kumar
(Administration Manager)

_____________________________________________________________________
7
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

EXHIBIT IV
General Comments of Mr Saxena’s Colleagues
and Subordinate Officer
1. Administrative Officer:
The A.O. had been with ABC for over 20 years, and had slowly risen from the clerical
cadre to this present position. According to Mr Sachdeo, he was an asset to the
Company. Because of his long experience, he knew all the procedures, rules and
precedents, and could therefore handle general administration and establishment
metters very competently. His long-standing personal relationships with workers and
staff had also helped, especially in the performance of his earlier duties of welfare,
Labour relations, etc. However, since he seemed considerably over-worked, and had
limited potential for growth, it had been necessary to create an additional post of
Personnel Officer.

The A.O. comments are given below:

“The new P.O. is doing only part of the duties I was earlier doing alone and he is
being paid more than even I am getting. I would not grudge him this, provided his
coming here had really benefited our factory. I, however, cannot see any
improvements made. The personnel work is still being performed in the same ad
hoc manner by various department managers, and the Labour matters, inquiries,
etc., are in any case being handled by other officers like the LO, ALO and EO.
Therefore, I don’t really know what keeps the P.O. busy all day long”.
2. Labour Officer:
The L.O. had been incharge of legal matters in ABC for about 15 years , and had also
applied for the post of P.O. as an internal candidate. His narrow specialization in legal
aspects alone had gone against him, and even though the Administration Manager had
recommended his promotion, the Interview Committee consisting of the Factory
Manager and his three managers (I/c Production, Commercial, and Administration),
had not found him suitable for personnel work.

The L.O.’s comments are given below:

“I am reporting to the P.O. for all legal matters, and have to take orders from him.
However, he is too inexperienced and immature, and has only theoretical knowledge.
I have been in ABC for over 15 years and was earlier handling legal matters, including
the work of Labour courts, industrial tribunal, etc. independently. I would like the P.O.
to handle even one case on his own without my help.”
3. Assistant Labour Officer:
The A.L.O. was a young man, recruited just 8 months earlier. According to Mr
Sachdeo, he was “extremely bright” and would do well after he had gained some more
practical experience.

The A.L.O. commented as under:

“I come in contact with the P.O. largely through the Labour Officer. However, my view
is that he is a capable officer, and would do well if he got some more guidance and
_____________________________________________________________________
8
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.
 Case ABC Engineering Works on Performance Appraisal

cooperation from other officers in our department. I really don’t want to say anything
more than this.”
4. Inquiry Officer:
The E.O. had been in ABC for 8 years and was incharge of discipline matters.

His comments are given below:

“I like the P.O. Earlier we used to have a highly legalistic approach to our workers in
discipline matters and for every minor offence we would charge-sheet the worker. Now
we don’t do that. We try to sort out the matters informally, and I think this has made the
workers happier. Of course, there are other reasons also why the workers could be
happy or unhappy. Good discipline, welfare and Labour relations, etc., should really be
the responsibility of all officers and not just the P.O. or E.O., although we officers in the
Personnel Department have to give proper guidance, quite a lot depends on others
E x h i b i t I

P a r t i a l o r g a n i s a t i o n C h a r t o f A B C E n g i n e e r i n g

F a c t o F f a c t o r u u u u
( M r . S a c h d e o )

P r o d u c tC i o o n m m e r c i a l A d m i n i s t r a t i o n
M a n a g e Mr a n a g e r M a n a g e r
( M r . K u m a r )
]

P r o d u c t O i o f nf i c e S uP p e dr s t so . n n e l A d m i n i s t r a t i v e
S u p d t . A s s i s t a n Ot s f f i c e r o f f i c e r
F o r e m a n a na dn d C l e ( r M k s r S a x e n a )
W o r d e r s

I n q u i r y L a b o u r
O f f i c e r O f f i c e rS t a f f

I n q u i r y A s s i s t a n t
C l e r k L a b o u r
O f f i c e r

M e d i c Oa lf f i c e
O f f i c e Cr l e r k

also.

_____________________________________________________________________
9
This case is prepared by Dr. C.P. Shrimali, Professor, Management Development
Institute, for classroom discussion only. It may be used only after prior permission of
the author.