A

RESEARCH PROJECT REPORT

ON

Performance Appraisal of Employees of Shahabad Sugar Mill

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE

REQUIREMENT OF PAPER FOR THE DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
(SESSION 2008-2011)

Under the supervision of: Submitted By:

Ms. Ruhi Mittal AMIT RANA
Lecturer 1208108
M.M. Institute of Management,
M.M. University, Mullana

SUBMITTED TO:

MAHARISHI MARKANDESHWAR INSTITUTE OF

MANAGEMENT, MAHARISHI
MARKANDESHWAR UNIVERSITY, MULLANA, AMBALA
HARYANA, 133207, INDIA
 DECLARATION

I hereby declare that the dissertation entitled “Performance Appraisal of

Employees of Shahabad Sugar Mill” submitted for the Degree of Bachelor
of Business Administration is my original work and the dissertation has not
formed the basis for the award of any degree, diploma, associate ship,
fellowship or similar other titles. It has not been submitted to any other
University or Institution for the award of any degree or diploma.

M.M.I.M, M.M. UNIVERSITY, AMIT RANA

MULLANA- AMBALA 1208108

DATE:
 CERTIFICATE

Certified that the research project entitled “Performance Appraisal of

Employees of Shahabad Sugar Mill” is an original piece of research work
done by Mr. Amit Rana, Roll No. 1208108 during the period of his study
under my guidance for the award of the degree of Bachelor of Business
Administration (BBA).

M.M.I.M., M.M. UNIVERSITY, AMIT RANA

MULLANA-AMBALA 1208108
 ACKNOWLEDGEMENT

My sincere thanks are due to all the contributors without whose efforts this
project would not have been accepted.

I owe my big thanks to Ms. Ruhi Mittal, Maharishi Markandeshwar Institute

of Management, Mullana for motivating me to undertake this project and
guiding me at every step towards completion of this project.

I also express my gratitude to all the respondents for their proper

responses and co-operation during my research project.

I would like to extend my thanks to my all friends for their valuable

suggestion and co-operation at various stages during my project.

Last but not the least I would like to thanks the Almighty GOD for the
blessings. He showered on me during the research project.

AMIT RANA
 CONTENTS

Declaration

Certificate

Acknowledgement

1. Introduction:

1.1 Introduction to Performance Appraisal;

1.2 Introduction to Sugar Industry;

1.3 Introduction to the Shahabad Co-Operative Sugar Mill

Ltd.;

2. Review of Literature;

3. Research Methodology;

3.1 Introduction;

3.2 Objectives of the Study;

3.3 Nature of the Study;

3.4 Sampling Procedure and Design;

3.5 Method of Data Collection;

3.6 Scope of the Study;

3.7 Significance of the Study;

3.8 Limitation of the Study;

4. Analysis and Interpretation;

5. Findings, Suggestions and Recommendations.

Annexure(s)

1. Sample Questionnaire;

2. Bibliography.
Chapter -1
Introduction
 CHAPTER-1

INTRODUCTION

___________________________________________

INTRODUCTION ABOUT TOPIC

1.1 Introduction to 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.”

Characteristics of Performance Appraisal System :

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.
5. The main purpose of Performance Appraisal is to secure information
necessary for making objective and correct decision an employee.
Process of Performance Appraisal System :

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

Limitations of Performance Appraisal System :

1. Errors in Rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge

Methods of Performance Appraisal System :

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.

Before relating the specific techniques to the goals of performance

appraisal stated at the outset of the article, I shall briefly review each,
taking them more or less in an order of increasing complexity.

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

Graphic Rating Scale 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.
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. Within the past five or six years,
MBO has become something of a fad and is so familiar to most managers
that I will not dwell on it here.

Ranking Method

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.

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:

Paired Comparison ranking 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

So far, we have been talking about assessing past performance. What

about the assessment of future performance or potential? In any placement
decision and even more so in promotion decisions, some prediction of
future performance is necessary. How can this kind of prediction be made
most validly and most fairly?

360 Degree Feedback

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.

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 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.
• Helps in counseling and feedback.

Rating Errors in Performance Appraisals

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:

• The rater may feel that anyone under his or her jurisdiction who is
rated unfavorably will reflect poorly on his or her own worthiness.
• He/She may feel that a derogatory rating will be revealed to the rate
to detriment the relations between the rater and the ratee.
• 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.

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

• Provide feedback to the reviewer / HOD on the employees’

behavioral traits indicated in the PMS Policy Manual
• Ensures that employee is aware of the normalization / performance
appraisal process
• Address employee concerns / queries on performance rating, in
consultation with the reviewer

b) Reviewer (Reporting Manager’s Reporting Manager)

• Discuss with the reporting managers on the behavioral traits of all the
employees for whom he / she is the reviewer
• 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)

• Presents the proposed Performance Rating for every employee of his

/ her function to the Normalization committee.
• HOD also plays the role of a normalization committee member
• Owns the performance rating of every employee in the department

d) HR Head

• Secretary to the normalization committee

 • Assists HOD’s / Reporting Managers in communicating the
performance rating of all the employees

e) Normalization Committee

• Decides on the final bell curve for each function in the respective
Business Unit / Circle
• 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

Performance Rating Process

EXCEPTIONAL CONTRIBUTOR (EC)

• Performs consistently and substantially above expectations in all

areas
• Achieves a final score greater than or equal to 115%
• Consistently delivers on stretch targets
• Is proactive
• Spots and anticipates problems, implements solutions
• Sees and exploits opportunities
• Delivers ahead of time
• Sees the wider picture-impacts across business
• Focuses on what’s good for the business
• Seen as role model by others
 • Recognized as exceptional by other functions as well
• Motivates others to solve problems
• Develops others
• Provides open and honest feedback
• Able to establish and lead cross-functional teams

SIGNIFICANT CONTRIBUTOR (SC)

• Performs above expectations in all areas

• Achieves final score between 100-114%
• Versatile in his/ her area of operation
• Develops creative solutions and require little / minimal supervision
• Sets examples for others
• Take ownership of own development
• Coaches others
• Demonstrates business initiative
• Is self motivated
• Supportive team player
• Leads own team very effectively
• Demonstrate functional initiative

Latest Devlopments in the Performance Appraisal System:

A growing number of organizations, including the likes of Ford, Microsoft

and Conoco, have adopted performance appraisal models in which best-to-
worst ranking methods are used to identify poor performers, who are then
given a period of time to improve. If they fail, they must leave. The
departure is often sweetened with a severance package, but if the poor
performer refuses to exit gracefully, they face the possibility of termination
without compensation.

The strategy is known as "rank and yank". According to Time magazine,

forced ranking appraisal systems have spread to around 20 per cent of
U.S. companies in recent years. For example, California-based Sun
Microsystems ranks its 43,000 employees into three groups. The top 20 per
cent are rated as "superior", the next 70 per cent as "standard". At the
bottom is a 10 per cent band of "underperformers". The underperformers
are told frankly that they must improve and are provided with one-on-one
coaches. CEO Scott McNealy is famous for telling his executives that the
bottom 10 per cent must be "loved to death". Underperformers who fail to
improve are offered a 'prompt exit' package. If they decline it, they face a
bleak future in which further incidents of poor performance could lead to
dismissal. Love has its limits, after all.

Advocates believe that forced rankings make managers and supervisors

take the tough decisions that otherwise they would avoid as being too
difficult or unpleasant. Some organizations view the forced ranking
approach as a way to create a continuously improving workforce.

Despite its appeal, there are problems with the forced ranking approach.
Someone must always fall into the lower or underperforming category,
even if everyone has performed at a satisfactory or better level. It is also
possible that those rated as "poor performers" in highly productive
departments may contribute more to the overall progress of the
organization than those rated as "good performers" in other departments.
As well, forced ranking can weaken teamwork. It can encourage unhealthy
levels of internal competition, leading to a decline in team values as
individuals seek to protect their own position at the expense of their co-
workers. As one employee said about the impact of forced ranking in his
organization, "... all the relationships instantly become strained."

One of the leading practitioners of forced ranking was Enron Corporation,

the Texas energy and trading giant that collapsed in late 2001 under a tidal
wave of debt and scandal.
1.2 INTRODUCTION TO THE SUGAR INDUSTRY

The sugar industry in India plays a vital role towards

socioeconomic development in the rural areas by mobilizing rural
resources and generating higher income and employment
opportunities. About 7.5 per cent of the rural population, covering
about 45 million sugarcane farmers, their dependents and a large
number of In India, the sugar industry is the second largest agro-
based industry, next only to textiles and contributes about Rs.1650
crore. To the central exchequer as excise duty and taxes annually.
Besides, the state governments realize about Rs.600 crore
annually through purchase taxes, cases, etc. The total value of
sugarcane produced in the country is estimated at Rs.24000 crore
per year. In 1980-81, utilization of sugarcane output was maximum
for the production of gur and khandsari (55 per cent), followed by
white sugar (33 per cent) and seed, feed and chewing (12 per
cent). However, utilisation of sugarcane for white sugar production
increased from 61per cent in 2001-02 to 73 per cent in 2007-08,
and that for gur and khandsari decreased from 28 per cent to 15
per cent during the same period. Thus, utilization of sugarcane for
white sugar production has been rising and that for gur and
khandsari production, falling. Forseed, feed and chewing, utilization
of sugarcane has been stable at about 12 per cent .The production
of sugar in India increased substantially from 164.53 lakh tonnes in
sugar year 1995-96 to 201.45 lakh tonnesIn 2002-03 and
decreased to 135.46 lakh tonnes in 2003-04and to 126.91 lakh
tonnes in 2004-05 particularly due to the onslaught of drought and
white woolly aphid in major sugar producing States like
Maharashtra, Tamil Nadu and Karnataka resulting in a fall in
sugarcane production, delayed payment of cane price and closure
of some sugar mills. However, considering the increasing price of
sugar in the international market, the Indian sugar industry
encouraged the sugarcane farmers to plant more sugarcane.
Accordingly, there was substantial diversion of area from other
crops. The number of sugar factories in operation in India
increased from 416 in 1995-96 to 455 in 2005-06. However, due to
maximum production of sugarcane, in 2006-07 followed by 2007-
08, this number increased to 504 and 516 in 2006-07 and 2007-
08respectively. As against the installed sugar production capacity
of 189.85 lakh tonnes in 2004-05, utilization of capacity was only
67per cent. The lower utilization of sugar production capacity
during2004-05 could be attributed to lower sugarcane production
and higher installed sugar production capacity. However, in 2006-
07, as against the installed sugar production capacity of 213.91
lakh tonnes, utilisation of capacity was of the order of about 133
per cent. The higher utilization of sugar production capacity during
2006-07 could be attributed to maximum sugarcane production.
The sugar export from India increased substantially from 8.87lakh
tonnes in 1995-96 to 49.57 lakh tonnes in 2007-08. The sugar
import into India increased substantially from 0.42 lakh
tonnesin1995-96 to 1.24 lakh tonnes, 5.53 lakh tonnes and 16.00
lakh tonnes in 2002-03, 2003-04 and 2004-05 respectively.Thus,
during the 1995-96 to 2007-08, the quantity of sugar exportedwas
substantially higher than what was imported.Sugar exported from
India increased from 2000 tonnes (valued at Rs.0.91 crore) in the
financial year 1990-91 to 16, 62, 370 tonnes (valued at Rs.1769.49
crore) in the financial year 2002-03 and decreased to 12,00,600
tonnes and 1004317 tonnes in the financial years 2003-04 and
2006-07 respectively, whereas sugar imported into India decreased
from 17,65440 tonnes (valued at Rs.2245.85 crore)in the financial
year 1994-95 to 320 tonnes (valued at Rs.1.11 crore) in the
financial year 2006-07 .During the decade ended 2008, sugar
export from India was maximum to UAE (5.40 lakh tonnes),
followed by Bangladesh (3.74lakh tonnes), Pakistan (3.50 lakh
tonnes), Sri Lanka (1.62 lakh tonnes), Malaysia (1.32 lakh tonnes)
and Yemen S(1.17 lakh tonnes)7.The Government of India, vide its
notification dated July 04, 200 had banned export of sugar
purportedly to check inflation caused rising sugar prices.
International Sugar Organization (ISO) assessed the increase in
sugar prices of different countries during October 2005to April 2006
and stated that the increase in domestic price of sugar in India is "a
mere tepid 10 per cent in aggregate terms over the past six
months" compared to 58 per cent in Brazil, 50 per cent in Russia
and 27 per cent in China". The Indian sugarcane farmers and the
sugar industry which had suffered major losses during 2003-04
and2004-05 could recoup the losses incurred, by exporting sugar.
Higher world market prices make sugar export a viable proposition,
particularly when excess stocks are available beyond local needs.
In India, sugar is a prime requirement in every household. Almost
75 per cent of the sugar available is consumed by sugar based
bulk consumers like bakeries, candy makers, sweet makers and
soft drink and ice cream manufacturers. Industrial consumption of
sugar is growing rapidly particularly from the food processing
sector and sugar-based bulk consumers. A rising trend in usage of
sugar could be attributed to greater urbanization, rising standard of
living and Change in food habit. While domestic consumption of
sugar accounts for 98 per cent of sugar production in India, export
accounts for the rest (long run average).India is the world's largest
sugar consumer. On the basis of existing trend of sugar
consumption and population growth rate of 1.6 per cent per annum,
the estimated requirement of sugar by 2010 would be 24.3 million
tonnes and the corresponding area required. The increase in area
under sugarcane cultivation from the level of 4.41 million ha. In
2008-09 to 5.5 million ha. by 2010 may not be possible due to other
competing crops, constant land area and water shrinkage and
hence will necessitate improvement in productivity of sugarcane
and sugar recovery, for which, research institutions have to play a
very important role.
Sugar Production In states

The following table shows level of sugar production (In Lakh Tonnes) in
Indian States:

State 2002-03 2003-04 2004-05 Estimated

Uttar Pradesh 58.74 46.08 50.32
Maharashtra 61.64 31.99 22.29
Karnataka 17.98 11.57 13
Tamil Nadu 17.04 11.9 9.84
Andhra Pradesh 11.88 8.81 9.75
Gujarat 12.38 10.77 8.32
Haryana 5.99 5.86 4.03
Uttaranchal 4.59 3.93 3.82
Punjab 5.11 3.88 3.37
Bihar 4.21 2.77 2.77
Madhya Pradesh 0.85 0.94 0.85
Other 0.91 1.09 1.58
(Source: Company Records)

1.3 Introduction to the Shahabad Co-operative Sugar Mills Ltd.

Shahabad Markanda is situated on Delhi-Chandigarh highway, at a

distance of 20 kms. From Kurukshetra towards Ambala. The Shahabad Co-
Operative Sugar Mill is stuated on Shahabad-Ladwa road at a distance of 3
kms. From national highway. The Shahabad Co-Operative Sugar Mill was
registered as Co-Operative society .on 09-01-1976. The letter of intent for
establishment of the sugar mill of 1250 TCD was received on 14-07-1981
and the commercial production was started on 06-02- 1985. The 1250 TCD
plant has given excellent results. It was observed that Shahabad area has
given potential for the increase in sugarcane production. It was decided to
increase the capacity of the mill from 1250 TCD to 3500 TCD. The
estimated cost on the expansion was 33 crores. The expansion job was
started in june, 1993 and the Straight Line Trial was conducted on 28-03-
1995 i.e. during the crushing season 1994-95. Against the estimated cost
of Rs. 33 crores the expansion was achieved by spending 29 crores. nThe
entire funds were raised by the Mill on its own and borrowing was made
from financial institution.The plant started crushing at full capacity of 3500
TCD from 07-11-1995 i.e. from crushing season 1995-96.

The Board of Directors takes all the policy decisisons of the Mills.
The decisions during the meeting of Board of Directors are taken
by the majority view and the government nominees have the
dissenting power. If any Government nominee gives his dissenting
note on any resolution then the matter is reffered to the
Government for the final decisions under section 29(3) of the
Haryana Co-Operative Societies Act.The decision of the
Government will be binding on the society and will be considered
as per resolution of the society. As per bye- laws no.45 the B.O.D.
shall consist of 16 Directors as under:-
• Six Directors to be selected by the producers members
admitted;

• Two Directors to be selected by the non-producer members

admitted;

• Three Directors to be nominated by the State Government till

share capital contributed is fully retired and loan from
financial institutions is repaid;

• Two nominee Directors of the Financial Institutions until loan

taken from them is repaid;

• Two Directors to be nominated by the State Government

having intimate knowledge of the Sugar Industry and are
professionally qualified;

• Managing Director as appointed by the State Government.

Performance:

The working of the Shahabad Co-Operative Sugar Mill has been

praise-worthy right from the inception. The mill has set unique
standards at National level. The mill has begged many technical
efficiency awards and cane development awards at National
Level. The details of the awards given to the Shahabad Co-
Operative Sugar Mills Ltd., by the National Federation of Co-
Operative Sugar Factories Ltd., Delhi is given Below:-
Awards Year

Efficiency Award 1988-89

Cane Development Efficiency Award 1988-89

Efficiency Award 1989-90

Technical Commendation Certificate 1990-91

Cane Development Efficiency Award 1991-92

Technical Commendation Certificate 1993-94

Technical Efficiency Award 1994-95

Best Financial Management Award 2002-03

Best Co-Operative Sugar Mills Award 2002-03

1st Prize in Financial Management 2003-04

Best Co-Operative Sugar Factory 2003-04

2nd Prize for Cane Development 2003-04

1st Prize for best Co-Operative Mill 2004-05

Cane Development Award 2005-06

Technical Efficiency Award 2006-07

Area of Operations:

The area of the Mills is in radius of 32 kms. It spreads 16 kms. Towards

Yamunanagar and 25 kms. In other directions. In the area of the mills,
there are three cane growers societies i.e. Radaur, Mustfabad, & Kesri,
through which around 505 sugarcane is purchased directly from growers by
the Mills. The area under sugarcane is 42000 acres during the crushing
season 2006-07.

There are 400 villages in the reserved area of Shahabad Co-Operative

Sugar Mills. 11500 growers supply sugarcane to the mills. For the
convienence of the cane growers, the Mill has set up 27 cane Purchasing
Centers in its reserved area. Purchi Distribution for the purchase of cane is
done by the computer and advance calendaring during the crushing season
by the mills. As per the policy of Haryana Government the payment to the
growers is made within 7 days through banks and Co-Operative societies,
by the Mills.

Under the sugarcane development plan, the Mill is providing various

facilities to its cane growers to increase the development of sugarcane
 Chapter-2
Review of Literature

CHAPTER-2

REVIEW OF LITERATURE

______________________________________________
According to Deming (1986) “The important message is that effective
performance management is a continuous cycle and not a single event.
The model first proposed by Deming (1986), demonstrates one example, of
a performance management cycle. Most performance management cycles
are similar in that they link together strategy and planning with employee
monitoring as well as reinforcing performance management standards. The
Deming cycle links the various elements of the performance management
process into a continuous process. The different elements can be analyzed
as follows:

1. Plan is agreeing the objectives and competence requirements for the

organization. This will also identify the behavioral requirements, objectives
and performance management plans. Agreements for meeting, personal
development enhanced knowledge and skills will also form part of the plan;

2.Act is the actual carrying out of the work toachieve the objectives;

3. Monitor is the process of continually checking on progress towards the

desired objectives and respond to new demands;

4. Review is holding regular meeting to ‘stock take’

And assess progress and take action where required for competing the
cycle by moving into the planning stage (Armstrong and Baron, 2007)

According to Egan (1995) “The underlying principles of Performance

Management have been described as one of the collaboration in which the
system deployed should be one which encourages development and one
which allows team members to move on to strategic development within
the organization”.

“ Boxall (1996) as a human resource process of ensuring that the results of

recruitment strategy were to ensure that the organization employed people
with competitively valuable knowledge and skills. In this Boxall reaffirms the
link between the performances of the organization with the individual”.

The principles of performance management have been summarized as

follows (Information Data Services):

1. Translate corporate goals into individual team, departments, and

divisional goals;
2. It helps to clarify corporate goals;
3. It is a continuous and evolutionary process in which performance
improves over time;
4. It relies on consensus and cooperation;
5. It creates a shared understanding of what is required to improve
performance and how this will be achieved;
6. It encourages self management of individual performance;
7. It requires a management style which is open and honest and
encourage two way communications between superiors and
subordinates;
8. It requires continuous feedback;
9. It measures and assesses all performance against jointly agreed
goals;
 10. It should apply to all staff;
11. It is not primarily concerned with linking performance to financial
reward;

According to Horton and Farnham (1999) “ A process of maximizing the

value added through the performance management such that the initial
costs are exceeded by the subsequent benefits. To achieve this, individuals
and teams take responsibility for the continuous improvement of the
business developing their own skills and effectiveness”.

According to Robson (2004) “The overall aim of performance management

is to establish a high performance culture. In this employees would
visualize as part of their function the requirement to continually assist in
improving the performance of the organization. They will also perceive that
they can influence important aspects of overall performance”.

2.1.Performance Measurement:

According to Eccles (1991) “A realization has developed amongst public

sector executives that new strategies and competitive realities requires
more comprehensive methods of measurement. This represents a radical
shift from traditional public sector considering performance in purely
financial terms as the foundation of performance to considering them as
one element of a broader set of measures”.
Accoding to Kaplan and Norton (1992)“A further study of performance
measurement models who suggested a measurement which looked at the
accomplishment of the business from 4 different perspectives:

• Financial perspective;
• Customer perspective;
• Internal business perspective;
• Innovating and Learning perspective.

By combining all 4 disciplines you develop a balanced scorecard

approach which enables a manager to understand the
interrelationship between various measures. This process is designed
to help organization looking forward instead of backward and
concentrate their attention on the critical areas of the business.
Kaplan and Norton suggest that building a balanced scorecard
approach enables an organization to link the financial budgets with the
strategic goals.

According to Klein (1998)“Outcomes can be measured against

competencies in their identified field of activity. The measurement is
against the individual’s core knowledge which will be identified by the
business drivers and monitored to maintain balance”.

According to CIPD (2008) “Performance measurement can be

coordinated by an interrelated framework between manager and
employee. This forms a key objective of the appraisal which agrees to
standards and performance indicators, and means of reward. For
successful performance measurement, a culture of an individual
responsibility for the continuing improvement of business processes
needs to be established and individual skills and contributions need to
be encouraged and nurtured”.

2.2.Performance Appraisal:

“Edmonstone (1996) suggested the following purpose of the process:

1. Improvement in the communication between boss and subordinate

through use of feedback;

2. Identification of the scope oF performance improvement and the

means to achieve this;

3. Identification of individual training needs;

4. Identification of individual for future promotion;

5. As a power means of management control through the setting of

objectives and the review of the performance against these
objectives.

This is by no means a definitive list, but demonstrates the direction in

which the performance appraisal system should move towards. The
appraisal interview is the key interface between management and the
employee and should allow the employee to have honest two way
communication with their direct line manager. This is seen as a one of
the key objectives of the appraisal process within LDL but also similar
to the study by Edmonstone (1996) above the identification of training
needs and objective setting is an essential element in the process”.

According to Armstrong and Baron (2005)“ Performance appraisal is

one element of the performance management which involves different
measurements throughout the organization. But it is the element
which is most important if organizations are to take advantage of their
most important asset employees and gain human capital advantage.
There are other processes within organization such as technology and
design but it is the human factor which is most difficult to replicate and
therefore the most valuable”.

“Armstrong (2006) described the role of performance appraisal as a

tool for looking forward to what needs to be done by people in the
organization in order to achieve the purpose of the job, to meet new
challenges, better use of technology skills and attributes. In addition, it
will develop both organizational and individual capabilities and reach
agreement on areas where performance needs to be improved.

2.2.1.Characteristics of Performance Appraisal:

Locke and Lathon (1990)“The performance appraisal should set for

the individual obtainable yet challenging goals. Clearly defined goals
or objectives determine the contribution an individual makes to the
organization. By agreeing with the individual what their goals and
objectives should be well have a positive influence on the individual’s
commitment and motivation .Adversely setting unattainable goals and
objectives will reduce individual commitment”.

According to Marsdon (1999)“The development of an appraisal

measurement standard can be very difficult particularly in
organizations where outcomes are not easily measured but it is one
that is necessary if the integration of the appraisal process into the
overall strategic goals of the organization is to be achieved. Any
performance appraisal system that did not consistently measured
work performance accurately cannot be considered an effective one.
Where proper standards and measurement are not used reliably,
problems may arise because there are no objective criteria. Therefore,
performance evaluation errors can occur making the process invalid”.

“Armstrong (2006) identified several criteria for performance measures

which should be present in evaluating performance through the
performance appraisal process:

1. Be related to the strategic goals of the business;

2. Be relevant to the roles and objectives of the individual concerned;
3. Focus on outputs, outcomes and behavior;
4. Provide a sound basis for feedback;
5. Be comprehensive and communicate all key aspects of
performance.
2.2.2.Critique of performance appraisal:

“Barlow (1989) suggests that given the circumstances and the possible
conflicts which can arise from the performance appraisal process it is not
surprising but some managers are even hostile to performance appraisal.
The process can act as a ‘lightening conductor’ for general complaints
about pay and promotion prospects making it difficult for the manager to
properly assess the individual”

Armstrong and Baron (2004) suggested some of these shortcomings may

be tempered by a shift in some organization to a more continuous process
of performance review rather than the more simplistic annual appraisal. In
this process, the work is continually assessed and distortions or errors can
be discussed at an early stage and agreement reached with the individual”.

2.3.Conclusion:

The literature review has drawn together an overview of performance

management with a concentration on the performance appraisal elements
of the process. This has been identified by the CIPD (2004) is the
cornerstone in many organization of the performance management cycle.
This bears resonance with the process deployed by Liverpool Direct who
has placed the most influence on performance as being the performance
appraisal. The criteria mentioned by Armstrong (2006) as the elements
required for a successful performance appraisal process are those which
would fit the Liverpool Direct model.

The literature has enabled the research to be focused on those elements

which are closely aligned with the research question. Identification of the
difficulties identified with the performance appraisal form an important part
of both the quantitative and qualitative research undertaken as part of this
study.
 Chapter-3
Research
Methodology

CHAPTER-3

RESEARCH METHODOLOGY
______________________________________________

3.1INTRODUCTION

RESEARCH METHODOLOGY

“Research simply means, “Search for knowledge”. According to Roman

and More, Research is “systematized effort to gain new knowledge”.

Research means a search for knowledge. Research is an art of scientific

investigation. It is a careful investigation or inquiry especially through
search for new facts in any branch of knowledge.
Research Methodology is a way to systematically solve the research
problem. It is a science of studying how research is done scientifically.
Research is an academic activity and as such the term should be used in a
technical sense. Research comprises defining and redefining problem,
formulating hypothesis or suggested solutions, collecting, organizing and
evaluating data, making deductions and reaching conclusions and at last
carefully testing the conclusions to determine whether they fit the
formulated hypothesis.

Research is any organized inquiry carried out to provide information

for solving problems. Business research is a systematic inquiry that
provides information to take business decisions.
Definition
“Research comprises of defining and redefining hypothesis or
suggesting solution, collecting, organizing and evaluating data
making deductions and reaching conclusions”.
By Clifford Woody

The term Research Methodology here comprises of all research

activities carried on in connection with the “Performance Appraisal of
employees of Shahabad Sugar Mill”. The basis purpose of Research
Methodology is to describe the research procedure. It helps the
researchers to the way to move on for carrying the study.

Formulation of research problem

↓
Extensive literature survey
 ↓
Research Design
↓
Collection of data
↓
Analysis of Data
↓
Interpretation
↓
Recommendation
 PROBLEM STATEMENT

The first step in research is formulating a research problem. A poorly

defined problem will not yield any useful result. It is rightly said that a
problem well defined if half solved.
In order to identify the research problem three categories of
symptomatic situation namely overt difficulties, latent difficulties and
unnoticed opportunities should be studied.

1. Overt difficulties are those, which are quite apparent, and which
manifest themselves for example if a firm has been witnessing a
decline in sale for same time this could be called on overt difficulty.

2. Latent difficulties on the other hand are those, which are not so
apparent and I which if not checked, would soon become evident for
ex. Decline sales may in due course demoralize the sale staff.

3. Unnoticed Opportunities indicate the potential for growth in a certain

area of marketing. Such opportunities are not clearly seen and some
effort is required to explore them.

As such no problem was given to me while doing my summer training

project but I found the following problems in the organization.

• Complicated terms and Conditions

 The terms and conditions of every plan were so much complicated
that it is not easily understandable by the customers.

• Strict Rules and High Targets

Rules and regulation for the employee of the organization were so
much tight some time they feel very hectic. Moreover the targets
given to them are also very high.

3.2 Objectives of the Study:

• To effect promotions based on competence and performance.

• To conform the services of probationary employees upon their

completing the probationary period satisfactorily.

• To let the employees know where they stand insofar as their

performance is concerned.

• To improve communication between the subordinate and an

employee.

• To determine whether the programmes such as selection,

training and transfers have been effective or not.

• To know employees what they expect from their organization

 when they perform best.
3.3 Nature of the study:
The sugar industry in India finds itself entangled in a complex web of
problems leading to "declining profitability to the cane growers as well as
sugar industries". The reasons for the same are to be traced and suitably
addressed to give a boost to this sector in the country. Unlike many
western or major sugarcane growing countries, sugarcane is the only
source of sugar in our country and therefore, any mismatch between
demand and supply of sugar in the country assumes significance at the
national level and influences the economics of sugarcane cultivation to a
great extent. The initiatives by the state governments in the form of fixing
remunerative sugarcane price on one end and pressurizing sugar mills to
make payments within a reasonable time on the other end encouraged
farmers to put in more area under the sugarcane crop. This underlines the
need to study the PERFORMANCE APPRAISAL OF EMPLOYEES of
sugar mill in order to understand the effectiveness of the price policy in
determining the area under sugarcane crop. The initiatives of research
institutions, particularly of those directly involved with sugarcane crop are
required to be listed in order to study the growth in productivity of
sugarcane crop. Further, the globalization of the Indian economy started in
early90s is bound to direct the trade of agricultural commodities in the
years to come. It is, therefore, necessary to study the performance
appraisal of employees in sugar mill. Keeping the above aspects in view, it
was felt necessary to conduct a commodity specific study on sugarcane in
a few selected states of India.
3.4Sampling Procedure and Design
Data Collection Source:
The study required the understanding of the concept of “Performance
appraisal of employees of Shahabad Sugar Mill” . The method used
was that of primary research. Under primary research a detailed
study was done by conducting the personal interview with the
employees by filling the questionnaires to obtain the required
information.

Sampling Plan:
Sampling Unit
Sampling Technique:
Filling up common questionnaires with 12 questions under
consideration by employees.
Sample Size:
The sample size of the employees are 50.

SAMPLING DESIGN

The various sampling plans used in the study were as follows:

• Random Sampling
In this sampling technique each and every unit of universe has the same
chance of being included in the sample and every unit is selected
randomly out of population.
 • Judgement Sampling
In this investigator selects only those items, which represents the
characteristics of the problem under study. The judgement of the
investigator plays an important role in this type of sampling.

• Convenience Sampling
In this the investigator chooses the items according to his own
convenience. The sample size depends upon the convenience of the
investigator but the chances of inaccuracy and biasness are more.
In my study, I use convenience Sampling.

3.5 Method of Data Collection:

To make the research complete it is very necessary to have useful

and authentic data. There are two types of data collection sources.

PRIMARY SOURCE OF DATA COLLECTION

Primary data are those, which are collected afresh & for the first time
& this happen to be original in character. In my project simple well-drafted
questionnaire was circulated among all respondents. Full freedom was
provided to an individual to answer the questions.

Personal & Telephonic interviews, observation, personal opinion &

viewpoints of the respondents about the various pension plans helped
incompletion of the project.
SECONDARY SOURCES OF DATA COLLECTION

These are those which are collected by someone else & which have
been passed through statistical process.

Brouchers, Manual, Journals, Magazines, Site of Shahabad Sugar

Mill and Various Articles lot many inputs for successful completion of
project.

Questionnaire Design

A Questionnaire, whether it is called a schedule, interview form, or

measuring instrument, is a structured technique for data collection that
consists of series of question, written or verbal, that a respondent
answers.

Objective Of A Questionnaire

 It must translates the information needed into a set of specific

questions that the respondents can and will answer.

 A questionnaire must uplift, motivate, and encourage the respondent

to become involved in the interview, to cooperate, and to complete
the interview.
  A questionnaire should minimize response error.

Questionnaire Design Process

1. Specify the information needed;
2. Specify the type of interviewing method;
3. Determine the content of individual question;
4. Design the question to overcome respondents inability and
willingness to answer;
5. Decide on the question structure;
6. Determine the question wording;
7. Arrange the question proper order;
8. Identify the form and layout;
9. Reproduce the questionnaire;
10.Eliminates the bugs by pretesting.
 In my survey, I use Personal Questionnaire.

RESEARCH DESIGN

There are many definitions of research design, but no definition

imparts the full range of important aspects. Several examples from leading
authors can be cited.
• Research design is like arrangement of conditions for collection and
analysis of data that aims to combine relevance to the research purpose
with economy in procedures.
• Research design is purely and simply the framework of plans for a
study that guides the collections and analysis of data.
• Research design is the conceptual structure within which the
research is conducted.

These definitions differ in detail, but together they give the essentials
of research design. First, the design is a plan for selecting the sources and
types of information used to answer the research question. Second, it is a
framework for specifying the relationship amongst the various variables.
Third, it is a blueprint that outlines each procedure from the hypothesis to
the analysis of data. The design provides answers for such questions as
these:
 • Why the study is being made?
• What techniques will be used together data?
• What kind of sampling will be used?
• How will time & cost constraints be dealt with?
• How the data can be analyzed? In my study the organization was
Shahabad Sugar Mill and sample size was around 50 persons.

TYPES OF RESEARCH DESIGN

Exploratory Descriptive Experimental

Research Design
“A Research Design isResearch Design
the arrangement of conditions for collection and
RResea Researc
analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure.”
While conducting research for this particular report Descriptive Research
design is being used.

Descriptive research, also known as statistical research, describes data

and characteristics about the population or phenomenon being studied.
Descriptive research answers the questions who, what, where, when
and how.

Although the data description is factual, accurate and systematic, the

research cannot describe what caused a situation. Thus, descriptive
 research cannot be used to create a causal relationship, where one
variable affects another. In other words, descriptive research can be
said to have a low requirement for internal validity.

The description is used for frequencies, averages and other statistical

calculations. Often the best approach, prior to writing descriptive
research, is to conduct a survey investigation. Qualitative research often
has the aim of description and researchers may follow-up with
examinations of why the observations exist and what the implications
of the findings are.

3.6 Scope of the study:

The scope of any performance appraisal should include the following:

1. It provides employees with a better understanding of their role and

2. responsibilities;

3. It increases confidence through recognizing strengths while

identifying training needs to improve weaknesses;

4. It improves working relationships and communication between

supervisors and subordinates;

5. It increases commitment to organizational goals;

 6. It develop employees into future supervisors;

7. It assist in personnel decisions such as promotions or allocating

rewards; and allow time for self-reflection, self-appraisal and
personal goal setting.

3.7 Significance of the Study:

Employees are the most significant resource of any business, and

performance appraisals reflect the organization's commitment in
developing this important resource of human capital. Performance
appraisals grant upper management an opportunity to reward excellent
performance or reprimand unsatisfactory performance. This powerful
managerial tool should directly reflect the overall organization's goals
and objectives; the employee assessment should provide useful
feedback about the employee's contributions or lack of contributions
toward these goals.
 3.8 LIMITATIONS OF THE STUDY

Due to constraints of time & resources the present study is likely to

suffer from certain limitations some of these are mentioned below, so that
study can be understood in a proper way:

• Area covered under the report as sample size was very small.

• Some of the respondents of the survey were unwilling to give

information.

• Sometimes wrong respondents provided information, which needed

to be, crosschecked & verified.
• Chances of biasness are there because of the use of convenient
sampling.

• Some respondents were not available and thus needed data could
not be found.

• Though every – “Precaution has taken due to large data & complex
calculation there may be chance of errors”.

CHAPTER-4
 DATA ANALYSIS &
INTERPRETATION

Data Analysis and Interpretation:

TABLE 4.1
Analysis of working experience of employees

Responses % of Respondents
Yes 52
No 48
 (Source: Self Prepared Questionnaire & Field Survey)

INTERPRETATION:

Table 4.1 shows the analysis of previous experience of Employees. It

reveals that 52% of the Respondents worked in any other company prior to
joining this organization. It also dissipates that 48% of respondents are not
having any previous experience. It shows that maximum respondents are
well versed with previous experience.

TABLE 4.2

Analysis of know-how of employees about the Performance Appraisal

Responses % of Respondents
Yes 38
No 62
 (Source: Self- Prepared Questionnaire and Field survey)

INTERPRETATION:

Table 4.2 shows the know- how of employees about the performance
appraisal model. It reveals that 38% of the respondents were informed
about the performance appraisal model during the induction. It also
dissipates that 62% of the respondents were not informed about the
performance appraisal model during their induction.
TABLE 4.3

Analysis of perceptions of employees about the Performance Appraisal

Responses % of Respondents
Simple 40
Complicated 10
Objective 2
Subjective 2
Efficient 40
Inefficient 6

(Source: Self prepared Questionnnaire and Field Survey)

INTERPRETATION:
Table 4.3 shows the analysis of perceptions of employees about the
performance appraisal model. It reveals that 40% of the respondents find
the performance appraisal model to be simple and efficient. It also
dissipates that 2% of the respondents find the performance appraisal
model to be objective and subjective. It shows that maximum respondents
are well versed with simple and efficient performance appraisal model.

TABLE 4.4
Analysis of employee perception about the Performance Appraisal from the
company

Responses % of Respondents
Yes 62
No 38

(Source: Self Prepared Questionnaire and Field Survey)

INTERPRETATION:

Table 4.4 shows the proper assessment of performance appraisal of

employees. It reveals that 62% of the respondents find that performance
appraisal give a proper assessment of your contribution. It also dissipates
that 38% of the respondents find that performance appraisal do not give a
proper assessment of your contribution. It shows that maximum
respondents are satisfied with the performance appraisal.

TABLE 4.5

Analysis of Employee match between Performance assessment and

expectations

Responses % of Respondents
Never 2
Rarely 30
Sometimes 16
Often 16
Every time 36
(Source: Self Prepared Questionnaire and Field Survey)

INTERPRETATION:

Table 4.5 shows the analysis of Employee match between Performance

match between Performance assessment and expectations. It reveals that
36% of the respondents
Find the match between Performance assessment and expectations every
time. It also dissipates that that 25 of the Respondents never find the match
between Performance assessment and expectations.

TABLE 4.6

Analysis of need for Performance Review

Responses % of Respondents
Once a month 4
 Every 3 months 0
Every 6 months 5
Once a year 41

(Source:Self Prepared Questionnaire and Field Survey)

INTERPRETATION:

Table 4.6 shows tha analysis of need for Performance Review. It reveals
that 41% of the respondents find the organization takes the Performance
review once a year. It also dissipates that 0% of the respondonts find the
organization do not take the Performance Review every 3 months. It shows
that maximum respondents are satisfied with the organization takes
performance review once a year.
TABLE 4.7

Analysis of satisfaction level with current Appraisal system of employees

Responses % of Respondents
Very Low 0
Low 7
Average 21
High 15
Very High 7
(Source:Self Prepared Questionnaire and Field Survey)

INTERPRETATION:

This shows that 0% of the Respondents are very dissatisfied, 7% are

dissatisfied, 21% of the respondents are neutral, 15% are satisfied, and 7%
are very satisfied with the current appraisal system.

Q.8. Which are the areas that should be improved upon?

Analysis of suggestions of areas which needs improvement
Responses % of Respondents
Standards 21
Monetary incentives 25
Frequency of appraisal 4
 30

25
% of Respondents

20

15

10

0
Standards Monetary Frequency of
incentives appraisal

INTERPRETATION:

This shows that 21% of the respondents want to improve standards,25% of

the respondents improve monetary incentives while 4% of the respondents
want to improve frequency of appraisal.

Q.9. If you were given an opportunity to rate the transparency of the

appraisal system, what marks would you given? (On a scale 1 to 10 with 1
being the lowest and 10 being the highest)
Analysis of responses to transparency rating in the organizations

Responses % of Respondents
1 2
2 1
3 1
4 4
5 6
6 14
7 9
8 7
9 5
10 1

16

14

12
% of Respondents

10

0
1 2 3 4 5 6 7 8 9 10

INTERPRETATION:

This shows that 14% of the respondents’ rate 6 on the transparency of the
appraisal system while 1% of the respondents’ rate 2, 3 & 10 on the
transparency of the appraisal system.

Q.10. Do you feel comfortable discussing any difference of opinion about

your performance rating with your appraiser?
Analysis of differential opinion from the employees about Performance
Appraisal

Responses % of Respondents
Yes 37
No 13

40

35

30
% of Respondents

25

20

15

10

0
Yes No

INTERPRETATION:

This shows that 37% of the respondents feel comfortable discussing ny

difference of opinion about your performance rating with your appraiser.
Q.11. How do you rate the performance system in your organization? (On a
scale of 1 to 10 with 1 being the lowest and 10 being the highest)

Responses % of Respondents
1 1
2 1
3 1
4 4
5 5
6 15
7 8
8 8
9 4
10 3
 16

14

12
% of Respondents

10

0
1 2 3 4 5 6 7 8 9 10

INTERPRETATION:

This shows that 15 % of the respondents rate 6 the performance system of

the organization while 1% of the respondents rate 1,2,3 the performance
system of the organization.
CHAPTER-5

FINDINGS,SUGGESTIONS AND RECOMMENDATIONS

___________________________________________

After having analyzed the data, it was observed that practically there was
no appraisal in the organization. To be an effective tool, it has to be on
the continuous basis. This is the thing that has been mentioned time and
again in the report, as, in the absence of continuity, it becomes a
redundant exercise. Before actually deciding drafting what should be the
kind of appraisal the following things should be taken care of:

1. The very concept of performance appraisal should be marketed

throughout the organization. Unless this is done, people would not
accept it, be it how important to the organization.

2. To market such a concept, it should not start at bottom, instead it

should be started by the initiative of the top management. This would
help in percolating down the concept to the advantage of all, which
 includes the top management as well as those below them. This
means that the top management has to take a welcoming and positive
approach towards the change that is intended to be brought.

3. Further, at the time of confirmation also, the appraisal form should

not lead to duplication of any information. Instead, detailed appraisal of
the employee’s work must be done – which must incorporates both the
work related as well as the other personal attributes that are important
for work performance.

4. It should be noted that the appraisal form for each job position should
be different as each job has different knowledge and skill
requirements. There should not be a common appraisal form for every
job position in the organization.

5. The job and role expected from the employees should be decided
well in advance and that too with the consensus with them.

6. A neutral panel of people should do the appraisal and to avoid

subjectivity to a marked extent, objective methods should be employed
having quantifiable data.

7. The time period for conducting the appraisal should be revised, so

that the exercise becomes a continuous phenomenon.

8. Transparency into the system should be ensured through the

discussion about the employee’s performance with the employee
concerned and trying to find out the grey areas so that training can be
implemented to improve on that.

Ideally in the present day scenario, appraisal should be done, taking

the views of all the concerned parties who have some bearing on the
employee. But, since a change in the system is required, it cannot be a
drastic one. It ought to be gradual and a change in the mindset of both
the employees and the head is required.

ANNEXURE
BIBLIOGRAPHY:

• REFERRED BOOKS:

I. Allan P. (1994), Designing and implementing and effective

performance appraisal system, Review of Business,
vol.19,no.2,pp2-8

II. Armstrong M. (1999), Handbook of HRM Practices, Kogan

Page London

III. Barlow.G (1989) Deficiencies and the perpetuation of power,

latent functions in management appraisal, Journal of
management studies

• WEBSITES:

I. Http//: hrmguide. Com

II. Http//: careers hrm. In

III. Http//: performance appraisal. In