A

PROJECT REPORT

ON

PERFORMANCE APPRAISAL SYSTEM

AT Kaira District Co-operative Milk Producers’ Union Limited.

A PROJECT SUBMITTED TO:

The Bhavanagar University of Bhavanagar in partial fulfillment of the

degree of Bachelor in Business Administration.

PREPARED BY: GUIDED BY:

NILESH .K. DHAMELIYA Dr.RACHNA DHRUVA

T.Y.B.B.A (I/C Principal)

ROLL NO: 93

SWAMI SAHAJANAND COLLEGE

OF

COMMERCE AND MANAGEMENT.

BHAVANAGAR UNIVERSITY.

BHAVANAGAR

BATCH: 2006-2009

1

CANDIDATE’S STATEMENT

I undersigned Nilesh K. Dhameliya, the student of TY BBA here by declare that

the project work presented in this report is my own work carried out under the

guidance of Dr. RACHANA DHRUVA of Swami Sahajanand College of

Commerce and Management.

Date:

Place: Bhavnagar

Signature:

Name: Nilesh K. Dhameliya

2

PREFACE

True learning is born out of experience and observation practical experience

is one of the best types of leanings that one can remember throughout the

life. And as a student of TYBBA. I got an opportunity to get training in the

industry. The main object of practical training is to develop practical

knowledge and experience and awareness about industrial environment and

business practices in the student as a supplement to theoretical studies of

administration and management in specific area like HRM. It increases the

skill, ability and attitude of a student to perform specific job in industrial

environment.

Fortunately, I got golden opportunity to visit and complete my training at Kaira

District Co-operative Milk Producers’ Union Limited Here, I got chance to see

the functioning HRD departments and imbibe a lot learning of the subjects.

Here, this report will identify effectiveness of performance appraisal system of

employee development at Kaira District Co-operative Milk Producers’ Union

Limited. It will show how performance appraisal as Kaira District Co-operative

Milk Producers’ Union Limited.

3

ACKNOWLEDGEMENT

I would also like to thank specially Mr. Syril Parmar, Personnel Officer, Kaira

District Co-operative Milk Producers’ Union Limited. Who gave me permission

to do this study. I would also like to thank officer of Kaira District Co-operative

Milk Producers’ Union Limited. Who gave me in depth knowledge about this

study and that is beneficiaries, without their support the study would have not

been possible.

Through this acknowledgement, I express specially thanks to Dr.Rachna

Druva Who guided me through out the project and gave me Valuable

suggestion and encouragement. And I would also like to thanks those people

who have helped me directly or indirectly in the preparation of this project,

which has been learning experience.

I appreciate the co-operation by the management and staff of ‘Kaira District

Co-operative Milk Producers’ Union Limited.’ for having given me the

opportunity to training in their office.

4

INDEX

CANDIDATE’S STATEMENT 2

PREFACE 3

AKNOWLEDGMENT 4

EXECUTIVE SUMMARY 7

CHAPTER~1 (INFORMATION ABOUT TOPIC) 8

- 1.1 Meaning and Definition of Performance Appraisal 9

-1.2 History 10

-1.3 Importance Of Performance Appraisal 11

-1.4 Objectives Of Research 11

-1.5 Step Of Performance Appraisal 12

-1.6 Basic Purpose Of Performance Appraisal 15

-1.7 Traditional Performance Appraisal 17

-1.8 Modern Appraisal 18

-1.9 Methods Of Performance Appraisal 19

CHAPTER~2 (INFORMATION ABOUT COMPANY) 28

- Company Profile 29

CHAPTER~ 3 (LITERATURE REVIEW) 31

5

CHAPTER~4 (RESEARCH METHODOLOGY) 34

-4.1 what is Research 35

-4.2 Research Methodology 36

-4.2.1 Research Design 37

-4.2.2 Sampling Plan 38

-4.2.3 Objective Of Study 38

-4.2.4 Sources of Data Collection 39

-4.2.5 Limitation Of Study 40

-4.2.6 Data Analyses and Interpretation 41

CHAPTER~ 5 (FINDINGS) 57

CHAPTER~ 6 (SUGGESTION) 59

CHAPTER~ 7 (CONCLUSION) 61

BIBLIOGRAPHY 63

APPENDIXE 65

6

EXECUTIVE SUMMARY

Research is prepared on performance appraisal system this research included

Objectives of performance appraisal, its importance and other belief information

about performance appraisal, name of organisation, history & development of

Kaira District Co-operative Milk Producers Union Limited. Company’s structure,

polices, environment & its achievements etc.

The discovery from the analysis of the data and interpretation. Here we can also

find the conclusion as per the analysis & interpretation. Here there is also

recommendation for the organisation to take the necessary step for the

effectiveness of Performance Appraisal System.

The research undertaken has certain outcomes Employees are very satisfied

with their jobs and the organization is very aware about performance appraisal.

At last, I would like to say that, the experience of visiting company was really

great. The organization is on very strong position. And I hope the organization

will achieve their goals every year.

7

CHAPTER ~1

INFORMATION ABOUT

TOPIC

8

1.1 Meaning and Definition of Performance Appraisal

Performance appraisal is a formal system that evaluates the quality of a

employee’s performance. An appraisal should not be viewed as an end in itself,

but rather as an important process within a broader performance management

system that links:

• Organizational objectives

• Day-to-day performance

• Professional development

• Rewards and incentives

In simple terms, appraisal may be understood as the assessment of an

individual’s performance in a systematic way, the performance being measured

against such factors as job knowledge, quality, and quantity of output, initiative,

leadership abilities, supervision, dependability, co-operation, judgment,

versatility, health, and the like. Assessment should not be confined to past

performance alone. Potentials of the employee for future performance must also

be assessed.

A formal definition of performance appraisal is:

“It is the systematic evaluation of the individual with respect to his or her

performance on the job and his or her potential for development.”

A more comprehensive definition is:

“Performance appraisal is a formal, structured system of measuring and

evaluating an employee’s job related behaviors and outcomes to discover

9

how and why the employee is presently performing on the job and how the

employee can perform more effectively in the future so that the employee,

organization, and society all benefit.”

1.2HISTORY:

Its roots in ti early 20 century with traced to Taylor’s pioneering time and motion

study. But this is not very helpful for the some many be said about almost

everything in the field of modern HRM.

As a distinct and formal management procedure use din the evaluation of worker

performance appraisal really dates from the time of Second World War not more

than 60 years ago. Yet in the broader sense the practice of appraisal is very

ancient art in the scale of thing historically, it is might be well lay claimed to be

world second older profession.

“A basic human tendency to make judgment about those one is working with, as

well as about one self”. Appraisal it seems to be the inevitable and universal in

the absence of care full structure system of appraisal, peoples will tends to judge

the work performance of other including subordinate naturally, informally &

arbitrarily.

The human inclination to judge and create serious motivational ethical in legal

problems in the workplace, without structured appraisal system there is a little

chances of ensuring that the judgment made with lawful fair, defensible and

accurate yet in a broader sense that practice of appraisal is very special art. In

scale of thing historical it might well lay claim to being the world second oldest

profession.

10

1.3 IMPORTANCE OF PERFORMANCE APPRAISAL

The importance or utility of employee performance appraisal within on

organisation is really great. As employment privilege may be earned by senior

performance, some plans for evaluating performance is being used. These plans

serve as the basis of improving their productive efficiency and supervisory

employee relations. They have other uses like training, compensation, handling

grievance etc.

1.4OBJECTIVES OF RESEARCH

◙ To study the performance appraisal as motivating factor for employees

◙ To understand how the result of performance appraisal system Are used

In training and employee development.

◙ To study the practical application of performance appraisal.

11

1.5.STEP OF PERFORMANCE APPRAISAL

Establish performance standards

Communicate performance expectation from employee

Measure the actual performance

Compare actual performance with standards

Discuss the appraisal results with the employee corrective actions for deficiencies

Decision Making

Follow up

12

ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the

standards, which will be used to as the base to compare the actual performance

of the employees. This step requires setting the criteria to judge the performance

of the employees as successful or unsuccessful and the degrees of their

contribution to the organizational goals and objectives. The standards set should

be clear, easily understandable and in measurable terms. In case the

performance of the employee cannot be measured, great care should be taken to

describe the standards.

COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the

standards to all the employees of the organization. The employees should be

informed and the standards should be clearly explained to the. This will help

them to understand their roles and to know what exactly is expected from them.

The standards should also be communicated to the appraisers or the evaluators

and if required, the standards can also be modified at this stage itself according

to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the

actual performance of the employees that is the work done by the employees

during the specified period of time. It is a continuous process, which involves

monitoring the performance throughout the year. This stage requires the careful

selection of the appropriate techniques of measurement, taking care that

13

personal bias does not affect the outcome of the process and providing

assistance rather than interfering in an employees work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard

performance. The comparison tells the deviations in the performance of the

employees from the standards set. The result can show the actual performance

being more than the desired performance or, the actual performance being less

than the desired performance depicting a negative deviation in the organizational

performance. It includes recalling, evaluating and analysis of data related

to the employees’ performance.

DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees

on one-to-one basis. The focus of this discussion is on communication and

listening. The results, the problems and the possible solutions are discussed with

the aim of problem solving and reaching consensus. The feedback should be

given with a positive attitude as this can have an effect on the employees’ future

performance. The purpose of the meeting should be to solve the problems faced

and motivate the employees to perform better.

DECISION MAKING

The last step of the process is to take decisions which can be taken either to

improve the performance of the employees, take the required corrective actions,

or the related HR decisions like rewards, promotions, demotions, transfers etc.

14

1.6. BASIC PURPOSE OF PERFORMANCE APPRAISAL

Salary Increase

Performance appraisal plays a role in making decision about salary increase.

Normally salary increase of an employee depends upon on how he is

performing his job. There is continuous evaluation of his performance either

formally or informally. This may disclose how well an employee is performing

and how much he should be compensated by way of salary increase.

Promotion

Performance appraisal plays significant role where promotion is based on

merit and seniority. Performance appraisal discloses how an employee is

working in his present job and what are his strong and weak points. In the

light of these, it can be decided whether he can be promoted to the next

higher position.

Training and Development

Performance appraisal tries to identify the strengths and weakness of an

employee on his present job. This information can be used for devising

15

training and development Programmes appropriate for overcoming

weaknesses of employees.

Feedback

Performance appraisal provides feedback to employees about their

performance. A person works better when he knows how he is working. This

works in two ways, firstly, the person gets feedback about his performance.

Secondly, when the person gets feedback about his performance, he can

relate his work to the organizational objectives.

Pressure on Employees

Performance appraisal puts a sort of pressure on employees for better

performance. If the employees are conscious that they are being appraised in

respect of certain factors and their future largely depends on such appraisal.

Others

a) Identifying systemic factors that are barriers to, or facilitators of,

effective performance.

b) To confirm the services of probationary employees upon they’re

completing the Probationary period satisfactorily.

c) To improve communication. Performance appraisal provides a format

for Dialogue between the superior and the subordinate, and improves

understanding of personal goals and concerns. This can also have the

effect of increasing the trust between the rater and the ratee.

d) To determine whether HR Programmes such as selection, training,

16

and transfer have been effective or not.

1.7Traditional Performance Appraisal

The history of performance appraisal is quite brief. Its roots in the early

20th century can be traced to Taylor's pioneering Time and Motion studies. But

this is not very helpful, for the same may be said about almost everything in the

field of modern human resources management.

During the First World War, appraisals concept was adopted by US army,

which was in the form of merit rating. It was man-to-man rating system for

evaluation of military personnel. From the army this concept entered the

business field and was restricted to hourly-paid workers. During 1920s, relational

wage structures for hourly- paid workers were adopted in industrial units and

each worker was used to be rated in comparison to other for determining wages

rates. This system was called merit rating.

The process was firmly linked to material outcomes. If an employee's

performance was found to be less than ideal, a cut in pay would follow. On the

other hand, if their performance was better than the supervisor expected, a pay

rise was in order.

For example, early motivational researchers were aware that

different people with roughly equal work abilities could be paid the same

amount of money and yet have quite different levels of motivation

and performance.

These observations were confirmed in empirical studies. Pay rates were

important, yes; but they were not the only element that had an impact on

employee performance. It was found that other issues, such as morale and self-

esteem, could also have a major influence.

17

As a result, the traditional emphasis on reward outcomes was progressively

rejected. In the 1950s in the United States, the potential usefulness of appraisal

as tool for motivation and development was gradually recognized. The general

model of performance appraisal, as it is known today, began from that time.

1.8 Modern Appraisal

Performance appraisal may be defined as a structured formal interaction

between a subordinate and supervisor, that usually takes the form of a periodic

interview (annual or semi-annual), in which the work performance of the

subordinate is examined and discussed, with a view to identifying weaknesses

and strengths as well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or

indirectly, to help determine reward outcomes. That is, the appraisal results are

used to identify the better performing employees who should get the majority of

available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers

who may require some form of counseling, or in extreme cases, demotion,

dismissal or decreases in pay. (Organizations need to be aware of laws in their

country that might restrict their capacity to dismiss employees or

decrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment

and justification of rewards and penalties - is a very uncertain and contentious

matter.

18

1.9 methods of Performance Appraisal

various methods or techniques are used for evaluation the performance of

employee such as strait ranking, grading of employees, critical incident, etc. thus

in regard the estimating work of employees, one measure of worth is the

contribution made by each employee but it is not always possible to measure

employee contribution as an individual’s work is intermixed with that of other.

Different authors and scholars suggested different approaches and classify the

method accordingly. The widely used cauterization is that given by Strauss and

sayles. They have classified performance appraisal methods into two categories,

A. Traditional methods, which lay emphasis on rating of an individual’s

personality traits such as initiatives, dependability drive, responsibity,

creativity, integrity, leadership potentials, intelligence, judgment etc.

B. Modern or newer methods place more emphasis on the evaluation of

work results job achievement than on personality traits.

[A] Traditional Method of performance appraisal

1) Confidential Reports :

Though popular with government departments, its application in

industry is not ruled out. Here the report is given in the form of Annual

Confidentiality Report (ACR). The system is highly secretive and

19

confidential. Feedback to the assessee is given only in case of an

adverse entry. Disadvantage is that it is highly prone to biases and

regency effect and ratings can be manipulated because the

evaluations are linked to future rewards like promotions, good

postings, etc.

2) Rating Scales :

The rating scale method offers a high degree of structure for appraisals. Each

employee trait or characteristic is rated on a bipolar scale that usually has

several points ranging from “poor” to “excellent” (or some similar arrangement).

The traits assessed on these scales include employee attributes such

as cooperation, communications ability, initiative, punctuality and technical (work

skills) competence. The nature and scope of the traits selected for inclusion is

limited only by the imagination of the scale’s designer, or by the organization’s

need to know.

The one major provision in selecting traits is that they should be in some way

relevant to the appraisee’s job.

  Advantages

The greatest advantage of rating scales is that they are structured and

standardized. This allows ratings to be easily compared and contrasted - even for

entire workforces.

Each employee is subjected to the same basic appraisal process and rating

criteria, with the same range of responses. This encourages equality in treatment

for all appraises and imposes standard measures of performance across all parts

of the organization.

20

Rating scale methods are easy to use and understand. The concept of the rating

scale makes obvious sense; both appraisers and appraises have an intuitive

appreciation for the simple and efficient logic of the bipolar scale. The result is

widespread acceptance and popularity for this approach.

  Disadvantages

Trait Relevance

Are the selected rating-scale traits clearly relevant to the jobs of all the

appraisees? It is inevitable that with a standardized and fixed system of appraisal

that certain traits will have a greater relevance in some jobs than in others.

For example, the trait “initiative” might not be very important in a job that is tightly

defined and rigidly structured. In such cases, a low appraisal rating for initiative

may not mean that an employee lacks initiative. Rather, it may reflect that fact

that an employee has few opportunities to use and display that particular trait.

The relevance of rating scales is therefore said to be context-sensitive. Job and

workplace circumstances must be taken into account.

3) Comparative Evaluation Method (Ranking & Paired

Comparisons):

These are collection of different methods that compare performance with that of

other co-workers. The usual techniques used may be ranking methods and

paired comparison method.

Ranking Method: Superior ranks his worker based on merit, from best to worst.

However how best and why best are not elaborated in this method. It is easy to

administer.

21

Paired Comparison Method: In this method each employee is paired with every

other employee in the same cadre and then comparative rating done in pairs so

formed.

4) Check-list Method:

Under this method, checklist of “Statements of Traits” of employee in the form of

Yes or No based questions is prepared. Here, the rater only does the reporting or

checking and HR department does the actual evaluation. The rater concerned

has to tick appropriate answers relevant to the appraises. When the checklist is

completed, it is sent to HR department for further processing. Various questions

in the checklist may have either equal weightage or more weightage may be

given to those questions, which are more important. The HR department then

calculates the total scores, which show the appraisal result of an employee.

• Advantages – economy, ease of administration, limited training required,

standardization.

• Disadvantages – Rater’s biases, use of improper weights by HR Dept, does

not allow rater to give relative ratings.

5) F orce Choice Method:

A series of statements arranged in the blocks of two or more are given and the

rater indicates which statement is true or false. The rater is forced to make a

choice. HR department does actual assessment.

• Advantages – Absence of personal biases because of forced choice.

22

• Disadvantages – Statements may not be correctly framed.

6 Critical Incident Method:

In this method, only critical incidents and behavior associated with these

incidents are taken for evaluation. This method involves three steps. A test of

noteworthy on the job behavior is prepared. A group of experts then assigns

scale values to them depending on the degree of desirability for the job. Finally, a

checklist of incidents, which define good and bad employees, is prepared.

• Advantages:

This method is very useful for discovering potential of employees who can be

useful in critical situation.

• Disadvantages:

a) Negative incidents are, generally, more noticeable than positive ones.

B) Overly close supervision may result.

7) Cost Accounting:

In fact this is nothing but Human Resource Accounting. It evaluates the

employees on the basis of what he rarns for the firm. Relationship is established

between the recruitment, placement and training cost and the value benefit to the

firm:

23

The following points are taken into account while evaluating human

resources of the firm:

(1) Cost of recruitment, placement and training

(2) Average value of units produced or services rendered

(3) Overhead expenses

(4) Loss to the firm due to errors, accidents, wastages etc.

8) Force Distribution Method:

One of the problems faced in large organizations is relative assessment

tendencies of raters. Some are too lenient and others too severe. This method

overcomes that problem. It forces every one to do a comparative rating of all the

employees on a predetermined distribution pattern of good to bad. Say 10%

employees in Excellent Grade, 20% in Good Grade, 40% in Average Grade, 20%

in Below Average Grade and 10% in unsatisfied grade. The real problem of this

method occurs in organizations where there is a tendency to pack certain key

departments with all good employees and some other departments with discards

and laggards. Relatively good employees of key departments get poor rating and

relatively poor employees of laggards’ departments get good rating.

[B] Modern Method of performance appraisal

1) MBO (Appraisal By Results) :

The use of management objectives was first widely advocated in the 1950s by

the noted management theorist Peter Drucker. MBO (management by objectives)

methods of performance appraisal are results-oriented. That is, they seek to

measure employee performance by examining the extent to which predetermined

24

work objectives have been met. The objectives are established jointly by the

supervisor and subordinate. Once an objective is agreed, the employee is usually

expected to self-audit; that is, to identify the skills needed to achieve the

objective. Typically they do not rely on others to locate and specify their strengths

and weaknesses. They are expected to monitor their own development and

progress.

Advantages

The MBO approach overcomes some of the problems that arise as a result of

assuming that the employee traits needed for job success can be reliably

identified and measured. 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,

whereas the traits and attributes of employees (which may or may not contribute

to performance) must be guessed at or inferred.

 Disadvantages

MBO methods of performance appraisal can give employees a satisfying sense

of autonomy and achievement. But on the downside, they 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.

2) Assessment Center Method :

This technique was first developed in USA and UK in 1943. An assessment

centre is a central location where managers may come together to have their

participation in job related exercises evaluated by trained observers. It is more

focused on observation of behaviours across a series of select exercises or work

25

samples. Assesses are requested to participate in in-basket exercises, work

groups, computer simulations, role playing and other similar activities which

require same attributes for successful performance in actual job.

• Advantages – Well-conducted assessment centre can achieve better forecasts

of future performance and progress than other methods of appraisals. Also

reliability, content validity and predictive ability are said to be high in Assessment

Centres. The tests also make sure that the wrong people are not hired or

promoted. Finally, it clearly defines the criteria for selection and promotion.

• Disadvantages – Concentrates on future performance potential. No

assessment of past performance. Costs of employees travelling and lodging,

psychologists. Ratings strongly influenced by assessee’s inter-personal skills.

Solid performers may feel suffocated in simulated situations.

3) Behaviourally anchored rating scales

This is a new method, which was been recently developed. The procedure for

BARS is usually five stepped, a) General critical incidents, b) Develop

performance dimensions, c) reallocation incidents, d) scale of incidents, e)

Develop final instrument.

4) 360o Appraisal:

It is a technique in which performance data/feedback/rating is collected from all

sections of people employee interacts in the course of his job like immediate

supervisors, team members, customers, peers, subordinates and self with

different weightage to each group of raters. This technique has been found to be

extremely useful and effective. It is especially useful to measure inter-personal

26

skills, customer satisfaction and team building skills. One of the biggest

advantages of this system is that assesses cannot afford to neglect any

constituency and has to show all-round performance. However, on the negative

side, receiving feedback from multiple sources can be intimidating, threatening,

expensive and time consuming.

EMPLOYEE PERFORMANCE EVALUATION

In Kaira District Co operative milk producers’ union ltd. Employee performance

evaluation conducting by section wise. There are mainly three sections for

performance evaluation.

Section –1 Competencies

● Communication Skills

● Technical Skills

● Decision-making ability

● Problem-solving attitude

● Leadership

● Teamwork

Above competences measures by 1.Exeptional, 2.stong, 3.fully competent,

4.need to development, 5.poor.

Section – 2 Discussions

● Strengths (Examples of where individual has outstanding merit)

● Developmental Needs (areas that need strenthing)

Section – 3 Overall Ranking

1. Exceptional

2. Strong

27

3. Fully Competent

4. Need to Development

5. Poor

EMPLOYEE COMMENTS:

CHAPTER ~2

INFORMATION ABOUT

COMPANY

28

1. Company profile

Setting up of Kaira District Co-operative Milk Producers’ Union:

The Kaira District Co-operative Milk Producers’ Union Limited began

pasteurizing milk scheme in June 1948. By the end of 1948, more than 400

farmers joined in more village society, and the quantity of milk handled by one

union increased from 250 to 5,000 liters per day. The success of this industry

was instrumental in launching the White Revolution that resulted in increased

milk production in India. It is officially termed as Operation Food by. The

breakthrough technology of spray drying and processing buffalo milk, developed

by Mr.H.M.DALAYA, was one of the key factors that contributed to the revolution.

Establishment of the Kaira District Co-operative Milk Producers’ Union Limited

which was formally registered on December 14,1946.

29

Branches in Gujarat are located below:

Valsad District (Vasundhara Dairy)

Mehsana District

Bharuch District (Dudh Dhara Dairy)

Panchmahal District (Panchmut Dairy)

Gandhinagar District (Mother Dairy)

Rajkot Dairy

Surat Dairy

Banaraskantha Dairy

Baroda Dairy

Himmatnagar Dairy

Kaira Dairy (Anand)

30

CHAPTER ~ 3

LITERATURE REVIEW

31

A FIELD STUDY OF PERFORMANCE APPRAISAL PURPOSE: RESEARCH-

VERSUS ADMINISTRATIVE- BASED RATINGS

MICHAEL M. HARRIS 1 DAVID E. SMITH 2 DENISE CHAMPAGNE 3

1 School of Business Administration University of Missouri-St. Louis 2 Anheuser-

Busch Companies, Inc. 3 University of Missouri-St. Louis

 Correspondence and requests for reprints should be addressed to Michael M.

Harris, School of Business Administration, University of Missouri, St. Louis, MO

63121-4499.

The authors would like to thank Paul Sackett and George Thornton for their

comments.

ABSTRACT

Many researchers have discussed the theoretical and practical importance of

rating purpose. Nevertheless, the body of empirical studies, the majority of which

were conducted in a laboratory setting, focus on leniency. There has been little

research on other effects of rating purpose. The present study examines 223

ratees in a field setting for whom there were both administrative-based

performance appraisal ratings (which were actually used for personnel decisions)

and research-based performance appraisal ratings (obtained for a validation

study). Two of the hypotheses were supported; administrative ratings were more

lenient than research-based ratings. The administrative-based ratings

demonstrated a statistically significant relationship with ratee seniority, while the

research-based ratings did not. There was mixed support for a third hypothesis:

Research ratings were significantly correlated with a predictor, while the

32

administrative ratings were not. The difference between the validity coefficients,

however, was not significant. Contrary to the hypothesis, the rank order between

administrative-based and research-based ratings was relatively high (r= 33).

Nursing center – performance appraisal

By DONNA L.M. MITCHELL AND ESTHER GREEN –

ABSTRACT: To accomplish effective performance reviews and appraisals that

respect employee dignity, managers must cultivate a wide range of

competencies. Systems are required to observe and collect data, cue and

measure observations, and then interpret behavior. Managers regard handling

disciplinary problems and criticizing subordinates' performances as the most

stressful aspects of their work. Evaluating an employee's performance at an

annual meeting is one of the tasks managers most dread. (Added: 24-Apr-2003

Hits: 737)

33

CHAPTER~4

RESEARCH

METHODOLOGY

34

4.1 What is Research?

In common words, research refers to a search for knowledge. Research

can be defines as a scientific and systematic search for information on a specific

search for information on specific topic. In short, Research means the search for

knowledge through objective and systematic method of finding solution to the

problem in search.

Definition:

Research:

According to Redman & Mary “ Research is a systematic study of

generating new knowledge”

35

4.2 RESEARCH METHODOLOGY

Methodology is a way to systematically solve the research problem. It may

be under stood as a science of studying how research is done scientifically. It is

necessary for the researcher to know not only the research method but also the

methodology. We can say that research methodology has many dimensions and

research methods do constitute a part of the research methodology. Research in

common parlance refers to a search for knowledge. Once can also define

research as a scientific and systematic search for pertinent information on a

specific topic. In fact, research is an art of scientific investigation.

Research comprises redefining problems, formulating hypothesis or

suggested. Solution, collecting, organizing and evaluating data; making

deduction and reaching conclusions; and at last carefully testing the conclusions

to determine whether they fit the formulating hypothesis. When we take of

research methodology concerning a research problem or study.

36

4.2.1 Research Design

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 in procedure. A research design may constitute decisions regarding

what, where, when, how much, by what means concerning an inquiry or a

research study. As such design includes an outline of what the researcher will do

from writing the hypothesis and its operational implication to the final analysis of

data.

1. Exploratory Research

This research is an exploratory type of research. The few reasons

for terming this study as an exploratory study are given as under.

It provides the organization with an idea about the effectiveness of

the program that it was conducting the data for this purpose was to be

gathered a new. Also no substitute data was available.

Many different aspects were to be evaluated & data was to be

collected from all the selected respondents. All the data was to be collected a

new. Thus, it can be concluded that it definitely is as exploratory study

37

4.2.2 Sampling Plan

There are two type of sampling plan

● Probability sampling

[Random sampling]

● Non-probability sampling

[Non- Random sampling]

The Researcher has utilized Simple Random sampling method for this study.

4.2.3 Objective of the study

◙ To study the performance appraisal as motivating factor for employees

◙ To understand how the result of performance appraisal system Are used

In training and employee development.

◙ To study the practical application of performance appraisal.

38

4.2.4 Sources of data collection:

While deciding about the method of data collection to be used for the

study; the researcher should keep in mind two types of data primary data &

secondary data.

PRIMARY DATA :

The data, which are collected for the first, time & thus happen to be

original in character. There are several methods of collecting the primary data:

- Observation method

- Interview method

- Questionnaire method

- Schedules

SECONDARY DATA :

The data, which is collected by someone else but is useful for the

current study being conducted.

- This research is based on primary data

- The instrument used for data collection is questionnaire

39

- A structured questionnaire was used for the purpose of research

- A copy of this structural questionnaire is attached in annexure

4.2.5 Limitation of the study

In this project I have tried to present facts with figure pertaining to my survey skill

it as some limitation, which is there in this project need identification.

◙ Research is based on the information given by the employee. There may be

possibility of getting wrong information.

◙ The information was totally depended on the questionnaire, which may not be,

understand by employee.

.

◙ Some employees were not interested in giving any information.

40

4.2.6 DATA ANALYSES AND INTERPRETATION

1. AGE

Interpretation:

From the above graph shows that most of the 60% (20-30 Years), 30% (30-

40Years), 10% (40-50Years) respondents are in the age group.

41

The majority of the respondents are in the age group of 20-30 years.

2. EDUCATION

Interpretation:

From the above graph shows that most of the 50% (Graduation) and 40%

(Post Graduation) 10% (Any Other Specified Degree Like Diploma)

respondents are educated in the organisation.

42

3. EXPERENCE

Interpretation:

From the above graph shows that most of the 65% respondents are having

work experience of 0 - 3 years.28% respondents having work experience

between 3 - 5 years.7% respondents having the work experience up to 5

years.

43

4. You aware about the performance appraisal system?

Interpretation:

From the above table shows that most of the 100% employees are aware

about the performance appraisal system.

44

5. If yes, then whether it is followed-up properly?

Interpretation:

From the above table shows that most of the 100% YES, Whether it is being

followed up properly.

45

6. At what frequency performance appraisal carried out your organization?

Interpretation:

From the above graph shows that most of the frequency 80% half yearly 20%

annually performance appraisal carried out in organisation.

46

7. Do you think the performance appraisal system adequately appraises the

potential of employee?

Interpretation:

From the above graph shows that most of the 75% respondents said

performance appraisal system adequately appraises the potential of

employee. And 25% respondents said No.

47

8. According to you, Performance Appraisal is a ------% correct indicator of an

employee’s development.

Interpretation:

From the above table shows that the 40% respondents said performance

appraisal system is 100% correct indicator for employee’s development. 30%

respondents said performance appraisal system is 75% correct indicator for

employee’s development. 20% respondents said performance appraisal

system is 50% correct indicator for employee’s development. 10%

respondents said performance appraisal system is 25% correct indicator for

employee’s development.

48

9. Good performance appraisal should be rewarded by

Interpretation:

From the above table shows that most of the 20% salary increment and 25%

promotion & enhanced responsibility to employees and 40% advance training

for good performance should be rewarded in organisation.

49

10. The performance appraisal effective in identifying training need?

Interpretation:

From the above table shows that the most of 100 identification training needs

in effective performance appraisal system in organisation.

50

11. Is goal setting a part of your performance appraisal system?

Interpretation:

From the above graph shows that most of the 80% respondents said goal

setting is a part of performance appraisal system and 20% respondents said

goal setting is not a part of our performance appraisal system.

51

12. What do you think should be areas covered under the performance

Appraisal?

Interpretation:

From the above graph shows that most of the 35% have knowledge and

17.5% acknowledgement, 22.5% future potential and 25% have

communication skill this above areas covered under the performance

appraisal.

52

13. Do you give training to the appraises for the use of the Performance

Appraisal system?

Interpretation:

From the above graph shows that most of the 100% respondents said they

get training for the use of the performance appraisal system.

53

14. Does negative feedback effect on motivation and performance of an

Individual?

Interpretation:

From the above graph shows that most of the 80% employees a negative

feedback affect motivation and performance of individuals. And 20%

employee a negative feedback effect on motivation and performance of an

individual.

15. On what basis do you appraise an employee?

54

Interpretation:

From the above graph shows that the 35% said Traits and 35% said on the

basis of results. And 30% respondents said on the basis of job behaviour.

16. Is Performance Appraisal is a motivating factor for employees?

55

Interpretation:

From the above table shows that most of the 85% respondents said

performance appraisal is a motivating factor for employees. Some 15%

respondents said it is only for some employees.

17. Which method do you follow in these?

( ) Rating method ( ) Interview or discussion

( ) Force choice description ( √ ) MBO

( ) Checklist method ( ) Human asset accounting

( ) Critical Incidents Method ( ) 360 degree appraisal

56

CHAPTER ~5

FINDINS

FINDINGS

57

◙ performance appraisal is effective in identifying training need

◙ This organization have goal setting as part of appraisal. The performance is

evaluated against these targets.

◙ Performance Appraisal is a motivating factor for employees.

◙ The present duration of performance appraisal is half and yearly both.

◙ Job knowledge, Communication skill, performance and communication

Skill these areas covered under the performance appraisal.

◙ All the employee are well knowledgeable and experienced.

◙ Good performance appraisal should be rewarded by salary increment,

Promotion or cash reward.

58

CHAPTER ~6

SUGGESTION

59

SUGGESTIONS

◙ The awareness sessions for the employees/appraises should be made

more interactive and the views and opinion of the appraises regarding

appraisal should be given due consideration.

◙ The employees who have excellent performance should be used as a

experienced for other employees, who would motivate others to perform

better.

◙ The Performance Appraisal should be conducted on regularly basis to be

evaluated much accurately.

◙ Financial and non-financial incentives should be linked to the annual

appraisal system so that employees would be motivated to perform better.

60

CHAPTER ~7

CONCLUSION

61

CONCLUSION

This research is done for knowing the effectiveness performance appraisal

system at Kaira District Co-operative Milk Producers’ Union Limited. By this

above research clear idea about the employee performance mapping system of

the organisation and the employees satisfaction with the system of appraisal.

The systematic implementation of performance appraisal system and its

appropriate feedback in terms of training need identification, achievements, and

career development are the feature of proper system.

62

BIBLIOGRAPHY

63

Bibliography

C. R. Kothari.’research Methodology’ New age international (p) Ltd.

Human Resource And Personnel Management - Aswathappa

Human Resource Management & Industrial Relation - Shah S.P

WEBSITES:

www.humanresource.about.com

www.hrindia.com

www.performance-appraisal.com

www.Indiandairy.com

64

Appendixe

65

QUESTIONNAIRE

1. Age:

O 20-30 years O 30-40 years

O 40-50 years

2. Education:

O Graduation O Post Graduation

O Any Specified Mentioned Degree.

3.Experience:

4.Are you aware about the performance appraisal system?

O Yes O No

5.if yes, then whether it is followed-up properly?

O Yes O No

6.at what frequency performance appraisal carried out your organization?

O Half yearly O Annually

7. Do you think the performance appraisal system adequately appraises the

potential of employee?

O Yes O No

66

8. According to you, Performance Appraisal is a ------% correct indicator of an

employee’s development.

O 100% O 50%

O 75% O 25%

9. Good performance appraisal should be rewarded by

O Salary increment O Promotion

O Advance training O Cash reward

10. Is the performance appraisal effective in identifying training need?

O Yes O No

11. Is goal setting a part of your performance appraisal system?

O YES

O NO

12. What do you think should be areas covered under the performance

appraisal?

O Job knowledge O Future Potential

O Acknowledgement O Communication skill

67

13.Do you give training to the appraises for the use of the Performance Appraisal

system?

O Yes O No

14.does negative feedback effect on motivation and performance of an

Individual?

O Yes O No

15. On what basis do you appraise an employee?

O Traits O Results

O Job behaviour

16. Is Performance Appraisal a motivating factor for employees?

O For all employees. O For some employees.

17. Which method do you follow in these?

( ) Rating method ( ) Interview or discussion

( ) Force choice description ( ) MBO

( ) Checklist method ( ) Human asset accounting

( ) Critical Incidents Method ( ) 360 degree appraisal

68