HUMAN RESOURCE MANAGEMENT

INTRODUCTION

Human resource management is rather difficult to say spontaneously what management

means though we have studied a course in management. But it is necessary to recall what

management is before studying of human resource management. Management has been the art of

getting things done through people. The term human resource is quite popular in India with the

institution of ministry of human resources development in the union cabinet. But most people

may not know what exactly the term human resource means.

The term human resource management can be thought of as the knowledge, skills,

creative abilities, talents and aptitudes of an organization workforce, as well as the value,

attitudes and beliefs of the individuals involved it can also be explained in the sense that is

resource like any natural resources. It does mean that the management can get and use the skills,

tapping and utilizing them again and again. Thus, it is long- term perspective where as personnel

is a short- term perspective. Human resources are also regarded as human factor, human asset,

human capital and the like. The terms labor and manpower had been used widely denoting

mostly the physical abilities and capabilities of employees. The term personnel had been used

widely in the employee as a whole but it does not clearly denote various components of human

resources like skill, knowledge, values.....etc.

MEANING OF HUMAN RESOURCE MANAGEMENT:

Different terms are used to denote human resource management. They are:-labor

management, labor administration, labor management relations, employee-employer relations,

industrial relations, personnel administration, personnel management and the like. Though these

terms can be differentiated widely the basic nature of distinction lies in the scope or coverage

evolutionary stage.

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In simple sense, human resource management means employing people, developing their

resources, utilizing, maintaining and compensating their services in tune with the job and

organizational requirements.

SIGNIFICANCE OF HUMAN RESOURCE MANAGEMENT:

Human resource plays a crucial role in the development process of modern economics. There

are great differences in development between countries which seem to have roughly equal

resources, so it is often felt that, though the exploitation of natural resources, availability of

physical and financial resources and international aid play prominent roles in the growth of

modern economics, none of these factors is more e significant that efficient and committed

manpower. It is in fact, said that all development comes from the human mind.

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT:

Objectives are pre-determined goals to which individual or group activity in an organization

is directed. Objectives of personnel management are influenced by organizational objectives and

individual and social goals. Institutions are instituted to attain certain specific objectives.

The objectives of the economic institutions are mostly to earn profits, and of the

educational institutions are mostly impact education and/ conduct research so on and so forth.

However, the fundamental objectives of nay organization is survival. Organizations are not just

satisfied with this goal. Further the goal of most of the organizations is growth and / or profits.

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Institutions procure and mange various resources including human to attain the specific

objectives. Thus, human resources are managed to divert and utilize their resources towards and

for the accomplishment of organizational objectives.

The other objectives of HRM are to meet the needs, aspirations, values and dignity of individual

employees and having due concern for the socioeconomic problems of the community and the

country.

THE OBJECTIVES OF HRM MAY BE AS FOLLOWS:

The created and utilize an able and motivated work force, to accomplish the best

organizational goals.

The establish and maintain sound organizational structure and desirable work in

relationships among all the members of the organization.

To secure the integration of individual and groups with in the organization by To create

facilities and opportunities for individual or group development so as to match it with the

growth of the organization.

To attain an effective utilization of human resources in the achievement of organizational

goals

To maintain high employee morel and sound human relations by sustaining and

improving the various conditions and facilities.

To strength and appreciate the human assets continuously by providing training and

development Progammes.

To provide an opportunity for expression and voice in management.

To provide fair, acceptable and efficient leader ship.

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Performance appraisal is the process of obtaining, analyzing and recording

information about the relative worth of an employee. The focus of the performance appraisal is

measuring and improving the actual performance of the employee and also the future potential of

the employee. Its aim is to measure what an employee does. According to Flippo, a prominent

personality in the field of Human resources, "performance appraisal is the systematic, periodic

and an impartial rating of an employee’s excellence in the matters pertaining to his present job

and his potential for a better job." Performance appraisal is a systematic way of reviewing and

assessing the performance of an employee during a given period of time and planning for his

future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It

helps to analyze his achievements and evaluate his contribution towards the achievements of the

overall organizational goals. By focusing the attention on performance, performance appraisal

goes to the heart of personnel management and reflects the management's interest in the

progress of the employees.

Performance appraisal is also known as employee appraisal, is a method by which the

performance of an employee is evaluated (generally in terms of quality, quantity, cost and time).

It is an ongoing process undertaken in partnership, between an employee and his or her

immediate supervisor that involves establishing expectations.

Appraisal is the performance of individuals, groups and organizations is a common

practice of all societies. While in some instances these appraisal processes are structure and

finally sanctioned, in other instances they are an informal and integral part of daily activities.

Once the employee has been selected trained and motivated he is then appraised to

his performance. Performance appraisal is the step where the management fined out effective it

has been at hiring and placing employees.

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MEANING:

Performance evaluation or performance appraisal is the process of assessing the

performance and progress of an employee or of a group of employees on a given job and his

potential for future development.

DEFINITIONS:

“It is the systematic evaluation of the individual with respect to his/her performance on

the job and his/her potential for development”.

--Flippo

“It is process of evaluating the performance and qualifications of the employees in terms

of be requirements of the job for which he is employed for purposes of administration including

placement selection for promotions, providing financial rewards”.

--- Heyel

“Performance appraisal is the systematic, periodic and an impartial rating of an

employee’s excellence in matters pertaining to his present job and his potential for a better job.”

DEFINITION OF PERFORMANCE MANAGEMENT:

“The performance management is getting better results from the organization from

individual’s teams by understanding and managing the problems with in the frame work of the

organization with concern to planned goals objectives and competence requirements”.

-- Armstrong

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OBJECTIVES OF PERFORMANCE APPRAISAL:

The main purposes of Performance appraisal are as follows:

1. To review the performance of the employees over a given period of time.

2. To judge the gap between the actual and the desired performance.

3. To help the management in exercising organizational control.

4. Helps to strengthen the relationship and communication between superior – subordinates and management – employees.

5. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

6. To provide feedback to the employees regarding their past performance.

7. Provide information to assist in the other personal decisions in the organization.

8. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

9. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

10. To reduce the grievances of the employees.

FEATURES OF PERFORMANCE APPRAISAL:

The following are the essential features of performance appraisal system

Performance Management is future oriented, rather than retroactive. Even the appraising

process as part of stocktaking-feeds significantly into futuristic performance planning and

improvement

It is participatory and provides for regular and frequent dialogues between a manager and

her manages both dyadic and, as a group-to addresses performance as well as

development needs

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Performance appraisal is not job evaluation. Performance appraisal refers to how well

someone is doing the assigned job. Job evaluation determines how much a job is worth to

the organization and therefore, what range of pay should be assigned to the job.

Performance appraisal is a continuous process in every large scale organization.

PROCESS OF PERFORMANCE APPRAISAL:

Performance appraisal is an important component of management information and

control system. Performance appraisal is different from personal appraisal.  An impartial system

of performance appraisal is not against employees but is actually beneficial to them in the long

run. Performance appraisal is a systematic and orderly evaluation of performance at work by

their superiors or others who are familiar with the techniques of performance appraisal. 

Performance appraisal is useful in guiding the employees for self-improvement and self-

development

.

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The performance appraisal process is a process that evaluates employee

performance.  Normally it compares quality, quantity, cost, and time.  Some of the things that

performance appraisal are used to do would be.

1. 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.

2. 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 them. 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.

3. 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 personal bias does not affect the outcome of the process and

providing assistance rather than interfering in an employees work.

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4. 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.

5. 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.

6. 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.

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THE APPRAISERS:

Self-appraisal

Superiors

Peers

Customers

Subordinates

Self-appraisal

Self-appraisal is a common practice today, with the employees being given a role in

evaluating their own performance. The employee himself his best equipped to evaluate his

performance because he understands his strengths and weaknesses the best. He can easily

identify the problem areas that need training and development.

Supervisor

It is the responsibility of the supervisor to ensure that his subordinates perform their

jobs well. Hence, the authority to evaluate the employee performance has traditionally been with

the supervisor has a very important role to play in the appraisal of his subordinates

Peers

Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,

because of the competition among peers. The organization has to reach an advanced stage of

development before it can handle peer appraisal. Peer appraisal has to use to assess the

communication and interpersonal skills of the employee, which can effect the team performance.

Customers

The performance of an employee has a direct and immediate impact on his customers

either internal or external. In service organization like banks and hotels, customer feedback has

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become the most important to in evaluating employee performance. In manufacturing the

internal customer evaluate the performance of the employee.

Sub-ordinates

The concept of the subordinates evaluating the performance of his supervisor is yet to

gain acceptance in most Indian companies. The Indian company dose not encourages the idea of

sub-ordinate appraisal.

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WHAT SHOULD BE RATED WHEN EVALUATING THE PERFORMANCE:

One of the steps in designing an appraisal programmed is to determine the evaluation

criteria. It is obvious that the criteria should be related to the job. The seven criteria for assessing

performance are.

Quality:

The degree to which the process or result of carrying out an activity approaches

perfection his terms of either conforming to some ideal way of performing the activity, of

fulfilling the activity’s intended purpose.

Quantity:

The amount produced, expressed in monetary terms, number of units, or numbers of

completed activity cycles.

Timeliness:

The degree to which an activity is completed or a result produced, at the earliest time

desirable from the stand points of coordinating with the outputs of others and of maximizing the

time available for other activities.

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Cost effectiveness:

The degree to which the use of the organization’s resources is maximized in the sense

of getting the highest gain of reduction in loss from each unit or instance of use of resources.

Need of supervision:

The degree to which a job performer can carry out a job function with either having

to request supervisory assistance or requiring supervisory intervention to prevent an adverse

overcome.

Interpersonal impact:

The degree to which a performer promotes feeling of self-esteem, good will and co-

operation among co-workers and subordinates.

Community service:

Firms are increasingly emphasizing on employees’ community involvement. This is

particularly true in educational institution.

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IMPORTANCE OF PERFORMANCE APPRAISAL

The importance of performance appraisal is as follows:

1. It helps management in making various HR decisions such as recruitment, promotion,

transfer, demotion, layoff, termination, succession planning etc;

2. It facilitates in identification of training and development needs of the employees;

3. It is a unified system and thus avoids the errors of nepotism, self-interest and

discrimination;

4. It makes known the performance standing to the employee himself and provides

opportunity for improvement through constructive criticism and guidance for their

development;

5. It improves communication between managers and their employees;

6. It helps in improving quality of supervision by highlighting inefficiencies in supervision;

and

7. It helps in evaluating the effectiveness on recruitment, selection, induction, placement,

compensation, etc.

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BENEFITS OF PERFORMANCE APPRAISAL

The benefits of performance appraisal are as follows:

Improvement of work performance by enhancing the productivity of an employee;

Identification of excellent performance with the aim of rewarding people who are ready

for promotion;

Identification of those who need some type of support to improve and increase their work

performance;

Determining whether the set targets have been achieved and whether laid down

standards have been adhered to;

Compensation according to achievement;

Detection and elimination of problem areas in jobs or the work environment;

Placement of employees according to their Knowledge. Skill and ability; and

Reduction or elimination of grievances.

Training and development needs.

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SOURECS OF PERFORMANCE APPRAISAL

Different sources of performance appraisal are as under:

1. Combination of group and individual appraisal:

Performance appraisal evaluates employees who frequently aspire to improve their

performance rather their service. To avoid this situation, teamwork is necessary. In some cases,

individual appraisal is needed and in others, group appraisal. Sometimes there is mismatch

between a manager’s own performance and that of the group. In such cases, individual appraisal

should improve the individual performance whereas group alone may have obscured the

problem. The difference between the two is that the individual appraisal is based upon the

confidentially of an individual performance appraisal whereas group appraisal is shared amongst

all the team members. However, careful thought and planning will enable to achieve their

management goals and support each other.

2. Appraisal by superior:

This is the most common appraisal and is based on the norm that the manager is the best

judge of his employee’s performance. However, there are several drawbacks:

Manager’s power to punish and reward employees;

The evaluation is often one-way; and

Manager may not be able to give proper feedback on performance to the employees.

Due to these drawbacks, other sources of employee appraisal have emerged such as self-

appraisal, peer review, upward or reverse appraisal.

3. Self-Appraisal:

According to Heery and Noon (2001), “self-appraisal is the technique of evaluating your

own performance and then discussing this which your line manager”. Self-appraisal is useful

when managers seek to increase an employee’s involvement in the performance appraisal

process. This requires that employees think about their strengths and weaknesses. It is useful

when the manager an the employee discuss and jointly establish future performance goals. This

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method became popular because it was assumed that if employees are involved in the appraisal

process, they may be committed to their jobs and that it could also reduce role conflict. However,

this system is subject to systematic biases and distortions. Due to the above problem, another

variation of self-appraisal came into existence, that is, ‘self initiated appraisal’, which is gaining

popularity. In this system, an employee is free to ask for review from his manager anytime he

wants. The drawback of this system is that it can be useful for small organizations but not for

large ones, as this activity takes additional time.

4. Peer Review:

Peer review has been in existence since 1920s.The system is based upon the assumption

that co-employees who perform similar tasks are more knowledgeable about the work than a

manager and are in a better position to evaluate work. However, there is a natural conflict of

interest inherent in a peer review, which can result in either positive or negative bias, depending

on the situation. Therefore, peer review is prone to lacking fairness. Bohalander and snell

(2001), give the following shortcomings of the peer review system:

Peer review may be simply a popularity contest;

Managers are reluctant to give up control over the appraisal process;

Those recording low ratings might retaliate against their peers; and

Peers rely on stereotypes in ratings.

5. Upward appraisal:

Employees by virtue of their frequent dealings and interactions with their manager can

evaluate them better. However, using this system, employees may harm or backstab their

managers. Another drawback of the system is that employees may not have access to all the

dimensions of managerial performance and employees may not always evaluate performance

objectively or honestly.

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6. Multi-source assessment:

This system provides employees with as objective information as possible by obtaining

input from all angles such as superiors, subordinates, peers and customers (internal and external)

whereby different aspects of the work can be assessed by different people. For example,

superiors can judge leadership ability, subordinates management style, peers can judge good

teamwork, and customers service quality. Thus, each employee is appraised in four different

ways and the same applies to everyone. Bohalander, snell and Sherman (2001), cite the

following safeguards used by Intel corporations:

Assured anonymity;

Make respondents accountable;

Prevent gaming on them system;

Use statistical procedures; and

identify

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QUALITIES FOR EFFECTIVE PERFORMANCE APPRAISAL

1. Encourage Discussion:

Research studies show that employees are likely to feel more satisfied with their appraisal

result if they have the chance to talk freely and discuss their performance. It is also more

likely that such employees will be better able to meet future performance goals.

2. Constructive Intention:

It is very important that employees recognize that negative appraisal feedback is provided

with a constructive intention .i.e., to help the overcome present difficulties and to improve

their future performance.

3. Remunerative Justice:

There is a critical need for remunerative justice in organizations. Performance appraisal-

whatever its practical flaws- are the only process available to help achieve fair, decent and

consistent rewards outcomes.

4. Employee Participation:

Employees should participate with their supervisors in the creation of their own

performance goals and development plans mutual agreement is a key to success.

5. Set Performance Goals:

It is important to set realistic and achievable goals and revise them as and when

necessary.

6. More Feedback:

Employees generally require more feedback and more frequently, than can be provided in

an annual appraisal sessions more that once or twice a year, performance management should

be viewed as an ongoing process.

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METHODS OF PERFORMANCE APPRAISAL

The various methods and techniques used for Performance appraisal can be categorized as the

following traditional and modern methods:

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METHODS OF

PERFORMANCE APPRAISAL

TREDITIONAL METHODS

MODERN METHODS

STRAIGHT RANKING METHOD

PAIRED COMPARISON METHOD

GRAPHIC RATING SCALE METHOD

GRADING METHOD

FORCED DISTRIBUTION METHOD

CRITICAL INCEDENT METHOD

CHECK LIST METHOD

ESSAY APPRAISAL METHOD

FIELD REVIEW METHOD

MANAGEMENT BY OBJECTIVES

360 DEGREE PERFORMANCE APPRAISAL

ASSESMENTS CENTER METHOD

BEHAVIORAL ANCHORED RATING SCALE METHOD

HUMAN RESOURCE ACCOUNTING METHOD

TRADITIONAL METHODS:

1. Straight Ranking Method:

It is the oldest land simplest method of performance appraisal by which the man

and his performance are considered as an entity by the rater. No attempt is made to

functionalize the rate or his performance. Ranking method is a technique; evaluator assigns

relative ranks to all employees in the same work unit doing the same job. Employees are

ranked from the best to the poorest on the basis of overall performance. The relative passion

of an employee is reflected in the numerical rank. It is one of the simplest methods. It is time

saving and comparative evaluation technique of appraisal.

The ‘workman’ is compared with the ‘whole man’ that is the ranking of man in a

work group is done against that one of another. But this greatest limitation of this method

used for paired comparison technique. As per the technique every employee to compare a

single individual having various behavioral traits. The task ranking individuals is difficult

when a large number of persons are rated.

2. Paired Comparison Method:

In this method, certain factors are selected for the purpose of analysis and the rater

for each factor designs a scale. A scale of man also created for each selected for each factor.

Then each man to be rated is compared with the man in the scale, and certain scores are

awarded to him. In other words, a whole man is compared to a “key man” in respect of one

factor at a time. This method is used in job evaluation and is known as the factor comparison

method.

This technique was used by the USA Army during the First World War. By this

method certain factors are selected for the purpose of analysis such as leadership

dependability, initiative and a scale is designed rates for each factor. In other words

comparing “Whole man”to“Whole man personnel is compared to the key man in respect of

one factor at a time. This method is used in a job evaluation and is known as the factor

comparison method.

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3. Graphic Rating Scales Method:

It is a numerical scale indicating different degrees of a particular train. The rate is

given a printed form for each employee to be rated. The form contains several characteristics

relating to the personality and performance of employee. Intelligence, attitude, quality of

world, leadership skills judgment, etc. this method is widely used as it is easy to understand.

It allows a statistical tabulation of scores and a ready comparison of scores among the

employees is possible. The approach is multi-dimensional as several significant dimensions

of the job can be considered in evaluation.

This is the most commonly used method of performance appraisal. Under it, a

printed forms one person to be rated, in this method initiative, attitude leadership, quality

and quantity of work, regularity of attendance towards superiors and associated veracity.

--------------------------------------------------------------------------

0 5 10 15 20 25

0 - No interest in work

5 - Carelessness

10 - Interested in work

15 - Enthusiastic about job and fellow workers

20 - Enthusiastic opinions and advises

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4. Grading Method:

Under this method, the rater considers certain factors and marks them accordingly to a

scale. The selected factor may be analytical ability, co-operation, dependability self-

expression, job knowledge. They may be grades as ‘A’-outstanding, ‘B’-very good, ‘C’-

good/average, ‘D’-fair, ‘E’-poor. The actual performance of an employee is then compared

with these grade definitions and he is allotted the grade which best described his

performance.

Under this system the rater considers certain features and marks them accordingly to a

scale.

A - Outstanding

B - Very Good

C - Good or Average

D - Fair

E - Poor and

0 5 10 15 20 25

The selected may be analytical ability, co-operative ness, dependability, self-expression, job

knowledge, judgment leadership and organizing ability. The actual performance at an employee

is then compared with this grade definition and he is allotted the grade which describes his

performance.

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5. Forced Distribution Method:

In these techniques the rater appraises an employee according to a pre-determined

distribution scale. It is assumed that it is desirable to rate only two factors by this method that

is job performance and promo ability. For this purpose a five poking performance scale is

used without any descriptive statement and employees are placed between two extremes of

good and bad performance.

Under this method the rating elements are several sets of paid phrases adjectives

relating to job proficiency or personnel qualification. The method has certain such as while

choosing statements from each series. The rate is unable to introduce personnel bias on

hallo effect as only one of the favorable phrases in each series is related to success of failure

on the job.

In this method, the rating elements are several sets of pair’s phases or adjectives

relating to job proficiency or personal qualification. The rater is asked to indicate which of

the phrases is most and least descriptive of the employee.

Under this method the rating elements are several sets of paid phrases adjectives

relating to job proficiency or personnel qualification. The method has certain such as while

choosing statements from each series. The rates is unable to introduce personnel bias on

hallo effect as only one of the favorable phrases in each series is related to success of failure

on the job.

6. Critical Incident Method:

In this method the superior keeps a written record or critical (either good or bad)

events and how different employees behaved during such events. The rating of the employee

depends on the positive or the negative behavior during these events. These critical incidents

are identified after through study of the job and discussions with the staff. This method helps

to avoid vague impression and general remarks as the rating is based on actual records of

behavior.

The method was developed and conducted by the armed forces in the United States

during World War II. The essence of this system is that if attempt to measure workers

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performance in terms of certain events or episodes that occur in the performance of the rates

job. These events are known as critical incidents.

The supervisor keeps a written record of the events (either good or bad) that

can easily be recalled and used in the courses of a periodical or formal appraisal. Feed back

is provided about the incident during performance review session.

The critical incident is discovered after a through study of the personnel

working on a job. The collected incidents are than tanked in a order of frequency and

importance. “This approach reduces the ‘regency’ effect of most performance ratings.”

7. Essay Appraisal Method:

Under this method, a group of evaluators assess employees. This group consists of the

immediate supervisors of the employee, other supervisors having close contact with the

employer’s work, head of the department and a personnel expert. The group determines the

standards of performance for the job, measure actual performance of an employee, analysis

the causes of poor performance and offers suggestions for improvements in future.

This method, employees are rated by an appraisal group, consulting of their supervisor

and three or four other supervisors who have some knowledge of their performance. The

supervisor explains to the group the nature of subordinates duties. The group then discusses

standards of performance for that job. The actual performance of job-holder and the causes

of their particular level of performance and others suggestions for future improvement.

The advantage of this method is that if is through very simple and devide at any bias

for it involves multiple judges. But it is very time consuming

8. Checklist Method:

In this method, series of questions are presented concerning an employee’s behavior.

Here rater does not evaluate employee performance; he supplies reports about it and the

personnel department does the final rating.

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Under this method does not evaluate employee performance, he supplies reports

about it and the final rating is done by the personnel dept. a series of questions are presented

concerning employee to his behavior. The rater than checks to indicate if the answer to

question about an employee is yes or no.

This is the one of the method of traditional methods in the performance appraisal

method. And in this method check the all the records of the employees and he supplies

reports to the personal department are done by the final rating about the employees.

9. Field Review Method:

In this method, a trainer employee from the personnel department interviews line

supervisors to evaluate respective subordinates. The supervisor is required to give his opinion

about the progress of his subordinates and his plan of action in cases requiring for

consideration.

The traditional methods given above focus on the traits of an employee than his job

performance. In the absence of predefined performance criteria or standards, the personal

bias or subjectivity of the evaluator affects the rating. This approach caused the following

responses:

The very nature of the appraisal system led to criticism.

Criticism exercised a negative impact on goal attainment.

Criticism increased antagonism and defensiveness among employees resulting in inferior performance.

Managers generally are not qualified to assess personality traits.

Some managers discourage good performance by over emphasizing shortcomings and almost neglecting good work.

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MODERN METHODS:

The modern methods are as follows

1. Management by Objectives (MBO):

The concept of management by objectives was developed by Peter Drucker in

1954.since then MBO has become an effective and operational technique of performance

appraisal and a powerful philosophy of managing.

Process of MBO:

Set Organizational Goals: Goals of the organization in key area of performance are laid

down. These goals are defined in clear, precise and measurable terms. A thorough

analysis of internal and external of the organization is made to set these goals.

Defining Performance Targets: On the basis of organizational goals, performance

standards for each employee are defined. Every subordinate writes down his own

performance goals, which are work related and career-orientated. His manager also writes

down the goals he thinks the subordinate should strive for. The two then discuss them,

reach an agreement and put the agreed goals in writing. Thus, employees at all levels are

involved in goal setting. The goals are periodically reviewed and revised to keep them

flexible and up-to-date.

Performance Review: Frequent performance reviews meetings between manager and

subordinate are held. In these meeting progress is assessed, weaknesses and constraints

are identified and steps to be taken to improve performance are decided. Subordinates

activity participate in this process. This leads to self-control by the employee.

Feedback: After every performance review feedback on performance is communicated

to the employee so that he can regulate and improve upon his own performance. On the

basis of performance review rewards are decided. New goals and performance targets are

determined for the next period.

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For successful implementation of MBO, the following are required.

Quantifiable and measurable goals that are neither too easy not too difficult to

achieve

A well – laid out action plan providing for contingencies

Employees who are suitably equipped ad motivated to achieve these goals.

Continuous and constructive feedback and guidance

Objective evaluation of the performance

Identification of areas for improvement and corrective action

Advantages:

Ends –means chain

Role clarity

Objective appraisal

Motivation and commitment

Management and development

Co-ordination

Limitations:

Difficulty in goal setting

Problem of participation

Lack of understanding

Time-consuming and expensive

Inflexibility

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2. 360 Degrees Performance Appraisal:

This is a new concept in performance appraisal, where the feedback is collected from all

around the employee, the superior, the subordinates, the peer group, and the customers. The

evaluation is very comprehensive in terms of the employee’s skills, abilities, styles and job-

related competencies.

Supervisor

It is the responsibility of the supervisor to ensure that his subordinates perform their

jobs well. Hence, the authority to evaluate the employee performance has traditionally been with

the supervisor has a very important role to play in the appraisal of his subordinates

Peers

Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,

because of the competition among peers. The organization has to reach an advanced stage of

development before it can handle peer appraisal. Peer appraisal has to used to assess the

communication and interpersonal skills of the employee, which can effect the team performance.

28

Supervisors Sub ordinates

Peers Customers

360 degree

Performance appraisal

Customers

The performance of an employee has a direct and immediate impact on his customers

either internal or external. In service organization like banks and hotels, customer feedback has

become the most important to in evaluating employee performance. In manufacturing the

internal customer evaluate the performance of the employee.

Sub-ordinates

The concept of the subordinates evaluating the performance of his supervisor is yet to

gain acceptance in most Indian companies. The Indian company dose not encourages the idea of

sub-ordinate appraisal.

Advantages of 360 degree performance appraisal:

Higher validity and reliability of the evaluation.

Self-evaluation by the employees gets compared with the perception of others.

Helps in maximizing employee potential in the face of challenges.

Ratings are likely to be accurate because these are done by experts.

The method is more reliable and valid as it is job specific and identified observable and measurable behavior.

The use of critical incidents is useful in providing feedback to the employee being rated.

Limitations of 360 degree performance appraisal:

It is time consuming and expensive to develop BARS for every job.

Behaviors used are more activity oriented than results oriented.

29

3. Assessments Center Method:

An assessment center is a group employee drawn from different work units. These

employees work together on assignments similar to the one they would be handling when

promoted. The most important feature of the assessments center is job-related simulations.

Evaluators observe and rank the performances of all participants. This group evaluates all

employees are both individually and collectively by using simulations techniques like role-

playing, business games and in-basket exercises? Employees are evaluated on the basis of job

related characteristics considered important for job success.

The evaluators prepare a summary report and feedback is administered on a face-to-

face basis to the employees who ask for it. An assessment center generally measures

interpersonal skills. Assessment centers are not only methods of appraisal but help to

determine training and development needs of employees and provide data for human

resource planning.

Purpose of assessment center:

To measures potential for first level supervision, sales and upper management

positions; and also for higher levels of management for development purposes.

To determining individual training and development needs of employees.

To select recent college students for entry level positions.

To provide more accurate human resource planning information.

To make an early determination of potential.

To assist in implementing affirmative action goals.

It is used mostly to help select employees for the first level supervisory positions.

Assessment is made to determine employee potential for purpose of promotion. The assessment

is generally with the help of a couple of employees and involve a paper – and –pencil test,

interviews and situational exercises, like in basket exercises, business game, role playing

incident and leader less group discussions.

30

4. Behavioral Anchored Rating Scales (BARS):

This method combines graphic rating with critical incidents method. BARS are

descriptions of various degrees of behavior relating to specific performance dimensions.

Critical areas of job performance and the most effective behavior for getting results are

determined in advance. The rater records the observable job behavior of an employee and

compares these observations with BARS. In this way an employee’s actual behavior is

judged against the desired behavior. These steps involved are;

Identify critical incidents: Persons with knowledge of the identity job to be

appraised describe specific examples of both effective and ineffective job behaviors.

Select performance dimensions: The persons then cluster the behavior incidents into

a smaller set (usually 5-10) of performance dimensions.

Retranslate the incidents: Another group of knowledge persons assign each incident

to the dimension that it best describes. Incidents for which there is less than 75%

agreement with the first group are not retranslated.

Assign scales to incidents: The second group rates each incident on a 7or 9 point

scale. Rating is done on the basis of how well the behavior described in the incident

represents the performance on the appropriate dimensions. Means (average) and

standard deviations are then calculated for the scale values assigned to each incident.

Develop final instrument: A subset of the incidents that meets both the retranslation

and standard deviation criteria is used as a behavioral anchor for the final

performance dimensions. A final BARS instrument typically comprises a series of

vertical scales that are endorsed by the include incidents. Each incident is positioned

on the scale according to its mean value.

31

5. Human Resource Accounting Method:

Human resources are a valuable asset for any organization. This asset can be valued in

terms of money. When competent and well -trained employees leave an organization the

human asset ids decreased and vice versa. Under this method performance is judged in terms

of costs and contributions of employees.

Costs of human resources consists of expenditure on human resource planning,

recruitment, selection, induction, training, compensation, etc. contribution of human

resources is the money value of labor productivity or value added by human resources.

Difference between cost and contribution will reflect the performance of employees. This

method is still in the transitory stage and is therefore, not popular at present.

The human asset accounting method refers to activity devoted to attaching money

estimate to have the value of firm’s internal human organization and its external customer

goodwill.

The current value of human organization can be appraised by developed procedures by

undertaking periodic measurements of “key casual” and “intervening enterprise” variables. The

key casual variables include the structure of organization management policies, decisions

business leader ship strategies, skill and behavior.

32

PROBLEMS OF PERFORMANCE APPRAISAL

The ideal approach to performance evaluation is that in which the evaluator is free

from personal biases, prejudices and idiosyncrasies. This is because when an evaluation is

objective, it minimizes the dysfunctional behavioral of the evaluator, which may be detrimental

to the achievement of organizational goals. The factors which impede objective evaluations are;

The Halo Effect

The halo effect is a “tendency to let the assessment of an individual one trait influence the

evaluation of that person on other specific traits.” There is this effect in appraisal when the

appraiser assigns the same rating to all traits regardless of an employee’s actual performance

on these traits.

The halo effect refers to the tendency to rate an individual consistently high or low or

average on the various traits, depending upon whether the rater’s overall impression of the

individual is favorable or not. This means that the halo effect allows one characteristic or

occurrence (either good or bad) to influence the rating of all performance factors. The halo

effect problem can be alleviated by:

Providing a training programmer to the evaluators.

Restructuring the questions by requiring the evaluator to consider each question independently.

Leniency or Strictness Tendency

Every evaluator has own value system which acts as a standard against which he makes

his appraisals. Relative to the true or actual performance an individual exhibits, some

supervisors have a tendency to be liberal in their rating that is they may have a tendency to

assign consistently ‘low rating’.

The Central Tendency Problem

33

It is the most commonly found error. It assigns “average rating” to all the employees with

a view to avoiding commitment or involvement; or when the rate is in doubt or has

inadequate information or lack of knowledge about the behavior of the employee, or when he

does not have much time at his disposal. The ranking tools discussed earlier are aimed at

avoiding this problem.

Similarity Error

This type of error occurs when the evaluator rates other people in the same way he

perceives himself. This error also washes out if the same evaluator appraises all the people in

the organization.

Miscellaneous Biases

Bias against employees on ground of sex, race religion or position is also a common error

in rating. For example, a higher rating may be given to a senior employee. The rater may also

be influenced by organizational influence and give higher rating to those holding higher

positions.

Social Differentiation

Rating is sometimes impeded by the evaluator’s style of behavior. Pious has classified

raters as ‘high differentiators’- that is using most of the scale or ‘low differentiators’-that is

using a limited range of the scale. “Low differentiators” tend to ignore or suppress

differences, perceiving the universe as more uniform than it really is.

High differentiators on the hand tend to utilize all available information to the utmost

extent and thus are better able to perceptually deny anomalies and contradictions than low

differentiator makes evaluations using ‘trait’ criteria unreliable.

STEPS FOR MAKING APPRAISAL SUCCESSFUL:

34

Existence of an atmosphere of confidence and trust.

The results of performance rather than personality traits should be given due weight.

The supervisor should analyze the strengths and weaknesses of the employee and advise him.

The appraisal programmed should be less time-consuming and less costly.

The results of appraisal should be immediately communicated to the employee.

A post appraisal interview should be arranged.

Training can be used to improve the standards of performance appraisal.

The right appraisal tools should be chosen to minimize arising problem.

OBJECTIVES OF THE STUDY

35

The following are the objectives of the present study in Maddi Lakshmaiah & Co.Ltd

Ganapavaram. Those are

To study the performance appraisal system in Maddi Lakshmaiah & Co.Ltd.

To know the relationship between performance appraisal and training and development in

Maddi Lakshmaiah & Co.Ltd

To know the methods used for employee performance appraisal.

To know the rewards given by the superior to the subordinates for good performance.

To identify the merits and demerits of performance appraisal in M.L & CO. LTD.,

METHODOLOGY OF THE STUDY

36

Research methodology is a way to systematically solve the research problems. It may be

understood as a science of studying how research is done scientifically. In this research we study

various steps that are generally adopted by a researcher in studying his research problem along with

logic behind them. It is necessary for researcher to design his methodology for his problem as the same

differ from problem to problem. The research methodology has a many dimensions and research

methods do constitute a part for the research methodology, the scope of research methodology than

that of research methods. The research methodology concerns a research problem or study.

The study was taken place of employees to know the process of performance appraisal in their

organization.

Data Collection:

To get information about the satisfaction level of employees from performance appraisal

system and its effectiveness a simple random sampling survey was conducted. For the present

study the data has been collected by the following ways.

Primary Data

Secondary Data

Primary Data :-

Data observed or collected directly from first-hand experience is called primary data.

Responses through questionnaires

Conducted Personal interviews with the respondents.

Secondary Data:

37

Published Data and the data collected in the past or other parties are called Secondary data.

Secondary data is collected through the

Company Websites

News papers

Journals

Textbooks

Sample Size :

Samples are taken 100 only.

Sampling Techniques :-

Simple Random Techniques

38

NEED OF THE STUDY

To effect promotion based on competence & performance.

To assess the training & development needs of the employees.

To bridge the gap between the existing performance and desired performance.

To help each employee to understand his own strengths & weaknesses.

It provides legally defensible reasons for making promotion, transfer, reward, & discharge decisions.

They can assist in a variety of personnel decisions by generating data about each employee periodically.

Develop inter personal relationship.

To help in salary increments.

To prevent grievance and in-disciplinary activities.

Provide information about the performance rank.

39

SCOPE OF THE STUDY

This study is useful to provide information about the performance ranks based on which

decision regarding salary fixation, confirmation, promotion, transfer and demotion are

taken.

It provides feedback information about the level of achievement and behavior of

subordinate.

This study is useful to provide information which helps to council the subordinate.

It helps the company knowing whether the performance appraisal techniques are used to the

full extent or not.

There by researcher can understand the effective implementation of the performance

appraisal system.

40

LIMITATIONS OF THE STUDY

The following are the limitations of the present study:

1. Time is the major limitation. The whole study was conducted within a period of 60 days.

This period is not enough to gather the information relating to all aspects of the study.

2. The study does not cover non-executives and some other executive staff members.

3. It is due to time constraint a sample of only 80 respondent’s opinion is covered.

4. because of the small size survey may or may not reflect the ideas and opinions of all

employees in Maddi Lakshmaiah & Co.Ltd

5. The information/data which is gathered from the study is not reliable because of personal

bias of employees.

41

INDUSTRY PROFILE

HISTORY:

Tobacco is a plant that grows natively in north and South America. It is in the same

family as the potato, pepper and the poisonous nightshade, a very dead plant. The seed of a

tobacco plant is very small. A ‘1’ ounce sample contains about 300,000 seeds.

It is believed that tobacco began growing in the America about 6,000 B.C. As early as ‘1’

B.C., American Indians began using tobacco in many different ways, such as in religious and

medicinal practices. Tobacco was believed to be a cure-all, and was used to dress wounds, as

well as a pain killer. Chewing tobacco was believed to relieve the pain of a toothache.

Soon after, sailors brought tobacco back to Europe, and the plant was being grown all

over Europe. The major reason for tobacco’s growing popularity in Europe was its supposed

healing properties. Europeans believed that tobacco could cure almost anything, from bad breath

to cancer.

In 1571, a Spanish doctor named Nicolas Monardes wrote a book about the history of

medicinal plants of the new world. In this he claimed that tobacco could cure 36 health problems.

In 1588, a Virginian named Thomas Harriet promoted smoking tobacco as a viable way

to get one’s daily dose of tobacco. Unfortunately, he died of nose cancer (because it was popular

then to breathe the smoke out through the nose).

During the 1600’s, tobacco was so popular that it was frequently used as money!

Tobacco was literally “as good as gold!” This was also a time when some of the dangerous

effects of smoking tobacco were being realized by some individuals. In 1610 sir Francis Bacon

noted that trying to quit the bad habit was really hard.

In 1632, 12 years after the mayflower arrived on Ply moth Rock, it was illegal to smoke

publicly in Massachusetts! This had more to do with moral beliefs of the day, than health

concerns about smoking tobacco.

42

INTRODUCTION TO TOBACCO INDUSTRY:

India is the second largest producer of tobacco in the world after china. Produced 572

million kegs of tobacco in 2002_2003. India only holds a meager 0.7% share of the us$30 billion global

import-export trade in tobacco, with cigarettes /cigarette tobacco accounting for 85% of the country

total tobacco exports. The tobacco industry holds tremendous potential for India. For the govt, it means

excise duties and export revenues, and for the country in general, it translates into huge employment

opportunities.

Dispute being the second largest producer, India is only the largest exporter of tobacco

products in the world out of the total tobacco products in India; only one_ third is flue_ cured tobacco

suitable for the manufacture of chewing tobacco, bides and other cheap tobacco products, which have

no demand outside the country. There is only an export demand for flue_ cured tobacco, which is used

for cigarette manufacturing.

If India adopted a rational tax polity for the tobacco industry that encouraged the

growing of export tobacco, Tobacco farmer income would income would increase and export revenue

would grow. If India adopted china’s tax policy on tobacco, tax revenue could rise from the current

rs.6, 031 cores to rs.54,000 cores. China’s economy_ oriented tax policies have given cigarettes 100%

share of domestic tobacco consumption. This strong domestic base has proved to be conducive to

exports as well as revenue generation.

Tobacco is a commodity product similar in economic terms to foodstuffs in that the price is

set by the fact that crop yields vary depending on local weather conditions. The price varies by specific

species grown, the total quantity on the market ready for sale, the area where it was grown, the health

of the plants, and other characteristics individual to product quality. Laws around the world now often

have some restrictions on smoking but, still 5.5 trillion cigarettes are smoked each year.

The tobacco industry comprises those persons and companies engaged in the growth,

preparation for sale, shipment, advertisement, and distribution of and tobacco-related products. It is a

global industry; tobacco can grow in any warm, moist environment, which means it is farmed on all

continents except Antarctica.

43

GROWTH:

In 1776, during the American revolutionary war, tobacco helped finance the revolution

by serving as collateral for loans the Americans borrowed from France! Over the years, more and

more scientists began to understand the chemical in tobacco, as well as the dangerous health

effects smoking produces.

In 1826, the pure form of nicotine was finally discovered. Soon after, scientists concluded

that nicotine was dangerous poison.

In 1836, New Englander Samuel Green stated that tobacco was an insecticide, a poison,

and can kill a man.

In 1847, the famous Phillip Morris was established, selling hand rolled Turkish

cigarettes. Soon after in 1849, J. E. Leggett and Brother were established in St. Louis, Mo. (the

company that has settled out of the big lawsuits recently). Cigarettes became popular around this

time when soldiers brought it back to England from the Russian and Turkish soldiers.

Cigarettes in the U.S. were mainly made from scraps left over after the production of

other tobacco products, especially chewing tobacco. Chewing tobacco became quite popular at

this time with the “cowboys” of the American West.

In 1875, R. J. Reynolds Tobacco Company (better known for its Reynolds wrap

aluminum foil) was established to produce chewing tobacco. It wasn’t until the 1900’s that the

cigarette became the major tobacco product made and sold. Still, in 1901 3.5 billion cigarettes

were sold, while 6 billion cigars were sold. Along with the popularity of cigarettes however, was

a small but growing anti-tobacco campaign, with some states proposing a total ban on tobacco?

WAR & CIGARETTES: A DEADLY COMBO:

The cigarette exploded during world war (1914-1918), where cigarettes were called the

“soldier’s smoke”. By 1923, Camel controls 45% of the U.S. market! In 1924, Phillip Morris

began to market Marlboro as a woman’s cigarette that is a “Mild as May”!

44

THE RECENT PAST:

During the 1980’s there were many lawsuits filed against the tobacco industry because of

the harmful effects of its products. Smoking became politically incorrect, with more public

places forbidding smoking. In 1982, the surgeon general reported that second hand smoke may

cause lung cancer. Smoking in pubic areas was soon restricted, especially at the work place. In

1985, lung cancer became the No.1 killer of women, beating out breast cancer! Phillip Morris

continued to diversify into other products, buying into General Foods Corporation and Kraft Inc

in 1985. R. Reynolds also diversified, buying Nabisco and becoming RJR / Nabisco.

In 1987, congress banned smoking on all domestic flights lasting less than 2 hours. In

1990, smoking is banned, except to Alaska and Hawaii. In 1990, Ben & Jerry's (of ice cream

fame) boycotts RJR / Nabisco, and dropped Oreos from its ice cream products.

During the 80’s and 90’s, the tobacco started marketing heavily in areas outside the U.S.,

especially developing countries in Asia. Marlboro is considered the world’s no.1 most valuable

brand of any product with a value over $30 billion! Over this period, there is a battle between

Coca Cola and Marlboro as the No.1 brand in the world.

In the recent years there is growing evidence that the tobacco industry has known all

along that cigarettes are harmful, but continue to market and sell them. There is also evidence

that they know that nicotine was addictive and exploited this hidden knowledge to get millions of

people hooked on this dangerous habit!

Tobacco industry is an agro based industry. Tobacco is cultivated mainly in the states of

Andhra Pradesh and Karnataka most of the tobacco is used for the manufacture of cigarettes and

for exports. Tobacco is also grown in Tamilnadu, West Bengal, Uttar Pradesh, Gujarat, Madhya

Pradesh, Maharashtra and Orissa also.

However the tobacco grown in these states is of very less quality and is not used for

manufacture of cigarettes and exports. Several varieties of tobacco such as Virginia flue

cured ,Virginia air cured light soil burley, sun cured Virginia ,nature, chewing. Tobacco,

HDBRG, wrapper tobacco, beedi tobacco and hookah tobacco etc. are grown in India. Virginia

45

flue cured is a major variety grown in India. More than 80% of Indian tobacco crop belongs to

this variety.

Tobacco board issues licenses to the farmers who are permitted to grow tobacco. The

licenses regulate the cultivations area the farmers have to restrict the cultivation to the given area

and must sell the grown tobacco through tobacco board auctions only any violation is an offence

and is punishable.

This is simple technical process by which the green leaf exposed to hot air at high

temperature and cooled slowly over a period of time. After the curing process, the primary leaf

tobacco turns into lemon yellow color, gold colour, brownish yellow colour, brown colour and

dark brown colour. This tobacco is called katcha tobacco leaf and is ready for sale. The formers

pack different colours as a separate grade which has a separate price in the market.

Tobacco must be sold only through tobacco board auction platforms under strict rules and

regulations. Farmer or buyer is permitted to transact in tobacco board auction platforms. Central

government has also established several tobacco research institutes for betterment of quality of

tobacco in India. The other varieties of tobacco are not regulated by tobacco board.

After stripping/threshing, the tobacco will be further processed for stabilization of

moisture. And this process is called “REDRYING”. In this process the tobacco first of all will be

dried completely then it will be given steam at the required temperature.

After retrying process the tobacco will be packed in the required packing say bale

packing /case packing etc. The packed tobacco is ready for export. In India, the first threshing

plant which is working uninterruptedly for the last 25/30 years an imported one by Maddi

Lakshmaiah &co ltd. This was installed at GANAPAVARAM and the plant is still running at

high efficiency levels in the country with 98% average efficiency level for the last 3 years. There

are two plants owned by ITC which can be compared with this plant in the country. ITC uses

their threshing plants for their own consumption.

46

THE MAJOR PLAYERS IN TOBACCO INDUSTRY IN INDIA ARE AS UNDER

Name of the company Occupation % of business in India

ITC ltd

Cigarette manufacturing & un

manufactured tobacco exports

50%

VST industries ltd

Cigarette manufacturing & un

manufactured tobacco exports 12%

GTC industries ltd

Cigarette manufacturing & un

manufactured tobacco exports 6%

Godfrey Phillips India ltd

Cigarette manufacturing & un

manufactured tobacco exports

8%

The consumption is linked with the habits of the people; the tobacco usage cannot

be eradicated, even in countries like USA where anti tobacco campaign started in 1962, the

production of cigarettes and consumption of cigarettes is still progressing.

47

Exporters:

S.No

Name of the

company

Occupation

% of business in

India

A ML group

Cigarette manufacturing &

un manufactured tobacco

exports

5%

B

Polisetty group

Cigarette manufacturing &

un manufactured tobacco

exports

5%

C Bommidala group

Cigarette manufacturing &

un manufactured tobacco

exports

3%

D

Mittapalli group

Cigarette manufacturing &

un manufactured tobacco

exports

3%

E Other companies

Cigarette manufacturing &

un manufactured tobacco

exports

8%

Our ML company has developed strong relationship with overseas manufacturing in

Europe, Russia and Middle East though there is very good demand from Russian market. Our

company is not exporting much because of poor economic conditions of the country.

48

PRODUCTION OF DIFFERENT VARIETIES OF TOBACCO IN INDIA

VFC Tobacco Traditional/NCOs/My sore 200 million

ISB Tobacco ISB tobacco 10 million

IAC Tobacco Veleswaram/Warangal 25 million

VAC Tobacco HDBRG 12 million

Current state of affairs:

The tobacco industry generally refers to the companies involved in the manufacture of

cigarettes, cigars, snuff, chewing and pipe tobacco. This industry is heavily dominated by giant firms.

Due to historical growing areas, many of these companies are concentrated in the southern United

States (particularly Raleigh-Durham, North Carolina; Winston-Salem, North Carolina; and

Richmond, Virginia). Other companies are based around the world.

49

COMPANY PROFILE

HISTORY:

The highly competitive tobacco market represented tremendous growth potential to Mr.

Maddi Lakshmaiah. Foreseeing the and for quality Indian tobacco a long term strategy was

formulated. Right from its inception, the company adhered to international standards and made

rapid in roads to global tobacco markets.

A sophisticated threshing plant of international standards was commissioned in 1976 first

in Andhra Pradesh. It created a revolution in tobacco processing and led to a huge upsurge in

demand. This led to the commissioning of two modern plants with threshers, redryers and other

sophisticated equipment for the processing of quality tobacco.

ML Group has taken its credo of total quality to the furthest, whether in the quality of

process, products or working conditions for the vast workforce. The foresighted innovation of Sri

Maddi Lakshmaiah has given the group strong edge. The personal involvement of the directors

in all aspects of the business has resulted in high quality operational parameters.

The quantum growth in ML Co: Spread of investment in infra structure and

diversification into other business.

“ML GROUP” under its umbrella, various companies have an annul turnover of Rs 1550

million and an asset base of Rs 2000 million. A real estate development wing was setup to

develop and lease commercial properties with working environment that rival the best

internationally.

50

The information about the establishment of the group which consists of five concerns as

displayed on the preceding pages, let us have a look on the various concerns of ML Group

individually:

ML group of companies (ML group) was founded by Mr.Maddi Lakshmaiah in 1970.

He joined in his family business in 1952 after completing his engineering degree. The joint

family business started payback in 1943 dealing with tobacco exports, well before India.

Maddi Lakshmaiah & Co Ltd was set up at Chilakaluripet, a village in Andhra Pradesh

that produces some of the best tobacco in the country. Today it has evolved into a diversified,

multi products conglomerate known as ML Group that is recognized world over for its

excellence. The company processes tobacco and another agro based products that are used both

in the country and exported to the most quality conscious world markets.

An emphasis on total quality and dedication to the interests of its client’s world wide is

a hallmark of ML group. The group is performing excellently well from the date of its

incorporation and has been exporting large volume of tobacco to Russia, CIS countries, U.K,

Europe, African countries, China, Latin American countries, Middle East countries,

Bangladesh & Nepal etc. The group established its branches in Russia & European countries

and has strong tie up with African and Latin American countries and especially with the

neighbor giant China.

Maddi Lakshmaiah & Co Ltd (MLCO)

ML Agro Products (MLAP)

K.S Subbaiah Pillai & co ltd (KSSP)

ML Exports (MLE)

Coramandal Agro Products & Oils Ltd (CAPOL)

Vision:

Descriptions of some thing can organization corporate culture, business technology an

activity in the future.

The company is trying to develop world class information technology building in

Bangalore, china and Hyderabad in the coming 5 years time.

51

The company is going for sheet tobacco plant in joint venture with on of the Indian best

tobacco cigarette manufacturer.

The company is also contemplating for 100% tobacco joint venture association with one

of the best cigarette manufacturer.

The company exports with second strongest country china, Russia and Germany.

The ambassadors are coming to Maddi Lakshmaiah Company limited in August.

Mission:

A mission statement is an enduring statement of purpose that distinguishes one business

from others similar firms. This statement identifies the scope of firms operations in product and

market terms.

M.L & company limited mission is to produce good quality of tobacco and get NO: 1

position in India in producing and exporting tobacco.

Policies:

Policies can be considered a guide to action it is desirable that persons responsible for

implementation of policies use discretion and judgment in appraising and deciding among

alternative courses of action.

The company has well defined policies for exports the quality tobacco.

To conduct its operation with honesty integrity and transparency.

Employment policy is formulation and adoption.

This company shall maintain quality leadership by providing products and services that

completely and consistently meet the agreed.

Requirements of all customs and unsure fitness for use of all products there by ensuring

total confidence to every customer.

Employment policy formulation and adoption.

Canteen, cleaning, security maintenance of good industrial relation.

Future plans:-

52

The company (Maddi Lakshmaiah) for an ECB for 50 million dollars and development

of regular trade and also infrastructure projects in India.

Maddi Lakshmaiah Company is also working on joint venture basis with UK based

Commodities Company for supply of agri products to South Asian countries.

The company already entered into joint venture with an US based company by name

CARGIL for the south Indian needs.

They have worked for joint venture arrangements with Yugoslavian government for

their requirement for India.

Achievements / awards:-

Maddi Lakshmaiah Company has no particular achievements/ awards.

Maddi Lakshmaiah group (CAPOL Chirala, Prakasam Dist) got several achievement

awards.

All India Cotton Feed Crushers Association, Mumbai awarded CAPOL as III highest

exporter and II highest domestic seller of cotton seed extraction for the year 1992-93.

CAPOL is the highest exporter and III highest domestic set of cotton seed extraction for

the year 1993-94.

CAPOL is the III highest domestic seller of cotton seed extraction in the year 1994-95.

CAPOL is the II highest domestic seller of cotton seed extraction in the year 1995-96.

CAPOL is the II highest domestic seller of cotton seed extraction in the year 1997-98

CAPOL is the III highest domestic seller of cotton seed extraction for the year 1999-

2000.

CAPOL is the II highest extraction of cotton linter for the year 2000-01.

CAPOL is the III highest exporter of cotton linter and III highest domestic seller of

cotton seed extraction for the year 2001-02.

The company (CAPOL) has been awarded may commendation led by government of AP

for its continuous harmonious relations with its employees in the years 1994,95,96,97.

Track record:-

The company has 30 years of performance.

53

It never failed in meeting the scheduled repayments of loans with the bank. Rather it

postponed most of the loans with the lenders.

LAND MARKS:-

Maddi Lakshmaiah Company was the first Indian company to join with China to do

business.

It was the first company to import tobacco and export tobacco.

Ambassadors have already come here and 4th one is coming in this august.

GRADING POINTS:-

Maddi Lakshmaiah Company has three grading points at Chilakaluripet i.e. Martur,

Muppavaram and some other on national highway between Guntur and Chilakaluripet and three

more in Guntur city.

MADDI LAKSHMAIAH & CO LTD:-

ML & company Limited, the fore runner of all the companies of ML group, the company

enjoys a pre eminent standing in the world of tobacco, exporting to China, Russia, Western

Europe, Africa and Bangladesh among others.

Supported by a team of experts, technicians, engineering and a skilled world –force, the

company has forged a head setting standards that have become benchmarks in the industry.

Today Chilakaluripet is a well known name in the global tobacco business in no little measure

due to the pioneering efforts of the intrepid founder, Sri Maddi Lakshmaiah.

ML AGRO PRODUCTS LTD:-

ML agro products ltd was born of a increase in demand for quality tobacco in both the

domestic and foreign markets. Building on the rich experience of running a profitable operation,

a new plant was set up in 1976 at Martur, Prakasam district.

54

It is fully self sufficient with modern threshers, lamina redryers, and automatic double

ram press, sophisticated quality control laboratory and mammoth ware houses. It ranks among

the largest threshing units in the country apart from its export commitments.

KS SUBBAIAH PILLAI & CO (INDIA) LTD:

K.S.S.P & Co Ltd was acquired in 1982 with all its assets K.S Subbaiah

Pillai & Co (India) Ltd is the group with leading tobacco exporting unit. In a field that is

extremely competitive, the excellent performance of the company is an indicator of the trust that

it enjoys across the globe.

COROMANDAL AGRO PRODUCTS & OILS LTD (CAPOL):

CAPOL started in 1976, extracts and refines cotton seed oil. Today it is a multi products

company with equipment to process all kinds of oil seeds. The plant has a storage capacity of

2100 tones for different types of oil.

Extreme care is taken to ensure that at every stage in the process of production right from

selection of the raw material to packing the products, only the best is passed.

Minimum human intervention and rigorous application of quality control process ensures

the final product conform to all appropriate standards. The by-products, hulls and de-oil cakes

are in high demand in many parts of the world.

ML EXPORTS:

ML exports is a totally export oriented unit, with clients in a variety of markets around

the world. The company enjoys a reputation for excellent delivery schedules and transparent

business practice in global markets.

SHARE HOLDING PATTERN & MANAGEMENT OF GROUP:

The group has been successfully improving its business in all of its activities such as

domestic sales, export sales, tobacco processing & other tobacco development activities,

55

warehousing facilities etc. The group has two tobacco processing plants and one solvent

extraction plant in South India. The group owns around 1, 00,000 sq. mts of warehousing

complexes in south India.

INCORPORTATION:

ML Company is a limited company (m/s Maddi Lakshmaiah and Company Limited)

which was originally incorporated on 8th day of October 1970 under the name, Maddi

Lakshmaiah and Company Private Limited having passed the necessary special resolution on the

23rd day of March 2002, in terms of Sec 31(1)/44 of the Companies Act 1956 the name of the

company changed to Maddi Lakshmaiah and Company Limited.

NATURE OF ACTIVITY:

o This factory produces good quality tobacco.

o The production capacity per each day is 1 lakh 20 tones

FINANCIAL STRUCTURE;

The initial investment of ML Company is 10, 00,000.

TURN OVER OF THE GROUP:

The turn over of the group for the financial year 1989-99 standards is at around Rs 800

million. The net earnings after taxes of the group have been maintained at Rs 150/200 million

per annum. The group has sound assets base having assets spread in most of the prime centers &

ports of South India. The group has developed excellent infrastructure during the past 30 years

which has been yielding a promising regular income of more than Rs 225 million every year.

56

Profit after tax:

SNO NO OF YEARS AMOUNT IN RS IN LAKHS

1 2004 109

2 2005 270

3 2006 203

4 2007 312

5 2008 262

6 2009 134

7 2010 103

8 2011 123

57

OBJECTIVES OF THE MADDI LAKSMAIAH COMPANY.LTD:

The objectives of the MADDI LAKSMAIAH COMPANY.LTD are as follows below

To serve the nation’s vital interest in the tobacco related sectors.

To earn a reasonable return on investment.

To work towards achievement of self reliance in the field of tobacco, threshing

formulation& distribution system.

To create strong research& development in the field of tobacco and stimulate R&D of

exports.

To maximize utilization of the existing facilities in order to improve efficient and

increased productivity.

58

BOARD OF DIRECTORS:

Managing Director : Sri Maddi Lakshmaiah

Director : Sri Maddi Seetha Devi

Director : Sri Maddi Venkateswara Rao (M.B.A in USA)

Director : Sri Maddi Ramesh

Executive Director : Sri Mallavarapu Rama Mohana Rao

Executive Director : Sri Meaden Sekhar

MANAGEMENT TEAM:

Managing Director : M. Venkateswara Rao

Director : M. Lakshmaiah

General Director : M. Rama Mohana Rao

Personnel Manager : B. Babu Rao

Leaf Manager : M. Rama Mohana Rao

Finance Manager : M. Shekhar

Export Manager : M. Shekhar

Production Manager : K.S. Rami Reddy

59

Circle Manager : Anji Babu

Factory coordinator : P. Subba Rao

ORGANIZATION STRUCTURE:

The company (ML Company) is under the complete administrative control of the

managing director and he are reported by the director and he is reported by general manager.

60

Managing director

Deputy Managing

director

General Managing director

Personal manager

Leaf manager

Financial manager

Export manager

Production manager

Personal officer

Safety officer

Welfare officer

Circle manager

Factory coordinator

Accounts officer

Plant engineer

Export officer

Branch manager

Staff

Buyers Supervisors

Staff workers

Shifting in charge Assist-

engineer

Staff workers

Staff

MAN POWER PARTICULARS:

In M.L & CO. LTD., employee’s total number is . It may be shown in the form of table as

follows.

S.NO. Type of workers permanent seasonal Temper\Daily

wage

total

1 Officers 16 - - 16

2 Staff(including boys) 154 70 - 224

3 Scavengers 7 - - 7

4 Female workers 223 - 74 307

5 Male workers 7 - - 7

6 Security - - 21 21

7 Engineering Daily

Wages

- - 50 50

8 Apprentice - 10 - 10

9 Carpenters 3 - - 3

10 Gunnies 2 - - 2

61

Staff

11 Meithei 105 - - 105

Total 527 80 145 752

Responsibilities of managers in M.L company:

The M.L Company managing director M.Venkateswara Rao is under the complete administrative

control of the managing direction and he is reported by the director and he is reported by general

manager

The general manager of ML Company is M. Ram Mohan Rao assisted by fine general

manager i.e., personal manager, leaf manager or department manager, finance manager, exports

manager and production manager.

The personal department manager B. Babu Rao is headed by who reports directly to G.M.

he looks after the areas of personnel & administration under there may be a personal offices

welfare officer and a safely officer.

The finance manager M.Shekhar is assisted by a team of experienced management and

non management staff who takes care of the finance is accounts activities of the organization.

The export manager M.Shekhar deals all the matters regarding the export departments

and directly reports to managing director.

The production manager K.S.Rami Reddy is headed by the G.M. is assisted by a plant

engineer and staff of the production department.

62

PERFORMANCE APPRAISAL AT M.L. & Co.Ltd

Performance Appraisal is one of the important mechanisms of HRD. It is the process

through which an individual employee's behavior and accomplishments for fixed time period are

measured and evaluated. The major purpose of measuring and evaluating is to assess the worth

or value. Performance appraisal is a systematic and objective way of judging the relative worth

or ability of an employee in performing his/her assigned task. It is thus the process of reviewing

an individual's performance and progress in a job and assessing his/her potential for future

improvement. It is a systematic method of obtaining, analyzing and recording information about

a person that is needed by the efficient management to help them to improve the job holder's

performance and plan their career and by the job holder to assist him to evaluate his own

performance and develop himself.

Sometime reliability may be reduced due to inconsistent use of measuring standards lack

of training appraisal techniques and inconsistency between different raters. Though these are no

accepted standards to determine which method of evaluation produces the best results. There is a

range of techniques that are used by the organization.

After evaluating the performance of the employee, evaluator is going to provide a

training & development programmers to the employees to improve the knowledge & skills. The

organization provides on-the –job training and off-the-job training. These training programmers

are useful to the employees. Every employee feels good about their job at the same time

organization also.

Key process of Performance appraisal in M.L. & Co.Ltd:

1. Performance planning/goal setting

63

2. Performance coaching/half yearly review

3. Performance review/ annual review

4. Feedback and consequences management

1. Performance planning /goal setting

Once the business/ functional scorecard is frozen the superior and the employee should

meet to clarify expectation from their key customers/shareholders and others. This input should

be converted into performance goals to be met during the review period.

The goals articulated are not merely a routine set of activities, but ideally should result in

value creation for the organization through either continuously improving or reducing gaps in the

existing products, process and services. To improve organizational performance, the goals must

necessarily incorporate ‘performance stretch’ i.e. they need to be significantly higher than the

goals of the previous year. Measurement criteria are for tracing performance against the goals.

The superior/employee is free to freeze the criteria as relevant to their nature of work.

Possible criteria may be quantity, quality, Cost, time and human reaction. The goals can be

added/deleted/modified with mutual consent in response to changing business priorities.

2. Performance coaching

Performance coaching is an ongoing process and based on continuous dialogue

between the superior and employee. It is important to spend time preventing performance

problems rather than evaluating them at the end of the year. The superior and the employee

should meet periodically to review performance; learning’s and progress against set goals.

Regular dialogue enhances employee’s engagement and is the foundation of coaching.

3. Performance Review

(A).Half yearly Review:

64

A formal half-yearly review is important for superior and employee to take stock of the

progress made and to make course corrections. The focus during the review should primarily be

on overcoming constraints and planning for the rest of the performance cycle. The superior

collects feedback from the customers, suppliers and peers and collates this feedback. The

superior calls project managers to the review if the employee has the project goals. The superior

is expected to give feedback on achievement of goal and behavioral aspects for the period under

review. Employees are also provided with an opportunity to give their feedback and seek

clarifications from the superior.

In addition to these regular discussions, the superior need to conduct and document

an interim review if the employee is being transferred to another department. This must also be

done if the employee demonstrates any extreme performance.

(B). Annual review:

Self-Review:

The annual review starts with a self-review. The employee fills sections-II. A with the

status of achievements on goals for the review period. In sections III, the employee has to

briefly describe his/her contribution towards organization building if any and identifies

development needs in both behavioral and function areas. The onus of development is on the

employee. The employee also mentions short and medium term career aspirations at M.L.

&Co.Ltd based on current skill and competencies required to fit into the aspired role. The aspired

role may not necessarily be hierarchically superior but it may envisage horizontal career

movements within and across functions, which may help in long-term development of the

employee.

65

Role of Key Persons in M.L. & Co. Ltd:

1. Role of employee:

Employees are expected to clarify expectations from their key stakeholders who may

be their immediate superior, customer’s peers and subordinates at the beginning of the review

period and use the same as an input for framing the goals in section II.

Employees are also expected to proactively seek performance feedback from key

stakeholders. During the half yearly formal review, the onus is on employee to seek clarification

on the expectations and give an honest feedback to his superior in the “appraiser’s feedback”

column and resolve issues of resources/constraints/support if any. The employee is also required

to give his honest input at the end of the review period about the quality of the process/feedback

and the improvement areas in section VIII. The employee should proactively seek the execution

of the development plan in section VII with both his /her superior and the concerned HR.

2. Role of the superior:

Superiors are expected to ensure that goals are set and signed off as per organizational

timelines. Even if, in departments/SBU’s where goals change more frequently based on

changing upstream priorities ,the event that the employee has project goals , the superior needs to

involve the project manager at the time of goal setting. The superior has to proactively follow the

perfect schedule and complete goal setting/half yearly review/annual review in time .The

superior should use the half-yearly review for clarifying expectations and sorting out issues of

resources/constraints. While assessing, the superior has to honestly and fairly apply the rating

template.

66

The superior should give sufficient comforts to the employee so that he/she is able to give

honest feedback in section VII. However, it must be made clear by the superior that the ratings

given in section VI are non-negotiable and cannot be altered following the final discussion and

closure unless it is prima facie evident that a gross miscarriage of justice has been committed.

The superior may call the employee during the review period to understand what the

employee had written in section III and seek clarification whenever require

3. Role of the Reviewer:

The reviewer is expected to help the superior in coming to a fair and unbiased

assessment of the employee and provide key development inputs. The reviewer is required to

question the superior as to why a certain rating has been proposed as per the guidelines in the

rating template. The reviewer is also expected to completely brief the superior of the proceedings

at the Apex review committee and the rationale if the ratings get altered. The reviewer should at

no point directly communicate with the employee over performance ratings, which might

confuse the employee and the ownership of the superior.

4. Role of HR:

HR has to support and facilitate the line managers {superior and reviewers} in all

administrative and technical areas like coaching and feedback as well as dealing with

performance problems. HR would facilitate discussion at the apex review committee, ensure

implementation of perfect philosophy and monitor overall quality of perfect.

HR would also help in implementing the development plan in section VII and

analyze the closure section for monitoring quality of feedback. HR would assist in reminding

line managers about the timelines on goals setting/half-yearly feedback /final review and would

and follow up for the same. HR shall also carry audits on the perfects process periodically.

67

1. Are you aware about the organization performance Appraisal system?

TABLE: 1

CHART: 1

opinion of employee regarding the awareness of employee about performance appraisal system

0

20

40

60

80

100

120

YES NO

NO. OF RESPONDENTS

PERCENTAGE

68

OPINION NO. OF RESPONDENTS PERCENTAGE

YES 100 100

NO 0 0

TOTAL 100 100

INTERPRETATION:

The above chart indicates that most of the respondents are i.e. 100% of employees are expressed the performance appraisal system is essential in an organization. So from the above analysis the performance appraisal system is the aware about the organization.

2. Are you satisfied with the annual performance appraisal?

TABLE: 2

OPINION NO. OF RESPONDENTS PERCENTAGE

SATISFIED 76 76

PARTIALLY SATISFIED 15 15

DISSATISFIED 9 9

TOTAL 100 100

CHART: 2

The satisfaction of employee regarding annual performance appraisal

010

2030

4050

6070

80

SATISFIED PARTIALLYSATISFIED

DISSATISFIED

NO. OF RESPONDENTS

PERCENTAGE

69

INTERPRETATION:

The above chart indicates that most of the respondents i.e. 76% of respondents are expressed satisfying with the annual performance appraisal. Where as 15% of employees are partially satisfied and 9% of employees are dissatisfied about annual performance appraisal.

3. What is your satisfaction level with the performance appraisal system in M.L. Company?

TABLE: 3

OPINION NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 60 60

GOOD 23 23

AVERAGE 17 17

TOTAL 100 100

CHART: 3

the satisfaction level of employee about P.A.S in M.L.Company

0

10

20

30

40

50

60

70

EXCELLENT GOOD AVERAGE

NO. OF RESPONDENTS

PERCENTAGE

70

INTERPRETATION:

From this above chart indicates that 60% of respondents are expressed the satisfaction level is excellent in the organization. Where as 23% of respondents are good and 17% of respondents are expressed average to the performance appraisal in the M.L Company.

4. Do you think performance appraisal is essential?

TABLE: 4

C HA RT: 4

opinion of employee regarding performance appraisal is essential

0102030405060708090

100

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

71

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 87 87

NO 13 13

TOTAL 100 100

The above chart indicates that most of the respondents i.e. 87% of respondents are expressed that the performance appraisal system is essential where as 13% of respondents are the responded that the performance appraisal system is some extent not essential in the organization.

5. Do you think that performance appraisal conducted periodically?

TABLE: 5

CHART: 5

opinion of employee regarding P.A.S. conducted periodically

0

10

20

30

40

50

60

70

80

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

72

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 70 70

NO 30 30

TOTAL 100 100

The above chart indicates that most of the respondents i.e. 70% of respondents are expressed the performance appraisal is conducted periodically. Where as 30% of employees are feel that the performance appraisal is not to be conducted periodically.

6. Periodicity of performance appraisal should be on

OPINION NO. OF RESPONDENTS PERCENTAGE

QUARTERLY BASIS 13 13

HALF-YEARLY BASIS 11 11

ANNUAL BASIS 76 76

TOTAL 100 100

TABLE: 6

CHART: 6

The employee opinion regarding conducting of performance appraisal

0

10

20

30

40

50

60

70

80

QUARTERLYBASIS

HALF-YEARLYBASIS

ANNUALBASIS

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart indicates that 13% of respondents are feeling

73

performance should be on quarterly basis. Where as 11% of respondents feel about half-yearly basis. And most of the respondents i.e., 76% of respondents are expressed their interest to annul basis of the performance appraisal.

7. What is your opinion regarding performance appraisal system helps in identifying strengths

and weaknesses of an individual on his job?

TABLE: 7

CHART: 7

opinion of employee regarding P.A.S. helps the identifying the strengths and weakness on his job

0

10

20

30

40

50

60

70

80

90

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

74

OPINION NO. OF RESPONDENTS PERCENTAGE

YES 80 80

NO 20 20

TOTAL 100 100

From the above chart most of the respondents, i.e. 80% of respondents are feel the performance appraisal system helps the identifying the strengths and weaknesses of an individual on his job. Where as 20% of employees are feel about the performance appraisal system is not fully identifying the strengths and weaknesses of individual on the job.

8. What is the present appraisal system which is used in your organization?

TABLE: 8

OPINION NO. OF RESPONDENTS PERCENTAGE

GRADING METHOD 60 60

CHECK LIST METHOD 20 20

BOTH 20 20

TOTAL 100 100

CHART: 8

opinion of employee regarding appraisal systen is used in organization

0

10

20

30

40

50

60

70

GRADING METHOD CHECK LIST METHOD BOTH

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

75

The above chart indicates that most of the respondents, i.e. 60% of respondents are expressed that the present appraisal system using grading method. And where as 20% of respondents are expressed about check list method is used and 20% of respondents are expressed that both the grading and check list methods are used in the organization.

9. What is the previous performance appraisal system in your organization?

TABLE: 9

OPINION NO. OF RESPONDENTS PERCENTAGE

GRADING METHOD 30 30

CHECK LIST METHOD 20 20

BOTH 50 50

TOTAL 100 100

CHART: 9

opinion of employee regading previous P.A.S. in organization

0

10

20

30

40

50

60

GRADINGMETHOD

CHECK LISTMETHOD

BOTH

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

The above chart indicates that 30% of employees are said that previously the organization used grading method and 20% of respondents are expressed check list method.

76

Most of the respondents are 50% of respondents are expressed both the grading method and check list methods of performance appraisal used in the organization

10. In your opinion what is the basis of performance appraisal system?

TABLE: 10

OPINION NO. OF RESPONDENTS PERCENTAGE

BEHAVIOUR 10 10

PERFORMANCE 40 40

BOTH 50 50

TOTAL 100 100

CHART: 10

the employee opinion regarding basis of P.A.S

0

10

20

30

40

50

60

BEHAVIOUR PERFORMANCE BOTH

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

The above chart indicates that 10% of respondents are expressed the ir view about the behavior is basis for performance appraisal and 40% of respondents are feeling the performance of employee is basis for performance appraisal system. Where as most of the

77

respondents i.e. 50% of respondents are expressed the both behavior and performance are basis for performance appraisal system.

11. Do you think performance appraisal system plays a role in advanced work plan?

OPINION NO. OF RESPONDENTS PERCENTAGE

STRONGLY AGREE 75 75

AGREE 15 15

DIS AGREE 10 10

TOTAL 100 100

TABLE: 11

CHART: 11

INTERPRETATION:

The above chart indicates that most of the respondents i.e. 75% of respondents are strongly agree to the performance appraisal system plays a key role in advanced work plan. Whereas 15% of respondents are feel agree and 10% of respondents are expressed disagree about performance appraisal system plays a role in advanced work plan.

78

12. What is your opinion regarding there is a link between organization goals and performance appraisal system?

TABLE: 12

CHART: 12

opinion of employee regarding link betweenorganizational goals and P.A.S.

0

10

20

30

40

50

60

70

80

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart 80% of respondents are expressed that the appraisal is linked to the organization goal. 20% of respondents are expressed that there is no link between the performance appraisal system and organization goals.

79

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 80 80

NO 20 20

TOTAL 100 100

13. Performance feed back allows employees to improve their efficiency?

TABLE: 13

CHART: 13

opinion of employee regading feedback allows improve efficiency

0

10

20

30

40

50

60

70

80

90

100

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart most of the respondents i.e. 95% of respondents are expressed performance feedback allows the employees to improving efficiency. Where as 5% of employees are expressed the feedback is not allowed improving efficiency of individual.

80

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 95 95

NO 5 5

TOTAL 100 100

14. Do you think counseling is essential for employees in connection with performance appraisal?

TABLE: 14

CHART: 14

opinion of employee regarding essentiality of counselling in connection with performance appraisal

0

20

40

60

80

100

120

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart all of the respondents i.e. 100% of respondents expressed that counseling is essential in connection with performance appraisal system in the Maddi Lakshmaiah.Company Ltd.

15. What kind of counseling should be occurring in an organization?

81

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 100 100

NO 0 0

TOTAL 100 100

TABLE: 15

CHART: 15

opinion of employee regarding counselling should occure in organization

0

10

20

30

40

50

60

70

80

90

FORMAL IN FORMAL

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart 80% of respondents are expressed their interest about formal counseling is essential. Whereas 20% of respondents are expressed Informal counseling should be occur in an organization.

16. Does the organization provide training & development programs after appraising period?

82

OPINIONNO. OF RESPONDENTS

PERCENTAGE

FORMAL 80 80

IN FORMAL 20 20

TOTAL 100 100

TABLE: 16

CHART: 16

opinion of employee regarding T&D programs after appraising period

0

20

40

60

80

100

120

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart all of respondents are expressed that the organization is providing the training and development programs after performance appraisal period.

17. Is Training & Development programs improving the quality work of the employees?

83

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 100 100

NO 0 0

TOTAL 100 100

TABLE: 17

CHART: 17

opinion of employee regarding T&D programs quality of work of the employee

0

10

20

30

40

50

60

70

80

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

The above chart indicates that most of the respondents i.e. 70% of respondents are expressed that the training and development programs improve the quality work of employee. Where as 30% of respondents are expressed there is no any improvement of the quality of employee with the T&D programs.

18. How is the present performance appraisal system in the organization?

84

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 70 70

NO 30 30

TOTAL 100 100

OPINION NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 60 60

GOOD 25 25

MODERATE 15 15

TOTAL 100 100

TABLE: 18

CHART: 18

opinion of employee regarding present performance appraisal system in organization

0

10

20

30

40

50

60

70

EXCELLENT

GOOD

MODERATE

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

From the above chart 60% of respondents are expressed that the present performance appraisal system is excellent and 25% of respondents are expressed Good. Where as 15% of respondents are feeling present appraisal system is moderate in the organization.

19. Does your company giving a greater feedback after apprising of employee performance?

85

TABLE: 19

CHART: 19

The employee opinion regarding giving of a greater feedback of performance appraisal

0102030405060708090

100

YES NO

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

The above chart indicates that the most of the respondents i.e. 90% of respondents are expressed that the organization giving a greater feedback after appraising. Where as 10% of respondents are expressed that the company has not giving a greater feedback after appraising of employee performance.

20) What is your satisfaction level with the feed back of appraiser regarding your performance?

86

OPINIONNO. OF RESPONDENTS

PERCENTAGE

YES 90 90

NO 10 10

TOTAL 100 100

TABLE: 20

OPINION NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 60 60

GOOD 30 30

BETTER 10 10

TOTAL 100 100

CHART: 20

opinion of employee regarding satisfaction level with the feedback of appraiser

0

10

20

30

40

50

60

70

EXCELLENT

GOOD

BETTER

NO. OF RESPONDENTS

PERCENTAGE

INTERPRETATION:

The above chart indicates that most of the respondents i.e. 60% of respondents are expressed their satisfaction level is excellent with the feedback. Where as 30% of respondents are expressed their satisfaction level about feedback is good. And 10% of respondents are expressed their satisfaction level with the feedback of appraiser regarding performance is better in the organization.

FINDINGS

87

It was observed that most of the employees in MADDI LAKSMAIAH COMPANY have the full awareness about performance appraisal system

It was observed that most of the employees have satisfied with annual performance appraisal.

It was observed that most of the employees feeling the performance appraisal system is very essential for identifying strengths and weaknesses.

It was observed that the M.L.Company has conducting performance appraisal system on annual basis

It was observed that the M.L.Company is being used both the grading and check list method of performance appraisal.

It was observed that most of the employees feel about counseling is essential for employee in connection with performance appraisal system.

It was observed that for conducting of performance appraisal system. The organization is considered not only the performance of the employee and also behavior aspects of the employee.

It was observed that the performance appraisal helps in assessing the training needs of the subordinates.

It was observed that the employee strongly believed that the training and development programs will improve the quality of their works.

It was observed that most of the employees have satisfied with the present (check list method and grading method) performance appraisal system.

SUGGESTIONS

88

Based on the findings of the study the following suggestions are recommended for

improving the performance of the employees and organization.

There is a need to modify the performance appraisal system in MADDI LAKSHMAIAH & CO.LTD

The company should conduct performance appraisal system periodically like twice or trice in a year.

The company should encourage participation of employees in their appraisal.

The M.L.Company must concentrate on personal counseling programs in addition to formal counseling.

It is better to take another performance appraisal like 360 degree performance appraisal.

The organization need to increase the satisfaction level in giving of feedback to employees regarding their performance.

The employees need to get the idea about the performance appraisal system helps in identifying strengths and weaknesses of themselves on their work.

CONCLUSION

89

The Performance appraisal system plays an important role in the development of

human resource in every organization. The study reveals that majority of the employees are

having awareness about the performance appraisal conducted in their organization and they felt

that performance appraisal is helpful for the organization growth. The organization evaluates the

performance of the employees regarding their job knowledge and the quality of work. The

majority of employees are greater feedback on their performance.

The M.L. Company presently following for appraising Performance of the

employees is GRADING AND CHECK LIST METHODS and majority of the employees are

satisfied with the present appraisal system. Majority of the employees felt that the performance

appraisal system is useful for identifying their abilities, strengths and weaknesses. From the

study it is suggested that the company has to provide proper mechanism to convey the employee

suggestions to top management. It is better to evaluate the performance of the employees for

frequently. Then there is a probability of employees to improve their skills and knowledge in

their working conditions.

BIBLIOGRAPHY

Books:

90

Ahuja K.K - Personal Management Publishers

Amstrong.M -A Hand Book of Reward Management Practice

Becker B.E,Huselid M A, and Ulrich D -

The HR Scorecard-Linked People, Strategy and Performance

Dwivedi RS -Managing Human Resource Management in India

Eugene Mc Kenna and Nic Beech-

Human Resource Management

Gary Dessler - Human Resource Management

Jhon Ivancevich - Human Resource Management

Ian Breadwell and Leen Holden

- Human Resource Management

Luis Gomez-mejia and David B Balkin and Robert L. Cardy

- Managing Human Resource Management

Mamoria CB and Gankar S V

- Personal Management

Websites:

www.google.com

http://appraisals.naukrihub.com/

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