An in-Depth Study of Performance Management System

84

AN IN-DEPTH STUDY OF PERFORMANCE MANAGEMENT SYSTEM

DISSERATION REPORT ON

“AN IN-DEPTH STUDY OF PERFORMANCE MANAGEMENT

SYSTEM AT MOTHERSON SUMI SYSTEMS LIMITED”

Towards the partial fulfillment of the degree of

“POST GRADUATE DIPLOMA IN MANAGEMENT” (2007-2009) to

INSTITUTE OF TECHNOLOGY AND SCIENCE, GHAZIABAD

SUBMITTED BY

PRIYANKA NARANGPGDM (2007-09)

UNDER THE GUIDANCE OF

PROF. SUNIL Kr.TYAGI

ITS GHAZIABAD

INSTITUTE OF TECHNOLOGY AND SCIENCE,

MOHAN NAGAR, GHAZIABAD

84


CERTIFICATE

This is to certify that the dissertation titled “AN IN DEPTH STUDY OF

PERFORMANCE MANAGEMENT SYSTEM AT MOTHERSON SUMI SYSTEM

LTD” submitted by PRIYANKA NARANG student of PGDM (2007-09) for the partial

fulfillment of the requirement of the POST GRADUATE DIPLOMA IN

MANAGEMENT embodies the bonafied work done by her under my supervision.

I also declare that this dissertation is a result of her effort and no part of this research has

been published earlier or been submitted as a project by her for any degree or diploma for

any institute or university.

Date: Signature of the mentor

84


CANDIDATE DECLARATION

I hereby declare that the project titled AN IN DEPTH STUDY OF PERFORMANCE

MANAGEMENT SYSTEM AT MOTHERSON SUMI SYSTEM LTD at Institute

Of Technology And science, Ghaziabad is original and bonafide work carried out by

me during the year 2007-2009 under the able guidance of Prof. SUNIL TYAGI

In partial fulfillment of the requirement of Post Graduate Diploma in Management at

INSTITUTE OF TECHNOLOGY AND SCIENCE, GHAZIABAD.

I also declare that this dissertation is a result of my effort and no part of this research has

been published earlier or been submitted as a project by me for any degree or diploma for

any institute or university.

PRIYANKA NARANG

84


ACKNOWLEDGEMENTS

There are a number of important people I want to thank, without whose support,

guidance, encouragement, and help this work would not have been possible. I would also

like to give my greatest thanks to God who deserves the ultimate praise and credit for all

good things in my life.

First and foremost, I want to thank Prof. Sunil Tyagi , who has been my advisor and

mentor throughout my studies, and served as the chair of my dissertation committee.

Without sir’s patient criticism, continual support, effective teaching, and constant

challenge and encouragement to give my very best efforts to my undertakings, I would

not have learned what I needed to nor been prepared to complete this dissertation and

future work. Much of what I have learned about the craft of research has come from Sir,

and I am forever grateful for the opportunity to have studied under his guidance.

I also want to give thanks to my Director General Mr. Shekhar Ghose who has

contributed immensely to my professional and personal development over the past two

years.

I am grateful to my Chair Person Prof. Parul Malik for her generosity, mentoring,

support, and sense of humor, which have always served to keep my spirits light and my

attitude positive.

As a student specializing in Human resource, I came to know about the ground realities in

topics like Performance management system with special reference to MSSL.

I would not have made it through this research without the support, encouragement,

teaching, and friendship of fellow students in the program.

84


ABSTRACT

Training is an integral part of the work situation and is closely related to the career ana

promotion structure. So practical training could be taken as a beginning of a process of in

doctrinate into the ways of a business organization and it is the first step which would be helpful

in future prospect. Training makes the concept clear and help in facing the actual situations.

I have done training at MSSL,NOIDA in Human Resource. During the

training Programme, I got the opportunity to learn valuable things regarding management. It was

my fortune to get the training in a very healthy atmosphere. The management of the company

offered learning situation sufficient facilities and training opportunities to fulfill the objectives of

training.

The project assigned to me was Performance Management System. In

my project report I have studied the procedure of Performance Management System at MSSL.

The process of PMS from Setting Goals till Learning and Development has been done in my

project report. From the study and work of Performance Management System I can say that it is

an important tool for Human Resource and also for the development of the employees.

This Project has really exposed me to a far new world and I sincerely

hope that “MOTHERSON SUMI SYSTEM LIMITED.” Will find my study equally valuable as

found it in shaping my career.

84


CONTENTS

1) CERTIFICATE 2

2) CANDIDATE DECLARATION 3

3) ACKNOWLEDGEMENT 4

4) ABSTRACT 5

5) CHAPTER 1: INTRODUCTION

5.1 Introduction of the study 8

5.2 Significance of the Study 9

5.3 Review of existing literature 10

5.4 Objectives Of the study 126) CHAPTER 2: RESEARCH METHODOLOGY 14

7) CHAPTER 3: DESCRIPTIVE WORK

7.1 Key factors affecting PMS 16

7.2 Conceptualization of the study 19

7.3 PMS Methodology 21

7.4 Performance Assessment 26

7.5 Annual Increment 32

7.6 Types of Errors in PMS 34

7.7 Company Profile 358) CHAPTER 4: DATA ANALYSIS AND INTERPRETATION 44

9) CHAPTER 5: FINDINGS & RECOMMENDATIONS 73

10) CHAPTER 6: CONCLUSION & LIMITATIONS 76

84


11) CHAPTER7: BIBLIOGRAPHY 81

CHAPTER -1

84


INTRODUCTION

The concept of Performance Management has been one of the most important and positive

developments in the sphere of Human Resource Management in recent years. Performance

Management is, of course, about performance. It is important to clarify what performance means,

because if performance cannot be defined, performance appraisal can’t be done properly and

eventually performance management system cannot be successfully implemented. Performance

appraisal which is key to Performance Management System may be defined as a structured

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

interview (annual and semi-annual), in which the work performance of the subordinate is

examined and discussed, with a view to identifying weaknesses and strengths as well as

opportunities for improvement and skills development.

Organizations are now looking forward to obtain competitive edge through highly developed

employee skills by adopting an efficient Performance Management system. The efficiency of an

organization depends directly on the capability and talent of its personnel, and how motivated

and satisfied they are. This study throws light on the effectiveness of implementing Performance

Management System in the organization and how Performance appraisal as a key to Performance

Management System helps to increase productivity of employees, which makes the organization

efficiently.

APPRAISAL- the word means “to fix a price or value for something”. So it is a process in which

one values the employee’s contribution and worth to the organization

84


SIGNIFICANCE OF STUDY

Today leading organizations are using every available tool with greater vigor to create a more

efficient and profitable business. One of these tools, Performance Management, historically has

been viewed as an effective highly political and time consuming task yet there is hardly a single

organization in the world that does not want a performance management system focused on

results and backed by commitment.

The performance appraisal is the key element in the performance management process. When

used effectively the performance appraisal can provide accurate feedback on past performance,

significantly enhance employees’ productivity and satisfaction and offer feedback to employees

on how to improve. For that reason performance appraisal is one of the most important

responsibilities of supervisor or manager.

84


REVIEW OF EXISTING LITRATURE

There are different views on what performance is. It can be regarded as simply the record of

outcomes achieved. On the individual basis, it would then be the record of a person’s

accomplishments (Bernadine et al, 1995; Kane, 1996).

On the other hand, it has also been suggested that performance is behavior and should be

distinguished from the outcomes because the outcomes can be contaminated by systems

prevalent in the organization (Campbell, 1990).

Performance means both Behavior and result Behavior, emanates from the performer and

transforms performance from abstraction to action. Not just the instrument for result, behavior is

also the outcome in its own right and can be judged apart from the result (Brumbrach, 1988).

“Performance Management is a continuous process of identifying, measuring, and

developing the performance of individuals and teams and aligning performance with the strategic

goals of the organization” (Herman Aguinis, 2007)

The concept of performance management has been one of the most important and positive

developments in the sphere of Human Resource Management in recent years. The phrase

‘Performance Management’ was first coined by Beer and Ruth in 1976. It became recognized, as

a distinctive approach in mid 1980s, because of the growing realization that a more continuous

and integrated approach was needed to manage and reward performance.

Performance Management System is the process of performance planning, Performance

Monitoring and Coaching, Measuring Individual Performance linked to organizational goals,

giving him/her feedback, rewarding the individual based on his/her achievements against set

performance goals and required competencies, and working out a plan for his/her development.

(Dr. R K Sahu,2007)

. Sound PMS of an organization is directly related to the satisfaction of the employees.

Performance appraisal is always result based rather than be effort based. This sometimes leaves

the employees dissatisfied. However in case of good PM, the appraisal process must be

transparent which allows the employees to interact with their managers and clarify their queries.

84


Under a performance appraisal system employees must be able to see some benefits to them,

which is important for personal development of employees. This result in the employee

satisfaction, which increases productivity as the performance of an organization, depends

directly on the performance of its people. (Dr. R K Sahu, 2007).

84


OBJECTIVE OF STUDY

TO STUDY THE RELEVENCE OF “PERFORMANCE MANAGEMENT SYSTEM”

AT MOTHERSON SUMI SYSTEM LIMITED.

ORGANIZATIONAL BENEFIT OF PERFORMANCE MANAGEMENT SYSTEM.

RECOGNIZING THE TRAINING NEED & IDENTIFICATION OF TYPE OF

TRAINING.

TO SUGGEST VARIOUS METHOD TO IMPROVE ITS EFFECTIVENESS.

84


CHAPTER -2

84


RESEARCH METHODOLOGY

Research process includes research design, which tells about the nature of the study. Research

comprises defining and redefining problems, and suggested solutions, collection, organizing a

devaluating data, making deductions and reaching conclusion. This research is an exploratory

research.

Research DesignThe following procedure will be adopted in the project:

A survey of the employees at different levels at MOTHERSON SUMI SYSTEM LIMITED.

will be done with the help of a structured questionnaire.

Sample SizeThe sample size of the employees would be around 50.

Sources of Data CollectionThe study is primarily based on primary data. Secondary data is collected through company’s

records, books related to the topic, HR magazines and journals, and data from the Internet will

also be taken.

Analysis PatternAfter the collection of data from the primary and secondary sources that will be properly

arranged and tabulated to make analysis and interpretation.

84


CHAPTER-3

84


KEY FACTORS AFFECTING PERFORMANCE

Ability: Ability is one of the important factors affecting performance management system.

Performance Management of an employee depends upon the ability of an employee. The more

able the employee is, the more he/she is important to the organization. Character traits, skills and

knowledge, which are used in the performance, are termed as the ability of an employee. It is

always present and will not vary widely over short periods of time. Apart from ability many

people who are not motivated keep their performance to an acceptable level by expending only

20-30% of their ability. Managers who know how to motivate their employees can achieve 80-

90% ability levels and consequently higher levels of performance. The amount of effort i.e.

manual or mental energy that a person is prepared to expend on a job to reach a certain level of

performance varies according to incentive and motivation to the employee. (Likert, 1976)

Motivation: Motivation factors are present in the job itself. They include such things as

opportunity for recognition, achievement, and growth. Hence, a leader that recognizes employee

efforts and helps employees achieve and grow can help improve satisfaction, as long as pay is

perceived as fair.

Thus, regularly spending time with employees focusing on development and achievement adds

value.

Maslow and basic needs (1940s & 50s) - broader view extending beyond the work place.

Proposed a hierarchy of needs - the lowest level needs are dominant till satisfied and

performance is affected if the needs according to these levels are not taken care of which can

lead to the dissatisfaction of an employee.

84


Physiological (food, shelter)

Safety (insurance, security, protection from harm)

Love (peer groups, recreation, affection, acceptance)

Self- actualization (creativity, growth, achieving one’s potential)

Esteem (achievement, status, self respect, recognition).

Also Herzberg’s motivation theory focused on two factors, Motivation and Hygiene. Hygiene

factors such as pay if perceived as unacceptable lead to job dissatisfaction, if perceived as

acceptable lead only to a state of no dissatisfaction. Hence, a large raise may result in a

temporary euphoria, but would not lead to job satisfaction.

Career development: This indicates some key learning’s relevant for our study and has hence

been reproduced. While managing careers we are essentially managing a process of enhancing

performance of individuals and groups to help them contribute concretely towards enhancing

shareholder value. Careers are built in corporations where basics of people management are

adhered to with sincerity and commitment are made only when the intellect merges conclusively

with the commercial and cultural realities of an organization and this cannot happen unless

intellect is given its rightful place through effective performance appraisal. Ever since companies

decided that maybe they should measure how their workers are doing and give the better

performers a raise, employers have married employee performance appraisals with annual salary

reviews. Within a short period of time, the argument began over whether the two should be

linked and, if so, to what extent. One facet of that ongoing debate is whether the size of pay

increase differences makes a difference and whether increasing pay for good performance is a

motivator for even better work the next year

84


Feedback: Performance Management System cannot be effective without feedback. As a basic

human tendency people tend to make judgments about those working with them. In the absence

of a meticulously structured objective system of appraisal, people will tend to judge the work

performance of others, including subordinates informally and arbitrarily based on their likes,

dislikes, biases and prejudices. The multi rater feedback process is called 360 Degree Feedback.

The powerful process is perhaps one of the most effective and widely used initiatives to develop

leadership capability, identify potential, and develop strong bonds between teams and for

enhancing key competencies in organizations. The focus of a 360-Degree implementation today,

continues to be on development. Rarely do companies use it for performance appraisals, rewards

and recognition, collecting data on employees or succession planning.

Compensation: Compensation reviews are another matter. In a compensation review, the goal is

to establish the employee's value to the corporation, based on their duties and responsibilities,

potential, and their own financial goals. If employees have a great performance review, they're

going to expect a great compensation package, and that might be difficult. They may view

themselves and their worth higher than the company does, hence dissatisfaction. Any number of

factors can come into play in compensation review, including the company's economic health

and how much it can prudently afford to pay, as well as the employee's skill level,

responsibilities, and longevity– not only with the company, but in their current position. Some

companies have a salary range for various positions that can take experience, seniority, and skill

levels into account. But increases are frequently based more on the economy and how the

company's doing than on actual performance. Most leaders try to give larger increases to higher

performing employees, and smaller increases lower performers..

IN ESSENCE, Performance Management System is the most important tool for every

organization and there are several benefits that a PMS system can offer in making an

organization more efficient and effective. The biggest success factor in all our initiatives has

been the Management’s commitment to fostering a culture of transparency and collaboration,

without which no system can be effective, however good they are. (Robbins, Low, Morel ; 1986.

84


CONCEPTUALISATION OF STUDY

PERFORMANCE MANAGEMENT SYSTEM

DEFINATION:

It is defined as a process that consolidates goal setting, performance appraisal and development into single common system, the aim of which is to ensure that employee’s performance is supporting the company’s strategic aim. Performance management includes the practices through which the manager defines the Employees goal and work, develop the employee’s capabilities and evaluate and reward the personal effort all within the framework of how the employee’s performance should be contributing to achieving company’s goal.It refers to a comprehensive scientific approach to ensure a link between efforts of individual employees with vision and goals of the organization, to achieve excellence in the organization on one side and satisfaction and growth of employees on the other side.

WHY PERFORMANCE MANAGEMENT:

The increasing use of PERFORMANCE MANAGEMENT by employer reflects several things. It reflects the popularity of TOTAL QUALITY MANAGEMENT. PM emphasis on the integrated nature of goal setting, appraisal and development reflect this assumption.PM also aids the employee’s continuous improvement effort. It means that each employee must continuously improve his or her own personal performance from one appraisal period to next. Focus of Performance Management System is of development of mission and goal statement of the company that includes Development of business plan, Communicating goals and objectives toemployees, Defining role responsibilities, Defining and measuring individual performance, Defining performance standards and comparing them to Individual performance, Competency analysis, Continuous monitoring and 360° feedback Conducting performance and development reviews, Coaching and counseling and Rewarding and Performance problem solving areas its major components.

84


METHODOLOGY OF PMS:Employee’s performance management includes planning work and setting expectation developing the capacity to perform continuously monitoring performance and evaluating it.

PLANACT CHECK DO

84


SET INDIVIDUAL PERFORMANCE:

PLAN:

OBJECTIVE LINKED WITH ORGANIZATIONAL GOAL.

DO:

PERFORM AGAINST THE SET OBJECTIVE AND IDENTIFY ANY DEVELOPMENT OPPURTUNITIES.

CHECK:

CONTINOUSLY MONITER PERFORMANCE AND PROVIDE ONGOING FEEDBACK.

ACT:

DELIVER AGAINST THE SET OBJECTIVE AND FORMALLY EVALUATE THE INDIVIDUAL PERFORMANCE TO TAKE RELEVENT CONSEQUENCE MANAGEMENT ACTION WRT PRAMOTION /INCREMENT/IMPROVEMENT PLAN.

FOCUS OF THE PROBLEM

The study focuses on understanding and effectiveness of Performance Management System in Motherson sumi system Limited. The study throws light on the positive impact and motivating employees with the performance management system to build the necessary commitment for the organization.

84


PMS – METHODOLOGY:

PMS process consists of four steps:

1. Goal setting

2. Monitoring and feedback

3. Rewards and recognition

4. Learning and development

1. SETTING GOAL:

Setting goal to achieve organizational objective.

Helping people to understand goals.

What need to be done?

How will it be measured?

2. MONITORING AND FEEDBACK:

Conduct review and give feedback.

How well are employees are meeting there goal.

Address issues on performance during the appraisal period.

3. REWARD AND RECOGNITION:

Monitory / non monitory

4LEARNING AND DEVELOPMENT:

Developmental needs are identified, agreed and planned for.

Learning and developmental opportunities provided.

84


PMS – YEARLY CYCLE:

JANUARY

84


MANAGERS ROLE IN PMS:Managers play a crucial link between organization and individual employees. Their action and

attitude are key drivers for the success of any performance management system. The manager’s

role in PMS described below:

Set goals for employees.

Create clear expectation for employees

Provide honest and timely feedback.

Be fair , reasonable and consistent

Work towards employees growth and development

Communicate honestly and directly.

Provide opportunities for learning through coaching.

EMPLOYEES ROLE IN PMS:The role of employees in the performance management system is equally critical as that of

manager. The employee’s role is described below:

Ask question so as to understand clearly what is expected.

Involve and participate in goal setting exercise.

Perform work as per assign standard.

Take charge of your own development.

Create opportunities to seek and give feedback to your manager.

84


SETTING GOALS:Goals have to be S.M.A.R.T.

S- SPECIFIC – set clear concrete goal.

M- MEASURABLE- quantity, quality, cost and time

A- ACHIEVABLE- realistic should stretch you.

R- RESULT ORIENTED- Deliverable, accomplishments.

T- TIME BOUND- deadliness, dates.

FOR EXAMPLE:

“TO ESTABLISH ALTERNATE VENDORS FOR TOP 10 CRITICAL

ITEMS FOR HOME UPS LINE OF PRODUCTS BY JUNE 2007”

EMPLOYEES APPRAISAL PROCESS:The performance will be assessed as per various parameters set in “performance management

system”. These are:

1. Assessment of performance against goal.

2. Assessment of skills and knowledge.

3. Assessment of attributes and behavior.

1. ASSESSMENT OF PERFORMANCE AGAINST GOAL:

The performance for the year is assessed on the basis of RESULT/ DELIVERABLES

achieved by end of the year against the goals.

2. ASSESSMENT OF KNOWLEDGE AND SKILLS:

Assessment of knowledge and skills is based on:

Professional and technical knowledge.

Professional and technical skills.

84


Communication skills.

Creativity and innovation

Leadership skills.

3. ASSESSMENT OF ATTRIBUTES AND BEHAVIOR:

Assessment of attributes and behavior is based on:

Personal conduct

Honesty and integrity

Attitude to work

Dependability

Loyalty

WEIGHTAGES:

Weightage allocated to each objective. The total of the entire objective comes to 100%.

The weightage allocated are;

INDIVIDUAL PERFORMANCE:

Against agreed goals / objective which carries a weightage of 40%.

INDIVIDUAL’S KNOWLEDGE AND SKILLS:

The application of skills and knowledge carries a Weightage of 35%.

INDIVIDUAL ATTRIBUTES AND BEHAVIOUR:

The demonstration of behavior / attributes carries a Weightage of 25%.

84


LEVEL AT MSSL:

There are different levels at MSSL, these are describe as:

1. STAFF: DRIVERS, ELECTRICIAN, PEON, COOK, FIELD ASSISSTANT,

WIREMAN, TESTER, TESTING ENGINEER, TECHNICIAN.

2. LEVEL 1: ASST. MANAGER, EXECUTIVE, and SERVICE ENGG. OFFICER.

3. LEVEL 2: SENIOR MANAGER / MANAGER.

4. LEVEL 3: GM / DGM.

5. LEVEL 4: V.P

6. LEVEL 5: CEO, DIRECTOR.

PERFORMANCE ASSESSMENT:The performance of an employee is measured through series of steps. There are

Various step involved in it. The first being the SELF- ASSESSMENT FORM, the

second being the KRA REVIEW FORM, and the final being the COMPETANCY

REVIEW FORM. At different levels there is different type of form

EXPLANATION:There are three parts for assessing the employee’s performance. PART A- self- appraisal, PART

B- KRA evaluation sheet, and PART C- Competency review form. The detail of which is

described below:

1. PART A – SELF APPRAISAL:

84


This is to be filled by the employee himself. This is filled in order to have a

review of the employee’s capabilities. This form is reviewed and the employee’s strong

points according to him are viewed.

For example:

“WHAT DO YOU THINK HAS BEEN YOUR MOST IMPORTANT

CONTRIBUTION TO THE DEPARTMENT OR ORGANIZATION IN LASTR YEAR?”

This form basically shows what employees feel that he has done in the last year.

2. PART B- KRA EVALUATION SHEET:

Key result areas are such critical areas of performance, which Though constitute few in number, would have major impact on business/ targets of the Units / function. KRA setting is the process that converts organizational Objectives into employee objectives. KRA setting for the next year should be done jointly between appraiser and appraisee and keeping in mind the resources and action that may be required for successful completion the targets, the agreed KRA become the standard against employee’s achievement will be evaluated. KRA setting helps in role/KRA clarity and regular review of progress made.

3. PART C- COMPETANCY REVIEW FORM:

This is also termed as “performance assessment rating form”. In this form the performance of the employees is judged on certain parameters. The parameters being:

“Job knowledge and skills, innovation and creativity, energy, act with integrity and work habits, compliance to system and procedure, credibility and ethics, work output and its quality, focus on result, team work, and self accountability. Towards the end of the form total score is given there which is average of the score of parameter, and accordingly ranking is given.In the excel sheet than the following data are entered i.e. the KRA rating and the performance evaluation sheet and accordingly the software derived the desired ranking and accordingly the appraisal and salary correction is done.

84


S No Competency Competency Descriptor

1 Job Knowledge & Skill Knows the fundamentals of his job and is able to apply his knowledge and skill to effectively accomplish the task

2 Quality of output Demonstrates accuracy and thoroughnessDisplays commitment to excellenceMonitors own work to ensure quality

3 Focus on Result Sees obstacles as challenges and approaches them with a positive “can-do” attitude,Keeps functioning effectively under critical and tight deadlines, heavy workloads,and/or other pressures

4 Planning & Organising Skill

Establishes a systematic course of action for self determines priorities and allocates time and resources effectively to ensure accomplishment of a specific objective.

5 Initiative & Innovation Identifies what needs to be done and takes action before being askedDevelops better, faster, or less expensive ways to do things

6 Interpersonal Relationship

Relates well with others. Anticipates and resolves confrontations, disagreements, and complaints in a win-win way.

7 Communication Skills Presents ideas and proposals in a structured manner to effectively communicate the intended message. Demonstrates willingness to share ideas and encourages others to do the same.

8 Reliability/Dependability Demonstrates a consistent effort to be on the job, carrying out instructions, and fulfilling responsibilities

9 Credibility and Ethics Honors his own commitmentsIs honest and forthrightTakes responsibility for his mistakes, Does not blame others

10 Openness to Learning Pursues self-developmentSeeks opportunities to acquire new

84


RATINGS:

1. POOR: Performance falls below the minimum requirement. not likely to meet the performance of competent employee.2. BELOW AVERAGE: Does not fully meet the requirements. Excessive supervision required.3. AVERAGE: Adequate performance, meets requirement. Need push to perform better.

4. ABOVE AVERAGE: Consistently higher performance than expected. Challenging assignments are normally handled.

5. OUTSTANDING: Exceptional performance which leaves nothing to be desired. Challenging assignment consistently well handled.

PERFORMANCE RATING:The Ratings will be defined as follows:

Rating Description For KRA achievement

For competency Assessment

1 Below Average Performance is below expected level

Does not sufficiently demonstrates skill and behavior required for effectiveness in current role

2 Average Minimum job requirements are met, needs improvement

Partially demonstrates skill and behavior required for effectiveness in current role

3 Good Performance is up to the expected level

Regularly demonstrates skill and behavior required for effectiveness in current role

84


4 Very Good Consistently exceeds expected level of performance. Strong potential for future growth.

Consistently demonstrates skill and behavior which surpass those required for effectiveness in current role. Strong potential for future growth.

5 Excellent Achievements are rarely equaled. Strong potential for fast track growth.

Demonstrates exemplary skill and behavior in all situations, far above that required for effectiveness in current role. Strong potential for fast track growth.

FORCED DISTRIBUTION OF PERFORMANCE RATING:

The distribution of final rating in any department/function will be on the following pattern:

Excellent Very Good Good Average Below Average

Not more than 10%

Not more than 20%

Not more than 50%

Not less than 20%

Not less than 5%

PERFORMANCE RATING & PROMOTION REVIEW COMMITTEE

The review committee at Head Office will review all the ratings and recommendations for comparative analysis to avoid major disparities within and across departments.The committee will consist of the departmental/functional Head and Director-HR.Performance Rating of all Managers and above and promotion recommendations Of Assistant Manager and above will also be reviewed by the CEO

84


WEIGHTAGES:

MANAGEMENT LEVEL

GRADES AVERAGE OF KRA AND PERFORMANCE REVIEW

COMPANY PERFORMANCE

SENIOR MANAGEMENT

SM1 TO SM6 25% 75%

MIDDLE MANAGEMENT MM1 TO MM4 40% 60%

JUNIOR MANAGEMENT EC 1 TO EC 3 70% 30%

STAFFS4 & S5

80% 20%

Thus according to this weightage the appraisal of an employee is decided. If he is Senior management rank than his performance weightage is 25% and companyperformance 75% is taken into account for appraising any employee in seniorManagement cader. In others words the pay rise depend on both the individual performance and the company performance.

84


ANNUAL INCREMENT: PERIODICITY & CYCLE OF INCREMENT

o Increment cycle would be on financial year basis, i.e., April to March.

o Increments and promotions would be effective from 01st of April.

ELIGIBILITY

o Increment would be given to all confirmed employees as of 31st March.

o Increments would also be given to employees whose last increment was effective from 01st October 2006 or before that on pro-rata basis.

o All functional heads will give performance rating and promotion recommendation

in the performance appraisal form for employees in their department which will be used for giving annual increments.

o Trainees and probationers will be eligible for performance review and increment in the next review cycle only.

QUANTUM OF INCREMENT:

o A fixed percentage increase in CTC will be given as annual increment depending upon the performance rating as per the table below:

Rating %age increase in CTCExcellent 20%Very Good 15%Good 10%Average 6%Below Average No Increment

o Employees across the level and function will get the same percentage increase if their performance rating is same.

84


o Quantum of increment will be on pro-rata basis depending up on the date of joining or date of last increment.

o In case an employee does not get any increment because of ineligibility as mentioned above, he will get increment in the next increment cycle for the entire period.

SALARY CORRECTION

o Over and above performance based increment, salary correction would also be considered depending upon the role and criticality of the position and to bring internal equity.

However, such cases has to be strictly restricted

PROMOTION GUIDELINES:

An employee to become eligible for promotion has to fulfill the following criteria:

o All promotions will be subject to vacancy at higher level. No promotion will be approved if the person continues performing the same nature of job.

o Has undergone two review cycle and has been rated either “Excellent” or “Very Good

o Has made significant contribution in his function which is not normally expected.o Has demonstrated potential for vertical growth, high degree of ability to work

independently and shoulder higher responsibilityo For promotion from Level 2 and above, should have demonstrated high degree of

strategic thinking and business leadership capability.

84


BENEFIT

Benefit to Employees Has an understanding of the expectations of the organization in terms of performance Employee’s performance and contributions are aligned with larger organizational goal. Employee knows how he is performing through periodic feedback

Benefit to Organization Ensures a realistic link between performance, recognition and reward Helps build a uniform focus across the organization Fosters leadership role in a Manager to counsel and coach his employees Improves communication top down.

84


TYPES OF ERROR IN PMS:TYPES OF ERRORS –

While evaluating performance of the candidate under the PMS few types of error can take place that are as follows –

STRICTNESS ERROR:

It occurs when the appraiser artificially assigns all or certain group of employees’ low performance ratings and consequently all or certain scores cluster at the bottom of the rating scales.

CENTRAL TENDENCY:

It is the tendency of the appraiser to avoid using the extremes of rating scales and to cluster the ratings around the mid point.

SPILL OVER EFFECT:

It is the tendency of the appraiser to carry in mind the past performance of the appraise in view while making evaluation on the present Performance.

RECENCY EFFECT:

Some times the raters assign ratings on the basis of recent behavior they have seen in their appraises forgetting about past behavior over a period. This is called recency effect.

After performance evaluation system we find source for the type of training to be given to

employees. According to the review of performance assessment we recognize the type of

training the employee need for his development. The departmental head gives the feedback

regarding the performance of the employees and accordingly the HR department reviews the

assessment and provides the type of training the employee required. Sometime the employee

himself mentions the type of training he or she needs. Training the important part for

development of any employee as it help to increase the knowledge of the employee in the area he

was lacking.

84


COMPANY PROFILE

The Sumi Motherson Group is a focused, dynamic and progressive group providing customers

with value added products, services and innovative solutions.

Established in 1975, the group has a turnover of US$ 625 million (2006-2007) and has

manpower over 20000 personnel.

Motherson Sumi System Limited (MSSL), the flagship company of Sumi Motherson Group a

joint venture between Sumitumo Wiring System / Sojitz Corporation, Japan and the

Motherson Group, MSSL is pioneer in manufacturing integrated wiring Harness and is the

market leader with over 50% share of Indian automotive market.

One of the leading names in Indian auto ancillary industry, the Group has core competencies in

manufacturing of Electrical Distributions Systems (EDS) and Polymer Processing. These

competencies are supported by specialization in Engineering Design, Information Technology,

Tool Manufacturing and Metal Machining. The Group has collaborated with global technology

leaders and adopted vertical backward integration in key areas.

The Group provides totally integrated solutions starting with designing from first principles to

delivering fully engineered higher levels modules for a wide range of applications to customers

across different industries.

MSSL offers to its customers the advantages of vertical backward integration for all critical

inputs and a full service supplier offers full system solution including design from 1 st principles

to prototyping mass production and logistics MSSL. MSSL has manufacturing facilities in

Noida, Delhi, Gurgoan, Pune, Bangalore, Nasik, Chennai and Faridabad.

84


WIRING HARNESS

Wiring harness is an assembly of wires bundled by tapes having terminals, housings caps, tubes

etc. to give electric connection to all parts of an automobile.

Power from battery is transmitted to various units throughout the vehicle with the aid of Wiring

Harness. For example – from switch to units like Head Light, Brake Light, Horn etc.

It functions like the blood circulation system of the Human Body.

WIRES

HOUSINGGgGS

TERMINALS

GROMMETS

CLAMPS

84


WIRING HARNESS PROCESS FLOW

Cutting & Stripping

Parts Fitting

Splicing

Joint Taping

Sub Assembly

Crimping

Joint Crimping END

START

Dispatch To

Customer

Ckt. Insp.

Visual Insp.

Final Assembly

84


Partners in the Sumi Motherson Group:

Anest Iwate Corporation (Japan)

Centre tooling mold makers Ptd Limited

Kyungshin Industrial Co. (S. Korea)

Lisa Draeximaier (Germany)

Nissho Iwai Corporation (Japan)

Schefenacker Internationai (Germany)

Sumitomo Wiring System Ltd (Japan)

Wickmann Werke GmbH (Germany)

Wilhefm Pudenz GmbH (Germany)

Woco Franz Josef Wolf and Co. (Germany)

Balda AG (Germany)

K E Protec (Japan)

Woco Industrietechnik GmbH (Germany)

Visicorp plc (UK)

Webasto AG (Germany)

Group Highlights:

It is the largest manufacturer of Automotive Wiring Harness in India, (65% share of

Passenger Car Market).

It is the largest manufacturer of Automotive Rear View Mirrors, (40% share of Passenger

Car Market).

It is the largest manufacturer of automotives wires in India.

It provides only facility of its kind to manufacture blade type-Auto motive fuses in India.

It is the leading manufacturer of injection molding components/ plastics and rubber

components.

http://www.motherson.com/Partners.html#%23





84


It provides state of the art tool room facility.

Group Vision:

To be a Globally Preferred Solutions Provider.

Group Mission:

Ensure customer delight.

Involve employees as partners in progress.

Set new standards in good corporate citizenship.

Enhance shareholders value.

Values:

We are building a robust organization that will help us consistently deliver superior operating

and financial results,

Be a lean / responsive and learning organization.

Continuously improving to achieve world-class standards and total customer satisfaction.

Proactively manage change.

Maintain high standards of integrity and safety.

Ensure a common culture and a common set of values throughout the organization.

Recognize individual’s contributions.

Develop stronger leadership skills, greater teamwork and a global perspective.

84


Overview of MSSL:

The Flagship Company of Sumi Motherson Group.

A Joint Venture with Sumitomo Wiring Systems Ltd, Japan-the third largest automotive

wiring harness manufacturer in the world.

A limited company listed on major stock exchanges.

Among the fastest growing auto ancillary companies in India.

Market Leader in Automotive Wiring Harness in India, supplying to all the leading automobile

manufacturers.

Full Service Supplier-Complete in –house design capability.

People Focus –Highly skilled & trained manpower.

Vertical backward integration –Well established resource base and infrastructure.

Over 13000 Types of Wiring Harness Produced Annually.

Over 24000 Types of Components Handled in Manufacturing.

20 Manufacturing Units.

Over 20 Million Wiring Harnesses Produced Annually.

Industries Served:

Automotive

4-Wheelers

2 & 3 Wheelers

Modules Suppliers

Tractors & Farm Equipment

Material Handling & Earthmoving Equipment

Whitegoods

Medical Diagnostics Equipment

Electrical & Electronics

84


Organization Structure:

A flat central organization structure with Strategic business unit concept where each SBU has its

own hierarchy and growth potential.

Chairman

COO

ProductEngineering

VendorDevelopment

ManufacturingMarketing & International

Business

Finance &Accounts

CorporateCommunication

ITHRMQuality

SBU

SBU

SBU

SBU

SBU

SBU

SBU

SBU

SBU

SBU

SBU

84


CHAPTER-4

84


QUESTIONNAIRE

ANALYSIS

84


Ques1. PLEASE INDICATE THE EXTENT TO WHICH YOU AGREE/ DISAGREE WITH THE FOLLOWING STATEMENTS:

A) PERFORMANCE RELATED PAY IS AN ESSENTIAL PART OF PERFORMANCE MANAGEMENT (PM).

B) THE FOCUS OF PM SHOULD BE DEVELOPMENTAL

84


C) THE MAIN OBJECTIVE OF PM SHOULD BE TO MOTIVATE INDIVIDUALS.

D) PM DISTRACTS PEOPLE FROM MORE IMPORTANT CORE ACTIVITIES

84


E) PM SHOULD BE DISTANCED AS FAR AS POSSIBLE FROM COMPENSATION.

F) PM IS ABOUT INDIVIDUAL AND THEIR LONG TERM DEVELOPMENT

84


G) PM DOES NOT HELP TO DEVELOP CAREERS ONLY BUT ALSO IMPROVE WORK PERFORMANCE

H) PM IS ABOUT DECIDING HOW MUCH TO PAY PEOPLE

84


I) PM PROVIDES A WAY OF KEEPING A RECORD OF AN INDIVIDUAL”S PROGRESS AND PERFORMANCE

J) PM IS ABOUT GETTING PEOPLLE TO WORK HARDER

84


K) PM HAS NO VALUE FOR INDIVIDUALS, ONLY FOR ORGANISATION

L) PM MOTIVATES PEOPLE AND MAKES THEM FEEL PART OF THE ORGANISATION

84


QUES 2. PLEASE INDICATE WHICH OF THE FOLLOWING FEATURES OF PM PROCESSES ARE INCLUDED IN YOUR ARRANGEMENTS, AND HOW EFFECTIVE YOU BELIEVE THIS TO BE.

A. ANNUAL APPRAISAL

0

10

20

30

40

50

60

70

Are a Feature Very Effective Partly Effective

Perc

enta

ge

B. BI-ANNUAL APPRAISAL

0

10

20

30

40

50

60

70

Are a Feature Very Effective Partly Effective Not Effective

Perc

enta

ge

84


C) 360 DEGREE FEEDBACK

0

5

10

15

20

25

30

35

40


Perc

enta

ge

D) PEER APPRAISAL

0

10

20

30

40

50

60

70


Perc

enta

ge

E) SELF APPRAISAL

84


0

10

20

30

40

50

60

70

80

90

100

Very Effective Partly Effective

Perc

enta

ge

F) SUBORDINATE FEEDBACK

0

10

20

30

40

50

60

70

80

Very Effective Partly Effective Not Effective

Perc

enta

ge

84


G) COMPETENCY ASSESSMENT

0

10

20

30

40

50

60

70

80


Perc

enta

ge

H) OBJECTIVE SETTING AND REVIEW

0

10

20

30

40

50

60


Perc

enta

ge

84


I) PERFORMANCE RELATED PAY

0

10

20

30

40

50

60

70


Perc

enta

ge

J) COACHING & MENTORING

0

10

20

30

40

50

60


Perc

enta

ge

K) CAREER MANAGEMENT

0

5

10

15

20

25

30

35


Perc

enta

ge

84


L) PERSONAL DEVELOPMENT PLANS

0

5

10

15

20

25

30

35


Perc

enta

ge

QUES.3. WHAT DO YOU UNDERSTAND BY THE TERM PERFORMANCE MANAGEMENT? A) PERFORMANCE APPRAISAL OR REVIEW

0

10

20

30

40

50

60

70

80

90

yes no

Perc

enta

ge

84


B) REGULAR MEETINGS WITH BOSS TO REVIEW PROGRESS

0

10

20

30

40

50

60

yes no

Perc

enta

ge

C) ASSESSMENT OF TRAINING AND DEVELOPMENTAL NEEDS

0

10

20

30

40

50

60

70

80

yes no

Perc

enta

ge

84


D) PERSONAL DEVELOPMENT PLANS

0

10

20

30

40

50

60

70

yes no

Perc

enta

ge

E) PAY BASED ON PERFORMANCE RATINGS

0

10

20

30

40

50

60

yes no

Perc

enta

ge

84


QUES 4 HAVE YOU CARRIED OUT ALL THE REQUIREMENTS OF YOUR OWN ORGANISATION’S PM ARRANGEMENTS IN THE LAST YEAR.

QUES 5 IF YES, WHAT ACTIONS WERE CARRIED OUT AS A RESULT?

A) IMPLEENTED A PROGRAMME OF SELF DEVELOPMENT.

0

10

20

30

40

50

60

70

80

90

yes no

Perc

enta

ge

84


B) RECEIVED A PAY RISE

44

45

46

47

48

49

50

51

52

53

54

yes no

Perc

enta

ge

C) IDENTIFIED CAREER DEVELOPMENT

44

45

46

47

48

49

50

51

52

53

54

yes no

Perc

enta

ge

84


D) AGREED IMPROVEMENTS TO BE DONE

0

10

20

30

40

50

60

yes no

Perc

enta

ge

QUES 6 PLEASE INDICATE THE EXTENT TO WHICH YOU AGREE OR DISAGREE WITH THE FOLLOWING SATATEMENTS

A) I HAVE THE AUTHORITY TO DETERMINE MY WORK OBJECTIVES

84


B) I RECEIVE A LOT OF FEEDBACK ON MY PERFORMANCE

C) THE MOST IMPORTANT THING ABOUT MY JOB IS PAY

84


D) HARD WORK IS NOT NECESSARILY RECOGNIZED OR REWARDED IN MY ORGANIZATION.

84


E) MY ORGANISATION VALUES MY CONTRIBUTION

F) I FULLY UNDERSTAND MY ORGANISATIONAL GOALS AND OBJECTIVES

84


G) I KNOW WHAT IS EXPECTED OF ME BY MY ORGANISATION

H) MY WORK OBJECTIVES ARE UNREALISTIC AND DIFFICULT TO ACHIEVE

84


I) I HAVE THE AUTONOMY OVER THE WORK I PERFORM

J) MY ORGANISATION IS COMMITTED TO MY TRAINING AND DEVELOPMENT

84


K) MY ORGANISATION COMMUNICATES WELL

L) MY WORK COLLEAGUES AND I HAVE RESPECT FOR EACH OTHER

84


M) I FEEL I AM CONSTANTLY BEING COMPARED WITH MY WORK COLLEAGUES

N) MY WORK COLLEAGUES AND I WORK AS A TEAM

84


QUES 7 PLEASE INDICATE THE EXTENT TO WHICH YOU AGREE AR DISAGREE WITH THE FOLLOWING STATEMENTS REGARDING PM AS IT APPLIES TO YOU

PERSONALLY IN YOUR CURRENT ROLE.

A) PM HELPS ME TO DO MY JOB BETTER

0

5

10

15

20

25

30

35

40

45

50

Strongly Agree Slightly Agree Slightly Disagree

Perc

enta

ge

B) PM HELPS ME TO DEVELOP MY SKILLS & POTENTIAL

0

10

20

30

40

50

60


Perc

enta

ge

84


C) THE OBJECTIVE & PERFORMANCE STANDARDS AGREED WITH MY MANAGER ARE REALISTIC

0

10

20

30

40

50

60


Perc

enta

ge

D) I GET USEFUL FEEDBACK FROM MY PM REVIEW

0

10

20

30

40

50

60


Perc

enta

ge

84


E) ASSESSMENT OF MY PERFORMANCE STANDARDS ARE CONSISTENT, FAIR AND UNBIASED

0

10

20

30

40

50

60

70

80

90

Strongly Agree Slightly Disagree

Perc

enta

ge

F) I FEEL MOTIVATED AFTER A REVIEW MEETING

0

5

10

15

20

25

30

35

40

45

50

Strongly Agree Slightly Agree Slightly Disagree Strongly Disagree

Perc

enta

ge

84


G) I DO NOT UNDERSTAND HOW MY BOSS DECIDES MY RATING

0

5

10

15

20

25

30

35

40


Perc

enta

ge

H) BOSSES GIVE THE BEST RATING TO PEOPLE THEY LIKE

0

10

20

30

40

50

60


Perc

enta

ge

I) I FULLY UNDERSTAND HOW MY OBJECTIVES & STANDARDS RELATE TO THE BUSINESS NEEDS

0

10

20

30

40

50

60

Strongly Agree Slightly Agree

Perc

enta

ge

84


J) I HAVE RECEIVED ADEQUATE TRAINING IN PM

0

5

10

15

20

25

30

35

40


Perc

enta

ge

K) TIME SPENT ON PM IS WORTH WHILE

0

10

20

30

40

50

60

70

80


Perc

enta

ge

84


CHAPTER-5

84


FINDINGS

From the various graphs and diagrams we are able to judge a few things that employees feel about the current performance appraisal process. These findings are based on the total research process and the analysis. These findings will help to make recommendations that could be implemented to improve and increase efficiency of the system.

According to employees:

Pay is an important part of performance management.

Performance management slightly distracts people from more important core activities.

They feel that performance management should not be distanced as far as possible from compensation

Performance management helps improve performance also along with developing careers.

People strongly agree that performance management has value for individuals along with the organization.

Performance management motivates people.

They think that annual appraisals are more effective than bi-annual appraisals.

Self-appraisal plays a very important role.

The first and foremost step of performance management system should be objective setting.

Coaching and mentoring should be introduced in a system.

84


Performance management according to them includes: Performance appraisal Assessment of training and developmental needs Personal development plans Pay based on performance ratings.

Around 90% of the employees surveyed carried out the requirements related to performance management and as a result received a pay rise, agreed improvements to be done.

Employees at MSSL have the authority to determine their work objectives.

Employees disagree that the most important thing about their job is the pay.

They agree that hard work is recognized or rewarded in their organization.

Employees slightly disagree that the organization is committed to their training and development.

Employees agree that performance management develops their skills and potential.

84


CHAPTER-6

84


LIMITATIONS OF THE STUDY

1. The scope of the project is limited to the Motherson Sumi System Ltd.

2. The time for the project is not sufficient to undergo all the procedures.

3. Employees may face time constraint while giving information.

4. Budget might be a constraint

84


CONCLUSION

Performance management system should be developed in order to improve th over all

performance of employees. It should include the following steps:

a) Performance planning b) Performance monitoring or review c) Performance rating d) Performance rewarding e) Performance developing

A) PERFORMANCE PLANNING

It enables the employees to develop role clarity and provides a sense of direction. It also provides

a norm or standard against which employees can review their performance.

Objective:

I. To set clear performance goals for each employee. II. To ensure commitment to perform

III. To enable objective performance appraisal

B) PERFORMANCE MONITORING / REVIEW

Monitoring well means consistently measuring performance and providing ongoing feedback to

employees and work groups on their progress toward reaching their goals. The performance

review should be conducted quarterly by the immediate superior to encourage performance, for

raising the resources or for any course corrections in which the appraisee will offer his

assessment of accomplishment of the activities. He would analyze his performance by

identifying the Facilitating and Inhibiting factors.

The Facilitating factors are those factors, which have helped in accomplishing the

objective.

The Inhibiting factors are those factors, which have prevented accomplishing the

objectives.

This will include self-appraisal and performance appraisal.

84


Objective:

I. To assess accomplishment of the planned goals/ targets/ activities.

II. To provide a rational basis for rewards

III. To identify training and development needs

C) PERFORMANCE RATING

Rating means evaluating employee or group performance against the elements and standards in an employee’s performance plan and assigning a summary rating of record.

Objective:

I. Final assessment in the form of ratings or assignments of points becomes very useful for development as well as administrative

decisions

II. Once the ratings are available, it is easy to identify individuals who can perform certain functions well or those who have demonstrated certain managerial and human capabilities

D) PERFORMANCE REWARDING

Rewarding means recognizing employees, individually and as members of groups, for their

performance and acknowledging their contributions to the organization’s mission. Rewards

should be in monetary as well as non-monetary terms. Rewards having recognition / prestige but

having no financial value should be envisaged for those types of exemplary performance which

may not have a bearing on the Performance appraisal ratings directly. This may be in the form of

appreciation (in writing) by superior, or head of the division.

84


Objective:

I. To provide motivation for sustaining / improving performance. II. To ensure that annual increments are strictly on the basis of merit i.e.

performance against targets.

PERFORMANCE DEVELOPMENT

Developing in this instance means increasing the capacity to perform through training, giving

assignments that introduce new skills or higher levels of responsibility, improving work

processes, or other methods. Giving them appropriate training sessions should develop those

employees who have failed to give desirable results. Providing employees with training and

developmental opportunities encourages good performance, strengthens job-related skills and

competencies, and helps employees keep up with changes in the workplace, such as the

introduction of new technology. Performance development plans should be made in order to

improve employees overall performance.

84


CHAPTER-7

84


BIBLIOGRAPHYSOURSES are:

Websites www.google.comwww.citehr.comwww.ask.comwww.articles911.com

Magazines

Human capitalicfai journals

Books:

which are full of information on performance appraisal System and its tool are also secondary data for the research.

http://www.articles911.com/

http://www.ask.com/

http://www.citehr.com/

http://www.google.com/

An in-Depth Study of Performance Management System

Documents

Transcript of An in-Depth Study of Performance Management System