Effectiveness of Performance Appraisal

EFFECTIVENESS OF PERFORMANCE APPRAISAL

A STUDY ON EFFECTIVENESS OF PERFORMANCE APPRAISAL SYSTEM IN SIDCO

DECLARATION

I, Riju Manaf do hereby declare that this project report in Effectiveness of Performance Appraisal system in SIDCO submitted by me in partial fulfillment of the award of degree of MASTER OF BUSINESS ADMINISTRATION of UNIVERSITY OF KERALA is my original work and has been prepared under the guidance of Assistant Professor: Shamini BijoyI also declare that this project has not been submitted by me fully or partially for the award of any degree diploma or recognition.

NeyyardamRiju Manaf26-05-2011Reg No.

ACKNOWLEDGEMENTAs a part of the curriculum of the fourth semester MBA of University of Kerala, it has been my great pleasure to work in SIDCO. as a project trainee.This project report has been made possible through the direct and indirect cooperation of various person to whom I would like to express my deep felt appreciation and gratitude. First of all I express my profound gratitude to the Lord almighty for the inspiration and guidance throughout this project.I hereby extend my sincere gratitude and thanks to the staff of SIDCO for providing valuable assistance, information and adequate data. I wish to thank Mr. Anil Kumar, production manager and all other staffs of SIDCO for their kind co-operation for the completion of the projects.I am extremely grateful and indebted to Mr. Shamini Bijoy, Assistant Professor, Kerala Institute of Cooperative Management, for having consented to be my project guide and without whose co-operation the project would have real difficult to complete.Finally I am also highly indebted to my parents for the financial as well as emotional support.Riju Manaf

CONTENTSi NoParticularsPage No

Section-I

(a)Declaration1

(b)Certificate From the Company

(c)Certificate From the College

(d)Acknowledgement2

(e)Table Of Content3

(f)List Of Table4

(g)List Of Figures6

Section-II

Chapter 1Introduction9

Chapter 2Research Methodology12

Chapter 3Industry Profile15

Chapter 4Company Profile28

Chapter 5Literature Review41

Chapter 6Data Analysis And Interpretation51

Chapter 7Finding And Suggestions97

Chapter 8Conclusion101

Section-III

Bibliography103

Appendix105

LIST OF TABLES

TABLE NOTITLEPAGE NO

4.1 Distribution of age wise profile of the Employee53

4.2 Distribution of Gender of Employee55

4.3 Distribution of experience of the employee57

4.4Distribution of Income of Employee59

4.5 Distribution of familiarity with the present performance appraisal system61

4.6Distribution of employees opinion considered for appraisal63

4.7 Distribution of interval at which performance is measured65

4.8 Distribution of effectiveness of various attributes67

4.9Distribution of present performance appriasal system helps to identify the strength and weakness69

4.10 Distribution of weakness of the employee is communicated in a non threatning manner71

4.11 Distribution of appraisal system provides an opportunity for self evaluation73

4.12 Distribution of company used to give feedback after the appraisal of your performance75

4.13 Distribution of present performance appraisal system is time consuming77

4.14Distribution of system gives idea of what is expected him by the management79

4.15Distribution shows Chi-Square test (Performance appraisal increases employee motivation) 81

4.16 Distribution of rater have the clear knowledge of that employees job82

4.17Distribution of performance appraisal system helps to improve performance84

4.18 Distribution of rewards are given according to performance86

4.19Distribution of satisfaction of employees for the appraisal system88

4.20 Distribution of objectives of performance appraisal are fair and unclear to the subordinates90

4.21Distribution of management provides counseling after the appraisal92

4.22 Distribution of management provides training after the appraisal94

LIST OF FIGURES

FIGURENOTITLEPAGE NO

4.1Diagram showing the distribution of age wise profile of the Employee54

4.2Diagram showing the distribution of Gender of Employee56

4.3Diagram showing the distribution of experience of the employee58

4.4Diagram showing the distribution of Income of Employee60

4.5Diagram showing the distribution of familiarity with the present performance appraisal system62

4.6Diagram showing the distribution of employees opinion considered for appraisal64

4.7Diagram showing the distribution of interval at which performance is measured66

4.8Diagram showing the distribution of effectiveness of various attributes68

4.9Diagram showing the distribution of present performance appriasal system helps to identify the strength and weakness70

4.10Diagram showing the distribution of weakness of the employee is communicated in a non threatning manner72

4.11Diagram showing the distribution of appraisal system provides an opportunity for self evaluation74

4.12 Diagram showing the distribution of company used to give feedback after the appraisal of your performance76

4.13Diagram showing the distribution of present performance appraisal system is time consuming78

4.14Diagram showing the distribution of system gives idea of what is expected him by the management80

4.15Diagram showing the distribution of rater have the clear knowledge of that employees job83

4.16

Diagram showing the distribution of performance appraisal system helps to improve performance85

4.17 Diagram showing the distribution of rewards are given according to performance87

4.18Diagram showing the distribution of satisfaction of employees for the appraisal system89

4.19Diagram showing the distribution of objectives of performance appraisal are fair and unclear to the subordinates91

4.20Diagram showing the distribution of management provides counseling after the appraisal93

4.21Diagram showing the distribution of management provides training after the appraisal95

CHAPTER IINTRODUCTION

IntroductionAlmost every organization in one way or another goes through a periodic ritual, formally or informally, known as performance appraisal. The formal performance appraisal has been called a tool of management, a control process, an activity and a critical element in human resources allocation. Uses for performance appraisal have included equal employment opportunity considerations, promotions, transfer and salary increases. Primarily performance appraisal has been considered an overall system for controlling an organization. Performance appraisal has also been called an audit function of an organization regarding the performance of individuals, groups and entire divisions.Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

Statement of the problem:Industrial organizations use systematic performance appraisal procedures for both non-supervisory and managerial employees. Need for performance appraisal system is as follows: It helps the supervisor to evaluate the performance of his employees systematically and assign that work in which they are best suited.

It helps in guiding and controlling the behavior as well as the work of the employees.

The ability of the staff is recognised and can be adequately rewarded.

It provides information to diagnose deficiencies in the employees skill, knowledge and determine the training and development need.

Maintain fair relationships with groups.

CHAPTER IIRESEARCH METHODOLOGY

Research Methodology:It is descriptive study based on the survey method. Data are collected from respondents through the questionnaire .Descriptive research is used to obtain information concerning the current status of the phenomena to describe what exists with respect to variable or conditions in a situation.A carefully designed questionnaire is used to collect information from the chosen respondents. The whole universe is made into different strata and the samples are drawn at random to have a proportionate representation from each stratum. The questions are included to know about the respondents opinion about the present performance appraisal system in SIDCO and to know how much it affects their performance.

Collection of Data: The research study is a descriptive study based on survey method. The study is completed by using primary and secondary data. Primary Data: For the collection of primary data a set of questionnaires were used from a sample size of 100 in number. Data also collected through direct interview. Secondary Data: The secondary data needed for the study was collected from the records and journals provided by the organisation and from the website of the organisation.

Sampling Techniques: SIDCO have been selected since it covers the large population .Only 100 samples from the employees. Primary data were collected by stratified random sampling techniques.

Scaling Techniques: The researcher used Likert scale for analyzing the data. The employees were asked to indicate his or her degree of agreement with the statement. Here five point scale was used. Likert method of summated rating is the simpler and most frequently used method to measure attitudes.Data Analysis and Interpretation: After the collection of data through questionnaires, the analysis of data and interpretations are made on the basis of predetermined objectives. Various statistical tools like pie charts and percentages are used for the analysis of data.Scope of the study:The study was limited to the employees of the SIDCO in Trivandrum.Limitations: Research was to be conducted maintaining the decorum of the company. Employees were busy in their work and thus did not spare much time to respond openly to the questions asked. Information and responses given by the respondents may be a biased due to several reasons. Limited time span for carrying out study also restricted the research work. As company is large, as per their tactics and guiding principle employees were not ready to disclose confidential facets.

CHAPTER IIIINDUSTRY PROFILE

3.1. SMALL SCALE INDUSTRYThe prospect of development in the sector of small businesses has importance because of its beneficial impact on the industrial economy of the world. In developing economies entrepreneurship in small scale industries has special importance in context to employment potential, equitable distribution of wealth, balanced regional development and growth and above all, the preservation and development of ancient culture, art and craft. In India the size of business criterion is used as a base of defining small scale business units. The definition of the small business in India has changed over years. During the year 1991, the Government of India has defined Small Scale Industrial Unit (SSI) as a unit or an undertaking having an investment in plant and machinery of not more than Rs. 60 lakhs and not more than Rs. 75 lakhs in case of ancillary units. Small scale industries, thus, occupy a prominent position in the development agenda of our country. This is because of their perceived importance in enhancing forward and backward linkages throughout the economically diverse sectors of the economy and their potential in generating employment and incomes.On the recommendations of the Abid Hussain Committee, the Government of India raised in 1997 the ceiling for the small scale industries, including ancillary units and export- oriented units up to Rs. 3 crores. Thus, a small scale industrial unit is one engaged in the production, processing and preservation of goods and rendering of certain services and having an original investment in plant and machinery not exceeding Rs. 3 crores.The small scale industrial sector in India comprises of a widely divergent spectrum of industries, ranging from the micro and rural enterprises- using rudimentary technology, on the one hand- to modern units using sophisticated technology on the other hand. The sector, as of today comprises of 3.4 million industrial units spread throughout the country providing employment to over 19.2 million people. It contributes to the socio- economic development of the nation is therefore significant. Over 7500 different products for domestic as well as international markets are produced in these units. Even in the phase of strict and difficult environmental and other constrains, the sector has been able to register an impressive growth rate. The small scale sector today contributes about 40% of the value added in manufacturing sector and 6.7% of GDP of India. Its share in the national exports stands at over 34%. The sector accounts for about 95% of the industrial units in the country and thus is rightly called the growth engine of the Indian economy.The small scale industrial sector is capable of addressing itself to the basic problems of Indian economy viz. unemployment and disparities in the regional development. The process of liberalization and economic reforms has created wide range of opportunities for the development of small scale sector. However, at the same time changes in the world scenario have thrown up new challenges to the very existence of this sector, as the integration of global markets has made competitiveness both in terms of quality and cost vitally important as resorting of quality goods at highly competitive prices has become the order of the day.Currently, knowledge-based industries like Information Technology and Biotechnology are considered to be the thrust areas for the growth. Industrial output is increasingly becoming knowledge driven, by developing new ideas and products, based on a strong research- the small scale industry could make a substantial contribution, provided they are able to develop a good marketing network.

3.1.1 Nature and CharacteristicsSmall scale industries have some special features on its own; the main characteristics of small scale businesses are as follows:1) Personal character: In small business concerns, the owner himself is considered as the manager. He actively participates in all aspects of the business such as planning, organizing, decision-making, etc.2) Limited area of operation: The operations of small scale industrial units are generally localized. It may usually cater to the local and regional demands. Its products may sometimes be exported.3) Labour intensive: They are labour intensive and so they can provide plenty of employment opportunities. Capital investment is limited due to its small size.4) Closely held: A small scale industrial unit is generally owned by one man. Sometimes it is owned by a group of persons. These persons supply the required capital.5) Simple organization: Usually a small scale unit has no division of labour because of its limited resources. It has only few layers of management.6) Indigenous resources: These units are indigenous resources. The required materials and labour are obtained by the firm locally.7) Limited scale of operation: A small scale unit has a limited share in the market. The size of the business is small and it has low gestation period.8) Simple technology: Highly sophisticated technologies and machineries are rarely employed. Machinery which can be handled manually is more in use under this sector.9) Limited investment: Capital investment in small scale industries is generally limited because they are not capital intensive, but labour intensive.

3.1.2. Objectives of Small scale Industrial unitsThe main objectives of developing small industrial units in India are: To generate large scale employment opportunities with relatively low capital investment. To eradicate the unemployment problems existing in the country. To encourage the balanced regional development of the nation. To bring the backward and rural areas too in the mainstream of national development. To ensure more equitable distribution of income and wealth. To improve the standard of living of the people. To encourage effective mobilization of countrys untapped capital and human resources. To encourage easy dispersal of industries all over the country. To reduce the concentration of economic power and wealth in a few.3.1.3. The importance of promoting Small Scale IndustriesThe promotion of small scale industries is important due to the following reasons: As small scale industrial are labour intensive, it provides the possibilities for creating employment opportunities. In a country like India where capital resources are scarce, SSIs which has less capital requirements is more suitable. They can be successfully operated in rural and backward areas. They are quick yielding They can act as a catalyst to enhance the growth of entrepreneurship. Decentralization of authority is very easy to put into practice in the management of small scale industrial units.The industrial policies adopted by the Indian Government maintain certain arguments in favour of entrepreneurial development in the small scale sector. Thus small scale industrial units enjoy the following considerations which make them important to the Indian economy:1) Price preference offered to small scale industrial units:Fore the purchases made by the government, semi government institutions and public companies for small scale units, the government gives the following price preferences:- 15% on the products of industries, which are situated out of the state. 5% on the products of medium scale industries and large scale industries situated inside the state. 2% additional price to the products of small units with ISI registration.2) Services rendered by taluk industries offices:The services rendered by the taluk industries offices are to grant provisional registration to small scale industrial units, to help them in their coordination and development etc. these office keep the entrepreneurs of small scale industries well informed about the incentives and assistance offered to them by the government. They also recommend the names of small scale units which deserve to get incentives and assistance, to the respective District Industry Office. They also help in promoting new industry units, and provide leadership in conducting various development schemes in the taluk level.3) Bridge FinanceBridge finance is an interim finance which commercial banks provide to entrepreneurs on a short term basis to enable them to tide over the delay in getting sanctioned term loans. In case the borrowing entrepreneurs delays in submitting the necessary document, the commercial banks and other financial institutions shall also delay in distributing sanctioned term loans. 4) Green channel clearance:These are several small scale units each with a capital investment, less than Rs. 10 lakhs. In order to encourage the growth of such industries, the entrepreneurs must get prior sanction with retrospective effort. Thus the system of getting prior sanction is known as Green Clearance Channel. Industries which are enlisted as of polluting nature by the Pollution Control Board shall not get this facility.5) Tax holiday benefit:New industrial enterprises, including small scale industrial units are exempted from paying income tax up to 6% of their profits (7.5 in case of companies) from their gross income. This is according to the section 80J of the Income Tax Act. Now according to section 80HH and 80HHA the entrepreneur of a small scale unit established in a rural area is entitled to get exempted of 20% of his profits. A small scale unit gets this exemption for ten years from the actual commencement of production.6) Different types of government incentives:The Central government or the State Government or both offer the following incentives to entrepreneurs of small scale industries: Export import subsidies and bounties Interest free loans Subsidies for research and development Subsidies for transportation Interest subsidies Financial assistance for purchasing power generators Exemption from property tax Subsidies to artisans, craftsmen, and entrepreneurs of traditional industries including handloom industries Incentives to non- resident Indians who start business on their own Special incentives to women entrepreneurs Exemption from paying income tax

3.2. SMALL SCALE INDUSTRY IN INDIASince the time of independence, small scale sector in India has been a major contributor to countrys gross domestic product (GDP). This traditional sector in India which is considered to have huge growth prospect with its wide range of products, with 40% share in total industrial output and 35% share in exports, the small scale industrial sector in India is acting as the engine of growth in the new millennium. The definition of small scale industrial undertakings has changed over years. Initially they were classified into two categories_ those using power with less than 50 employees and those not using power with the employ strength being more than 50 but less than 100. However, the capital resources invested on plant and machinery, building has been the primary criteria to differentiate the small scale industries from the large and medium scale industries. An industrial unit can be categorized as small scale unit if it fulfills the capital investment limit fixed by the Government of India for the small scale sector.As per the latest definition which is effective since December 21, 1999, for any industrial unit to be regarded as small scale industrial unit, the following conditions must be satisfied:- Investment in fixed assets like plant and equipment either held on ownership terms on lease or on hire purchase should not be more than Rs. 10 million. However the unit in no way must be owned or controlled or ancillary of any industrial unit.3.2.1. Performance of Small Scale Industries Employment Production Exports Opportunities Economic Indicators Employment Generation SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector generates employment for four persons.

Chart number 3.1 Employment in small scale sectorAccording to the SSI Sector survey conducted by the Ministry and National Informatics Centre with the base year of 1987-88, the following interesting observations were made related to employment in the small scale sector.

Generation of Employment - Industry Group-wiseFood products industry has ranked first in generating employment, providing employment to 4.82 lakh persons (13.1%). The next two industry groups were Non-metallic mineral products with employment of 4.46 lakh persons (12.2%) and Metal products with 3.73 lakh persons (10.2%). In Chemicals & chemical products, Machinery parts and except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total contribution by these eight industry groups being 49%. In all other industries the contribution was less than 5%. Per unit employment Per unit employment was the highest (20) in units engaged in Beverages, tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu. Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4 was in Repair services line. Per unit employment was the highest (10) in metropolitan areas and lowest (5) in rural areas. However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas. In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products (18), Basic metal industries (13) and Non-metallic mineral products (12). Rural: Non-metallic products contributed 22.7% to employment generated in rural areas. Food Products accounted for 21.1%, Wood Products and Chemicals and chemical products shared between them 17.5%. Urban: As for urban areas, Food Products and Metal Products almost equally shared 22.8% of employment. Machinery and parts except electrical, Non-metallic mineral products, and Chemicals & chemical products between them accounted for 26.2% of employment. In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper products & printing (total share being 33.6%).State-wise Employment Distribution: Tamil Nadu (14.5%) made the maximum contribution to employment. This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%) the total share being 27.7%. Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%), and Punjab (5.6%) together accounted for another 27.4%. Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra & Nagar Haveli. It was 12 in Maharashtra, Tripura and Delhi. Madhya Pradesh had the figure of 2. In all other cases it was around the average of 6.

ProductionThe small scale industries sector plays a vital role for the growth of the country. It contributes 40% of the gross manufacture to the Indian economy. It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector produces 4.62 lakhs worth of goods or services with an approximate value addition of ten percentage points.The small scale sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive.

Chart number 3. 2Production from small scale sectorThe number of small scale units has increased from an estimated 8.74 lakhs units in the year 1980-81 to an estimated 31.21 lakhs in the year 1999. From the year 1990-91 this sector has exhibited a comparatively lower growth trend (though positive) which continued during the next two years. However, this has to be viewed in the background of the general recession in the economy. The transition period of the process of economic reforms was also affected for some period by adverse factors such as foreign exchange constraints, credit squeeze, demand recession, high interest rates, shortage of raw material etc. When the performance of this sector is viewed against the growth in the manufacturing and the industry sector as a whole, it instills confidence in the resilience of the small scale sector. The estimates of growth for the year 1995-96 have shown an upswing. The growth of SSI sector has surpassed overall industrial growth from 1991 onwards. The positive trend is likely to strengthen in the coming years. This trend augurs a bright future for the small scale industry. Export contributionSSI Sector plays a major role in India's present export performance. 45%-50% of the Indian Exports is being contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35% of total exports. The number of small scale units that undertake direct exports would be more than 5000. Besides direct exports, it is estimated that small scale industrial units contribute around 15% to exports indirectly. This takes place through merchant exporters, trading houses and export houses. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods. It would surprise many to know that nontraditional products account for more than 95% of the SSI exports. The exports from SSI sector have been clocking excellent growth rates in this decade. It has been mostly fuelled by the performance of garment, leather and gems and jewellery units from this sector.

Chart number 3.3 Export from small sectorThe lucrative product groups where the SSI sector dominates in exports are sports goods, readymade garments, woolen garments and knitwear, plastic products, processed food and leather products.

OpportunitiesSmall industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

Chart number 3.4 Small scale unitsBy its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialization. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices.The opportunities in the small scale sector are enormous due to the following factors: Less Capital Intensive Extensive Promotion & Support by the Government -Reservation for Exclusive Manufacture by small scale sector Project Profile Funding Finance & Subsidies Machinery Procurement Raw Material Procurement Manpower Training Economic IndicatorsThe Small Scale Industry today constitutes a very important segment of the Indian economy. The development of this sector came about primarily due to the vision of our late Prime Minister Jawaharlal Nehru who sought to develop core industry and have a supporting sector in the form of small scale enterprises. Small Scale Sector has emerged as a dynamic and vibrant sector of the economy.- Today, it accounts for nearly 35% of the gross value of output in the manufacturing sector and over 40% of the total exports from the country. - In terms of value added this sector accounts for about 40% of the value added in the manufacturing sector. - The sector's contribution to employment is next only to agriculture in India. It is therefore an excellent sector of economy for investment

CHAPTER IVCOMPANY PROFILE

4.1 HISTORY Kerala SIDCO, a promotional agency for small scale industries, set up as a Public Sector Undertaking of Government of Kerala which was set up in November, 1975 has four decades of servicing to its credit. This corporation is rendering assistances to Small Scale Industries (SSIs ) in the state, like providing infrastructure facilities, distribution of essential raw materials, marketing of SSI products, undertaking civil and electrical works of state and central government owned enterprises and offices. Moreover SIDCO is supplies Bitumen to local bodies as nodal agency and paraffin wax to small scale industrial units. SIDCO is actually an amalgamation of two former companies namely Kerala State Small Industries Corporation formed in July 1961 and Kerala Employment promotion Corporation formed in 1947. The authorized share capital of the company is 13 crores comprising of 12000 equity shares of Rs.1000 each issued, subscribed and fully paid up capital is Rs.1244.02 lakhs. At present Kerala SIDCO possess industrial lands in 12 sites, best suited for industrial purposes. Kerala, the Gods own country is gifted with abundant natural resources essential for the establishment of industrial units and SIDCO is glad to promote and purpose some of the plots for allotment for industrial purpose. Kerala SIDCO is in the lookout for more suitable areas across Kerala which will be made available to investors suiting their requirements. The main objective of the newly formed corporation which was clearly delineated in the articles of association is extracted below: To aid, council, finance and protect and promote the interests of small industries in the state, stabilizes and run any industrial undertakings, projects or enterprise whether owned or run by government, statutory body, company ,co-operative society, firm or individuals by providing them with capital, credit, means, resources, supply of machinery and equipments on hire purchase procurement and distribution of scare raw materials, advise on import control policy and export promote procedures in marketing and sales of products, revitalization of sick units and rehabilitation of defunct units, adequate information and publicity, construction, maintenance and management and administration of Industrial Estates and Development Plots, provision for all infrastructural facilities, technical and managerial assistance for the prosecution of their work and business.To promote employment and entrepreneurship among the skilled, semi-skilled, trained, experienced and educated members of the public by promoting, establishing and undertaking the development areas and plots, growth centres, common facilities or service centers or other infrastructural works on its own or as agents of government or any other body, corporate or co-operative society or person.To promote and operate schemes for industrial development and to develop entrepreneurship by providing package consultancy services, including pre investment services and for that purpose to prepare and get or cause to be prepared reports, studies, surveys, procedures, designs, blue- prints, statistical and other information necessary for successful implementation of industrial projects.1.1.1. Organizational functions and divisions From the inception of the new company, SIDCO was assisting the department of the implementation of 10,000 industrial programmes.SIDCO started in a big way with the following divisions Technical consistency Research and development Raw materials Finance ( Share participation and margin money loans) Import and export Marketing Machinery Manufacturing Information and publicity

.1.1.2. Objectives of SIDCO SIDCO aims at Development of small scale industries in the state by providing: Infrastructure facilities Raw material Marketing products of Small scale industries unit Promotional activities for SSI products.1.1.3. Important activities of Kerala SIDCO Kerala Small Industries Development Corporation is a fully owned Government Corporation set up to promote small industries in the state of Kerala. This corporation is rendering assistance to Small Scale Industries(SSIs) in the state, like providing infrastructure facilities, distribution of essential raw materials, marketing of SSI products, undertaking civil and electrical works of state and central government owned enterprises and offices. Moreover Kerala SIDCO supplies Bitumen to local bodies as model agencies and paraffin wax to small scale industrial units. At present Kerala SIDCO posses 17 industrial estates and 36 industrial parks, best suited for industrial purpose. SIDCO is in the lookout for more suitable areas across Kerala, which will be made available to investors suiting their requirements. In Kerala, SIDCO is the prime institutional agency providing support facilities to small scale industry. It has established the prime objective of rendering and promoting schemes for industrial development and to develop entrepreneurship by proving consultancy services.

1.1.4. Major functional divisions 1. Raw Material Division2. Production division 3. Marketing Division4. Construction Division5. Industrial Estate Division6. Information Technology and Telecommunication Division7. Import and Export Division8. Super Check Cell and Quality Inspection1. RAW MATERIAL DIVISION Raw material division is engaged in the distribution of various raw aerials to SSI sector and public sector undertaking in Kerala through the 14 districts Raw material distribution includes Iron and Steel, Paraffin Wax, Titanium Dioxide, Plastic granules, cement, a and GI pipes, Aluminium Sheet, coal , petroleum products like lubricants, Rubber processing oil and Bitumen. Small scale industrial units can purchase the raw materials fr their units through the raw material depots are reasonable price. The regional office of raw material division is situating at Kadavanthra, Ernakulam.Mode of distribution of raw materials: The raw materials division distributes materials through 14 district level depots listed here Trivandrum, Kollam, AlleppeyRaw materials distributed: Iron and Steel, pig iron, paraffin wax, titanium dioxide, plastic raw materials, cement, oil and lubricants, bitumen , aluminium sheets and sections, Galvanised iron pipes, paints.

Field of interest:In the current scenario of globalization and free trade, this division is looking for import of industrial raw materials like paraffin wax, furnace oil, fatty acid, cement, iron and steel, iron scraps, plastic raw materials, bitumen, etc of the imported prices are competitive.2. PRODUCTION DIVISION Now 8 production units are functioning under Kerala SIDCO in various districts of the state. Government departments, public sector undertakings and autonomous bodies are free to purchase all types of furniture and other equipments produced in these units, without observing usual tender formalities.3. MARKETING DIVISION Marketing division of SIDCO provides assistance to small scale units in canvassing orders from Government departments and public sector undertakings. Government of Kerala as per the order No GP (Rt) No 54/2008/SPD dated 12.012.09 entrusted public sector undertakings, Govt departments local self governments institutions and schools etc can purchase steel, wooden, hospital furniture and lab equipments from SIDCO without tender formalities. Government has been renewing the orders from time to time. There are seven sales emporias and seven marketing centres all over Kerala. SIDCO participates in exhibitions and trade fairs on behalf of SSI sector for the promotion of their products. Steps are in progress to market SSI products in food, plastic, leather, Rubber, Electrical in addition to wood, steel and hospital furniture and laboratory equipments. In the light of the Government orders from time to time SIDCO can supply furniture to Govt. Departments without render. 4. CONSTRUCTION DIVISIONThe main functions of this division is to undertake construction and maintenance work of sheds in Industrial Estates, Industrial Development plots, providing infrastructure facilities for industrial growth centres, setting up of Industrial parks etc.

5. INDUSTRIAL ESTATE DIVISIONKerala SIDCO owns Conventional Industrial Estates and 36 Mini Industrial Estates which are functioning in different Districts of Kerala. There are 920 factory sheds in which more than 750 SSI units are functioning. The above said factory sheds were allotted on Lease basis. A very few sheds are vacant for allotment preferably on Out Right purchase basis. A very few sheds are vacant for allotment preferably on Out Right purchase basis. In addition to these factory sheds, Industrial plots are being allotted to the entrepreneurs in Industrial Estates, Mini Industrial Estates and industrial parks for constructing factory sheds of their own design to rub industrial units.Considering the importance of Small Scale Industries, as part of Government policy, the scheme for setting upon on industrial park in each of the 140 Assembly constituencies of the State is being implemented by SIDCO. At present 12 sites under possession of which 7 sites are ready for allotment in various districts of Kerala.

6. INFORMATION TECHNOLOGY & 8. TELECOMMUNICATION DIVISIONSIDCO IT &T Division is providing software and hardware solutions to Central and sate Government Bodies, Autonomous Institutions and SSI units. The areas identified for business are Development & maintenance of software solutions & websites development. IT & Telecom products & services Hardware products & Services Office Automation products & services Spares and other consumablesKerala SIDCO Ltd IT &T Division supplies Hardware (servers, laptops, and Desktop &computer peripherals) software solutions, Telecom products, Office automation products Annual Maintenance contract, Third party maintenance contract and repair and maintenance contract. Kerala SODCO Ltd has empanelled accredited IT & Telecomm firms to execute projects undertaken. We are fully equipped to execute any IT & Telecom implementation as per Government Guidelines. Though our business partners we are capable of providing any solution which the clients demand and with the wide repertoire of qualified service personnel we can provide on all support for all our future clients located through the length and breadth of the state. SIDCO have complete the work of digitalization of assembly proceedings of Kerala Legislative Assembly and web based text books set ordering and individual text book ordering system of IT at school. The digitalized proceedings of the 1st Kerala Legislative Assembly (1957-1959) was unveils by Her Excellency Smt. Pratibha Devisingh Patil, President on India during the closing ceremony of Golden Jubilee celebration of Kerala Legislative Assembly.The major projects undertaken by this division involves setting up a state of the art Telecom city, one stop shop with all telecom facilities and services spread over 25 acres at Trivandrum, the state capital with intelligent buildings and high tech habitat centre with a total investment of RS 400 to 450 crores. The goal for Telecom city is to create a state of the art telecommunication centre that will capitalize all the cutting edge technologies of the telecommunication industry to position the state for new regional and international investments. Another prestigious project is the construction of multi-storied commercial complex at Kochi with a total estimate of Rs 200 cores

8. IMPORT AND EXPORT DIVISION This is a new division formed with view to give all possible assistance to the SSI sector by functioning and channelizing agents for the SSI units in Kerala both for their new material import and for product export. This division is an extension of marketing division.

9. SUPERCHECK CELL AND QUALITY INSPECTION The super check cell with the vigilance officer, SIDCO, as the convener super check of the articles supplied by the managing division and the production division with a view to check and ensure quality of the products/ services and to provide better after sales services to the customers. A special officer (Quality Inspector) has been appointed exclusively for quality inspection which will be done after the sale of the products.

4.2 STRATEGIC INTENDVision Serving Small Scale Industry on a Large Scale MissionTo provide full client satisfaction by adding value with respect to service quality and service experience that goes beyond managing time, cost and qualityObjectives Development of Small Scale Industries in the state by providing Infrastructure facilities Raw material supplies Marketing SSI products Promotional activities of SSI products4.3 Product ProfileKerala SIDCO ia public undertaking. Government have examined the proposal given by the company in detail and are pleased to appoint Kerala SIDCO as the agency for procurement supply for the following item to government department and public sector undertaking in addition to the items enumerated to the government order.The company supplies, Water facilities, public water taps, plastic moulded furniture, pipes and pipe fittings, plastic water tanks and survey equipments. Kerala SIDCO is functioning 8 production units out there.These units include Wood working units and 4 Engineering units. Kerala SIDCO is a sole canalizing agent for procurement supply of selected item manufactured by Small Scale Industrial Units. SSI products are Steel furniture, hospital furniture, wooden furniture and lab equipments and chemicals. The raw material includes Iron and steel, paraffin wax, titanium dioxide, plastic granules, Galvanized Iron Sheets and Pipes, Aluminums sheets, Petroleum products like Lubricants, Rubber process Oil and Bitumen.

To support Kerala SIDCO as agency for the procurement and supply for the following items1. Tarpaulin2. Electrical Chock, Condensers, Starters3. Control Panels4. Lab Chemicals 5. Aluminums and Steel Products6. Man Hole Covers7. Wax Candles8. Rolling Shutters9. Voltage Stabilizers10. Agricultural Tools and Implements11. Paints and Varnishes12. Safety MatchesAt present 8 production units are functioning. All units are depends on job works. The government departments can purchase various furniture and equipments produced in these units without any tender formalities.The Indian economy is passing through the process of globalization, liberalization and also more as the privatization. This disreputes the control of the supply of materials among SSI units. Almost all the items dealt in the division have been de controlled and we have to trade these like private dealers and to face strict competitors in the market so companys market share go on diminishing year by year.In order to give more help and assistance to SSI units to market their products, government has appointed Kerala SIDCO as a sole canalizing agency for certain selected items. They have submitted a proposal to government for implementing the common branding and marketing of SSI products by their company.

Considering the importance of Small Scale Industries in the industrialization of the state as part of the government policy, the task of setting up an Industrial Park each in the 140 Legislative Constituencies in states is being implemented by Kerala SIDCO. Accordingly proposals from 36 constituencies were received last year offering land for development as industrial parks. Through land in 12 sites have been handed over in SIDCO, the land of Mararikulam have been resumed by government and development works in Industrial Parks at Shornur and Thiruvarpa were completed. Plots are being allocated to enterprises on 90 years long term lease with suitable lease right and at an yearly rent of Rs. 1/ per cent. CompetitorThere is only one main competitor for Kerala SIDCO is KINFRA (Kerala Infrastructural Development Corporation). Other competitors include Local Companies and Foreign Multi National Companies Customer ProfileThe main customers of Kerala SIDCO are Government Departments and Public Undertakings. The main customers of Raw materials produced by Kerala SIDCO are Iron and Steel Authority of India, Tata Iton and Steel CompanyLtd, Vishakhapatanam Steel Plant and Madras Refineries Ltd for Paraffin Wax.

4.4 MANAGEMENT OF THE COMPANY Organization structure:The Board of Directors manages the company and Government of Kerala constitutes them, unless and otherwise determined by the government. The number of members shall not be less than two or not more than nine. The government appoints all the Directors, including the full time Managing Director. The organization structure of the company is of pyramid in shape with the Board of Directors on the top of the cadre. The Managing Director shall execute the affairs of the company through line managers at different such as finance, marketing, production, etc. the BODs responsibility is the overall control and supervision of the company. The General Manager shall be in charge of the day-to-day management of the business of the company and in the absence of the Managing Director , he shall take decision on the financial matters in consolidation with the Finance controller.Board of directors consists of: The Chairman Managing Director The General Manager from SIDBI Two Non-officials Additional Secretary from industrial Department President of Kerala Small Industries Association Additional Secretary from Finance Department.

ORGANIZATIONAL STRUCTURE

Chart number 3.1 showing organizations chart

CHAPTER VLITERATURE REVIEW

Concepts & Review of literature:

"Performance, and performance alone,Dictates the predator in any food chain" -SEAL Team INTRODUCTION The process of HRD helps the employees to acquire or develop technical, managerial and behavioural knowledge, skill and abilities and moulds the values, beliefs and attitudes necessary to perform present and future roles. The process of performance appraisal helps the employee and the management to know the level of employees performance compared to the standard level. Performance appraisal is essential to understand and improve the employees performance through HRD. In fact, performance is the basis for HRD. It was viewed that performance appraisal was useful to decide upon employee promotion/transfer, salary determination and the like. But the recent developments in human resource management indicate that performance appraisal is the basis for employee development.PERFORMANCE APPRAISAL A poor appraisal is, often worse than no appraisal at all. Evidence shows that the training of appraisal can make than more accurate raters. A performance appraisal (PA) or performance evaluation is a systematic and periodic process that assesses an individual employees job performance and productivity in relation to certain pre-established criteria and organizational objectives. Performance appraisal is also a technique of HRD. The performance interview and the process of the performance analysis help the subordinate to interact closely with his superior. The interaction helps particularly subordinates learn from his superior the job related and behavioural related aspects. This process becomes a training and development and educational process. Thus, performance appraisal is closely related to HRD. In fact, performance appraisal helps employee development. Some applications of PA are performance improvement, promotions, termination, test validation, and more. While there are many potential benefits of PA, there are also some potential drawbacks. Before the 1960s, performance evaluations were designed primarily as tools for the organization to use in controlling employees (Eichel and Bender, 1981). Eichel and Bender go on to state that past performance was used to guide or justify managements actions in dealing with the employee. At the time, according to these authors, performance appraisal provided the basis for salary, retention, discharge, or promotional decisions. Over the past quarter century, the purpose of performance appraisal has shifted from tools supporting the activities of management to an increasing trend towards personnel development (Eichel and Bender,1984). Vroom (1990) states that formal performance appraisal plans can be designed to meet the following key needs: (a) the organization; (b) the supervisor; and (c) the employee. He stresses the need for effective evaluation as it can effectively serve these critical areas. ICMA (2005) states that almost all employees are eager to know how well they are doing in their jobs, but many dread the meetings in which their performance is to be discussed. Diagrammatic Representation of Performance AppraisalObjectives of Performance Appraisal: To enable the employees towards achievement of superior standards of work performance. To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way. Boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism. Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching. Identifying the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions. Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment. Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills. Advantages of Performance Appraisal:It is said that performance appraisal is an investment for the company which can be justified by following advantages:1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways: a. Through performance appraisal, the employers can understand and accept skills of subordinates. b. The subordinates can also understand and create a trust and confidence in superiors. c. It also helps in maintaining cordial and congenial labour management relationship. d. It develops the spirit of work and boosts the morale of employees. All the above factors ensure effective communication.6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a persons efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Definitions:Denhardt (1991) defines performance appraisal as a specific evaluation with respect to an individuals progress in completing specified tasks.Devries, Morrison, Shullman and Gerlach (1981) define performance appraisal as a process by which an organization measures and evaluates an individual employees behaviour and accomplishments for a finite period.Moulder (2001) states that performance appraisals are valued for defining expectations and measuring the extent to which expectations are met. She goes on to state that appraisals can make clear to employees where they are having success and where they need to improve performance. Moulder indicates that appraisals are useful in setting goals and in fostering improved communications among work groups and between employees and supervisors.Dale Yodder defines performance appraisal refers to all formal procedure used in working org to evaluate personalities and contribution and potential of group members.Edward Flippo defines performance appraisal is the systematic periodic and an impartial rating of an employees excellence in matters pertaining to his present job and his potential for better job.Dale.S.Beach definesperformance appraisal is the systematic evaluation of individuals with respect to his or her performance on the job and his or her potential for development.

Performance appraisal methods Performance appraisal methods include 10 appraisal methods / types as follows:1. Critical incident methodThis format of performance appraisal is a method which is involved identifying and describing specific incidents where employees did something really well or that needs improving during their performance period.2. Weighted checklist methodIn this style, performance appraisal is made under a method where the jobs being evaluated based on descriptive statements about effective and ineffective behavior on jobs.3. Paired comparison analysisThis form of performance appraisal is a good way to make full use of the methods of options. There will be a list of relevant options. Each option is in comparison with the others in the list. The results will be calculated and then such option with highest score will be mostly chosen.4. Graphic rating scalesThis format is considered the oldest and most popular method to assess the employees performance. In this style of performance appraisal, the management just simply does checks on the performance levels of their staff.5. Essay Evaluation methodIn this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of staffs behaviours. Essay evaluation method is a non-quantitative technique. It is often mixed with the method the graphic rating scale.

6. Behaviourally anchored rating scalesThis formatted performance appraisal is based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of working performance. The form is a mix of the rating scale and critical incident techniques to assess performance of the staff.7. Performance ranking methodThe performance appraisal of ranking is used to assess the working performance of employees from the highest to lowest levels. Managers will make comparisons of an employee with the others, instead of making comparison of each employee with some certain standards.8. Management by Objectives (MBO) methodMBO is a method of performance appraisal in which managers or employers set a list of objectives and make assessments on their performance on a regular basis, and finally make rewards based on the results achieved. This method mostly cares about the results achieved (goals) but not to the way how employees can fulfil them.9. 360 degree performance appraisalThe style of 360 degree performance appraisal is a method that employees will give confidential and anonymous assessments on their colleagues. This post also information that can be used as references for such methods of performance assessments of 720, 540, 18010.Forced ranking (forced distribution)In this style of performance appraisal, employees are ranked in terms of forced allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one.

Performance appraisal system practiced in SIDCO The Performance appraisal system practiced in SIDC in 360 Degree Performance Appraisal. An appraisal made by top management, immediate superior, peers, subordinates, self and customers is called 360 Degree Appraisal. Here, the performance of the employee or manager is evaluated by six parties, including himself. So, he gets a feedback of his performance from everyone around him. This method is very reliable because evaluation is done by many different parties. These parties are in the best position to evaluate the employee or manager because they are continuously interacting and working with him. This method is mostly used to evaluate the performance of the employees. However, it is also used to evaluate other qualities such as talents, behaviour, values, ethical standards, tempers, loyalty, etc.360 degree appraisal was first developed by General Electric (GE), USA in 1992. Today it is used by all major organisations. In India, it is used by Crompton Greaves, Wipro, Infosys, Reliance Industries, etc.Six Parties In 360 Degree Appraisal

The six parties involved in 360 degree appraisal are :-1. Top ManagementThe top management normally evaluates the middle level managers. However, in a small organization, they also evaluate the performance of the lower level managers and senior employees.2. Immediate SuperiorThe immediate superior is in a very good position to evaluate the performance of his subordinates. This is because they have direct and accurate information about the work performance of their subordinates.3. Peers / Co-workersPeer or colleagues also evaluate each other's performance. They work continuously with each other, and they know each other's performance. Peer evaluation is used mostly in cases where team work is important.4. SubordinatesThe Subordinates can also evaluate the performance of his superior. Now-a-days students are asked to evaluate the performance of their teachers.5. Self AppraisalIn the self-appraisal, a person evaluates his own performance. He should be honest while evaluating himself. This results in self-development.6. CustomersCustomers can also evaluate the performance of the employees who interacts with them. This evaluation is best because it is objective. It is also given a lot of importance because the customer is the most important person for the business. Organizations use customer appraisals to improve the strengths and remove the weaknesses of their employees. In addition to these six parties, appraisal can also be done by an Appraisal Panel. This panel consists of 5 to 6 different types of members. Outside Consultants are also used for conducting appraisals. In some cases, Personnel Department also conducts an appraisal of employees and managers.Objectives of the Study: To study the effectiveness of the current performance appraisal system in SIDCO To assess, whether the current performance appraisal system motivates the employee. To find out the opinion of the employees about the present system. To find out whether performance appraisal system identifies any training needs & development. To propose suitable suggestion, if required, regarding the performance appraisal system

CHAPTER VIDATA ANALYSIS&INTERPRETATION

Data Analysis and Interpretation

The term analysis refers the computation of certain measures along with searching for patterns of relationships that exists among data groups. Statistical tools used in this study for data analysis are a) Percentage analysis: Percentage analysis is a useful tool for data analysis Percentage analysis is calculated as follows Percentage analysis: Number of respondentsX 100 Total number of respondentsb) Diagrams: Diagrams are used to represent the data diagrammatically. It gives a clear idea about information. Here I have used bar diagrams to represent the raw data.

Table 4.1Distribution of age wise profile of the Employee

Sl. NoAgeNo: of RespondentsPercentage (%)

120-30 yrs00

230-40 yrs1212

340-50 yrs4646

450-60 yrs4242

5Total100100

Table Source: Survey Data

Interpretation:The above table shows that 46 percent of the employee belongs to the age group of 40-50 yrs, 42 percent belongs to 50-60 yrs and the rest belongs to 30-40 yrs.

Figure 4.1Distribution showing the distribution of age wise profile of the Employee

Table 4.2Distribution of Gender of Employee

Sl. NoGenderNo. of respondentsPercentage (%)

1Male4646

2Female5454

3Total100100


Interpretation:The above table shows that 54 percent of the employee is Female and the rest is Male employee.

Figure 4.2Diagram showing the distribution of Gender of Employee

Table 4.3Distribution of experience of the employee

Sl. NoExperience

No. of respondentsPercentage (%)

11-10 yrs

66

210-20 yrs

3434

320-30 yrs

6060

4Total

100100


Interpretation:The above table shows that 60 percent of the employees have experience between 20-30 yrs, 34 percent have 10-20 yrs and rest have 1-10 yrs.

Figure 4.3Diagram showing the distribution of experience of the employee

Table 4.4Distribution of Income of EmployeeSl. NoIncome (Rs)No. of respondentsPercentage(%)

1Below 100001616

210000-200002020

320000-300004040

4Above 300002424

5Total100100


Interpretation:The above table shows that 40 percent of the employee have income between Rs 20000-30000.

Figure 4.4Diagram showing the distribution of Income of Employee

Table 4.5Distribution of familiarity with the present performance appraisal system

Sl. NoResponseNo. of respondentsPercentage (%)

1Yes8080

2No2020

3Total100100


Interpretation:The above table shows that 80 percent of the employees have familiar with the present performance appraisal system.

Figure 4.5Diagram showing the familiarity of the present performance appraisal system

Table 4.6Distribution of employees opinion considered for appraisal.


1Yes7070

2No3030

3Total100100


Interpretation:The above table shows that 70 percentage agree to the statement, 30 percentage disagree to the statement and other reluctant to say their opinion.

Figure 4.6Diagram showing the distribution of employees opinion considered for appraisal.

Table 4.7Distribution of interval at which performance is measured

Sl. NoIntervalNo. of respondentsPercentage(%)

13 Months00

26 Months00

31 year100100

4Others (Specify)00


Interpretation:The above table shows that 100 percentage employees performance is measured at a year.

Figure 4.7Diagram showing the interval at which the performance is measured

Table 4.8Distribution of effectiveness of the various attributes in the peformance appraisal.Sl. NoOpinionNo. of respondentsPercentage(%)

1Strongly Agree88

2Agree7070

3Neutral2020

4Disagree22

5Strongly Disagree00

6Total100100


Interpretation:The above table shows that 78 percent employees agrees that the various attributes used in the appraisal are effective.

Figure 4.8Diagram showing the distribution of efectiveness of the various attributes in the peformance appraisal

Table 4.9Distribution of present performance appriasal system helps to identify the strength and weakness.Sl. NoOpinionNo. of respondentsPercentage (%)

1Strongly Agree1212

2Agree6262

3Neutral1818

4Disagree88


6Total100100

Table Source: Survey DataInterpretation:The above table shows that 74 percent agree to the statement, 18 percent reluctant to say the opinion

Figure 4.9Diagram showing the distribution of present performance appriasal system helps to identify the strength and weakness.

Table 4.10Distribution of weakness of the employee is communicated in a non-threatening manner.

Sl.NoOpinionNo. of respondentsPercentage (%)

1Strongly Agree1414

2Agree5858

3Neutral1616

4Disagree1212


6Total100100


Interpretation:The above table shows that 72 percent agree to the statement, 16 percent reluctant to say their opinion and rest disagree to the statement.

Figure 4.10Diagram showing the distribution of weakness of the employee is communicated in a non-threatening manner.

Table 4.11Distribution of appraisal system provides an opportunity for self evaluation.Sl. NoResponseNo. of respondentsPercentage (%)

1Yes8888

2No1212

3No Comments00

4Total100100


Interpretation:The above table shows that 88 percent of the employee agrees to the statement, 12 percent reluctant to say their opinion.

Figure 4.11Diagram showing the distribution of appraisal system provides an opportunity for self evaluation.

Table 4.12Distribution of company used to give feedback after the appraisal of your performance.


1Yes8484

2No1616

3Total100100


Interpretation:The above table shows that 84 percent agree to the statement, 16 percent to their opinion.

Figure 4.12Diagram showing the distribution of company used to give feedback after the appraisal of your performance.

Table 4.13Distribution of present performance appraisal system is time consuming.


1Yes4848

2No5252

3Total100100


Interpretation:The above table shows that 52 percent says that the appraisal is not time consuming, 48 percent says that the appraisal is time consuming.

Figure 4.13Diagram showing the distribution of present performance appraisal system is time consuming.

Table 4.14Distribution of system gives idea of what is expected of him by the management

Sl. NoOpinionNo. of respondentsPercentage (%)

1Strongly Agree1313

2Agree6767

3Neutral1515

4Disagree66


6Total100100


Interpretation:The above table shows that 80 percent agree to the statement and 15 percent reluctant to say their opinion.

Figure 4.14Diagram showing the distribution of system gives idea of what is expected of him by the management

TESTING THE EFFECTIVENESS OF PERFORMANCE APPRAISAL ON EMPLOYEE MOTIVATIONUSING CHI-SQUARE TESTHo: {There is effect of performance appraisal on employee motivation}H1: {There is no effect of performance appraisal on employee motivation } TABLE 4.15SI NoEmployees OpinionObserved Frequency (0)Expected Frequency (E)0-E(0-E)2(0-E)2/E

1Strongly agree25205251.25

2Agree45202562531.25

3Neither agree nor disagree2020000

4Disagree1020-101005

5Strongly disagree020-2040020

(0-E)2/E = 57.5 Calculated Value = 57.5 Degree of freedom = 0.05 Level of Significance = (n-r-1) = 5-1 = 4 Table value = 9.488 Here, Calculated Value > Tabled ValueInterpretation:Since the calcuated value is greater than tabled value, the hypothesis is rejected. There is an effect of performance appraisal on employee motivation. Table 4.16 Distribution of rater have clear knowledge of that employees job.


1Yes8080

2No2020

3Total100100


Interpretation:The above table shows that 80 percent agree to the statement, 20 percent reluctant to say their opinion and the rest disagree.

Figure 4.15Diagram showing the distribution of rater have clear knowledge of that employees job.

Table 4.17Distribution of performance appraisal system helps to improve performance.Sl. NoResponseNo. of respondentsPercentage (%)

1Yes8888

2No1212

3Total100100


Interpretation:The above table shows that 88 percent agree to the statement and 12 percent disagree to the statement.

Figure 4.16Diagram showing the distribution of performance appraisal system helps to improve performance.

Table 4.18 Distribution of rewards are given according to performance.Sl. NoResponseNo. of respondentsPercentage (%)

1Yes5252

2No4848

3Total100100


Interpretation:The above table shows that 52 percent agree to the statement and 48 percent disagree.

Figure 4.17Diagram showing the distribution of rewards are given according to performance.

Table 4.19Distribution of satisfaction of employees for the appraisal system.

Sl. NoOpinionNo. of respondentsPercentage (%)

1Highly satisfied66

2Satisfied6262

3Neutral2121

4Dissatisfied99

5Strongly Dissatisfied22

6Total100100


Interpretation:The above table shows that 68 percent satisfied to the statement, 21 percent reluctant to say opinion and rest dissatisfied to this.

Figure 4.18Diagram showing the distribution of satisfaction of employees for the appraisal system.

Table 4.20Distribution of objectives of performance apprisal are fair and clear to the subordinates.


1Yes8080

2No2020

3Total100100


Interpretation:The above table shows that 80 percent employees agree to the statement and 20 percent employees disagree to the statement.

Figure 4.19Diagram showing the distribution of objectives of performance apprisal are fair and clear to the subordinates.

Table 4.21Distribution of management provides counseling after the appraisal.Sl. NoResponseNo. of respondentsPercentage (%)

1Yes5050

2No5050

3Total100100


Interpretation:The above table shows that 50 percent agree and 50 percent disagree to the statement.

Figure 4.20Diagram showing the distribution of management provides counseling after the appraisal.

Table 4.22Distribution of management provides training after the appraisal.Sl. NoResponseNo. of respondentsPercentage (%)

1Yes7676

2No2424

3Total100100


Interpretation:The above table shows that 76 percent agree to the satement, 24 disagree to the statement.

Figure 4.20Diagram showing the distribution of management provides training after the appraisal.

CHAPTER VIIFINDINGS & SUGGESTIONS

FINDINGS

Performance appraisal has also been called an audit function of an organization regarding the performance of individuals, groups and entire divisions. Performance appraisal also helps in assigning right job to right person and thus prevents the organization from money drain in human resources. The following are findings from the study conducted at SIDCO.

1. An attempt to the age in the study reveals that 46 percent of the employees belongs to 40-50 yrs.2. An attempt to the gender in the study reveals that 54 percent of the employee belongs to female.3. Regarding the experience of the employee, the study reveals that 60 percent of the employees have 20-30 yrs of experience.4. Regarding the income of the employee, the study reveals that 40 percent of the employees have salary between Rs. 20000-30000.5. An analysis of the familiarity with the present appraisal system reveals that 80 percent of the employees are familiar.6. An analysis on the employee opinion considered for appraisal reveals that 70 percent agree to it.7. An analysis of the attributes rated in the appraisal system shows, 78 percent agree that it helps to reveal the performance of the employee.8. An analysis of whether the appraisal helps to identify the strength and weakness, 74 percent agree to it.9. An analysis on weakness of the employee communicated in non-threatening manner reveals that 72 percent agree to it.10. Regarding the self evaluation, the study reveals that 88 percent agree that the appraisal help them in self evaluation.11. Regarding the feedback, the study reveals that 84 percent agree that feedback is given to them after appraisal.12. Regarding the time consumption of the system, the study reveals that 52 percent disagree that it is time consuming.13. The Chi-Square test shows that there is no effect of performance appraisal on employee motivation 14. Regarding the raters knowledge of employees job, the study reveals that 80 percent agree that rater have clear knowledge.15. Regarding the performance improvement, the study reveals that 88 percent agree that the appraisal system helps to improve their performance.16. Regarding the rewards, the study reveals that only 52 percent agree that rewards are given according to the performance.17. An analysis on whether they are satisfied with the appraisal system shows that 68 percent are satisfied.18. An analysis on whether the management provides counseling after the appraisal reveals that 50 percent agree and 50 percent disagree to it.19. Regarding the training after the appraisal, the study reveals that 76 percent agree that the management provides training if required.

SUGGESTIONS

The employees are not that much confident about the fact that their performance is been measured correctly, that is because of the lack of transperancy from the part of the top management. Hence they should take enough action so that the subordinates does not have feeling that the wrong person is given merit, which will let down their morale and performance. Employee participation is minimum in the performance mangement and the performance appraisal system in the company. Hence I suggest them to make sure enough participation of employees in such decision making through meetings or opinion polls etc. The company should give achiveble goals to the employees. Many employees feels that proper feedback is not given after the appraisal. To improve performance, feedback is necessary so management should take necessary steps for that. To improve performance, motivation is a factor. Most of the employees have a positive attitude towarsd learning new things. Mangement should utilise this and motivate the employee. Previously SIDCO was using Check List method for appraisal. Recently they have introduced 360 degree performance appraisa. Since it is new method for the employees, mangement should take steps to educate them.

CHAPTER VIII CONCLUSION

Conclusion

The study reveals that Apprisal system in SIDCO is somewhat satisfactory. Most of the employees are familiar with the present apprasial system in the organisation. They have the opinion that appraisal help to improve their performance. Main problem revealed through the study was that, employees are not confident that their performance is been measured correctly. And other one, employee participation is minimum in the performance mangement and the performance appraisal system in the company.Management should take proper steps to overcome these issues.

BIBLIOGRAPHY

BIBLIOGRAPHY

1. Chhabra TN : Principles & Practice of Management, Dhanpat Rai & co.(P) Ltd 2008, P-3942. Khanka SS : Human resource Management, S. Chand & Company Ltd 2008, P-3433. Khanka SS : Organisational Behaviour, S. Chand & Company Ltd 2009, P-2014. Gupta C.B: Human Resource Management ,New Delhi ,Sultan & Chands Publication , 20075. Kothari C.R : Research Methodology , New Delhi: New age international Publisher ,20066. Shekaran, Uma: Research Methods for Business, New Delhi, John Willy India Privatr Ltd, 20047. Luthans Fred : Organizational Behaviour, Tata Mcgraw Hill, 2004.

8. Aswathappa.K : Human Resource Management and Personnel Management, Newdelhi, Tata Mcgraw Hill, 2004.

APPENDIX

QUESTIONNAIRE:

A study on the Effectiveness of the Performance Appraisal System in SIDCO

Sir/Madam I, Riju Manaf doing MBA program in University of Kerala. As a part of my academic course I am required to do a project. I present before you a questionnaire to be answered by you for the purpose of my study. The data collected from you will be strictly kept confidential and is used only for study purpose. I will be grateful if you kindly spend some time to fill up this questionnaire.[Instruction:-Put tick () mark for appropriate response and detail if necessary on space provided]1) Name:2) Age: 20-30yrs 30-40yrs 40-50yrs 50-60yrs 3) Gender: Male Female 4) Experience: 1- 10 yrs 10-20yrs 20-30yrs 5) Income: Below10000 10,000-20,000 20,000-30,000Above 300006) Are you familiar with the present performance appraisal system? Yes No7) Do you feel that your opinion are considered for appraising the performance Yes No8) Interval at which performance is measured3 Month 6 Month l year Others (Specify)................................ 9) Are you agreeing that the various attributes rated in the present appraisal system are effective?Strongly agree Agree Neutral Disagree Strongly Disagree

10) Current performance appraisal system helps you to identify your strength and weakness.Strongly agree Agree Neutral Disagree Strongly Disagree11) Do you feel that the weakness of an employee is communicated in a non-threatening manner.Strongly agree Agree Neutral Disagree Strongly Disagree12) Do you feel that the performance appraisal system provides an opportunity for self evaluation. Yes No No Comments13) Do you feel that the company used to give feedback after the appraisal of your performance.Yes No14) Do you feel that the current performance appraisal system is too time consuming.Yes No15) The present appraisal system gives each appraise an idea of what is expected of him by the managementStrongly agree Agree Neutral Disagree Strongly Disagree16) The performance appraisal system in SIDCO increases employee motivation Strongly agree Agree Neutral Disagree Strongly Disagree17) Do you feel that the rater have clear knowledge of that employees job.Yes No18) Do you think that the performance appraisal system helps to improve your performance?Yes No19) Do you feel that the rewards are given according to your performance.Yes No20) Are you satisfied with the current performance appraisal system?Highly satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

21) Do you feel that the objectives of performance appraisal are fair and clear to the subordinates? Yes No22) Do you feel that the management provides counselling, if required, after the performance appraisal for employees? Yes No23) Do you feel that the management provides training, if required, after the performance appraisal for employees?Yes No24) Any suggestion ........................................................................................................................

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Effectiveness of Performance Appraisal

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