1

A STUDY ON PERFORMANCE APPRAISAL

OF EMPLOYEES IN

FUTURE GENERALI INDIA LTD, THRISSUR

PROJECT REPORT

Submitted by

ARUN PRAKASH J

Register No.: 098001158008

in partial fulfillment for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

IN

RVS INSTITUTE OF MANAGEMENT STUDIES,

COIMBATORE – 641 402

JUNE 2011

2

RVS INSTITUTE OF MANAGEMENT STUDIES

COIMBATORE – 641 402

PROJECT WORK

JUNE 2011

This is to certify that the project entitled

A STUDY ON PERFORMANCE APPRAISAL

OF EMPLOYEES IN

FUTURE GENERALI INDIA LTD, THRISSUR

is the bonafide record of project work done by

ARUN PRAKASH. JRegister No.: 098001158008

of MBA during the year 2009-2011.

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

--Project Guide Head of the

Department/directorSubmitted for the Project Viva-Voce examination held on -----------------------------

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

--Internal Examiner External Examiner

3

DECLARATION

I affirm that the project work titled “A STUDY ON PERFORMANCE APPRAISAL

OF EMPLOYEES IN FUTURE GENERALI INDIA LTD, THRISSUR” being

submitted in partial fulfillment for the award of Master of Business

Administration is the original work carried out by me. It has not formed the part

of any other project work submitted for award of any degree or diploma, either

in this or any other University.

(Signature of the Candidate)

ARUN PRAKASH

J

098001158008

I certify that the declaration made above by the candidate is true

(Signature of the Guide)

Mrs. Manju Shree. R, MBA, M.Phil, (PhD)Assistant

Professor

4

ACKNOWLEDGEMENT

I wish to express my sincere thanks to Dr.P.V.Prabha MBA., Ph.D.,

Director, RVS Institute of Management Studies for her support in my project

.

I pay my respectful thanks to our Head of the Department Mrs. J.

Nirubarani MBA, M.Phil, B.Ed, D.P.C.S of her individual guidance and

encouraging me throughout the course of the project.

I would like to express my sincere thanks to our Mrs. R Manju Shree for

providing all necessary facilities to carry out this project

I would like to express my sincere thanks to Mr. Ranjith Thambi,

Regional Manager( Human Resource), Salem Steel plant, Salem, for his

valuable support and guidance throughout my project work.

I also express my gratitude to all the Faculty members, My Friends and

My Parents who have helped me to carry out this work. Last but not least I thank

the Almighty for his blessing showed on me during this work.

ARUN PRAKASH. J

5CONTENTS

CHAPTERNo. DESCRIPTION PAGE No.

List of Tables I

List of Charts Iii

Abstract Iv

Chapter 1 Introduction

1.1 About the Industry 1

1.2 About the Company 7

1.3 About the Study 10

1.3.1. Objectives of the Study 19

1.3.2. Scope of the Study 20

1.3.3. Limitations of the Study 21

Chapter 2 Review of Literature 22

Chapter 3 Research Methodology 27

Chapter 4 Analysis & Interpretation 28

Chapter 5 Findings and Inferences 69

Chapter 6 Recommendations 71

Chapter 7 Conclusion 72

Appendix 73

Bibliography 76

6

INTRODUCTION

1.1 ABOUT THE INDUSTRY

In all industrial organizations by far the greatest asset is the human resource. This

asset has to be evaluated periodically to know their potential, strength and weakness for the

growth and development of individual and the organization. The evaluation of the employee

in the industrial organization is done by what is called as „performance appraisal‟.

The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance

Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance

Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a

large population and the untapped market area of this population Insurance happens to be a

very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per

cent annually. Together with banking services, it adds about 7 per cent to the country‟s GDP

.In spite of all this growth the statistics of the penetration of the insurance in the country is very

poor. Nearly 80% of Indian populations are without Life insurance cover and the Health

insurance. This is an indicator that growth potential for the insurance sector is immense in India. It

was due to this immense growth that the regulations were introduced in the insurance sector and

in continuation “Malhotra Committee” was constituted by the government in 1993 to examine

the various aspects of the industry. The key element of the reform process was Participation of

overseas insurance companies with 26% capital. Creating a more efficient and competitive

financial system suitable for the requirements of the economy was the main idea behind this

reform.Since then the insurance industry has gone through many sea changes

.The competition LIC started facing from these companies were threatening to the existence

of LIC .since the liberalization of the industry the insurance industry has never looked back

and today stand as the one of the most competitive and exploring industry in India. The entry

of the private players and the increased use of the new distribution are in the limelight today.

The use of new distribution techniques and the IT tools has increased the scope of the industry

in the longer run.

7

HISTORY OF INSURANCE SECTOR

The business of life insurance in India in its existing form started in India in the year

1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of

the important milestones in the life insurance business in India are given in the table 1.

Table 1: milestone’s in the life insurance business in India

Year Milestones in the life insurance business in India

1912 The Indian Life Assurance Companies Act enacted as the first statute toregulate the life insurance business

1928 TheIndianInsuranceCompaniesActenactedtoenablethegovernmenttocollectstatisticalinformationaboutbothlifeandnon-lifeinsurance

businesses

1938 EarlierlegislationconsolidatedandamendedtobytheInsuranceActwith the objective of protecting the interests of the insuring public.

1956 245 Indian and foreign insurers and provident societies taken over by thecentralgovernmentandnationalised.LICformedbyanActof

Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore

from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton

Insurance Company Ltd., the first general insurance company established in the year 1850 in

Calcutta by the British. Some of the important milestones in the general insurance business

in India are given in the table 2.

Table 2: milestone’s in the general insurance business in India

8

Year Milestones in the general insurance business in India

1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact

all classes of general insurance business1957 General Insurance Council, a wing of the Insurance Association of India,

framesacodeofconductforensuringfairconductandsoundbusiness

practices

1968 TheInsuranceActamendedtoregulateinvestmentsandsetminimum

solvency margins and the Tariff Advisory Committee set up.

1972 The General Insurance Business (Nationalisation) Act, 1972 nationalised

the general insurance business in India with effect from 1st January 1973.

107insurersamalgamatedandgroupedintofourcompaniesviz.the

NationalInsuranceCompanyLtd.,theNewIndiaAssuranceCompany

Ltd.,theOrientalInsuranceCompanyLtd.andtheUnitedIndia

Insurance Company Ltd. GIC incorporated as a company.

Indian Insurance Market – History

Insurance has a long history in India. Life Insurance in its current form was introduced in

1818 when Oriental Life Insurance Company began its operations in India. General Insurance

was however a comparatively late entrant in 1850 when Triton Insurance company set up its

base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre

Nationalization b) Nationalization and c) Post Nationalization. Life Insurance was the first to

be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the

operations of various insurance companies. General Insurance followed suit and was

nationalized in 1973. General Insurance Corporation of India was set up as the controlling

body with New India, United India, National and Oriental as its subsidiaries. The process of

opening up the insurance sector was initiated against the background of Economic Reform

process which commenced from 1991. For this purpose Malhotra Committee was formed

during this year who submitted their report in 1994 and Insurance Regulatory Development

9

Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private

companies and Private Insurance Company effectively started operations from 2001.

Insurance Market- Present:

The insurance sector was opened up for private participation four years ago. For years now,

the private players are active in the liberalized environment. The insurance market have

witnessed dynamic changes which includes presence of a fairly large number of insurers both

life and non-life segment. Most of the private insurance companies have formed joint venture

partnering well recognized foreign players across the globe.

There are now 29 insurance companies operating in the Indian market – 14 private life

insurers, nine private non-life insurers and six public sector companies. With many more joint

ventures in the offing, the insurance industry in India today stands at a crossroads as

competition intensifies and companies prepare survival strategies in a detariffed scenario.

There is pressure from both within the country and outside on the Government to increase the

foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV

partners to bring in funds for expansion.

There are opportunities in the pensions sector where regulations are being framed. Less than

10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first licence

for a standalone health company in the country as many more players wait to enter. The health

insurance sector has tremendous growth potential, and as it matures and new players enter,

product innovation and enhancement will increase. The deepening of the health database over

time will also allow players to develop and price products for larger segments of society.

State Insurers Continue To Dominate There may be room for many more players in a large

underinsured market like India with a population of over one billion. But the reality is that the

intense competition in the last five years has made it difficult for new entrants to keep pace

with the leaders and thereby failing to make any impact in the market.

10

Also as the private sector controls over 26.18% of the life insurance market and over 26.53%

of the non-life market, the public sector companies still call the shots.

The country‟s largest life insurer, Life Insurance Corporation of India (LIC), had a share of

74.82% in new business premium income in November 2005.

Similarly, the four public-sector non-life insurers – New India Assurance, National Insurance,

Oriental Insurance and United India Insurance – had a combined market share of 73.47% as of

October 2005. ICICI Prudential Life Insurance Company continues to lead the private sector

with a 7.26% market share in terms of fresh premium, whereas ICICI Lombard General

Insurance Company is the leader among the private non-life players with a 8.11% market

share. ICICI Lombard has focused on growing the market for general insurance products and

increasing penetration within existing customers through product innovation and distribution.

Reaching Out To Customers No doubt, the customer profile in the insurance industry is

changing with the introduction of large number of divergent intermediaries such as brokers,

corporate agents, and banc assurance.

The industry now deals with customers who know what they want and when, and are more

demanding in terms of better service and speedier responses. With the industry all set to move

to a detariffed regime by 2007, there will be considerable improvement in customer service

levels, product innovation and newer standards of underwriting.

Intense Competition In a de-tariffed environment, competition will manifest itself in prices,

products, underwriting criteria, innovative sales methods and creditworthiness. Insurance

companies will vie with each other to capture market share through better pricing and client

segmentation.

The battle has so far been fought in the big urban cities, but in the next few years, increased

competition will drive insurers to rural and semi-urban markets.

11

Global Standards While the world is eyeing India for growth and expansion, Indian

companies are becoming increasingly world class. Take the case of LIC, which has set its

sight on becoming a major global player following a Rs280-crore investment from the Indian

government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, Nepal and will

soon start operations in Saudi Arabia. It also plans to venture into the African and Asia-

Pacific regions in 2006.The year 2005 was a testing phase for the general insurance industry

with a series of catastrophes hitting the Indian sub-continent.

However, with robust reinsurance programmes in place, insurers have successfully managed

to tide over the crisis without any adverse impact on their balance sheets.

With life insurance premiums being just 2.5% of GDP and general insurance premiums being

0.65% of GDP, the opportunities in the Indian market place is immense. The next five years

will be challenging but those that can build scale and market share will survive and prosper.

The IRDA has issued the first licence for a standalone health company in the country as many

more players wait to enter. The health insurance sector has tremendous growth potential, and

as it matures and new players enter, product innovation and enhancement will increase. The

deepening of the health database over time will also allow players to develop and price

products for larger segments of society.

12

1.2 ABOUT THE COMPANY

Future Generali is a joint venture between the India-based Future Group and the Italy-based

Generali Group.

Future Generali is present in India in both the Life and Non-Life businesses as Future

Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

Future Group

Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India‟s

leading business houses with multiple businesses spanning across the consumption space.

While retail forms the core business activity of Future Group, group subsidiaries are present

in consumer finance, capital, insurance, leisure and entertainment, brand development, retail

real estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet

of retail space in 71 cities and towns and 65 rural locations across India. Headquartered in

Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is listed on the

Indian stock exchanges. The company follows a multi-format retail strategy that captures

almost the entire consumption basket of Indian customers. In the lifestyle segment, the group

operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In the value

segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look,

touch and feel of Indian bazaars with the choice and convenience of modern retail.

The group‟s specialty retail formats include sportswear retailer, Planet Sports, electronics

retailer, eZone, home improvement chain, Home Town and rural retail chain, Aadhaar, among

others. It also operates popular shopping portal, www.futurebazaar.com.

Future Capital Holdings, the group‟s financial arm, provides investment advisory to assets

worth over $1 billion that are being invested in consumer brands and companies, real estate,

hotels and logistics. It also operates a consumer finance arm with branches in 150 locations.

13

Other group companies include, Future Generali, the group‟s insurance venture in partnership

with Italy‟s Generali Group, Future Brands, a brand development and IPR company, Future

Logistics, providing logistics and distribution solutions to group companies and business

partners and Future Media, a retail media initiative.

The group‟s presence in Leisure & Entertainment segment is led through, Mumbai-based

listed company Galaxy Entertainment Limited. Galaxy leading leisure chains, Sports Bar and

Bowling Co. and family entertainment centres, F123. Through its partner company, Blue

Foods the group operates around 100 restaurants and food courts through brands like Bombay

Blues, Spaghetti Kitchen, Noodle Bar, The Spoon, Copper Chimney and Gelato.

Future Group‟s joint venture partners include, US-based stationery products retailers, Staples

and Middle East-based Axiom Communications. Future Group believes in developing strong

insights on Indian consumers and building businesses based on Indian ideas, as espoused in

the group‟s core value of „Indianness.‟ The group‟s corporate credo is, „Rewrite rules, Retain

values.‟

The Generali Group

The Generali Group is a leading player in the global insurance and financial markets.

Established in Trieste in 1831, today the Group is one of Europe‟s largest insurance providers

and the European biggest Life insurer. It is also one of the world‟s top asset managers with

assets totalling more than € 400 billion. With an employed sales force of more than 100,000

people serving 70 million clients in 68 countries, the Group occupies a leadership position in

Western Europe and an increasingly important place in Eastern Europe and Asia.

The Group strategy aims to consolidate General‟s pre-eminence on its key markets and

achieve a premier position on markets with high growth potential, establishing its leadership

in profitability.

14

Identity Card

Since its establishment, the Generali Group has always held a reputation for its capital and

financial strength. Its solidity derives from prudent investment management and a focus on

achieving a correct match between risk and medium/long-term profitability.

Generali Group is one of the leading insurance groups in Europe, with a 2009 total

premium income of more than € 70 billion

It is present in 68 countries

It has 70 million clients worldwide

It has 85,322 employees (15,956 in Italy)

It has over € 400 billion of assets under management

High rating assigned by the international rating agencies:

A.M. best: A+ stable

Standard & poor‟s: AA- stable

Fitch IBCA: AA- negative

Moody‟s: AA3 stable

While the world is eyeing India for growth and expansion, Indian companies are

becoming increasingly world class. Take the case of LIC, which has set its sight on

becoming a major global player following a Rs280-crore investment from the Indian

government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, Nepal and

will soon start operations in Saudi Arabia. It also plans to venture into the African and

Asia-Pacific regions in 2006.The year 2005 was a testing phase for the general insurance

industry with a series of catastrophes hitting the Indian sub-continent.

15

1.3 ABOUT THE STUDY

1.3.1 Definitions

According to Hyde (1973) „performance appraisals is the process of evaluating the

performance and qualification of the employees in terms of requirements of the job for which

he is employed, for the purpose of administration including placement, sections for

promotions, providing financial rewards and other actions which need differential treatment

among the members of a group as distinguished from actions affecting all members equally”.

So performance appraisal is the systematic evaluation of the individual employed in the

industry with respect to his performance in the job and his potential for development.

The word performance may mean various things to various people depending upon the

context and usage.

„Performance‟ is used to connote what an individual „does‟ and not necessarily what

anybody else likes him to do or what the individual himself is prone to do or capable of doing.

It is conceptualized as a composite phenomenon comprising concrete on job behavior; the

actions and the results of which can be observed, recorded and evaluated.

Hence, the word performance is used to imply the following features either separately

or in mutual combination.

1) Itis the result that people register on the job, and

2) It is whatever people do, to cause those results.

According to Arun Monappa and Mizra S. Saiyadain, “performance appraisal is a

systematic and objective way of judging the relative worth or ability of an employee in

performing his task. Performance appraisal helps to identify those who are performing their

assigned task well and those who are not and the reasons for such performance.

16

Why Appraise?

In a small family business, the role, satisfaction, performance of staff is likely to be

discussed and examined jointly with individual as a natural part of the process of running the

business. Parents do not have to devise forms, formulae and timetables to ensure that the

development of the children who are constantly in their minds. It is part of being a parent. The

directors of small business will normally do the same thing instinctively. They may

misunderstand their children, but it will not be for want of interest.

In a large concern, relationships become depersonalized and responsibilities are less

obvious. Appraisal is only a means of reintroducing a personal element; as is usually the case,

it requires a “format” and a drill to enable it to keep its place in the queue for the busy

manager‟s attention. Furthermore, big business has to have things on record. The fact that a

manager has also the plans for his subordinates in his head is of little help to the man in the

center who needs to co-ordinate these plans and let them into the large jigsaw puzzle of the

total enterprise.

Whenever two people work together, the one is a superior subordinate position in relation to

the other, the performance appraisal process become inescapable, because no one can avoid

noticing and judging both the quality and quantity of assistance he gets from a

“helper”.

Performance appraisal is made by comparing an accurate, concise and relevant description of

job performance of a predetermined set of standards developed independently by the

supervisor or furnished to him by a staff unit. The differences between the congruencies of the

two data patterns field a result that constitutes an objective appraisal and provides the only

sound basis for the post appraisal interview.

Methods of Performance Appraisal Systems

The method used in rating and evaluating employees still tends to be the weak point in

the entire procedure of career planning and development. There is no generally accepted

standard as to what method produces the best results. Among the numerous methods of

appraisal, the following are most popular today.

17

Ranking Methods

In this method the rater, judges competence by ranking employees from top to bottom

presumably by comparing with worth of each other. The three most popular ranking methods

are

a) peeror buddy and

b) paired comparison

a) PEER OR BUDDY

It consists of each employee evaluating, by secret ballot each of the other members in

the group. This method is frequently called the „Mutual rating system‟

b) PAIRED COMPARISON

In this, every employee is paired with every other worker in the group. Then the

supervisor must decide which of the two subordinates in each pair is more valuable to

the paired with every other employee and each one‟s rank relative to every other

person has been ascertained.

Graphic Rating Scale

It consists of a line with varying degree of each characteristic or qualification upon it.

The rater indicates the degree of each person‟s qualification by the point checked on the line.

This scale is continuing from one extreme, which is assumed to be negative, to the other

supposed to be positive. The midpoint should be average.

Essay Methods

In this method the appraiser describes the competence of rates by recalling past

performance. It uses an essay to describe the aspects of a person‟s performance, usually

without a prescribed format. The evaluator may be asked to describe a person‟s strength and

limitation or simply describe the competence sometime after performance is over.

18

Check List Method

They simply report the incidents in such a way that combinations of information‟s

reported represent the profile of the individual being rated. The most popular forms are:

Forced Choice Rating Scale

This plan includes an arrangement of several pairs of statements concerning the job

performance of the employee. There are two comments, which appear to be equally favorable,

and two comments, which appear to be equally unfavorable. From this the rater must choose

one statement t descriptive of the person under consideration and one which is least

descriptive.

Critical Incident Check List

This method involves recording significant or critical incidents of positive or negative

performance as a basis for appraising performance.

In this method, such specific events are selected which are related to his job like

overcoming with anger at the working time, disinclination to co-operate, suggestion fro

improvement in work procedure, prohibition of future training. After that, these could be

weighed in the order of importance and graded. Once all the critical factors of a job are

identified the supervisor may then observe and record the instances and events of the job

behavior falling under any of these factors as this takes place. A concrete performance record

of a man objectively observed and recorded comes into being for his future evaluation.

Group Appraisal Method

Under this method employees are rated by an appraisal group consisting of their

immediate supervisor and three or four other supervisors. The group then discusses the

standards of performance for that job, the actual performance of the job holder and the causes

of their particular level of performance, and offers suggestions for future improvement. The

advantage of this method is that it is very simple and avoids any bias. But it is very time

consuming.

19

Field Review Method

Under this method, evaluator asks the supervisor questions about the workers working

under him and gets his opinion and records it. There are signed by the supervisor and kept for

future reference as a context.

Appraisal Procedures

It is possible for the appraisal to be done by one or combination of the following:

Theimmediate manager

Other managers familiar with employees work

A higher level manager

Personneldepartment specialist

The employee‟s peers

The employee himself

The employee-subordinate

In most of the cases the immediate manager does the appraisal. It is believed that

being closest to his employees; he is in the best position to know them and their work.

Moreover, being generally responsible for feedback of appraisal to the employees and for

recommendation or approval of personnel actions, which may depend upon the appraisal. It is

usually desirable to have him as a party to the performance appraisal.

However, there is always the risk of some innocent or purposeful bias entering into the

appraisal done by the immediate manager. This risk is reduced by getting these appraisals

reviewed by a higher level manager or supplemented by other appraisals.

Sometimes personnel department specialists are also included in the appraisal process.

They serve as advisors to the managers who are doing the appraisal. These specialists probe

and question each manager as he goes through the appraisals for individuals, forcing the

manager to think about how much evidence he actually has on which to make appraisal

judgments.

20

Appraisal by employee‟s peers is done on the belief that a group of employees can more

reliably identify its outstanding and poorest performance than managers who are not part of the

group. It is also hoped that the out-comes of appraisals by peers will be more acceptable

to employees than the outcomes of the appraisals by others. The final possibility, which is

most behavioral in orientation, is to allow sub-ordinates to rate themselves. The major values

lie in the development and motivation areas, it being claimed that this approach (self-

appraisal).

a) Resultsin a superior upward flow of information

b) Forces the subordinate to become more personally involved and to do some systematic

thinking about self and work.

c) Improves communication between superior and subordinate in which each is given

more information by the other when disagreements are discovered and

d) Improves motivation as a result of greater participation.

The usual fear of this approach (self-appraisal) is that of excessively high ratings. If

the basic participatory management approach continues to grow, it is certain that the self-

rating of the process will become more wide spread.

PROBLEMS

As with most other personnel techniques, performance appraisal has the problems of

validity and reliability. Performance appraisal is intended to evaluate the performance and

potential of employees. Yet they may not be valid indicators of what they are intended to

assess because of variety of limitations of their use. The most common sources of error are the

halo effect, bias, inflation of ratings and central tendency.

The Halo Effect

The halo effect (its counter part, the “horn effect”) is the tendency of evaluators to

base assessments of all individual characteristics which are presumed to be independent of

each other on the raters overall impression of the person being evaluated. In essence the halo

effect is the tendency to generalize for a predetermined while the halo effect applies to almost

all methods of appraisal, it seems to apply less to the forced choice method.

21

Bias

Many otherwise valid appraisals are invalidated because of bias on the part of the

appraiser. The bias may occur for many reasons including racial religious or interpersonal

conflict. Also, an evaluator may not like the person being evaluated. While it is difficult to

deal with bias, the more descriptive methods offer less chance for over bias. Bias may also be

a factor of time. Recent impressions are likely to bias appraisals, as there is a tendency to

forget or overlook more distant events. Consequently, recent information about an individual

may have undue influence on evaluation methods.

Inflation of Ratings

Another limitation on appraisal in the tendency to inflate ratings. Sometimes there is a

gradual inflation of ratings over time. In other organizations inflation may occur as a part of

certain raters at all time.

Central Tendency

There is also a tendency for evaluators to avoid using the extremes of rating scales. In

other words, there appears to be a tendency for rating to cluster around the midpoint or centre,

of the rating scale.

Difference Between Performance Appraisal And Personnel Appraisal

A distinction must be observed between performance appraisal and personnel

appraisal. A personal appraisal, frequently part of the managerial selection procedure, is an

analysis and evaluation of the psychological structure abilities, motives, temperament of the

candidate. Performance appraisal on the other hand, is not properly concerned with describing

the person; rather its purpose is to describe and evaluate what the person has done. The

emphasis in performance review should be on behavior and its results, not on traits; on past

achievements, and future potential. Adequate performance appraisal then is based upon actual

behavior and only upon behavior relevant to the responsibilities and functions of man being

rated.

22

Inadequacies Of Performance Appraisal System

No matter how well defined the dimension for appraising performance on quantitative

goals are, judgments on performance are usually subjective and impressionistic. Because

appraisals provide inadequate information about the subtleties of performance managers using

them to compare employees for the purpose of determining salary increases often make

arbitrary judgments. Ratings by different managers and especially those of different units are

usually incomparable, what is excellent work in one unit will not be acceptable by another in

the same company. When salary increases are allocated on the basis of a normal distribution

which is in turn based on rating of results rather than on behavior competent employees may

not only be denied increases but may also become demodulated.

Trying to base promotion and lay off decision on appraisal, data leaves the decisions

open to acrimonious debate. When employees who have been retired early have complained

federal authorities of age discrimination, defendant companies have discovered that there

were inadequate data to support lay off decisions.

Although managers are used to give feedback freely and often there is no built in

mechanism for ensuring they do so. Delay in feed back creates both frustration, when good

performance is not quickly recognized, and anger, when judgment is rendered for

inadequacies long past.

There are few established mechanism to cope with either the sense of inadequacy

managers have about appraising subordinates, or the paralysis and procrastination that result

from guilt about playing God.

23

Traditional and systematic approach

This type of appraisal is systematic. It evaluates all performances in the same manner,

utilizing the same approach so that the ratings obtained of separate personnel are comparable.

The essential purpose of this approach is the accurate measurement of human performance. It

attempts to reduce if not eliminate, hum an bias and prejudice by means of a system

particularly a system that is subject to impartial review and check.

In all the methods of traditional and systematic appraisal, the Manager is sitting in

Judgment on the performance of subordinates hoping to obtain an impartial objective, factual

and acceptable measurement.

In recent years, the critics of the above philosophy of rating have increased in number

and loudness. Instead of sitting in judgment, the superior should devote attention to

establishment of goals. Now-a-days performance appraisal is increasingly being based on

management by objective techniques. Management by objectives (MBO) is a process whereby

organizational goals and objectives are set through the participation of organization members

in terms of result expected.

In simple the elements of management by objective in actual practice are setting

objectives, tracking progress and evaluating results.

In both the traditional and management by objectives approaches the trend is in the

direction of attempting to evaluate what the person does, rather than what he or she is. This

approach resulted in an appraisal of initiative, dependability, personality etc. More recently

emphasis has been give to measuring the results of the employees performance. Thus both

elements, the qualities of the person and the facts of job-performance, may enter into any

Rating process.

24

1.3.1 OBJECTIVES OF THE STUDY

Primary Objectives:

To study the performance appraisal of the employees in Future Generali India Ltd, Thrissur.

Secondary Objectives:

To critically evaluate the pros and cons of existing performance appraisal system for

the employees in the organization.

To assess the level of awareness of the employees about the existing performance

appraisal system.

To draw general inferences about the perception and expectations of the employees

about the performance appraisal system.

25

1.3.2 SCOPE OF THE STUDY

Appraisals of performance serve administrative research and counseling purposes. Pay

actions for individuals, especially for managers and specialist are frequently determined by

their appraisals. Many compensation plans are designed to reward merit. Decisions with

respect to promotion, transfer, demotion and termination may be based on performance

appraisal. For the individual, therefore obtaining favorable appraisals are crucial to his/her

success in the organizations. Appraisals of performance can also be used for research purpose.

In validating selection methods, for example, appraisals may be used us a criteria for

determining whether or not one selection instruments or procedures are related to job

performance appraisals in counseling their subordinates through praise for satisfactory

performance, and suggestions for improving performance, a supervisor presumably can

motivate a subordinate to perform more effectively.

A good performance appraisal system serves a number of useful purposes in an

organization. It is used as :

1) A mechanism to facilitate development of employees by identifying areas of

improvement.

2) A means to improve quality of communication between superiors and subordinates.

3) A way to create a climate of openness and trust.

4) A system to strengths, weaknesses and potential of employees.

26

LIMITATIONS OF THE STUDY

As the questions were directed at the personal opinion of the employees, some of them

felt embarrassing and hence manufactured favorable answers.

Since the proportional stratified random sampling method we selected, the samples

were (sample size 100) the representatives of all the units in the organization viz., Top

managers, Assistant Sales Managers, Operation staffs, Securities, Attendees and

Advisors etc., Proportionate to each stratum (sub population) some difficulties were

experienced to collect the data from the samples in time. There were 100 respondents

out of 100 (sample size).

It is difficult to cortile an appraisal form which can fully and completely assess any

employees.

It is difficult to lay down ideal reference points „so‟ for as attributes of personality are

conferral.

Answer to such abstract queries as attainable of the employee towards working

organization policies or adaptability cannot appropriately be graded.

27

REVIEW OF LITERATURE

The history of performance appraisal is quite brief. Its roots in the early 20th century can be

traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the

same may be said about almost everything in the field of modern human resources

management. As a distinct and formal management procedure used in the evaluation of work

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

60 years ago.

Dulewicz (1989):

In a broader sense, the practice of appraisal is a very ancient art. In the scale of things

historical, it might well lay claim to being the world's second oldest profession.There is,

says Dulewicz (1989), "... a basic human tendency to make judgments about those one is

working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal.

In the absence of a carefully structured system of appraisal, people will tend to judge the

work performance of others, including subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal problems

in the workplace. Without a structured appraisal system, there is little chance of ensuring

that the judgments made will be lawful, fair, defensible and accurate.

Performance appraisal systems began as simple methods of income justification. That is,

appraisal was used to decide whether or not the salary or wage of an individual employee was

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

was found to be less than ideal, a cut in pay would follow. On the other hand, if their

performance was better than the supervisor expected, a pay rise was in order.Little

consideration, if any, was given to the developmental possibilities of appraisal. If was felt

that a cut in pay, or a rise, should provide the only required impetus for an employee to either

improve or continue to perform well. Sometimes this basic system succeeded in getting the

results that were intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people with roughly

28

equal work abilities could be paid the same amount of money and yet have quite

different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes;

but they were not the only element that had an impact on employee performance. It was

found that other issues, such as morale and self-esteem, could also have a major influence.

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

1950s in the United States, the potential usefulness of appraisal as tool for motivation and

development was gradually recognized. The general model of performance appraisal, as it

is known today, began from that time.

Performance appraisal may be defined as a structured formal interaction between a

subordinate and supervisor, that usually takes the form of a periodic interview (annual or

semi-annual), in which the work performance of the subordinate is examined and discussed,

with a view to identifying weaknesses and strengths as well as opportunities for

improvement and skills development.

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

help determine reward outcomes. That is, the appraisal results are used to identify the better

performing employees who should get the majority of available merit pay increases, bonuses,

and promotions.By the same token, appraisal results are used to identify the poorer

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

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

might restrict their capacity to dismiss employees or decrease pay.)

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

of rewards and penalties - is a very uncertain and contentious matter.

Derven, 1990 (Issues in management)

Few issues in management stir up more controversy than performance appraisal.There are many reputable sources - researchers, management commentators, psychometicians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible

29

to perfect it. At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it. There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes - such as pay rises and promotions.

Research (Bannister & Balkin, 1990) ,

The group believes that the linkage to reward outcomes reduces or eliminates the

developmental value of appraisals. Rather than an opportunity for constructive review and

encouragement, the reward-linked process is perceived as judgmental, punitive and

harrowing.

For example, how many people would gladly admit their work problems if, at the same time,

they knew that their next pay rise or a much-wanted promotion was riding on an appraisal

result? Very likely, in that situation, many people would deny or downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the person being appraised. Many

appraisers feel uncomfortable with the combined role of judge and executioner.Such

reluctance is not difficult to understand. Appraisers often know their appraisees well, and are

typically in a direct subordinate-supervisor relationship. They work together on a daily basis

and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain

work skills is one thing; giving an appraisal result that has the direct effect of negating a

promotion is another.

The result can be resentment and serious morale damage, leading to workplace disruption,

soured relationships and productivity declines. On the other hand, there is a strong rival

argument which claims that performance appraisal must unequivocally be linked to reward

outcomes.The advocates of this approach say that organizations must have a process by which

rewards - which are not an unlimited resource - may be openly and fairly distributed to those

most deserving on the basis of merit, effort and results.

Herriot.P. Assessment and selection in organizations,

30

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

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

and consistent reward outcomes.

It has also been claimed that appraisees themselves are inclined to believe that appraisal

results should be linked directly to reward outcomes Rather than feeling relieved, appraisees

may suspect that they are not being told the whole truth, or that the appraisal process is a

sham and waste of time.

Research (Bannister & Balkin, 1990) :

There has reported that appraisees seem to have greater acceptance of the appraisal process,

and feel more satisfied with it, when the process is directly linked to rewards. Such findings

are a serious challenge to those who feel that appraisal results and reward outcomes must

be strictly isolated from each other.

There is also a group who argues that the evaluation of employees for reward purposes, and

frank communication with them about their performance, are part of the basic responsibilities

of management. The practice of not discussing reward issues while appraising performance

is, say critics, based on inconsistent and muddled ideas of motivation.

Reference:

Dulewicz. V. (1989) Performance appraisal and counseling,

Research (Bannister & Balkin, 1990) ,

Herriot.P. Assessment and selection in organizations,

John Wiley & Sons, New York, pp645-649. Methods and practices for recruitment and appraisal

Derven, 1990 (Issues in management)

31

RESEARCH METHODOLOGY

The major element of the study was personal interview with a detailed questionnaire.

Main aim of the study was to find out the employees opinion about the existing performance

appraisal system prevailing in the organization. As the study relates to personal form of

interview carried out among the employees it was but natural that more emphasize was given

to primary research so as to enable with primary data.

The main purpose of research is to get first hand knowledge from the respondents. It

also ensures to certain extent the authenticity of the data collected as we are able to read the

mind of the respondents.

The study was carried out among the employees in the organization, with the help of

detailed questionnaire. The questionnaire had dichotomous questions, multiple choice options

and it consisted both open and closed ended questions. The open – ended questions enabled to

pull out the opinion from the respondents in their version.

SAMPLING DESIGN

Proportion stratified random sampling method was followed. There are 200 officers

are worked in the organization. Sample size selected was 100 (i.e.,) 50% of the total

population). The samples were the representatives of all the units in the organization

proportionate to each stratum (Sub population).

32

ANALYSIS AND INTERPRETATION

Analysis and interpretation is the most important step in the research. It gives a very

clear understanding of the position and full pictures of the company. The term interpretation

means explaining the meaning and significance of the data so arranged. It is the study of the

relationship between various factors.

This chapter deals with the data analysis and interpretation regarding simple

percentage of the respondents from the study. It is given in the tabulation various

classification with number of respondents and percentages.

The data used for analysis is basically primary data collected by structured to

questionnaires. The data was tabulated and inferences are drawn form them based on these

inferences the finding and suggestion are given.

33

AGE:

TABLE NO: 1

Table Showing The Age Category Of Respondents

Age/department Top ASM Operations S&A AdvisorsManagers

Total (%)

Below 30 11 11

30 - 40 1 9 10

40 - 50 2 11 1 14 28

50 – Above 3 7 3 2 36 51

From the above table express that the age category of respondents. There are Out of

these 100 respondents 11% belong to the age group of below 30 years. 10% belongs to the age

group of 30-40 year. 28% belong to the age group of 40-50 years. And the 51% belongs to age

group of 50 above years.

Thus it is concluded from the above table that a majority of 51% of the age category is

of above 50 years.

34

EXPERIENCE:

TABLE NO: 2

Table Showing the Respondents Experience in the Filed

Experience\ Top ASM Operations S&A Advisors TotalDepartment Manager (%)

Below 10 11 11

10 - 15 1 9 10

15 -20 2 10 4 2 14 32

20 above 3 8 36 47

The above table showing that the period of services of the respondents; 11% belong to

the below 10 year Experience, 10% belong to the 10 – 50 year experience, 32% belong to the

15 – 20 Year experience and the 47% belong to 20 above year experiences service.

Thus it is concluded from the above table that a maximum of 47% of the respondents are with

experience of more than 20 years.

35

CATEGORY:

TABLE NO: 3

Table Showing the Category of Respondents

Respondents Number

Top Managers 5

Assistant Sales Top Managers 19

Operations 4

Securities and Attendees 2

Advisors 70

Total (%) 100

From the above table indicate that the category of 100 Respondents. Top Managers are

5, Assistant Sales Top Managers are 19, Operation Staffs are 4, Securities and attendees is 2

and the Advisors are 70.

Thus it is concluded from the above table that a majority of 70% of the respondents

were advisors.

36

OPINION:

TABLE NO: 4

Table Showing the Opinion of the Respondents towards the Utilization of the

Present Appraisal System

NO OF Annual Necessary Something GimmickRESPONDENT ritual evil useful

Top Manager 1 2 2

ASM 2 1 11 5

Operations 4

S&A 2

Advisors 17 2 49 2

Total (%) 19 4 68 9

From the above table express that the option of the respondents towards the general

view of utilization of the present appraisal system. 19% of an annual ritual system in general,

4% of a necessary evil system in general, 68% of something useful for the employees and the

organization system in general and the 9% of a management gimmick of system.

Thus it is concluded from the above table that a majority of 68% of the respondents

think the appraisal is something useful.

37

CHART SHOWING THE OPINION OF THE RESPONDENTS TOWARDS THE

UTILIZATION OF THE PRESENT APPRAISAL SYSTEM

Chart –4.1

38

ADEQUACY:

TABLE NO: 5

Table Showing the Options of the Respondents to Adequacy Level of Present System

RESPONDENT\ADEQUACY Yes No

Top Manager 3 2

ASM 8 11

Operations 3 1

S&A 2

Advisors 59 11

Total (%) 75 25

From the above table express that the option of the respondents towards to adequacy

level of 75% yes and the 25% no, on the system.

A majority of 75% of the respondents think that the present appraisal system is

adequate to the current needs.

39

CHART SHOWING THE OPTIONS OF THE RESPONDENTS TO ADEQUACY

LEVEL OF PRESENT SYSTEM

Chart –5.1

40

OBJECTIVE OF APPRAISAL:

TABLE NO: 6

Table Showing the Attitude towards the Objectives of Present System

RESPONDENT promotion Transfer To identify To identify otherthe talents the training

Top Manager 2 2 1

ASM 5 1 7 1

Operations 1 1 1 1

S&A 1 1

Advisors 10 40 17 3

Total (%) 18 4 49 20 9

From the above table indicate that the option of the respondents towards to the objectives of

present system. 18% of promotional opportunities of the employees in the system, 4% of

transfer on the system, 49% of to identify the talents of the employees in the system, 20% of

the to identify the training needs of the system and the 9% of other option on employees on

the system.

Thus it is concluded from the above table that a maximum of 49% believe that the appraisal is

conducted for the purpose of identifying the talents of them.

41

CHART SHOWING THE ATTITUDE TOWARDS THE OBJECTIVES OF PRESENT

SYSTEM

Chart – 6.1

42

SATISFACTION:

TABLE NO: 7

Table Showing the Satisfied With the Present Appraisal Method in Organization

RESPONDENT Highly Moderately Satisfied Dissatisfied HighlySatisfied Satisfied Dissatisfied

Top Manager 2 3 1

ASM 4 8 4 2

Operations 1 3

S&A 1 1

Advisors 11 29 23 5 2

Total (%) 16 43 31 8 2

From the above the table showing that the option of the respondents towards to the

satisfied with the present appraisal method in your organization is 16% of very satisfied on

employees, 51% of satisfied on employees and the 33% of dissatisfied on employees.

Thus it is concluded from the above table that a majority of 43% of the respondents

think the present appraisal system is moderately satisfying the needs of the organization.

43

CHART SHOWING THE SATISFIED WITH THE PRESENT APPRAISAL METHOD

IN ORGANIZATION

Chart -7.1

44

APPRAISAL PERIOD:

TABLE NO: 8

Table Showing the Attitude towards the Appraisal Period

RESPONDENT Monthly Quarterly Half annually At the timeyearly of need

Top Manager 3 2

ASM 2 2 13 2

Operations 2 2

S&A 2

Advisors 6 10 2 42 10

Total (%) 8 12 7 61 12

From the above the table express that the option of the respondents towards to interval

of performance appraisal the 8% of the monthly the system, 12% of quarterly the system, 7%

of half yearly the system,61% of the annually the system and the 12 % at time of need of the

system.

Thus it is concluded from the above table that a majority of 61% of the respondents

prefer the appraisal to be held on annual basis.

45

PURPOSE:

TABLE NO: 9

Table Showing the Respondents Opinion about the Purpose of the System

RESPONDENT Improving Setting Helping self- Improvingperformance goals development communication

Top Manager 2 3

ASM 11 4 2 2

Operations 4

S&A 1 1

Advisors 48 14 5 3

Total (%) 65 19 11 5

From the above the table indicate that the option of the respondents towards help

system.65% of the improving present performance of the system, 19% of the setting higher

goals of the system,11% of the help the self development on the system and the 5% of

improving communication between you and your boss on system.

Thus it is concluded from the above table that a majority of 65% of the respondents

think the appraisal is done for improving the performance of the employees.

46

THE CHART SHOWING THE RESPONDENTS TO HELP THE SYSTEM

Chart – 9.1

47

DISCLOSURE OF PERFORMANCE:

TABLE NO: 10

Table Showing the Aspects of Respondents towards Discloser of Their Performance

RESPONDENT\ OPINON Favorable only unfavorable only Both

Top Manager 1 3 1

ASM 8 11

Operations 3 1

S&A 2

Advisors 4 22 44

Total (%) 5 36 59

From the above table express that the option of the respondents towards of

respondents towards discloser of their performance system.5% of the favorable aspects only

of system, 36% of the unfavorable aspects only of system and the 59% of both on the system.

Thus it is concluded from the above table that a majority of 59% of the respondents

think the disclosure of the performance is favorable as well as unfavorable.

48

RESPONDS TOWARDS COMMUNICATION:

TABLE NO: 11

Table Showing the Attitude of Respondents towards the Communication System

RESPONDENT Very Happy Satisfied Dissatisfied VeryHappy Dissatisfied

Top Manager 1 4

ASM 1 9 4 2 3

Operations 4

S&A 2

Advisors 8 34 8 4 16

Total (%) 9 50 14 7 20

From the above the table showing that the option of the respondents towards the

communication system is 9% very happy with the system, 50% happy with the system,

14% of satisfied with the system, 7% dissatisfied with the system and 20% are very

dissatisfied with the system.

Thus it is concluded from the above table that a majority of 50% are happy with the

communication system present in the company.

49

PREFERENCE OF COMMUNICATION OF APPRAISAL:

TABLE NO: 12

The Table Showing the Respondents Preference in Communication of Appraisal

NO OF RESPONDENT Own Supervisor Top Manager Colleague of samework

Top Manager 1 1 3

ASM 4 11 4

Operations 1 3

S&A 2

Advisors 43 21 6

Total (%) 48 36 16

From the above table express that the option of the respondents preference in

communication.48% of the your own supervisor , 36% of the Top Manager and the 16% of

the college of same work on system.

Thus it is concluded from the above table that a maximum of 48% of the respondents

prefer their own supervisor to communicate the appraisal.

50

CHART SHOWING THE RESPONDENTS PREFERENCE IN COMMUNICATION

Chart – 12.1

51

EXTENT FOR OBJECTIVE:

TABLE NO: 13

Table Showing the Respondents Extent Using the Performance Appraisal for Objective

RESPONDENT Very limited Limited Neutral Average Greatextent extent extent extent

Top Manager 3 2

ASM 1 12 3 1 3

Operations 2 1 1

S&A 2

Advisors 4 57 5 4

Total (%) 8 75 8 2 7

From the above table showing that the option of the respondents is identifying the

training need. 8% of the very limited extent on system, 75% of the limited extent on system,

8% neutral extend on system, average extend on system and 7% of the great extent on the

system.

Thus it is concluded from the above table that a majority of 75% of the respondents

think the appraisal have limited extent on the objective.

52

PREFERENCE ON TRAINING NEEDS:

TABLE NO: 14

Table Showing the Respondents Preference on Training Needs

RESPONDENT Very Limited Neutral Average Great extentlimited extent extend extend

extent

Top Manager 5

ASM 2 16 1

Operations 1 2 1

S&A 1 1

Advisors 11 50 4 2 3

Total (%) 14 74 5 2 5

From the above table indicate that the option of the respondents preference the training

needs.14% of the very limited of the system,74% of the limiter extent on system, 5%extent on

system, 2%extent on system and the 5% of great extent on system.

Thus it is concluded from the above table that a majority of 74% of the respondents

think the preference on training needs are of limited extent.

53

EFFECT ON PROMOTION:

TABLE NO: 15

Table Showing the Respondents Promotion on the Company

RESPONDENT Very Limited Neutral Average Greatlimited extent extent extent extent

extent

Top Manager 5

ASM 3 2 14

Operation 4

S&A 2

Advisors 10 30 5 4 21

Total (%) 13 32 5 4 46

From the above table showing that the option of the respondent‟s promotion on the

company of the 13%very limited of the system, 41% of the limiter extent on system and the

46% of great extent on system.

Thus it is concluded from the above table that a maximum of 46% of respondents

believe that the appraisal have impact on the promotions.

54

CHART SHOWING THE RESPONDENTS PROMOTION ON THE COMPANY

Chart -15.1

55

SUPERVISOR’S VISIT THE ON THE WORK:

TABLE NO: 16

Table Showing the Respondents in Supervisors Visits the On the Work

Respondent\ No. 1 supervisors 2 supervisors 3 supervisors Above 4Supervisors supervisors

Top Manager 5

ASM 18 1

Operation 4

S&A 2

Advisors 3 4 60 3

Total (%) 3 4 89 4

From the above table express that the option of the respondent‟s in visits theon the

work the 3% of 1 visit the work , 4% of the 2visit the work, 89%of the 3 visit the work

and the 4% of abovevisit the work the job on the system.

Thus it is concluded from the above table that a majority of 89% of the respondents

believe that the number of supervisors visiting during the work hours is 3.

56

PREFERED APPRAISAL:

TABLE NO: 17

Table Showing the Preference Respondents towards the Preferred Appraisal

Top Manager 3 2

ASM 11 8

Operation 1 3

S&A 1 1

Advisors 32 38

Total (%) 48 52

Respondent\System Open system Confidential system

From the above table indicate that the option of the respondent‟s towards the preference

of appraisal system.48% of the open system appraising and the 52% of confidential appraising

method.

Thus it is concluded from the above table that a majority of 52% of the respondents prefer the

confidential appraising system.

57

CHART SHOWING THE PREFERENCE RESPONDENTS TOWARDS THE

PREFERED APPRAISAL

Chart -17.1

58

FACTORS:

TABLE NO: 18

TABLE SHOWING THE PREFERENCES OF RESPONDENTS TOWARDS THE

FACTORS OF THE APPRAISAL

Top Manager 2 3

ASM 8 11

Operation 2 2

S&A 2

Advisors 42 28

Total (%) 54 46

RESPONDENT All employees good Particular employee good

From the above table express that the option of the respondent‟s towards

the factors of the appraisal system is 54% of the every one the employees should be

grated excellent and the 46% of only a small percentage of the employees should be

rated as excellent on the system.

A majority of 54% of the respondents think the statement “all employees good” is

right in appraisal system.

TABLE NO: 19

59

FACTORS TO BE DROPPED OR INCLUDED:

TABLE SHOWING RESPONDENTS FACTORS TO BE DROPPED OR

INCLUDED IN PERFORMANCE APPRAISAL

RESPONDENT Yes No

Top Manager 4 1

ASM 16 3

Operation 4

S&A 2

Advisors 62 8

Total (%) 88 12

From the above table express that the option of the respondent‟s dropped or included

in performance appraisal system 88% of the yes on employees and the 12% of employees no

on the answers on system.

A majority of 88% of the respondents think many factors are to be dropped and

included in the system.

60

CHART SHOWING RESPONDENTS DROPPED OR INCLUDED IN

PERFORMANCE APPRAISAL

Chart -19.1

61

FACTOR TO BE INCLUDED:

TABLE NO: 20

Table Showing Respondents to Be Included the Information

RESPONDENT\FACTOR Reliability Punctuality Other

Top Manager 5

ASM 3 14 2

Operation 4

S&A 2

Advisors 11 54 5

Total (%) 14 79 7

From the above table showing that the option of the respondent‟s to be included the

information on system 14%of the reliability of system, 79% of the reliability of system and

the 7% of the other on system.

A majority of 79% of the respondents think the factor to be included is punctuality.

\

62

CHART SHOWING RESPONDENTS TO BE INCLUDED THE INFORMATION

Chart –20.1

63

TABLE NO: 21

FACTOR’S RELATION TO WORK:

TABLE SHOWING THE RESPONDENTS FACTORS RELATED TO YOUR

NATURE OF WORK

NO OF RESPONDENT Yes No

Top Manager 5

ASM 19

Operation 4

S&A 2

Advisors 61 9

Total (%) 91 9

From the above table showing that the option of the respondent‟s factors related to

your nature of work on system 91%yes on the nature of work and the 9% of no on nature of

work of the feeling of employee‟s.

A majority for 91% think the factors are related to the work.

64

TABLE NO: 22

VAGUE SYSTEM:

TABLE SHOWING RESPONDENTS FEEL THAT THE PRESENT SYSTEM IS

VAGUE

RESPONDENT Yes No

Top Manager 3 2

ASM 9 10

Operation 3 1

S&A 2

Advisors 37 33

Total (%) 52 48

From the above table showing that the option of the respondent‟s the attitude towards

the merits rating system 52% of the yes on merits system ant the 48% of no on merits system.

A majority of 52% of the respondents think the present system is vague.

65

TABLE NO: 23

PREFERENCE OF RATING SCALES:

TABLE SHOWING RESPONDENTS THE PREFERENCE OF RESPONDENTS

TOWARDS RATING SCALES

RESPONDENT Yes No

Top Manager 2 3

ASM 13 6

Operation 2 2

S&A 2

Advisors 49 21

Total (%) 68 32

From the above table express that the option of the respondent‟s the preference of

respondents towards rating scales 68% on the specific rating and the 32% did not prefer for

that.

A majority of 68% of the respondents prefer the present rating scales.

66

CHI –SQUARE TEST

The chi-square test is an important test amongst several test of significance developed

by statisticians. Chi-square is a statistical measure used in the context of sampling analysis for

comparing a variance to theoretical variance.

The chi-square is a measure of actual divergence of the observed and expected

frequencies and as such when there is no difference between actual and observed frequencies,

the value of chi-square is 0. Chi-square test frequencies is significant or not.

The following formula can be used for calculating chi-square value.

Chi-square test 2= OE 2

E

Where,

O = Refers to the observed frequencies and

E = Refers to the expected frequencies

DEGREE OF FREEDOM

The term degree of freedom refers to the number of “independent constraints” in a set

of data. The degrees of freedom are calculated by the formula.

V = c 1 r 1

V = Stands for degree of freedom

c = Stands for number of Columns

r = Stands for number of rows

67

LEVEL OF SIGNIFICANCE

The probabilities indicate the extent of reliance that can be

drawn. The same technique is used incase of chi- square test and the

are available at various probabilities level. These levels are called

Usually the value of chi- square is at 5% level of significance.

placed on conclusion

table value chi- square

level of significance.

Null hypothesis (Ho)

“Null hypothesis is one that would be true if the alternative hypothesis were false”. It

is a very useful tool in testing the significance of difference. It assert that the there is no real

difference in the sample and the population in the particular matter under consideration. It is

usually denoted by the symbol Ho.

The level of significance is always the same percentage (usually 5%) which should be

chosen with great care, thought and reason. It will be rejected when the sampling result is less

than 0.05 probability of occurring it Ho is true and vice versa in case of 5% level of

significance.

S. No O E O – E ( O – E )² ( O – E)²

E

68

CROSS TABULATION BETWEEN AGE OF EMPLOYEES AND WORKERS

PARTICIPATION IN MANAGEMENT

PARTICPATIVE MENEGEMNTAGE Total

Strongly Agree Neutral Disagree StronglyAgree Disagree

Below 0 2 2 2 2 825 yrs.

26 – 30 2 3 2 2 3 12yrs.

31 – 35 4 5 10 5 2 26yrs.

36 – 40 5 3 18 4 4 34yrs.

Above 3 3 10 3 1 2040 yrs.

Total 14 16 42 16 12 100

Source: Survey data

(H0): There is no significant relationship between age of workers and workers participation in

management.

(H1): There is significant relationship between age of workers and workers participation in

management.

69

1 2 1.6 0.4 0.16 0.1

2 2 1.2 0.8 0.64 0.31

3 22 4.8 -2.8 7.84 1.41

4 2 1.3 0.7 0.49 0.37

5 2 0.9 1.1 1.21 1.39

6 2 2 0 0 0

7 3 1.5 1.5 2.25 1.5

8 2 5.7 -3.7 13.69 2.20

9 2 1.6 0.4 0.16 0.1

10 3 1.1 1.9 3.61 3.28

11 6 6.3 -0.7 0.09 0.01

12 8 4.8 3.2 10.24 2.13

13 13 18.3 -5.2 27.04 1.26

14 9 5 4 16 3.2

15 2 3.5 -1.5 2.25 0.42

16 8 9.6 -1.6 2.56 0.26

17 3 7.3 -4.3 18.49 2.5

18 39 27.8 11.2 125.44 4.51

19 4 7.7 -3.7 13.69 1.77

20 4 5.7 -1.4 1.96 0.36

21 7 5.3 1.7 2.89 0.54

22 3 4.0 -1 1 0.25

23 16 15.3 0.7 0.49 0.03

CV 27.762

70

(H0):

CHISQUARE TEST

Calculated2Value = 27.762

Degree of freedom = 16

Table value = 25.365

Significant level = Significant at 5% level

It is observed from the above table that the calculated value of chi-square is greater

than the table value. Hence the null hypothesis is rejected and it is concluded that there is

significant relationship between age and participative management.

CROSS TABULATION BETWEEN GENDER AND SATISFCATION LEVEL OF

CURRENT COMMUNICATION SYSTEM

CURRENT COMMUNICATION SYSTEM

GENDER Total

Highly Satisfied Moderate Dissatisfied HighlySatisfied Dissatisfied

Male 13 33 25 5 5 81

Female 4 4 3 2 6 19

Total 17 37 28 7 11 100

Source: Survey data

There is no significant relationship between gender and current satisfaction level

appraisal system.

71

(H1): There is significant relationship between gender and current satisfaction level

appraisal system.

CHISQUARE TEST

Calculated2Value = 10.011

Degree of freedom = 4

1 28 27.9 0.1 0.01 0.22

2 48 45.4 2.6 6.76 0.04

3 35 33.18 1.82 3.31 0.09

4 10 8.7 1.3 1.69 0.09

5 10 13.9 -3.9 15.21 8.09

6 4 4.0 0 0 0

7 4 6.5 -2.5 6.25 0.26

8 3 4.8 -1.8 3.24 0.47

9 2 1.5 0.5 0.25 0.16

10 6 2.0 4 16 8

CV 11.023Table value = 9.378

Significant level = Significant at 5% level

72

73

S.NO WEIGHTED

STATEMENTS AVERAGE METHOD

It is observed from the above table that the calculated value of chi-square is greater than the

table value. Hence the null hypothesis is rejected and it is concluded that there is significant

relationship between gender and current satisfaction level appraisal system.

WEIGHTED AVERAGE:

74

1. Age 5.2

2. Experience 1.87

3. Category 1.21

4. Opinion 3.3

5. Adequacy 3.5

6. Objective of appraisal 3.8

7. Satisfaction 3.81

8. Appraisal period 3.31

9. Purpose 3.46

10. Disclosure of performance 3.34

11. Responds towards communication 3.58

12. Preference of communication of appraisal 3.76

13. Extent for objective 3.48

14. Preference on training needs 3.14

15. Effect on promotion 3.22

16. Supervisor‟s visit the on the work 3.34

17. Preferred appraisal 3.32

18. Factors 2.78

19. Factors to be dropped or included 3.92

20. Factor to be included 3.14

21. Factor‟s relation to work 3.64

22. Vague system 3.15

23. Preference of rating scales 3.62

75

SUMMARY OF FINDINGS

Under this study after analyzing and interpretation of research has found the following

findings and suggestion.

Findings

1) The maximum (70%) of respondent is worker the data collected.

2) The maximum (51%) category of respondents is above 50 age person and the minimum

age category of respondent is 30-40 of the employees

3) The maximum (51%) experience of respondents are 20 years and above and the

minimum (10%) experience is the 10-15 year

4) The maximum (68%) respondents towards the utilization of the present appraisal

system, is something useful thing on the system.

5) The majority (75%) option of the respondents to adequacy level of presents system is

accepted and (25%) on the employees this system is not accepted.

6) The majority (49%) attitude towards the objectives of present system is to identify the

talents.

7) The majority (51%) satisfied with the present appraisal method in Future Generali India

Life Insurance Company is satisfied

8) The majority (61%) attitude towards the appraisal period is the annually respondents to

gathering the employees.

9) The majority (65%) respondents to help the system the improving performance to the

employees

10) The majority (59%) respondents towards disclosure are the favorable and unfavorable

on the performance is the best.

11) The majority (64%) attitude of respondents towards the communication system is the

happy.

12) The maximum (48%) respondent performance is communication is the major of the

employee is choosing the thinking supervisor on the system.

76

13) The maximum (85%) respondents identifying the training needs was limited extent of

employees.

14) The respondents identifying the training has is the limited extent on the (81%).

15) The respondents promotion on the company is the Great extent on the employees is the

(46%).

16) The preference of respondents in visits the supervisor on the work is the 3 supervisor

visit and advices the work to help (89%) employees thinking.

17) The preference respondents towards any preference appraised confidential system

(52%).

18) The preference of respondents towards the factors of the appraisal is all the employees

good is the (46%).

19) The majority (88%) respondents dropped or includes in performances appraises is the

accepted.

20) The majority (79%) respondents to be included the performance is .

21) The majority (91%) respondents factor related to your nature of work is the accepted to.

22) The majority (52%)respondents feel that the present system is vague

23) The majority (68%)respondents prefer present rating scales

77

SUGGESTIONS AND RECOMMENDATIONS

The company should provide more facilities to their workers in order to strength the

company affairs.

The company to adapt innovation techniques in order to identified the talent of

the employees.

The company adapt easy methods to appraisal the employees

The company should take performance appraisal very often in order to know

the quality and quantity of the employees.

The company should make effective communication in order to make satisfied among

manager, engineer, Attendees, designer, electrician, supervisor, workers and others.

Increase the transparency of the system.

Educate the employees more of the uses and advantages of the system.

78

CONCLUSION

Performance appraisal is the process of reviewing an individual‟s performance of

progress in a job work assessing his potential. It is a system of obtaining analyses for recorded

information about person doing a specific job ,rather than assassin to job itself . Under this

study it is related to improve the performance of individual and their by improve the

effectiveness of the Future Generali India Life Insurance Company limited . Future Generali

India Life Insurance Company limited to distribution of rewards such as salary, promotion

status to their employees well in advance so that we can keep all the employees work

peacefully and successfully .

Under this study, the Future Generali India Life Insurance Company limited may be

appraisal in various ways of method in order to improve and develop the concern. The

concern written onwards cards and on the basis of individual work performance, attitudes,

behaviors, sincerity, honest and sure other positive factors the cards are arranged in order

from low to higher finally how often employee appraisal should be undertaken will

largely ,depend on its purpose in other words frequency of the need to make decisions as

regards sanctioning encourages in pay, promotion, transfer and the extent of motivate required

for appropriate development of employees.

79

APPENDICES

A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN

FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LTD.

THRISSUR.

QUESTIONNAIRE

1. Name :2. Age :

3. Sex :

a) Male b) Female

4. Educational Qualification

:

5. Experience

:

6. Unit / department :

7. What do you think about the appraisal systems in general? it is

a) An annual ritual

b) A Necessary evil

c) Something useful for the employees and the organizationd)A management gimmick

8. Does the present appraisal method cover the objective

a) Yes b) No

9. What do you think, are the objective of the appraisal?

a) Promotion b) Transfer

c) To identify the talents of the employee

80

d) To identify the training reeds e)Any other

10. Are you satisfied with the present appraisal method in your organization?

a) Very satisfied b) Satisfied c) Dissatisfied

11. How often do you think the performance appraisal should be done?

a) Monthly b) Quarterly c) Half Yearlyd) Annually e) At the time need

12.How did the system help you?

a) Improving present performance b) Setting higher goals

c)Helping self-development

d) Improving communication between you and your boss.

13. What aspects should be communicated to you?

a) Favorable aspects only b) Unfavorable aspects only

c) Both

14. Are you happy with the way of communication of your appraisal

a) Very happy b) Happy c) Satisfied d) Dissatisfied

e)Very Dissatisfied

15. In your opinion who should communicate the appraisal to you

a) Your own Supervisor b) Manager

c) Colleague of same rank

16. What is theextent of using the performance appraisal for objectives

a) Very limited extent a) Limited extent a) Neutral b) Average

extent c) Great extent

17. Is performance appraised successful in correctly identifying

training needs? if yes, to what extent?

a) Very limited extent a) Limited extent a) Neutral extentb)

81

Average extent c) Great extent

18. How does performance appraisal influence promotions in the company?

a) Very limited extent a) Limited extent a) Neutral extent b)

Average extent c) Great extent

19. So for have many superiors have appraised you?

a) 1 b) 2 c). 3 d). Above 4

20. Which system of appraisal you prefer?

a) Open system appraising b) Confidential appraising

21. In appraisal ratings, which of the following two statements you agree?

a) Every one of the employees should be rated

excellent b) Only a small percentage of the employees

should be rated as excellent.

22. Are there any factors to be dropped or included in performance Appraisal?

a) Yes b) No

23. What are the factors to be included?

a) Reliability b) Punctuality c) Others

24. Are the factors related to your nature of work?

a) Yes b) No

25. Do you feel that the present system is vague?

a) Yes b) No

26. Do you prefer specific ratings scales for different factors?

a) Yes b) No

27. Are there any suggestions or information you would like to give?

82

BIBLIOGRAPHY

Books:

1. Bernardin H.J. and Walter C.S (1997). “Effects of rater training and diary

keeping on psychometric error in rating”, British raters, 62: pgs 64-69.

2. Tznier, A., Kopelman, & R.E. Livneh, N. (1993). Effects of performance

appraisal format on perceived goal characteristics, appraisal process

satisfaction, and changes in rated job performance: a field experiment. The

Journal of Psychology, 127(3):281-291. pgs 205-212

3. Bernardin H.J., Kane. J, Ross. S, Spina.J, Johnson D. (1995). Performance

Appraisal Design, Development and Implementation. In Ferris R et al:

Handbook of Human Resource Management. Cambridge: Blackwell(1995)

4. Blumberg,H.H.(1972).“Communicationofinterpersonalevaluations”.

Personality and Social Psychology, Vol. 23, Pgs.157-162

5. Boice, DF. And Kleiner, BH. (1997), Designing effective performance

appraisal system, Work Study, Vol.63. Pgs:556-560

6. Borman,W (1978). Exploring upper limits of reliability and validity in job

performance ranking,

7. Bretz, R, G. Melkovich and W. Read(1992). The current state of performance

appraisal research and practice: concerns, directions and implications ,

Vol.18 no.2 Pgs. 321-352

8. Cooper, W. (1981). Ubiquitous Hal-, Psychological Bulletin,90, Pgs: 2-6

9. Longenecker, CO, Sims, HP & Gioia, D.A (1987). Behind the Mask: The

Politics of employee appraisal , Academy of Management Executive, Vol. !,

no.3, pgs: 183-193

10. Mero, NP & Motowildo, SJ (1995). Effects of Rater Accoutability on the

accuracy and the favourability of the Performance rating. Pgs: 517-524

Journal:

83

1. Tyler, T.R. 1989. The psychology of procedural justice: A test of the group-

value model. Journal of Personality and Social Psychology, 57(5):830-838.

2. Sheppard, J.A. 1993. Productivity loss in performance groups: A motivation analysis.

Psychological Bulletin, 113(1), 67-81.

3. Solomon, G.B. 2001. Performance and personality impressions cues as predictors

of athletic performance: An extension of expectancy theory. International Journal

of Sport Psychology, 32(1):88-100.

4. Skinner, B.F., 1953. Science and Human Behavior. NewYork. Free Press.

5. Tziner, A., Joanis, C., & Murphy, K. (2000). A comparison of three methods of

performance appraisal with regard to goal properties, goal perceptions, and

ratee satisfaction. Group and Organization Management, 25:175-190.

Websites:

1. http://www.citehr.com/55847-books-performance-appraisal-system.html

2. http://www.performance-appraisal.com/intro.htm

3. http://nccur.lib.nccu.edu.tw/bitstream/140.119/33944/11/93304011.pdf

4. http://hrweb.berkeley.edu/performance-management/cycle/assessment/tips/supervisors

5. http://www.amazon.com/Performance-Appraisal-Phrase-Book-Techniques/dp/