CHAPTER I INTRODUCTION 1.

Meaning of Performance Appraisal

Morley (2004) states that performance appraisal is a managerial tool to control individual performance in organizations in order to achieve maximum performance (p.64) According to Badaway (2007) effective performance appraisal has two objective to create needs information for basis salary adjustment, and to identify areas for future performance development and growth.

2. Concept of Performance Appraisal

Performance evaluation or performance appraisal is the process of assessing the performance and progress of an employee or of a group of employees on a given job and his potential for future development. It consists of all formal procedures used in working organisations to evaluate personalities, contributions and potentials of employees,. According to Flippo, "performance appraisal is the systematic, periodic and an impartial rating of an employee's excellance in matters pertaining to his present job and his potential for a better job". It is the process of obtaining, analysing and recording information about the relative worth of an employee. Performance appraisal and merit rating are used synonymously. But strictly speaking performance appraisal is a wider term than merit-rating. In merit rating the focus is on judging the calibre of an employee so as to decide salary increment. It is designed primarily to cover rank and file personnel. On the other hand, performance appraisal focuses on the performance and future potential of (he employee. Its aim is not simply to decide salary increments but to develop a rational basis for personnel decisions. Merit rating measures what the person is (traits) whereas performance appraisal measures what the person does (performance).

3. Characteristics of Performance Appraisal

Performance appraisal is a process consisting of a series of steps. These steps are described later It is the systematic examination of an employee's strengths and weaknesses in terms of the job. Performance appraisal is a scientific or objective study. Formal procedures are used in this study. The same approach is adopted for all jobholders so that the results are comparable. It is an ongoing or continuous process wherein the evaluations are arranged periodically according to a definite plan. The main purpose of performance appraisal is to secure information necessary for making objective and correct decisions on employees.

4. Objectives of Performance Appraisal

To provide feedback to employees so that they come to know where they stand and can improve their job performance. To provide a valid database for personnel decisions concerning placements, pay, promotion, transfer, punishment, etc. To diagnose the strengths and weaknesses of individuals so as to identify further training needs. To provide coaching, counselling, career planning and motivation to subordinates. To develop positive superior-subordinate relations and thereby reduce grievances. To facilitate research in personnel management. To test the effectiveness of recruitment, selection, placement and induction programmes

Thus, performance appraisal aims at both judgemental and developmental efforts. The first two objectives are judgemental whereas the remaining is developmental. Under developmental efforts employees are helped to identify their weakness and take steps to overcome them. It is largely self development of employees. By focussing attention on performance, performance appraisal goes to the heart of personnel management and reflects management's interest in the progress of employees.

5. Uses of Performance Appraisal

Performance appraisal is a significant element of the information and control system in organisation. It can be put to several uses concerning the entire spectrum of human resource management functions. Some common applications of performance appraisal are given below: Performance appraisal provides valuable information for personnel decisions such as pay increases, promotions, demotions, transfers and terminations. Management gets an objective basis for discussing salary increases and promotions with the staff. Thus, performance appraisal serves as the basis of suitable personnel policies. It helps to judge the effectiveness of recruitment, selection, placement and orientation systems of the organisation It is useful in analysing training and development needs. These needs can be assessed because performance appraisal reveals people who require further training to remove their weaknesses. It also identifies individuals with high potential who can be groomed up for higher positions. Performance appraisal can be used to improve performance through appropriate feedback, working and counselling to employees. It serves as a means of telling a subordinate how he is doing and suggesting necessary changes in his knowledge behaviour and attitudes. It serves to stimulate and guide employee's development. Performance appraisal facilitates human resource planning, career planning and succession planning.

It promotes a positive work environment which contributes to productivity. When achievements are recognised and rewarded on the basis of objective performance measures, there is improvement in work environment.

A competitive spirit is created and employees are motivated to improve their performance. Systematic appraisal provides management an opportunity to properly size up the employees. It also enables a manager to understand his strengths and weaknesses.

Systematic appraisal of performance helps to develop confidence among employees. Appraisal records protect management from charges of discrimination levelled by trade union leaders. Employee grievances can be reduced.

6. The Process of Performance Appraisal

Establishing Performance Standards. The appraisal process begins with the setting up of criteria to be used for appraising the performance of employees. The criteria is specified with the help of job analysis which reveals the contents of a job. This criteria should be clear, objective and in writing. It should be discussed with the supervisors to ensure that all the relevant factors have been included. Where the output can be measured the criteria is clean. If work performance cannot be measured, the personal characteristics which contribute to employee performance must .be determined. These characteristics include work quality, honesty, and reliability, cooperation and teamwork, job knowledge, initiative, leadership, safety consciousness, attendance, learning ability, adaptability, judgement, sense of responsibility, health and physical condition, etc In addition, who is to do the appraisal and how frequently appraisal is to be done should also be decided. In fact, performance standards will depend upon the objectives of the appraisal i.e., to appraise actual performance on the present job or to judge potential for higher jobs.

Communicating the Standards. The performance standards specified in the first step are communicated and explained to the employees so that they come to know what is expected of them. The standards should be conveyed to the evaluators. The reactions of employees to the standards should be obtained. If necessary the standards may be revised or modified in the light of feedback obtained from the employees and the evaluators.

Measuring Performance. Once the performance standards are specified and accepted, the next stage is the measurement of actual performance. This requires choosing the right technique of measurement, identifying the internal and external factors influencing performance and collecting information on results achieved. Personal observations, written reports and face to face contacts are the means of collecting data on performance. The performance of different employees should be so measured that it is comparable. What is measured is more important than how it is measured. Comparing the Actual With the Standards. Actual performance is compared with the predetermined performance standards. Such comparison will reveal the deviations which may be positive or negative. Positive deviations occur when the actual performance exceeds the standards. On the other hand, excess of standard performance over the actual performance represents negative deviation. Discussing the Appraisal. The results of the appraisal are communicated to and discussed with the employees. Along with the deviations the reasons behind them are also analysed and discussed. Such discussion will enable an employee to know his weaknesses and strengths. Therefore, he will be motivated to improve himself. The impression the
5

subordinate received about his performance has an impact, on his subsequent performance. The impact may be positive or negative depending how the appraisal feedback is presented and discussed with the employee. Taking Corrective Actions. Through mutual discussions with employees, the steps required to improve performance are identified and initiated. Training, coaching, counselling, etc. examples of corrective actions that help to improve performance. are

7. Problems in Performance Appraisal

1. Errors in Rating. Performance appraisal may not be valid indicator of performance and potential of employees due to the following types of errors: Halo Effect: It is the tendency to rate an employee consistently high or low on the basis of overall impression. One trait of the employee influences the rater's appraisal on all other traits. For example, an employee may be rated high on performance just because he sits on the job late in the evening. Similarly, a person who does not shave regularly may be considered lazy at work and may be underrated. This error may be minimised by rating all the employees on one trait before taking up another trait. Stereotyping: This implies forming a mental picture of a person on the basis of his age, sex, caste or religion. It results in an oversimplified view and blurs the assessment of job performance.

 Central Tendency: It means assigning average ratings to all the employees in order to avoid commitment or involvement. This is adopted because the rater has not to justify or clarify the average ratings. As a result the ratings are. clustered around the midpoint.

Constant Error: Some evaluators tend to be lenient while others are strict in assessing performance. In the first case performance is overrated (leniency error) while in the second type it is underrated (strictness-error). This tendency may be avoided by holding meetings so that the raters understand what is required of them. Personal Bias: Performance appraisal may become invalid because the rater dislikes an employee. Such bias or prejudice may arise on the basis of regional or religious beliefs and habits or interpersonal conflicts. Bias may also be the result of time. Recent experience or first impression of the rater may affect the evaluation Spill Over Effect: This arises when past performance affects assessment of present performance. For instance, recent behaviour or performance of an employee may be used to judge him. 2. Lack of Reliability: Reliability implies stability and consistency in the measurement Lack of consistency over time and among different raters may reduce the reliability of performance appraisal. Inconsistent use of measuring standards and lack of training in appraisal techniques may also reduce reliability. Different qualities may not be given proper weightage. Factors like initiative are highly subjective and cannot be quantified.

3. Incompetence Raters: May fail to evaluate performance accurately due to lack of knowledge and experience. Post appraisal interview is often handled ineffectively. 4. Negative Approach: Performance appraisal loses most of its value when the focus1 of management is on punishment rather than on development of employees. 5. Multiple Objectives: Raters may get confused due to two many objectives or unclear objectives of performance appraisal. 6. Resistance: Trade unions may resist performance appraisal on the ground that it involves discrimination among its members. Negative ratings may affect interpersonal relations and industrial relations particularly when employees/unions do not have faith in the system of performance appraisal. 7. Lack of Knowledge: The staff appraising performance of employees might not be trained and experienced enough to make correct appraisal.

8. Essentials of an Effective Performance Appraisal System

To be effective, a performance appraisal system should satisfy the following requirements.

Mutual Trust: An atmosphere of mutual trust and confidence should be created in the organisation before introducing the appraisal system. Such an atmosphere is necessary for frank discussion of appraisal. It also helps to obtain the faith of employees in the appraisal system. Clear Objectives: The objectives and uses of performance appraisal should be made clear and specific. The objectives should be relevant, timely and open; The appraisal system should be fair so that it is beneficial to both the individual employee and the organisation. The system should be adequately and appropriately linked with other subsystems of human resource management. Standardisation: Well-defined performance factors and criteria should be developed. These factors as well as appraisal form, procedures and techniques should be standardised. It will help to ensure uniformity and comparison of "ratings. The appraisal techniques should measure what they are supposed to measure. These should also be easy to administer and economical to use. The appraisal system should be performance based and uniform1. Employees should be made fully aware of performance standards and should be involved in setting the standards. Training: Evaluators should be given training in philosophy and techniques of appraisal. They should be provided with knowledge and skills in documenting appraisals, conducting post appraisal interviews, rating errors, etc.

Job Relatedness: The evaluators should focus attention on job-related behaviour and performance of employees. In order to focus attention on behaviour under the employee's control, raters must become familiar with the observed behaviour. It is also necessary to prepare a checklist so as to obtain and review job performance related information. Ratings should be tied up with actual performance of units under the rater's control. The information generated through evaluators should be tailered to the needs of the organisation, performance requirements and norms of behaviour. Multiple criteria should be used for appraisal and appraisal should be done periodically rather them once a year. Documentation: The raters should be required to justify their ratings. Documentation will encourage evaluaters to make counscious efforts minimising personal; biases. It will also help to impart accountability for ratings. Feedback and Participation: Arrangements should be made to communicate the ratings to both the employees and the raters. The employees should actively participate in managing performance and in the ongoing process of evaluation. The superior should play the role of coach and coun-seller. The overall purpose of appraisals should be developmental rather than judgemental. Individual Differences: While designing the appraisal system, individual differences in organisations should be recognised. Organisations differ in terms of size, nature, needs and environment. Therefore, the appraisal system should be tailor-made for the particular organisation. The needs of rates in terms of feedback, mobility, confidence and openness should also be considered.

10

Post Appraisal Interview. After appraisal, an interview with the employee should be arranged. It is necessary to supply feedback, to know the difficulties under which the employees work and to identify their training needs. The later should adopt a problem solving approach in the interview and should provide counselling for improving performance.

Review and Appeal: A mechanism for review of ratings should be provided. The review may be made by a committee consisting of line executives and personnel experts. The committee will see whether the raters are unusually strict or lenient. It may compare ratings with operating results and may require the raters to give specific examples or tangible proof. Differences if any are discussed and dissent is recorded. Provision must be made for an appeal in case the employee rater is not satisfied with the ratings.

9. Methods of Performance Appraisal

I. Modern Methods II. Traditional Methods

I. Modern Methods:
Confidential Report: This is a traditional form of appraisal used in most government organisations. A confidential report is a report prepared by the employee's immediate superior. It covers the strengths and weaknesses, main achievements and failure, personality and behaviour of the employee'. It is descriptive appraisal used for promotions and transfers of employees. But it involves a lot of subjectivity because appraisal is based on impressions rather than on data. No feedback is provided to the employee being appraised and,
11

therefore, its credibility is very low. The method focusses on evaluating rather than developing the employee. The employee who is appraised never knows his weaknesses and the opportunities available for overcoming them. In recent years a negative confidential report is required to be communicated to the employee. If the employee disagrees, a noting to that effect has to be made on the report. This has been made necessary by trade unions and courts.

Free Form or Essay Method: Under this method, the evaluator writes a short essay on the employee's performance on the basis of overall impression. The description is expected to be as factual and concrete as possible. An essay can provide a good deal of information about the employee especially if the evaluator is asked to give examples of each one of his judgments. But this method suffers from several drawbacks. First, it involves bias as evaluation is not based on specific performance dimensions related to the job. Bias may also arise because rating is in the evaluater's own words. The appraisal may be loaded with a flowery language rather than appraisal of actual performance. There is no common criterion for appraisal. Secondly, the quality of appraisal depends on the writing ability of the evaluator rather man oh employee performance. One evaluator may be a good essay writer but the other may not be. Thirdly, it is a very time consuming method of appraisal. This method may be appropriate for assessing senior executives where the number involved is small. Fourthly, it is not possible to compare two essay appraisals due to variations in their length and contents. Straight Ranking Method: In this technique, the evaluator assigns relative ranks to all the employees in the same work unit doing the same job. Employees are ranked from the best to the poorest on the basis of overall performance. The "wholeman is compared with the whole man' without analysing performance. The relative position of an employee is reflected in his numerical rank.
12

Paired Comparisons Method: This is a modified form of man to man ranking. Herein, each employee is compared with all the others in pairs one at a time. The number of times an employee is. Judged better than the others determine his rank. Comparison is made on the basis of overall performance. Forced Distribution Method: In this technique, the rater is required to distribute his ratings in the form of a normal frequency distribution .The purpose is to eliminate the rater's bias of central tendency. Here also ranking technique is used. This method is highly simple to understand and easy to apply. Secondly, it helps to reduce bias involved in straight ranking and paired comparisons. But in this method employees are placed in a certain category and not ranked within a category. The method is based on the questionable assumption that all groups of employees have the same distribution of good and poor performances. The rater does not explain why an employee is placed in a particular category. Specific job related performance criteria are not used in ratings. The rater may resent the restriction placed on his freedom of choice. Graphic Rating Scales: It 'is a numerical scale indicating different degrees of a particular trait. The rater, is given a printed form for each employee to be rated. The form contains several characteristics relating to the personality and performance of employees. Intelligence, quality of work, leadership skills, judgement, etc. Checklist Method: A checklist is a list of statements that describe the characteristics and performance of employees on the job. The rater checks to indicate if the behaviour of an employee is positive or negative to each statement. The performance of an employee is rated on the basis of number of positive checks. There are three types of checklists that can be used:

13

Simple Checklist Weighted checklist forced choice Checklist

Critical Incidents Method: In this method the supervisor keeps a written record of critical (either good or bad) events and how different employees behaved during such events. The rating of an employee depends on his positive/negative behaviours during these events. These critical incidents are identified after thorough study of the job and discussion with the staff. For example, a fire, a sudden breakdown of machinery, a serious accident, etc. Group Appraisal Method: Under this method, a group of evaluators assesses employees. This group consists of the immediate supervisor of the employee, other supervisors having close contact with the employee's work, head of the department and a personnel expert. The group determines the standards of performance for the job measures actual performance of an employee analyses the causes of poor performance and offers suggestions for improvements in future. The advantage of this method is that it is simple yet more thorough. Due to multiple evaluators personal bias is minimised. But it is a very timeconsuming process. Field Review Method: In this method, a training officer from the personnel department interviews line supervisors to evaluate their respective subordinates. The interviewer prepares in advance the questions to be asked. By answering these questions a supervisor gives his. opinions about the level of performance of his subordinate, the subordinate's work progress, his strengths and weaknesses, promotion potential, etc. The evaluator takes detailed notes of the answers which are then approved by the concerned supervisor. These are then placed in the employee's personal service file.

14

This system relieves the supervisor of the need for filling in appraisal forms. The supervisor's personal bias is reduced due to the active involvement of the personnel officer. The ratings are usually classified into three categories, i.e., outstanding, satisfactory and unsatisfactory. This is, however, a time-consuming method. The success of this method depends upon the competence and sincerely of the interviewer.

II. Traditional Methods

Assessment Centre Method: An assessment centre is a group of employees drawn from different work units. These employees 'work together on an assignment similar to the one they would be handling when promoted. Evaluates observe and rank the performance of all the participants. Experienced managers with proven ability serve as evaluators. This group evaluaters all employees both individually and collectively by using simulation techniques like role playing, business games and in basket exercises. Employees are evaluated on job related characteristics considered important for job success. The evaluators observe and evaluate employees as they perform jobs. Assessments are done generally to determine employee potential for promotion. The evaluators prepare a summary report and feedback is administered on a face to face basis to the employees who ask for it. Human Resource Accounting Method: Human resources are a valuable asset of any organisation. This asset can be valued in terms of money. When competent, and well-trained employees. Leave an organisation the human asset is decreased and vice versa. Under this method performance is judged in terms of costs and contributions of employees. Costs of human resources consist of expenditure on. Human resource planning, recruitment, selection, induction, training, compensation etc. Contribution of human resources is the money value of labour productivity or value added by human resources. Difference between cost and contribution will reflect the performance of employees.

15

Behavioural Anchored Rating Scales (BARS): This method combines graphic rating scales with critical incidents method. BARS are descriptions of various degrees of behaviour relating to specific performance dimensions. Critical areas of job performance and the most effective behaviour for getting results are determined in advance. The rater records the observable job behaviour of an employee and compares these observations with BARS. In this way an employee's actual job behaviour is judged against the desired behaviour. The steps involved in constructing BARS are as follows: Identify Critical Incidents: Persons with knowledge of the job to be appraised (job holders/supervisors) describe specific examples of both effective and ineffective job behaviours. Select Performance Dimensions: The persons than cluster the behavioural incidents into a smaller set (usually five to ten) of performance dimensions. Retranslate the Incidents: Another group of knowledgeable persons assign each incident to the dimension that it best describes. Incidents for which there is less than 75 percent agreement with the first group are not retranslated. Assign Scales to Incidents: The second group rates each incident on a seven or nine point scale. Rating is done on the basis of how well the behaviour described in the incident represents performance on the appropriate dimensions. Means (averages) and standard deviations are then calculated for the scale values assigned to each incident. Incidents that have standard deviations of 1.5 or less (on a seven point scale) are included in the final anchored scales.
16

Develop Final Instrument: A subset of the incidents that meets both the retranslation and standard deviation

criteria is used as a behavioural anchor for the final performance dimensions. A final BARS instrument typically comprises a series of vertical scales (one scale per dimension) that are endorsed by the included incidents. Each incident is positioned on the scale according to its mean value. Appraisal by Results or MBO: The concept of management by objectives (MBO) was developed by Peter Ducker in 1954. He called it 'management by objectives and self control'. Since then MBO has became an effective and operational technique of performance appraisal and a powerful philosophy of managing .it is also known as Work Planning and Review or Goal setting approach to appraisal. Management by objectives has been defined as "a process whereby the superior and subordinate managers of an organisation jointly identify its common goals, define each individual's major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members". In other words, MBO involves appraisal of performance against clear, time bound and mutually agreed job goals.

10. 360 degree appraisal:

Where appraisal is made by superiors, peers, subordinates and clients, it is called the 360-degree system of appraisal. First developed at General Electric, US in 1992, the system has become popular in our country too. GE (India), Reliance Industries, Compton Greaves, Godrej Soaps, Wipro, Infosys, Thermax and Thomas Cook are using the method with greater benefits. The Arthur Anderson Survey (1997) reveals that 20 per cent of the organisations use the 360-degree method. In the 360-degree method, besides assessing performance, other attributes of the -talents, behavioural quirks, values, ethical standards, tempers and loyalty are evaluated by people who are best placed to do it.
17

11. Challenges of performance Appraisal:

Create a culture of herself to be assessed that inspires every employee improve and lend himself Align organisational objectives no individual aspirations clear growth paths for, talented- individuals Provide new challenges to rejuvenate careers that have reached the plateau stage partnership with Empower employees to: make decisions without the fear of failed in all Pebureaucratise the organisation structure for, ease of information

18

1.2. SCOPE OF THE STUDY:

The information provided is highly useful in making decisions regarding various personal aspects such as promotion and merit increases. Provide a basis for judging the effectiveness of personnel sub-divisions such as the recruiting, selection, training and compensation. Helps to pinpoint weak areas in the primary systems such as marketing finance and production. Provides systematic judgments to backup salary increases, transfers, promotions, demotions or termination. It is a means of telling a subordinate how he is doing and suggesting needed changes in his behavior, attitudes, skills or job knowledge. The superior uses it as a base for coaching and counseling the individual.

19

1.3. OBJECTIVES OF THE STUDY:

The main objectives of the study are: To identify the opinion of the employees towards the criteria they prefer in Performance Appraisal System. To know the attitude of employees towards the Performance Appraisal System. To know the purposes of Performance Appraisal System. To identify the training and development needs of the employees. To suggest measures to make the present Performance Appraisal System followed by the company as an effective one.

20

1.4. RESEARCH METHODOLOGY:

Research methodology is a way to scientific and systematic search for information on a specific topic and solves the research problem. Research design: The research design is descriptive in nature, which aimed to capture reasons and effects. Descriptive research studies are those studies, which are concerned with describing the characteristics of a particular individual or a group. Size of the population The size of the company population was 537. Out of the total population the researcher collected 100 samples from the esae digitronics . Sample design 100 workers were selected out of 537 as sample in the company. Sample random, sampling method was adopted for this study

Data collection method:

Data was collected based on two sources: a. Primary Data b. Secondary Data Primary Data: The Primary Data was collected with the help of well-structured questionnaire. The questionnaire was carefully prepared and checked to remove possible errors to obtain information in a standard form. Format of the questionnaire is given in the appendix. Secondary Data: The information regarding the performance appraisal system has been drawn from the company manuals records, reports and from reference books.

21

STATISTICAL TOOLS: The data was analyzed on the basis of Simple Percentage analysis, Mean Score Percentage analysis and Chi-square test. Based on the tables, the facts were presented in the form of pie charts and bar diagrams. Simple Percentage analysis is used to find out from total number of respondents how many percent respondents are responding towards various options in the questionnaire. PERCENTAGE METHOD: Percentage analysis refers to a ratio. Percentage should be computed and shown if appropriate. Frequently figures in tables become more meaningful if they are expressed as percentages. In constructing a table it is important to decide whether or not it can be improved. Additional columns should be inserted in the table and the percentages computed and entered. Such percentage is sometimes called derived statistics. Percentage = No. of respondents Total Number of Respondents CHI-SQUARE METHOD: The chi-square test is an important test amongst the several tests of significance developed by statisticians. Chi-square, symbolically written as 2 is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance. The chi-square test is applicable in large number of problems. Chi-square 2 = (O E) 2 E Chi square test is used to find out the association between two attributes and it is defined as, 100

22

2 cal = ( Oij Eij) 2 / Eij Here Oij Observed frequency, Eij Expected frequency This is compared with 2tab (r-1) (c-1) dt at a level of significance and if, 2cal < 2tab then it can be said as there is no association between two attributes if 2 cal > 2 tab then it can be said as there is a association between two attributes

1.5. LIMITATIONS OF THE STUDY:

The results of the survey are totally dependent on the accuracy and authenticity of the information provided by the respondents from. Essae digitronics Out of 537 permanent employees of the company, opinions were collected from 100 employees only. As the simple random sampling technique is used for collecting questionnaires it has its own limitations. The human behaviour is dynamic and hence the results may not hold good for a long time.

23

CHAPTER II REVIEW OF LITERATURE

H.A. Locher & K.S. Teel (2006), Appraisal Trends, Personnel journal, identified the primary factors that could be used to improve appraisal effectiveness, the response to the open-ended questions pertaining to the causes of appraisal ineffectiveness were content analyzed. Responses generated by managers and subordinates were

classified by a panel of three judges according to their content and frequency counts were tabulated for each response. Managers generated and average of 3.0 responses to this question (n=142) while subordinates averaged 3.7 responses (n=767). The results show both the managers and subordinates suggestions on how to improve appraised effectiveness. The remainder of this study will focus on the implications of these

findings on public sector performance appraisal effectiveness.

B.P. Maroney and M.R. Buckley, (2005), Dose Research in Performance Appraisal Influence the Practice of Performance Appraisal. Public Personnel Management. Public sector performance appraisals are a significant aspect of making employees more productive and are the tool of choice in such performance enhancing efforts. It has been said that anything worth doing is worth doing well. Given the goals of most appraisal systems, this saying appears to be quite appropriate and yet, effective appraisals are not assured by a technically sound system alone. Others elements such as managers and subordinates attitudes toward performance appraisals, and expectations also play a significant role in achieving effecting effectiveness of performance appraisal. This study should serve as a case study for organizations to assess the effectiveness of their study should serve as a case study for organizations to assess the effectiveness of their appraisal systems. Organization must continually look for ways to keep effect

24

Hedge, j. & teachout,M1 (2004), In their study exploring the concept of acceptability as a criterion for evaluating performance .Group and organization management .the main purpose of performance management as perceived by the respondents .most of the respondents(96%) reported their organization used a performance management system. a lesser number(64%) stated their organization had a formal performance management manual. whilst approximately 68 percent are contemplating change to their present system .only 24 percent are currently making changes. the determination of training and development needs and the appraisal of past performance ,together with the alignment of individual and organization objective

(75.5%) attracted a high priority of the responses .to a lesser extent of importance are : the development of individual competencies ,career planning ,salary increase and the assessment of future promotional prospects .discipline and dismissal, organizational change ,and the retention of high calibre staff ,are espoused to be of least importance Mohamed anus.,(2003) ,conducted a study on performance appraisal system of accelerated software systems(p) ltd ,Bangalore shri Nehru maha vidhyalaya college of arts and science the size of the sample taken for the study is limited to 75 employees .stratified random sampling is selected as the sampling technique for the study .the tools used were simple percentage analysis and chi square analysis has been used for the study. based on the findings the researcher suggested that some of the respondents felt that the work load was high. The management could reduce the workload to enable its employees to perform more efficiently; the management can make a more effective use of ideas. Suggestions knowledge and skills of its employees. The respondents feels that performance appraisal increase their productivity and morale .so the management can implement effective appraisal system the assessment has to the carried out as a

continoues process. The usefulness of the performance appraisal system and areas in which improvement has to be made. the current appraisal method followed by accelerated software systems pvt.,ltd., has been used for the employee to overcome their weakness and improve their strengths and thus enable them to improve their performance. The study was conducted by the school of management at curtin university of technology ,perth,(2003) and the Australian catholic university (nsw),in association with
25

the Australian human resource institute (ahri).performance management continues to be one of the most critical and criticized processes within the discipline of human resource management .this paper reports the finding of the most recent and largest Australian study undertaken to date of performance management systems across industry and government organizations of all sizes and types. the finding suggest that the use of performance management systems remain problematic although there are some positive indications ,for the first time in this country, of a more strategic approach to performance management. According to john strazzanti ,(2002).general manager and president of computer corporation industry says that effective appraisal system produce effective organization .a new performance appraisal system is administrating three times a year .the employees as to be both qualitative on . Bolar s(2002) survey of seven(7) Indian manufacturing and sales companies revealed the following three broad objective of managerial performance appraisal to determine the salary increment ,to facilitate organization planning in the areas of planning placement according to suitability ,transfer ,demotion or termination and etc and to identifying training and development efforts. Mr.sathya s.m(2001) of Snmv case had conducted a study on the effectiveness of the managerial performance appraisal system at visteon India the objective of the study was to study how far the existing managerial performance appraisal system is effective in visteon India ,to find out the level of awareness of the existing performance appraisal system and to identify the factors responsible for the non effectiveness of the appraisal system .the primary data was collected through questionnaire taking 100

respondent as samples .the researcher has concluded that the alignment of the appraisal system as per the organizational values based on development appraisal makes the appraisal more acceptable, more workable and result oriented.

26

k.chandrasekher(2001) research associate ,alagappa university of management karaikudi in his article in hrd times, discussed that organizations do not have any difficulty in assessing and evaluating the performance of the employees, since there are nuberous methods to carry out the performance appraisal. but this is not the case with potential appraisal .there are only a very few methods through which we could assess the potentials of the employees for higher positions .those potential appraisal methods include assessment centers ,psychological appraisal , promotability succession planning . forecasts and

27

CHAPTER III PROFILE OF ORGANIZATION: Company profile:

Essae Group, a progressive conglomerate, was founded in the year 1965. Essae Digitronics belongs to the Essae Group of Companies and is based in Bangalore, India.

Founded on February 2nd, 1996 Structured into six business divisions Operates from four manufacturing facilities Certified for ISO 9001 since April 2000 Automotive business certified for ISO / TS 16949 : 2002 since October 2003 OE Supplier to major automotive industries in India

Departments
Production Marketing Finance Human resource

Excellence in Process:
Process Excellence is achieved by paying attention to details. Superior quality products can be manufactured only by establishing processes that are capable of delivering superior results. Excellence in processes starts with people. Quality begins and ends in the minds of the people. The human mind is our fundamental resource. Constant training by both internal faculty members and by Essae Chandran Institute ensures that people upgrade both their knowledge and application of knowledge in the work place. All senior employees are continuously exposed
28

to

latest

concepts

and

technology.

No process can deliver world -class quality products without excellent raw material. Our Quality Assurance System ensures that materials are purchased only from vendors whose processes have been reviewed and approved. Inspection of all material at various stages - incoming, in process and final stages ensure that only the best material is worked upon.

Business Divisions:

Truck Scales Transportation Weighment Rapid LoadOut Systems Machined Components Speedo Hub Drive Powder Coating Process

PRODUCTS Truck Scales:

Essae Digitronics manufactures Electronic Truck Scales, popularly known as Weigh Bridges. A dedicated team for design manufacture marketing, installation and servicing of electronic truck scales ensures impeccable focus and faster response to customer's needs. With a manufacturing license agreement from WEIGH-TRONIX Inc., USA, and Essae Digitronics is able to offer world-class products to Indian customers. Under this division, Essae Digitronics offers:

Electronic Truck Scale Electronic Concrete Truck Scale Electronic Coil Scale Tank Weighing Systems

29

 Portable Axle Weigh Bridge

Weigh Pad

Speedo hub drive:

The Hub Drive Division is the largest manufacturer of Speedo hub drives in India and these Hub drives are used in mopeds, scooterettes and motorcycles.

A market share of over 90% in Hub drives speaks volumes about the quality of the product and value offered to the customer.

Speedo Hub Drives perform the vital function of transmitting the front wheel rotation of a two-wheeler to the speedometer. Reliability and Field Performance are critical in this product. The design of the product ensures very large MTBF.

The Hub Drive Division has a unique modular production system. Assembly stations are so designed that one person puts together the entire assembly, thereby eliminating handling damages and other wasteful activities.

Mistake - proofing is implemented at all possible stages to ensure that a defective component does not go the next process. The components are assembled, inspected and packed by the same person. This ensures process ownership and better product quality.

The Flow Production System is implemented methodically using the principles of cell engineering, facilitating flow of material from one operation to another with ease. This enables faster feedback to the subsequent and the previous processes and improves productivity substantially. Each operator is a process owner. The operators themselves do the process setup, manufacturing and inspection of all components.

30

Powder coating process:

Fully automated plant for powder coating.

Phosphating Process is controlled by PLC's to ensure conformance to process parameters.

Conveyors Spraying and Baking Line Rollon / Rollof Painting Booth enable quick colour changeover. Plant annual installed capacity is 66 lakh sq. ft.

EssaeGroup:
Essae Group, a progressive conglomerate, was founded in the year 1965 with a vision of serving society by supplying superior quality products that provide high value for money. Companies In Group Company Essae Teraoka Ltd Essae Solution Pvt .Ltd Activity Electronic Weighing Solution, Electronic Cash Machined Components

Essae Technologys Pvt .Ltd Barcode System Essae Electronics Pvt .Ltd Essae Chandran Institute Servewel Industries Essae Foundation Essae Digitronics Pvt .Ltd Electronic Manufacturing Systems (EMS) Total Quality Management Education Machined Components Primary Education for the under privileged Truck Scale, Automobile Assemblies &Components

31

ACTIVITIES:
Relentlessly focusing on delighting the Customer, the group's activities include manufacturing and marketing of

Electronic weighing scales and systems Auto Components Electronic Cash Registers Bar Coding and Scanning Systems. PCB Assemblies A training institute, with world class facilities and international networking has

been established to enhance the knowledge of Indian Organizations in the realms of Quality Management.

Features:

Ten Manufacturing Facilities in Bangalore, Pondicherry and Goa. 68 Marketing outlets all over India. All companies in the Group are certified for ISO 9001.

32

CHAPTER IV 4.1. DATA ANALYSIS AND INTERPRETATION

TABLE - 1 TABLE SHOWING AGE GROUP OF THE RESPONDENTS Age group of Respondents (in years) 25 35 36 45 Above 45 No. Of Respondents 66 24 10 Percentage 66 % 24 % 10 %

Interpretation: Among 100 respondents, 66% are between the age of 25-35 years, 24% are between the age of 36-45 years and 10% belongs to the age of above 45. Inference: Most of the respondents belongs to the age group of 25-35

33

CHAPTER-IV 4.1. DATA ANALYSIS AND INTERPRETATION CHART-1

CHART SHOWING AGE GROUP OF THE RESPONDENTS

10%

24%

66%

25 35

36 45
34

Above 45

TABLE - 2

TABLE SHOWING GENDER OF THE RESPONDENTS

Gender the of Respondents Male Female No. Of Respondents 60 40

Percentage

60 % 40 %

Interpretation: From the above table we interpret that 60% of the respondents are male and 40% of the respondents are female. Inference Most of the respondents belongs to the gender of male

35

CHART-2

CHART SHOWING GENDER OF THE RESPONDENTS

40%

60%

Male

Female

36

TABLE - 3

TABLE SHOWING MONTHLY INCOME OF THE RESPONDENTS

Salary the of Respondents No. Of Respondents 10,000 20,000 20,000 30,000 Above 30,000 30 50 20

Percentage 30 % 50 % 20 %

Interpretation: From the above table, we interpret that 30% of the respondents belongs to 10,000 20,000 salary group, 50% of the respondents belongs to 20,000 30,000 salary group and 20% of the respondents belongs to the above 30,000 salary group. Inference Most of the respondents belongs to the monthly income is 20,000-30,000

37

CHART-3

CHART SHOWING MONTHLY INCOME OF THE RESPONDENTS

50%

50 45 40 35 30 25 20 15 10 5 0
10,000 20,000 20,000 30,000 Above 30,000 20% 30%

38

TABLE 4

SHOWING ON APPRAISAL GIVEN BY THE COMPANY

No. Of Respondents Appraisal Yes No 100 100 % Percentage

Interpretation: It is inferred that the company has appraised 100% of the respondents. Inference 100% of the respondents has appraised by the company

39

CHART-4

CHART SHOWING ON APPRAISAL G IVEN BY THE COMPANY

100%

100 90 80 70 60 50 40 30 20 10 0 Yes No

0%

40

TABLE 5 TABLE SHOWING THE NO TIMES THE EMPLOYEES BEEN APPRAISED

No. Of Times No. Of Respondents Less than 5 5 10 Above 10 38 62 -

Percentage 38 % 62 % -

Interpretation: From the above table, we interpret that 38% of the respondents suggest that they have been appraised less than 5 times by the company, 62% of the respondents suggest that they have been appraised 5 - 10 times by the company. Inference: Most of the respondents belongs to the 5 10 times the employees been appraised

41

CHART-5

CHART SHOWING THE NO OF TIMES THE EMPLOYEES BEEN APPRAISED

70 62%

60

50 38% 40

30

20

10 0% 0

Less than 5

5 10

Above 10

42

TABLE 6

TABLE SHOWING THE PURPOSE OF PERFORMANCE APPRAISAL SYSTEM

Purpose To assess performance To reward To improve performance Determining training needs

No. Of Respondents 12 10 70 8

Percentage 12 % 10 % 70 % 8%

Interpretation: According to the survey, 12% of the respondents suggest that the purpose of performance appraisal system is to assess performance, 10% of the respondent suggest that the purpose of performance appraisal system is to reward, 70% of the respondents suggest that the purpose is to improve performance and 8% suggest that the purpose of performance appraisal system is to determining training needs. Inference: Most of the respondents belongs to the purpose of performance appraisal system is to improve the performance.

43

CHART-6

CHART SHOWING THE PURPOSE OF PERFORMANCE APPRAISAL SYSTEM

70% 70

60

50

40

30

20

12% 10% 8%

10

To assess performance

To reward

To improve performance

Determining training needs

44

TABLE 7

TABLE SHOWING THE CRITERIA USED FOR PERFORMANCE APPRAISAL

Criteria No. Of Respondents Work Efficiency Co-operation Attendance Job Knowledge Creativity 100 35 75 55 60

Percentage 100 % 35 % 75 % 55 % 60 %

Interpretation: From the above table, we interpret that work efficiency, attendance, creativity, job knowledge, co-operation, are the criteria used for performance appraisal which is supported by the respondents as 100%, 75%, 60%, 55%, & 35%, respectively. Inference: Majority of the respondents belongs to the criteria used for performance appraisal is work efficiency

45

CHART-7

CHART SHOWING THE CRITERIA USED FOR PERFORMANCE APPRAISAL

100% 100

90 75% 80

70 55% 60

60%

50 35% 40

30

20

10

Work Efficiency

Co-operation

Attendance

Job Knowledge

Creativity

46

TABLE 8 TABLE SHOWING OF PERFORMANCE APPRAISERS

Appraisers Superiors Self appraisal Sub ordinates 360 degree appraisal Peers

No. Of Respondents 78 5 5 4 8

Percentage 78 % 5% 5% 4% 8%

Interpretation: It is inferred from the above table that in the opinion of 78% of the respondents, superiors are good to appraise their performance. 8% of the respondents, peers are good to appraise their performance. 5% of the respondents, favour appraisal by self and sub-ordinates are equal strength. Only 4%of the respondents recommend 360 degree appraisal. Inference: Most of the respondents belongs to the performance appraisers is superiors

47

CHART-8

CHART SHOWING OF PERFORMANCE APPRAISERS

80

78%

70

60

50

40

30

20

10 5% 55 4%

8%

Superiors

Self appraisal

Sub ordinates

360 degree appraisal

Peers

48

TABLE 9

TABLE SHOWING OF SATISFACTION LEVEL WITH APPRAISAL SYSTEM

Satisfaction Level No. Of Respondents Partially not satisfied Average Satisfaction Partially Satisfied 17 65 18

Percentage 17 % 65 % 18 %

Interpretation: From the above table, we interpret that 17% of the respondents are partially not satisfied with the performance appraisal system followed by the company, 65% of the respondents are averagely satisfied and 18% are partially satisfied with the performance appraisal system followed by the company. Inference: Most of the respondents belongs to the satisfaction level with appraisal system is average satisfaction

49

CHART-9

CHART SHOWING SATISFACTION LEVEL WITH APPRAISAL SYSTEM

70

65%

60

50

40

30 18%

17% 20

10

Partially not satisfied

Average Satisfaction

Partially Satisfied

50

TABLE - 10 TABLE SHOWING OF FAIRLY TREATMENT WHEN BEING APPRAISED BY SUPERVISOR Fairly Treatment Yes No No. Of Respondents 100 Percentage 100 % -

Interpretation: From the above table we inferred that 100% of the respondents are fairly treated when being appraised by their supervisor. Inference: 100% of the respondents are fairly treated when being appraised by their supervisor.

51

CHART-10

CHART SHOWING OF FAIRLY TREATMENT WHEN BEING APPRAISED BY SUPERVISOR

100% 100 90 80 70 60 50 40 30 20 10 0%

0
Yes No

52

TABLE 11

TABLE SHOWING OF THE TRANSPARENCY OF APPRAISAL SYSTEM

Transparency Yes No

No. Of Respondents 100 -

Percentage 100 % -

Interpretation: From the above table, we inferred that 100% of the respondents suggest that the appraisal system in the company is transparent. Inference: 100% of the respondents suggest that the appraisal system in the company is transparent.

53

CHART-11

CHART SHOWING OF THE TRANSPARENCY OF APPRAISAL SYSTEM

100%

100

90

80

70

60

50

40

30

20

10

0%

Yes

No

54

TABLE 12

TABLE SHOWING ON THE FREQUENCY OF TRAINING

Frequency Once in a year Monthly finally On special request of employees

No. Of Respondents 87

Percentage -87 %

13 -

13 % -

Quarterly

Interpretation: It is inferred from the above table that the training is given at Essae Digitronics Pvt Ltd. Limited fianlly and on special request of employees. Inference: Majority of the respondents belongs to the frequency of training is finally

55

CHART-12

CHART SHOWING ON THE FREQUENCY OF TRAINING

90

87%

80

70

60

50

40

30

20

13%

10 0% 0 0% 0%

once in a year

monthly

finally

on special request of employees

quarterly

56

TABLE - 13

TABLE SHOWING OF EXPECTATIONS FROM THE TRAINING PROGRAMME Expectations Improve quality of work Self awareness Personality development Human relations Job knowledge No. Of Respondents 100 27 70 24 85 Percentage 100 % 27 % 70 % 24 % 85 %

Interpretation: From the above table we interpret that from the training programmes 100% of the respondents expect the improvement of quality of work, 85% of the respondents expect job knowledge, 70% of the respondents expect personality development, 27% expect self-awareness and24% expect human relations. Inference Majority of the respondents belongs to the expectations from the training programme is improve quality of work

57

CHART-13

CHART SHOWING EXPECTATIONS FROM THE TRAINING PROGRAMME

100% 100 85%

90

80 70% 70

60

50

40 27% 30 24%

20

10

Improve quality of work

Self awareness

Personality development

Human relations

Job knowledge

58

TABLE 14

TABLE SHOWINGT ON TRAINING & DEVELOPMENT PROGRAMME

Programme Seminars / Courses On-the-job training Computer assisted training Specialist lecture Other

No. Of Respondents 10 55 20 10 5

Percentage 10 % 55 % 20 % 10 % 5%

Interpretation: From the above table, we interpret that 10% of the respondents suggest that seminars / courses are more effective training and development programme, 55% suggest that on-the-job training is more effective, 20% suggest that computer assisted training is more effective 10% suggest that specialist lecture is more effective and 5% of the respondents suggest that other training and development programme is more effective. Inference: Most of the respondents belongs to the training &development programme of onjob- training

59

CHART-14

CHART SHOWING ON TRAINING & DEVELOPMENT PROGRAMME

60

50

40

30

20

10

Seminars / On-the-job Computer Courses training assisted training

Specialist lecture

Other

60

TABLE - 15

TABLE SHOWING SATISFACTION LEVEL WITH THE OPPORTUNITIES OF TRAINING AND DEVELOPMENT PROGRAMME

Satisfaction Level Very Satisfied Satisfied Dissatisfied Very dissatisfied

No. Of Respondents 20 80 -

Percentage 20 % 80 % -

Interpretation: From the above table, we interpret that 20% of the respondents are very satisfied with the opportunities of training and development programme, 80% of the respondents are satisfied with the opportunities of training and development programme. Inference: Majority of the respondents belongs to the satisfied with the opportunities of training and development programme

61

CHART-15

CHART SHOWING SATISFACTION LEVEL WITH THE OPPORTUNITIES OF TRAINING AND DEVELOPMENT PROGRAMME

80% 80

70

60

50

40

30 20% 20

10 0% 0 0%

Very Satisfied

Satisfied

Dissatisfied

Very dissatisfied

62

TABLE - 16

TABLE SHOWING PERCEPTION ABOUT THE PRESENT PERFORMANCE APPRAISAL SYSTEM

Perception Motivating De-motivating

No. Of Respondents 100 -

Percentage 100 % -

Interpretation: From the above table, we interpret that 100% of the respondents suggest that the present performance appraisal system is motivating. Inference: 100% of the respondents suggest that the present performance appraisal system is motivating.

63

CHART-16

RESPONDENTS PERCEPTION ABOUT THE PRESENT PERFORMANCE APPRAISAL SYSTEM

100% 100

90

80

70

60

50

40

30

20

10

0%

Motivating

De-motivating

64

4.2. RANKING METHOD TABLE - 17 RESPONDENTS PROBLEM IN GIVING FEEDBACK ABOUT PERFORMANCE APPRAISAL Problem Low Motivation Non recognition Lack of willingness of top mgt in adopting this practice Work culture not so conducive to proper giving and receiving of feedback Lack of accountability Interpretation: From the above table it can be stated that the problem such as work culture not so conducive To proper giving & receiving of feedback influencing the respondents Performance Appraisal is 4.63. The problem of non- recognition is 3.70. The problem of lack of accountability is 2.90.The problem Lack of willingness of top mgt in adopting this practice is 2.58 and the problem of low motivationIs1.19 and the ranks are given accordingly asI, II, III, IV, V respectively.
65

R1 1X5 14x5 5X5

R2 1X4 49X4 12X4

R3 5X3 30X3 23X3

R4 2X2 7X2 56X2

R5 91X1 0X1 0X1

Total 119 370 258

Mean 1.19 3.70 2.58

Rank 5 2 4

71X5

21X4

8X3

0X2

0X1

463

4.63

9X5

17X4

34X3

35X2

5X1

290

2.90

TABLE - 18 RESPONDENTS OPINION ABOUT THE PARAMETERS OF APPRAISAL SYSTEM Parameters Work Efficiency Job Knowledge Sociability Skill Development Co-operation 3X5 14X4 10X3 25X2 48X1 199 1.99 5 R1(5) 69X5 10X5 6X5 12X5 R2(4) 7X4 40X4 10X4 29X4 R3(3) 5X3 45X3 6X3 34X3 R4(2) 6X2 3X2 47X2 19X2 R5(1) 13X1 2X1 31X1 6X1 Total 413 353 213 322 Mean Rank 4.13 3.53 2.13 3.22 1 2 4 3

Interpretation: From the above table, it can be stated that the parameters such as work efficiency influencing the respondents Performance Appraisal is 4.13. The parameter job knowledge is 3.53. The parameter skill development is 3.22. The parameter sociability is 2.13. The parameter co-operation is 1.99. And the ranks are given accordingly as I, II, III, and IV & V respectively.

66

4.3. CHI-SQUARE METHOD TABLE - 19 RESPONDENTS RELATIONSHIP BETWEEN THE SATISFACTION LEVEL AND AGE

Ho: There is no relationship between the satisfaction levels of sample respondents belonging to different age groups with the performance appraisal system.

H1: There is relationship between the satisfaction levels of sample respondents belonging to different age groups with the performance appraisal system.

Level of satisfaction with Performance Appraisal Age High 25 35 36 45 Above 45 Total 14 3 0 17 System Medium 40 18 6 64 Low 12 3 4 19 66 24 10 100 Total

67

EXPECTED FREQUENCY Level of satisfaction with Performance Appraisal System Age High Medium Low

(66 X 17) / 100 = (66 X 64) / 100 = (66 X 19) / 100 = 25 35 11.22 42.24 12.54

(24 X 17) / 100 = (24 X 64) / 100 = (24 X 19) / 100 = 4.56 36 45 4.08 15.36

(10 X 17) / 100 = (10 X 64) / 100 = 6.4 Above 45 1.7

(10 X 19) / 100 = 1.90

68

Oi 14 40 12 3 18 3 0 6 4

Ei 11.22 42.24 12.54 4.08 15.36 4.56 1.7 6.4 1.9

(Oi Ei) 2 / Ei 0.68 0.11 0.023 0.285 0.453 0.533 1.7 0.025 2.32 6.129

Chi-square 2 =

(O E) 2 E

Chi square test is used to find out the association between two attributes and it is defined as, 2 cal = ( Oij Eij) 2 / Eij Here Oij Observed frequency, Eij Expected frequency Degree of freedom = (3 1) X (3 1) = 4

Table Value = 9.49

69

Calculated Value = 6.129 Table Value > Calculated Value Result: The calculated x2 test value (6.129) is less than the table value (9.49) at 5 percent level. The test proves that there is no relationship between the satisfaction levels of sample respondents belonging to different age groups with the performance appraisal system. Therefore, the null hypothesis is accepted.

70

TABLE - 20 RESPONDENTS RELATIONSHIP BETWEEN THE SATISFACTION LEVEL AND GENDER

Ho: There is no relationship between the satisfaction levels of sample respondents belonging to different gender groups with the performance appraisal system. H1: There is relationship between the satisfaction levels of sample respondents belonging to different gender groups with the performance appraisal system. Level of satisfaction with Performance Appraisal System Gender High Male Female Total 10 8 18 Medium 40 26 66 Low 10 6 16 60 40 100 Total

EXPECTED FREQUENCY Level of satisfaction with Performance Appraisal System Gender High Male Medium Low

(60 X 18) / 100 = (60 X 66) / 100 = (60 X 16) / 100 = 9.60 10.80 39.60

Female

(40 X 18) / 100 = (40 X 66) / 100 = (40 X 16) / 100 = 6.40 7.20 26.40

71

Oi 10 40 10 8 26 6

Ei 10.8 39.6 9.6 7.2 26.4 6.4

(Oi Ei) 2 / Ei 0.059 0.004 0.016 0.088 0.006 0.025 0.198

Chi-square 2 =

(O E) 2 E

Degree of freedom = (2 1) X (3 1) = 2 Table Value = 5.99 Calculated Value = 0.198 Table Value > Calculated Value

Result: The calculated x2 test value (0.198) is less than the table value (5.99) at 5 percent level. The test proves that there is no relationship between the satisfaction levels of sample respondents belonging to different gender groups with the performance appraisal system. Therefore, the null hypothesis is accepted.

72

TABLE - 21

RESPONDENTS RELATIONSHIP BETWEEN THE SATISFACTION LEVEL AND SALARY

Ho: There is no relationship between the satisfaction levels of sample respondents belonging to different salary groups with the performance appraisal system.

H1: There is relationship between the satisfaction levels of sample respondents belonging to different salary groups with the performance appraisal system.

Level of satisfaction with Performance Appraisal Salary High 10,000 20,000 20,000 30,000 Above 30,000 Total 10 12 6 28 System Medium 12 27 7 46 Low 8 11 7 26 30 50 20 100 Total

73

EXPECTED FREQUENCY Level of satisfaction with Performance Appraisal System salary High Medium 8.40 13.80 Low (30 X 28) / 100 = (30 X 46) / 100 = (30 X 26) / 100 = 7.80 10,000-20,000

(50 X 28) / 100 = (50 X 46) / 100 = (50 X 26) / 100 = 13.0 20,000-30,000 14.00 23.00

(20 X 28) / 100 = (20 X 46) / 100 = (20 X 26) / 100 = 5.20 Above 30,000 5.60 9.20

74

Oi 10 12 8 12 27 11 6 7 7

Ei 8.4 13.8 7.8 14 23 13 5.6 9.2 5.2

(Oi Ei) 2 / Ei 0.30 0.234 0.005 0.285 0.695 0.307 0.028 0.526 0.623 3.003

Degree of freedom = (3 1) X (3 1) = 4 Table Value = 9.49 Calculated Value = 3.003 Table Value > Calculated Value Result: The calculated x2 test value (3.003) is less than the table value (9.49) at 5 percent level. The test proves that there is no relationship between the satisfaction levels of sample respondents belonging to different salary groups with the performance appraisal system. Therefore, the null hypothesis is accepted.

75

CHAPTER-V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 5.1. FINDINGS:

From the Analysis and Interpretation a study on Performance Appraisal System, the following are the findings: Most of the respondents belongs to the age group of 25 35 Among 100 respondents most of them are male Most of the respondents have salary between 20,000 30,000 The company has appraised 100 % of the respondents. Most of the respondents have been appraised 5 10 times by the company Most of the respondents suggest that the purpose of performance appraisal system is to improve performance In the, Essae Digironics superiors are recommended to act as appraisers In the Essae Digironics, most the employees are averagely satisfied with the performance appraisal system followed by the company 100% of the respondents are fairly treated when being appraised by their supervisor. 100% of the respondents suggest that the appraisal system in the company is transparent. In Essae Digitronics, the frequency of training is finally. Most of the employees in Essae Digitronics expect the improvement of quality of work and job knowledge. from the training programme Most of the respondents that the on the job training is the more effective training followed by the company. 80% of the respondents are satisfied with the opportunities of training and development. The perception about the present performance appraisal system is motivating.

76

 On the basis of the respondents opinion work efficiency and job knowledge are the parameters of Performance Appraisal System. There is no relationship between the satisfaction levels of sample respondents belonging to different age groups with the performance appraisal system. There is no relationship between the satisfaction levels of sample respondents belonging to different gender with the performance appraisal system. There is no relationship between the satisfaction levels of sample respondents belonging to different salary groups with the performance appraisal system.

77

5.2. SUGGESTIONS:

Management should adopt variety for performance appraisal. Top management should concentrate more on the training and development programmes and should take necessary steps to improve human relations, selfawareness and co-operation.

The present work culture is not so conductive to proper giving and receiving of feedback and hence management should take necessary steps to make the work culture conducive. In this regard an overall change in the work culture is necessary.

Management should come forward to recognize the problem in giving feedback about performance appraisal system.

78

5.3. CONCLUSION:

A study on the Performance Appraisal System of Essae Digitronics aimed at critically evaluating the Performance Appraisal System in Essae Digitronics. The employees are satisfied with the performance appraisal system followed by the company. The evaluation on performance appraisal system reveals that the performance appraisal system of Essae Digitronics to be good. The management should come forward to recognize the problem in giving and receiving of feedback about performance appraisal system and thus achieve the purpose of performance appraisal successfully.

79

BIBLIOGRAPHY
Books referred

K. ASWATHAPPA, Human Relations and Personnel Management, 1999 Edition, TATA McGraw Hill Publishing Company Ltd., C. R. KOTHARI, Research Methodology, Second Edition (1999), Wishwa Prakashan, New Delhi. N. G. NAIR & LATHA NAIR, Personnel Management and Industrial Relations, 1999 Edition, S. Chand & Company Ltd. P. S. SUBBA RAO, Personnel / Human Resource Management, 2000 Edition, Himalaya Publication House, Bangalore.

Websites http://www.performanceappraisalsystem.com/ http://www.essaedig.com/

80

APPENDIX
A STUDY ON PERFORMANCE APPRAISAL SYSTEM IN ESSAE DIGITRONICS PVT LTD IN BANGALORE

1. Name of the respondent: 2. Age 3. Gender 4. Department 5. Designation 6. Salary : 25 35 yrs 36 45 yrs above 45 : Male Female : : : 10,000 20,000 20,000 30,000 above 30,000 7. Have you ever been appraised by your company? Yes No

8. How many times you have been appraised by your company? Less than 5 5 - 10 above 10 9. What do you think are the purposes of Performance Appraisal System? To assess performance To reward

To improve performance Determining training needs 10. What are the criteria used for Performance Appraisal and what are they? Work efficiency Attendance Creativity 11. In your opinion whom do you recommend to appraise you? Superiors Subordinates Self Appraisal 360-degree appraisal Peers Co-operation Job Knowledge

81

12. To what extent are you satisfied with the Performance Appraisal System followed by the company? Partially no Satisfied Partially Satisfied 13. Do you feel you are fairly treated when being appraised by your supervisor? Yes No Average Satisfaction

14. Is the appraisal system in your company transparent? Yes No

15. What is the frequency in which the training is given in your company? Once in a year Biannually Monthly Quarterly

on special request of employees 16. Do you think you need to be given training, based on performance appraisal? If Yes what are you expectations from the training programmes? Improve quality of work Personality Development Job knowledge 17. Which training & development programme is more effective? Seminars / Courses On the job training Self awareness Human relations

Computer assisted training Specialist lecture Other 18. How satisfied are you in general with your opportunities for training and development? Very satisfied Dissatisfied Satisfied Very Dissatisfied

82

19. Rank the following problem in giving feedback about Performance Appraisal? Low Motivation Lack of willingness of top management in adopting this practice Work culture not so conducive to proper giving and receiving of Feedback Lack of accountability

20. State your perception about the present performance appraisal system? Motivating De-motivating

21. Rank the following parameters for performance appraisal in accordance to your opinion? Work efficiency Sociability Co-operation Job knowledge Skill development

83