PROJECT REPORT

ON

PERFORMANCE APPRAISAL OF COOPERATIVE MILK VENDOR IN LUDHIANA (VERKA)

Submitted to : Panjab University, Chandigarh In partial fulfillment of the requirement for the degree of BACHELOR OF BUSINESS ADMINISTRATION

Submitted By:

KHALSA COLLEGE FOR WOMEN CIVIL LINES, LUDHIANA (2012-2013) CERTIFICATE

I certify that the project report "Performance Appraisal of Cooperative Milk ender (Verka) in Ludhiana" has been undertaken by me for the partial fulfillment of requirement of degree of Bachelor of Business Administration and is a original piece of work done and that no part of this project has been submitted for any other degree, diploma, fellowship or similar title in the university or in any other university. I express my sincere gratitude to my advisor Ms for their valuable guidance, support and cooperation extended for completion of this project.

CERTIFICATE

This is to certify that project report entitled "Performance Appraisal of Cooperative Milk ender (Verka) in Ludhiana" submitted in the partial fulfillment of the requirement of the actual BBA (Bachelor of Business Administration) at Khalsa College for Women affiliated to Panjab University is a bonafied Research work carried by University Roll No. __________ under my supervision and no part to this project has been submitted for any other degree.

Advisor Ms.

INDEX

CHAPTER 1. 2. 3. 4. 5. 6. 7. 8. 9.

PARTICULARS INTRODUCTION TO SUBJECT INTRODUCTION TO PERFORMANCE APPRAISAL ORGANISATION PROFILE PERFORMANCE APPRAISAL SYSTEM IN VERKA OBJECTIVE METHODOLOGY ANALYSIS AND INTERPRETATION OF DATA CONCLUSION & SUGGESTIONS ANNEXURE a) Questionnaire b) Bibliography

PAGE NO.

CHAPTER - I VERKA MILK PLANT LUDHIANA

The Punjab State Cooperative Milk Producers Federation Limited (MILKFED) was established in 1973 by Punjab Diary Development Cooperative Act 1967, but it came to real self in year 1983 when all the milk plants Punjab Dairy Development Cooperation Ltd. were handed over to cooperative sector. Punjab is 2 nd largest milk producing around 10% of countrys milk production i.e. 8 millions tonnes annually. The foundation stone of Milk Plant, Ludhiana was laid by Hon'ble S. Parkash Singh Badal, then the CM of Punjab in 1970. The

commissioning of plant was done by Punjab Diary Development Cooperation in 1974. Inauguration was done by Late Smt. Indira Gandhi then the PM of India. The capacity utilization of plant is more than 80%. The turnover of the plant touched to 180 crores profit of union has increased manifold. Milk products like ghee, table butter, skimmed milk pwoder whole milk powder, curd, paneer, milk cake, etc. are being manufactured by milk plant Ludhiana. Milk Cooperatives are integral part of milk marketing and diary development programme in India, known as operation flood launched by government of India in collaboration with world food programme of

United Nation in July 1970. The main aim is to set modern diary industry to meet the India's rapid increasing need for milk and products and making it capable of viable and self sustaining growth. Operation flood helped diary farmers to direct their own

development, placing control of the resources they create in their own hands. A national milk grid links milk producers through out in India with consumers in over 700 towns and cities, reducing seasonal and regional price variation while ensuring that the producer get fair market prices in a transparent manner on a regular basis. The bedrock of operation flood has been village milk producer's cooperatives, which procure milk and provide inputs and services, making modern management and technology available to members. COOPERATIVE STRUCTURE The cooperative is three-tire structure namely i) ii) iii) The Village Cooperative Society The District Cooperatives Union The State Federation Primary Cooperative Society consists of members with in the village jurisdiction who own cattle and supply milk to the cooperatives on a regular basis. Milk is collected twice daily the sample of each

producers is tested individually for fixing prices. The payment for milk supplied i.e. also made daily to enable them to buy inputs like feed.

An elected management committee of nine members manager the primary cooperative society for a term of three years, of which one will be the chairman. The management committee appoints a secretary, a

treasures and other staff. The staff is trained in first aid and artificial insemination to meet the local emergency needs. The District Milk Producers Cooperative Union represents all the primary milk producers. Cooperative societies which are members of the union and is managed by an elected management committee of 19 directors, which elects it own chairman. The union has a large

professional staff lead by the managing director. The union is responsible for procurement, processing and marketing of milk and providing technical and input services like veterinary services, supply of feel fooder, seeds and equipments besides training the staff. The state daily federation, it is a state level cooperative federation which would be able to support and guide district unions, absorb surplus milk available with the district unions for distribution in big cities and also convert any surplus milk received from the district unions into milk powder and other products either for sale or for later use for the combination in times of scarcity particularly in the lean season. It is

important that the federation should have control over the it dairies and the market in at least one major city which could absorb surplus milk and the number of federation to be formed should be based primarily on this

consideration of availability of a ready market within its area of operation. It is important to note that, this is only an outline

organisational pattern and there should be no rigidity in applying it. In the cooperative structure, the marketing federation forms the third tier, for centralized marketing and purchase of milk. Its purpose is to maximize the returns to the primary producers in their unions through centralized marketing, purchase and quality control. COOPERATIVE A cooperative is an autonomous association of persons who voluntarily cooperate for their mutual social, economic, and cultural benefit. Cooperatives include non profit community organizations and

businesses that are owned and managed by the people who use its services and by the people who work there. A cooperative is a legal entity owned and democratically controlled by its members. Members often have a close association with the enterprise as producers or consumers of its product or services, or as its employees. However, they may also be unincorporated a associations or business corporation such as limited liability companies or partnerships; such forms are useful when the members want to allow. 1. 2. Some members to have a greater share of the control. Some investors to have a return on their capital that exceeds fixed interest.

Neither of which may be allowed under local laws for cooperatives. Cooperatives often share their earnings with the membership as dividends which are divided among the members according to their participation in enterprise. Types of Cooperative Governance Retailers cooperative Workers cooperative Volunteer cooperative Social cooperative Consumer cooperative Business & employment cooperative

Types of cooperatives Housing cooperatives Utility cooperatives Agriculture cooperative Credit unions and cooperative banking Federal or secondary cooperative Cooperative wholesale society Cooperative union

COOPERATIVE STRUCTURE The basic structure of a cooperative is what fundamentally

distinguish, it most from other forms of business and societies and is why they are so much more responsive to the needs of communities. A cooperative has members, and those members have a direct say in how their cooperative develops the products and services the cooperative sells and the prices that are charged. They do this by way of their of their voting power and control over the cooperative board of directors. Members elects Board of Directors hires reports to Management hires reports to Staff serves Members Step 1 Members collectively elect the BOD and may individually stand for election themselves. Step 2 The BOD is responsible for governing the cooperative, which includes setting its direction and hiring senior management (for instance, the executive Director, CEO, etc.). The board is accountable to membership, and reports to them on an annual basis at a minimum. reports to

Step 3 Senior management is responsible for operating the cooperative, which includes hiring staff, program/business development,

administration, etc. Senior management is accountable to the board and reports to the directors at board meeting. The services are sender to the public members. Objectives of Cooperatives 1. 2. 3. Render services, not for profit Mutual help, not cooperation Self help, not dependence

CHAPTER 2 PERFORMANCE APPRAISAL

Once an employee is selected and trained for a job their management would like to see how he performs his work. It helps in

evaluating the performance of employees and in assessing the hiring and training methods followed in air organisation. The employees are

recruited with some objectives in mind, whether these have been achieved or not has to be regularly evaluated. Merit rating is a process of

evaluating an employee's performance of a job in terms of its requirements. The rating of a man by another man is as old as mankind, but formal merits rating system are of relatively recent origin. Merit

rating is also termed as performance appraisal or employee appraisal refers to all formal procedures used in working organisations to evaluate personalities and contribution and potential of group members.

PERFORMANCE APPRAISAL PROCESS Establishing Standards

Communicating Standards to Employees

Measuring Actual Performance

Comparing Actual with Standards

Discussing Reports with Employees

Taking Corrective Actions METHODS OF PERFORMANCE APPRAISAL A number of methods are available for measuring performance of employees. Different organisations devise their own methods of appraisal. In one organistion, the method may be based on informal consultation between a superior and a subordinate, in another organisation it may be based on results achieved and all managers may follow the same process. Usually, performance appraisal is based on two basis : (i) appraisal on the basis of personal traits of managers, known as trait appraisal (ii) appraisal by verifiable results, known as appraisal by results. Both the approaches

are not mutually exclusive but can be used in combination. Trait Appraisals Traits approach is also known as traditional approach. It is based on the evaluation of traits in a person. This system may list ten to fifteen personal characteristics such as ability to get along with people, competence, judgement, initiative, leadership etc. There may also be added work related characteristics such as job knowledge, ability to complete an assignment, success in carrying out plans, efforts in cost reduction etc. In the recent past, personal traits have outnumbered work related characteristics. The rater appraises subordinates on the basis of these standards and gives his rating. Since there may be different methods of rating people on the basis of such dimensions, there are several methods based on traits approach. Some such methods are discussed here. 1. Straight Ranking Method It is the simplest and old method of merit-rating. Every employee is judged as a whole without distinguishing the rates from his performance. A list is then prepared for ranking the workers in order of their performance on the job so that an excellent employee is at the top and the poor at the bottom. It permits comparison of all employees in any single rating group regardless of the types of work. The difficulty of this method is that it is very difficult to compare persons on the whole when they differ in qualities, attitudes, etc. This

method only tells us about the standing of various persons and not the actual difference among them. We can only say who is number 1, 2, 3, and so on but cannot say how much the person at number one is better than that at number two. This method is suitable only when there are limited persons in an organisation. 2. Paired Comparison Method In this method every person is compared trait-wise, with other persons one at a time, the number of times one person is compared with others is tallied on a piece of paper. These numbers help in yielding rank orders of employees. For example, if there are five persons to be compared. A's performance is first compared with that of B to find out who has better performance, then A is compared with C, D and E in turn and performance is recorded. Then B is compared to C, D, and E, since he has already been compared with A. In turn C is compared with D and E and so on. The results of these comparisons are tabulated and a rank is assigned to each employee. The number of rank order in this would be n(n-2) where n represents the number of persons to be compared. This method gives more reliable rating than straight ranking. But it will be suitable only when the number of persons is small. 3. Grading System Under this system certain features like analytical ability,

cooperativeness, dependability, job-knowledge, etc. are selected for

evaluation. The employees are given grades according to the judgement of the rater. The grades may be such as : A-outstanding; B-very good; C-satisfactory ; D-average; F-below average, etc. The actual performance of every employee is rated with various grades in mind. 4. Forced Distribution Method Some raters suffer from a constant error i.e. either they rate all employees as good, average or poor. They do not evaluate the employees properly. This system minimises rater's bias so that all employees are not similarly rated. This system is based on the presumption that all employees can be divided into five categories i.e. Outstanding, above average, average, below average and poor. The rater is asked to place 10 per cent persons in outstanding group; 20 per cent in above average; 40 percent in average; 20 per cent in below average and 10 per cent in poor category. The main idea in this system is to spread ratings in a number of grades. This method will be useful only when the group of employees is large. It is also easy to understand and simple to apply. 5. Check List Method Under this method the supervisors are provided with printed forms containing descriptive questions about the performance of employees. The supervisor has the answer ill yes or no. After ticking these questions the forms are sent to Personnel Department where final rating is done.

Various questions in the form may be weighed equally or certain questions may be given more weightage than others. The check list may contain such questions 1. 2. 3. 4. 5. Is the employee hard working ? Is he regular on the work? Does he co-operate with his superiors? Does he maintain his equipment well? Does he follow instructions well? Yes/No Yes/No Yes/No Yes/No Yes/No

The supervisor's bias remains in this method because he can distinguish between positive and negative questions. It is also difficult to put all possible questions in the check list because it will become lengthy. 6. Critical Incident Method This method attempts to measure worker's performance in terms of certain-events or incidents that occur in the course of work. The assumption ill this method is that the performance of an employee on the happening of critical incidents determines his failure or success. The supervisor keeps a record of critical incidents at different times and then rates him on this basis. Examples of critical incidents are: (i) (ii) (iii) (iv) Refused to accept instructions without a detailed discussion. Refused to accept instructions even when these were clear. Increased his efficiency despite resentment from other workers. Showed presence of mind in saving a worker when there was

accidental fire. (v) Performed a difficult task even though it was outside his regular duties. (vi) Displayed a courteous behaviour to a supplier.

(vii) He helped fellow employees in solving their problems. The problem in this method is that outstanding incidents may not regularly happen. Moreover, negative incidents may be more noticeable than the positive ones. The supervisor may not record an incident immediately and forget it later on. It may also be very difficult for a supervisor to decide whether an incident is critical or not. 7 Free Essay Method Under free essay method the supervisor writes a report about the employee which is based on his assessment. The supervisor continuously watches the workers or subordinates and writes his assessment in the report. The areas covered are the behaviour with employees, job knowledge, employee traits, development needs for future, etc. In this method the supervisor will be able to give a detailed account of the employee's performance. The system may suffer from human bias because of likings or dislikings of the supervisor. An appraiser may not be able to express his judgement in appropriate words and it will limit the utility of appraisal reports.

PERFORMANCE MANAGEMENT Since organizations exits to achieve goals, the degree of success that individual employees have in reaching their individual goals is important in determining organisation effectiveness. Performance system is fundamentally a feed back process, which require sustained commitment. The cost of failure to provide such

feedback may result in a loss of key professional employees, the continued poor performance of employees who are not meeting performance standards and a loss of commitment by employees, in sum, the myth that the employee known what. they are doing without adequate feedback from management can be an expensive fantasy. THE PURPOSE OF APPRAISING PERFORMANCE In general appraisal system serve 2 fold purpose. 1. To improve the work performance of employees by helping them realize and use their full potential in carrying out their firms mission. 2. To provide information to employ and managers for use in making, work related decision. More specifically appraisals serve the following purposes a) Appraisal provide feedback to employees and help the management identify the areas where development efforts are needed to bridge the gaps thereby serving as a vehicles for personal and career

development. b) It helps management spot individuals who have specific skills so that their promotions transfer are in line with organizational requirements. c) Appraisal serve as a key input for administering a formal organisation reward and punishment system. d) The performance system can be used as a criterion against which selection devices and development programs are validated. REQUIREMENT SYSTEM 1. Reliability The foremost requirement of social system is reliability. In this OF THE PERFORMANCE MANAGEMENT

contact it refers to consistency of judgement. For any given employee appraisals made by raters working independently of one another should agree closely. But raters with different perspective (e.g. : supervisions, peers, subordinates) may see the same individuals job performance very differently to provide reliable data, each rates must have and adequate opportunity to observe what the employee has done and the condition under which he or she has cone it. By making appraisal system relevant sensitive and reliable we assume the resulting judgement are valid as well. 2. Acceptability In practice, acceptability is the most important requirement of all,

for it is that human resources program must have the support of those who will use user them. Unfortunately many organisation do not put much

effort into garnering the front end support and participation of those who will use the appraisal system. Ultimately it is management's

responsibility to define as clearly as possible the type and level of job behaviour desired of employees. It is important to enlist the active support and cooperation of subordinates by making will be evaluated on. 3. Practicality This implies that appraisal instrument are easy for managers and employees to understand and to use. For years, personnel specialists have searched for the perfect appraisal method as if it were some kind of miraculay cure for many pit falls that plaque organisations. Such a method does not exit. In explicit what aspects of job performance they

tomorrows world of work for more empphasis needs to be placed on process issues. Factors such as timing and frequency are no less

important. In sum performance appraisal is a dialogue involving people and data. Both technical and human issues are involved. Neither can be overemphasized at the expense of the other. WHO SHOULD EVALUATE PERFORMANCE? The most fundamental requirement for any rater is that he or she

has an adequate opportunity to observe the rates job performance over a reasonable period of time. This suggest several possible rates. 1. The immediate supervisor Generally appraisal is done by this person. He is probably the most familiar with individual's performance and in most jobs has had the best opportunity to observe actual job performance further more, the immediate supervisor is probably best able to relate the individuals performing to department and organizational objectives. In some jobs such as outside sales law enforcement and teaching, the immediate supervisor may observe a subordinate's actual job performance rarely. Here judgement of peers play important role. 2. Subordinates Appraisal by subordinates can be useful input to the immediate development subordinates know first hand the extent to which the supervisor actually delegates, how well he communicates, the types of leadership he has and the extent to which he or she plans and organisms. 3. Self appraisal On one hand it improves the rate's motivation and moral, on the other it tends to be more lenient, less variable and biased. The evidence on the accuracy of self assessment is fairly complex. In industry it is seen that feedback/input is taken from various sources - peers, subordinates, superiors, etc. some companies have gone step a head in taking feedback

from the customers and integrating it into the performance management process.

CHAPTER-3 ORGANISATION PROFILE

HISTORY Milk was first delivered in bottles on January 11, 1878. The day is now remembered as Milk Day and is celebrated annually. There is a

different tradition meant to celebrate dairy farmers in the world. For away from the din and maddening pace of city, there rests, near Amritsar sleepy village Called Verka. Peaceful in its seclusion, life

crawls on it own pace. The cool breeze, and rustle of banyan leaves, the chirruping of the birds, the quite flow of the shimmering water besides those soft folds of rush green, nestling a healthy cattle grazing away to glory. A perfect picture of health and happiness. Today Verka has outstripped its own boundaries to reach our homes. Verka was there long before it come to MILKFED. But then, it was the difference between When we MILKFED took it on, we

being there and making it big.

believed that it had potential to do a lot more. And it did. With little more of a consumer oriented approach, Verka become a brand to reck on with. with its growing outlets and thus easier availability, it reached far and wide across the state and beyond. To people today, VErka is part of their daily lives.

INTRODUCTION OF : THE VERKA MILK PLANT LUDHIANA Verka Milk Plant, Ludhiana is known Ludhiana District Cooperative Milk Produce Union. It is situated on Ferozepur Road. It is fully equipped with modern fluid milk plants facilities. Verka Milk Plant Ludhiana is a prestigious milk plant of Punjab state famous all over the country and abroad for the supply of quality milk product. It has got first position in Northern Zone. In the year 1983 control of milk plant transferred to milkfed. Milk Plant Ludhiana produces variety of milk product like milk cake, cheese, butter, ghee skimmed milk powder and standardized milk. Milk plants sells better quality of pasteurized milk to people. Ghee manufactured by this plant is not only sold in country but also supplied to foreign countries like Nepal, Dubai, etc. Machinery of best technology has been installed in the milk plant. The machinery is available for following milk products. 1. 2. 3. 4. 5. 6. 7. 8. Pasteurized fluid milk Sterilized flavoured milk Milk cake Paneer Lassi Ice-cream Butter Ghee

9. 10. 11. 12.

Skimmed milk powder Whole milk powder Baby food Infant milk food Milk Plant Ludhiana is playing a vital role in Socio Economic

development of real messes of Ludhiana District. Normally middle men and traders dominate the market. The milk plant steadily marched

towards fix goal of becoming a strong and viable milk plant and now is at no. 1 in Northern Zone. PROFILE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

23. 24. 25.

CHAPTER - 5 OBJECTIVES

This project aims at studying the system of performance appraisal and its effectiveness in an organisation performance appraisal and its effectiveness in an organisation. Performance appraisal is the most significant and indispensable tool or the management as it provide useful information for decision making in area of promotion and compensation reviews. Thus broad objectives of the study includes: To evaluate performance appraisal in Verka. It serves as a guide for decision making. To describe the use of performance appraisal in organisation. To known how often performance appraisal is done in organisation. To known what type of performance appraisal is followed by organisation. To know whether performance appraisal effects job performance of employees.

CHAPTER 6 METHODOLOGY
The project work has been carried out in three stages, a structured questionnaire with objective and question was communicated tested and finalize. During the second stage, the questionnaire was administered to the employees at Verka by contacting them. The work relating to data entry compilation data analysis and report constituted the third stage. Interview index was also used at some places to get information on project subject. The detail of the methodolkogy adopted. RESEARCH PLAN To meet the objectives of the study undertaken, descriptive research type was adopted. RESEARCH DESIGN It is an arrangement of plan, which guides the collection of data and analysis of data. The purpose of research design is to ensure that data collected is accurate and relevant. Any research work requires clarity of objectives to be achieved effectively. Research design is so chosen that the analysis is accurate. THE QUESTIONNAIRE Keeping in view the objective of the study, questionnaire was designed and tested on few employees. After getting the proper response

and sanction from the concerned department the questioning was finalized. DATA ENTRY AND ANALYSIS It has been an uphill task to enter the enormous data received through the questionnaire which consisted nearly 20 questions. Response to the descriptive questions though very few but was valuable for the purpose of study. Hence these were further structured in time with the system adopted for compilation and data analysis. SELECTION OF POPULATION Due to constraints, the study has been conducted in the city of Ludhiana. DATA COLLECTION METHOD Primary Data In this study, I have used the unbiased structured questionnaires and personal interview, as the method for receiving primary data. Secondary Data In this study, I have acquired the information from newspaper, magazines and various websites.