INTRODUCTION

INTRODUCTION
HRM Human Resource Management (HRM) is the management of an organization's employees. While human resource management is sometimes referred to as a "soft" management skill, effective practice within an organization requires a strategic focus to ensure that people resources can facilitate the achievement of organizational goals. Effective human resource management also contains an element of risk management for an organization which, as a minimum, ensures legislative compliance. Definition Process by which a manager or consultant (1) examines and evaluates an employee's work behavior by comparing it with preset standards, (2) documents the results of the comparison, and (3) uses the results to provide feedback to the employee to show where improvements are needed and why. Performance appraisals are employed to determine who needs what training, and who will be promoted, demoted, retained, or fired. Performance Appraisal The history of performance appraisal is quite brief. Its roots in the early 20 th century can be traced back to Taylors pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal, management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War not more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the worlds second oldest profession! There is, says Dulewicz (1989), . a basic human tendency to make judgments about those one is working with as well as about oneself. Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employees performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to reform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self- esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. PERFORMANCE APPRAISALS ARE A REGULAR REVIEW OF EMPLOYEE PERFORMANCE WITH IN ORGANIZATIONS. Generally, the aims of a scheme are; Give feedback on performance to employees. Identify employee training needs. Document criteria used to allocate organizational rewards. Form a basis for personnel decisions: salary increases, promotions Disciplinary actions, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and administrator. Validate selection techniques and human resource policies to meet federal Equal Employment opportunity requirements. A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360 appraisals.
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The most popular methods that are being used as performance appraisal process are: Management by objectives (MBO) 360 degree appraisal Behavioral Observation Scale (Bos) Behaviorally anchored Rating Scale (BARS)

Trait based systems, which rely on factors such as integrity and conscientiousness. Are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two-fold: 1) Because trait based systems are by definition based on personality traits. They make it difficult for a manager to provide feedback that can cause positive change in employee performance. This is caused by the fact that personality dimensions are for the most part static, and while an employee can change a specific behaviour they cannot change their personality. For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to again when the threat of being caught is gone 2) Trait based systems, because they are vague, are more easily influenced by office politics. Causing them to be less reliable as a source of information on an employees true performance. The vagueness of these instruments allows managers to fill them out based on who they want to/feel should get a raise, rather than basing scores on specific behaviors employees should/should not be engaging in. These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioural information.

PERFORMANCE APPRAISAL AS AN HRM FUNTION HRM is considered as a process of increasing knowledge, skills and capacities of people It is important not only for an enterprise but also for a nation to develop its human resources. At the enterprise level, employees training and executive development are the main areas of human resource development. The quality of manpower required varies from job to job. Therefore, the quality of employees required for a job can be determined only after determining the job requirements. JOB ANALYSIS is the process of knowing the requirements of a particular job. It is the process of analyzing a job so as to collect all pertinent facts about the job in terms of duties and responsibilities involved in it and the qualifications needed for the successful performance of the job. With the help of information obtained through job analysis, two statements namely JOB DESCRIPTION and JOB SPECIFICATION can be prepared. JOB DESCRIPTION contains details about the contents of a job whereas job specification or man specification reveals the physical and other qualification and experience required in an individual to perform the job satisfactorily. 1) JOB DESCRIPTION Plays a major role while the recruitment is done by the organizations. It helps the employees to match the qualification which they have with those which are needed to perform a particular job. Once the shortcomings are identified the next step is to overcome them. The deficits are then met through especially designed training plans. Realistic plans for the procurement or for the training of the employees or for their development should be made after considering the macro and micro environment which affect the manpower objectives of the organization. A plan for Training and Development generally includes following points:

1) Number of employees to be trained. 2) Existing employees to be retrained. 3) Skill areas for training. 4) Availability of trainers. 5) Training period. 6) New courses to be developed and changes to be made in existing courses.

BASIC PHILOSOPHY OF PP & A: LEADERSHIP THROUGH QUALITY

RECOGNISATION AND REWARD Individual Reorganisation

PERFORMANCE IMPROVEMENT Building on Successes Skill Development Regular Counselling & Feedback

PERFORMANCE PLAING Link to company Goals Policy Deployment Understanding & agreeing the role

PP & A
CAREER PLANING Mapping towards skills and experience MANAGEMENT RESOURCE PLANING Input to Succession plans Company Resource

PERSONAL DEVELOPMENT Individual development action plans

PERFORMANCE APPRAISAL METHOD Performance appraisal methods include 11 methods / types as follows: 1. Critical incident method The critical incidents for performance appraisal is a method in which the manager writes down positive and negative performance behavior of employees throughout the performance period

2. Weighted checklist This method describe a performance appraisal method where rater familiar with the jobs being evaluated prepared a large list of descriptive statements about effective and ineffective behavior on jobs 3. Paired comparison analysis Paired comparison analysis is a good way of weighing up the relative importance of options. A range of plausible options is listed. Each option is compared against each of the other options. The results are tallied and the option with the highest score is the preferred option.

4. Graphic rating scales

The Rating Scale is a form on which the manager simply checks off the employees level of performance. This is the oldest and most widely method used for performance appraisal. 5. Essay Evaluation This method asked managers / supervisors to describe strengths and weaknesses of an employees behavior. Essay evaluation is a non-quantitative techniqueThis method usually use with the graphic rating scale method. 6. Behaviorally anchored rating scales
This method used to describe a performance rating that focused on specific behaviors

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or sets as indicators of effective or ineffective performance.

It is a combination of the rating scale and critical incident techniques of employee performance evaluation.

7. Performance ranking method

Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst. Manager will compare an employee to another employee, rather than comparing each one to a standard measurement. 8. Management By Objectives (MBO) MBO is a process in which managers / employees set objectives for the employee, periodically evaluate the performance, and reward according to the result. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods) 9. 360 degree performance appraisal 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them. 10.Forced ranking (forced distribution) Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.

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For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom. 11. Behavioral Observation Scales Behavioral Observation Scales is frequency rating of critical incidents that worker has performed.

PROCESS OF PERFORMANCE APPRAISAL

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Establishing Performance Standards The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

COMMUNICATING THE STANDARDS

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Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE The most difficult part of the performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance. DISCUSSING RESULTS

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The result of the appraisal is communicated and discussed with the employees on one-toone basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc. CHALLENGES OF PERFORMANCE APPRAISAL In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are: Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms

Create a rating instrument

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The purpose of the performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of competence

Top management should choose the rates or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. Errors in rating and evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the ratter should exercise objectivity and fairness in evaluating and rating the performance of the employees Resistance The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

PURPOSE OF PERFORMANCE APPRAISAL

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Performance Appraisal is being practiced in 90% of the organizations worldwide. Selfappraisal and potential appraisal also form a part of the performance appraisal processes. Typically, Performance Appraisal is aimed at:

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future.

Provide information to assist in the HR decisions like promotions, transfers etc. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees. Helps to strengthen the relationship and communication between superior subordinates and management employees.

PERFORMANCE APPRAISAL & DEVELOPMENT PLAN PURPOSE: The purpose of conducting a Performance Appraisal is to review and evaluate the performance of an executive/journalist on contract. OBJECTIVE: To inform the appraise of his/her relative performance in terms of targets and Key Result Areas(KRA) To encourage meaningful and transparent communication between the appraiser and appraise.
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 To identify the training need for development. GUIDELINES: The date and time for the appraisal interview has to be fixed well in advance by mutual consent between the appraiser and the appraise to allow for adequate preparation. A separate self-evaluation form has to be filled by every executive/journalist on contract prior to the appraisal interview and submitted to the appraiser. After the form is filled, the appraiser should then proceed with the appraisal interview. During the appraisal interview the appraise first do a Target based review for the appraise and he should appraise the appraise on the important parameters that have been identified. The appraiser should explain to the appraise why he/she has been given a particular score against a particular parameter and point out the appraisers strengths and weaknesses. The targets for the next year should be retained by the Department Head for midterm review. The appraiser should keep a copy of his/her self-evaluation and performance appraisal form and note the areas for improvement

DEFINITION OF SCORES: Scores/ Rating Definition

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High Flier/Outstanding

(5)

Employee who truly achieves outstanding success in the given targets and accomplishes much more than the expected tasks with efficiency and effectiveness. Research indicates that only 1% of the total employee population belongs to this

Regularly Exceeds

(4)

category. Employee who exceeds the requirements of the job. It gives an indication that the person is prepared sufficiently for a higher classified job. Research indicates that only about 15% of the total employee population belongs to this

Meets Requirement

(3)

category. This rating is to be given to the employee who has the requisite qualities to perform the present job with efficiency. Research indicates that 73% of the total employee population belongs to this category.

Occasionally Meets

(2)

Employee whose performance is adversely affected due to the lack of qualities required to perform in his current job. This is an indication that the person needs to be trained and developed sufficiently to orient means him totally towards good

Fails To Meet

(1)

performance. This rating

unacceptable

performance over a period of time. In spite of all efforts in training and development the employee

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continues to demonstrate lack of qualities to perform the job.. 1) Performance Assessment Discussion This candid discussion between the Appraiser and the Appraise on the latters performance during the year should focus on the following aspects: Demonstration of the extent of performance by the employee in the objective terms. Identifying the key drivers and facilitators for performance. Reviewing and discussing performance bottlenecks and making plans to overcome them. Planning of KRAs, Measures and Performance Standards for the next year. 2) Assessment by Appraiser Post discussion with the employees, the Appraiser will fill in the following information: 3) Performance Review The Appraiser will forward the Worksheet duly assessed and completed by him/her to the Reviewer (the immediate supervisor of the Appraiser) for his/her review and validation. Based on discussion with the Reviewer, the Assessed Level of Overall Performance for the employee will be documented in the Worksheet (based on the guidelines in the above table). The reviewer and the appraiser shall document their overall comments relating to the assessment of employee and sign off at respective places in the worksheet. 4) Performance Calibration Process

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After the completion of performance review, the Overall Performance as assessed will be taken through the Performance Calibration Process by the Functional Directors. This process would aim at reviewing performance levels across the functional area and apply necessary changes in line with structured guidelines, if any. 5) Feedback to Appraise Post calibration process, the Assessed Level of Overall Performance will be communicated to the Appraise by the Appraiser. The Appraise writes down his impressions and views (including those regarding the objectivity of the process), signs off the worksheet and hands it over back to the Appraiser. The Appraiser then forwards the Worksheet to the Functional Head. EMPLOYEE DEVELOPMENT GUIDELINES (A) Identifying Key Behaviour Areas and their Desired Level

The Appraise should fill in the following information in consultation with the Appraiser and HR Managers. Sl.No. 1 2 Term Key Behavior Area Description These are the behaviors that are required by an

individual To perform his/her job effectively. Desired Level of Behavior This is the proficiency with which the Key Behavior is Required to be demonstrated by the job-holder for

(B)

performing his/her job effectively. Demonstration of Key Behaviours by Appraise

Appraise provides Examples of Demonstration of Key Behaviour (with reference to the Desired Level of Behaviour) for each of the Key Behaviour Areas. These Examples (may be Critical Incident) would always have to be work-related and would be determinants of their Proficiency Level (explained below) on the applicable Key Behaviour Areas. Review

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(C)

Development

Post filling in the Examples of Demonstrated Behaviour, the Appraise and the Appraiser candidly discusses the following: 1. The Frequency of demonstration of a Behaviour by the Appraise, as well as the Proficiency with which it is demonstrated over a defined period of time. 2. Development Support required by the Appraise to take on higher/ wider roles within the next year. 3. Training Needs of the Appraise that need to be addressed within the next year. Post discussion with the Appraise, the Appraiser will fill in the following information in the Worksheet: The Appraiser signs off and forwards the documents to the Appraise for his/her comments and sign-off. Post this; the Appraise forwards the Worksheet to the concerned HR Manager. The Proficiency Level is communicated the Functional Director. This data will form an important parameter for Progression / Re-designation decisions.

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OBJECTIVES OF THE STUDY

OBJECTIVES OF THE STUDY

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To study the procedure of performance appraisal implemented in Dhampur Sugar Mill, Dhampur

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To analyse the methods of performance appraisal used in Dhampur Sugar Mill, Dhampur

To analyse how to calculate the gap between the actual and desired performance To explore how the individual use their strength and weakness so that their performance may be appraised

To study how performance appraisal linked with T&D needs To study how performance appraisal is a tool to strong them relationship and communication between superiors and subordinates

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SCOPE & IMPORTANCE

SCOPE & IMPORTANCE

This project report is proven to be relevant and important in various aspects related to the topic360 Degree Performance Appraisal . It provide the details of the term performance appraisal that is, How it came into existence, its relevancy in the organization and for the employee, What all benefits it provide, What process is

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followed for performance appraisal and to what extent it is efficient, effective and satisfactory. The researched had tried to view the things critically so as the suggestion can be proposed for the issues which are up to the mark.

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INDUSTRY PROFILE

INDUSTRY PROFILE
Introduction Sugars are a major form of carbohydrates and are found probably in all green plants. They occur in significant amounts in most fruits and vegetables. There are three main
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simple sugars sucrose, fructose and glucose. Sucrose is in fact a combination of fructose and glucose and the body quickly breaks down into these separate substances. The Need For Energy All energy stored in food is derived originally from the sun and it is made by green plant life. The sun's energy acts upon the green chemical "chlorophyll" in the leaves of plants to produce sugars and starches from the carbon-dioxide in the atmosphere and the water from the roots by a process known as Photosynthesis. These carbohydrates (starches and sugar) acts as a plants food and energy supply. The energy need of human body is largely dependent on the carbohydrates that are derived from plants. A Balanced Diet A balanced diet can come from a variety of different foods, calculated to give the desired levels of carbohydrates, proteins, fats, vitamins and minerals. Nutritional scientists advocate that carbohydrates should provide at least 50% of over energy requirements. India has been known as the original home of sugar and sugarcane. Indian mythology supports the above fact as it contains legends showing the origin of sugarcane. India is the second largest producer of sugarcane next to Brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tonnes per hectare.

India is the largest single producer of sugar including traditional cane sugar sweeteners, khandsari and Gur equivalent to 26 million tonnes raw value followed by Brazil in the second place at 18.5 million tonnes. Even in respect of white crystal sugar, India has ranked No.1 position in 7 out of last 10 years.
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Traditional sweeteners Gur & Khandsari are consumed mostly by the rural population in India. In the early 1930s nearly 2/3rd of sugarcane production was utilised for production of alternate sweeteners, Gur & Khandsari. With better standard of living and higher incomes, the sweetener demand has shifted to white sugar. Currently, about 1/3rd sugarcane production is utilised by the Gur & Khandsari sectors. Being in the small scale sector, these two sectors are completely free from controls and taxes which are applicable to the sugar sector. The advent of modern sugar processing industry in India began in 1930 with grant of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in the year 1930 - 31 to 135 in the year 1935-36 and the production during the same period increased from 1.20 lakh tonnes to 9.34 lakh tonnes under the dynamic leadership of the private sector. The era of planning for industrial development began in 1950-51 and Government laid down targets of sugar production and consumption, licensed and installed capacity, sugarcane production during each of the Five Year Plan periods. The targets and achievements during various plan periods are given below. History The discovery of sugarcane, from which sugar as it is known today, is derived dates back unknown thousands of years. It is thought to have originated in New Guinea, and was spread along routes to Southeast Asia and India. The process known for creating sugar, by pressing out the juice and then boiling it into crystals, was developed in India around 500 BC. Its cultivation was not introduced into Europe until the middle-ages, when it was brought to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to thrive in a most favorable climate.

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It was not until the eighteenth century that sugarcane cultivation was began in the United States, where it was planted in the southern climate of New Orleans. The very first refinery was built in New York City around 1690; the industry was established by the 1830s. Earlier attempts to create a successful industry in the U.S. did not fare well; from the late 1830s, when the first factory was built. Until 1872, sugar factories closed down almost as quickly as they had opened. It was 1872 before a factory, built in California, was finally able to successfully produce sugar in a profitable manner. At the end of that century, more than thirty factories were in operation in the U.S.

Uttar Pradesh Sugar Industry is one of the largest sugar industries in the Indian economy. The lavish measures in form of new promotional policies for the Uttar Pradesh sugar industry by the state government of Uttar Pradesh was introduced at a time when it was much needed to further boost the growth of the Uttar Pradesh sugar industry. The improvements in the plant capacity and the introduction of new techniques which enables the optimization of the existing plant capacities has the further made the growth definite. With the new promotional policies of the Uttar Pradesh sugar industry, the investors have already starting eying the future prospects. There are 20 more sugar processing units are coming up as a part of Uttar Pradesh sugar industry. The existing companies under the Uttar Pradesh sugar industry are planning an investment pertaining to expansion of about Rs 4,000 crore. At present the major companies in the Uttar Pradesh sugar industry are Balrampur Chini, Simbhaoli Sugars Ltd., Bajaj Hindusthan Ltd., etc. A batch of Brownfield and Greenfield expansion projects has already started their activities of crushing cane. The increase in the capacity would help the Uttar Pradesh sugar industry to churn out an extra 140,000 tons of crushed cane everyday to the existing 2.5 million tons of sugar produced within a few years time. The total sugar production under the Uttar Pradesh sugar industry would lead to 7.5 million tons, making Uttar Pradesh the biggest manufacturer of sugar in India. 30

The Uttar Pradesh sugar industry has a bright future as one of the prospective players in the global sugar market. The demand for sugar across the world has been growing exponentially. The Uttar Pradesh sugar industry with its capacity can cater to this international demand. The advantages of the Uttar Pradesh sugar industry are that the cost of production is quite low and the climatic conditions and the conditions of the soil are favorable to the sugarcane production. The region of India where the state of Uttar Pradesh lies is one of the most fertile lands in India called the 'doab'. This is an extremely fertile belt of lands between the rivers Ganges and Jamuna. To boost the production of the Uttar Pradesh sugar industry, the government of Uttar Pradesh is likely to set up a research and development unit which would develop better quality sugarcane plants to have better yield and diseases-resistant crops to ensure that the industry has a sustainable growth. The geographical position of the state of Uttar Pradesh is one of the key advantages as it is very easy to access. With all these developments the Uttar Pradesh sugar industry can meet the increasing domestic demands in India, which due to the improvements in the economic conditions and the rise in the general income level. The present consumption of sugar is nearly 19 mt annually and it may go up to 24 MT on a yearly basis. At present, the situation of the Indian sugar production can improve with all these measures. In the financial year of 2004-2005, India had to import 8.89 lakh tons of sugar from different countries due to the huge decline in the national sugar production. These measures would have a long term effect on the sugar production of the state and therefore of the entire country.

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Sugar Industry in India is well developed with a consumer base of more than billions of people. It is also the second largest producer of sugar in the world. There is around 45 millions of sugar cane growers in India and a larger portion of rural labourers in the country largely rely upon this industry. Sugar Industry is one of the agricultural based industries. In India it is the second largest agricultural industry after textile industry. Statistics on Sugar Production As to the statistics there were a total number of 571 sugar factories in India as on March 31, 2005 compared to 138 during1950-51. These 571 sugar mills produce a total quantity of 19.2 million tones (MT). Sugar production in India increased from 15.5 MT in 1998-99 to 20.1 MT in 200203.

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Department of Agriculture and Co-operation, sugarcane production in 2004-05 is estimated at 232.3 MT from 237.3 MT in 2003-04. Sugarcane production is expected to reach 257.7 MT in 2005-06. Sugar Production In states The following table shows level of sugar production (In Lakh Tonnes) in Indian States: State Uttar Pradesh Maharashtra Karnataka Tamil Nadu Andhra Pradesh Gujarat Haryana Uttaranchal Punjab Bihar Madhya Pradesh Other 2002-03 58.74 61.64 17.98 17.04 11.88 12.38 5.99 4.59 5.11 4.21 0.85 0.91 2003-04 46.08 31.99 11.57 11.9 8.81 10.77 5.86 3.93 3.88 2.77 0.94 1.09 2004-05 Estimated 50.32 22.29 13 9.84 9.75 8.32 4.03 3.82 3.37 2.77 0.85 1.58

The sugar production in the states largely depends upon monsoon. From 1998-03 good monsoon resulted a larger production of sugar in the country. Sugar Pricing: Government of India fixes Statutory Minimum Price (SMP) for sugarcane according to Clause 3 of the Sugarcane Order. This statutory Minimum Price is designed through the consent of Commission for Agricultural Coast and Prices (CACP) and respective state Governments. For the year 2004-05, the rate was fixed at Rs. 74.50 per quintal with a basic recovery of 8.5%. INDIAN GOVERNMENT ON SUGAR INDUSTRY The following policy initiatives are taken to boost the Sugar industry: Government declared the new policy on August 20, 1998 with regards to licenses for new factories, which shows that there will be no sugar factory in a radius of 15 km. Setting up of Indian Institute of Sugar Technology at Kanpur is meant for improving efficiency in the industry.

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In the year 1982, the sugar development fund was set up with a view to avail loans for modernization of the industry.

Manufacturing Process and Technology Sugar (sucrose) is a carbohydrate that occurs naturally in every fruit and vegetable. It is a major product of photosynthesis, the process by which plants transform the sun's energy into food. Sugar occurs in greatest quantities in sugarcane and sugar beets from which it is separated for commercial use. The natural sugar stored in the cane stalk or beet root is separated from rest of the plant material through a process known as refining. For sugarcane, the process of refining is carried out in following steps

Pressing of sugarcane to extract the juice. Boiling the juice until it begins to thicken and sugar begins to crystallize. Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar. Shipping the raw sugar to a refinery where it is washed and filtered to remove remaining non-sugar ingredients and color.

Crystallizing, drying and packaging the refined sugar

Beet sugr processing is similar, but it is done in one continuous process without the raw sugar stage. The sugar beets are washed, sliced and soaked in hot water to separate the sugar -containing juice from the beet fiber. The sugar-laden juice is then purified, filtered, concentrated and dried in a series of steps similar to cane sugar processing. For the sugar industry, capacity utilization is conceptually different from that applicable to industries in general. It depends on three crucial factors the actual number of ton of sugarcane crushed in a day, the recovery rate which generally depends on the quality of the cane and actual length of the crushing season. Since cane is not transported to any great extent, the quality of the cane that a factory receives depends on its location and is outside its control. The length of the crushing

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season also depends upon location with the maximum being in south India. Sugarcane in India is used to make either sugar, khandsari or gur. However, sugar products produced worldwide are divided into four basic categories : granulated, brown, liquid sugar and invert sugar. Granulated : Granulated sugar is the pure crystalline sucrose. It can be classified into seven types of sugar based on the crystal size. Most of these are used only by food processors and professional bakers. Each crystal size provides unique functional characteristics that make the sugar appropriate for the food processor's special need. Granulated Sugar There are many different types of granulated sugar. Most of these are used only by food processors and professional bakers and are not available in the supermarket. The types of granulated sugars differ in crystal size. Each crystal size provides unique functional characteristics that make the sugar appropriate for the food processor's special need. "Regular" Sugar, Extra Fine or Fine Sugar "Regular" sugar, as it is known to consumers, is the sugar found in every home's sugar bowl and most commonly used in home food preparation. It is the white sugar called for in most cookbook recipes. The food processing industry describes "regular" sugar as extra fine or fine sugar. It is the sugar most used by food processors because of its fine crystals that are ideal for bulk handling and are not susceptible to caking. Fruit Sugar Fruit sugar is slightly finer than "regular" sugar and is used in dry mixes such as gelatin desserts, pudding mixes and drink mixes. Fruit sugar has a more uniform crystal size than "regular" sugar. The uniformity of crystal size prevents separation or settling of smaller crystals to the bottom of the box, an important quality in dry mixes and drink mixes. Bakers Special Bakers Specials crystal size is even finer than that of fruit sugar. As its name suggests, it was developed specially for the baking industry. Bakers Special is used for sugaring doughnuts

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and cookies as well as in some commercial cakes to produce fine crumb texture. Superfine, Ultrafine, or Bar Sugar This sugar's crystal size is the finest of all the types of granulated sugar. It is ideal for extra fine textured cakes and meringues, as well as for sweetening fruits and iced-drinks since it dissolves easily. In England, a sugar very similar to superfine sugar is known as caster or castor, named after the type of shaker in which it is often packaged. Confectioners ( Powdered ) Sugar This sugar is granulated sugar ground to a smooth powder and then sifted. It contains about 3% corn starch to prevent caking. Confectioners sugar is available in three grades ground to different degrees of fineness. The confectioners sugar available in supermarkets is the finest of the three and is used in icings, confections and whipping cream. The other two types of powdered sugar are used by industrial bakers. Coarse Sugar The crystal size of coarse sugar is larger than that of "regular" sugar. Coarse sugar is normally processed from the purest sugar liquor. This processing method makes coarse sugar highly resistant to color change or Inversion (natural breakdown to fructose and glucose) at high temperatures. These characteristics are important in making fondants, confections and liquors. Sugar has Medical Value Apart from sugar being a cheapest instant source of energy, it has several medical & therapentical values. Some of them are as elaborated below. Sugar For Oral Rehyderation Sugar is extremely valuable in treatment of severe infantile diarrhea, a serious problem that kills around 3.5 million children in a year in underdeveloped countries. Oral re-hydration treatment (restoring of liquids by mouth) is used for infants with diarrhea due to cholera or re-hydrating viruses. It is simpler and easier to mix sugar with salt to treat de-hydration children even in the most remote areas. Further studies prove that oral sucrose was an
36

effective as intravenous treatment in retaining re-hydration. Sugar Heals Wounds Sugar has tremendous healing power. Sugar helps in wiping out infections in all types of wounds and speed up the healing time as well. Fills up sugar in the open wounds and it dissolves in tissue where micro organism cannot survive. Sugar is the Best Carrier of Vitamin E, A and Minerals Vitamin A deficiency in South American population is being combated successfully with the use of fortified sugar. Encouraged by the results, fortification of sugar with vitamin A is being attempted to combat vitamin A as well as mineral (iron ) deficiencies a major area of concern in some of the developing countries. Sugar Brokers & Wholesalers A R Chocklingam Chettiar & Coimbatore - 641 001 Sons Tamil Nadu, India 113, Subbiah Mudaliar Street, Kesajee Corporation Coimbatore - 641 001, Tamil Nadu, India 11 / 33A, Thadagam Road, Edayarpalayam, Coimbatore Lakshmi Sugar Merchant - 641 025 Tamil Nadu, India 79, Subbiah Mudaliar Street, P N Nelson Agency Coimbatore - 641 001, Tamil Nadu, India Sakthi Sugars Ltd 180, Race Course Road , Coimbatore - 641 018
37

Address 76, Rajammal Layout,

Phone Number

+ 91 - 422 - 2470687

+ 91 - 422 - 2395605

+ 91 - 422 - 2401028

+ 91 - 422 - 2395454

+ 91 - 422 - 2210569

Tamil Nadu, India Central Co-Op Bank Building, Tamil Nadu Co-Op Sugar State Bank Road, Federation Coimbatore - 641 018 Tamil Nadu, India 105 / 106, Old Market Tribhovandas Vendravan & Bros Street, + 91 - 421 - 2240060 Tiruppur - 641 604, Tamil Nadu, India 23 / 63, Subaiyah Mudaliyar Street, V Hirachand Coimbatore - 641 001, Tamil Nadu , India 438, Rangai Gowder Street, Vellingiri & Co Coimbatore - 641 001, Tamil Nadu, India + 91 - 422 - 2391019 + 91 - 422 - 2392993 + 91 - 422 - 2300573

Sugar Mill Machinery Mfrs

Address 167, Thirumalayam Palayam,

Phone Number

Aeromen Engg Co

Ettimadai Pirivu, Coimbatore - 641 105, Tamil Nadu, India

+ 91 - 422 - 2656495

Doall Ehgineering Products

A1, Kanakkal Street, K.K.Pudur, Coimbatore - 641 038,

38

+ 91 - 422 - 2447519

Tamil Nadu, India 29-D, Dharapuram Road, Krishna Industries Udumalpet - 641 126 Tamil Nadu, India 12 / 15, Ammankulam Street, Murthy Industries Coimbatore - 641 107, Tamil Nadu, India 761, Marapallam Madukkarai, R K Industries Coimbatore - 641 105, Tamil Nadu, India 45, N Gounder Street, Sakthi Sugars Ltd Pollachi - 642 001 Tamil Nadu, India 1276, Mettupalayam Road, Sri Sujay Engineering Products Coimbatore - 641 043, Tamil Nadu, India 54, Sowripalayam Road, Sri Vijayalakshmi Industries Coimbatore - 641 028, Tamil Nadu, India + 91 - 422 - 2316202 + 91 - 422 - 2442430 + 91 - 4259 - 223935 + 91 - 422 - 2622378 + 91 - 422 - 2654271 + 91 - 4252 - 223879

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Sugar Producers Bannariamman Sugars Ltd

Address 12/175 Sathy Road,

Phone Number + 2354214

Annur, Tamil Nadu, India 23 / 63 Subbiah Mudaliyar Street, Hirachand V & Ottagee Sugars Coimbatore - 641 001, Tamil Nadu, India 53-54, Race Course Road, Jeypore Sugar Co Ltd Coimbatore - 641 018, Tamil nadu, India 338, Avinashi Road, Peelamedu, Raasi Sugars Coimbatore - 641 004, Tamil Nadu, India D 338 Avinashi Road, Rajshree Sugars Chemicals Ltd Coimbatore - 641 004, Tamil Nadu, India 95-A, Vyshnav Complex, Race Course , Sakthi Sugars Ltd Coimbatore - 641 004, Tamil Nadu, India 818, Ranga Gounder Street, Sri Velmurugan Trading Co Coimbatore - 641 001, Tamil nadu, India Velan Distributors (P) Ltd 1127, R G Street, Coimbatore - 641 001, + 91 - 422 - 2397733 + 91 - 422 - 2393381 + 91 - 422 - 2211060 + 91 - 422 - 2575199 + 91 - 422 - 2576746 + 91 - 422 - 2216767 + 91 - 422 - 2392983

40

Tamil Nadu, India

41

COMPANY PROFILE

COMPANY PROFILE

42

DHAMPUT SUGAR MILLS LTD HISTORY The Dhampur Group began its operations at Dhampur, Uttar Pradesh in 1933 with a crushing capacity of 300 TCD. The current capacity of Dhampur Group is 39,500 TCD. Its products include Power, Ethanol, Chemicals, Refined Sugar and Plantation White Sugar. Leadership begins with a vision Lala Ram Narain ji [1880 1943], founder of the Dhampur Group, took on the task of supporting his entire family at a very young age and shouldered his responsibilities with fortitude and confidence. During this period he worked with a forest contractor but the craving to press forward and accomplish, burnt deep within his heart. He soon spotted an opportunity in supply of wooden sleepers, for laying new railway tracks and boldly struck out on his own. His determination defied logistics and laid the foundations of the Dhampur Group. From such modest beginnings, he hand-crafted the destiny of the corporate house that today, directly and indirectly, provides employment and livelihood to a large number of individuals and families of the rural India. In the early 1930s, while the strategists debated over choice of role models on which to shape the Indian economy, Lala Ram Narain ji anticipated the need for industrialization. The outcome of his foresight was investment in two sugar mills one at Dhampur and the other as a 50% partner, at Bareilly, in Uttar Pradesh. The Dhampur Sugar Mill was commissioned in 1933. Shri Murli Manohar ji [1916 1964], eldest son of Lala Ram Narain ji took up the baton at an early age to carry forward the vision and legacy of his father. Even in face of a youth spent in comparatively difficult circumstances, the indomitable will he inherited from his father manifested itself in 1947 when the Indian Sugar Industry was passing through a challenging 43

phase. He resisted efforts to divest the Dhampur unit and took over the Managing Agency of the factory agreeing to pay a fixed dividend to his partners. He accomplished this task with great lan and successfully turned around the fortunes of the Dhampur factory. He passed away at the young age of 48 but the path for the future generations had already been etched. Dhampur Today The Dhampur Group is spearheaded by its dynamic Chairman, Mr.V.K.Goel. His visionary innovativeness and emphasis on continuous R&D have made the company a technological leader in sugarcane processing and green energy solutions. Starting from 300 TCD in 1933 the Dhampur Group has recorded an impressive performance taking its crushing capacity of sugarcane to 39500 metric tonnes per day, with power cogeneration capacity of 145 MW and alcochem capacity of 270,000 liters per day. Through its successful pioneering efforts, the Dhampur Group directed the industrys development by introducing new technologies like Fibrizors, Pressure Feeders, Fiber based single tandem, Pressure Evaporation System with Falling Film Type Evaporator Bodies, Vertical Continuous Pans etc. These innovations became the mainstay of sugar technology in India. Dhampur is one of the most integrated sugarcane processing companies in India. Dhampur's sugarcane co-generation capacity is one of the largest in the country and it has perhaps the highest ethanol manufacturing capacity relative to its cane crushing capacity, in the country. It is also the first and the largest producer of refined sulphurless sugar in the country. BOARD OF DIRECTORS

44

Mr. V.K. Goel Promoter Director and Chairman, aged 69 years is a Chemical Engineer. He is a well known Sugar Technologist and Entrepreneur with vast experience of around 47 years. He is the source of inspiration for every innovation and R&D and has placed the company among the global leaders in sugarcane technology. He has been the President of Indian Sugar Mills Association (ISMA), an apex body of sugar manufacturers of India. An avid sportsperson, he is also the Founder President of Delhi Squash Association. Mr. A.K. Goel Promoter Director and Vice Chairman, aged 63 years, is a commerce graduate. He too has vast experience of over 41 years in the Sugar and Paper Industry. He has been the President of U.P. Sugar Manufacturers Association (UPSMA) and President of Indian Sugar Manufacturers Association (ISMA). He is also the Founder President of Indian Agro Paper Mills Association (IAPMA). He is a dedicated bridge player and Founder President of Contract Bridge Association. He has represented India at the Bridge Olympiad and the Bermuda Bowl. Mr. Gaurav Goel Promoter Director and Managing Director. Mr. Gaurav Goel, aged 36 years is the son of Mr. Ashok Kumar Goel. He is a Business Management Graduate from United Kingdom and has been associated with the company since 1994. He is responsible for the overall management of financial aspects. He has been the President of Entrepreneurs Organization (EO), Delhi Chapter, for the year 2006-07. He takes avid interest in Tennis, Bridge and Reading. Mr. Gautam Goel Promoter Director and Managing Director. Mr. Gautam Goel aged 36 years is the son of Mr.

45

Vijay Kumar Goel. He has been associated with the company since 1994. He is responsible for the technical and working aspect of operations. He is presently the Chairman of the Cogeneration Sub-Committee as well as of the Media and Communications Sub-Committee of the Indian Sugar Mills Association (ISMA). He is a dedicated sportsperson with special interest in Squash and has represented Delhi in national tournaments. Mr. Ashwani K. Gupta Independent Director. Mr. Ashwani Kumar Gupta, aged 54 years, is a Chartered Accountant, headquartered at Lucknow. He has experience of over 31 years and is acknowledged as one of the leading Finance, Treasury, Real Estate, Securitisation, Re-construction of Assets Experts in the Industry today and is on the Board of various prestigious companies. Mr.Gupta is Regional Council Member of Central India Regional Council of Institute of Chartered Accountants of India. He has been Government Nominee on the Board of Joint Sector Companies and RBI nominee on the Boards of Bank. Mr. M.P.Mehrotra Independent Director. He is a Chartered Accountant with experience of over 41 years and with vast exposure of finance and taxes. He has wide experience as an Auditor and Tax Consultant and is an expert on Companies Act and Income Tax Act. He is the founder Partner of Mehrotra & Mehrotra and member of several prominent organizations such as Central Board of Trustees, Employees Provident Fund Organization (EPFO), Ministry of Labour, Govt. of India, Task Force for MOUs, Ministry of Heavy Industries & Public Enterprises, Govt. of India, Advisory Committee, Handlooms, Ministry of Textiles,Govt. of India, PHDCCI and ASSOCHAM and several others. He has been Director, Canara Bank and Trustee, Cochin Port Trust. Mr. Harish Saluja

46

Independent Director. He is a Chartered Accountant with experience of about 36 years and with vast exposure of the financial market in India. Mr. Rahul Bedi Independent Director, aged 57 years. Experienced Journalist. He is the India Correspondent for the Daily Telegraph, UK and the Irish Times, Dublin. He specializes in military and security-related issues. An MA in English Literature from Delhi University he was also at Oriel College, Oxford as the Reuters Fellow in the mid 1980's.He has co-authored several books. In the 1970's he was Assistant Master at The Mayo College, Ajmer and The Doon School where he taught English, History and Mathematics. Mr. J.P. Sharma Employee Director. A senior employee of the company, acting as Occupier for the Factories of Company. Mr. Priya Brat Independent Director. He is a science graduate and started his career as an academician but has been a banker since 1959. During his remarkable career he has been associated with several major financial institutions. He has been on the boards of State Bank of Patiala, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Travencore, State Bank of Saurashtra, M.P.State Development Corporation, M.P.State Electronic Development Corporation and OPTEL. Mr.B.B.Tandon Independent Director. Mr. B.B. Tandon was a member of Indian Administrative Services (IAS) 1965-2001, Election Commissioner of India w.e.f. 13.06.2001 to 15.05.2005, member of the Delimitation Commission w.e.f. 12.07.2002 to 15.05.2005 and Chief Election 47

Commissioner of India w.e.f 16.05.2005 to 29.06.2006. He was also invited as International Election Observer to observe the Second Cambodian General Election held in Jul,2003. He also served as a member of the "Commission on Constitutional and Electoral Reforms" set up by the Govt. of Mauritius in November, 2001. He also headed the working group on comprehensive revision of the Companies Act,1956, which recommended several changes/amendments in the said Act. Having joined the service in 1965, Shri Tandon held various top-level posts in the Government of India including as Addl. Secy.- Ministry of Company Affairs and at State level as principal secy. (power) - Govt. of Himachal Pradesh. He has also served on the Board of several Public Sector Undertakings. Ms. Romi Chakravorty Nominee Director appointed by IDBI Ltd. Mr. S.P.Arora Nominee Director appointed by IFCI Ltd. Mr. Amit Dhawan Mr. Amit Dhawan is Nominee Director appointed by ICICI Bank Limited. He is Deputy General Manager with the Corporate Banking Group of ICICI Bank Limited. He joined ICICI Group in 1996 and has worked in various departments. Mr. Dhawan is a B.E. (Mechanical) and Masters in Business Administration from University of Delhi, India. Mr. Dhawan was deputed to help set up the Banks operations in the USA. He launched the loan Origination practice and was instrumental in forging some of the Banks strategic alliances in the USA. MISSION & VISION

48

Dhampur stands tall with the collective confidence that our farmers, our workers, our vendors and our stakeholders have pledged with us. Their sense of belonging, their hopes and expectations motivate us to perform better each time. Preserving their trust is our corporate mantra. At Dhampur we have striven to realize a corporate environment of collaborative effort and have worked towards continuous improvement in every sphere of our activity. In our quest for excellence we have given special consideration to our social obligations, whether it is caring for the rural hinterland or the environment we live in. A significant and endearing feat for the Group is that some of its employees have been a part of the Dhampur family for two to three generations. Projections of the sugarcane based Industry in India are exceptionally promising and Dhampur is totally geared up to think beyond the cube:

To provide energy alternatives to an energy-starved country through cogeneration and ethanol.

To value add on our product portfolio To maximize the potential of the agro industry in India. To continuously bring down the cost of conversion. To encourage creativity and resourcefulness, and focus on continuous R&D. To optimize the value of stakeholder investments with a continuous improvement in financial performance.

To diversify and protect the bottom-line during industry downturn. To attain the highest level of accountability, corporate governance and shareholder value.

49

In a country where agriculture is the predominant activity, sugarcane processing units wield a tremendous impact on the area of their location. We continue to play our role with absolute commitment and watch with fascination and pride as even the most backward areas where our units are located, slowly transform into a beehive of activity, touching the lives of thousands of people, now a part of the ever increasing Dhampur family.

50

PRODUCT PROFILE

PRODUCT PROFILE SUGAR:

BRAND : DHAMPURE 51

With the belief that the Indian consumer today is as quality and health conscious as any other consumer today the world over, Dhampur Sugar Mills made an initiative to produce a sugar comparable to the high standards of the western countries, in India. Dhampur embarked on the project in 1996, under the aegis of the Sugar Technology Mission to make sugar that would be sparkling white, pure and healthier. Dhampur perfected the technique and the result was India's first double refined sulphurless sugar sold under its brand Dham pure. Dhampure is a better sugar simply because its processing continues long after that of ordinary sugar has stopped. The secret behind Dhampure's purity is the unique Defeco Remelt Process, in which the sugar after it has crystallized is melted all over again and all the impurities are removed without the use of sulphur. Since no sulphur is used in the manufacturing of Dham pure sugar, it meets even the strict standards of the European Union on sulphur content. The double refined Dhampure sugar has no impurities, so its crystals have natural translucent white colour and don't require bleaching with sulphur-dioxide. Dhampure is packed under a controlled environment, untouched by hand, assuring impeccable hygiene.

POWER COGENERATION CAPACITY : 145 MW (80 MW GRID INTERACTIVE)

52

BAGASSE, the residual fiber of sugarcane after crushing and extraction, is a valuable byproduct generated during the sugar manufacturing process. It has high calorific value and is therefore used to generate steam and thereby electricity, which is a conventional thermal alternative and eliminates emission of green house gases. In 1994, Dhampur was the first sugar company in India to start eco-friendly cogeneration at one of its units, with a low project outlay as compared to conventional power plants. Conventionally, this was restricted to providing captive power in order to meet the energy requirements of the sugar factory. However, Dhampur was one of the first to realize the tremendous potential it had towards reducing the power deficit, by supplying to the grid, thereby contributing to the bio-energy effort undertaken by the country. An additional benefit of using bagasse is that it is a renewable source of fuel and does not contribute to Greenhouse gasses as the sugarcane plantation consumes more carbon dioxide than that generated in burning bagasse. Today, the Groups combined co-generation capacity stands at 145 MW with 80 MW of grid interactive power. Dhampur is the first in the world to install 105 kg.cm 2 boiler and turbine in its sugar division, which has increased efficiencies in bagasse usage and made it perhaps the most efficient cogeneration unit in the world. Dhampur additionally installed energy saving devices which would further increase bagasse savings. This saving would enable the company to run its power plants without external bagasse purchases. Power generation in non-sugar season as well, will result in consistent cash inflows. Dhampur was the first sugar company in Uttar Pradesh, which was allowed export of power under Open Access (during off-season), from 1st October, 2009, resulting in higher realizations. ETHANOL CAPACITY : 270 KL Per Day Ethanol is a generic name for Ethyl Alcohol which is a product of sugarcane molasses and juice, prepared by fermentation and distillation processes. It is a volatile, flammable and colourless liquid, widely used as a solvent of substances intended for human contact or consumption, including fragrances, flavoring, colouring and medicines. When blended, as an additive with fuel for motor vehicles, it is known as Motor Fuel Grade Alcohol or Power Alcohol. It can be blended 53

with petrol in varying quantities up to any extent depending upon the technology of the engine. Up to 15% blend no modifications are required in the engines. Usage of ethanol-blended gasoline began in the late 1970s. Environmentally, the use of ethanol blends has assisted in reducing carbon monoxide emissions. In the United States, one out of every eight gallons of gasoline sold contains ethanol. Most of this ethanol is purchased as blends of 10% ethanol and 90% gasoline, known as E10, and is used as an octane enhancer to improve air quality. In India we are presently using E5 that is, 5% ethanol blend with gasoline but a government order for 10% blend is expected in the near future.

A SUGAR INDUSTRY PERSPECTIVE & ETHANOL PRODUCTION

Most sugar companies in India are evolving into integrated players as diversification into distillery, ethanol and power has become possible. This has improved the demand for molasses and ensures better economics. The Government of India has made blending of 5% Ethanol in motor vehicle fuels, compulsory all over India. This directive has provided sugar mills the opportunity to implement forward integration. A 5% ethanol blend on an all-India basis would require around 500 million liters. The current installed capacity would be adequate to meet this requirement as also for E10 blend, even after fully meeting the requirement of the chemical industry and potable sectors, as India is the second largest producer of sugar in the world.

Ethanol blended fuels are advantageous due to the following characteristics: Renewable source of energy Renewable source of energy Use Molasses which is readily available and is a by-product of the sugar manufacturing process

54

Diversifies the Sugar Industry Utilizes industrial installed capacity, improving the economy of the industry. Energy security, trade balance and risk reduction. Reduce use of gasoline and ensures less dependence on imports of oil Market opportunity for agricultural crops Rural economic development and boost to the agricultural sector Environmental benefits (reduced carbon dioxide and carbon monoxide emission. It does not contribute to the harmful greenhouse gasses)

Displaces dangerous and environmentally damaging components in gasoline, such as benzene.

India presently has an installed capacity of over 3,000 million liters per annum but is producing less than 50% of installed capacity.

PERFORMANCE APPRAISAL IN DHAMPUR SUGAR MILL The employee Performance Appraisal enables the manager or the supervisor to identify, evaluate and develop an individuals performance. It is a tool to encourage strong performers to maintain their high level of performance and to motivate poor performers to do better. It offers a chance for a supervisor and subordinate to have time out for a one-on-one discussion of important work issues that might not otherwise be addressed. Performance Appraisal is a medium that provides recognition for an employees good work. The existence of an Appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This has a positive influence on the individuals sense of worth, commitment and belonging. Performance Appraisal offers an excellent opportunity, for a supervisor and subordinate to recognize and agree upon individual training and development. From the point of view of the organization as a whole, consolidated appraisal data can form a picture of the

55

overall demand for training. This data may be analyzed by variables such as sex, department etc. in this respect, performance appraisal can provide a regular and efficient training needs audit for the entire organization. Appraisal data can be used to monitor the success of the organizations recruitment and induction practices. For example how well are the employees performing who were hired in the past two years? Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the work force is improving staying steady or declining. Performance Appraisal not only results in a healthy interaction between the supervisor and the employee but also brings forth the problems of a job (if any), needs of a job, strengths and weaknesses of an employee, the training needs etc. The benefits of Performance Appraisal can be discussed under three headings. Benefits for the employee

Gaining a better understanding of their role. Understanding more clearly how and where they fit in within the wider picture. Understanding of how performance is assessed and monitored. Getting an insight into how their performance is perceived. Improving and understanding their strengths, weaknesses and developmental needs.

Identifying ways to improve employee performance. Providing an opportunity to discuss and clarify developmental and training needs. Understanding and agreeing to their objectives for the next year. Discussing career direction and prospects.

The above if done in true spirit encourages employee satisfaction.

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Benefits to the line manager/supervisor/team leader

Opportunities to hear and exchange views and opinions away from the normal pressure of work.

Identifying potential difficulties or weaknesses. Understanding the resources available. Planning for and setting objectives for the next period. Thinking about and clarifying each ones role in the team. Planning for achieving improved performance. Planning for further delegation and coaching. Motivating members of the team.

Benefits to the organization

Identifying and assessing potential. Gathering information regarding the expectations and aspirations of employees. Analyzing information to improve decisions about promotions and motivation. Reviewing succession plan. Assessing training needs which forms the base for developing training plans. Updating of employee records (achievements, new competencies). Career counseling.

In reality, many managers handle performance appraisals quite poorly. The result is not only an unpleasant meeting, but one where the manager and his/her staff members never quite appreciate the others point of view, and never appreciate the others point of view, and never quite settle an appropriate goals for the coming year. Its almost inevitable that the staff members will end up less happy, motivated and less motivated than what she/he was before. To make performance appraisal an enriching experience for both the

57

employee and his supervisors, the supervisor should remember not to make the following 5 mistakes. Waiting for the performance appraisal to give feedback This is a very commonly committed blunder. Its where a manager falls to give someone adequate feedback on their performance during the year, and then dumps it on them in the performance appraisal meeting. Unfortunately, the feedback is almost always negative, so the employee ends up sitting there in shock- at best, wondering why his/her manager didnt say something sooner, at worst, feeling unjustly victimized. Overemphasizing recent performances Its very natural to remember and give greater weight to recent events rather than earlier events. This can lead to an inaccurate and unfair assessment when it comes to reviewing an employees performance. The manager must take notes of an employees work throughout the year. Being too positive or too negative Some managers feel uncomfortable giving negative feedback and consequently, can omit to give employees the constructive criticism they need to improve. And then there are other managers who are instinctively too negative, leaving the employee wondering if they can do anything right. As a manager, appraising an employees performance, he should give an honest opinion, so that the employee understands and appreciates the managers view. Being critical without being constructive

58

Some managers can be too critical and neglect to provide any constructive advice on how an employee can improve. This doesnt help the employee or the manager. In order to refrain the employee from feeling victimized, the manager should validate his criticism by giving reasons and improvement tips. Talking and not listening The final big mistake that the managers make in a performance appraisal is, doing too much talking and not enough listening. Performance Appraisal meeting are meant to be interactive- where the manager doesnt simply rely on his/her own appraisal of the employees performance but also listens to the employees viewpoint and his feedback of the job. In truth, managers who seek to influence the performance of their employees need not always have the support of an elaborate corporate system. The most effective performance management approaches build on a strong communication system that is transparent; exemplifies high standards and trust. In a nutshell Performance Appraisal is a legitimate employee evaluation and feedback system which makes the system and working of a company more transparent and goal-oriented. It is not just a process to review an employees performance but also an opportunity that can give the employee, the required motivation to do better and the superior a feedback on the problems

Self Appraisal

59

This involves assessment of ones performance by the employee himself. The employee identifies his own strengths and weaknesses, offers his opinion on the adequacy of the training he has received and suggests ways in which the organization might better use his talents, skills and experiences. Self appraisal is based on the assumption that nobody knows a person better than the person himself. Further, it helps in making the process of appraisal more transparent. However, employees often have an inaccurate perception of their performance where they exaggerate their accomplishments and in such cases, self appraisal may lose its meaning. Therefore, most often, self-appraisal on the part of the employees is taken as a supplement, that is as an additional input to formal appraisal by the superiors in an organization. Self appraisal is used only for developmental purposes and not for administrative purposes.

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
61

Research Design The research design is the conceptual structure with in which research is conducted it consist the blue print of the collection measurement and analysis of data. In that project the research design was adopted for the Descriptive cum Analytical The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from an operational point of view Research design is simply the framework or plan for a study, used as a guide in collecting and analyzing data. There are three types of Research Design:1. Exploratory Research Design:- The major emphasis in exploratory Research design is on discovery of ideas and insights. 2. Descriptive Research Design:- The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables. 3. Causal Research Design:- A Causal Research Design is concerned with determining cause and effect relationship. Descriptive cum Analytical Research Design is used in my project report . DATA COLLECTION I have taken the primary data for this project report since the data is secondary nature so test of sampling have not undertaking Instrument used: Questionnaire Sample Size: 50 Population of Interest: Employees. Sampling Technique: Convenience.

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FINDINGS & ANALYSIS

FINDINGS AND ANALYSIS

63

Q.1. Do you understand the basic objective of performance appraisal? Table No. 1 Sr. No.. 1 2 Options Yes No Percentage 75% 25%

Graph No. 1

25%

Yes No

75%

Interpretation: About the understanding of the basic objecties of perfofmance appraisal, 75% respondents said Yes & 25% respondents said No.

Q.2. How is your Performance appraised? Table No. 2

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Sr. No.. 1 2

Options Individually In team

Percentage 70% 30%

Graph No. 2

30% Individually In team 70%

Interpretation: Your performance is appraised by the company, then 70% respondents say that his performance is appraised individually, 30% respondents say his performance is appraised in team.

Q.3. Who is appraising your performance? Table No.3

65

Sr. No.. 1 2 3 4

Options Manager Customer Employees Others

Percentage 100% 0% 0% 0%

Graph No. 3

0%

Manger Customer Employees Others

100%

Interpretation: 100% respondents said that his performance is appraised by Manager.

Q.4. Does the system of appraisal provide real measurement of the performance of employee? Table No.4 Sr. No.
66

Options

Percentage

1 2 3

Correct Partially Correct Incorrect

86% 10% 4%

Graph No. 4

10%

4%

Correct Partially Correct Incorrect

86%

Interpretation: Is the system of appraisal provides real measurement of the performance of employees, then 86% respondents say that it is real, 10% respondents say that it is partially correct and 4% respondents say that it is incorrect. Q.5. Do you find that Appraisal System reflect any scope of improvement in ones performance? Table No.5 Sr. No.. 1 Options Agreed Percentage 70%

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2 3

Partially Agreed Disagreed

20% 10%

Graph No. 5

10%

20%

Agreed Partially Disagreed 70%

Interpretation: Appraisal sysem reflects any scope of improvement in ones performance than 70% respondents are agreed about this statement, 20% respondents are partially agreed and 10% respondens are disagreed. Q.6. Does this Appraisal System help you to know your progress in achieving the set target? Table No.6 Sr. No.. 1 2 Options True Partially True Percentage 100% 0%

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False

0%

Graph No. 6

0% 0%

True Partially true False

100%

Interpretation: The appraisal system help you to know the progress in achieving the set targets then 100% respondents say that this statement is true.

Q.7 Perforamnce Appraisal helps you in:Table No.7 Sr. No.. 1 2 3 4

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Options Promotion Career Planning Goal achievement Any other

Percentage 25% 15% 60% 0%

Graph No. 7

0% 25% Promotion Career Planning 60% Goal achievement Any other

15%

Interpretation: Performance appraisal helps in then 25% respondents say it help in promotion, 15% respondetns say is help in career planning, 60% respondents say it help in goal achievement. Q.8 Are you satisfied with criteria adopted to appraise you? Table No.8 Sr. No.. 1 2 Options Yes No Percentage 69% 31%

Graph No. 8

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31% Yes No 69%

Interpretation: About the satisfaction with the criteria adopted to appraise the employee by the company then 69% respondents were satisfied and 31% respondents were not satisfied.

Q.9. Is the Performance Appraisal System transparent? Table No.9 Sr. No.. 1 2 Options Yes No Percentage 78% 22%

Graph No. 9

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22%

Yes No

78%

Interpretation: Is the performance appraisal system transparent, then 78% respondents say Yes and 22% respondent say No.

Q.10. Do you feel that rewards are given according to your performance? Table No.10 Sr. No.. 1 2 Options Yes No Percentage 85% 15%

Graph No. 10

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15%

Yes No

85%

Interpretation: Do you feel that rewards given to you according to your performance then 85% respondent say it is Yes and 15% respondents say that it is No.

Q.11. Does honest feedback given to you? Table No.11 Sr. No.. 1 2 Options Yes No Percentage 72% 28%

Graph No. 11

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28%

Yes No 72%

Interpretation: The feedback given to you by the company is honest, then 72% respondents say that it is true , 28% respondents say that it is partially true.

Q.12. If any development is required after performance appraisal then proper training is given to you. Table No.12 Sr. No.. 1 2 Options Yes No Percentage 17% 83%

Graph No. 12

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17%

Yes No

83%

Interpretation: Is any development required after performance appraisal, then proper training is given to you by the company then 17% respondent say Yes, 83% respondent say No.

Q.13. Are you satisfied with the current Performance appraisal system? Table No.13 Sr. No.. 1 2 Options Yes No Percentage 91% 09%

Graph No. 13

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9%

Yes No

91%

Interpretation: Are you satisfied with the current perforamnce appraisal system then 91% respondents Yes and 09% respondent say No.

CONCLUSION
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CONCLUSION
Organizational development, which rests on the strength and support of the human elements, is catching the imagination of several policy-makers leading to the promulgation of several techniques and tools in this direction. The emergence of the 360-degree performance appraisal, a comprehensive mechanism to know the pulse of the organization, has got a lot of implications.

Formal systems for appraising performance are neither worthless nor evil, as some critics have implied: Nor are they panaceas, as many managers might wish. A formal appraisal system is, at the very least, a commendable attempt to make visible, and hence
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improvable, a set of essential organization activities. Personal judgments about employee performance are inescapable, and subjective values and fallible human perception are always involved. Formal appraisal systems, to the degree that they bring these perceptions and values into the open, make it possible for at least some of the inherent bias and error to be recognized and remedied. Many organizations that go out shopping for performance appraisals, 360 or other versions, have already taken a step in the wrong direction. They typically have forgotten to diagnose their real needs. If your business has a desire for the 360 Appraisal process make sure you ask yourself "Why?" What is your organization's or management's real need? Don't do it because everyone else seems to be doing it. Make sure the process and philosophy are appropriate to your organization and its values. By improving the probability that good performance will be recognized and rewarded and poor performance corrected, a sound appraisal system can contribute both to organizational morale and organizational performance. Moreover, the alternative to a bad appraisal program need not be no appraisal program at all, as some critics have suggested. It can and ought to be a better appraisal program. And the first step in that direction is a thoughtful matching of practice to purpose.

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SUGGESTIONS
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SUGGESTIONS
To be very legally defensible and effective a system would have these suggestions: Employee participation in establishing performance standards Standards based on critical elements of job; clearly recorded in writing Employee advised of critical requirements before the appraisal System should not be based on interpersonal comparisons (eg. curve) Performance Appraisal done in writing at least annually Set goals with the employee. Don't just criticize a deficient performer; set goals for follow up and for improvement or development. Work together to create a
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plan of action to help the employee in deficient areas and to establish goals for the coming year. Set a follow up period and be sure to revaluate the employee at the appropriate time. A performance evaluation should motivate an employee to want to improve. The employee should feel excited about the challenges and his/her ability to meet them. If employees hear only about their failures and weaknesses, they'll start to believe they can't succeed. If employees get support and encouragement from their supervisor, they'll gain the desire and confidence to keep trying. When the supervisors' suggestions for improvement bring results - and recognition employees are even more likely to listen to future suggestions.

LIMITATIONS
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LIMITATIONS
I faced some of the limitations while preparing this report. Some of them are: 1. Although every employee listen me carefully and gave me proper attention to help me for solving my questionnaire, but all they were not sure for their satisfaction level. 2. Although every employee cooperated me, as I have stated above, but every employee had his own work or assignment, due to that he could unable to provide sufficient time to solve my questionnaire.
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3. Lack of sufficient time of the respondent. 4. Personal survey method is highly expensive as well as highly time consuming. 5. The respondent may be biased or influenced by some other more factors. 6. Respondent were reactant to fill the questionnaire. 7. Considering the fact that nothing in perfect in this world, very individual is bound to make mistake at some point or the other, and have I am also not an exception for this.

BIBLIOGRAPHY
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BIBLIOGRAPHY

Book: Kothari C.R. Research Mehtodology Vishwa Publication Second Edition Page No. 1-20 Ashwathpa K. Human resources management, Tata McGraw hill. 5th Edition Page No. 35 - 50

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Clark, Donald. Performance, Learning, Leadership, and Knowledge. History of Learning and Training. Accessed 21 June 2005.

Jha R.N Personal growth training and developmentSavera publicationGupta, Kavita. A Practical Guide to Needs Assessment. San Francisco: Jossey-Bass/Pfeiffer, 1999

Websites

www.dsm.com

QUESTIONNAIRE
Name: Age: Department: Designation: Qualifications: Number of Years of Service at Q.1. Do you understand the basic objective of performance appraisal ?
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Sr. No.. 1 2 Q.2.How is Your Performance appraised? Sr. No.. 1 2 Q.3. Who is appreaising your performance? Sr. No.. 1 2 3 4

Options Yes No

Options Individually In team

Options Manager Customer Employees Others

Percentage

Q.4. Does the system of appraisal provide real measurement of the performance of employee? Sr. No.. 1 2 3 Options Correct Partially Correct Incorrect Percentage

Q.5. Do you find that Appraisal System reflect any scope of improvemen in ones performance? Sr. No.. 1 Options Agreed Percentage

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2 3

Partially Agreed Disagreed

Q.6. Does this Appraisal System help you to know your progress in achieving the set target? Sr. No.. 1 2 3 Options True Partially True False Percentage

Q.7 Perforamnce Appraisal helps you in:Sr. No.. 1 2 3 4 Options Promotion Career Planning Goal achievement Any other Percentage

Q.8 Are you satisfied with criteria adopted to appraise you? Sr. No.. 1 2 Options Yes No Percentage

Q.9. Is the Performance Appraisal System transparent?

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Sr. No.. 1 2

Options Yes No

Percentage

Q.10. Do you feel that rewards are given according to your performance? Sr. No.. 1 2 Options Yes No Percentage

Q.11. Does honest feedback given to you? Sr. No.. 1 2 Options Yes No Percentage

Q.12. If any development is required after performance appraisal then proper training is given to you. Sr. No.. 1 2 Options Yes No Percentage

Q.13. Are you satisfied with the current Performance appraisal system:Sr. No.. 1 2 Options Yes No Percentage

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89