SUMMER TRAINING PROJECT REPORT

ON
STUDY OF PERFORMANCE APPRAISAL OF EMPLOYEES
AT
INDIA YAMAHA MOTORS PVT. LTD.

Submitted to the partial fulfillment towards the award of degree in

Master of Business Administration of Uttar Pradesh Technical University, U.P.
Submitted by:

Submitted to:

Declaration

~1~

This is to declare that I Praveen Kumar Yadav , student of MBA, T.E.R.I.P.G.C., Ghazipur has
worked in the India Yamaha Motors Pvt. ltd under the able guidance and supervision of HR
Executive Mr. Barinder Arora.
I declare that work done on this project or study is true and no part of this report has been
reproduced from any other report and the contents are based on original research.

Praveen Kumar Yadav

Roll No. :

~2~

ACKNOWLEDGEMENTS
It gives me great pleasure to present the report entitled STUDY OF PERFORMANCE
APPRAISAL OF EMPLOYE in INDIA YAMAHA MOTORS PVT. LTD.
I would like to thank to Dr. Dileep Singh: HOD MBAs and Ms.Neha Katiyar faculty-NIET who
gives me proper guidance during my research project report.
First of all, with profound pleasure and proud privilege, I take this opportunity to express my
deep sense of gratitude and indebtedness to the INDIA YAMAHA MOTORS PVT. LTD. for
giving me opportunity to undertake this project.
There is a saying Hundred miles journey begins with one step It was my first step in the
industry so that with immense gratitude and heartful appreciation.

Praveen Kumar Yadav

~3~

CONTENTS
Description

Page no.

CHAPTER-1
1.1 Introduction

1.2 Objective of the study

1.3 Need and scope

10

1.4 Limitation

11

CHAPTER-2: A profile of organization

2.1 History

14

2.2 About the organization

15

2.3 Products

25

2.4 Financial position

29

2.5 Organization Structure

34

CHAPTER-3: Theoretical framework of topic

3.1 Meaning

36

3.2 Importance

37

3.3 Classification

41

~4~

CHAPTER-4 :Research Methodology

62

3.5 Sample size

CHAPTER-5 :Analysis and interpretation

4.1 Analysis

64

4.2 Interpretation

64

CHAPTER-6: Conclusion
5.1 Findings

73

5.2 Conclusion

74

5.3 Suggestions

75

Bibliography

77

Annexure

78

~5~

S. NO.
1

LIST OF GRAPHS
Page No.
Performance appraisal system being carried out 64
by the company

Which Recommendation do you personally

identify With

the attitudinal factors desire to learn new

69
Techniques, skills and practices, cooperation With
others

the performance appraisal system adopted is

biased in any way

70

S. NO.
1

LIST OF CHARTS
Awareness of the performance appraisal system

Page No.
64

Most important factor

65

Which recommendation
identify with

do

~6~

you

66

personally 66

CHAPTER-1
INTRODUCTION

~7~

 Introduction
Objective of study
Need and scope
Limitations of study

Introduction
Formal introduction of performance appraisal came in 1920. Performance Appraisal is the
process of measuring qualitative and qualitative employees past or present performance
against the background of his expected role performance, the background of his work
environment and about his future potential f or an organization.

Performance appraisal is a systematic way of judging the relative worth of an employee in

performing his task. It helps to identify employees who are performing their task well &
those who not & the reason for such (poor) performance.

According to Edward Flipper Performance Appraisal is systematic, periodic

&

impartial rating of an employee excellence in matter of pertaining to his job &

his

potential for a better job

~8~

According to Dale Yoder Performance Appraisal includes all formal procedure to

evaluate personalities and contributions and potentials of group
members in working organization.

According to Dale S Beach Performance Appraisal is systematic evaluation of the

individual with respect to his or her performance on the job and his or her potential for
development.

Objective of the study

To critically analyze the performance appraisal system in Yamaha Motor India Pvt. Ltd.

To gain familiarity with the organizations environment and the work culture existing in
the organization.

The purpose of the study is to evaluate the impact of performance appraisal system
carried out in the organization.

It is to view that how the present appraisal system has contributed towards the
efficiency and effectiveness of the employees in the organization.

The objective of the study is also to feel the pulse of the employees views and their
suggestions.

~9~

 Need and Scope

Performance appraisal is broadly used for meeting the following purposes:

To identify employees for salary increase, promotion, transfer and layoff for termination
of services.

To determine training and development needs of the employees.

To motivate employees by providing feedback on their performance levels.

To establish a basis for research and reference for personnel decisions in future.

Purpose of
Performance
Appraisal

Evaluative

1. Compensation Decisions
2. Staffing Decisions

Development

1. Performance feedback
2. Training and Development needs

3. Evaluate Selection System

~ 10 ~

Limitations of an Appraisal System

The major problems in the Appraisal system are:

1. The halo effect: The halo effect is a tendency to lead the assessment of individual
one-trait influences the evaluation of that person on the other specific traits. There is
this effect in appraisal when the appraiser assigns the same rating to all traits
regardless of an employees actual performance on the traits.
2. Leniency or strictness tendency or constant errors: Every evaluator has his own
value system that acts as a standard against which he makes appraisals. The leniency
bias crops when to be liberal in their ratings by assigning high rates considerably. Such
ratings do not serve any purpose.
3. Central tendency problem: It is the most commonly found error. It assigns average
rating to all employees with a view to avoid commitment when the rater is in doubt or
has inadequate information or lack of knowledge about the behavior of the employee.
4. Similarity errors: This type of error occurs when evaluators rates other people in the
same way he perceives himself. For e.g. the evaluator who perceives himself as
aggressive may evaluate others by looking for aggressiveness. Those who show this
characteristic may be benefited while other may suffer.
5. Personal prejudice : If the evaluator likes or dislikes any employee or a group then
he may rate him accordingly and therefore the purpose of appraisal wont be achieved.

~ 11 ~

CHAPTER II

A COMPANY PROFILE

~ 12 ~

COMPANY PROFILE

History of Yamaha motors sales Pvt. Ltd.

Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50

joint venture with the Escorts Group in 1996. However, in August 2001, Yamaha acquired its
remaining stake as well, bringing the Indian operations under its complete control as a 100%
subsidiary of Yamaha Motor Co., Ltd, Japan.

Yamaha Motor operates from its state-of-the-art-manufacturing units at Faridabad in

`Haryana and Surajpur in Uttar Pradesh and produces motorcycles both for domestic and
export markets. With a strong workforce of 2000 employees, Yamaha Motor is highly
customer-driven and has a countrywide network of over 400 dealers.

~ 13 ~

~ 14 ~

About India Yamaha Motor Pvt. Ltd.

Yamaha made its initial foray into India in 1985. Subsequently, it entered into a 50:50
joint-venture with the Escorts Group in 1996. However, in August 2001, Yamaha
acquired its remaining stake becoming a 100% subsidiary of Yamaha Motor Co., Ltd,
Japan (YMC). In 2008, Mitsui & Co., Ltd. entered into an agreement with YMC to
become a joint-investor in the motorcycle manufacturing company Yamaha Motor
Private Limited (YM)".

YM operates from its state-of-the-art manufacturing units at Surajpur in Uttar Pradesh

and Faridabad in Haryana and produces motorcycles for both domestic and export markets.
With a strong workforce of more than 2,000 employees, YM is highly customer-driven and has
a countrywide network of over 400 dealers.

The new Surajpur plant has been inaugurated by Mr. T.Kazikawa C.E.O & MD
Yamaha Global on 6th July 2009, which has capacity to produce 6 Lakh motorcycles
annually including Fazer followed by FZ-16, FZ-S, YZF-R15 and other models. The
plant capacity can be augmented up to 1 million units.

As a company that makes the world its field and offers products for the land, the
water, the snowfields and the sky, Yamaha Motor strives to be a company that offers
new excitement and a more fulfilling life for people all over the world and to use our
ingenuity and passion to realize peoples dreams and always be the ones they look to
for the next Kendo.

~ 15 ~

 What is KANDO?
Kendo is a Japanese word for simultaneous feelings of deep satisfaction and intense
excitement that we experience when we encounter something of exceptional value.
At Yamaha Motors we believe that the products and the services that surpass customers
expectations can generalize Kendo. Yet for all the emotional elevation Kendo provides, the
feeling can be short lived, and people may be touched only for a moment. Therefore our
challenge is to make sure that all our products and services genuinely thrill, impress and
touch customers at the first time and every time. We strive to achieve our corporate
mission by adhering to these principles.

We must remain keenly aware of customer evolving needs company provided them
quality products and services of exceptional value that surpass their expectations. We can
and will earn a fair profit by putting forth a superior effort to satisfy our customers.

As a good corporate citizen the companies act in a worldwide perspective and in

accordance with global standards. They are planning to work locally to better the social
environment and think globally in helping and preserve the natural environment.

~ 16 ~

Important facts about Surajpur and Faridabad plant:

1.
2.
3.

Surajpur plant was established in 1985.

Faridabad plant was established in 1965.

The turnover of Surajpur plant is around Rs. 702 corers as compared to 208 in Faridabad
plant.

4.

The volume of motorcycles procured in number is 2, 11,913 in the Surajpur plant in the
year ending 31st Dec. 2001 and in the Faridabad plant it was 77,200.

5.

Manpower in Surajpur plant as compared to 1946 in Faridabad plant.

6.

The average age of employees in Surajpur plant is 35 Whereas 45 years in the

Faridabad plant.

7. There are about 750 machines used in Surajpur plant Where as 600 in Faridabad plant.
8.

Total area in Surajpur is 3,51,385 sq. meters. In Faridabad It is 1, 21,674 sq. meters.

9. The building area of Surajpur is 54,815 sq. meters. whereas in Faridabad plant it is
50,678 sq. meters.

~ 17 ~

 SWOT ANALYSIS
Strengths:

Yamaha Motor products extend from land to sea and even into the skies, with
manufacturing and business operations that include everything from motorcycles, PSA
electro-hybrid bikes, marine and power products to automotive engines.

Continuously does product improvement in accordance with demanding customers.

The distribution network of Yamaha Motors is very wide and spread across the country.

Probably the best in terms of R&D facility.

Has great brand name and commands lot of respect among bikers community.

Weakness:

Narrow product line in terms of motorcycles.

Yamahas strategy for Indian market was on right alleyway, but somewhere down the
lane, they are still relying on conventional model which no longer in use.

Yamaha despite the promise has failed to deliver and is still an underdog in the race to
top.

A series of unsuccessful and flop bikes have eroded the legacy of RX100 and RD350.

~ 18 ~

Opportunities

The motorcycle market has been growing at a phenomenal rate and there has been a shift
in the consumer preferences from 2 stroke bikes. Yamaha motors have recognized this
and are bringing out new models of 4 stroke bikes quite regularly to cater the needs of
the customers.

Consumers have become technology conscious and Yamaha Motors have best R&D
facilities. So they can tap new costumers with innovative technology in motorcycle
design and manufacturing.

There lies lot of potential in 150cc and above segment and Yamaha has not made enough
inroads in this segment.

Threats:

Continuous divisions of customer segment have made conventional bikes which was the
strength of Yamaha motors.

Constant demand for price reduction from customers.

Bajaj Auto and TVS have taken large part of the market share from Yamaha.

Growing competition in the industry, both in the terms of new models and price
undercutting, too is a matter of concern as both the sales realization and operation
margins may come under pressure.

~ 19 ~

Customers:

CORE COMPETENCIES

We put customers first in everything we do. We take decisions

keeping the customers in mind.

Challenging
spirit: We strive for excellence in everything we do and in the quality of goods

and services we provide. We work hard to achieve what we commit and achieve
results faster than our competitors and we never give up.

Team work: We work cohesively with our colleagues as a multi- cultural team
built on trust, respect, understanding and mutual co-operation. Everyones contribution
is equally important for our success.

Frank and Fair

We are honest, sincere, open minded, fair and transparent in
Organization:
our dealings. We actively listen to others and participate in healthy and
frank discussions to achieve the organizations goal.

~ 20 ~

OBJECTIVES OF THE COMPANY:

Chief profitable condition in mid-term plan.

No further investments in mid-term.

Continuous improvement in daily production (quality distributor and the cost)

Motivated and charged up employees.

The strength of YMIL lies in being a customer driven company. The countrys largest
network of nearly 10,958 dealers in two wheeler industry starting with RX-100, RXG,
RZ-135, YBX-125, YD-125, YD-110 (Crux) it came up with a recently launched
model Enticer.

~ 21 ~

 Vision

We will establish YAMAHA as the "exclusive & trusted brand" of customers by

"creating Kendo" (touching their hearts) - the first time and every time with world class
products & services delivered by people having "passion for customers".

~ 22 ~

YAMAHA as
the
exclusive &
trusted
brand of
customers

By creating
KANDO
(touching
their hearts)
the first
time &
every time

~ 23 ~

With world
class
products &
services
having
passion for
customers

YAMAHAS

MISSION

We are committed to..

~ 24 ~

Be the Exclusive & Trusted Brand

for marketing and manufacturing
the products and thus serving our
customers.
Build the Winning Team with
capabilities for successs to
conduct our business ethically &
socially.

Earning the loyalty of our partners

& increasing our stakeholder
value.

~ 25 ~

The more hearts you reach the more hearts you touch.

IYMPL is a new company serving the customer needs by following the

corporate mission of Yamaha Motors of creating Kendo a Japanese word that means
touching peoples hearts.

IYMPL is committed to make products as per the customers requirements and

achieve customer satisfaction. To fulfill the customers in Indian market YM plans to

produce new models in the coming years.

~ 26 ~

 YAMAHA PRODUCTS

Yamaha Motor Company Limited A Japanese motorized vehicle-producing

company (whose HQ is at 2500 Shangri, Iwata, Shizuoka), is part of the Yamaha

Corporation. After expanding Yamaha Corporation into the world's biggest piano maker,
then Yamaha CEO Grenache Kawakami took Yamaha into the field of motorized vehicles
on July 1, 1955. The company's intensive research into metal alloys for use in acoustic
pianos had given Yamaha wide knowledge of the making of lightweight, yet sturdy and
reliable metal constructions. This knowledge was easily applied to the making of metal
frames and motor parts for motorcycles. Yamaha Motor is the world's second largest
producer of motorcycles (after Honda). It also produces many other motorized vehicles
such as all-terrain vehicles, boats, snowmobiles, outboard motors, and personal
watercraft.

The Yamaha corporate logo is comprised of three tuning forks placed on top of

each other in a triangular pattern.

In 2000, Toyota and Yamaha Corporation made a capital alliance where Toyota

paid Yamaha Corporation 10.5 billion yen for a 5 per cent share in Yamaha Motor
Company while Yamaha and Yamaha Motor each bought 500,000 shares of Toyota stock
in return.

~ 27 ~

MOTORCYCLE MODELS
Yamaha has made an extensive number of two- and four-stroke scooters, onroad and off-road motorcycles. The Yamaha XS 650, introduced in 1970, was such an
overwhelming success that it crippled the British monopoly of vertical twin motorcycles.

VMAX (1,679cc),

MT01 (1,670cc),

~ 28 ~

YZF-R1 (998cc),

FZ1 (998cc),

YZF-R15 version 2.0 (150cc),

Frazer (153cc),
FZ-S (153cc),
FZ16 (153cc),
SZ-R(153cc),
SZ & SZ-X (153cc),
SS125 (123cc),
YBR 125 (123cc),
YBR 110 (106cc)
Crux (106cc).

~ 29 ~

MOPEDS

Yamaha PAS (Nickel metal hydride battery)

PAS Lithium (Lithium ion battery)

PAS Business (Ni-Cod battery)

~ 30 ~

 BALANCE SHEET OF IYMPL

ASSETS

D
e
c
.
2
0
0
7

D
e
c
.
2
0
0
8

D
e
c
.
2
0
0
9

~ 31 ~

D
e
c
.
2
0
1
0

De
c.
20
11

Current Assets

Cash and
deposits in
bank

79,

11

13

Trade notes
and accounts
receivable

Inventories

Merchandized
and finished
goods

22

24

19

29

32

31

1
4
7
,
3
8
0

Work-inprocess

Raw materials
and supplies

Other

70,

73,

68,

Total current
assets

67

75

~ 32 ~

71

2
0
1
,
6
8
4

1
3
7
,
3
2
8

4
2
,
7
4
6
3
3
,
4
0
1
5
8
,
2
5
9
6
2
0
,
8
0
0

20
5,3
62

18
3,7
11

13
6,3
08

37,
42
3

39,
90
3

36,
31
9

63
9,0
28

~ 33 ~


LIABILITIES

D
e
c
.

2
0
0
7

D
e
c
.
2
0
0
8

D
e
c
.

D
e
c
.

2
0
0
9

2
0
1
0

11

De
c.
20
11

Current liabilities

Notes and
accounts
payable

18

Short-term
loans

Current
portion of
long-term
debt

8,

Current
portion of
bonds

Commercial
Paper

12

Other

15

18

~ 34 ~

1
9
6,
1
1
8
1
4
8,
8
1
9
6,
8
8
1

3
5,
0
0
0

1
8
9,

12
5,
80
9

35
,4
55

57
,5
76

18
4,
53

5
8
9

51

Total current
liabilities

5
7
6,
4
0
9

36
5,
13
1

22
9,
41
0

72
,9
91

30
2,
40
1

Long-term liabilities

Long-term debt

Bonds

Other

Total long-term
liabilities

Total liabilities

11

~ 35 ~

66
7,
53
3

NET ASSETS (SHAREHOLDER'S EQUITY)

Owners' equity

Common Stock ,
with no par
value

Capital surplus

Other

Total owners'
equity

Valuation and
translation
adjustment Note
2)
Share Warrants
Minority
Interest Note 1)
Total
shareholder's
equity

19
8,
50
9

38
2,
32
3

98
,1
47

85
,6
66

10
2

36
,4
54

31
0,
80
9

1,2

1,1

98

Total liabilities
and
shareholder's
equity

1,1

~ 36 ~

10
8,
07
0

97

4 YEARS + DECEMBER 2014 YEARS FINANCIAL FORECAST

D
e
c.
2
0
1
0

1,
7
5
6,
7
0
7

1
8
1,
5
8
6

1,
5
7
5,
1
2
0

D
e
c.
2
0
1
1

1,
6
0
3,
8
8
1

1
7
0,
2
0
8

1,
4
3
3,
6
7
2

D
e
c.
2
0
1
2

1,
1
5
3,
6
4
2

1
3
0,
4
3
7

1,
0
2
3,
2
0
5

D
e
c.
2
0
1
3

De

For the year

Net sales

Japan

Overseas

Cost of
sales

1,
2
8
0,
6
1

~ 37 ~

1,
2
2
6,
7
7

1,
2
9
4,
1
3
1
1
4
2,
3
7
8
1,
1
5
1,
7
5
2

15

1,2

9
5
1,
3
5
0

1,3

9
9
8,
5
6
5

SG&A
expenses

Operating
profit

Ordinary
profit(Los
s)

Net
Income

Capital
expenditu
res

Depreciati
on

R&D

3
4
9,
0
9
2

5
3
2
8,
7
2
3

4
8,
3
8
2

1
4
0,
3
3
8

5
8,
8
7
2

1,
8
5
1

2
4
4,
2
5
6

6
2,
5
8
0

5
1,
3
0
8

6
8,
3
4
0

6
6,
1
4
2

1
8,
3
0
0

2
1
6,
1
4
8

68,

78,

35,

8
4,
7
8
9

9
4,
3
9
1

4
6,
0
3
5

3
3,
9
3
9

5
4,
5
7
8

5
9,
6
0
6

5
3,
7
0
1

3
6,
5
9
4

~ 38 ~

2
6
4,
8
7
2

1
2
6,
9
9
8

7
1,
2
2
2

52,

36,

expenses

5,
5
5
0

5,
0
9
0

2,
0
6
6

5,
1
8
3

65,

At the year end

Total
assets

Interestbearing
debt Note
1)
Net
assets(Sha
reholder's
equity)
Note 2)

Number
of shares
issued
(excluding
treasury
stock)

Stock
Price
Aggregate
market
value

1,
2
5
8,
4
3
0

2
2
9,
7
5
5

5
6
9,
2
2
1

2
8
6,
3
2
7,
8
6
9

2,
7
0
5

7
7
4,

~ 39 ~

1,
1
6
3,
1
7
3

3
4
9,
2
0
3

4
2
8,
4
8
3

2
8
6,
3
7
3,
3
2
6

9
3
2
2
6
6,

9
8
7,
0
7
7

3
9
9,
9
4
2

2
4
9,
2
6
6

2
8
5,
8
4
9,
6
3
5

1,
1
6
6

3
3
3,

9
7
8,
3
4
3
3
2
2,
4
4
3
3
1
0,
8
0
9
3
4
9,
0
9
7,
0
3
5
1,
3
2
3
4
6
1,

5
1
6

Note 3)

Number
of
sharehold
ers

Number
of
employees

Cash
Dividends

8
9
9

2
6,
9
4
8

4
6,
8
5
0

4
1.
0
0

~ 40 ~

3
0
0

3
5,
1
5
6

4
9,
7
6
1

2
5.
5
0

8
5
5

3
0,
0
1
3

4
9,
9
9
4

0.
0
0

3
1,
6
1
5
5
2,
1
8
4
0.
0
0

20.

Consolidated Statements Of Cash Flows

Million yen

Net cash provided

by operating
activities

Net cash used in

investing activities
Net cash provided
by (used in)
financing
activities

Effect of exchange
rate changes on
cash and cash
equivalents

Net
increase(decrease)
in cash and cash
equivalents

De

De

De

94

12

74

10

18

11

16

1,

6,

34

27

31

2,

66

13

13

68

Cash and cash

equivalents at
beginning of the
year

38

74

10

Increase due to
inclusion of
subsidiaries in
consolidation

1,

39

85

Decrease due to

~ 41 ~

5,

exclusion of
subsidiaries from
consolidation

Cash and cash

equivalents at end
of the year

74

10

~ 42 ~

13

13

20

 Organizational Structure
Of

Yamaha Motors

~ 43 ~

~ 44 ~

CHAPTER-3

THEORETICAL FRAMEWORK OF THE TOPIC

Meaning

Importance

Classification

Advantages

Research Methodology
Universe of study
Sample size
Statistical tool used

~ 45 ~

AN INTRODUCTION TO PERFORMANCE APPRAISAL

History of Performance Appraisal System

Employee appraisal techniques are said to have used for the first time during the first
world war, when at the instance of Walter Dill Scott, the US army adopted the man to
man rating system for evaluation of military personnel. During 1920-30 period,
relational wage structures for hourly paid workers was adopted in industrial units.
Under this system, the policy of giving grades wage increments on the basis of merit
was accepted. These early employed plans were called Merit rating programs which
continued to be so called up to mid-50s. By then most of these plans were of the rating
scale type, where emphasis was given to factors, degrees and points. In the early 50s
however, attention begin to be devoted to performance appraisal of technical,
professional and managerial personnel. Since then, as a result of the experiments and a
great deal of study, the philosophy of performance appraisal has undergone a
tremendous change. Consequently the change has also taken place in the terminology
used. Now the older phrase Merit rating is largely restricted to the rating of hourly
paid employees and is frequently used in developing criteria for salary administration,
promotions, transfers, etc. the later phrase Personnel Appraisal place emphasis on
the development of the individual as and widely used to evaluate, technical,
professional and managerial personnel.

~ 46 ~

Important features of Performance Appraisal:

It is a systematic description of an employees job relevant strengths and weaknesses.

It helps in determining how well an employee is performing the job and establishes a
plan for improvement.

Appraisals are arranged periodically according to a definite plan.

It is a continuous process in every large-scale organization.

~ 47 ~

EXISTING PERFORMANCE APPRAISAL SYSTEM IN YAMAHA

MBO PROCESSS

MBO, developed by Peter Ducker in 1954, reflects management Philosophy which

values and neutralizes employees contribution.

MBO involves setting specific measurable goals with each employee and then
periodically reviewing the progress need.

Steps involved in MBO :

Set organizations goals

Set departmental goals

Discuss departmental goals

Define expected results

Performance review

Provide feedback

SET ORGANIZATIONS GOALS: Establish an organizations goal for next

year and set goal.

~ 48 ~

SET DEPARTMENTAL GOALS : Here department heads and their

superiors jointly set goals for their department

DISCUSS DEPARTMENTAL GOALS : Department heads discuss the

departments goals with all subordinates in the department and ask them to develop
their own individual goals i.e. how can each employee contribute to the department for
attaining goals.

DEFINE EXPECTED RESULTS

: Here department heads and their
subordinates (Set individual goals) set short term performance target.

PERFORMANCE REVIEW
: Department heads compare the actual
performance of each employee with expected results.
PROVIDE FEEDBACK
: Department heads hold periodic
performance review meeting with subordinate to discuss progress in achieving
expected results

~ 49 ~

METHOD OF PERFORMANCE APPRAISAL

~ 50 ~

~ 51 ~

Communicating
standards

Taking corrective
actions

CLASSIFICATION

TRADITIONAL

METHODS
Discussing

reports

MODERN METHODS

Measuring
Actual

Behaviorally
anchored
rating
scales (BARS) performance

Graphic rating scales

Straight ranking

Assessment center

Paired comparison method

Human resource accounting

Critical incident method

Free essay method

Group appraisal

Confidential reports``

Grading System

Field Review

Nomination

Work sample test

Comparing
Forced distribution method

Management by objectives (MBO)

Actual
Checklist method

360 degree appraisal

with standards

~ 52 ~

Importance of Performance Appraisal

It is to provide information about the performance ranks on the basis of which

decisions regarding salary fixations, confirmation, promotion, transfers and
demotions are taken.

It provides information about the level of achievement and behavior of

subordinates. This information helps to review the performance of subordinates,
rectifying performance deficiencies and to set new standards of work if necessary.

It provides information that helps to counsel the subordinates.

It also provides information to diagnose deficiency in employee regarding skills,
knowledge and determining the training needs.

It is to prevent grievances and in disciplinary activities.

~ 53 ~

Contents of Performance Appraisal

Every organization has to decide upon the content to be appraised before

program is approved. Generally the content to be appraised is determined on
the basis of the job analysis. Certain contents to be appraised in a job are as
mentioned below:

1. Regularity of attendance
2. Self-expression- written and oral
3. Ability to work with others
4. Leadership styles and abilities
5. Initiative
6. Technical skills
7. Technical ability/knowledge
8. Ability to grasp new things
9. Ability to reason
10. Originality and resourcefulness
11. Creative skills
12. Area of interest
13. Area of suitability

~ 54 ~

14. Judgment skills

15. Integrity
16. Capability for assuming responsibility
17. Level of acceptance by subordinates
18. Honesty and sincerity
19. Thoroughness in job and organizational knowledge
20. Knowledge of systems and procedures
21. Quality of suggestions offered for improvement

~ 55 ~

TRENDS IN PERFORMANCE APPRAISAL

ITEMS

EARLIER

EMPHASIS

PRESENT

EMPHASIS
Merit rating

Terminology

Employee

appraisal
Purpose

Determining

Development of

qualification for wage increase,

personnel, improved

transfer, promotion, layoff

performance on the job

and providing emotional
security

Application

Hourly paid workers

Technical,

professional and
managerial personnel

Factors

rated

Heavy emphasis

personnel attributes

Results,

accomplishments,
performance

Techniques

Rating scales,

Mutual goal

statistical manipulation of data

setting, critical incidents,

for comparison purpose

group appraisal,
performance standards,
less quantitative

Dale Beach has identified changes in performance appraisal taken place since 1920.

These are:

~ 56 ~

~ 57 ~

Wages and Salary administration of IYMPL

Objectives of
At IYMPL there are two types of employees:
Performance Appraisal

1. The hourly rated workers (HRWs)

2. The monthly rated employees (MREs)

Concrete And
The
HRWs are further
into: Tangible particulars about their work
measuring
the divided
efficiency
loyee

(A) Direct HRWs

(B) Indirect HRWs

The wages and salaries of the employees depend on the basic salary given to them.

Salaries are given on the basis of grade of the employee.

maintaining
The
following are organizational
the different grades control.
and the salaries of the employees at the
assessment of performance

company:

~ 58 ~

Environment policy
Protection of the environment is an essential part of the companys policy.
In line with IYMPL guiding principles, they will continue to integrate environmental
protection systematically into their operations.

Their aim is to protect the environment in which we live in to optimally utilize the
scarce resources.

Environmental guidelines of the IYMPL

Strengthening environmental awareness

Preventive action by organizational management

Dialogue with the public

Systematic documentation

Environmental friendly technology use

Systematic environmental production reduce risk

Regular checkups and monitoring

Information to the customers

External companies committed to our environmental policy

~ 59 ~

 Functions of HR Department

The various functions performed by the HR department of YMCL at Surajpur are as

follows:

1. Manpower Planning

It is one of the most important functions of the HR department in any organization.

Human resource or the manpower planning is the process by which management
determines how an organization should move from current manpower position to the
desired one. It analyzes the present as well as the future vacancies in the organization
that may result from transfers, retirements, promotions, and sickness levels, leave of
absence or due to some other reason in the various departments of the organization.

At IYMPL manpower planning is carried out with the job analysis that is the process
by which pertinent information obtained about a job.

2. Recruitment and Employment

It is another operative function of personnel department and carried out by external

as well as internal sources. The internal sources means searching for the right candidate
within the organization who is upgraded and promoted. The external sources are those who
are the new entrants to the labor force . The process of employment starts with job
advertisement, it involves three stages that are, recruitment, selection and placement.

~ 60 ~

3. Inductions and Orientation

It means introduction of an employee to the organization and the job by giving

him proper and all possible information regarding the organizations policies and culture
and about his work. The program (orientation program) is carried out by personnel
department. Here the new entrants are sent to every department to introduce themselves
to the staff, to get them accustomed to the work environment and providing him an
insight of how work is done in the organization.

New entrants are informed about the following:

Performance appraisal in the organization

Confirmation/ increment/ promotion

Maintenance of personal files of the employees

Data bank of all employees

Company policies related to the HR

4. Industrial Relations

The functions of HR are carried out through the following way YMIL:-

Labor laws and industrial registers as well as statutory registers are maintained in the
organization according to the law.

~ 61 ~

Liaison with labor department and the other civic authorities are maintained so as to carry
out the different functions relating to industrial peace.

Submission of returns under various labor laws.

Implementation of Standing Orders and Contract Act.

Formation of various statutory committee such as:

*Workmen Committee

4. Training and Development:

It is complex process and is concerned with increasing the capabilities of individuals

and groups so that they can contribute effectively to the attainment of organizational goals.
The terms training development and education training are the processes of learning a
sequence of programmed behavior. Is an application of knowledge, which gives people an
awareness of rules and procedures to guide their behavior and to improve their performance
on their current job. Development is the related process, which also brings about growth of
personality, help individual to progress towards maturity and actualization of his potential
capacities. Training and development is carried out after assessing the training needs of an
employee. It is carried out by conducting in the company training programs and by
coordinating the training of various categories of trainees with the help of various
respective shops in charge. Evolution of this training program is done so as to make sure
that the trainee has improved.

5. Personal Research:
~ 62 ~

This is conducted by personnel department, which conducts study and survey on:

Employment Turnover (Exit Interview)

Absenteeism

Wage Survey

Personnel Budget: the personnel department that takes into account

all the costs, expenses and profits to be generated in the year, prepares
this budget.

Compiling Skill Inventory

The personnel department looks out the following functions:

Canteen
Safety
Negotiations with union
Disciplinary Proceedings
Attending Conciliations/ Labor Court
Grievance Handling/ Counseling
Conducting workmen classes

~ 63 ~


The welfare activities carried out by the personnel department of
IYMPL are:
1. Canteen

The canteen is run on the contractual basis under the supervision of personnel

and administration department of the company. The canteen has the capacity to
accommodate 2000 people at time. The meal, which is served in the canteen, is at a very
subsidized rate and of good quality. To maintain euphoric environment, it has an air
condition and a music system.

2. Uniform

The company has made a provision of distributing three pairs of uniform and

two pairs of shoes along with one pullover every year.

3. Medical Facilities

The company gives free medical facilities to all its employees. It has a

dispensary within the premises of the company. The dispensary has all the basic
emergency equipment, medicine and oxygen facility with four beds capacity dorm.
There are two doctors and four experienced male compounders who are always present
during the working hours. Incase of serious illness, there is an ambulance that can take
the patient to one of the best hospitals located in nearby regions.

4. Cultural Activities
~ 64 ~

The company conducts following activities for the entertainment of its

employees:

Sports tournaments

Cultural programs

Family picnics

Tours and camps

5. Other Welfare Activities

The other welfare activities include the following:

Fair price shops

Rest rooms

Welfare fund scholarship

And few other welfare activities

6. Transport Facility

The office of the company provides transport facility to all its employees for

coming and going to or from the company. The office manages buses that are on
contractual basis. It makes sure that the buses operate at the right time to and from the
company and also welcome suggestions and the complaints regarding the buses. This
facility is provided to all employees at subsidized rates.

7. Security
~ 65 ~

The security department of the company is responsible for the following

functions:

Security of factory / elimination of leakage and theft.

Intelligence report internal / external.

Fire fighting- upkeep or training.

Statutory license for chemical store / explosive equipment.

Records of gate meeting and analysis.

Records of visitors.

Records of incoming and outgoing material.

The employees on the punch card system shall punch their cards for marking attendance

and shall punch out at the close of shift during the lunch break if going out. All the workmen
shall be at their workstations at the timings notified and commence their work within the
commencement of shift timings.

The following records are to be maintained by the personnel department:

Leave Records

Overtime Records

Salary and Wages Data

Out Pass Records

Control and Exit of Manpower

~ 66 ~

Horticulture

8. Industrial relations, safety and Health

The senior manager, industrial relation, safety and health occupy a very crucial
position in the company. His function starts from supervisors of safety heads of man
and material to the provision of various accessories and their maintenance. Some of
his important functions are:

Pollution Controls and Checks

Safety heads

Sale of Scrap

In case of an accident in the plant, finding of exact reasons and contacting the different
authorities and taking the decisions.

Regular medical examination of workers working in hazardous processes.

9. Time Office

Time office is an office under personnel department and the main function of it

is to mark the attendance of the workers to make the records for their leave, absenteeism,
and overtime etc.

10.Other Functions

There is a function for the provision of daily worksheet. In this, department head

or supervisor sends out the worksheet to the time office indicating the number of

~ 67 ~

workers and the number of hours. It acts as cross check instrument that verifies the
attendance and to avoid any manipulations or mistakes.

The other job of the timekeeper is the allocation of casuals. After making the

attendance, he counts the number of employees absent and then the absenteeism report is
prepared by the time office in charge who then sends it to all the departmental heads and
the industrial engineering casuals. This department requires authorization from
department head. The timekeeper also gives advance payment forms for employees to
the employees. Sometimes the personnel department may ask him to prepare some
statements. He has to do some monthly and weekly jobs.

Weekly Jobs

Weekly report of attendance for the personnel and factory manager.

Notice for working Sundays and weekly offs and posting of these in the
booking sheets.

Maintain and check the leave records of all the employees.

Prepare weekly incentive sheets and allowance sheet.

Monthly Jobs

Collecting of total working hours of each and every employee and to prepare
wage slips for the workers to receive the wages.

Prepare monthly leave records.

~ 68 ~

Statement for casual workers indicating name, no. of days he worked and the
department.

Preparing the attendance register for the next month for all types of employees.

Complete the PF for casual workers.

The payment made by contractors to the labor under the supervision of the
timekeeper and he puts his seals and signs on such statements

Leave:
1. Casual Leave

Intended for urgent work or unforeseen circumstances.

It is of seven working days.

2. Sick Leave

A medical certificate issued by a registered doctor must support application of

sick leave.

It can be entitled for a maximum period of seven days.

3. Earned Leave

It can be availed to a minimum of three days at a time to a total of twenty-one

days in a calendar year.

House Loan:

~ 69 ~

Eligibility: Minimum five years of continuous service in the company.

Scholarship Scheme:

It is applicable to the employees up to the grade of M8.

It is to recognize and subsidize the cost of education of children of all regular

employees.

Provident Fund Scheme:

Provident Fundable Salary = Basic Salary + Special Allowance

Pension Scheme:

It is a part of PF Act.

The rate of contribution towards employees pension scheme is 8.33% of the pay that is

diverted from ID employees share of PF.

~ 70 ~


Chapter -4

Research methodology

RESEARCH METHODOLOGY

~ 71 ~

A research design is a framework or blueprint for conducting the research project. It

details the procedures necessary for obtaining information needed to structure and for to solve
research problem.

Keeping the objective of the study in mind carries out the research. For the purpose of
the study data was collected from:

1. Primary Source
2. Secondary Source

Primary Source includes personal interviews and filling up of questionnaire by the

employees of the company.

Secondary source of data was collected through previous years research files and

employees handbook and companys annual reports.

Sample Size:

The sample size was 50 employees of Faridabad plant of the company; most of the
workers and few supervisors.

RESEARCH DESIGN : Exploratory research.

SAMPLING TECHNIQUE : Convenience sampling.

~ 72 ~

CHAPTER -5

ANALYSIS AND INTERPRETATION

Analysis
Interpretation

~ 73 ~

ANALYSIS OF DATA AND INTERPRETATION OF THE

STUDY

A survey was conducted among a sample size of 50 workers. The objective of

the study was to highlight the performance appraisal system of the company and the
feedback of the employees regarding it. The findings of the survey are as follows:

Q 1 Are you aware of the performance appraisal system being carried out by
the company?
Analysis:
The survey brought into light that the awareness level of the
Employees towards the appraisal policy were low:

Aware; 40%
Unaware; 60%

~ 74 ~

Q 2. According to you, which is the most important

Factor among the following in the performance Appraisal system?

Analysis:

40% agreed on productivity

30% believed quality of the output

20% believed attendance

10% punctuality

Chart Title

quality40% attendance

10%

CHAPTER-5

~ 75 ~

30%
punctuality

20%

output

~ 76 ~

Q3. If you were being positively appraised,which Recommendation do you

personally identify With?
Analysis:
The following diagrams elucidate, which Recommendation the employees
Have identified:

Chart Title

30%

promotion
special increment
10%

~ 77 ~

annual increment
60%

Q4. Is the performance appraisal sheet shown to You or discussed with you?
Analysis:
35% say it is shown
65% say it is not shown

~ 78 ~

70%

2
65%

60%

50%

40%
35%

30%

20%

10%

0%

shown

not shown

Q5. Do you think performance appraisal should have negative

recommendation, if yes then which one of the following:

Analysis:

50% of the workers were in favour and 50% were against it

50% say increment should be stopped and the rest 50% say it should not be .

~ 79 ~


1
50%

2
50%

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

favour

disfavour

~ 80 ~

 Q6. Are the attitudinal factors desire to learn new Techniques, skills and
practices, cooperation With others, contribution of new idea saving Consciousness;
mentioned in your format Sufficient for judging your performance?

Analysis:

insufficient
20%

sufficient
80%

0%

10%

20%

30%

40%

~ 81 ~

50%

60%

70%

80%

 Q7. Do you think the performance appraisal system adopted is biased in any
way ?

Analysis:

90% disagreed

10% agreed

~ 82 ~

Chart Title

10%

agreed

disagreed
90%

Q8. In your opinion your performance should be appraised after how much time?

Analysis:

Nearly most of the workers in favors of quarterly appraisal in

theorganization.

~ 83 ~

Annual; 15%

Quarterly; 55%

Half yearly; 30%

~ 84 ~


Q9. Are you satisfied with your performance appraisal?

Analysis:

Most of the workers were found satisfied with their appraisals.

Bar Graph
Dissatisfied
Bar Graph
Satisfied
0%

50%

~ 85 ~

100%

CHAPTER-6

CONCLUSION

Findings

Conclusion

Suggestions
~ 86 ~

~ 87 ~

FINDINGS

While conducting the studies over this topic certain assumptions were there:

The data collected from secondary sources such as annual reports of the company are
correct and reliable.

The data collected through conducting of structured personal interviews and

questionnaires is reliable because whole of the analysis and interpretations are drawn from
them.

No manipulations are done on the part of respondents while filling up of schedules.

There are uniformity of appraisal process in all departments.

Quarterly assessment of individuals should be done instead of yearly.

Efforts should be made to reduce the chances of biasness.

The salary structure of the employees should be revised timely as per the performance s.

~ 88 ~

CONCLUSION

The India Yamaha motors Pvt ltd is world class in customer satisfaction, quality,
and people satisfaction. But to sustain its growth and performance, it needs to continue
its focus on processes and people. The company now needs to focus on employee
retention and becoming more efficient.

~ 89 ~

SUGGESTIONS

The performance appraisal system should be more performance oriented.

Quarterly assessment of individuals should be done instead of yearly.

Individual should be informed about the actual criteria on the basis of which his work
potential assessed.

The appraisal system should provide two-way communication between the assessor and
the assessed.

The salary structure of the employees should be revised timely as per the performances.

It should be more transparent in its working.

Efforts should be made to reduce the chances of biasness.

An employees appraisal should be discussed with him in order to remove his weaknesses.

The HR policies should be clear to all employees i.e. the policies could be more result
oriented in approach.

There should be uniformity of appraisal process in all departments.

The employees interest should be taken in account while allocating the work department
to him.

~ 90 ~

Data and information, which an employee enters in the appraisal form, should be correct
and authentic.

Employee should take the entire discussion of feedback session positively and look at the
opportunity to improve.

Prior to feedback and counseling session the manager should remember that the
performance appraisal is the most important thing for the employee.

Appraisal system also gives the manager an opportunity to get a constructive feedback of
their own performances from their team members.

The managers should not delay the discussions as it may lose value.

The results of the performance rather than the personality traits should be given due
weight.

The existence of an atmosphere of confidence and trust should prevail between the
supervisor and employee.

The supervisor should analyze the weaknesses and strengths of an employee and advice
him to take corrective measures.

The appraisal program should be less time consuming and costly.

It should be used as a motivational tool.

~ 91 ~

BIBLIOGRAPHY

EYMIL Report Magazines.

Flippo B.Edwin, Personnel Management.

Hand Book of Managers, Escorts Motors India Ltd.

Mamoria C.B., Personnel Management.Flippo B.Edwin, Personnel Management

Rao P.Subba, Essentials of Human Resource Management and Industrial Relations.

~ 92 ~

Annexure

~ 93 ~

 QUESTIONNAIRE

Q-1 Are you aware of the performance appraisal system being carried

out by the company?

Yes

No

Q-2 According to you, which is the most important factor among the
Following in the performance appraisal system?

Productivity/Output

Punctuality

Attendance

Quality of output

Q-3 Are the attitudinal factors desire to learn new techniques, skills

and practices, cooperation with others, contribution of new ideas,

saving consciousness; mentioned in your format sufficient for

judging your performance ?

Yes

~ 94 ~

NO

Q-4 Do you think the performance appraisal system adopted is biased

in any way ?
Yes

No

Q-5 If you were being positively appraised, which recommendation

Do you personally identify with?

Special Increment

Annual Increment

Promotion

Q-6 Is the performance appraisal sheet shown to you or discussed

With you?

Yes

No

Q-7 Do you think performance appraisal should have negative

Recommendation, if yes then which one of the following:

~ 95 ~

Yes

No

Increment being stopped

Promotion being stopped

Demotion

Transfer

Separation

Q-8 In your opinion your performance should be reviewed:

Quarterly

Half-yearly

Annually

Q-9 Are you Satisfied with your performance appraisal?

Satisfied

Dissatisfied

~ 96 ~