Square Textiles

Performance Appraisal
Management 351
Submitted by: GROUP 5
Suhaani Nooreen Jilani
ID: 111 0392 030
Kazi Sadman Rashid
ID: 113 0648 030
Maruf Abedin Majumder
ID: 111 0167 530
Mehedi Hossain
ID: 122 0273 030
Arnob Saha
ID: 113 0294 630
Farheene Adeeba Chowdhury
ID: 113 0282 030
E-mail: farheene@gmail.com

Section: 5
Submitted to: Ms Fatema Azad (FtA)
Date: 10-12-2013

Letter of Transmittal
10th December, 2013
Ms Fatema Azad
Faculty, MGT 351
School of Business
North South University

Dear Miss,
This is the group report of MGT 351 course as per your request on Square Textiles. We express
gratitude to all those people who provided us with valuable information in order to complete this
project. We have tried with our utmost sincerity to complete this report despite the many
limitations we had to face. It would be an honor if you could kindly look into it. If you have any
uncertainty or query regarding any information we would be pleased to clarify your confusion.
Thank you.
Sincerely,
Maruf Abedin Majumder (ID: 111 0167 530)
Suhaani Noreen Jilani (ID: 111 0392 030)
Kazi Sadman Rashid (ID: 113 0648 030)
Mehedi Hossain (ID: 122 0273 030)
Arnob Saha (ID: 113 0294 030)
Farheene Adeeba Chowdhury (ID: 113 0282 030)

Executive Summary
The report is based on the Human Resource Management sector of Square Textiles. This report is
focused on the performance appraisal of Square Textiles. Suhaani Noreen Jilani interviewed Mr.
Mostaque Ahmed Siddique, Chief Operating Officer (COO) of Square Textiles Ltd, Bangladesh.
Information provided by him was used to write this report. We tried to find out the total process
of the performance appraisal of the company and how the results were used to judge the
employees performance. Our purpose was to find out the process of performance appraisal of
the company & through this report we have discussed the methods that are being used by Square
Textiles to evaluate employees performance. We tried to relate the theories learnt in class with
actual practices of Square Textiles. There are some problems that Square needs to look into and
we have provided some solutions to those problems in this report.

Table of Contents
Page No.
1. Introduction
2. Background
2.1 Key Product Services
2.2 Human Resource Management
3. Topic Analysis
3.1 Objectives
3.2 Performance Appraisal Process
3.3 Performance Appraisal Techniques
4. Problem Identification
4.1 Supervisor
4.1.1 Bias
4.1.2 Wide Span of Control
4.2 Problems with Self Evaluation
4.3Problems with Graphic Scale Rating
4.4 One-way Communication
4.5 Merit Pay
5. Recommendation
5.1 Multiple Criteria
5.2 Train Evaluators
5.3 Multiple Raters
5.4 Two-way Communication
5.5 Management by Objective
6. Conclusion

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1. Introduction
This report is based on Human Resource Management, sector of Square Textiles, a company
established in Bangladesh in the year 1997. Our main focus was on the performance appraisal of
the company and how the results were used to judge the employees performance. Performance
appraisal is the process of evaluating employee performance. Performance appraisals are reviews
of employee performance over time, so appraisal is just one piece of performance management.
It measures how well an employee is doing their job, providing feedback, and establishing plans
for performance improvement.
We collected our data and the information through interview, books and class lectures. We also
tried to find out the methods that are being used by the company to evaluate the performance of
their employees. Later in the report we discuss the related problems with appraisal system in
Square textiles. Some solutions are also recommended by us for the company to improve its
appraisal system in the end of the report.

2. Background
In 1997, Square Group entered the textile sector with its manufacturing facilities of cotton yarn.
Combining modern technology with skilled manpower Square venture soon rose to the top of the
local textile industry. The industry is one of the largest producers of knitting & weaving yarns in
Bangladesh.
2.1 Key Product Services
The business line of the company manufactures:
100% Cotton Ring Span Yarn For Hosiery
100% Cotton OE Rotor Yarn for Hosiery
Knit Fabrics for 100% export oriented readymade Garments Industry.
It also performs the following services: Dying & Post Mercerization.
Fabric Dying

2.2 Human resource management

This includes the employees inside the organization. Employees are important and it is their
abilities that are incorporated to produce the companys products. The HR Department has
division of labor as their principle priority to ensure efficient production and troubleshooting.
The focus is on potential and experience when it comes to hire recruits for the company, with
attention to young talents. This department is responsible to ensure worker/employee training
and growth.
Square textile provides lodging facility to 80% of its employees. To motivate the employees, the
company provides various facilities like free meals, transportation and a medical center.

3. Topic Analysis
3.1 Objectives
The main objective of performance is to improve the performance of the organization through
improved employee performance. The goal of performance appraisal is to allow the employee
the opportunity to progress to their full potential in order to meet the organizational needs and his
personal development goals. Through this process, true teamwork and maximum performance
can be achieved. The foundation of the performance appraisal is improved communication
between the employee and the manager.
There are mainly three objectives of performance appraisal, the first one being strategic
purpose. Through performance appraisal the organization can link employees goal with
organization goal. It helps to identify which employees are really contributing to the
organizational goals. The second one is rewards and other administrative purpose. Depending
on employee performance the organization can decide if the employee needs a promotion or a
bonus or not. Developmental purpose is considered the third objective. This means that
performance appraisal helps identify the strengths and weaknesses of the employees. Also,
organizations can come up with strategies which would help employees become more efficient at
their job.

3.2 Performance Appraisal Process

The supply chain department conducts performance appraisal for all employees of the
department. The HR department helps in the process. At first employees are given the
opportunity for self-assessment. Then they are evaluated by their reporting boss and the person
supervising his boss. Thus everyone is evaluated. The MD evaluates the higher management. For
this there is a special form. The MD and the other executive sit together and discuss the
performance of the employees. The employee whose performance is outstanding gets a
promotion. They also decide what to do with employees who have performed poorly.
Square Textiles also uses performance appraisal to find out the standards of the employees
performance. It helps employees to plan work and identify skills in order to achieve them.
Employee is motivated as there is clarity of what he is required to do in a given period. Increased
clarity brings greater focus on job related activities, which in turns facilitates better performance
and commitment. This increases the productivity of the individual employees and the
organization stands benefited.
The company also evaluates its new recruits. The new recruits are trained for six weeks and then
given a six months probation. After the probation period the company undertakes performance
appraisal and keeps the qualified personnel permanently. If it can be seen that the employee has
potential then training is provided to help them improve.

The company follows performance based compensation. For promotion the company
systematically evaluates the employees following the set criteria. Basic salary is provided based
on individual skills and knowledge. If the performance level is satisfactory employees may get
an increment, if not promotion.
3.3 Performance Appraisal Techniques
There are different techniques that can be used for performance appraisal. Ranking is used by
Square to evaluate their employees. Every employee is ranked on a scale of 1 to 10. The person

whose performance is extraordinarily good gets a 10 and person with the worst performance will
get below 5. This helps managers compare an employee with every other employee.
Graphic Scales Ratings is another technique used by Square. There are different criteria on which
employees are evaluated. So each employee is rated on a scale of 1-10 for each criterion. This is
a more specific evaluation method which helps managers understand the strengths and
weaknesses of each employee.
Another technique used is the essay description method. The manager doing the evaluation
describes each employee in writing, in the form of an essay. This can be very detailed. However,
it is very time consuming and depends heavily on the writing skills of the manager so this is less
frequently used.
4. Problem Identification
Despite all the benefits, performance appraisal has some drawbacks. It is likely that the
performance measures are not accurate due to flaws in processes used. Some of the problems
with the technique used in Square Textiles are discussed below.
4.1 Supervisor
As discussed previously, employees are evaluated by their supervisors. Here are some problems
with supervisor evaluation
4.1.1 Bias:
Bias is a personal based tendency, either toward or against an individual employee. Employees
are evaluating themselves and being evaluated by their supervisors. It is difficult to remove the
biasness when the mangers are evaluating his/her subordinates. Biases make the evaluation
process subjective rather than objective, and certainly provide the opportunity for a lack of
consistency in effect on different groups of employees.

4.1.2 Wide Span of Control:

When there is wide span of control, it is possible that the supervisor does not notice an employee
frequently. There is also likely that the manager does not know what job responsibility the
employees have. In todays work environment theres just too much information for any one
individual to learn. So jobs have been segmented down into smaller and smaller areas, and the
supervisor may not know each of those jobs in great detail.
4.2 Problems with self evaluation:
Most of the research evidence shows that self- assessments tend to overestimate the individuals
ability to do a job. A significant portion of the evidence seems to show that individuals with
lower levels of knowledge and skills within their field tend to inflate their self-assessment of
their abilities. On the other hand, as individuals become more knowledgeable and more skilled,
the evidence tends to show that they will either accurately estimate or even underestimate their
capabilities in their jobs.
4.3 Problems with Graphic Scale Rating:
The problem is that some of the employees do not actually read the questions. Based on central
tendency, leniency or strictness supervisors or employees just go down the list checking the same
rating regardless of actual performance on the item.
4.4 One-way Communication:
Employees are only evaluated by their supervisors and by themselves. In other words s/he is only
being evaluated as a subordinate. There is not sufficient evidence to determine if the employee is
appropriately fulfilling his/her duty as a supervisor or colleague.
When the senior management is reviewing the employee is not present. The management
discusses the evaluation among them and decides the course of action.
4.5 Merit Pay:
In the organization, getting a merit raise, bonus, or promotion is connected from an employees
performance appraisal scores. Employees who are the weak link are unlikely to asses themselves
accurately. There is a possibility that s/he might not take the evaluation process seriously.

5. Recommendation
In the previous section, the problems regarding the appraisal system in Square Textile was
discussed. This section will discuss about the some of the solution of the problems.
5.1 Multiple Criteria
One method of overcoming some of the problems with the appraisal process is to ensure that the
firm uses multiple criteria to evaluate an individuals performance over time. The firm should
have at least one evaluation criterion for each major function within an individual job. By
evaluating multiple criteria, the firm have the ability to lower the incidence of bias, stereotyping,
recency and halo effect because many criteria is used, not just one or two are being analyzed.
5.2 Train Evaluators:
Simply through the process of training, many of the common problems are mitigated, if not
eliminated. Once evaluators become aware that the common errors occur with some regularity,
they almost immediately begin to evaluate such errors and guard against them. Even the bias and
stereotyping errors may be mitigated through the rater training process. It is usually assumed that
most of the employees want to do a good job, and once they know that an error is being
committed, they will make attempts to correct that error.
Evaluators should also be trained to use the various performance assessment methods and forms.
When a graphic rating scale is used, some training should be given to better understand the
differences between the word descriptors.
It is important for the manager to write an accurate account for the essay description. If the
supervisor cannot convey his/her opinion clearly, the employee being evaluated might suffer.
Hence, managers could be given communication skills training so they can deliver their thoughts
in the most effective manner and not cause any misunderstandings.
5.3 Multiple Raters:
To minimize errors in the evaluation process, at least in some cases, is to use multiple raters to
evaluate an individual. Multiple evaluators limit the ability of one individual appraiser to provide

a biased opinion concerning an employees performance, as well as limiting the ability for
stereotyping in the appraisal process. In addition, halo effect, central tendency, strictness and
leniency errors tend to even out among multiple raters. It is for these reasons that 360
evaluations are so effective and with the most accurate in measuring an employees performance.
5.4 Two way Communication
A proper and effective two way communication can be established by providing feedback.
Feedback is an essential part of effective learning. Feedback can improve an employee's
confidence, self-awareness and enthusiasm for learning. Feedback serves as a tool to help
employees know how people perceive their work and helps them get back on track. So by
involving the employees in the reviewing and decision process the management could help
employees learn his/her failings and improve.
5.5 Management by Objective (MBO)
The Management by Objectives (MBO) method is a process in which managers and employees
jointly set objectives for the employees, periodically evaluate performance, and reward
according to the results. Employees get ongoing feedback on how they are doing, usually at
scheduled interval meetings. On an organization-wide basis, MBO is not too commonly used as
the sole assessment method. It is more commonly used based on the evaluative assessment
during the development part of the performance appraisal.
Six steps of MBO:
Set the organisation goal
Set the departmental goal
Discuss departmental goal
Define expected results
Performance review
Provide feedback

6. Conclusion
In conclusion Square textiles seem to follow proper performance appraisal techniques in
evaluating their employees. Not all employees are on the same baseline. There are layers in the
structure of the organization and different goals are expected from different employees. Some
need training to better their skills; others need motivation through different methods for example
amenities or compensation. And there is always that officer who can be promoted to a higher
level. The main idea of performance appraisal is to recognize the work needed to be done and
creating a person to do that certain job. Square textiles are spot on when it comes to this. Their
methods of recruit and employee evaluation are efficient. Feedback to employees is also
considered by the higher authorities for further improvement. All in all the company does one
outstanding job when it comes to performance management and improvement.