ABSTRACT

A STUDY ON THE EFFECTIVENESS OF PERFORMANCE APPRAISAL

SYSTEM IN CORPORATION,

The study is mainly to find out the Effectiveness of Performance Appraisal

system used in the study is also to find out the factors which influence the performance
of workers.
The research study conducted is descriptive in nature and the population size
used for this study is 100. Both primary and secondary data are collected to meet the
requirements.

For collecting the data a structured questionnaire was used. The

questionnaire is with multiple choices, open ended and close ended questions.
The study is mainly based on the primary data and the required primary data
were collected through the structured questionnaire from the entire population. In this
study percentage analysis and two- way analysis is used to interpret the data collected.
The study revealed that the majority of the respondents feel that company has to
create awareness among employees about the importance of performance appraisal
system. Majority of the respondents feels that the system is fair and clear and helps in
developing and improving their performance.
In his study the respondents are the total population. Since the size of the
population is finite.
Based on the information given by the respondents it is clear that importance
about the appraisal technique is high. There is a general feeling of insecurity among the
people regarding the job since the result is highly validated.
Hence the market potential for employees is high the company has to formulate
appropriate strategies to get many potential employees to do the business.
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CHAPTER 1
INTRODUCTION
An organizations goals can be achieved only when people put in their best
efforts. Employee assessment is one of the fundamental jobs of HRM. But not an easy
though. Performance appraisal it is the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is
employed, for purposes of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential
treatment among the members of a group as distinguished from actions affecting
members equally.
It is often believed that the most significant personnel/ human resource
outcomes involve contributions of employees for the attainment of organizational goals.
These contributions refers to employees performance, it refers to how effectively
employees meet the duties and responsibility of the job. In focusing on utilization of
human resource it is implied that work activities can be made more efficient and
productive, and that opportunities for personal fulfillment through work can be
enhanced. Performance can be improved by making sure that right person is chosen for
the right job. Efforts should be made in such a way that employees will voluntarily and
gladly cooperate in the operation of the industry and to promote peace and production
for the prosperity of the nation.
To measure individual job performance the personal characteristics must be
determined which leads to increased productivity and contribute to employee
performance. It is assumed here that there are characteristics and traits that lead to
productivity and these can be perceived, measured and evaluated.
Most managers and supervisors have at some time other questioned on the basis
or relevance of appraisal, as it more commonly termed. Despite increasing attention
given to evaluation particles and development of evaluation system disconcertingly the

difficulties the doubts and the lack of credibility about various systems appear to have
increased. An appraisal system in an organization has to consistent with its managerial
styles and centrally controlled management would a often find it difficult to promote
and sustain an appraisal system that is based on participation of employees, certainly
types of appraisal system may not be suited certain types of technology.
In fact management has to make clear choice about their managerial styles and
their relief and approaches vis--vis employee development and work organized and
institute personal appraisal system with in such a frame work. The appraisal system its
objective and machines require definite formulation and the process particularly the
human response continuous attention.
The use of Degree feedback in organization has increased dramatically me
recent years. Today most people have heard of it and many are familiar with its basic
elements and procedures a person performance is rated by a range of coworkers
including superior peers sub ordinates and occasionally customers these are feed back to
the person and compare with self-rating development goals are set often in connection
with a strategy for achieving these goals sometimes there is used by the organization to
make administrative decision about such things as pay rides and promotion.
The main aims of appraisal are:1. making reward decision
2. Improving performance
3. motivating staff
4. succession planning and identifying potential
5. promoting managers sub ordinate dialogue
Performance appraisal:
Definition
Performance appraisal is a set of process for establishing shared understanding
about what it is to be achieved and managing developing people in a way which
increase the probability that it will be achieved in the short and longer term.

Purpose of performance
1. To give the employee the opportunity to discuss performance and performance
standards regularly with supervisors.
2. To provider the supervisors means of identifying the strength and weakness of
an employee performance
3. designed to helps an employee improve performance
4. to provide a basic for salary recommendations
5. to help determine promotions and transfer
6. To reduce grievances.
Benefits of performance appraisal
To the appraisal
1. Greater clarity of the results standards expected of them
2. Accurate and constructive feedback on past performance
3. Greater knowledge of strengths and weakness
4. An opportunity to communicate upwards views and feelings about the job and
the utilization of the appraisal skills in the job.
5. Discussion of career prospects.
To the appraiser
1. The opportunity to measure and identify trend in performance of staff
2. Better understanding of staff their fears anxiety hopes and aspirations
3. Enhanced modification of staff by focusing attention on term as individuals
4. Developing staff performance
5. Identifying opportunity for rotating the duties of staff.
The organization
1. Improved communication]
2. Generally enhanced motivation of staff
3. The greater harmonization of objectives
4. Improved corporate performance.
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Methods of performance appraisal

With the evaluation and development of appraisal system a number of methods
or techniques of performance appraisal have developed

Methods of performance appraisal

Traditional method

Modern method

1. Graphic rating scales

1. Behaviorally rating scales

2. Ranking methods

2. Assessment Centre

3. Pried comparison method

3. Human resources accounting

4. Forced comparison method4. Management by objectives

5. Check list method

5. Psychological appraisal

a) Simple check list

b) Weighted check list
c) Critical incident method
6. Essay or free from appraisal
7. Group appraisal
8. Confidential reports.
Modern method
As we have seen most traditional methods emphasize either on the tasks or the
workers personality while making an appraisal. In order to bring about a balance
between these too modern the most important are
1.

Assessment centre method

2.

Human asset accounting method

3.

Behaviorally anchored rating scales.

Performance appraisal of managers

Management by Objective
Management by objectives of the establishment of effectiveness areas and
effectiveness standards for managerial positions and the periodic conversion of these
into measurable time bound objectives linked vertically and horizontally and with future
planning.

Management by Objectives process:

In this process five basic steps have to be followed

Set organization goals

Job goal setting

Performance reviews

Set check posts

Feed back

Benefits of management by objectives program:

1. Management by objectives helps and increase employee
2. Managers are most likely to compete with themselves with other mangers.
3. Management by objectives results in a mean ends chain
4. Management by objectives reduces role conflict and ambiguity.
5. Management by objectives identified problems better and early
6. Management by objectives identifies performance deficiencies
7. Management by objectives helps the individuals manager to develop personal
leadership.
Industry profile
Silk the queen of all fabrics is historically one of Indias most important
industries. India producers a variety of silks called mulberry, tasar, muga and eri based
on the feeding habit on the cocoons.The sericulture industry today employs over
700,000 farm families and ios mostly concentrated in Karnataka, tamilnadu and AP and
to some extent assam west Bengal. Karnataka accounts for more than

70 % of the

countrys total silk production.5.6 million people out of which 4.7 million are
agriculturists the rest are revelers, weavers etc.,
India is the second largest producer of silk contributing to about 18% to the
world production. what is however more net worth is the fact that indies requirements of
raw silk is much higher than current production as present thus there is considerable
scope for stepping up production of raw silk in the country.While sericultures want
important of raw silk to be restricted to have better market for their produce, exports
want imports of cheaper raw silk so as to be able to export more silk products at
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competitive rates. India has all the four varieties of silk namely mulberry tassel era and
mega. It is however disheartening to note that we have not yet been able to fully exploit
this advantage and make our presents felt on the international scene more prominently
than at present. For this one has to clearly understand the strengths and weakness of
different segments of this sector.
The strength of this industry lies in its wide base, the sustaining market demand
pull especially from the Indian handloom weaving sector, the infrastructure created by
the national sericulture project and the research and training capabilities.
Corporatization of Indian silk industry
The Indian silk industry by and large remains in the age old cottage industry
sector. If big things are to happen in the Indian silk sector we should attract the
industrial groups for greater participation in setting up organized silk production in
modern lines. industrial groups could take any or all of the silk sectors like large scale
mulberry plantation ,giant rearing houses mechanized reeling filatures, modern silk
weaving mills state- of- the art dyeing and processing houses and also silk exports in a
big way.The experimental pilot projects started at few pockets is of any indignation
there is greater potential in large scale corporatization of silk industry in India.

CHAPTER 2
REVIEW OF LITERATURE
Performance appraisal
Performance Appraisal is the process through which an individual employees
behavior and accomplishments for a fixed time period are measured and
evaluated.Performance Appraisal is a systematic and objective way of judging the
relative worth or ability of an employee in performing his\ her task. Performance
Appraisal helps to identify those who are performing their assigned task well and reason
for such recording information about a person that is needed:
1.
2.
3.

For the efficient management of business or organization.

By the manager to help to improve the workers performance.
By the worker to assist him to evaluate his own performance.

Performance appraisal is systematic way of judging the relative importance of an

employee in performing his/her task. It is undertaken for the variety of purpose such as
to consider employees for salary increases, promotions, transfer and termination of
services, to determine training and development needs of the employee, and to establish
basis for research and reference relating to employee matters.
Denhardt (1991): defines performance appraisal as a specific evaluation with respect to
an individuals progress in completing specified tasks.
Devries, Morrison, Shullman and Gerlach (1981): define performance appraisal as a
process by which an organization measures and evaluates an individual employees
behavior and accomplishments for a finite period.
Moulder (2001): states that performance appraisals are valued for defining expectations
and measuring the extent to which expectations are met. She goes on to state that
appraisals can make clear to employees where they are having success and where they
need to improve performance. Moulder indicates that appraisals are useful in setting
goals and in fostering improved communications among work groups and between
employees and supervisors.
Before the 1960s, performance evaluations were designed primarily as tools for the
organization to use in controlling employees (Eichel and Bender, 1981). Eichel and
Bender go on to state that past performance was used to guide or justify managements
actions in dealing with the employee. At the time, according to these authors,
performance appraisal provided the basis for salary, retention, discharge, or promotional
decisions.
Over the past quarter century, the purpose of performance appraisal has shifted from
tools supporting the activities of management to an increasing trend towards personnel
development (Eichel and Bender,1984).
Vroom (1990): states that formal performance appraisal plans can be designed to meet
the following key needs: (a) the organization; (b) the supervisor; and (c) the employee.
He stresses the need for effective evaluation as it can effectively serve these critical
areas.
ICMA (2005): states that almost all employees are eager to know how well they are
doing in their jobs, but many dread the meetings in which their performance is to be
discussed.
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CHAPTER 3
RESEARCH METHODOLOGY
Research is simply a scientific search for knowledge especially in the areas
related to functions research, as separate department can be source of great help to
management decision making. The way in which the data are collected for the research
project. All of the techniques, methods and procedures adopted in terminology work to
carry out terminology research.
Research Design
Research design may be defined as A plan of what data to gather, from whom,
how and when to collect the data, and how to analyze the data obtained.The research
design used for the research is descriptive research. As descriptive study is concerned
with describing the characteristics of a particular individual or a groups effectiveness of
performance and its appraisal, descriptive study is chosen as a method of study.
NEED FOR THE STUDY
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In focusing on utilization of human resource, it is implied that work activities

can be made more efficient and productive, and that opportunities for personal
fulfillment through work con be enhanced. It shows the need for training
program.Performance can be improved by making sure the right person is chosen for
the right job. Efforts should be made in such a way that employee would voluntarily and
gladly cooperation in the operation of the industry and to promote peace and production
for the prosperity of the nation.
The trend now a day is in the direction of attempting to measure what the man
does (Performance appraisal) rather than what he is (Merit rating) to measure what is
the output rather than what is the input. Helps in identifying performers and nonperformers.To measure individual job performance the personal characteristics which
leads to increased productivity. It is assumed here that their characteristics and traits that
lead to productivity and these can be perceived, isolated measure and evaluated.
SCOPE OF THE STUDY
The study on the effectiveness of performance appraisal system is undertaken
for it is considered as the main ingredient in the assessment of an individuals
performance in a systematic way. It will help measuring the effectiveness of the system
and the employee opinion towards it. It will give the recommendation for improving the
effectiveness of the system.
There are also certain outcomes to the assessment carried out which depend on
the performance of the employee. It throws light on their opinion regarding the
appraisal system and the probable outcomes. In this project report an attempt is made to
understand the meaning and relevance of appraisal system.
OBJECTIVES OF THE STUDY
To study the effectiveness of the current performance appraisal system
followed in KSIC.
To understand the problems associated with performance appraisal.

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 To assess whether or not, the current appraisal meets out its purpose of
providing the inputs for HR department.
To make sure that the current system is intact and not obsolete.
To find out the gap existing between, what is expected from the system
by employees and employer, if any?
To suggest intervention programs as solution to the identified problems.

SOURCES OF DATA
Research Instrument
The research instrument used is the questionnaire. Questionnaire is the sheet
containing questions relating to certain aspects regarding which researcher has to collect
data. The questionnaire used in the research consists of close-ended questions to obtain
the views of respondents.
Primary Data
The primary data was collected from the respondents through the questionnaire
and observation method.
Observation Method
A research technique in which the behavior of research subjects is watched and
recorded without any direct contact or interaction.
Questionnaire Method
A type of measurement instrument that yields a single score by arithmetically
combining responses to a number of items (statements/questions with several possible
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responses represented on some form of scale), where each item attempts to measure one
aspect of the factor being measured.
Secondary Data
The secondary data was collected from books, magazines, journals and
resources available online.
SAMPLING TECHNIQUE
Sampling Design
The sampling design of a scientific survey refers to the statistical techniques and
methods adopted for selecting a sample and obtaining estimates of the survey variables
from the selected sample.

Simple Random Sampling

The sampling method used for the study is simple random sampling. A simple
random sample gives each member of the population an equal chance of being chosen.
This sampling method gives equal chances for all the respondents opinions to be
considered without any bias. It gives equal consideration and opportunity for all the
responses.
Total Population
The universe is finite
Total population size of 400
Sample Size
The Sample size selected from total population is 100.
STATISTICAL TOOLS

Percentage Analysis
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Percentage analysis is used to give a tabulated representation of the respondents

views.
Number of responses
Percentage = --------------------------------------- * 100
Total number of employees
CHI-SQUARE TEST
Chi square is a non-parametric test of statistical significance for bivariate tabular
analysis
(O E)2
=

--------------------E

Where
O = Observed value
E = Expected value
Degree of freedom = (n-1) (c-1)
MULTIPLE REGRESSION
Multiple Regression analysis is the simplest form of regression analysis
involves finding the best straight line relationship to explain how the variation in an
outcome (or dependent) variable, Y, depends on the variation in a predictor (or
independent or explanatory) variable, X. once the relationship has been estimated we
will be able to use the equation Y=b0+b1X in order to predict the value of the outcome
variable for different values of the explanatory variable.
LIMITATIONS OF THE STUDY
1. The research exercise was conducted within a limited duration, so a detailed study
could not be conducted
2. Few of the respondents were newly joined,so had to loose exact data from them.
3. The result would be varying according to the individuals as well as time.

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CHAPTER-V
FINDINGS, SUGGESSTION AND CONCLUSION
FINDINGS

Majority of the respondents are aware of the appraisal system in the

organization.
Majority of the respondents said that they know the objectives of the
appraisal system.
Majority of the respondents said that they the current system helps them in
indentifying their strengths and weaknesses.

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 Majority of the respondents felt that the system is transparent and helps in
strengthening their relationship with their superior.
Majority of the respondents felt that the system helps in discovering their
potential
Majority of the respondents felt that the system communicates the plan of
the top management to the employees.
Majority of the respondents felt that the system the discussion happens
during review is useful.
Majority of the respondents felt that the feedback taken during review
process is followed up by the HR department.
Majority of the respondents felt that the Goals set are in alignment with
your career aspirations
Most of the respondents were high satisfied with the effectiveness of the
current appraisal system.
There is a significant relationship between the Experience and objectives
of the system are clear.
There is a significant relationship between Education level and gets an
opportunity to express developmental needs.
Regression analysis

get opportunity to express developmental needs .874

to gain more insight into strengths and weakness .879

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5.SUGGESTIONS
For appraisees:
Employees are asked for a draft of the performance appraisal form or narrative
form. They will get information on how much they have accomplished.
Employees can ask for clarification and specific examples if they hear
generalizations or dont understand what the problem
He has to take initiatives by which mutality will be incorporated and trust will
be built.
For appraisers:
Has to get pre training about the system
Job description should be clearly revealed
Review actual work performance in relation to the performance plan,objectives
and outcomes
Allow the employee to engage self evaluation
Provide positive feedback as well as negative feedback
Use specific examples to illustrate employees accomplishments
For reviewers:

To communicate departments goals in line with the organization vision

To cross verify final ratings and promotion related to all team members

To moderate ratings of team members based on departmental performance

Avoid being biased , be fair in rewarding or penalizing

To review the potential talent identified by the appraiser.

Management committee:
Critically review business results based on set targets
Decide on increment and incentive matrix for organization
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 Review and approve departmental/SBU rating pattern and promotions on time

basis

Human resource department

Facilitate performance management process across the company
Conduct workshop for higher clarity and bearing on performance management
system
Make use of PMS to create talent pipeline for future
Purpose and work closely with management committee on compensation
strategy & implementation linked to market and performance
Ensure visibility in completion of this exercise and timely release of reward
letters

17

CONCLUSION
Performance can be improved by making sure the right person is chosen for the
right job. Efforts are made in such a way that employee would voluntarily and gladly
cooperation in the operation of the industry and to promote peace and production for the
prosperity. The approach resulted in an appraisal system in witch the employees merits
like initiative, dependently, personality, etc, were compared with others and ranked.
The study suggest that importance should be given in making employees aware
about the benefits it provides in terms of both their development and to organization.
Steps like awareness camp should be conducted, to reap maximum benefits from the
appraisal method. It was found that the current system is effective and serves its purpose
fullest.

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BIBLOGRAPHY
Books
1.
2.

Human Resource Management by V. K. Sharma

Essentials of Human Resource Management And Industial Relations
by P. SubhaRao

3.

Human Resource Management by L.M. Prasad

4.

Human Resource Management In Organisation by Robinson

Websites
1.

www.ebsco.com

2.

www.springer.com

3.

www.citehr.com

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APPENDIX
PERFORMANCE APPRAISAL SYSTEM REVIEW QESTTIONNAIRE
This is to certify that the information collected through the questions mentioned
below would only be used for the research process and would not be disclosed to any
third party
1. Personal details:
Name:
Age:
Designation:
Experience:
Education:
Department:
S.NO

QUESTION

The

appraisal

opportunity
3

SA
system
to

provides

experssthis

an
his

developemental needs.
The
appraisal
system

aims

strengatening

appraisee

appraiser

at

relationships through mutuality and trust.

The appraisal system helps interested
appraise to agin more insights into their

strengths and weaknesses.

The appraisal system has scope for
helping each employee discover his
potential.
20

SD

The appraisal system has scope for

communicating the plans of the top
management and the business goals to

the staff.
The objectives of the appraisal system
are clear to all employees.

Discussion
areas/key

on
result

key

performance

areas/tasks/

targets

between appraiser appraisee pairs is

very edudacive to both the appraise and
9

the appraiser.
Performance review discussions are of
high quality and are conducted with

10

care.
The HRD department follows up the
training needs identified during the

11

appraisal seriously.
The process is used

mainly

for

improving the future performance along

12

with reviewing the present performance.

The HRD department actively reviews
each appraisal and discusses them with

13

the managers.
The deadlines set to complet and submit
the

14

performance

documents

are

sufficient.
The performance revie committees do a
thorough jop in reviewing and using the

15

appraisal data.
The performance goals set by the
appraiser for you are in alignment with
your career aspiration.

16. what do you think about the appraisal system in tvs?

21

(a) systematic (b) complexed (c) flexible (d) performance oriented

17 .How do you find the present appraisals method in your organization?
(a) Highly satied (b) satisfied (c) Neutral (d) Dissatisfied (e) Highly dissatisfied.
18. How often, you think that the performance appraisal should be done?
(a) monthly (b) Quarterly (c) Half yearly (d) Annually (e) Need based
19. Should the current appraisal process by reviewed?
(a) Yes (b) no (c) Cant say
20. who in your opinion should appraise the employee?
(a) superior (b) peer (c) subordinates (d) self appraisal (e) consultant (f) All of the
above

21. Give some suggestions for improving the system?

1) ---------------------------------------------------------------2) ----------------------------------------------------------------

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