International Journal of Research in Management & ISSN : 2348-6503 (Online)

Vol. 2 Issue 1 Jan. - Mar. 2015

Business Studies (IJRMBS 2015) ISSN : 2348-893X (Print)

A Study on the Effectiveness of Performance Appraisal System

and its Influence with the Socio-Demographic Factors of the
Employees of a Manufacturing Industry in Tamil Nadu
Dr. J. Vincent Xavier
Asst. Professor, School of Management Studies, St. Joseph’s College (Autonomous)
Tiruchirappalli, Tamil Nadu, India
Abstract
The present competitive environment, organizations have to ensure peak performance of their employees continuously in order
to compete the market place, effectively and traditionally, this objective was attempted to achieve though employee performance
appraisal which was more concerned with telling employees where they lacked in their performance. Once the employee has been
selected trained and motivated, he is then appraised for his performance. Performance appraisal is the step where the management
finds out how effective it has been at hiring and placing employees. If any problems are identified, steps are taken with the employed
and to remedy them. The performance of an employee is influenced with various factors. The socio demographic factored has
influenced in many ways.Here the researcher tries to find out the effectiveness of the performance appraisal system in Tamil Nadu
based manufacturing industry, India. It is a descriptive type of research, simple random sampling was adopted, and self-prepared,
structured questionnaire with the five point scale was used to collect the primary data. The finding is the socio demographic factors
and the overall performance of the employee has the influence.

Key words
Performance Appraisal, Performance management, Employee appraisal, Human Resource.

I. Introduction subjective thereby making the rating on scientific lines highly

Performance Appraisal is a process of evaluating an employee
performance of job in terms of its requirements. Heyel observes, “
it is the process of evaluating the performance and qualifications of
the employees in terms of the requirement of the job for which he
is employed, for purposes of administration including placement,
selection for promotions, providing financial rewards and other
action which require differential treatment among the members
of a group as distinguished from actions affecting all members
equally others regard, it as a process of estimating or judging the
value excellence, qualities or status of some object, person or
thing.” collectively, it is a part of all the other staffing processes,
recruitment, selection, placement and indoctrination. It is found
systematic assessment of how well employees are performing their
jobs in relation to established standards and the communication
of that assessment to employees”. (Wendell French:1992)
Employee appraisal techniques was used for the first time during
the First World War, when, Walter dill Scott, the US army adopted
the man to man rating system for evaluating military personnel.
During the 1920-30 periods, rational wage structures for hourly
paid workers were adopted in industrial units. Prof. Beach has
charted out, showing the changes in the terminology of employee
appraisal that have taken place since 1920. The major aim of
performance appraisal is to enable an organization to maintain
an inventory of the number and quality of all managers and to
identify and meet their training needs and aspirations. In addition,
increments rewards, maintain individual and group development
and improving the employee’s performance. To measure the
performance appraisal there are several methods and techniques.
The method and scales differ for obvious reasons. These are based
on the sources of traits or qualities, different kinds of workers, and
degree of precision of the employees. The types of performance
appraisal are involved both in traditional and modern methods.
Perhaps we have various types of appraisal methods they have
certain limitations. Mamoria C.B, (2004) pointed out that, if the
factors included in the assessment are irrelevant, the result of
merit rating will not be accurate. Some of the factors are highly
difficult. Supervisors are guided by their personal emotions, likes
and dislikes. This makes their ratings highly biased. But at present
every organisation has their own method to appraise the employees.
The appraisal systems are based on their immediate internal and
external environment. Even though there are some tested tool to
measure the employee performance it is difficult to follow because,
the organisation’s climate may differ from industry to industry.
Many organisations they have formulated their own system which
are prepared based on their own circumstance. Here the researcher
tries to say the influence of the socio demographic factors on
performance appraisal system in a manufacturing industry situated
at Tiruchirappalli, Tamil Nadu, India.
II. Statement of The Problem
The problem of this research is to identify the relationship between
socio demographic factors and the performance appraisal system,
further how it influenced on promotion, enhancing the job skills
and qualities, fixing of salary, and increment.
III. Objectives of The Study
The major objective of this study is to find out the effectiveness
of the performance appraisal system with the relevance of the
socio demographic factors of the employees.
IV. Hypothesis
There is an association between socio demographic factors and
the overall performance appraisal system.
V. Scope of The Study
This study has scope as it covers a wide range of the effectiveness
of the performance appraisal system. This study would not only
provide a vital input in the reformulation of a new PA system but
also identify the influence of PA system with the socio-demographic
factors. Further this study would make the employees understand
about the ways and means to develop a sound financial viability
and growth. More than it enhances the performance of the whole

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ISSN : 2348-6503 (Online)
Vol. 2 Issue 1 Jan. - Mar. 2015
ISSN : 2348-893X (Print)
organization considerably.
VI. Review of Related Studies
For the present study reviews were collected from the previous
studies, books, journals and other related articles.
Hassan Danial Aslam (2010) had studied the Improving
Performance Management Practices in IT Firms of Pakistan.
Results indicated that by implementing steps of performance
management processes i.e. setting objectives, training, performance
agreement, and performance review and reward. Ellen V. Rubin
(2011) conducted the Appraising Performance Appraisal Systems
in the Federal Government: A Literature Review, The result
suggests analyzing performance appraisal system structures,
beyond employee survey data; it provides to the scholars with
rich research opportunities. Singh Sanjeet (2011) conducted A
Study of Effect of Performance Appraisal on the Organization and
the Employee. The findings of the research showed that there is a
noticeable effect of the performance appraisal on the organization
as well as on the Individual. Miah Khasro M., (2012) studied the
Performance Management System in UK Retail Industry: it is a
case Study. Findings showed that, the organization is very powerful
in employee performance management, as they are concerned for
both poor and high performer with corrective action and reward
respectively. Devina Upadhyay & Anu Guptha (2012) have
conducted Efficacy of Performance Management System: An
Empirical Study at ICICI Bank. This research has attempted
to minimize the research gap existing in the field of efficacy of
performance management system. Zvavahera P (2013) had
conducted “An evaluation of the effectiveness of performance
management systems on service delivery in the Zimbabwean
civil service”. It was concluded that the current performance
management system was not enhancing the provision of quality
International Journal of Research in Management &
Business Studies (IJRMBS 2015)
service in the civil service because employees did not see any
merit in its application. Roger sumlin (2014) studied Performance
management – “Impacts and Trends” The result of the study was
every organisation has find out their own PA system. Khushbu
S. Dave (2014) had conducted a research Paper on Performance
Appraisal of Nurses in Hospitals. This analysis clearly states
that there is a need to go for the improvement in the performance
Appraisal system of nurses to get better outcome. Involvement of
nurses for their appraisal will make the appraisal systems more
effective, easily and meaning because, it will help the hospitals
to get the expected results in minimum time.
VII. Methodology of This Study
The period of the study was between May to November 2014.
It is purely an empirical and the descriptive form of study. The
pilot study was conducted in a cement manufacturing industry
situated at Tiruchirappalli District of Tamil Nadu state in India.
The researcher has formulated the questionnaire based on the
objective of this study. The questionnaire was properly tested
its reliability and validity with the level of 0.8261, the Split half
Guttmann method was used. Ten questionnaires were given to
the respondents for the pre-testing. The population was 200
employees 5 per cent simple random sampling was taken for the
study. The primary data were collected through the questionnaire.
The secondary data were collected through various books, journals
and some web journals. The data were analysed with the proper
statistical application. This study has certain limitations. The
study was conducted only at a single cement manufacturing
industry. Therefore the findings are not generalized with other
industries. The reliability of the research report is purely based on
the consistency of the responses given by the respondents.

VIII. Data Analysis and Interpretation

The data were analysed in two ways, a simple percentage and statistical analysis were carried out.
Analysis based on Socio-demographic factories

Table 1 : Source Primary data

S.No Details A B C D E
1 Age Below 25 (44%) 26-35(22%) 36-45(16%) 46 and (18%)
above
2 Gender 92 % (Male) 8 % (Female)
3 Edu Diploma (17%) UG (51%) PG( 22%)
Qualification
4 Designation Supervisors (28 %) Engineers (41 %) Managers (31%)
5 Experience Below 5 years (52 %) 6-10 (10%) 11-15(6%) Above 16 yrs
( 32%)
6 Monthly income Below 10000-(4%) 10001-20000 (14%) 20001-30000 30001-- 40001 and
(38%) 40000(26%) above (8%)
7 Marital Status 52%(Married) 48% (Unmarried)

From the table No.1 it is revealed that the socio demographic factors of the employees. From this 44 per cent of the respondents are
below the age 25 years. Regarding gender wise distribution, 92 per cent of the respondents are male and 8 per cent of the respondents
are female. Therefore, it is manufacturing industry perhaps most of the respondents are male. In this half of the respondents are
qualified at undergraduate level. Maximum numbers of respondents are from engineers. While 50 per cent of the respondents have
received monthly salary between Rs.20001-30000, and 52 per cent of the respondents are married level.

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International Journal of Research in Management & ISSN : 2348-6503 (Online)
Vol. 2 Issue 1 Jan. - Mar. 2015
Business Studies (IJRMBS 2015) ISSN : 2348-893X (Print)

Age wise distribution Marital status

IX. Analysis on Performance Appraisal system

Regarding the opinion of the respondents on the performance appraisal system in the industry, there are fifteen selected statements
analysed. First, the opinion on the level of PA system, majority of the respondents (60 per cent) has agreed that the existing PA system
is good. Whereas the PA system helps to the employees to identify the areas that need to improve and asses the training needs of
the employees, majority of the respondents (82 per cent) have agreed; only minimum number of the respondents (8 per cent) have
disagreed.
The statement regarding exposure about why performance appraisal is conducted, for this statement half of the respondents have
agreed (57 per cent) that to know the employees actual performance. Only minimum number of the respondents have disagreed (37
per cent). Regarding PA by the subordinates, majority of the respondents (60 per cent) have agreed and only few members (26 per
cent) have disagreed. It is seen that the industrial democracy is practised well in the organisation.
Diagram no- 3 Diagram no- 4

Training needs and PA Opportunity to express views on PA

The statement regarding the opportunity to express their views on PA system, majority of the respondents (66 per cent) have agreed
the statement. Minimum numbers of the respondents have disagreed. The statement regarding PA helps the employee to understand
their ability and inability about performance majority of the respondents have agreed and only minimum numbers of the respondents
have disagreed.
Next the statements regarding periodically conducting of PA system, majority of the respondents (62per cent) have agreed and
welcomed the periodical assessment. . Only minimum numbers of the respondents have disagreed, whereas the results of PA is
properly communicated to the employees nearly half of the respondents only agreed that statement. The remaining is disagreed. It
is found that the results are not properly communicated. 72 per cent of the respondents have agreed the statement regarding the PA
system increased my skills and quality, Only 6 per cent of the respondent s have disagreed. It is shown the PA system not only the
technical part but also it covers the employees qualities like behaviour, interrelationship.

While, the confidentiality of the PA system, majority of the respondents (68 per cent) have agreed that it is confidential. Minimum
number of the respondents (26 per cent) have disagreed the statement. It is found the result of the PA system is not shown to other
employees, because it may create quarrels between the employees.

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28
ISSN : 2348-6503 (Online) International Journal of Research in Management &
Vol. 2 Issue 1 Jan. - Mar. 2015
ISSN : 2348-893X (Print) Business Studies (IJRMBS 2015)

Diagram no- 5 Diagram no- 6

Confidentiality of PA Wage and increment with PA

The statement regarding fixing of wage and increment and the system in an organisation.
result of PA, a vast majority of the respondents (74 per cent) The result of PA system plays a vital role in fixing of wage and
have agreed that the wage and increment have been fixed based increment. It is observed that the performance appraisal system
on the result of the PA. Only 14 per cent of the respondents have gets its value. The PA system conducted in the organisation is
disagreed. It is observed that the performance appraisal system confidential, it is found the result of the PA system is not shown to
gets its value. The results of the performance appraisal reflects others, because it is happened it may create quarrels between the
actual performance, in this statement a vast majority of the employees. The subordinates are also involved in the PA system.
respondents have agreed the statement. (74 per cent).It means It shows that the industrial democracy of the organisation. The
the PA is properly conducted in this organisation. This outcome is PA system includes or covers of qualitative aspects, It is shown
correlated with the statement number 1 of this table. The statement the PA system not only the technical part but also it covers the
regarding promotion it is based on the results of PA majority of the employees qualities like behaviour, interrelationship. There is a
respondents (68per cent) have agreed. Only minimum numbers timely and effective feedback system followed in the organization.
are disagreed. It shows that the importance of the PA system in PA conducted in this organisation is without any partiality.
an organisation. Whereas the statement regarding timely and
effective feedback system followed in the organization a good XI. Hypothesis Based Findings
number of the respondents (66 per cent) have agreed and only
minimum numbers are disagreed (12 per cent). It is observed that A. Null Hypothesis
the feedback system followed in the organisation is good. There is no association between age of the respondents and their
overall performance appraisal system.
X. Findings, Suggestions Chi-square test was used
Findings based on Socio demographic factors Performance appraisal
Majority of the respondents (44%) are belonging to the age group system Statistical
below 25 years. It is found that this industry has more young Sl.no Age
Low High inference
Human resources. A vast majority of the respondents (92%) are (n=34) (n=16)
male members though it is a manufacturing industry; the nature of B e l o w 22
the work is very hard perhaps most of the respondents are male. 1 0
25yrs (64.7%)
(52%) are unmarried. It reveals that there are more newly recruited
26 to 8 X2 = 38.302
employees. Half of the respondents (50%) receive salary between 2 0
35yrs (23.5%) Df = 3
Rs.10001-15000. Majority of the respondents (52%) have less
36 to 4 7 P < 0.05
than 5years of experience. It is seen that this industry is filling 3
45yrs (11.8%) (43.8%) Significant
the vacancies immediately after the retirement of the employees.
It is a good practice. 46yrs & 9
4 0
Findings based on Performance Appraisal system above (56.3%)
The existing PA system is good. The PA system helps the employees There is an association between age of the respondents and their
to identify the areas of improvement. Employees have proper overall performance appraisal system. Hence the null hypothesis
awareness on PA system. The PA system helps to assess the training is rejected and research hypothesis is accepted
needs of the employees. PA helps the employee to understand
their ability and inability. The PA is periodically conducted in B. Null Hypothesis
the organisation. Employees have the opportunity to express their There is no association between gender of the respondents and
views on PA system. The results of PA are properly communicated their overall performance appraisal system.
to the employees. The result of the performance appraisal reflects
actual performance. The result of the PA helps to increase the job
efficiency of the employees. Promotion is based on the results of
PA in this organisation. It shows that the importance of the PA

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International Journal of Research in Management & ISSN : 2348-6503 (Online)
Vol. 2 Issue 1 Jan. - Mar. 2015
Business Studies (IJRMBS 2015) ISSN : 2348-893X (Print)

Chi-square test was used D. Null Hypothesis

Performance appraisal There is no association between gender of the respondents and
system Statistical their overall performance appraisal system.
Sl.no Gender T-test was used
Low High Inference
(n=34) (n=16) Overall
Statistical
34 12 X2 = 9.239 Sl.no Performance Mean S.D
1 Male inference
(100%) (75%) Df = 1 appraisal system
4 P < 0.05 1 Male (n=46) 1.2609 .44396 T = -3.298
2 Female 0 Df =48
(25%) Significant
2 Female (n=4) 2.0000 .00000 P < 0.05
There is an association between gender of the respondents and their Significant
overall performance appraisal system. Hence the null hypothesis
is rejected and research hypothesis is accepted There is an association between gender of the respondents and their
overall performance appraisal system. Hence the null hypothesis
C. Null Hypothesis is rejected and research hypothesis is accepted.
There is no association between experience of the respondents
and their overall performance appraisal system. E. Null Hypothesis
There is no association between marital status of the respondents
Chi-square test was used and their overall performance appraisal system.
Performance
appraisal system T-test was used in the above hypothesis.
Statistical
Sl.no Experience Overall
Low High inference Statistical
Sl.no Performance Mean S.D
(n=34) (n=16) appraisal system
inference
26 1 Unmarried (n=24) 1.0000 .00000 T = -6.072
1 Below 5yrs 0
(76.5%) Df =48
5 X2 = 2 Married (n=26) 1.6154 .49614 P < 0.05
2 6 to 10yrs 0 50.000 Significant
(14.7%)
Df = 3 There is an association between marital status of the respondents
3
3 11 to 15yrs 0 P < 0.05 and their overall performance appraisal system. Hence the null
(8.8%)
Significant hypothesis is rejected and research hypothesis is accepted.
16yrs & 16
4 0 XII. Suggestions
above (100%)
There are some deviants or they have difference of opinion on
There is an association between experience of the respondents the PA system or they may not interested in the PA system. The
and their overall performance appraisal system. Hence the null organisation has to identify them and give proper training to them
hypothesis is rejected and research hypothesis is accepted. to make involve in the organisation activities regularly. Further
Null Hypothesis the HR professionals have to make the appraisal system more
There is no association between salary of the respondents and pragmatic way.
their overall performance appraisal system.
XIII. Conclusion
Chi-square test was used Employee’s performance appraisal is necessary to the industry to
Performance achieve the goals of the industry. It is the duty of every organisation
appraisal system Statistical to give proper training and improve the efficiency of the employees
Sl.no Salary Low High inference in a better way. Employees are considered as the valuable assets of
(n=34) (n=16) all organisations. The progress of the employees is closely linked
2 with the performance. If the performance is improved obviously
1 Below Rs.5000 0
(5.9%) the quality of the organisation is improved. In way the performance
Rs.5001 to 7 X2 = appraisal system is an important factor to improve the quality of
2 0 50.000 the employee as well as the industry. Here the study result clearly
Rs.10000 (20.6%)
Df = 3 shown that the performance appraisal system of the particular
Rs.10001 to 25 P < 0.05 industry is good and effective and have a high influence in the
3 0
Rs.15000 (73.5%) Significant socio demographic factors.
Rs.15001& 16
4 0 Reference
above (100%)
[1]. Aswathappa, K. (1997). “Human Resources and Personal
There is an association between salary of the respondents and their Management”, New Delhi, Tata McGraw Hill publishing
overall performance appraisal system. Hence the null hypothesis company.
is rejected and research hypothesis is accepted. [2]. Biswajeet Pattanayak (2000), “Human Resource
Management”, Prentice Hall of India Private Limited,

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ISSN : 2348-6503 (Online) International Journal of Research in Management &
Vol. 2 Issue 1 Jan. - Mar. 2015
ISSN : 2348-893X (Print) Business Studies (IJRMBS 2015)

New Delhi. Performance Appraisals and the Impact of Forced

[3]. Devina Upadhyay& Anu Gupta (2012) “Efficacy of
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University of Southern California
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APPENDIX
S .
Particulars SDA DA N A SA Mean
No.
1 Q1 20% 11% 9% 48% 12% 3.93
2 Q2 2% 6% 10% 4% 78% 4.18
3 Q3 17% 15% 11% 49% 8% 4.20
4 Q4 8% 22% 5% 53% 12% 4.18
5 Q5 10% 19% 9% 54% 8% 4.23
6 Q6 4% 10% 20% 56% 10% 4.07
7 Q7 15% 16% 24% 32% 8% 4.00
8 Q8 4% 4% 18% 58% 16% 4.14
9 Q9 2% 8% 14% 72% 4% 4.09
10 Q10 8% 14% 10% 50% 18% 4.17
11 Q11 2% 12% 12% 54% 20% 4.24
12 Q12 2% 24% 6% 56% 12% 4.65
13 Q13 6% 22% 12% 60% 0% 4.29

14 Q14 2% 4% 22% 60% 12% 4.25

15 Q15 0% 12% 16% 60% 6% 4.20

Author Profile experience of eighteen years to hiscredit which includes fouryears’

experience in developmental field andadministration management
Dr. J. Vincent Xavier is presently working remaining fourteen years in academic field. He has published
at St. Joseph’s College (Autonomous), more than fifteen research articles in international and national
Tiruchchirappalli, Tamil Nadu, India. level journals.
This college is an ‘A’ Grade (NAAC) CPE
(UGC), and 170 years old institution. He
workedon the capacity of Assistant Professor
in the School of management studies. He
also served as a guest faculty in Visual
communication department in Periyar
E.V.R. College, Tiruchirappalli. He has specialization in Human
Resource management. Further hisDoctorate in Management
and hasfocused upon Organisational Development practices with
special reference to paper manufacturing industries. He has total

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