A COMPARATIVE STUDY OF JOB SATISFACTION &

JOB ANXIETY AMONG MALE & FEMALE EMPLOYEE in

an INDUSTRIAL ORGANIZATION
A PROJECT REPORT SUBMITTED TO INDIRA GANDHI NATIONAL OPEN UNIVERSITY IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF

MASTER IN BISINESS ADMINISTRATION

(MBA)
SUBMITTED BY
Paulomi Shah (MBA)
Enrolment No -023311293

UNDER THE GUIDENCE OF

Jayendra S. Shah (M.S.W., D.L.P.,L.L.B.)

SCHOOL OF COMPUTER AND INFORMATION SCIENCES

INDIRA GANDHI NATIONAL OPEN UNIVERSITY

MAIDAN GARHI, NEW DELHI 110 068.

2007

CERTIFICATE OF ORIGINALITY

This
is
to
certify
that
the
project
report
entitled
______________________________ submitted to Indira Gandhi National Open
University in partial fulfilment of the requirement for the award of the
degree of MASTER OF BUSINESS ADMINISTRATION ( MBA) , is original work
carried out by Mr. / Ms._____________________________________________ with
enrolment no. _____________ under my guidance.
The matter embodied in this project is genuine work done by the student
and has not been submitted whether to this University or to any other University
/ Institute for the fulfilment of the requirement of any course of study.

.
Signature of the Student:

....
Signature of the Guide

Date: ..

Date:

Name and Address

..

Name, Desig. f the student

and Add. of the Guide:
..

..

..

..

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Enrol No

PREFACE
Today more and more industrial organizations are realizing the importance of
human resources and are looking of human assets and investing in them in the same
way as if investing in the capital assets. Industries are centers for major change in
opportunity and productivity and thus it is essential for them to survive in competitive
markets. For this the organizations would have to be dynamic and growth oriented and
human resources form a real productive entity, which like other resources can be
developed to unlimited extent. People are the valuable resources with abundant
potentialities and capabilities who serve the organization to accomplish its goals.
Organizations could not accomplish the things they do without individuals working cooperatively towards common goals. Organizations must create a positive wok
environment where individual employees will be motivated to work to their potential
and co-operate with other employees on accomplishing organizational goals.
Organization should have policies which look after employee welfare, employee
productivity, individual goal accomplishment, employee job satisfaction and quality of
work life. Organization should emphasis on creating a positive work culture healthy
interpersonal relations job security recognition and fair evaluation better pay structures
more opportunities and chance for growth rewards for better performance and overall
development of its employees concern for the employees can create congruence where
individual and organizational goals can be accomplished job satisfaction is an
1important factor contributing to better performance of worker which has its
repercussions on quality and quantity of work. Here the researcher has made a effort to
study various factors of job satisfaction and job anxiety which determines and
influences individuals involvement in work and interest in the work, which will affect
organizations performance.
I offer my deep sense of gratitude to my research guide. Mr. Jayendar
Shah for extending support, guidance and encouraging me to take this topic and helping
me at all stages of this study. I am thankful to ________________and Shri.
M.N.Parmar for extending their kind cooperation and guidance in my research study.
I am also thankful to Alembic Ltd. For allowing me to take up the study and
especially to Mr. Jani (Sr.HRD Manager) for their support and encouragement.

I should not forget to thank those respondents who have extended their
maximum co-operation in giving the shape to this study in totality.
I am thankful to Shri.Prajesh Trivedi for providing prompt typing and also to
Hasmukh Printing Press binding the thesis.
Last but not the least. I am indebted to my friends who supported me selflessly
and my parents for providing unending moral support and for doing everything they
could to help me complete the research.
11 November - 2007
BARODA

-Paulomi Shah

Table of Contents

1. Introduction of the Organization

2. Introduction of the subject
2.1. Methodology of study
2.2. Objective of the Study.
3. Review of the literature
4. Data Analysis and Interpretation.
5. Findings , Conclusion and Suggestions
6. Bibliography
7. Annexure
- Questionnaire

1. Introduction of the Oragnization

"The customer is the most important person in the premises."
Mahatma Gandhi

Welcome to Farmson
"Farmson is the pioneer and leading manufacturer of Paracetamol/Acetaminophen
based in India with significant global presence."
Farmson has too world class manufacturing sites at Nandesari, Vadodara (Gujarat) in
Western part of India with total manufacturing capacity of 20000 MT per anum.
Farmson is background integrated for the manufacturing of the intermediate Para
Amino Phenol through its suter company JNP Producer based in proximity of
Pracetamol manufacturing sites at Jhagadia Ankleshwar.

History and Background

Farmson Pharmaceutical Gujarat Pvt. Ltd. (Farmson) pioneered the production of

Paracetamol / Acetaminophen in India way back in the year 1969. It all began with a
technocrat's missionary zeal to manufacture Paracetamol using indigenous technology
and what emerged was an innovative route to produce an international quality product
with unmatched quality and consistency.
Farmson is today India's largest manufacturer of Paracetamol / Acetaminophen with a
production capacity of 20000 MT/Year. Farmson's unique combination of high volume
capability, cutting edge technology and expertise enables it to meet the ever

challenging, expectations and growing demands of the customers both in domestic

market and globally.
Our growth is fuelled by our quality excellence and exemplary service capabilities that
have facilitated us to earn an enviable list of customers and brand associations that have
lasted through decades and have become even stronger.
Philosophy

Progress through collective wisdom" is thekey to Farmson's success. We place intrinsic

faith in our people, product and technology. We achieve excellence through total
employee involvement, in meeting the customer expectations of quality and service,
each time every time. Our prudent plans and incessant efforts of yesteryears have
shaped our glorious present. We firmly believe that our current endeavors will help us
stride ahead to a more prosperous and brighter tomorrow.
"Quality extends well beyond our product. It is ingrained in everything we do and
reflects our total commitment to our customers."
Late
Our Founder, Mentor and Guide

K.K.Vithani,

"Farmson is the pioneer and leading manufacturer and exporter of Paracetamol /

Acetaminophen in India."
Farmson is a world class, large scale manufacturing company partnering with market
leaders to offer pharmaceutical products and services.
We have a long history as a producer of active pharmaceutical ingredients (APIs),
pharmaceutical formulation intermediates(PFIs) and finished dosages(FDs).

The Company owes its leadership to the "Seven Avenues to Super Success."
Complete Customer Satisfaction
Update Indigenous Technology
Research Orientation and Team Work
Single Product Policy
Good Manufacturing Practices
Total Quality Management
Large Production Capacity

Commitment to Customer
Farmson leads the way due to its complete commitment to its customers and
the total faith they place on the company.
We believe in building long term association of mutual interest and benefit. The
solidarity of these relationships is based on foundations of mutual trust,
adherence to just-in-time delivery, prompt service, and round the clock
responsiveness to customers.

Global Perspective
India today has emerged as the formidable source of API's and intermediates in the
international marketplace. The winds of liberalization and globalization have lifted the
country to an eminent position in the world economy. In the API industry, India has
firmly established itself as the dominant player.
Farmson, a leader in the country has worked incessantly to achieve higher presence in
the global market and the expansion of capacity with ongoing efforts to get approval
from various international regulatory bodies is the step in right direction and which will
help establish Farmson as a true global entity.
We export to regions of European Union, Middle East and Far East Asia along with
countries like South Africa, Canada, Mexico and Sri Lanka.
"Farmson is the pioneer and leading manufacturer and exporter of Paracetamol /
Acetaminophen in India"
The Company owes its leadership to the "Seven Avenues to Super Success"

Complete Customer Satisfaction

Update Indigenous Technology
Research Orientation and Team Work

Mission

A leader in chosen product category

A sensitive and responsive manufacturer
A supplier of product as per customers expectation
A company that offers exemplary value and service
A preferred supplier to all customers
A window to the world of Paracetamol /Acetaminophen

A contributor to good health and prosperity of the society

Farmson Management Team
1. Samir K. Patel

Chairman & Managing Director

2. Vinit S. Menon

Chief Executive Officer

3. N.K. Patel

Director

4. Dr. V.M. Aras

President Operations

5. Vijay Verma

GM Marketing

2. Intro. of the subject

Today the life of an individual has become more and more complex in the age of
industrialization and urbanization. The present industrial culture is characterized by a
work system which does not significantly stimulate workers to peak performance. It has
led to a state where many individuals in gratifying their social and psychological needs
and has there fore generated feelings of subordination, dependence and submissiveness.
It has also de-emphasized self actualization, growth process, creativity and
innovativeness. The situation is still worse in case of small scale units where workers,
in absence of job security and adequate work rewards find it extremely difficult to
satisfy their physiological needs continuously.

INTRODUCTION
The history of performance appraisal is quite brief. Its roots in the early 20th century. But
this is not very helpful, for the same may be said about almost everything in the field of
modern human resources management.
As a distinct and formal management procedure used in the evaluation of work
performance, appraisal really dates from the time of the Second World War - not more than
60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things
historical, it might well lay claim to being the world's second oldest profession!
There is, says Dulewicz (1989), "... a basic human tendency to make judgments about
those one is working with, as well as about oneself." Appraisal, it seems, is both
inevitable and universal. In the absence of a carefully structured system of appraisal, people
will tend to judge the work performance of others, including subordinates, naturally,
informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal problems
in the workplace. Without a structured appraisal system, there is little chance of ensuring
that the judgments made will be lawful, fair, defensible and accurate.

Performance appraisal systems began as simple methods of income justification. That is,
appraisal was used to decide whether or not the salary or wage of an individual employee
was justified.
The process was firmly linked to material outcomes. If an employee's performance was
found to be less than ideal, a cut in pay would follow. On the other hand, if their
performance was better than the supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. If was
felt that a cut in pay, or a rise, should provide the only required impetus for an employee to
either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended; but more
often than not, it failed.
For example, early motivational researchers were aware that different people with roughly
equal work abilities could be paid the same amount of money and yet have quite different
levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes; but
they were not the only element that had an impact on employee performance. It was found
that other issues, such as morale and self-esteem, could also have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In
the 1950s in the United States, the potential usefulness of appraisal as tool for
motivation and development was gradually recognized. The general model of
performance appraisal, as it is known today, began from that time.

Modern Appraisal
Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview (annual
or semi-annual), in which the work performance of the subordinate is examined and
discussed, with a view to identifying weaknesses and strengths as well as opportunities
for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are used to
identify the better performing employees who should get the majority of available merit
pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers who
may require some form of counseling, or in extreme cases, demotion, dismissal or
decreases in pay. (Organizations need to be aware of laws in their country that might
restrict their capacity to dismiss employees or decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment and
justification of rewards and penalties - is a very uncertain and contentious matter.

Controversy
Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources - researchers, management commentators,
psychometricians - who have expressed doubts about the validity and reliability of the
performance appraisal process. Some have even suggested that the process is so
inherently flawed that it may be impossible to perfect it.
At the other extreme, there are many strong advocates of performance appraisal. Some
view it as potentially "... the most crucial aspect of organizational life".

Between these two extremes lie various schools of belief. While all endorse the use of
performance appraisal, there are many different opinions on how and when to apply it.
There are those, for instance, who believe that performance appraisal has many
important employee development uses, but scorn any attempt to link the process to
reward outcomes - such as pay rises and promotions.
This group believes that the linkage to reward outcomes reduces or eliminates the
developmental value of appraisals. Rather than an opportunity for constructive review
and encouragement, the reward-linked process is perceived as judgmental, punitive and
harrowing.
For example, how many people would gladly admit their work problems if, at the same
time, they knew that their next pay rise or a much-wanted promotion was riding on an
appraisal result? Very likely, in that situation, many people would deny or downplay
their

weaknesses.

Nor is the desire to distort or deny the truth confined to the person being appraised.
Many appraisers feel uncomfortable with the combined role of judge and executioner.
Such reluctance is not difficult to understand. Appraisers often know their appraisees
well, and are typically in a direct subordinate-supervisor relationship. They work
together on a daily basis and may, at times, mix socially. Suggesting that a subordinate
needs to brush up on certain work skills is one thing; giving an appraisal result that has
the direct effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument which claims that performance
appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process by which
rewards - which are not an unlimited resource - may be openly and fairly distributed to
those most deserving on the basis of merit, effort and results.

There is a critical need for remunerative justice in organizations. Performance appraisal

- whatever its practical flaws - is the only process available to help achieve fair, decent
and consistent reward outcomes.
It has also been claimed that appraisees themselves are inclined to believe that appraisal
results should be linked directly to reward outcomes - and are suspicious and
disappointed when told this is not the case. Rather than feeling relieved, appraisees may
suspect that they are not being told the whole truth, or that the appraisal process is a
sham

and

waste

of

time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that appraisees seem to have
greater acceptance of the appraisal process, and feel more satisfied with it, when the
process is directly linked to rewards. Such findings are a serious challenge to those who
feel that appraisal results and reward outcomes must be strictly isolated from each
other.
There is also a group who argues that the evaluation of employees for reward purposes,
and frank communication with them about their performance, are part of the basic
responsibilities of management. The practice of not discussing reward issues while
appraising performance is, say critics, based on inconsistent and muddled ideas of
motivation.
In many organizations, this inconsistency is aggravated by the practice of having
separate wage and salary reviews, in which merit rises and bonuses are decided
arbitrarily, and often secretly, by supervisors and managers.
After employee selection, performance appraisal is arguably the most important
management tool a farm employer has at her disposal. The performance
appraisal, when properly carried out, can help to fine tune and reward the
performance of present employees. In this chapter we (1) discuss the purpose
for the performance appraisal, (2) introduce the negotiated performance
appraisal approach, and (3) talk about the steps to achieving a worthwhile
traditional performance appraisal.

BASIC PURPOSES
Effective performance appraisal systems contain two basic systems operating in
conjunction: an evaluation system and a feedback system.
The main aim of the evaluation system is to identify the performance gap (if
any). This gap is the shortfall that occurs when performance does not meet the
standard set by the organization as acceptable.

The main aim of the feedback system is to inform the employee about the
quality of his or her performance. (However, the information flow is not
exclusively one way. The appraisers also receives feedback from the employee
about job problems, etc.)
One of the best ways to appreciate the purposes of performance appraisal is to
look at it from the different viewpoints of the main stakeholders: the employee

and

the

organization.

Employee Viewpoint

From the employee viewpoint, the purpose of performance appraisal is fourfold:

(1) Tell me what you want me to do
(2) Tell me how well I have done it
(3) Help me improve my performance
(4) Reward me for doing well.
Organizational Viewpoint
From the organization's viewpoint, one of the most important reasons for having a
system of performance appraisal is to establish and uphold the principle of
accountability.
For decades it has been known to researchers that one of the chief causes of
organizational failure is "non-alignment of responsibility and accountability." Nonalignment occurs where employees are given responsibilities and duties, but are not
held accountable for the way in which those responsibilities and duties are
performed. What typically happens is that several individuals or work units appear to
have overlapping roles.
The overlap allows - indeed actively encourages - each individual or business unit to
"pass the buck"
This event, the principle of accountability breaks down completely. Organizational
failure is the only possible outcome.
In cases where the non-alignment is not so severe, the organization may continue to
function, albeit inefficiently. Like a poorly made or badly tuned engine, the nonaligned organization may run, but it will be sluggish, costly and unreliable. One of
the principal aims of performance appraisal is to make people accountable. The
objective is to align responsibility and accountability at every organizational level.

RESEARCH METHODOLOGY
SIGNIFICANCE OF THE STUDY:The individual performance and growth in the organization is influenced by
varied factors. Constant changing environment have influenced individual at personal
level. Job satisfaction and job anxiety are two growing factors which have affected and
influenced the individual behavior in the organization and this factor are seen clearly
because of influence of the multinational organizations, changing governments
economic policies globalization etc. job satisfaction Is based on most pragmatic and
essentially pessimistic philosophy, that man is motivated by money alone. The
individuals involvement, loyalty, dedication and involvement on part of the individual
is missing which is affecting organizational effectiveness and productivity as well as
individuals growth and enhancement. Another vital aspect which influences individual
behavior is experience of anxiety in the job. Due to constant change in the
organizations structure, policies, incorporation of never management concepts it has
influenced the human behavior. People who never largely spend their life in serving
organizations experience varied challenges and competitions. Success and failure
brings both positive and negative growth and attitudinal development in the individual.
Such stages of success and failure can bring in anxiety which may affect individuals
performance at professional level and an adverse effect on the personal levels.

Objective of the study

The general objective of the study is to examine employees perception of the Ghana
Telecom Employee Performance Appraisal system for the purpose of improving the
overall performance of the company.
The specific objectives of the study are to:

1. Explain the rationale of the existing employees performance appraisal

system;
2. To identify the usefulness of the existing system;

3. Examine staff perception of the Ghana Telecom Performance Appraisal

System;
4. Determine the socio-economic factors that influence staff perception of the
Performance Appraisal;
5. Make recommendations for the purpose of improving the Companys
Employees Performance Appraisal System.

Provide supervisors and employees with a method to identify individual job

performance objectives and discuss their alignment with organization

objectives;
Provide supervisors and employees with a forum for ongoing communication
and feedback on the attainment of individual objectives and performance in core

competency areas;
Facilitate the identification of areas for improvement needed by employees to

perform more effectively on the job;

Provide employees with the opportunity to collaborate with their supervisor to

develop a personal job performance development plan.

Identify areas for competency improvement;

HYPOTHESIS :-

(1) Higher educational qualification, higher job performance.

(2) Lower Educational qualification, higher job performance.
(3) Higher monthly income higher job satisfaction and lesser job anxiety.
(4) Performance level in female is higher when compared to male employees.
(5) Experience has significant relationship with performance and satisfaction.

STUDY DESIGN :The study has been carried out in Famson Pharma Ltd., Baroda from July, 2014

to Oct. 2014. The study is conducted on employees of Famson Pharma Ltd.. It is into
production of high quality Pharmaceutical products. The product is sold within India,
has got international market also. The universe was classified in five departments.
1.

Project and Planning Dept.

2.

Material Dept.

3.

Personnel Dept.

4.

Account Dept.

5.

Marketing Dept.

At present appx. 300 employees are working within this organization in which
75 employees are working on the assistant grade level ( Typist, Stenographer,
Clerk) within these 75 employees, 50 are male employees and 25 are female
employee. Out of 50 male employees 30 respondents were selected on the basis
of lottery system of stratified random sampling while all 25 female respondents
were selected for data collection. So the total number of 43 employees which is
14.33% of the organization was takes for the study purpose.

TOOLS FOR DATA COLLECTION :Questionnaire was used as the tool of collecting data regarding personal
back-ground and about the variables job satisfaction and job anxiety.
To study the job satisfaction level among employees, job satisfaction
scale developed by me and with the help of my guide Mr. Jayendra Shah sir ,
Faculty of IGNOU for Vadodara study cent., has been used for collecting data.
This scale has a 5 point scale if job satisfaction.

LIMITATIONS OF THE STUDY :The data is collected through questionnaire. The present study is carried
our for academic purpose so sample size is restricted. The study is restricted to
an organization under study so it can not be generalized for all workers in other
industries.

ORGANIZATION OF THE STUDY :-

(1) The first chapter deals with the introduction of the organization etc.
(2) The second chapter deals with the concepts, definition, objectives, hypothesis,
research methodology etc.
(3) The third chapter deals with the preview of literature.

(4) The fourth chapter third deals with data analysis and interpretation
(5) The fifth chapter deals with findings, conclusions, suggestions of the data
collected.

3. Review of literature
A review of literature is a vital component of scientific approach and is regarded
to be by and large important for scientific research. Moreover it also gives the
investigator an understanding of the previous work that has been done, which has to be
related to the present study. One cannot develop an insight in to various dimensions of
problem until and unless one has learnt various models and researches developed in the
area of subject.
Managing employee performance is an integral part of the work that all
managers and rating officials perform throughout the year. It is as important
as managing financial resources and program outcomes because employee
performance or the lack thereof, has a profound effect on both the financial
and program components of any organization.

The Department of the Interiors performance management policy is

designed to document the expectations of individual and organizational
performance, provide a meaningful process by which employees can be
rewarded for noteworthy contributions to the organization, and provide a
mechanism to improve individual/organizational performance as necessary.

To accomplish these objectives, managers need to identify organizational

goals to be accomplished, communicate individual and organizational goals
to employees that support the overall strategic mission and goals of the
Department, monitor and evaluate employee performance, and use
performance as a basis for appropriate personnel actions, including
rewarding noteworthy performance and taking action to improve less than
successful performance.

The Office of Personnel Management defines performance management as the

systematic process of:

planning work and setting expectations

continually monitoring performance

developing the capacity to perform

periodically rating performance in a summary fashion; and

rewarding good performance

PURPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practiced in 90% of the organisations worldwide. Selfappraisal and potential appraisal also form a part of the performance appraisal
processes.

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

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior

subordinates and management employees.

To diagnose the strengths and weaknesses of the individuals so as to identify the

training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

The most significant reasons of using Performance appraisal are:

Making payroll and compensation decisions 80%

Training and development needs 71%

Identifying the gaps in desired and actual performance and its cause 76%

Deciding future goals and course of action 42%

Promotions, demotions and transfers 49%

Other purposes 6% (including job analysis and providing superior support,

assistance and counseling)

BENEFITS OF PERFORMANCE APPRAISAL

Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily
working life, it offers a rare chance for a supervisor and subordinate to have "time out"
for a one-on-one discussion of important work issues that might not otherwise be
addressed. Almost universally, where performance appraisal is conducted properly, both
supervisors and subordinates have reported the experience as beneficial and positive.
Appraisal offers a valuable opportunity to focus on work activities and goals, to
identify and correct existing problems, and to encourage better future performance.
Thus the performance of the whole organization is enhanced.
For many employees, an "official" appraisal interview may be the only time they get to
have exclusive, uninterrupted access to their supervisor. Said one employee of a large
organization after his first formal performance appraisal, "In twenty years of work,
that's the first time anyone has ever bothered to sit down and tell me how I'm doing."
The value of this intense and purposeful interaction between a supervisors and
subordinate
should
not
be
underestimated.
1. MOTIVATION AND SATISFACTION
Performance appraisal can have a profound effect on levels of employee motivation and
satisfaction - for better as well as for worse.
Performance appraisal provides employees with recognition for their work efforts. The
power of social recognition as an incentive has been long noted. In fact, there is
evidence that human beings will even prefer negative recognition in preference to no
recognition at all.
If nothing else, the existence of an appraisal program indicates to an employee that the
organization is genuinely interested in their individual performance and development.
This alone can have a positive influence on the individual's sense of worth,
commitment and belonging.
The strength and prevalence of this natural human desire for individual recognition
should not be overlooked. Absenteeism and turnover rates in some organizations might
be greatly reduced if more attention were paid to it. Regular performance appraisal, at
least, is a good start.
2. TRAINING AND DEVELOPMENT
Performance appraisal offers an excellent opportunity - perhaps the best that will ever
occur - for a supervisor and subordinate to recognize and agree upon individual training
and development needs.
During the discussion of an employee's work performance, the presence or absence of
work skills can become very obvious - even to those who habitually reject the idea of
training for them!

Performance appraisal can make the need for training more pressing and relevant by
linking it clearly to performance outcomes and future career aspirations.
From the point of view of the organization as a whole, consolidated appraisal data can
form a picture of the overall demand for training. This data may be analysed by
variables such as sex, department, etc. In this respect, performance appraisal can
provide a regular and efficient training needs audit for the entire organization.

3. RECRUITMENT AND INDUCTION

Appraisal data can be used to monitor the success of the organization's recruitment and
induction practices. For example, how well are the employees performing who were
hired in the past two years?
Appraisal data can also be used to monitor the effectiveness of changes in recruitment
strategies. By following the yearly data related to new hires (and given sufficient
numbers on which to base the analysis) it is possible to assess whether the general
quality of the workforce is improving, staying steady, or declining.
4. EMPLOYEE EVALUATION
Though often understated or even denied, evaluation is a legitimate and major objective
of performance appraisal.
But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since
evaluative and developmental priorities appear to frequently clash. Yet at its most basic
level, performance appraisal is the process of examining and evaluating the
performance of an individual.
Though organizations have a clear right - some would say a duty - to conduct such
evaluations of performance, many still recoil from the idea. To them, the explicit
process of judgement can be dehumanizing and demoralizing and a source of anxiety
and distress to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and
development at the same time; it must be one or the other.
But there may be an acceptable middle ground, where the need to evaluate employees
objectively, and the need to encourage and develop them, can be balanced.

CHALLENGES OF PERFORMANCE APPRAISAL

In order to make a performance appraisal system effective and successful, an
organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:
1. DETERMINING THE EVALUATION CRITERIA
Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be carefully
selected. For the purpose of evaluation, the criteria selected should be in quantifiable or
measurable terms
2. CREATE A RATING INSTRUMENT
The purpose of the Performance appraisal process is to judge the performance of the
employees rather than the employee. The focus of the system should be on the
development of the employees of the organization.
3. LACK OF COMPETENCE
Top management should choose the raters or the evaluators carefully. They should have
the required expertise and the knowledge to decide the criteria accurately. They should
have the experience and the necessary training to carry out the appraisal process
objectively.
4. ERRORS IN RATING AND EVALUATION
Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait
influencing the evaluators rating for all other traits) etc. may creep in the appraisal
process. Therefore the rater should exercise objectivity and fairness in evaluating and
rating the performance of the employees
5. RESISTANCE
The appraisal process may face resistance from the employees and the trade unions for
the fear of negative ratings. Therefore, the employees should be communicated and

clearly explained the purpose as well the process of appraisal. The standards should be
clearly communicated and every employee should be made aware that what exactly is
expected from him/her.

PROCESS OF PERFORMANCE APPRAISAL

1. ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the standards
which will be used to as the base to compare the actual performance of the employees.
This step requires setting the criteria to judge the performance of the employees as
successful or unsuccessful and the degrees of their contribution to the organizational
goals and objectives. The standards set should be clear, easily understandable and in
measurable terms. In case the performance of the employee cannot be measured, great
care should be taken to describe the standards.
2. COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all
the employees of the organization. The employees should be informed and the
standards should be clearly explained to the. This will help them to understand their
roles and to know what exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the standards can also
be modified at this stage itself according to the relevant feedback from the employees
or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

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

5. DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on oneto-one basis. The focus of this discussion is on communication and listening. The
results, the problems and the possible solutions are discussed with the aim of problem
solving and reaching consensus. The feedback should be given with a positive attitude
as this can have an effect on the employees future performance. The purpose of the
meeting should be to solve the problems faced and motivate the employees to perform
better.
6. DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR
decisions like rewards, promotions, demotions, transfers etc.

TRADITIONAL METHODS OF PERFORMANCE

APPRAISAL
1. ESSAY APPRAISAL METHOD
This traditional form of appraisal, also known as Free Form method involves a
description of the performance of an employee by his superior. The description is an
evaluation of the performance of any individual based on the facts and often includes
examples and evidences to support the information. A major drawback of the method is
the inseparability of the bias of the evaluator.
2. STRAIGHT RANKING METHOD
This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis of
their overall performance. It is quite useful for a comparative evaluation.
3. PAIRED COMPARISON
A better technique of comparison than the straight ranking method, this method
compares each employee with all others in the group, one at a time. After all the
comparisons on the basis of the overall comparisons, the employees are given the final
rankings.
4. CRITICAL INCIDENTS METHODS
In this method of Performance appraisal, the evaluator rates the employee on the basis
of critical events and how the employee behaved during those incidents. It includes
both negative and positive points. The drawback of this method is that the supervisor
has to note down the critical incidents and the employee behaviour as and when they
occur.
5. FIELD REVIEW
In this method, a senior member of the HR department or a training officer discusses
and interviews the supervisors to evaluate and rate their respective subordinates. A
major drawback of this method is that it is a very time consuming method. But this
method helps to reduce the superiors personal bias.
6. CHECKLIST METHOD
The rater is given a checklist of the descriptions of the behaviour of the employees on
job. The checklist contains a list of statements on the basis of which the rater describes
the on the job performance of the employees.
7. GRAPHIC RATING SCALE

In this method, an employees quality and quantity of work is assessed in a graphic

scale indicating different degrees of a particular trait. The factors taken into
consideration include both the personal characteristics and characteristics related to the
on-the-job performance of the employees. For example a trait like Job Knowledge may
be judged on the range of average, above average, outstanding or unsatisfactory.
8. FORCED DISTRIBUTION
To eliminate the element of bias from the raters ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal
distribution curve. The rater chooses the appropriate fit for the categories on his own
discretion.

MODERN METHODS OF PERFORMANCE

APPRAISAL

1. ASSESSMENT CENTRES
An assessment centre typically involves the use of methods like social/informal events,
tests and exercises, assignments being given to a group of employees to assess their
competencies to take higher responsibilities in the future. Generally, employees are
given an assignment similar to the job they would be expected to perform if promoted.
The trained evaluators observe and evaluate employees as they perform the assigned
jobs and are evaluated on job related characteristics.
The major competencies that are judged in assessment centres are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career
orientation etc. assessment centres are also an effective way to determine the training
and development needs of the targeted employees.
2. BEHAVIORALLY ANCHORED RATING SCALES
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which
combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities like
inter-personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.
In this method, an employees actual job behaviour is judged against the desired
behaviour by recording and comparing the behaviour with BARS. Developing and
practicing BARS requires expert knowledge.
3. HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of money.
In this method the Performance appraisal of the employees is judged in terms of cost
and contribution of the employees. The cost of employees include all the expenses
incurred on them like their compensation, recruitment and selection costs, induction
and training costs etc whereas their contribution includes the total value added (in
monetary terms). The difference between the cost and the contribution will be the
performance of the employees. Ideally, the contribution of the employees should be
greater than the cost incurred on them.

360 DEGREE PERFORMANCE APPRAISALS

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees performance comes from all the
sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors - anyone who comes into
contact with the employee and can provide valuable insights and information or
feedback regarding the on-the-job performance of the employee.
360 degree appraisal has four integral components:
1. Self appraisal
2. Superiors appraisal
3. Subordinates appraisal
4. Peer appraisal
Self appraisal gives a chance to the employee to look at his/her strengths and
weaknesses, his achievements, and judge his own performance. Superiors appraisal
forms the traditional part of the 360 degree appraisal where the employees
responsibilities and actual performance is rated by the superior.
Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superiors ability to delegate the work,
leadership qualities etc. Also known as internal customers, the correct feedback given
by peers can help to find employees abilities to work in a team, co-operation and
sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360
degree Performance appraisal have high employee involvement and also have the
strongest impact on behavior and performance. It provides a "360-degree review" of the

employees performance and is considered to be one of the most credible performance

appraisal methods.
360 degree appraisal is also a powerful developmental tool because when conducted at
regular intervals (say yearly) it helps to keep a track of the changes others perceptions
about the employees. A 360 degree appraisal is generally found more suitable for the
managers as it helps to assess their leadership and managing styles. This technique is
being effectively used across the globe for performance appraisals. Some of the
organizations following it are Wipro, Infosys, and Reliance Industries etc.

Arguments Against 360 Degree Performance Appraisal

Despite the fact that 360 degree appraisals are being widely used throughout the world
for appraising the performance of the employees at all levels, many HR experts and
professionals argument against using the technique of 360 degree appraisals. The main
arguments are:

360 performance rating system is not a validated or

corroborated technique for Performance appraisal.

With the increase in the number of raters from one to five

(commonly), it become difficult to separate, calculate and eliminate personal
biasness and differences.

It is often time consuming and difficult to analyze the

information gathered.

The results can be manipulated by the employees towards

their desired ratings with the help of the raters.

The 360 degree appraisal mechanism can have a

adversely effect the motivation and the performance of the employees.

360 degree feedback as a process- requires commitment

of top management and the HR, resources(time, financial resources etc),
planned implementation and follow-up.

360 degree feedback can be adversely affected by the

customers perception of the organisation and their incomplete knowledge about
the process and the clarity o f the process.

Often, the process suffers because of the lack of

knowledge on the part of the participants or the raters.

MANAGEMENT BY OBJECTIVES
The concept of Management by Objectives (MBO) was first given by Peter Drucker
in 1954. It can be defined as a process whereby the employees and the superiors come
together to identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed.
The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the
comparison of the employees actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the
choosing the course of action to be followed by them, they are more likely to fulfill
their responsibilities.
THE MBO PROCESS
The principle behind Management by Objectives (MBO) is to create empowered
employees who have clarity of the roles and responsibilities expected from them,
understand their objectives to be achieved and thus help in the achievement of
organizational as well as personal goals.
Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART goals i.e. goals
that are:
Specific
Measurable
Achievable
Realistic, and
Time bound.
The goals thus set are clear, motivating and there is a linkage between
organizational goals and performance targets of the employees.

The focus is on future rather than on past. Goals and standards are set for the
performance for the future with periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting and

increasing employee empowerment increases employee job satisfaction and
commitment.

Better communication and Coordination Frequent reviews and interactions

between superiors and subordinates helps to maintain harmonious relationships
within the enterprise and also solve many problems faced during the period.

1. Data analysis and interpretation

Analysis and interpretation of the data has been presented in this chapter tables have
been presented in forms of single- variety tables and Bi- Variety tables. Analysis and
interpretation of the data helps investigator and also the future researcher to work on
the related topic.

Table 1.

PRACTICE OF
ORGANISATION.
Yes / No

PERFORMANCE

APPRAISAL

IN

%
Respondents
Respondents
Yes
45
100
No
00
00
Total
45
100
The above table shows that all 45 respondents (100%) have declared that
performance appraisal system is being practiced in their organization.
This means that in the organization the researcher has carried out study. the
performance appraisal system is widely and thoroughly being practiced.

Table 2.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY AGE OF RESPONDENTS (CAREER PLANNING)
Age Group
%
Respondents
Respondents
30-40
21
46
41-50
13
28
50+
11
24
Total
45
100
Out of 45, 11 maximum respondents (46%) of 30-40 age group believes
that objective of performance appraisal system in their organization is career
planning.
Out of 45, 11 respondents, minimum 7 (24%) are of age group 50+ which
can be interpreted that since they are in the end of their career, may be having
satisfied career growth, achieved through their performance.

Table 3.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY AGE OF RESPONDENTS (IDENTIFICATION OF
TRAINING NEEDS)
Age Group
%
Respondents
Respondents
30-40
23
58
41-50
07
20
50+
09
22
Total
39
100
Total of 45 respondents, 39(86%) have opined that objective of
performance appraisal is identification of training and development needs.

The age factor does not have much influence on their such opinion, when
leads us to interpret that his particular objective is widely served through
performance appraisal system irrespective of age of employees i.e. middle level
managers.

Table 4.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM BY

AGE OF RESPONDENTS (PERFORMANCE MANAGEMENT)
Age Group
%
Respondents
Respondents
30-40
12
31
41-50
17
39
50+
13
30
Total
43
100
The same proportion (95%) of middle of level managers have find that
performance appraisal is also meant for management of performance as well as
identification of training and development needs.
Similarly, this particular opinion is not remarkably influenced by age
factor that means that these objectives are extensively used.

Table 5.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM BY

EDUCATION OF RESPONDENTS (CAREER PLANNING).
Education
%
Respondents
Respondents
U.G.
04
08
Graduate
12
27
Post Graduate
29
65
Total
45
100
Here middle level managers responding about career planning having one
of the objective of performance appraisal system in their organisation, highest 29
(65%) are post graduates. This particular result can be interpreted that. due to
their higher education they are having satisfying career development, hence they
have conviction about career planning being objective of performance appraisal.

Table 6.

OBJECTIVE OF PERFORMANCE APPRAICAL SYSTEM BY

EDUCATIONOF RESPONDENTS (IDENTIFICATION OF
TRAINING NEEDS)
Education
%
Respondents
Respondents
U.G.
04
08
Graduate
15
27
Post Graduate
26
65
Total
45
100

100% of the respondents thing that identification of Training and

Development needs is objective of performance appraisal system.
The education level of respondents have remarkable impact. The primary
interpretation can be that due to their higher education they have much
conviction and understanding about ideal objectives of performance appraisal in
their organisation.

Table 7.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY EDUCATION OF RESPONDENTS (PERFORMANCE
MANAGEMENT)
Education
%
Respondents
Respondents
Graduate
12
27
Post Graduate
30
73
Total
42
100
Among the middle level managers, who think that objective of
performance appraisal is performance management, 74%, are post graduate.
This remarkable influence of education level leads us to infer that higher
education level helps to better understanding and conviction of performance
appraisal system and its objectives.

Table 8

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY EXPERIENCE OF RESPONDENTS (CAREER
PLANNING)
%
Experience
Respondents
Respondents
Less than 5 years
03
07
6-15 years
10
22
16-25
32
71
Total
45
100
Out of 55% of the respondents, 8(73%) are having work experience of 1625 years. These again can be interpreted that due to long years of association
with organization they are having better career development and has
envelopment belief in performance appraisal system and its one of the objective
being career planning. While only 3(27%) of respondents in their less years of
association believe that career planning i objective of performance appraisal
system in their organization.

Table 9.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY EXPERIENCE OF RESPONDENTS (IDENTIFICATION
OF TRAINING NEEDS)
Experience
%
Respondents
Respondents
Less than 5 years
02
04
6-15
18
40
16-25
25
56
Total
45
100
From the above table it is seen that the tenure of respondents more believe
in ideal objective of performance appraisal. It can be interpreted that during their
long association with this organisation they have observed and experience the
outcome of performance appraisal system in form of better identification of
training needs.

Table 10.

OBJECTIVE OF PERFORMANCE APPRAISAL SYSTEM

BY EXPERIENCE OF RESPONDENTS (PERFORMANCE
MANAGEMENT)
Experience
%
Respondents
Respondents
Less than 5 years
02
04
6-15 years
18
40
16-25 years
25
56
Total
45
100
Once again here it is found that longer association of respondents has
helped them to get fruits of performance appraisal system in their organization as
highest (63%) of middle level managers having work experience of 16-25 years
believe so.

Table 11.

PURPOSE
OF
ORGANISATION
Purpose

PERFORMANCE

APPRAISAL

%
Respondents
11
66

IN

Respondents
Control
05
Identification of
30
level of K.S.A.
Just a Formality
10
23
Total
45
100
The maximum weightage (by 80%) is for identification of level of
respondents for their knowledge, skills and attitude for their present role.
The secondary purpose as opined by 75% of respondents is as a control
measure to maintain satisfactory level of performance.
While considerable proportion (50%) have opined that performance
appraisal as just a formality.
Thus it can be interpreted that the performance appraisal system is not
functioning on line of its ideal objectives as should be according to philosophy
of HRD.

Table 12.

WHO SHOULD BE APPRAISED IDEALL ?

%
Appraise
Respondents
Respondents
Only Supervisors
31
70
Only Managers
29
65
All Employees
41
90
From the above table there is remarkable finding that almost all (90%)
respondent believes that performance appraisal should be for all employees of
organization.
This can be interpreted as respondents faith in performance appraisal
system of a high degree.

Table 13.

TYPE OF PERFORMANCE APPRAISAL SYSTEM IN

ORGANISATION
Type
%
Respondents
Respondents
0
360
12
27
1800
28
62
Self appraisal
20
44
Assessment Center
05
11
By Supervisor
40
88
From this table it is found that the respondents have given multiple
opinion but the considerable are that of "By supervisor" (90%) and "1800"
(60%).
Thus, it can be interpreted that the performance appraisal type extensively
used is appraisal by supervisor followed by 1800 appraisal.

Table 14.

EMPHASIS IN PERFORMANCE APPRAISAL SYSTEM

Emphasis
Respondents
Respondents
Job knowledge
40
88
job skills
12
26
People skills
14
31
Attitude
15
33
As seen in this table the performance appraisal system in this organization
gives highest emphasis on job knowledge and least emphasis on "People skills".
This leads the study to infer that this performance appraisal system lacks
in focusing on the attitudinal development and interpersonal skills of managers
which are equally important for any organization to sustain and develop.

Table 15.

FEEDBACK OF PERFORMANCE APPRAISAL

Receives Feedback

%
Respondents
Respondents
Yes
07
15
No
38
85
Total
45
100
This result reveals the fact that the feedback of appraisal is not being
communicated to the middle level managers, responding to this study.

Table 16.

OPINION ABOUT IDEAL PERFORMANCE APPRAISAL

SYSTEM
Type
Respondents
Resp.(%)
0
360
42
93
0
180
18
40
Self appraisal
07
15
Assessment Center
23
51
0
The highest (100%) respondents opine that 360 appraisal system is ideal.
Considerable weightage is also given to assessment center.
This finding reveals that the effectiveness and efficiency of these two
performance appraisal system.

STATISTICAL ANALYSIS
HYPOTHESIS TEST -1
CHI-SQUARE
To find out any significant difference between the appraisals systems helps to identify
the strength and weakness of employees and rating helps for management to provide
employee counseling.

HypothesisA Study On Performance Appraisal System At

Famson Pharma Ltd.

Null Hypothesis (H0) : There is no significant relationship between the appraisal
system identifying the strength and weakness of employees and also management
provide employee counseling.
Alternate Hypothesis (H1): There is a significant relationship between the appraisal
system identifying the strength and weakness of employees and also management
provide employee counseling.

TABLE SHOWING THE APPRAISAL SYSTEM IDENTIFY THE STRENGTH AND

WEAKNESS OF
OPTION

STRENGTH

AND

WEAKNESS

OF Total

EMPLOYEE

COUSELLING

OPINION

EMPLOYEES
Very Good NEUTRAL BAD VERY

HIGHLYSATISFIED
SATISFIED
NEUTRAL
DISSATISFIED
HIGHLYDISSATISFIED
TOTAL

Good
04
02
01
07

06
06

11
06
17

10
02
12

BAD
02
01
03

06
16
13
08
02
45

E=R*C/N
Where R = sum of row total
C = sum of column total
N = sample size
Calculated Value
Observed Freq.
Expected Freq.
04
0.93
02
0.40
06
2.13
10
4.26
11
4.91
02
3.46
02
1.24
06
3.02
01
0.31
01
0.13
Calculated value of chi-square ()=43.979

(O-E)2
9.4249
2.56
14.9769
32.9476
37.0881
2.1316
0.5776
8.8804
0.4761
0.7569

(O-E)2/E
10.13
0.16
7.031
7.73
7.55
0.616
0.465
2.94
1.535
5.822

Degree of freedom = (row-1)*(column -1) = (5-1)*(5-1) = 4*4 = 16 Critical value: the

table value of 2at 5% and for 16 degree of freedom is 2 (0.05, 16) = 26.296
INTERPRETATION: Since the calculated value of e (2)=128.607 is > 2(0.05, 16)
=26.296, so the null hypothesis (H0) is rejected and the alternate hypothesis (H1) is
accepted.
opinion

No. of Respondents

Rank(X)

Highly satisfied
09
Satisfied
08
Neutral
13
Dissatisfied
10
Highly dissatisfied
07
The observed value regarding the organization provides
work development.
Opinion
Strongly agree
Agree
Neutral
Disagree
Strongly disagree

No. of Respondents
9
7
18
6
5

Calculation of correlation:
Rank (x)
Rank(y)
3
2
4
3
1
1
2
4
5
5

D= x-y
1
1
0
-2
0

3
4
1
2
5
additional benefits for your

Rank (Y)
2
3
1
4
5
D2
1
1
0
4
0
06

r = 1- ((6 * 6) / 120)
r = 0.7
RESULT: Also r = 0.7 indicates a high positive correlation between the promotion is purely based on
appraisal and the rating helps to fix increment and also the organization provide additional benefit for
your work development.

5. Findings
100% means all 45 have declared that performance appraisal system is
being practiced in their organization. This means that in the organization
the researcher has carried out study. the performance appraisal system is
widely and thoroughly being practiced.
According to data analyzed 46% believe that performance appraisal used
for career planning.
The important outcome that 24% employee those who are above age of
50 out of all respondents mean that now their career is almost at the end,
but they themselves satisfied by career planning.
But out of all 86% respondents says that performance appraisal system
used for training and development also. So age factor does not have very
much influence on this openion.
The same proportion (95%) of middle of level managers have find that
performance appraisal is also meant for management of performance as
well as identification of training and development needs.
o Similarly, this particular opinion is not remarkably influenced by
age factor that means that these objectives are extensively used
Here middle level managers responding about career planning having one
of the objective of performance appraisal system in their organisation,
highest 29 (65%) are post graduates. This particular result can be
interpreted that. due to their higher education they are having satisfying
career development, hence they have conviction about career planning
being objective of performance appraisal.
100% of the respondents thing that identification of Training and
Development needs is objective of performance appraisal system.
o The education level of respondents have remarkable impact. The
primary interpretation can be that due to their higher education
they have much conviction and understanding about ideal
objectives of performance appraisal in their organisation.
Among the middle level managers, who think that objective of
performance appraisal is performance management, 74%, are post
graduate.

o This remarkable influence of education level leads us to infer that

higher education level helps to better understanding and conviction
of performance appraisal system and its objectives.
Out of 55% of the respondents, 8(73%) are having work experience of 1625 years. These again can be interpreted that due to long years of
association with organization they are having better career development
and has envelopment belief in performance appraisal system and its one
of the objective being career planning. While only 3(27%) of respondents
in their less years of association believe that career planning i objective of
performance appraisal system in their organization
From the above table it is seen that the tenure of respondents more believe
in ideal objective of performance appraisal. It can be interpreted that
during their long association with this organisation they have observed
and experience the outcome of performance appraisal system in form of
better identification of training needs.
Once again here it is found that longer association of respondents has
helped them to get fruits of performance appraisal system in their
organization as highest (63%) of middle level managers having work
experience of 16-25 years believe so.
The maximum weightage (by 80%) is for identification of level of
respondents for their knowledge, skills and attitude for their present role.
o The secondary purpose as opined by 75% of respondents is as a
control measure to maintain satisfactory level of performance.
o While considerable proportion (50%) have opined that
performance appraisal as just a formality.
o Thus it can be interpreted that the performance appraisal system is
not functioning on line of its ideal objectives as should be
according to philosophy of HRD.
From the above table there is remarkable finding that almost all (90%)
respondent believes that performance appraisal should be for all
employees of organization.
o This can be interpreted as respondents faith in performance
appraisal system of a high degree.
From this table it is found that the respondents have given multiple
opinion but the considerable are that of "By supervisor" (90%) and "180 0"
(60%).
o Thus, it can be interpreted that the performance appraisal type
extensively used is appraisal by supervisor followed by 180 0
appraisal.

 As seen in this table the performance appraisal system in this organization

gives highest emphasis on job knowledge and least emphasis on "People
skills".
o This leads the study to infer that this performance appraisal system
lacks in focusing on the attitudinal development and interpersonal
skills of managers which are equally important for any
organization to sustain and develop.
This result reveals the fact that the feedback of appraisal is not being
communicated to the middle level managers, responding to this study.
The highest (100%) respondents opine that 360 0 appraisal system is ideal.
Considerable weightage is also given to assessment center.
o This finding reveals that the effectiveness and efficiency of these
two performance appraisal system.

6. Conclusion And Suggestion

Human resources are the vital source of every organization. Every employee in an organization increases
the productivity and goodwill of every company. An employee, being an individual is treated as assets in
the organization. So the organization should mainly emphasis performance appraisal techniques and its
development programme. Both the appraiser and appraise should realize the principle and use the tool of
appraisal system in a constructive way for the prosperity of the organization. The performance appraisal
technique prevailing in the organization is fair. Employees are satisfied with the present performance
appraisal system that is a traditional one. As many new appraisal techniques are emerged, the
organization can implement modern technique which would be more effective. The welfare measure of
organization is at par with the company policies and has brought a great sense of involvement in work
among the employees of the organization. If the suggested measures are taken into consideration it will
help to increase the effectiveness of performance appraisal system.

After having analyzed the data, it was observed that

there was appraisal in the

organization. It is an effective tool, since it is on continuous basis. Performance

appraisals in Famson is satisfactory for its effective management and evaluation of
staff. Appraisals here are helping individuals to develop, improve organizational
performance, and feed into business planning . Performance appraisals enable
management in monitoring of standards, agreeing expectations and objectives, and
delegation of responsibilities and tasks. Staff performance appraisals also establish
individual training needs and enable organizational training needs analysis and
planning. 90degrees appraisal system or review is being followed in Tata Motors i.e
feedback that comes from members of an employee's immediate work circle most
often, 360-degree feedback will include direct feedback from an employee's
subordinates, peers, and supervisor(s), as well as a self-evaluation. It can also include,
in some cases, feedback from external sources, such as customers and suppliers or other
interested stakeholders. The appraisal process is continuous here and encourages
employee productivity with positive feedbacks.
Suggestion-

CONCLUSION
1.
Performance Appraisal system is widely extensively and regularly
practiced in this organization.
2.
The main important objective of performance appraisal system, in this
organisation are :

3.
4.
5.
6.
7.
8.

i)
Identification of Training Needs
ii)
Performance Management. and
iii)
Career Planning.
The prime purpose of performance appraisal is identification of level of
knowledge, skills and attitude of appraisees in respect of their present
role.
Almost all respondents believe that performance appraisal system should
be operative for all employees of organization.
In this organization performance appraisal is being done by their
supervisor.
The highest emphasis is on job knowledge and job skills.
The appraisees do not get feedback of their appraisal.
The respondents strongly believe that 3600 appraisal system can become
ideal performance appraisal system.

Suggestion
1. To improve attendance there should be rewards for those employees who attains
above 95% attendance.
2. There should be training sessions to improve team building.
3. There should be proper training for appraisal to the employees.
4. In the beginning of the year employee must know the performance standards on
which his/her performance will be judged in end of year.
5. More stress relieving packages should be offered to the mentally stressed staff.
6. Overtime should be taken care of at time of performance appraisal, which would
motivate the employees to perform better for longer hours.
7. Performance appraisal should after at proper span of time .

8. Since the ideal objective and purpose of performance appraisal system are
not know and believed by majority of respondents, it is required to
provide awareness and orientation towards ideal performance appraisal
system in this organization.
9. Performance appraisal system, needs to be more relevant to individual
goals as well as organization goals.
10. Behaviourally Anchor Scales (BAS).
11. Performance appraisal system, in this organisation should be linked up
with other sub-systems, of HRD, such as counselling, career planning and
development, rewards and potential appraisal.

12. For to make performance appraisal system more meaningful and result
oriented, it should be focused on key result areas, in addition to key
performance.
13. The feedback of performance appraisal is necessarily be communicated to
the appraisees.

Performance appraisal should be done by expert person

Ideally in the present day scenario, appraisal should be done, taking the views of all the
concerned parties who have some bearing on the employee. But, since a change in the
system is required, it cannot be a drastic one. It ought to be gradual and a change in the
mindset of both the employees and the head is required.

6. Bibliography
BOOKS
1. Performance Appraisal Handbook for US Department Of the Interior
(ebook)
2. Aswathappa K, Human Resource & Personnel Management, Tata McGraw- Hill
Publishing Co. Ltd., New Delhi, Sixth edition 2001
3.

Kothari C.R., Research methodology methods & techniques, Wishwa Prakasan

ublishing Co. Ltd., New Delhi, Sixth edition 2001.

4. Human Resources Management by P.Subarao

5. McGraw Hill, 2003.
6. [1]. Radha, Human Resource Management , Himalaya Publication.
7. [2]. Arora P.N and Arora .S Statistics for Management, First Edition
Chards & company ltd. New Delhi 2008
8. [3]. C.R .Kothari, Research Methodology, New Age International
Publishers. Second revised edition; 2004
9. [4]. R.Senapathi, Research methodology, Lakshmi publication; First
edition.
Wbsites
10. http://performance-appraisals.org
11. http://appraisals.naukrihub.com
12. http://www.performance-appraisal.com

UNPUBLISHED DISSERTATION
(1) A STUDY OF PERFORMANCE APPRAISAL IN A PRIVATE ORGANIZATION
, UNPUBLISHED MASTER DISSERTATION , FACULTY OF SOCIAL WORK
(MSU) , 2006 & 2008.

PERIODICALS
1.

HRM Review from ICFAI Press Issue of the year 20013 & 2014 (Monthly
Publication )

PERFORMANCE APPRAISAL
Questionnaire
APPENDIX
TOPIC :

The Perceptions of Middle Level Management About the Performance

Appraisal System.

Personal Inventory
Name (Optional) :
Age

30 to 40 Yrs.

41 to 50 Yrs.

More than 50 Yrs.

Educational
Qualification :

Graduate

Post Graduate

Other (Specify)

Experience :

Less than 5 Yrs.

6 15 Yrs.

16-25 Yrs.

Designation :
Department :

1.

Is performance appraisal system is being practiced in your organisation ?

Yes

No

If Yes then please specify to which extent.

Very High
2.

High

Somewhat

What do you think is the objective of performance appraisal system, in your

organization ?
Promotion
Transfer (Job Change)
Career Planning
Rewards

Identification of Training needs

Performance Management
3.

What is the purpose of performance appraisal in your organization ?

As a _____________ for to maintain satisfactory performance
To help the employees to identify his level of knowledge, skills and attitude in
reference of required level for present role.
Just for sake of formality.

4.

Who are appraised in your organization ?

Only supervisors
Only Managers
Only workers
All Employees

5.

Who do you think should be appraised ideally in ?

Only supervisors
Only Managers
Only workers
All Employees

6.

Who is the appraiser in your organization ?

Immediate supervisor only.
Employee himself
Both immediate supervisor and employee together.
Head of the Department
Peers / Colleagues
All above mentioned together
If any other than above options, then please specify _________________

7.

Which of the following performance appraisal system is being practiced in your

organization ?

8.

9.

3600

1800

Self Appraisal

Assessment Centre

By Supervisors

What is being appraised in your organization ?

Performance (Key Performance Area)

Results (Key Result Area)

What is given more emphasis in performance appraisal system of your

organization ?
Job knowledge
Job related technical skills
People skill
(Communication, Interpersonal relation skills, leadership etc.)
Attitude

10.

How many times in a year your performance is being appraised ?

Once in a year.

Twice in a year

If other than above mentioned option then please specify _______________

11.

Do you receive feedback of your performance appraisal.

Yes

12.

No

What par of performance appraisal is being communicated ?

Positive
13.

Negative

None

Who do you think become the ideal appraiser ?

Immediate supervisor only.
Employee himself
Both immediate supervisor and employee together
Head of the Department
Peers / Colleagues
All above mentioned together
If any other than above options, then please specify ________________

14.

15.

16.

What do you opine about ideal performance appraisal system ?

3600

1800

Self Appraisal

Assessment Centre

What is your perception about feedback of performance appraisal ?

It is necessary to have factual / realistic idea about my status of performance

Positive feedback helps to be motivated.

Negative feedback leads to frustration and hence demotivates.

Feedback does not affect all.

Is feedback of performance appraisal utilised for improvement of performance

through its linkages with other systems ?
Yes

No

If Yes, pleas specify

Training and Development

Career planning and career development

Counseling

Rewards

Quality worklife

Organisation development

Restructuring of organization

Thank You