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HUMAN RESOURCE MANAGEMENT

INTRODUCTION
Human resource management is rather difficult to say spontaneously what management
means though we have studied a course in management. But it is necessary to recall what
management is before studying of human resource management. Management has been the art of
getting things done through people. The term human resource is quite popular in India with the
institution of ministry of human resources development in the union cabinet. But most people
may not know what exactly the term human resource means.

The term human resource management can be thought of as the knowledge, skills,
creative abilities, talents and aptitudes of an organization workforce, as well as the value,
attitudes and beliefs of the individuals involved it can also be explained in the sense that is
resource like any natural resources. It does mean that the management can get and use the skills,
tapping and utilizing them again and again. Thus, it is long- term perspective where as personnel
is a short- term perspective. Human resources are also regarded as human factor, human asset,
human capital and the like. The terms labor and manpower had been used widely denoting
mostly the physical abilities and capabilities of employees. The term personnel had been used
widely in the employee as a whole but it does not clearly denote various components of human
resources like skill, knowledge, values.....etc.

MEANING OF HUMAN RESOURCE MANAGEMENT:


Different terms are used to denote human resource management. They are:-labor
management, labor administration, labor management relations, employee-employer relations,
industrial relations, personnel administration, personnel management and the like. Though these
terms can be differentiated widely the basic nature of distinction lies in the scope or coverage
evolutionary stage.

In simple sense, human resource management means employing people, developing their
resources, utilizing, maintaining and compensating their services in tune with the job and
organizational requirements.

SIGNIFICANCE OF HUMAN RESOURCE MANAGEMENT:

Human resource plays a crucial role in the development process of modern economics. There
are great differences in development between countries which seem to have roughly equal
resources, so it is often felt that, though the exploitation of natural resources, availability of
physical and financial resources and international aid play prominent roles in the growth of
modern economics, none of these factors is more e significant that efficient and committed
manpower. It is in fact, said that all development comes from the human mind.

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT:

Objectives are pre-determined goals to which individual or group activity in an organization


is directed. Objectives of personnel management are influenced by organizational objectives and
individual and social goals. Institutions are instituted to attain certain specific objectives.

The objectives of the economic institutions are mostly to earn profits, and of the
educational institutions are mostly impact education and/ conduct research so on and so forth.
However, the fundamental objectives of nay organization is survival. Organizations are not just
satisfied with this goal. Further the goal of most of the organizations is growth and / or profits.

Institutions procure and mange various resources including human to attain the specific
objectives. Thus, human resources are managed to divert and utilize their resources towards and
for the accomplishment of organizational objectives.
The other objectives of HRM are to meet the needs, aspirations, values and dignity of individual
employees and having due concern for the socioeconomic problems of the community and the
country.

THE OBJECTIVES OF HRM MAY BE AS FOLLOWS:

The created and utilize an able and motivated work force, to accomplish the best
organizational goals.
The establish and maintain sound organizational structure and desirable work in
relationships among all the members of the organization.
To secure the integration of individual and groups with in the organization by To create
facilities and opportunities for individual or group development so as to match it with the
growth of the organization.
To attain an effective utilization of human resources in the achievement of organizational
goals
To maintain high employee morel and sound human relations by sustaining and
improving the various conditions and facilities.
To strength and appreciate the human assets continuously by providing training and
development Progammes.
To provide an opportunity for expression and voice in management.

To provide fair, acceptable and efficient leader ship.

Performance appraisal is the process of obtaining, analyzing and recording


information about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future potential of
the employee. Its aim is to measure what an employee does. According to Flippo, a prominent
personality in the field of Human resources, "performance appraisal is the systematic, periodic
and an impartial rating of an employees excellence in the matters pertaining to his present job
and his potential for a better job." Performance appraisal is a systematic way of reviewing and
assessing the performance of an employee during a given period of time and planning for his
future.
It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the achievements of the
overall organizational goals. By focusing the attention on performance, performance appraisal
goes to the heart of personnel management and reflects the management's interest in the
progress of the employees.
Performance appraisal is also known as employee appraisal, is a method by which the
performance of an employee is evaluated (generally in terms of quality, quantity, cost and time).
It is an ongoing process undertaken in partnership, between an employee and his or her
immediate supervisor that involves establishing expectations.
Appraisal is the performance of individuals, groups and organizations is a common
practice of all societies. While in some instances these appraisal processes are structure and
finally sanctioned, in other instances they are an informal and integral part of daily activities.
Once the employee has been selected trained and motivated he is then appraised to
his performance. Performance appraisal is the step where the management fined out effective it
has been at hiring and placing employees.

MEANING:
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job and his
potential for future development.

DEFINITIONS:
It is the systematic evaluation of the individual with respect to his/her performance on
the job and his/her potential for development.
--Flippo
It is process of evaluating the performance and qualifications of the employees in terms

of be requirements of the job for which he is employed for purposes of administration including
placement selection for promotions, providing financial rewards.
--- Heyel
Performance appraisal is the systematic, periodic and an impartial rating of an employees
excellence in matters pertaining to his present job and his potential for a better job.

DEFINITION OF PERFORMANCE MANAGEMENT:


The performance management is getting better results from the organization from
individuals teams by understanding and managing the problems with in the frame work of the
organization with concern to planned goals objectives and competence requirements.
-- Armstrong

OBJECTIVES OF PERFORMANCE APPRAISAL:


The main purposes of Performance appraisal are as follows:
1. To review the performance of the employees over a given period of time.
2. To judge the gap between the actual and the desired performance.
3. To help the management in exercising organizational control.
4. Helps to strengthen the relationship and communication between superior
subordinates and management employees.
5. To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future.
6. To provide feedback to the employees regarding their past performance.
7. Provide information to assist in the other personal decisions in the organization.
8. Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
9. To judge the effectiveness of the other human resource functions of the organization
such as recruitment, selection, training and development.
10. To reduce the grievances of the employees.

FEATURES OF PERFORMANCE APPRAISAL:


The following are the essential features of performance appraisal system
Performance Management is future oriented, rather than retroactive. Even the appraising
process as part of stocktaking-feeds significantly into futuristic performance planning and
improvement
It is participatory and provides for regular and frequent dialogues between a manager and
her manages both dyadic and, as a group-to addresses performance as well as
development needs

Performance appraisal is not job evaluation. Performance appraisal refers to how well
someone is doing the assigned job. Job evaluation determines how much a job is worth to
the organization and therefore, what range of pay should be assigned to the job.
Performance appraisal is a continuous process in every large scale organization.

PROCESS OF PERFORMANCE APPRAISAL:


Performance appraisal is an important component of management information and
control system. Performance appraisal is different from personal appraisal. An impartial system
of performance appraisal is not against employees but is actually beneficial to them in the long
run. Performance appraisal is a systematic and orderly evaluation of performance at work by
their superiors or others who are familiar with the techniques of performance appraisal.
Performance appraisal is useful in guiding the employees for self-improvement and selfdevelopment

The performance appraisal process is a process that evaluates employee


performance. Normally it compares quality, quantity, cost, and time. Some of the things that
performance appraisal are used to do would be.

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 them. 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
one-to-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.

THE APPRAISERS:
Self-appraisal
Superiors
Peers
Customers
Subordinates

Self-appraisal
Self-appraisal is a common practice today, with the employees being given a role in
evaluating their own performance. The employee himself his best equipped to evaluate his
performance because he understands his strengths and weaknesses the best. He can easily
identify the problem areas that need training and development.

Supervisor
It is the responsibility of the supervisor to ensure that his subordinates perform their
jobs well. Hence, the authority to evaluate the employee performance has traditionally been with
the supervisor has a very important role to play in the appraisal of his subordinates

Peers
Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,
because of the competition among peers. The organization has to reach an advanced stage of
development before it can handle peer appraisal. Peer appraisal has to use to assess the
communication and interpersonal skills of the employee, which can effect the team performance.

Customers
The performance of an employee has a direct and immediate impact on his customers
either internal or external. In service organization like banks and hotels, customer feedback has

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become the most important to in evaluating employee performance. In manufacturing the


internal customer evaluate the performance of the employee.

Sub-ordinates
The concept of the subordinates evaluating the performance of his supervisor is yet to
gain acceptance in most Indian companies. The Indian company dose not encourages the idea of
sub-ordinate appraisal.
.
WHAT SHOULD BE RATED WHEN EVALUATING THE PERFORMANCE:
One of the steps in designing an appraisal programmed is to determine the evaluation
criteria. It is obvious that the criteria should be related to the job. The seven criteria for assessing
performance are.

Quality:
The degree to which the process or result of carrying out an activity approaches
perfection his terms of either conforming to some ideal way of performing the activity, of
fulfilling the activitys intended purpose.

Quantity:
The amount produced, expressed in monetary terms, number of units, or numbers of
completed activity cycles.

Timeliness:
The degree to which an activity is completed or a result produced, at the earliest time
desirable from the stand points of coordinating with the outputs of others and of maximizing the
time available for other activities.

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Cost effectiveness:
The degree to which the use of the organizations resources is maximized in the sense
of getting the highest gain of reduction in loss from each unit or instance of use of resources.

Need of supervision:
The degree to which a job performer can carry out a job function with either having
to request supervisory assistance or requiring supervisory intervention to prevent an adverse
overcome.

Interpersonal impact:
The degree to which a performer promotes feeling of self-esteem, good will and cooperation among co-workers and subordinates.

Community service:
Firms are increasingly emphasizing on employees community involvement. This is
particularly true in educational institution.

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IMPORTANCE OF PERFORMANCE APPRAISAL


The importance of performance appraisal is as follows:
1. It helps management in making various HR decisions such as recruitment, promotion,
transfer, demotion, layoff, termination, succession planning etc;
2. It facilitates in identification of training and development needs of the employees;
3. It is a unified system and thus avoids the errors of nepotism, self-interest and
discrimination;
4. It makes known the performance standing to the employee himself and provides
opportunity for improvement through constructive criticism and guidance for their
development;
5. It improves communication between managers and their employees;
6. It helps in improving quality of supervision by highlighting inefficiencies in supervision;
and
7. It helps in evaluating the effectiveness on recruitment, selection, induction, placement,
compensation, etc.

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BENEFITS OF PERFORMANCE APPRAISAL


The benefits of performance appraisal are as follows:
Improvement of work performance by enhancing the productivity of an employee;
Identification of excellent performance with the aim of rewarding people who are ready
for promotion;
Identification of those who need some type of support to improve and increase their work
performance;
Determining whether the set targets have been achieved and whether laid down standards
have been adhered to;
Compensation according to achievement;
Detection and elimination of problem areas in jobs or the work environment;
Placement of employees according to their Knowledge. Skill and ability; and
Reduction or elimination of grievances.
Training and development needs.

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SOURECS OF PERFORMANCE APPRAISAL


Different sources of performance appraisal are as under:
1. Combination of group and individual appraisal:
Performance appraisal evaluates employees who frequently aspire to improve their
performance rather their service. To avoid this situation, teamwork is necessary. In some cases,
individual appraisal is needed and in others, group appraisal. Sometimes there is mismatch
between a managers own performance and that of the group. In such cases, individual appraisal
should improve the individual performance whereas group alone may have obscured the
problem. The difference between the two is that the individual appraisal is based upon the
confidentially of an individual performance appraisal whereas group appraisal is shared amongst
all the team members. However, careful thought and planning will enable to achieve their
management goals and support each other.
2. Appraisal by superior:
This is the most common appraisal and is based on the norm that the manager is the best
judge of his employees performance. However, there are several drawbacks:
Managers power to punish and reward employees;
The evaluation is often one-way; and
Manager may not be able to give proper feedback on performance to the employees.
Due to these drawbacks, other sources of employee appraisal have emerged such as selfappraisal, peer review, upward or reverse appraisal.
3. Self-Appraisal:
According to Heery and Noon (2001), self-appraisal is the technique of evaluating your
own performance and then discussing this which your line manager. Self-appraisal is useful
when managers seek to increase an employees involvement in the performance appraisal

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process. This requires that employees think about their strengths and weaknesses. It is useful
when the manager an the employee discuss and jointly establish future performance goals. This
method became popular because it was assumed that if employees are involved in the appraisal
process, they may be committed to their jobs and that it could also reduce role conflict. However,
this system is subject to systematic biases and distortions. Due to the above problem, another
variation of self-appraisal came into existence, that is, self initiated appraisal, which is gaining
popularity. In this system, an employee is free to ask for review from his manager anytime he
wants. The drawback of this system is that it can be useful for small organizations but not for
large ones, as this activity takes additional time.
4. Peer Review:
Peer review has been in existence since 1920s.The system is based upon the assumption
that co-employees who perform similar tasks are more knowledgeable about the work than a
manager and are in a better position to evaluate work. However, there is a natural conflict of
interest inherent in a peer review, which can result in either positive or negative bias, depending
on the situation. Therefore, peer review is prone to lacking fairness. Bohalander and snell
(2001), give the following shortcomings of the peer review system:
Peer review may be simply a popularity contest;
Managers are reluctant to give up control over the appraisal process;
Those recording low ratings might retaliate against their peers; and
Peers rely on stereotypes in ratings.
5. Upward appraisal:
Employees by virtue of their frequent dealings and interactions with their manager can
evaluate them better. However, using this system, employees may harm or backstab their
managers. Another drawback of the system is that employees may not have access to all the
dimensions of managerial performance and employees may not always evaluate performance
objectively or honestly.

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6. Multi-source assessment:
This system provides employees with as objective information as possible by obtaining
input from all angles such as superiors, subordinates, peers and customers (internal and external)
whereby different aspects of the work can be assessed by different people. For example,
superiors can judge leadership ability, subordinates management style, peers can judge good
teamwork, and customers service quality. Thus, each employee is appraised in four different
ways and the same applies to everyone. Bohalander, snell and Sherman (2001), cite the
following safeguards used by Intel corporations:
Assured anonymity;
Make respondents accountable;
Prevent gaming on them system;
Use statistical procedures; and
identify

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QUALITIES FOR EFFECTIVE PERFORMANCE APPRAISAL


1. Encourage Discussion:
Research studies show that employees are likely to feel more satisfied with their appraisal
result if they have the chance to talk freely and discuss their performance. It is also more
likely that such employees will be better able to meet future performance goals.
2. Constructive Intention:
It is very important that employees recognize that negative appraisal feedback is provided
with a constructive intention .i.e., to help the overcome present difficulties and to improve
their future performance.
3. Remunerative Justice:
There is a critical need for remunerative justice in organizations. Performance appraisalwhatever its practical flaws- are the only process available to help achieve fair, decent and
consistent rewards outcomes.
4. Employee Participation:
Employees should participate with their supervisors in the creation of their own
performance goals and development plans mutual agreement is a key to success.
5. Set Performance Goals:
It is important to set realistic and achievable goals and revise them as and when
necessary.
6. More Feedback:

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Employees generally require more feedback and more frequently, than can be provided in
an annual appraisal sessions more that once or twice a year, performance management should
be viewed as an ongoing process.

METHODS OF PERFORMANCE APPRAISAL


The various methods and techniques used for Performance appraisal can be categorized as the
following traditional and modern methods:

METHODS OF
PERFORMANCE APPRAISAL

MODERN
METHODS

TREDITIONAL
METHODS

STRAIGHT RANKING
METHOD

MANAGEMENT BY
OBJECTIVES

PAIRED COMPARISON
METHOD

GRAPHIC RATING SCALE


METHOD

360 DEGREE
PERFORMANCE
APPRAISAL

ASSESMENTS
CENTER METHOD

BEHAVIORAL
ANCHORED
RATING SCALE
METHOD

HUMAN
RESOURCE
ACCOUNTING
METHOD

GRADING METHOD

FORCED DISTRIBUTION
METHOD

CRITICAL INCEDENT
METHOD

CHECK LIST METHOD

ESSAY APPRAISAL
METHOD

FIELD REVIEW METHOD

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TRADITIONAL METHODS:
1. Straight Ranking Method:
It is the oldest land simplest method of performance appraisal by which the man
and his performance are considered as an entity by the rater. No attempt is made to
functionalize the rate or his performance . Ranking method is a technique; evaluator assigns
relative ranks to all employees in the same work unit doing the same job. Employees are
ranked from the best to the poorest on the basis of overall performance. The relative passion
of an employee is reflected in the numerical rank. It is one of the simplest methods. It is time
saving and comparative evaluation technique of appraisal.
The workman is compared with the whole man that is the ranking of man in a
work group is done against that one of another. But this greatest limitation of this method
used for paired comparison technique. As per the technique every employee to compare a
single individual having various behavioral traits. The task ranking individuals is difficult
when a large number of persons are rated.

2. Paired Comparison Method:


In this method, certain factors are selected for the purpose of analysis and the rater
for each factor designs a scale. A scale of man also created for each selected for each factor.
Then each man to be rated is compared with the man in the scale, and certain scores are
awarded to him. In other words, a whole man is compared to a key man in respect of one
factor at a time. This method is used in job evaluation and is known as the factor comparison
method.
This technique was used by the USA Army during the First World War. By this
method certain factors are selected for the purpose of analysis such as leadership
dependability, initiative and a scale is designed rates for each factor. In other words
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comparing Whole mantoWhole man personnel is compared to the key man in respect of
one factor at a time. This method is used in a job evaluation and is known as the factor
comparison method.

3. Graphic Rating Scales Method:


It is a numerical scale indicating different degrees of a particular train. The rate is
given a printed form for each employee to be rated. The form contains several characteristics
relating to the personality and performance of employee. Intelligence, attitude, quality of
world, leadership skills judgment, etc. this method is widely used as it is easy to understand.
It allows a statistical tabulation of scores and a ready comparison of scores among the
employees is possible. The approach is multi-dimensional as several significant dimensions
of the job can be considered in evaluation.
This is the most commonly used method of performance appraisal. Under it, a
printed forms one person to be rated, in this method initiative, attitude leadership, quality
and quantity of work, regularity of attendance towards superiors and associated veracity.
-------------------------------------------------------------------------0

10

15

20

No interest in work

Carelessness

10

Interested in work

15

Enthusiastic about job and fellow workers

20

Enthusiastic opinions and advises

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4. Grading Method:
Under this method, the rater considers certain factors and marks them accordingly to a
scale. The selected factor may be analytical ability, co-operation, dependability selfexpression, job knowledge. They may be grades as A-outstanding, B-very good, Cgood/average, D-fair, E-poor. The actual performance of an employee is then compared
with these grade definitions and he is allotted the grade which best described his
performance.
Under this system the rater considers certain features and marks them accordingly to a
scale.
A

- Outstanding

- Very Good

Good or Average

Fair

Poor and

10

15

20

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The selected may be analytical ability, co-operative ness, dependability, self-expression, job
knowledge, judgment leadership and organizing ability. The actual performance at an employee
is then compared with this grade definition and he is allotted the grade which describes his
performance.

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5. Forced Distribution Method:


In these techniques the rater appraises an employee according to a pre-determined
distribution scale. It is assumed that it is desirable to rate only two factors by this method that
is job performance and promo ability. For this purpose a five poking performance scale is
used without any descriptive statement and employees are placed between two extremes of
good and bad performance.
Under this method the rating elements are several sets of paid phrases adjectives
relating to job proficiency or personnel qualification. The method has certain such as while
choosing statements from each series. The rate is unable to introduce personnel bias on
hallo effect as only one of the favorable phrases in each series is related to success of failure
on the job.
In this method, the rating elements are several sets of pairs phases or adjectives
relating to job proficiency or personal qualification. The rater is asked to indicate which of
the phrases is most and least descriptive of the employee.
Under this method the rating elements are several sets of paid phrases adjectives
relating to job proficiency or personnel qualification. The method has certain such as while
choosing statements from each series. The rates is unable to introduce personnel bias on
hallo effect as only one of the favorable phrases in each series is related to success of failure
on the job.

6. Critical Incident Method:


In this method the superior keeps a written record or critical (either good or bad)
events and how different employees behaved during such events. The rating of the employee
depends on the positive or the negative behavior during these events. These critical incidents
are identified after through study of the job and discussions with the staff. This method helps

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to avoid vague impression and general remarks as the rating is based on actual records of
behavior.
The method was developed and conducted by the armed forces in the United States
during World War II. The essence of this system is that if attempt to measure workers
performance in terms of certain events or episodes that occur in the performance of the rates
job. These events are known as critical incidents.
The supervisor keeps a written record of the events (either good or bad) that
can easily be recalled and used in the courses of a periodical or formal appraisal. Feed back
is provided about the incident during performance review session.
The critical incident is discovered after a through study of the personnel
working on a job. The collected incidents are than tanked in a order of frequency and
importance. This approach reduces the regency effect of most performance ratings.

7. Essay Appraisal Method:


Under this method, a group of evaluators assess employees. This group consists of the
immediate supervisors of the employee, other supervisors having close contact with the
employers work, head of the department and a personnel expert. The group determines the
standards of performance for the job, measure actual performance of an employee, analysis
the causes of poor performance and offers suggestions for improvements in future.
This method, employees are rated by an appraisal group, consulting of their supervisor
and three or four other supervisors who have some knowledge of their performance. The
supervisor explains to the group the nature of subordinates duties. The group then discusses
standards of performance for that job. The actual performance of job-holder and the causes
of their particular level of performance and others suggestions for future improvement.
The advantage of this method is that if is through very simple and devide at any bias
for it involves multiple judges. But it is very time consuming

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8. Checklist Method:
In this method, series of questions are presented concerning an employees behavior.
Here rater does not evaluate employee performance; he supplies reports about it and the
personnel department does the final rating.
Under this method does not evaluate employee performance, he supplies reports
about it and the final rating is done by the personnel dept. a series of questions are presented
concerning employee to his behavior. The rater than checks to indicate if the answer to
question about an employee is yes or no.
This is the one of the method of traditional methods in the performance appraisal
method. And in this method check the all the records of the employees and he supplies
reports to the personal department are done by the final rating about the employees.

9. Field Review Method:


In this method, a trainer employee from the personnel department interviews line
supervisors to evaluate respective subordinates. The supervisor is required to give his opinion
about the progress of his subordinates and his plan of action in cases requiring for
consideration.
The traditional methods given above focus on the traits of an employee than his job
performance. In the absence of predefined performance criteria or standards, the personal
bias or subjectivity of the evaluator affects the rating. This approach caused the following
responses:

The very nature of the appraisal system led to criticism.

Criticism exercised a negative impact on goal attainment.

Criticism increased antagonism and defensiveness among employees resulting in


inferior performance.

Managers generally are not qualified to assess personality traits.

Some managers discourage good performance by over emphasizing shortcomings


and almost neglecting good work.

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MODERN METHODS:
The modern methods are as follows

1. Management by Objectives (MBO):


The concept of management by objectives was developed by Peter Drucker in
1954.since then MBO has become an effective and operational technique of performance
appraisal and a powerful philosophy of managing.
Process of MBO:
Set Organizational Goals: Goals of the organization in key area of performance are laid
down. These goals are defined in clear, precise and measurable terms. A thorough
analysis of internal and external of the organization is made to set these goals.
Defining Performance Targets: On the basis of organizational goals, performance
standards for each employee are defined. Every subordinate writes down his own
performance goals, which are work related and career-orientated. His manager also writes
down the goals he thinks the subordinate should strive for. The two then discuss them,
reach an agreement and put the agreed goals in writing. Thus, employees at all levels are
involved in goal setting. The goals are periodically reviewed and revised to keep them
flexible and up-to-date.
Performance Review: Frequent performance reviews meetings between manager and
subordinate are held. In these meeting progress is assessed, weaknesses and constraints
are identified and steps to be taken to improve performance are decided. Subordinates
activity participate in this process. This leads to self-control by the employee.

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Feedback: After every performance review feedback on performance is communicated


to the employee so that he can regulate and improve upon his own performance. On the
basis of performance review rewards are decided. New goals and performance targets are
determined for the next period.

For successful implementation of MBO, the following are required.


Quantifiable and measurable goals that are neither too easy not too difficult to
achieve
A well laid out action plan providing for contingencies
Employees who are suitably equipped ad motivated to achieve these goals.
Continuous and constructive feedback and guidance
Objective evaluation of the performance
Identification of areas for improvement and corrective action

Advantages:

Ends means chain

Role clarity

Objective appraisal

Motivation and commitment

Management and development

Co-ordination

Limitations:

Difficulty in goal setting

Problem of participation

Lack of understanding

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Time-consuming and expensive

Inflexibility

2. 360 Degrees Performance Appraisal:


This is a new concept in performance appraisal, where the feedback is collected from all
around the employee, the superior, the subordinates, the peer group, and the customers. The
evaluation is very comprehensive in terms of the employees skills, abilities, styles and jobrelated competencies.
Peers

Customers

360 degree
Performance appraisal

Supervisors

Sub ordinates

Supervisor

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It is the responsibility of the supervisor to ensure that his subordinates perform their
jobs well. Hence, the authority to evaluate the employee performance has traditionally been with
the supervisor has a very important role to play in the appraisal of his subordinates

Peers
Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,
because of the competition among peers. The organization has to reach an advanced stage of
development before it can handle peer appraisal. Peer appraisal has to used to assess the
communication and interpersonal skills of the employee, which can effect the team performance.

Customers
The performance of an employee has a direct and immediate impact on his customers
either internal or external. In service organization like banks and hotels, customer feedback has
become the most important to in evaluating employee performance. In manufacturing the
internal customer evaluate the performance of the employee.

Sub-ordinates
The concept of the subordinates evaluating the performance of his supervisor is yet to
gain acceptance in most Indian companies. The Indian company dose not encourages the idea of
sub-ordinate appraisal.
Advantages of 360 degree performance appraisal:

Higher validity and reliability of the evaluation.

Self-evaluation by the employees gets compared with the perception of others.

Helps in maximizing employee potential in the face of challenges.

Ratings are likely to be accurate because these are done by experts.

The method is more reliable and valid as it is job specific and identified observable and
measurable behavior.

29

The use of critical incidents is useful in providing feedback to the employee being
rated.

Limitations of 360 degree performance appraisal:

It is time consuming and expensive to develop BARS for every job.

Behaviors used are more activity oriented than results oriented.

3. Assessments Center Method:


An assessment center is a group employee drawn from different work units. These
employees work together on assignments similar to the one they would be handling when
promoted. The most important feature of the assessments center is job-related simulations.
Evaluators observe and rank the performances of all participants. This group evaluates all
employees are both individually and collectively by using simulations techniques like roleplaying, business games and in-basket exercises? Employees are evaluated on the basis of job
related characteristics considered important for job success.
The evaluators prepare a summary report and feedback is administered on a face-toface basis to the employees who ask for it. An assessment center generally measures
interpersonal skills. Assessment centers are not only methods of appraisal but help to
determine training and development needs of employees and provide data for human
resource planning.
Purpose of assessment center:

To measures potential for first level supervision, sales and upper management
positions; and also for higher levels of management for development purposes.
To determining individual training and development needs of employees.

30

To select recent college students for entry level positions.


To provide more accurate human resource planning information.
To make an early determination of potential.
To assist in implementing affirmative action goals.
It is used mostly to help select employees for the first level supervisory positions.
Assessment is made to determine employee potential for purpose of promotion. The assessment
is generally with the help of a couple of employees and involve a paper and pencil test,
interviews and situational exercises, like in basket exercises, business game, role playing
incident and leader less group discussions.

4. Behavioral Anchored Rating Scales (BARS):


This method combines graphic rating with critical incidents method. BARS are
descriptions of various degrees of behavior relating to specific performance dimensions.
Critical areas of job performance and the most effective behavior for getting results are
determined in advance. The rater records the observable job behavior of an employee and
compares these observations with BARS. In this way an employees actual behavior is
judged against the desired behavior. These steps involved are;
Identify critical incidents:

Persons with knowledge of the identity job to be

appraised describe specific examples of both effective and ineffective job behaviors.
Select performance dimensions: The persons then cluster the behavior incidents into
a smaller set (usually 5-10) of performance dimensions.
Retranslate the incidents: Another group of knowledge persons assign each incident
to the dimension that it best describes. Incidents for which there is less than 75%
agreement with the first group are not retranslated.

31

Assign scales to incidents: The second group rates each incident on a 7or 9 point
scale. Rating is done on the basis of how well the behavior described in the incident
represents the performance on the appropriate dimensions. Means (average) and
standard deviations are then calculated for the scale values assigned to each incident.
Develop final instrument: A subset of the incidents that meets both the retranslation
and standard deviation criteria is used as a behavioral anchor for the final
performance dimensions. A final BARS instrument typically comprises a series of
vertical scales that are endorsed by the include incidents. Each incident is positioned
on the scale according to its mean value.

5. Human Resource Accounting Method:


Human resources are a valuable asset for any organization. This asset can be valued in
terms of money. When competent and well -trained employees leave an organization the
human asset ids decreased and vice versa. Under this method performance is judged in terms
of costs and contributions of employees.
Costs of human resources consists of expenditure on human resource planning,
recruitment, selection, induction, training, compensation, etc. contribution of human
resources is the money value of labor productivity or value added by human resources.
Difference between cost and contribution will reflect the performance of employees. This
method is still in the transitory stage and is therefore, not popular at present.
The human asset accounting method refers to activity devoted to attaching money
estimate to have the value of firms internal human organization and its external customer
goodwill.
The current value of human organization can be appraised by developed procedures by
undertaking periodic measurements of key casual and intervening enterprise variables. The
32

key casual variables include the structure of organization management policies, decisions
business leader ship strategies, skill and behavior.

PROBLEMS OF PERFORMANCE APPRAISAL


The ideal approach to performance evaluation is that in which the evaluator is free
from personal biases, prejudices and idiosyncrasies. This is because when an evaluation is
objective, it minimizes the dysfunctional behavioral of the evaluator, which may be detrimental
to the achievement of organizational goals. The factors which impede objective evaluations are;
The Halo Effect
The halo effect is a tendency to let the assessment of an individual one trait influence the
evaluation of that person on other specific traits. There is this effect in appraisal when the
appraiser assigns the same rating to all traits regardless of an employees actual performance
on these traits.
The halo effect refers to the tendency to rate an individual consistently high or low or
average on the various traits, depending upon whether the raters overall impression of the
individual is favorable or not. This means that the halo effect allows one characteristic or
occurrence (either good or bad) to influence the rating of all performance factors. The halo
effect problem can be alleviated by:

33

Providing a training programmer to the evaluators.

Restructuring the questions by requiring the evaluator to consider each question


independently.

Leniency or Strictness Tendency


Every evaluator has own value system which acts as a standard against which he makes
his appraisals. Relative to the true or actual performance an individual exhibits, some
supervisors have a tendency to be liberal in their rating that is they may have a tendency to
assign consistently low rating.

The Central Tendency Problem


It is the most commonly found error. It assigns average rating to all the employees with
a view to avoiding commitment or involvement; or when the rate is in doubt or has
inadequate information or lack of knowledge about the behavior of the employee, or when he
does not have much time at his disposal. The ranking tools discussed earlier are aimed at
avoiding this problem.
Similarity Error
This type of error occurs when the evaluator rates other people in the same way he
perceives himself. This error also washes out if the same evaluator appraises all the people in
the organization.
Miscellaneous Biases
Bias against employees on ground of sex, race religion or position is also a common error
in rating. For example, a higher rating may be given to a senior employee. The rater may also
be influenced by organizational influence and give higher rating to those holding higher
positions.

34

Social Differentiation
Rating is sometimes impeded by the evaluators style of behavior. Pious has classified
raters as high differentiators- that is using most of the scale or low differentiators-that is
using a limited range of the scale. Low differentiators tend to ignore or suppress
differences, perceiving the universe as more uniform than it really is.
High differentiators on the hand tend to utilize all available information to the utmost
extent and thus are better able to perceptually deny anomalies and contradictions than low
differentiator makes evaluations using trait criteria unreliable.

STEPS FOR MAKING APPRAISAL SUCCESSFUL:

Existence of an atmosphere of confidence and trust.

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

The supervisor should analyze the strengths and weaknesses of the employee and advise
him.

The appraisal programmed should be less time-consuming and less costly.

The results of appraisal should be immediately communicated to the employee.

A post appraisal interview should be arranged.

Training can be used to improve the standards of performance appraisal.

The right appraisal tools should be chosen to minimize arising problem.

35

OBJECTIVES OF THE STUDY


The following are the objectives of the present study in Maddi Lakshmaiah & Co.Ltd
Ganapavaram. Those are

To study the performance appraisal system in Maddi Lakshmaiah & Co.Ltd.

To know the relationship between performance appraisal and training and development in
Maddi Lakshmaiah & Co.Ltd

To know the methods used for employee performance appraisal.

To know the rewards given by the superior to the subordinates for good performance.

36

To identify the merits and demerits of performance appraisal in M.L & CO. LTD.,

METHODOLOGY OF THE STUDY

Research methodology is a way to systematically solve the research problems. It may be


understood as a science of studying how research is done scientifically. In this research we study
various steps that are generally adopted by a researcher in studying his research problem along with
logic behind them. It is necessary for researcher to design his methodology for his problem as the same
differ from problem to problem. The research methodology has a many dimensions and research
methods do constitute a part for the research methodology, the scope of research methodology than
that of research methods. The research methodology concerns a research problem or study.
The study was taken place of employees to know the process of performance appraisal in their
organization.

37

Data Collection:
To get information about the satisfaction level of employees from performance appraisal
system and its effectiveness a simple random sampling survey was conducted. For the present
study the data has been collected by the following ways.

Primary Data

Secondary Data

Primary Data :Data observed or collected directly from first-hand experience is called primary data.
Responses through questionnaires
Conducted Personal interviews with the respondents.

Secondary Data:
Published Data and the data collected in the past or other parties are called Secondary
data.
Secondary data is collected through the
Company Websites
News papers
Journals
Textbooks

Sample Size :
Samples are taken 100 only.

Sampling Techniques :38

Simple Random Techniques

NEED OF THE STUDY

To effect promotion based on competence & performance.

To assess the training & development needs of the employees.

To bridge the gap between the existing performance and desired performance.

To help each employee to understand his own strengths & weaknesses.

It provides legally defensible reasons for making promotion, transfer, reward, & discharge
decisions.

They can assist in a variety of personnel decisions by generating data about each employee
periodically.

39

Develop inter personal relationship.

To help in salary increments.

To prevent grievance and in-disciplinary activities.

Provide information about the performance rank.

SCOPE OF THE STUDY

This study is useful to provide information about the performance ranks based on which
decision regarding salary fixation, confirmation, promotion, transfer and demotion are
taken.

It provides feedback information about the level of achievement and behavior of


subordinate.

This study is useful to provide information which helps to council the subordinate.

It helps the company knowing whether the performance appraisal techniques are used to the
full extent or not.

40

There by researcher can understand the effective implementation of the performance


appraisal system.

LIMITATIONS OF THE STUDY


The following are the limitations of the present study:
1. Time is the major limitation. The whole study was conducted within a period of 60 days. This
period is not enough to gather the information relating to all aspects of the study.
2. The study does not cover non-executives and some other executive staff members.
3. It is due to time constraint a sample of only 80 respondents opinion is covered.

41

4. because of the small size survey may or may not reflect the ideas and opinions of all
employees in Maddi Lakshmaiah & Co.Ltd
5. The information/data which is gathered from the study is not reliable because of personal
bias of employees.

INDUSTRY PROFILE
HISTORY:
Tobacco is a plant that grows natively in north and South America. It is in the same
family as the potato, pepper and the poisonous nightshade, a very dead plant. The seed of a
tobacco plant is very small. A 1 ounce sample contains about 300,000 seeds.
It is believed that tobacco began growing in the America about 6,000 B.C. As early as 1
B.C., American Indians began using tobacco in many different ways, such as in religious and
medicinal practices. Tobacco was believed to be a cure-all, and was used to dress wounds, as
well as a pain killer. Chewing tobacco was believed to relieve the pain of a toothache.

42

Soon after, sailors brought tobacco back to Europe, and the plant was being grown all
over Europe. The major reason for tobaccos growing popularity in Europe was its supposed
healing properties. Europeans believed that tobacco could cure almost anything, from bad breath
to cancer.
In 1571, a Spanish doctor named Nicolas Monardes wrote a book about the history of
medicinal plants of the new world. In this he claimed that tobacco could cure 36 health problems.
In 1588, a Virginian named Thomas Harriet promoted smoking tobacco as a viable way
to get ones daily dose of tobacco. Unfortunately, he died of nose cancer (because it was popular
then to breathe the smoke out through the nose).
During the 1600s, tobacco was so popular that it was frequently used as money! Tobacco
was literally as good as gold! This was also a time when some of the dangerous effects of
smoking tobacco were being realized by some individuals. In 1610 sir Francis Bacon noted that
trying to quit the bad habit was really hard.
In 1632, 12 years after the mayflower arrived on Ply moth Rock, it was illegal to smoke
publicly in Massachusetts! This had more to do with moral beliefs of the day, than health
concerns about smoking tobacco.

INTRODUCTION TO TOBACCO INDUSTRY:


India is the second largest producer of tobacco in the world after china. Produced 572 million
kegs of tobacco in 2002_2003. India only holds a meager 0.7% share of the us$30 billion global
import-export trade in tobacco, with cigarettes /cigarette tobacco accounting for 85% of the country
total tobacco exports. The tobacco industry holds tremendous potential for India. For the govt, it means
excise duties and export revenues, and for the country in general, it translates into huge employment
opportunities.
Dispute being the second largest producer, India is only the largest exporter of tobacco
products in the world out of the total tobacco products in India; only one_ third is flue_ cured tobacco
suitable for the manufacture of chewing tobacco, bides and other cheap tobacco products, which have

43

no demand outside the country. There is only an export demand for flue_ cured tobacco, which is used
for cigarette manufacturing.
If India adopted a rational tax polity for the tobacco industry that encouraged the
growing of export tobacco, Tobacco farmer income would income would increase and export revenue
would grow. If India adopted chinas tax policy on tobacco, tax revenue could rise from the current rs.6,
031 cores to rs.54,000 cores. Chinas economy_ oriented tax policies have given cigarettes 100% share
of domestic tobacco consumption. This strong domestic base has proved to be conducive to exports as
well as revenue generation.
Tobacco is a commodity product similar in economic terms to foodstuffs in that the price is
set by the fact that crop yields vary depending on local weather conditions. The price varies by specific
species grown, the total quantity on the market ready for sale, the area where it was grown, the health
of the plants, and other characteristics individual to product quality. Laws around the world now often
have some restrictions on smoking but, still 5.5 trillion cigarettes are smoked each year.
The tobacco industry comprises those persons and companies engaged in the growth,
preparation for sale, shipment, advertisement, and distribution of and tobacco-related products. It is a
global industry; tobacco can grow in any warm, moist environment, which means it is farmed on all
continents except Antarctica.

GROWTH:
In 1776, during the American revolutionary war, tobacco helped finance the revolution by
serving as collateral for loans the Americans borrowed from France! Over the years, more and
more scientists began to understand the chemical in tobacco, as well as the dangerous health
effects smoking produces.
In 1826, the pure form of nicotine was finally discovered. Soon after, scientists concluded
that nicotine was dangerous poison.
In 1836, New Englander Samuel Green stated that tobacco was an insecticide, a poison,
and can kill a man.

44

In 1847, the famous Phillip Morris was established, selling hand rolled Turkish cigarettes.
Soon after in 1849, J. E. Leggett and Brother were established in St. Louis, Mo. (the company
that has settled out of the big lawsuits recently). Cigarettes became popular around this time
when soldiers brought it back to England from the Russian and Turkish soldiers.
Cigarettes in the U.S. were mainly made from scraps left over after the production of
other tobacco products, especially chewing tobacco. Chewing tobacco became quite popular at
this time with the cowboys of the American West.
In 1875, R. J. Reynolds Tobacco Company (better known for its Reynolds wrap
aluminum foil) was established to produce chewing tobacco. It wasnt until the 1900s that the
cigarette became the major tobacco product made and sold. Still, in 1901 3.5 billion cigarettes
were sold, while 6 billion cigars were sold. Along with the popularity of cigarettes however, was
a small but growing anti-tobacco campaign, with some states proposing a total ban on tobacco?
WAR & CIGARETTES: A DEADLY COMBO:
The cigarette exploded during world war (1914-1918), where cigarettes were called the
soldiers smoke. By 1923, Camel controls 45% of the U.S. market! In 1924, Phillip Morris
began to market Marlboro as a womans cigarette that is a Mild as May!

THE RECENT PAST:


During the 1980s there were many lawsuits filed against the tobacco industry because of
the harmful effects of its products. Smoking became politically incorrect, with more public
places forbidding smoking. In 1982, the surgeon general reported that second hand smoke may
cause lung cancer. Smoking in pubic areas was soon restricted, especially at the work place. In
1985, lung cancer became the No.1 killer of women, beating out breast cancer! Phillip Morris
continued to diversify into other products, buying into General Foods Corporation and Kraft Inc
in 1985. R. Reynolds also diversified, buying Nabisco and becoming RJR / Nabisco.

45

In 1987, congress banned smoking on all domestic flights lasting less than 2 hours. In
1990, smoking is banned, except to Alaska and Hawaii. In 1990, Ben & Jerry's (of ice cream
fame) boycotts RJR / Nabisco, and dropped Oreos from its ice cream products.
During the 80s and 90s, the tobacco started marketing heavily in areas outside the U.S.,
especially developing countries in Asia. Marlboro is considered the worlds no.1 most valuable
brand of any product with a value over $30 billion! Over this period, there is a battle between
Coca Cola and Marlboro as the No.1 brand in the world.
In the recent years there is growing evidence that the tobacco industry has known all
along that cigarettes are harmful, but continue to market and sell them. There is also evidence
that they know that nicotine was addictive and exploited this hidden knowledge to get millions of
people hooked on this dangerous habit!
Tobacco industry is an agro based industry. Tobacco is cultivated mainly in the states of
Andhra Pradesh and Karnataka most of the tobacco is used for the manufacture of cigarettes and
for exports. Tobacco is also grown in Tamilnadu, West Bengal, Uttar Pradesh, Gujarat, Madhya
Pradesh, Maharashtra and Orissa also.
However the tobacco grown in these states is of very less quality and is not used for
manufacture of cigarettes and exports. Several varieties of tobacco such as Virginia flue cured
,Virginia air cured light soil burley, sun cured Virginia ,nature, chewing. Tobacco, HDBRG,
wrapper tobacco, beedi tobacco and hookah tobacco etc. are grown in India. Virginia flue cured
is a major variety grown in India. More than 80% of Indian tobacco crop belongs to this variety.
Tobacco board issues licenses to the farmers who are permitted to grow tobacco. The
licenses regulate the cultivations area the farmers have to restrict the cultivation to the given area
and must sell the grown tobacco through tobacco board auctions only any violation is an offence
and is punishable.
This is simple technical process by which the green leaf exposed to hot air at high
temperature and cooled slowly over a period of time. After the curing process, the primary leaf
tobacco turns into lemon yellow color, gold colour, brownish yellow colour, brown colour and

46

dark brown colour. This tobacco is called katcha tobacco leaf and is ready for sale. The formers
pack different colours as a separate grade which has a separate price in the market.
Tobacco must be sold only through tobacco board auction platforms under strict rules and
regulations. Farmer or buyer is permitted to transact in tobacco board auction platforms. Central
government has also established several tobacco research institutes for betterment of quality of
tobacco in India. The other varieties of tobacco are not regulated by tobacco board.
After stripping/threshing, the tobacco will be further processed for stabilization of
moisture. And this process is called REDRYING. In this process the tobacco first of all will be
dried completely then it will be given steam at the required temperature.
After retrying process the tobacco will be packed in the required packing say bale
packing /case packing etc. The packed tobacco is ready for export. In India, the first threshing
plant which is working uninterruptedly for the last 25/30 years an imported one by Maddi
Lakshmaiah &co ltd. This was installed at GANAPAVARAM and the plant is still running at
high efficiency levels in the country with 98% average efficiency level for the last 3 years. There
are two plants owned by ITC which can be compared with this plant in the country. ITC uses
their threshing plants for their own consumption.

THE MAJOR PLAYERS IN TOBACCO INDUSTRY IN INDIA ARE AS UNDER

Name of the company

Occupation

47

% of business in India

50%
Cigarette manufacturing & un
ITC ltd

manufactured tobacco exports

Cigarette manufacturing & un


VST industries ltd

12%

manufactured tobacco exports

Cigarette manufacturing & un


GTC industries ltd

Godfrey Phillips India ltd

manufactured tobacco exports

6%

Cigarette manufacturing & un

8%

manufactured tobacco exports

The consumption is linked with the habits of the people; the tobacco usage cannot
be eradicated, even in countries like USA where anti tobacco campaign started in 1962, the
production of cigarettes and consumption of cigarettes is still progressing.

Exporters:

Name of the
S.No

company

% of business in
Occupation

48

India

Cigarette manufacturing &


A

ML group

un manufactured tobacco

5%

exports
Cigarette manufacturing &
B

Polisetty group

un manufactured tobacco

5%

exports
Cigarette manufacturing &
C

Bommidala group

un manufactured tobacco

3%

exports
Cigarette manufacturing &
D

Mittapalli group

un manufactured tobacco

3%

exports
Cigarette manufacturing &
E

Other companies

un manufactured tobacco

8%

exports

Our ML company has developed strong relationship with overseas manufacturing in


Europe, Russia and Middle East though there is very good demand from Russian market. Our
company is not exporting much because of poor economic conditions of the country.

49

PRODUCTION OF DIFFERENT VARIETIES OF TOBACCO IN INDIA


VFC Tobacco

Traditional/NCOs/My sore

ISB Tobacco

ISB tobacco

IAC Tobacco

10 million

Veleswaram/Warangal

VAC Tobacco

200 million

HDBRG

25 million
12 million

Current state of affairs:


The tobacco industry generally refers to the companies involved in the manufacture of
cigarettes, cigars, snuff, chewing and pipe tobacco. This industry is heavily dominated by giant firms.
Due to historical growing areas, many of these companies are concentrated in the southern United
States (particularly Raleigh-Durham, North Carolina; Winston-Salem, North Carolina; and
Richmond, Virginia). Other companies are based around the world.

COMPANY PROFILE

50

HISTORY:
The highly competitive tobacco market represented tremendous growth potential to Mr.
Maddi Lakshmaiah. Foreseeing the and for quality Indian tobacco a long term strategy was
formulated. Right from its inception, the company adhered to international standards and made
rapid in roads to global tobacco markets.
A sophisticated threshing plant of international standards was commissioned in 1976 first
in Andhra Pradesh. It created a revolution in tobacco processing and led to a huge upsurge in
demand. This led to the commissioning of two modern plants with threshers, redryers and other
sophisticated equipment for the processing of quality tobacco.
ML Group has taken its credo of total quality to the furthest, whether in the quality of
process, products or working conditions for the vast workforce. The foresighted innovation of Sri
Maddi Lakshmaiah has given the group strong edge. The personal involvement of the directors in
all aspects of the business has resulted in high quality operational parameters.
The quantum growth in ML Co: Spread of investment in infra structure and
diversification into other business.
ML GROUP under its umbrella, various companies have an annul turnover of Rs 1550
million and an asset base of Rs 2000 million. A real estate development wing was setup to
develop and lease commercial properties with working environment that rival the best
internationally.
The information about the establishment of the group which consists of five concerns as
displayed on the preceding pages, let us have a look on the various concerns of ML Group
individually:
ML group of companies (ML group) was founded by Mr.Maddi Lakshmaiah in 1970.
He joined in his family business in 1952 after completing his engineering degree. The joint
family business started payback in 1943 dealing with tobacco exports, well before India.
Maddi Lakshmaiah & Co Ltd was set up at Chilakaluripet, a village in Andhra Pradesh
that produces some of the best tobacco in the country. Today it has evolved into a diversified,

51

multi products conglomerate known as ML Group that is recognized world over for its
excellence. The company processes tobacco and another agro based products that are used both
in the country and exported to the most quality conscious world markets.
An emphasis on total quality and dedication to the interests of its clients world wide is a
hallmark of ML group. The group is performing excellently well from the date of its
incorporation and has been exporting large volume of tobacco to Russia, CIS countries, U.K,
Europe, African countries, China, Latin American countries, Middle East countries,
Bangladesh & Nepal etc. The group established its branches in Russia & European countries
and has strong tie up with African and Latin American countries and especially with the
neighbor giant China.
Maddi Lakshmaiah & Co Ltd (MLCO)
ML Agro Products (MLAP)
K.S Subbaiah Pillai & co ltd (KSSP)
ML Exports (MLE)
Coramandal Agro Products & Oils Ltd (CAPOL)
Vision:

Descriptions of some thing can organization corporate culture, business technology an


activity in the future.

The company is trying to develop world class information technology building in


Bangalore, china and Hyderabad in the coming 5 years time.

The company is going for sheet tobacco plant in joint venture with on of the Indian best
tobacco cigarette manufacturer.

The company is also contemplating for 100% tobacco joint venture association with one
of the best cigarette manufacturer.

The company exports with second strongest country china, Russia and Germany.

The ambassadors are coming to Maddi Lakshmaiah Company limited in August.

Mission:

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A mission statement is an enduring statement of purpose that distinguishes one business


from others similar firms. This statement identifies the scope of firms operations in product and
market terms.
M.L & company limited mission is to produce good quality of tobacco and get NO: 1
position in India in producing and exporting tobacco.
Policies:
Policies can be considered a guide to action it is desirable that persons responsible for
implementation of policies use discretion and judgment in appraising and deciding among
alternative courses of action.

The company has well defined policies for exports the quality tobacco.

To conduct its operation with honesty integrity and transparency.

Employment policy is formulation and adoption.

This company shall maintain quality leadership by providing products and services that
completely and consistently meet the agreed.

Requirements of all customs and unsure fitness for use of all products there by ensuring
total confidence to every customer.

Employment policy formulation and adoption.

Canteen, cleaning, security maintenance of good industrial relation.

Future plans: The company (Maddi Lakshmaiah) for an ECB for 50 million dollars and development
of regular trade and also infrastructure projects in India.
Maddi Lakshmaiah Company is also working on joint venture basis with UK based
Commodities Company for supply of agri products to South Asian countries.
The company already entered into joint venture with an US based company by name
CARGIL for the south Indian needs.
They have worked for joint venture arrangements with Yugoslavian government for
their requirement for India.
53

Achievements / awards: Maddi Lakshmaiah Company has no particular achievements/ awards.


Maddi Lakshmaiah group (CAPOL Chirala, Prakasam Dist) got several achievement
awards.
All India Cotton Feed Crushers Association, Mumbai awarded CAPOL as III highest
exporter and II highest domestic seller of cotton seed extraction for the year 1992-93.
CAPOL is the highest exporter and III highest domestic set of cotton seed extraction for
the year 1993-94.
CAPOL is the III highest domestic seller of cotton seed extraction in the year 1994-95.
CAPOL is the II highest domestic seller of cotton seed extraction in the year 1995-96.
CAPOL is the II highest domestic seller of cotton seed extraction in the year 1997-98
CAPOL is the III highest domestic seller of cotton seed extraction for the year 19992000.
CAPOL is the II highest extraction of cotton linter for the year 2000-01.
CAPOL is the III highest exporter of cotton linter and III highest domestic seller of cotton
seed extraction for the year 2001-02.
The company (CAPOL) has been awarded may commendation led by government of AP
for its continuous harmonious relations with its employees in the years 1994,95,96,97.
Track record:The company has 30 years of performance.
It never failed in meeting the scheduled repayments of loans with the bank. Rather it
postponed most of the loans with the lenders.

54

LAND MARKS: Maddi Lakshmaiah Company was the first Indian company to join with China to do
business.
It was the first company to import tobacco and export tobacco.
Ambassadors have already come here and 4th one is coming in this august.
GRADING POINTS:Maddi Lakshmaiah Company has three grading points at Chilakaluripet i.e. Martur,
Muppavaram and some other on national highway between Guntur and Chilakaluripet and three
more in Guntur city.
MADDI LAKSHMAIAH & CO LTD:ML & company Limited, the fore runner of all the companies of ML group, the company
enjoys a pre eminent standing in the world of tobacco, exporting to China, Russia, Western
Europe, Africa and Bangladesh among others.
Supported by a team of experts, technicians, engineering and a skilled world force, the
company has forged a head setting standards that have become benchmarks in the industry.
Today Chilakaluripet is a well known name in the global tobacco business in no little measure
due to the pioneering efforts of the intrepid founder, Sri Maddi Lakshmaiah.

ML AGRO PRODUCTS LTD:ML agro products ltd was born of a increase in demand for quality tobacco in both the
domestic and foreign markets. Building on the rich experience of running a profitable operation,
a new plant was set up in 1976 at Martur, Prakasam district.
It is fully self sufficient with modern threshers, lamina redryers, and automatic double
ram press, sophisticated quality control laboratory and mammoth ware houses. It ranks among
the largest threshing units in the country apart from its export commitments.

KS SUBBAIAH PILLAI & CO (INDIA) LTD:

55

K.S.S.P & Co Ltd was acquired in 1982 with all its assets K.S Subbaiah
Pillai & Co (India) Ltd is the group with leading tobacco exporting unit. In a field that is
extremely competitive, the excellent performance of the company is an indicator of the trust that
it enjoys across the globe.

COROMANDAL AGRO PRODUCTS & OILS LTD (CAPOL):


CAPOL started in 1976, extracts and refines cotton seed oil. Today it is a multi products
company with equipment to process all kinds of oil seeds. The plant has a storage capacity of
2100 tones for different types of oil.
Extreme care is taken to ensure that at every stage in the process of production right from
selection of the raw material to packing the products, only the best is passed.
Minimum human intervention and rigorous application of quality control process ensures
the final product conform to all appropriate standards. The by-products, hulls and de-oil cakes
are in high demand in many parts of the world.

ML EXPORTS:
ML exports is a totally export oriented unit, with clients in a variety of markets around
the world. The company enjoys a reputation for excellent delivery schedules and transparent
business practice in global markets.

SHARE HOLDING PATTERN & MANAGEMENT OF GROUP:


The group has been successfully improving its business in all of its activities such as
domestic sales, export sales, tobacco processing & other tobacco development activities,
warehousing facilities etc. The group has two tobacco processing plants and one solvent
extraction plant in South India. The group owns around 1, 00,000 sq. mts of warehousing
complexes in south India.

56

INCORPORTATION:
ML Company is a limited company (m/s Maddi Lakshmaiah and Company Limited)
which was originally incorporated on 8th day of October 1970 under the name, Maddi
Lakshmaiah and Company Private Limited having passed the necessary special resolution on the
23rd day of March 2002, in terms of Sec 31(1)/44 of the Companies Act 1956 the name of the
company changed to Maddi Lakshmaiah and Company Limited.

NATURE OF ACTIVITY:
o

This factory produces good quality tobacco.

The production capacity per each day is 1 lakh 20 tones

FINANCIAL STRUCTURE;
The initial investment of ML Company is 10, 00,000.

TURN OVER OF THE GROUP:


The turn over of the group for the financial year 1989-99 standards is at around Rs 800
million. The net earnings after taxes of the group have been maintained at Rs 150/200 million per
annum. The group has sound assets base having assets spread in most of the prime centers &
ports of South India. The group has developed excellent infrastructure during the past 30 years
which has been yielding a promising regular income of more than Rs 225 million every year.

57

Profit after tax:

SNO

NO OF YEARS

AMOUNT IN RS IN LAKHS

2004

109

2005

270

2006

203

2007

312

2008

262

2009

134

2010

103

2011

123

58

OBJECTIVES OF THE MADDI LAKSMAIAH COMPANY.LTD:


The objectives of the MADDI LAKSMAIAH COMPANY.LTD are as follows below
To serve the nations vital interest in the tobacco related sectors.
To earn a reasonable return on investment.
To work towards achievement of self reliance in the field of tobacco, threshing
formulation& distribution system.
To create strong research& development in the field of tobacco and stimulate R&D of
exports.
To maximize utilization of the existing facilities in order to improve efficient and
increased productivity.

59

BOARD OF DIRECTORS:

Managing Director

Sri Maddi Lakshmaiah

Director

: Sri Maddi Seetha Devi

Director

: Sri Maddi Venkateswara Rao (M.B.A in USA)

Director

: Sri Maddi Ramesh

Executive Director

: Sri Mallavarapu Rama Mohana Rao

Executive Director

: Sri Meaden Sekhar

MANAGEMENT TEAM:

Managing Director

M. Venkateswara Rao

Director

M. Lakshmaiah

General Director

M. Rama Mohana Rao

Personnel Manager

B. Babu Rao

Leaf Manager

M. Rama Mohana Rao

Finance Manager

M. Shekhar

Export Manager

M. Shekhar

Production Manager

K.S. Rami Reddy

Circle Manager

Anji Babu

Factory coordinator

P. Subba Rao

60

ORGANIZATION STRUCTURE:
The company (ML Company) is under the complete administrative control of the
managing director and he are reported by the director and he is reported by general manager.

Managing director
Deputy Managing
director
General Managing
director

Personal
manager

Financial
manager

Leaf
manager

Personal
officer

Circle
manager

Factory
coordinato
r

Accounts
officer

Welfare
officer

Branch
manager

Shifting in
charge

Staff

Safety
officer

Buyers

Staff
Staff

Export
manager

Export
officer

Production
manager

Plant
engineer

Assistengineer

Supervisors
Staff
workers
Staff
workers

61

MAN POWER PARTICULARS:


In M.L & CO. LTD., employees total number is . It may be shown in the form of table as
follows.
S.NO.

Type of workers

permanent

seasonal

Temper\Daily total
wage

Officers

16

16

Staff(including boys)

154

70

224

Scavengers

Female workers

223

74

307

Male workers

Security

21

21

Engineering Daily

50

50

Wages
8

Apprentice

10

10

Carpenters

10

Gunnies

11

Meithei

105

105

Total

527

80

145

752

Responsibilities of managers in M.L company:

62

The M.L Company managing director M.Venkateswara Rao is under the complete administrative
control of the managing direction and he is reported by the director and he is reported by general
manager
The general manager of ML Company is M. Ram Mohan Rao assisted by fine general
manager i.e., personal manager, leaf manager or department manager, finance manager, exports
manager and production manager.
The personal department manager B. Babu Rao is headed by who reports directly to G.M.
he looks after the areas of personnel & administration under there may be a personal offices
welfare officer and a safely officer.
The finance manager M.Shekhar is assisted by a team of experienced management and
non management staff who takes care of the finance is accounts activities of the organization.
The export manager M.Shekhar deals all the matters regarding the export departments
and directly reports to managing director.
The production manager K.S.Rami Reddy is headed by the G.M. is assisted by a plant
engineer and staff of the production department.

PERFORMANCE APPRAISAL AT M.L. & Co.Ltd

63

Performance Appraisal is one of the important mechanisms of HRD. It is the process


through which an individual employee's behavior and accomplishments for fixed time period are
measured and evaluated. The major purpose of measuring and evaluating is to assess the worth
or value. Performance appraisal is a systematic and objective way of judging the relative worth
or ability of an employee in performing his/her assigned task. It is thus the process of reviewing
an individual's performance and progress in a job and assessing his/her potential for future
improvement. It is a systematic method of obtaining, analyzing and recording information about
a person that is needed by the efficient management to help them to improve the job holder's
performance and plan their career and by the job holder to assist him to evaluate his own
performance and develop himself.
Sometime reliability may be reduced due to inconsistent use of measuring standards lack
of training appraisal techniques and inconsistency between different raters. Though these are no
accepted standards to determine which method of evaluation produces the best results. There is a
range of techniques that are used by the organization.
After evaluating the performance of the employee, evaluator is going to provide a
training & development programmers to the employees to improve the knowledge & skills. The
organization provides on-the job training and off-the-job training. These training programmers
are useful to the employees. Every employee feels good about their job at the same time
organization also.
Key process of Performance appraisal in M.L. & Co.Ltd:
1. Performance planning/goal setting
2. Performance coaching/half yearly review
3. Performance review/ annual review
4. Feedback and consequences management

1. Performance planning /goal setting

64

Once the business/ functional scorecard is frozen the superior and the employee should
meet to clarify expectation from their key customers/shareholders and others. This input should
be converted into performance goals to be met during the review period.
The goals articulated are not merely a routine set of activities, but ideally should result in
value creation for the organization through either continuously improving or reducing gaps in the
existing products, process and services. To improve organizational performance, the goals must
necessarily incorporate performance stretch i.e. they need to be significantly higher than the
goals of the previous year. Measurement criteria are for tracing performance against the goals.
The superior/employee is free to freeze the criteria as relevant to their nature of work.
Possible criteria may be quantity, quality, Cost, time and human reaction. The goals can be
added/deleted/modified with mutual consent in response to changing business priorities.
2. Performance coaching
Performance coaching is an ongoing process and based on continuous dialogue
between the superior and employee. It is important to spend time preventing performance
problems rather than evaluating them at the end of the year. The superior and the employee
should meet periodically to review performance; learnings and progress against set goals.
Regular dialogue enhances employees engagement and is the foundation of coaching.
3. Performance Review
(A).Half yearly Review:
A formal half-yearly review is important for superior and employee to take stock of the
progress made and to make course corrections. The focus during the review should primarily be
on overcoming constraints and planning for the rest of the performance cycle. The superior
collects feedback from the customers, suppliers and peers and collates this feedback. The
superior calls project managers to the review if the employee has the project goals. The superior
is expected to give feedback on achievement of goal and behavioral aspects for the period under
review. Employees are also provided with an opportunity to give their feedback and seek
clarifications from the superior.

65

In addition to these regular discussions, the superior need to conduct and document
an interim review if the employee is being transferred to another department. This must also be
done if the employee demonstrates any extreme performance.
(B). Annual review:
Self-Review:
The annual review starts with a self-review. The employee fills sections-II. A with the
status of achievements on goals for the review period. In sections III, the employee has to
briefly describe his/her contribution towards organization building if any and identifies
development needs in both behavioral and function areas. The onus of development is on the
employee. The employee also mentions short and medium term career aspirations at M.L.
&Co.Ltd based on current skill and competencies required to fit into the aspired role. The aspired
role may not necessarily be hierarchically superior but it may envisage horizontal career
movements within and across functions, which may help in long-term development of the
employee.

Role of Key Persons in M.L. & Co. Ltd:


1. Role of employee:

66

Employees are expected to clarify expectations from their key stakeholders who may
be their immediate superior, customers peers and subordinates at the beginning of the review
period and use the same as an input for framing the goals in section II.
Employees are also expected to proactively seek performance feedback from key
stakeholders. During the half yearly formal review, the onus is on employee to seek clarification
on the expectations and give an honest feedback to his superior in the appraisers feedback
column and resolve issues of resources/constraints/support if any. The employee is also required
to give his honest input at the end of the review period about the quality of the process/feedback
and the improvement areas in section VIII. The employee should proactively seek the execution
of the development plan in section VII with both his /her superior and the concerned HR.
2. Role of the superior:
Superiors are expected to ensure that goals are set and signed off as per organizational
timelines. Even if, in departments/SBUs

where goals change more frequently based on

changing upstream priorities ,the event that the employee has project goals , the superior needs to
involve the project manager at the time of goal setting. The superior has to proactively follow the
perfect schedule and complete goal setting/half yearly review/annual review in time .The
superior should use the half-yearly review for clarifying expectations and sorting out issues of
resources/constraints. While assessing, the superior has to honestly and fairly apply the rating
template.
The superior should give sufficient comforts to the employee so that he/she is able to give
honest feedback in section VII. However, it must be made clear by the superior that the ratings
given in section VI are non-negotiable and cannot be altered following the final discussion and
closure unless it is prima facie evident that a gross miscarriage of justice has been committed.
The superior may call the employee during the review period to understand what the
employee had written in section III and seek clarification whenever require
3. Role of the Reviewer:
The reviewer is expected to help the superior in coming to a fair and unbiased
assessment of the employee and provide key development inputs. The reviewer is required to
67

question the superior as to why a certain rating has been proposed as per the guidelines in the
rating template. The reviewer is also expected to completely brief the superior of the proceedings
at the Apex review committee and the rationale if the ratings get altered. The reviewer should at
no point directly communicate with the employee over performance ratings, which might
confuse the employee and the ownership of the superior.
4. Role of HR:
HR has to support and facilitate the line managers {superior and reviewers} in all
administrative and technical areas like coaching and feedback as well as dealing with
performance problems. HR would facilitate discussion at the apex review committee, ensure
implementation of perfect philosophy and monitor overall quality of perfect.
HR would also help in implementing the development plan in section VII and
analyze the closure section for monitoring quality of feedback. HR would assist in reminding
line managers about the timelines on goals setting/half-yearly feedback /final review and would
and follow up for the same. HR shall also carry audits on the perfects process periodically.

1. Are you aware about the organization performance Appraisal system?

TABLE: 1

68

OPINION

NO. OF RESPONDENTS

PERCENTAGE

YES

100

100

NO

TOTAL

100

100

CHART: 1

INTERPRETATION:
The above chart indicates that most of the respondents are i.e. 100% of employees
are expressed the performance appraisal system is essential in an organization. So from the above
analysis the performance appraisal system is the aware about the organization.

2. Are you satisfied with the annual performance appraisal?


TABLE: 2

69

NO. OF RESPONDENTS
OPINION

SATISFIED

PERCENTAGE

76

76

15

15

DISSATISFIED

TOTAL

100

100

PARTIALLY SATISFIED

CHART: 2

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 76% of respondents
are expressed satisfying with the annual performance appraisal. Where as 15% of employees are
partially satisfied and 9% of employees are dissatisfied about annual performance appraisal.

3. What is your satisfaction level with the performance appraisal system in M.L. Company?

TABLE: 3

70

OPINION

EXCELLENT

NO. OF RESPONDENTS

PERCENTAGE

60

60

23

23

AVERAGE

17

17

TOTAL

100

100

GOOD

CHART: 3

INTERPRETATION:
From this above chart indicates that 60% of respondents are expressed the satisfaction
level is excellent in the organization. Where as 23% of respondents are good and 17% of
respondents are expressed average to the performance appraisal in the M.L Company.

4. Do you think performance appraisal is essential?

TABLE: 4

71

NO. OF RESPONDENTS
OPINION

H
RT
4

PERCENTAGE

YES

87

87

NO

13

13

TOTAL

100

100

C
A
:

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 87% of respondents are
expressed that the performance appraisal system is essential where as 13% of respondents are the
responded that the performance appraisal system is some extent not essential in the organization.

5. Do you think that performance appraisal conducted periodically?

TABLE: 5

72

NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

70

70

NO

30

30

TOTAL

100

100

CHART: 5

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 70% of respondents are
expressed the performance appraisal is conducted periodically. Where as 30% of employees are
feel that the performance appraisal is not to be conducted periodically.

6. Periodicity of performance appraisal should be on

73

TABLE: 6
OPINION

NO. OF RESPONDENTS

QUARTERLY BASIS
HALF-YEARLY BASIS
ANNUAL BASIS
TOTAL

PERCENTAGE

13

13

11

11

76

76

100

100

CHART: 6

INTERPRETATION:
From the above chart indicates that 13% of respondents are feeling
performance should be on quarterly basis. Where as 11% of respondents feel about half-yearly
basis. And most of the respondents i.e., 76% of respondents are expressed their interest to annul
basis of the performance appraisal.

7. What is your opinion regarding performance appraisal system helps in identifying strengths
and weaknesses of an individual on his job?

74

TABLE: 7
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

80

80

NO

20

20

TOTAL

100

100

CHART: 7

INTERPRETATION:
From the above chart most of the respondents, i.e. 80% of respondents are
feel the performance appraisal system helps the identifying the strengths and weaknesses of an
individual on his job. Where as 20% of employees are feel about the performance appraisal
system is not fully identifying the strengths and weaknesses of individual on the job.

8. What is the present appraisal system which is used in your organization?

TABLE: 8

75

OPINION

NO. OF RESPONDENTS

PERCENTAGE

GRADING METHOD

60

60

CHECK LIST METHOD

20

20

BOTH

20

20

TOTAL

100

100

CHART: 8

INTERPRETATION:
The above chart indicates that most of the respondents, i.e. 60% of respondents are
expressed that the present appraisal system using grading method. And where as 20% of
respondents are expressed about check list method is used and 20% of respondents are expressed
that both the grading and check list methods are used in the organization.

9. What is the previous performance appraisal system in your organization?

TABLE: 9

76

CHART: 9

OPINION

NO. OF RESPONDENTS

PERCENTAGE

GRADING METHOD

30

30

CHECK LIST METHOD

20

20

BOTH

50

50

TOTAL

100

100

INTERPRETATION:
The above chart indicates that 30% of employees are said that previously the
organization used grading method and 20% of respondents are expressed check list method.
Most of the respondents are 50% of respondents are expressed both the grading method and
check list methods of performance appraisal used in the organization

77

10. In your opinion what is the basis of performance appraisal system?

TABLE: 10
OPINION

BEHAVIOUR

NO. OF RESPONDENTS

PERCENTAGE

10

10

PERFORMANCE

40

40

BOTH

50

50

TOTAL

100

100

CHART: 10

INTERPRETATION:
The above chart indicates that 10% of respondents are expressed the ir
view about the behavior is basis for performance appraisal and 40% of respondents are feeling
the performance of employee is basis for performance appraisal system. Where as most of the
respondents i.e. 50% of respondents are expressed the both behavior and performance are basis
for performance appraisal system.

78

11. Do you think performance appraisal system plays a role in advanced work plan?

TABLE: 11
NO. OF RESPONDENTS
OPINION

PERCENTAGE

STRONGLY AGREE

75

75

AGREE

15

15

10

10

100

100

DIS AGREE
TOTAL

CHART: 11

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 75% of respondents are
strongly agree to the performance appraisal system plays a key role in advanced work plan.
Whereas 15% of respondents are feel agree and 10% of respondents are expressed disagree about
performance appraisal system plays a role in advanced work plan.

79

12. What is your opinion regarding there is a link between organization goals and performance
appraisal system?

TABLE: 12
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

80

80

NO

20

20

TOTAL

100

100

CHART: 12

INTERPRETATION:
From the above chart 80% of respondents are expressed that the appraisal is
linked to the organization goal. 20% of respondents are expressed that there is no link between
the performance appraisal system and organization goals.

80

13. Performance feed back allows employees to improve their efficiency?

TABLE: 13
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

95

95

NO

TOTAL

100

100

CHART: 13

INTERPRETATION:
From the above chart most of the respondents i.e. 95% of respondents are
expressed performance feedback allows the employees to improving efficiency. Where as 5% of
employees are expressed the feedback is not allowed improving efficiency of individual.

81

14. Do you think counseling is essential for employees in connection with performance
appraisal?

TABLE: 14
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

100

100

NO

TOTAL

100

100

CHART: 14

INTERPRETATION:
From the above chart all of the respondents i.e. 100% of respondents expressed
that counseling is essential in connection with performance appraisal system in the Maddi
Lakshmaiah.Company Ltd.

15. What kind of counseling should be occurring in an organization?

82

TABLE: 15
NO. OF RESPONDENTS
OPINION

PERCENTAGE

FORMAL

80

80

IN FORMAL

20

20

100

100

TOTAL

CHART: 15

INTERPRETATION:
From the above chart 80% of respondents are expressed their interest about
formal counseling is essential. Whereas 20% of respondents are expressed Informal counseling
should be occur in an organization.

16. Does the organization provide training & development programs after appraising period?

83

TABLE: 16
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

100

100

NO

TOTAL

100

100

CHART: 16

INTERPRETATION:
From the above chart all of respondents are expressed that the organization is
providing the training and development programs after performance appraisal period.

17. Is Training & Development programs improving the quality work of the employees?

84

TABLE: 17
NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

70

70

NO

30

30

TOTAL

100

100

CHART: 17

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 70% of respondents
are expressed that the training and development programs improve the quality work of employee.
Where as 30% of respondents are expressed there is no any improvement of the quality of
employee with the T&D programs.

18. How is the present performance appraisal system in the organization?

85

TABLE: 18

NO. OF RESPONDENTS
OPINION

EXCELLENT

PERCENTAGE

60

60

GOOD

25

25

MODERATE

15

15

100

100

TOTAL

CHART: 18

INTERPRETATION:
From the above chart 60% of respondents are expressed that the present
performance appraisal system is excellent and 25% of respondents are expressed Good. Where as
15% of respondents are feeling present appraisal system is moderate in the organization.

19. Does your company giving a greater feedback after apprising of employee performance?

TABLE: 19
86

NO. OF RESPONDENTS
OPINION

PERCENTAGE

YES

90

90

NO

10

10

TOTAL

100

100

CHART: 19

INTERPRETATION:
The above chart indicates that the most of the respondents i.e. 90% of
respondents are expressed that the organization giving a greater feedback after appraising. Where
as 10% of respondents are expressed that the company has not giving a greater feedback after
appraising of employee performance.

20) What is your satisfaction level with the feed back of appraiser regarding your performance?

TABLE: 20
87

CHART: 20
NO. OF RESPONDENTS
OPINION

EXCELLENT

PERCENTAGE

60

60

GOOD

30

30

BETTER

10

10

TOTAL

100

100

INTERPRETATION:
The above chart indicates that most of the respondents i.e. 60% of respondents are
expressed their satisfaction level is excellent with the feedback. Where as 30% of respondents
are expressed their satisfaction level about feedback is good. And 10% of respondents are
expressed their satisfaction level with the feedback of appraiser regarding performance is better
in the organization.

FINDINGS
88

It was observed that most of the employees in MADDI LAKSMAIAH COMPANY


have the full awareness about performance appraisal system

It was observed that most of the employees have satisfied with annual performance
appraisal.

It was observed that most of the employees feeling the performance appraisal system is
very essential for identifying strengths and weaknesses.

It was observed that the M.L.Company has conducting performance appraisal system on
annual basis

It was observed that the M.L.Company is being used both the grading and check list
method of performance appraisal.

It was observed that most of the employees feel about counseling is essential for
employee in connection with performance appraisal system.

It was observed that for conducting of performance appraisal system. The organization is
considered not only the performance of the employee and also behavior aspects of the
employee.

It was observed that the performance appraisal helps in assessing the training needs of the
subordinates.

It was observed that the employee strongly believed that the training and development
programs will improve the quality of their works.

It was observed that most of the employees have satisfied with the present (check list
method and grading method) performance appraisal system.

89

SUGGESTIONS
Based on the findings of the study the following suggestions are recommended for
improving the performance of the employees and organization.
There is
a
need to modify the performance appraisal system in MADDI
LAKSHMAIAH & CO.LTD
The company should conduct performance appraisal system periodically like twice or
trice in a year.
The company should encourage participation of employees in their appraisal.
The M.L.Company must concentrate on personal counseling programs in addition to
formal counseling.
It is better to take another performance appraisal like 360 degree performance appraisal.
The organization need to increase the satisfaction level in giving of feedback to
employees regarding their performance.
The employees need to get the idea about the performance appraisal system helps in
identifying strengths and weaknesses of themselves on their work.

90

CONCLUSION
The Performance appraisal system plays an important role in the development of
human resource in every organization. The study reveals that majority of the employees are
having awareness about the performance appraisal conducted in their organization and they felt
that performance appraisal is helpful for the organization growth. The organization evaluates the
performance of the employees regarding their job knowledge and the quality of work. The
majority of employees are greater feedback on their performance.
The M.L. Company presently following for appraising Performance of the
employees is GRADING AND CHECK LIST METHODS and majority of the employees are
satisfied with the present appraisal system. Majority of the employees felt that the performance
appraisal system is useful for identifying their abilities, strengths and weaknesses. From the
study it is suggested that the company has to provide proper mechanism to convey the employee
suggestions to top management. It is better to evaluate the performance of the employees for
frequently. Then there is a probability of employees to improve their skills and knowledge in
their working conditions.

91

BIBLIOGRAPHY
Books:
Ahuja K.K
Amstrong.M

- Personal Management Publishers


-A Hand Book of Reward Management Practice

Becker B.E,Huselid M A, and Ulrich D The HR Scorecard-Linked People, Strategy and


Dwivedi RS

-Managing Human Resource Management in India

Eugene Mc Kenna and Nic BeechHuman Resource Management


Gary Dessler

- Human Resource Management

Jhon Ivancevich

- Human Resource Management

Ian Breadwell and Leen Holden


- Human Resource Management
Luis Gomez-mejia and David B Balkin and Robert L. Cardy
- Managing Human Resource Management
Mamoria CB and Gankar S V
- Personal Management
Websites:
www.google.com
http://appraisals.naukrihub.com/

92

Performance