CHAPTER I

INTRODUCTION

1.1. PERFORMANCE APPRAISAL SYSTEM:

Performance appraisals are also known as employee rating, employee evaluation,

performance review, performance evaluation and results appraisal. Performance appraisal
(PA) is one of the important components in the rational and systemic process of Human
Resource Management.

The information obtained through performance appraisal provides foundations

for recruiting and selecting new hires, training and development of existing staff, and
motivating and maintaining a quality work force by adequately and properly rewarding
their performance. Without a reliable performance appraisal system, a human resource
management system falls apart, resulting in the total waste of the valuable human assets a
company has.

There are two primary purposes of performance appraisal: evaluative and

developmental. The evaluative purpose is intended to inform people of their performance
standing. The collected performance data are frequently used to reward high performance
and to punish poor performance. The developmental purpose is intended to identify
problems in employees performing the assigned task. The collected performance data are
used to provide necessary skill training or professional development.

DEFINITION:

Performance appraisals are the process of evaluating how well employees

perform their jobs when compared to a set of standards and then communicating that to
employee. It is basically a systematic review of a person's work and achievement over a
recent period usually leading to plans for the future.

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 Performance appraisals are about the employee performance and accountability.
When it is done correctly, employees, their supervisors, the HR Department and
ultimately the organization benefit by ensuring the individual efforts contribute to the
strategic focus and productivity of the organization. They are influenced by other
activities of organization and in turn affect the organization's success.

For an organization this formal performance appraisal plans are designed to meet three
needs,

1. They provide systematic judgments to backup salary increase, transfer, demotion

and termination.
2. They are means of telling a subordinator how he is doing and suggesting needed
changes in his behavior, attitude, skills, or job knowledge.
3. The superior uses them as a basic for coaching and counseling the individual.

PROBLEM IN PERFORMANCE APPRAISAL

The problem with subjective measure is the rating which is not verifiable by
others and has the opportunity for bias. The rate biases include: (a) halo effect (b) the
error of central tendency, (c) the leniency and strictness biases (d) personal prejudice, and
(e) the recent performance effect.

Halo Effect: It is the tendency of the raters to depend excessively on the rating of one
trait or behavioral consideration in rating all others traits or behavioral considerations.
One way of minimizing the halo effect is appraising all the employees by one trait before
going to rate on the basis of another trait.

The error of Central Tendency: Some raters follow play safe policy in rating by rating
all the employees around the middle point of the rating scale and they avoid rating the
people at both the extremes of the scale. They follow play safe policy because of
answerability to management or lack of knowledge about the job and person he is rating
or least interest in his job.

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The Leniency and Strictness: The leniency bias crops when some raters have a
tendency to be liberal in their rating by assigning higher rates consistently. Such ratings
do not serve any purpose. Equally damaging one is assigning consistently low rates.

Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at
the lower end, which may distort the rating purpose and affect the career of these
employees.

The Recent performance Effect: The raters generally remember the recent actions, of
the employee at the time of rating and rate on the basis of these recent actions favorable
or unfavorable than on the whole activities.

Other factors that are considered as problems are

 Failure of the superiors in conducting performance appraisal and post

performance appraisal interview.
 Most part of the appraisal is based on subjectivity.
 Less reliability and validity of the performance appraisal techniques.
 Negative ratings affect interpersonal relations and industrial relations system.
 Influence of external environmental factors and uncontrollable internal factors.
 Feedback and post appraisal interview may have a setback on production.
 Management emphasizes on punishment rather than development of an employee
in performance appraisal.
 Some ratings particularly about the potential appraisal are purely based on guess
work.

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BENEFITS OF APPRAISAL

Benefits for the employee:

 Gaining a better understanding of their role.

 Understanding more clearly how and where they fit in within the wider picture.

 A better understanding of how performance is assessed and monitored.

 Getting an insight into how their performance is perceived.

 Improving understanding of their strengths and weaknesses and developmental

needs.

 Identifying ways in which they can improve performance.

 Providing an opportunity to discuss and clarify developmental and training needs.

 Understanding and agreeing their objectives for the next year.

 An opportunity to discuss career direction and prospects.

Benefits to the line manager/supervisor/team leader:

 Opportunities to hear and exchange views and opinions away from the normal
pressure of work.

 An opportunity to identify any potential difficulties or weaknesses

 An improved understanding of the resources available

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  An opportunity to plan for and set objectives for the next period

 An opportunity to think about and clarify their own role

 An opportunity to plan for achieving improved performance

 An opportunity to plan for further delegation and coaching

 An opportunity to motivate members of the team.

Benefits to the organization:

 A structured means of identifying and assessing potential

 Up-to-date information regarding the expectations and aspirations of employees

 Information on which to base decisions about promotions and motivation

 An opportunity to review succession planning

 Information about training needs which can act as a basis for developing training
plans

PURPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practiced in 90% of the organizations worldwide.

Self-appraisal and potential appraisal also form a part of the performance appraisal
processes. The purpose of performance appraisal must be clearly communicated both to

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raters and rates, because their reactions to the appraisal process are significantly different
depending on the intended purpose.

There are two primary purposes of performance appraisal: evaluative and

developmental. The evaluative purpose is intended to inform people of their performance
standing. The collected performance data are frequently used to reward high performance
and to punish poor performance.

The developmental purpose is intended to identify problems in employees

performing the assigned task. The collected performance data are used to provide
necessary skill training or professional development.

Typically, Performance Appraisal is aimed at:

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

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

 To help the management in exercising organizational control.

 To diagnose the training and development needs of the future

 Provide information to assist in the HR decisions like promotions, transfers
etc.
 Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
 To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.
 To reduce the grievances of the employees.

 Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

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METHODS OF PERFORMANCE APPRAISAL

TRADITIONAL METHODS

1. Essay Appraisal Methods

This traditional form of appraisal, also known as “Free Form method” involves a
description of the performance of an employee by his superior. The description is an
evaluation of the performance of any individual based on the facts and often includes
examples and evidences to support the information. A major drawback of the method is
the inseparability of the bias of the evaluator.

2. Straight Ranking Method

This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis of
their overall performance. It is quite useful for a comparative evaluation.

3. Paired Comparison Method

A better technique of comparison than the straight ranking method, this method
compares each employee with all others in the group, one at a time. After all the
comparisons on the basis of the overall comparisons, the employees are given the final
rankings.

4. Critical Incident Method

In this method of Performance appraisal, the evaluator rates the employee on the
basis of critical events and how the employee behaved during those incidents. It includes

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both negative and positive points. The drawback of this method is that the supervisor has
to note down the critical incidents and the employee behaviour as and when they occur.

5. Field Review

In this method, a senior member of the HR department or a training officer

discusses and interviews the supervisors to evaluate and rate their respective
subordinates. A major drawback of this method is that it is a very time consuming
method. But this method helps to reduce the superiors’ personal bias.

6. Checklist Method

The rater is given a checklist of the descriptions of the behaviour of the

employees on job. The checklist contains a list of statements on the basis of which the
rater describes the on the job performance of the employees.

7. Graphic Rating Scale

In this method, an employee’s quality and quantity of work is assessed in a

graphic scale indicating different degrees of a particular trait. The factors taken into
consideration include both the personal characteristics and characteristics related to the
on-the-job performance of the employees. For example a trait like Job Knowledge may
be judged on the range of average, above average, outstanding or unsatisfactory.

8. Forced Distribution

To eliminate the element of bias from the rater’s ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal distribution
curve. The rater chooses the appropriate fit for the categories on his own discretion.

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MODERN METHOD

1. Assessment Centres

An assessment centre typically involves the use of methods like social/informal

events, tests and exercises, assignments being given to a group of employees to assess
their competencies to take higher responsibilities in the future. Generally, employees are
given an assignment similar to the job they would be expected to perform if promoted.
The trained evaluators observe and evaluate employees as they perform the assigned jobs
and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonal
skills, intellectual capability, planning and organizing capabilities, motivation, career
orientation etc. assessment centres are also an effective way to determine the training and
development needs of the targeted employees.

2. Behaviorally Anchored Rating Scales

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique

which combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities like
inter-personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.

In this method, an employee’s actual job behavior is judged against the desired
behavior by recording and comparing the behavior with BARS. Developing and
practicing BARS requires expert knowledge.

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 3. Human Resource Accounting Method

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

CHALLENGES OF PERFORMANCE APPRAISAL

In order to make a performance appraisal system effective and successful, an

organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:

 Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the
top management. The performance data to be considered for evaluation should be
carefully selected. For the purpose of evaluation, the criteria selected should be in
quantifiable or measurable terms.

 Create a Rating Instrument

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 The purpose of the Performance appraisal process is to judge the performance of
the employees rather than the employee. The focus r of the system should be on the
development of the employees of the organization.

 Lack of Competence

Top management should choose the raters or the evaluators carefully. They
should have the required expertise and the knowledge to decide the criteria accurately.
They should have the experience and the necessary training to carry out the appraisal
process objectively.

 Errors in Rating and Evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait
influencing the evaluator’s rating for all other traits) etc. may creep in the appraisal
process. Therefore the rater should exercise objectivity and fairness in evaluating and
rating the performance of the employees

 Resistance
The appraisal process may face resistance from the employees and the trade
unions for the fear of negative ratings. Therefore, the employees should be communicated
and clearly explained the purpose as well the process of appraisal. The standards should
be clearly communicated and every employee should be made aware that what exactly is
expected from him/her.

APPROACHES TO PERFORMANCE DEVELOPMENT

Traditional Approach

Traditionally, performance appraisal has been used as just a method for

determining and justifying the salaries of the employees. Than it began to be used a tool

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for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past
performance of the employees.

This approach was a past oriented approach which focused only on the past
performance of the employees i.e. during a past specified period of time. This approach
did not consider the developmental aspects of the employee performance i.e. his training
and development needs or career developmental possibilities.

The primary concern of the traditional approach is to judge the performance of

the organization as a whole by the past performances of its employees. Therefore, this
approach is also called as the overall approach. In 1950s the performance appraisal was
recognized as a complete system in itself and the Modern Approach to performance
appraisal was developed.

Modern Approach

The modern approach to performance development has made the performance

appraisal process more formal and structured. Now, the performance appraisal is taken as
a tool to identify better performing employees from others, employees’ training needs,
career development paths, rewards and bonuses and their promotions to the next levels.

Appraisals have become a continuous and periodic activity in the organizations.

The results of performance appraisals are used to take various other HR decisions like
promotions, demotions, transfers, training and development, reward outcomes. The
modern approach to performance appraisals includes a feedback process that helps to
strengthen the relationships between superiors and subordinates and improve
communication throughout the organization.

The modern approach to Performance appraisal is a future oriented approach and

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is developmental in nature. This recognizes employees as individuals and focuses on their
development.

PRE-REQUISITES FOR EFFECTIVE & SUCCESSFUL

PERFORMANCE APPRAISAL

 Documentation – means continuous noting and documenting the performance. It also

helps the evaluators to give a proof and the basis of their ratings.

 Standards / Goals – the standards set should be clear, easy to understand, achievable,
motivating, time bound and measurable.

 Practical and simple format - The appraisal format should be simple, clear, fair and
objective. Long and complicated formats are time consuming, difficult to understand, and
do not elicit much useful information.
 Evaluation technique – An appropriate evaluation technique should be selected; the
appraisal system should be performance based and uniform. The criteria for evaluation
should be based on observable and measurable characteristics of the behavior of the
employee.

 Communication – Communication is an indispensable part of the Performance

appraisal process. The desired behavior or the expected results should be communicated
to the employees as well as the evaluators. Communication also plays an important role
in the review or feedback meeting. Open communication system motivates the employees
to actively participate in the appraisal process.

 Feedback – The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the employees
and the manner of giving feedback should be such that it should have a motivating effect
on the employees future performance.

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 Personal Bias – Interpersonal relationships can influence the evaluation and the
decisions in the performance appraisal process. Therefore, the evaluators should be
trained to carry out the processes of appraisals without personal bias and effectively.

PROCESS OF PERFORMANCE APPRAISAL

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.

Communicating the Standards

Once set, it is the responsibility of the management to communicate the standards

to all the employees of the organization. The employees should be informed and the
standards should be clearly explained to the. This will help them to understand their roles
and to know what exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the standards can also
be modified at this stage itself according to the relevant feedback from the employees or
the evaluators.

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

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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.
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.

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Discussing Result

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.

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.

RECENT DEVELOPMENTS

Performance Appraisal are practically Improved and it include

 Change in the approach to performance management.

 Emphasis in documentation.
 Collaboration performance management.
 Customized performance management system.

Thus the performance management comprises process and activities involved

in Performance Appraisals. It was widely discussed and was the best and most useful
themes in the international society for training and development. Performance
Improvement seems to be a refreshing approach.

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1.2. COMPANY PROFILE

ROSUN –OVERVIEW

The saga that began in the mid 80’s saw a small MS ingot manufacturing
company grow leaps and bounds through vertical integration. With the enterprising vision
of Sri Ravichandran.R, technocrat-agriculturist turned industrialist, Rosun was born to
produce world class construction related Iron & Steel products. From there, the
visionary’s empire grew to the state-of-the-art rolling mills & Sponge Iron Manufacturing
unit with integrated power plant

ROSUN GROUP of companies was founded in 1994 by

Shri.R.RAVICHANDRAN, A legend in his own style for his uncommon vision. Shri. R.
RAVICHANDRAN has steel industry experience since 1985, when he first promoted an
Induction furnace along with his partners.

The strong foundation laid down by his extraordinary business acumen and
uncompromising integrity has given the group a strong set of values and fundamentals.
After having been a blazing success in the past decade the group has held the values
closer than ever and has forced more on it's core business strengths surpassing
conventional paradigms and setting new benchmarks.

Under the leadership of Shri. R. RAVICHANDRAN, today, the company has

become on the of the most respected family business houses with an annual turnover
exceeding Rs.50 Crores. ROSUN TMT bars have been certified to be world class by ISO
1786 and the only certified brand in South India for 8, 10, 12, 16 and 20mm TMT bars.

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GROUP OF COMPANIES

 Sri Varahiamman Steels Private Limited, Coimbatore, Tamilnadu.

 Rosvar Steel Private Limited, (Unit-I) Coimbatore, Tamilnadu.
 Rosvar Steels Private Limited (Unit-II) Coimbatore, Tamilnadu.
 Rosvar Iron And Power Limited, Hospet, Bellary Dist., Karnataka

The group's strong vision has given it the right direction and ever-increasing urge
to grow. It is the vision that is leading the ROSUN GROUP to new horizons, expanding
and diversifying to new scales in the steel re-rolling industry and cutting edge
technologies.

ROSVAR STEELS LTD., and S.V.A. STEEL RE-ROLLING MILLS LTD.,

are group companies of ROSUN GROUP and its re-rolling mills are readying for ISO
9001 Certification and its products are accredited by the Bureau of Indian Standards
(BIS) ISI License holder IS: 1786. ROSVAR has now adopted Tem core technology for
the production of TMT Rebar’s.

ROVAARIS is a member firm of ROSUN Group of Companies. At Rovaaris it

is understood that every organization relies on their own unique strengths to overcome
industry challenges and competitive needs. Rovaaris is a business partner which will
work to understand individual needs, build on the strengths while improving, re-
designing or aligning the processes to overcome industry challenges.

Simply put, they provide BPO services as a spectrum of integrated services

designed to reduce the costs, improve the quality of the core competencies and profitably
grow the business. Its flexible and innovative solutions are designed to assist in as many
or few areas as needed, and are modeled to expand the business as the needs increase.

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TECHNOLOGY AND INFRASTRUCTURE

ROSUN TMT bars are produced using the world’s most advanced technology.
After the finishing stand the at high temperature are passed through Quenching system (a
predetermined quantity of high pressure). The instant cooling tempers the outer surface
and becomes very hard. Then it involves cooling at ambient temperature that allows the
hot core to temper the surface through thermal exchange. So thus it makes stronger, more
flexible and better suited for construction.

PRODUCT PROFILE

Products
TMT Deformed Bars
MS Round Bars
MS Angles
MS Flats
MS Sections, etc....

SPECIAL FEATURES OF TMT BARS

 Higher strength with better elongation.

 Excellent weld-ability.
 Resistant to fire hazards.
 Excellent ductility.
 Easy work-ability at site
 Better bonding strength.
 Better corrosion resistance.

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ROSUN QUALITY ASSURANCE

With so many consumers relying on their products, it becomes imperative for

them to maintain a strict quality standard. And that’s why they are committed to quality
management. Their in-house quality assurance division is fully equipped to test
everything from incoming raw materials to the finished products. An elaborate system
has been set up to ensure that each and every component right from raw materials to
finished product is tested before being used/dispatched

The activities of the quality assurance division are governed by highly skilled
metallurgists and technicians and involve an elaborate three-stage inspection system to
minimize incidence of error. Sophisticated testing facilities, deep commitment to
excellence and continuous improvement efforts enable us to produce the best quality of
steel in tune with exact standard require.

Quality conscious buyers now look for more tensile strength with high ductility
with the world standards in the materials they choose. Thus was ROSUN TMT, the need
to develop a world class technology that would give customers value for money.

ROSUN TMT ADVANTAGES

 Earthquake Resistance

For earthquake resistance structure need to be provided with balanced stiffness,

strength and ductility between its members, connection and support. ROSUN TMT Bars
provide very high strength with comparatively higher elongation values along with better
ductility as compared to other Rebars. Better Weldability of TMT bars helps in making
high strength connections with the other sections with little overlap.

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  Heat Resistance

In ROSUN TMT Bars, tested results have shown loss of strength up to 500 degree
celcious. In the temperature range 550 to 600 degree celcious the yield strength decreases
20N/sq.mm.only. Hence the TMT Bars can be used in places prone to fire hazards. In
CTD Bars there is large loss of strength at elevated temperatures.

 Corrosion Resistance

ROSUN TMT Bars have better Corrosion Resistance property than normal
CTD Bars. In TMT Bars the fine layer of scale forms protective layer thereby
preventing further corrosion, whereas, in CTD Bars, this initial layer falls down during
the Twisting process. Corrosion Resistance can be further improved as per the
requirement of the customer by altering the material chemistry.

SRI VARAHIAMMAN STEELS PRIVATE LIMITED

It was started as Training Institute in the Advanced Technological areas in

Electronics and further enhanced its activities towards Design and Product development.
It is now one of the state-of-the-art modern rolling mills in the entire South India. The
unit is capable of producing wide range of TMT Bars and Wire Rod Coils.

Varahi embedded, an embedded software\Hardware design and development

Company incorporated in the year 2002 as a part of the Pioneer group of Company-
Rosun Group engaged in Steel Manufacturing for the last fifteen years. The state of the
art Research and Development center ensures that the employees have at their disposal all
the resources needed to provide the best possible services to the clients. It aims to provide
with a competitive advantage through timely delivery of high quality and cost effective
Hardware\Software solution to the clients.

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 Our Company strives to become a one-stop shop for our client's entire spectrum
of Software\Hardware Design and Development Information requirements. This ensures
that our client can depend on a Single reliable partner for all their aspects of product
development. Our Portfolio of services includes,

 Existing Product Development

 Concept to product development

 Custom Build product development

 Product Re-Engineering

 Adapting new technology in Old products

 Support Services and consulting

 PCB Design Development

The company takes all efforts to bring the best Technical Professional with
complementary skill set, expertise and experience. The management comprises
Executives having Years of experience in the technical aspects of product development
based on the latest Technology and makes the whole product cost effective. It always
employs the services of specialized R & D personnel whose sole purpose is to research in
emerging technologies and incorporate them for better solution.

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IMMEDIATE FUTURE

 Marching towards 500 Crores.

 A Wire rod, Structural and TMT Rod mills.
 A block Mill.
 Thermal Power Plant.
 Wind power.

STRENGTHS OF THE COMPANY

 Our Young team of Management and Staff are fully aware of the Vision of our
Company and work together as a team to achieve our goals
 The Capability to change as per the timings has been a constant happening within
the company without difficulty enabling the progress in development and growth
 Our Continuous training programs and Open door policy sustains transparency
throughout the system.

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1.3 OBJECTIVES OF THE STUDY

 To study the Performance Appraisal system in SRI VARAHIAMMAN STEELS

PRIVATE LIMITED.

 To analyze the level of satisfaction of employees regarding the Performance

Appraisal system.

 To analyze the impact of various regarding factors the Performance Appraisal

System.

 To study the outcomes of Performance Appraisal System in SRI

VARAHIAMMAN STEELS PRIVATE LIMITED.

 To study the self motivation of employees in Performance Appraisal System

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1.4. NEED OF THE STUDY

One of the most talked about subjects in corporate circles, in recent times, is how
to maintain a satisfied workforce. An efficient and satisfied workforce is the most
significant factor in the organization effectiveness and management excellence.

In the recent past employee turnover has been increasing and at this juncture,
finding out the new employees, will be of great help to management. In order to fulfill the
needs like training, development, promotions, transfer, incentives, bonus and other non
monetary aspects.

Management needs information on the new needs of the employee’s in order to

make sound decision both prevailing and solving employee’s problem.

1.5. LIMITATIONS

 Since the time adopted for the study is short, it is also a constraint.

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  The sample size is restricted to 100.
 Few respondents felt that their views would be exposed to the management and
their view might be slightly biased.
 It is limited only to SRI VARAHIAMMAN STEELS PRIVATE LIMITED,
Coimbatore.
 The sampling is based on simple random so there may be bias in collecting the
data.

CHAPTER II
REVIEW OF LITERATURE

Strauss and Sayles (1980), examined that different appraisal systems rate
different factor. An effective performance appraisal program provides management with
a rational basis for determining who should be promoted or receives salary increase.

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Performance appraisal can also be used as a spring board for coaching managers and for
helping set goals for their own development.

De Cenzo and Robbins (1993), stated that performance appraisals need not be as
stressful or threatening as they are with proper preparation and a few key criteria in place,
the performance appraisal process can be enhanced. However, we can expect to reap its
enhancement only after we make this transition towards more participative performance
appraisals; ones that focus not solely on performance, but also on personal development.

The most commonly used frequency in appraisal is on yearly basis .This trend is
in tune with the earlier studies quoted (Gregerson 1996), where U.S multinational nave
been found to prefer the annual appraisal, which goes well with usage of the standardized
format of performance appraisal.

Cole (1998), stated that in performance Appraisal the communication between the
appraiser and appraisee should increase. The appraiser should know more and more about
the circumstances under which his appraisee is working, the difficulties he is
experiencing and contribution he is making. The appraisee should also understand how
he himself is responsible for some achievements or non-achievements. To meet the
objectives at the end of the year the appraisee reflects about his performance and
identifies factors that helped him in doing whatever he has done and factors that
prevented him from doing better.

Ashwathappa (1999), suggested that assessment should not be confined to past

performance alone. Potential of the employees for future performance must also be
assessed. Under some conditions it may be desirable to appraise performance both at
work group level for merit pay increases and at individual level to assess training needs.

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 Rao (1999), has examined that Performance Appraisal practices in Indian
Organization are quite varied. They vary from almost “no appraisal” to a sophisticated
multipurpose, multi component based appraisal system. In some organization it is not
common to find that there is no formal mechanism of appraising performance. At the
other extremes there are organization that have Performance Appraisal that aim
simultaneously at different objectives like data generation for personnel decision like
reward, promotions, job rotation, transfers, etc.., are creation of new organization culture
of openness, trust, mutuality etc.., About 50% of organization seems to profess the
purpose of their appraisal as regulating employee behavior as well as developing
employee capabilities. About 30% of them still use appraisals only for controlling and
regulating employee behavior where as only 10% seem to use appraisals mainly for
development purpose.

Anurag Sharma (2000), states that performance appraisal is not effective

because firstly many organizations do not have clearly established corporate reviews.
Many managers, particularly in large organizations, routinely complete required forms,
which are then field and the subject not mentioned again until the next review period,
usually a year hence. Secondary another problem in many organizations is that the
process of performance evaluation lacks credibility. This usually due to the failure of
management to spell and clearly what aspects of the job are to be evaluated and to define
the standards against which performance is to be measured.

Casico (2000), suggested that the opportunity to participate in the performance

appraisal process, particularly if appraisal is combined with goal setting, improves the
ratees motivation and reduces his or her defensiveness during the appraisal interview. On
the other hand self appraisal tend to be more lenient, less variable and to show less
agreement with judgment of others.

- 28 -
 Edward Deming (2000), states that performance appraisal system is devas
tooling to individuals and destructive to organizations, appraisal rating system
nourishness shorts term performance, annihilated long term planning, builds fear,
demolishes team work, nourishness rivalry and politics. It leaves people bitter, crushed,
buised, battered, desolate, despondent, dejected and feeling inferior.

Srinivas R.Kandula and B.Hari Bapuji (2000), suggested that the focus must
shift from appraisal system to appraisal process. Organizations must make sincere efforts
to foster a climate where performance is appraised in its true spirit and in the context of
organizations. Spirit and in the context of organization appraisal system can continue its
existence in present form but those responsible must realize that punishing poor
performance is as important as rewarding good performance.

Rithesh Agarwal and Varun Gupta (2001), state that the appraiser should
convene an open meeting with the appraiser to discuss the performance of all employees
before, during and after performance review discussion. In such meetings, everyone
should be encouraged to comment on each others achievements and areas requiring
improvement. The idea behind proposing such a meeting is that an appraiser should be
given a chance to tell truth and reality to his subordinates. If he is confident that he has
been fair and objective while appraising, why not tell and take others in confidence about
what has made him rate the subordinate themselves would come to a consensus as to who
is the most eligible of them all to promoted and why there cannot be more than a specific
number of promotions.

To quote Appley (2003), Regardless of appraisal form or system used, an

appraisal cannot help but be more conscious of the individual appraisal and have a greater
interest in future. Again he says: It is impossible to look objectively at other without
stacking ourselves against same standards. All development work grows out of a
consciousness of individual’s assets, of his value of his potential power

- 29 -
 Rogers (2004), stated that external evaluations both positive and negative, do not
make for personal growth. An employee grows and becomes a self responsible person
only when he recognizes that the locus of evaluation lies within him and not outside that
he has free of judgment by others.

Mathis and Jackson (2005), stated that performance appraisal can answer
questions about whether the employer acted fairly or how the employer actually knew
that employees performance did not meet standards. Even though an employer
technically may not need a reason to terminate an employee, as a practical
matter,appraisal can provide justification for such actions should they became necessary.
Employees also benefit if appraisal help them know whether they need to improve even
after a positive appraisal.

Venkata Ratnam and Srivatsava (2005), stated that assessing potential is

different from appraising performance. Potential refers to the abilities but not currently
utilized or the ability to discharge higher responsibility in future roles. Performance refers
to ones behaviors, skills, abilities in meeting the requirements on job which are currently
hold.

CHAPTER III
RESEARCH METHODOLOGY

“Encyclopedia of social science defines research as the manipulation of

analyzing to extended, correct or verify knowledge”. Kerlinger defines “Research as a

- 30 -
systematic, controlled, empirical and critical investigation of hypothetical proportions
about the presume med relations among natural phenomena”

Research is an important part of any filed of study, It provides much more new
and current information. This chapter mainly discusses about the problems taken for his
study, title of the study, objective of the study, definitions for various terms used in this
study, methods of Research, way of data collection, difficulties faced by the Researcher
and pattern of the project.

Methodology is defined as specification of methods and procedures for acquiring

the information needed. It is a plan or frame work for doing and study and collecting the
data. The project is a study marked by prior formulation of research questions. The
investigator already knows the substantial amount about the research problem before the
project is initiated.

3.1 SAMPLING DESIGN

Sampling process of obtaining the information about an entire population by

examining only a part of it. For the purpose of this study the researcher has used the
simple random sampling method. The total population was dividing into groups and the
samples are collected randomly from these groups.

3.2 SOURCES OF DATA

Primary Data
The instrument used to collect primary data is well designed questionnaire. The
questionnaire consists of 24 questions which are close ended. The questionnaire is
properly constructed and properly set up.

- 31 -
Secondary Data
Secondary data are extracted from the files, registers, records obtained from the
personnel department.

3.3 SAMPLING PLAN

Population
The population of this study comprises a total of 200 employees in SRI
VARAHIAMMAN STEELS PRIVATE LTD.

Sampling Unit
The study was conducted with respect to worker of all departments.

Sampling Size
A total of 100 employees were selected for the study including both male and
female.

Sampling Procedure
The sample procedure adopted for the study was Simple Random Sampling
Method.

Research Instrument
Questionnaire is the research instrument through which primary data collected,
and it consisted of 24 closed end questions.

Pilot Study
A pilot study is conducted on a sample size 10, right at the beginning of the
survey. At the pilot study the researcher made a number of changes in the questionnaire,
which is seen as necessary. The changes are amended at this point to aid proper survey.

- 32 -
3.4 TOOLS AND TECHNIQUES USED FOR ANALYSIS

PERCENTAGE ANALYSIS

Percentage analysis is used to find the percentage values for all the different
questions used in making comparison between two or more series of data.

Percentage (%) = (Number of respondents /Total number of respondents)*100

CHI-SQUARE TEST

The chi-square test is also known as non parametric test or distribution free test.
The researcher has made use of Statistical Package of Social Science (SPSS 11.0) during
analysis of the collected data for calculating Chi-Square. It is used when it is impossible
to make any assumption about the populations or when the researcher is unable to
estimate the population parameters.

Chi Square = (O – E)2

CHAPTER IV
ANALYSIS AND INTERPRETATION

TABLE 1
TABLE SHOWING THE AGE OF THE RESPONDENT

- 33 -
 Age No. of Respondents Percent

20-30 53 53

30-40 32 32

40 Yrs and above 15 15

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 53% of the
respondents are in the age group of 20-30 years, 32% of them are 31-40 and 15% of
them are 40 years and above.

INFERENCE CHART 1
AGE OF THE RESPONDENT
This reveals that 53% of the employees are in the age group of 20-30. This shows
that the company has recruited more employees in the age group of 20-30 years.
60

50

40
Respondents

30

20

10

0
20-30 30-40 40 Yrs & above
Age

- 34 -
 TABLE 2
TABLE SHOWING THE GENDER OF THE RESPONDENT

Gender No. of Respondents Percent

- 35 -
 Male 82 82

Female 18 18

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 82% of them are male
employees and 18% of them are female employees.

INFERENCE
This reveals that 82% of them are male employees.

CHART 2
GENDER OF THE RESPONDENT

90
80
70
60
Respondents

50
40
30
20
10
0
Male Female
Gender

- 36 -
 TABLE 3
TABLE SHOWING THE DEPARTMENTS OF THE RESPONDENT

Department No. of Respondents Percent

- 37 -
 Administration 3 3

Finance 11 11

Stores 40 40

Production 8 8

Lab 23 23

Maintenance 10 10

Despatch 5 5

Total 100 100

INTERPRETATION
In the total strength of the respondent, it was found that 40% of the respondents
are from Stores department, 23% of them are from Lab section, 11% of them from
Finance department, 10% of them are from Maintenance department, 8% of them are
from Production department, 5% of them are from Despatch section and 3% of them are
from Administration department.

INFERENCE
This reveals that 40% of the employees are working in Stores department.

- 38 -
 CHART 3
DEPARTMENT OF THE RESPONDENTS

40

35

30

25
Respondents

20

15

10

Maintenance
Administration

Fnance

Stores

Production

Lab

Department despatch

TABLE 4
TABLE SHOWING THE MARITAL STATUS OF THE RESPONDENT

- 39 -
 Marital Status No. of Respondents Percent

Married 57 57

Unmarried 43 43

Total 100 100

INTERPRETATION
The above table shows that 57% of the respondents are married and 43% of them
are unmarried.

INFERENCE
This reveals that 57% of the employees are married.

- 40 -
 CHART 4
MARITAL STATUS

60

50
Respondents

40

30

20

10

0
Married Unmarried
Option

TABLE 5
TABLE SHOWING THE LENGTH OF SERVICE OF THE RESPONDENT

- 41 -
 Length of Service No. of Respondents Percent

< 2 Years 43 43

2-4 Years 27 27

5-7 Years 20 20

7 Years & Above 10 10

Total 100 100

INTERPRETATION
The above table infers that 43% of them have a length of service of < 2 years,
27% of them have served 2-4 years, 20% of them have 5-7 years of service and 10% of
them have above 7 years of service.

INFERENCE
This reveals that 43% of the employees have a length of service < 2 years.

- 42 -
 CHART 5
LENGTH OF SERVICE OF RESPONDENTS

45

40

35
Respondents

30

25

20

15

10

0
<2 Years 2-4 Years 5-7 Years 7 Years and
above
Length of Service

TABLE 6
TABLE SHOWING THE OPINION WHETHER THE RESPONDENT IS CLEAR
ABOUT THE NATURE OF JOB

- 43 -
 Opinion No. of Respondents Percent

Strongly Agree 33 33

Agree 40 40

Neutral 23 23

Disagree 4 4

Strongly Disagree - -

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 40% of the
CHART
respondents agree that they are clear 6 the nature of the job, 33% of the respondents
about
Clarity towards the Nature of the Job
strongly agree, 23% of them are neutral and 4% of them disagree

40
INFERENCE
35
This reveals that 40% of the employees agree that they are clear about the nature
30
of the job.
Respondents

25

20

15

10

0
Strongly Agree Agree Neutral Disagree
Opinion

- 44 -
 TABLE 7
TABLE SHOWING THE AWARENESS OF TARGETS AND OBJECTIVES
TOWARDS THE RESPONDENTS

- 45 -
 Opinion No. of Respondents Percent

Strongly Agree 32 32

Agree 40 40

Neutral 20 20

Disagree 5 5

Strongly Disagree 3 3

Total 100 100

INTERPRETATION
The above table shows that 40% of the respondents agree that they are aware of
the targets and objectives to be achieved, 32% of them strongly agree, 20% of them are
neutral towards it, 5% of them disagree and 3% of them strongly disagree.

INFERENCE
This reveals that 40% of the employees agree that they are aware of the targets
and objectives to be achieved.

- 46 -
 CHART 7
Awareness of Targets and Objectives

40

35

30
Respondents

25

20

15

10

0
Strongly Agree Neutral Disagree Strongly
Agree Agree
Opinion

TABLE 8
TABLE SHOWING THE ABILITY TO ACHIEVE TARGETS OF THE
RESPONDENT

- 47 -
 Opinion No. of Respondents Percent

Yes 78 78

No 22 22

Total 100 100

INTERPRETATION
The table infers that 78% of the respondents are able to achieve the targets and
22% of them are unable to achieve the targets.

INFERENCE
This reveals that 78% of the employees are able to achieve the targets.

- 48 -
 CHART 8
Ability to Achieve the Targets

80

70

60
Respondents

50

40

30

20

10

0
Yes No
Option

TABLE 9
TABLE SHOWING THE SATISFACTION TOWARDS THE WORK
ENVIRONMENT OF THE RESPONDENT

- 49 -
 Opinion No. of Respondents Percent

Highly Satisfied 24 24

Satisfied 51 51

Neutral 20 20

Dissatisfied 3 3

Highly Dissatisfied 2 2

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 51% of the
respondents are satisfied towards the work environment, 24% of them are highly
satisfied, 20% of them are neutral, 3% of them are dissatisfied and 2% of them are highly
dissatisfied.

INFERENCE
This reveals that 51% of the employees satisfied towards the work environment.

- 50 -
 CHART 9
Satisfaction towards Work Environment

60

50

40
Respondents

30

20

10

0
Highly Satisfied Neutral Dissatisfied Highly
Satisfied Satisfied
Opinion

TABLE 10
TABLE SHOWING THE OPINION REGARDING THE WORKLOAD OF THE
RESPONDENT

- 51 -
 Opinion No. of Respondents Percent

Over load 20 20

Sufficient 80 80

Less work load - -

Total 100 100

INTERPRETATION
The above table infers that 80% of the respondents have sufficient workload and
20% of the respondents workload is overloaded.

INFERENCE
This reveals that 80% of the employees have sufficient workload.

- 52 -
 CHART 10
Workload of the Respondents

80

70

60
Respondents

50

40

30

20

10

0
Overload Sufficient
Opinion

TABLE 11

- 53 -
 TABLE SHOWING THE SATISFACTION TOWARDS TRAINING OF THE
RESPONDENT

Opinion No. of Respondents Percent

Highly Satisfied 20 20

Satisfied 55 55

Neutral 25 25

Dissatisfied - -

Highly Dissatisfied - -

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 55% of the
respondents are satisfied towards the training provided in the concern, 25% of them are
neutral towards it and 20% of them are highly satisfied

INFERENCE
This reveals that 55% of the employees are satisfied towards the training
provided in the concern.

- 54 -
 CHART 11
Satisfaction towards Training

60

50

40
Respondents

30

20

10

0
Highly Satisfied Satisfied Neutral

Opinion

TABLE 12

- 55 -
 TABLE SHOWING THE EXTENT OF MISTAKE OF THE RESPONDENT
TOWARDS THE WORK

Opinion No. of Respondents Percent

Very Great Extent - -

Great Extent 5 5

Neutral 20 20

Some Extent 45 45

Never 30 30

Total 100 100

INTERPRETATION
The above table shows that 45% of the respondents do mistakes at some extent,
30% of them never make mistakes, 20% of them are neutral and 5% of them do mistake
at a great extent.

INFERENCE
This reveals that 45% of the employees do mistake towards the work at some
extent.

- 56 -
 CHART 12
Extent of Mistake towards Work

45

40

35

30
Respondents

25

20

15

10

0
Great Extent Neutral Some Extent Never
Opinion

TABLE 13

- 57 -
 TABLE SHOWING THAT MISTAKE AT WORK AFFECTS PERFORMANCE
RATING OF THE RESPONDENT

Opinion No. of Respondents Percent

Strongly Agree 25 25

Agree 55 55

Neutral 14 14

Disagree 6 6

Strongly Disagree - -

Total 100 100

INTERPRETATION
The above table infers that 55% of the respondents agree that mistakes at work
affects the performance rating, 25% of them strongly agree, 14% of them are neutral and
6% of them disagree.

INFERENCE
This reveals that 55% of the employees agree that mistakes at work affect the
performance rating.

- 58 -
 CHART 13
Mistake at Work Affects Performance Rating

60

50

40
Respondents

30

20

10

0
StronglyAgree Agree Neutral Disagree
Opinion

TABLE 14

- 59 -
TABLE SHOWING AWARENESS OF PERFORMANCE APPRAISAL SYSTEM
OF THE RESPONDENT

Opinion No. of Respondents Percent

Highly Aware 22 22

Aware 36 36

Neutral 34 34

Not Aware 10 10

Highly Not Aware 6 6

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 36% of the
respondents are aware of the performance appraisal system of the concern, 34% of them
are neutral, 22% of them are highly aware, 10% of them are not aware and 6% of them
are highly not aware.

INFERENCE
This reveals that 36 % of the employees are aware of the performance appraisal
system of the concern.

- 60 -
 CHART 14
Awareness of Performance Appraisal System

40

35

30
Respondents

25

20

15

10

0
Highly Aware Aware Neutral Not Aware Highly Not
Aware
Opinion

TABLE 15

- 61 -
TABLE SHOWING SATISFACTION TOWARDS THE PERFORMANCE RATE
OF THE RESPONDENT

Opinion No. of Respondents Percent

Highly Satisfied 30 30

Satisfied 60 60

Neutral 10 10

Dissatisfied - -

Highly Dissatisfied - -

Total 100 100

INTERPRETATION
The table shows that 60% of the respondents are satisfied towards the
performance rate, 30% of them are highly satisfied and 10% of them are neutral.

INFERENCE
This reveals that 60% of the employees are satisfied towards the performance
rate.

- 62 -
 CHART 15
Satisfaction towards Performance Rate

60

50

40
Respondents

30

20

10

0
Highly Satisfied Satisfied Neutral
Opinion

TABLE 16

- 63 -
 TABLE SHOWING THE EXTENT OF SUPERIOR’S ENCOURAGEMENT
TOWARDS PERFORMANCE LEVEL OF THE RESPONDENT

Opinion No. of Respondents Percent

Very Great Extent 17 17

Great Extent 23 23

Neutral 13 13

Some Extent 47 47

Never - -

Total 100 100

INTERPRETATION
The above table infers that 47% of the respondents were encouraged by the
superiors to some extent, 23% of them at great extent, 17% of them at a very great extent
and 13% of them are neutral.

INFERENCE
This reveals that 47% of the employees accept that the superiors encourage them
to some extent.

- 64 -
 CHART 20
Job Knowledge Factor to Measure the Performance

35

34

33
Respondents

32

31

30

29

28

27
Practical Skill Technical Ability Improved
performance
Opinion

TABLE 17

- 65 -
TABLE SHOWING WHETHER THE PRESENT PERFORMANCE APPRAISAL
SYSTEM MOTIVATES THE RESPONDENTS

Opinion No. of Respondents Percent

Strongly Agree 29 29

Agree 43 43

Neutral 18 18

Disagree 10 10

Strongly Disagree - -

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 43% of the
respondents agree that the present performance appraisal system motivate to improve
their performance, 29% of them strongly agree, 18% of them are neutral and 10% of
them disagree.

INFERENCE
This reveals that 43% of the employees agree that the present performance
appraisal system motivate to improve their performance.

- 66 -
 CHART 17
Motivation of Present Performance System towards Work

45

40

35
Respondents

30

25

20

15

10

0
Strongly Agree Agree Neutral Disagree
Opinion

TABLE 18

- 67 -
 TABLE SHOWING THE CONDUCT FACTORS TO MEASURE THE
PERFORMANCE OF RESPONDENT

Opinion No. of Respondents Percent

Attendance 12 12

Discipline 28 28

Co-operation with 38 38
superiors

Attitude towards concern 19 19

None 3 3

Total 100 100

INTERPRETATION
The above table infers that 38% of the respondents prefer co-operation with the
superiors as the conduct factor to measure the performance, 28% of them prefer
discipline, 19% of them prefer attitude towards concern, 12% of them prefer attendance
and 3% of them has preferred none.

INFERENCE
This reveals that 38% of the employees prefer co-operation with the superiors as
the conduct factor to measure the performance.

- 68 -
 CHART 18
Conduct Factor to Measure the Performance

40
35
30
Respondents

25
20
15
10
5
0
Attendance Discipline Co-operation Attitude None
with towards
Superiors cocern
Opinion

TABLE 19

- 69 -
 TABLE SHOWING THE WORK FACTOR TO MEASURE THE
PERFORMANCE OF RESPONDENT

Opinion No. of Respondents Percent

Quantity 20 20

Quality 39 39

Willingness to accept 33 33
responsibility

Economy in use of 8 8
materials

None - -

Total 100 100

INTERPRETATION
The above table infers that 39% of the respondents prefer quality as the work
factor to measure the performance, 33% of them prefer willingness to accept
responsibility, 20% of them prefer quantity and 8% of them have preferred economy in
use of material.

INFERENCE
This reveals that. 39% of the employees prefer quality as the work factor to
measure the performance.

- 70 -
 CHART 19
Work Factors to Measure the Performance

40

35

30
Respondents

25

20

15

10

0
Quantity Quality Willingness to Economy in use
Accept of Materials
Responsibility
Opinion

TABLE 20

- 71 -
 TABLE SHOWING THE JOB KNOWLEDG E FACTOR TO MEASURE THE
PERFORMANCE OF RESPONDENT

Opinion No. of Respondents Percent

Practical skill 35 35

Theoretical knowledge - -

Technical ability 30 30

Improved performance 35 35

None - -

Total 100 100

INTERPRETATION
The above table shows that 35% of the respondents prefer practical skill as the
job knowledge factor to measure the performance, 35% of them prefer improved
performance and 30% of them have preferred technical ability.

INFERENCE
This reveals that 35% of the employees have preferred both practical skill and
improved performance as the job knowledge factor to measure the performance.

- 72 -
 CHART 20
Job Knowledge Factor to Measure the Performance

35

34

33
Respondents

32

31

30

29

28

27
Practical Skill Technical Ability Improved
performance
Opinion

TABLE 21

- 73 -
 TABLE SHOWING THE OPINION OF RESPONDENT TOWARDS THE
OUTCOME OF PERFOMANCE APPRAISAL FOR GOOD PERFORMANCE

Opinion No. of Respondents Percent

Promotion 39 39

Increment 32 32

Special rewards 19 19

Incentives 10 10

None - -

Total 100 100

INTERPRETATION
The above table infers that 39% of the respondents prefer promotion as the
outcome of performance appraisal for a good performance, 32% of them prefer
increment, 19% of them prefer special rewards and 10% of them prefer incentives.

INFERENCE
This reveals that 39% of the employees have preferred promotion as the outcome
of performance appraisal for a good performance

- 74 -
 CHART 21
Outcome of Performance Appraisal for Good
Performance

40

35

30

25
Respondents

20

15

10

0
Promotion Increment Special Incentives
rewards
Opinion

TABLE 22

- 75 -
 TABLE SHOWING THE OPINION OF RESPONDENT TOWARDS THE
OUTCOME OF PERFOMANCE APPRAISAL FOR MEDIOCRE
PERFORMANCE

Opinion No. of Respondents Percent

Counseling 28 28

Warning 18 18

Training 42 42

Transfer 13 13

None - -

Total 100 100

INTERPRETATION
The above table infers that 42% of the respondents prefer training as the outcome
of performance appraisal for a mediocre performance, 28% of them prefer counseling,
18% of them prefer warning and 13% of them prefer transfer.

INFERENCE
This reveals that 42% of the employees prefer training as the outcome of
performance appraisal for a mediocre performance

- 76 -
 CHART 22
Outcome of Performance Appraisal for Mediocre
Performance

45

40

35
Respondents

30

25

20

15

10

0
Counseling Warning Training Transfer
Opinion

TABLE 23

- 77 -
 TABLE SHOWING THE OPINION OF RESPONDENT TOWARDS THE
OUTCOME OF PERFOMANCE APPRAISAL FOR BAD PERFORMANCE

Opinion No. of Respondents Percent

Disciplinary action 47 47

Demotion 12 12

Termination 18 18

Warning 23 23

None - -

Total 100 100

INTERPRETATION
The above table infers that 47% of the respondents prefer disciplinary action as
the outcome of performance appraisal for a bad performance, 23% of them prefer
warning, 18% of them prefer termination and 12% of them prefer demotion.

INFERENCE
This reveals that 47% of the employees have preferred disciplinary action as the
outcome of performance appraisal for a bad performance.

- 78 -
 CHART 23
Outcome of Performance Appraisal for Bad Performance

50
45
40
35
Respondents

30
25
20
15
10
5
0
Disciplinary Demotion Termination Warning
Action
Opinion

TABLE 24

- 79 -
 TABLE SHOWING THE OPINION OF RESPONDENT TOWARDS THE
IMPROVEMENT OF PERFOMANCE LEVEL THROUGH THE OUTCOMES
OF PERFORMANCE APPRAISAL

Opinion No. of Respondents Percent

Strongly Agree 28 28

Agree 41 41

Neutral 20 20

Disagree 11 11

Strongly Disagree - -

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table shows that 41% of the
respondents agree towards the improvement of performance level through the outcomes
of performance appraisal, 28% of them agree, 20% of them are neutral and 11% of them
disagree.

INFERENCE
This reveals that 41% of the employees agree towards the improvement of
performance level through the outcomes of performance appraisal.

- 80 -
 CHART 24
Improvement of Performance level through the Outcmes
of Performance Appraisal

45
40
35

30
Respondents

25

20
15
10

5
0
Strongly Agree Agree Neutral Disagree
Opinion

TABLE 25

- 81 -
 TABLE SHOWING SATISFACTION TOWARDS THE OUTCOMES OF
PERFORMANCE APPRAISAL PROVIDED BY THE CONCERN

Opinion No. of Respondents Percent

Highly Satisfied 27 27

Satisfied 38 38

Neutral 25 25

Dissatisfied 10 10

Highly Dissatisfied - -

Total 100 100

INTERPRETATION
The above table shows that 38% of the respondents are satisfied towards the
outcomes of performance appraisal provided by the concern, 27% of them are highly
satisfied, 25% of them are neutral and 10% of them are dissatisfied.

INFERENCE
This reveals that 38% of the employees are satisfied towards the outcomes of
performance appraisal provided by the concern.

- 82 -
 CHART 25
Satisfaction towards the Outcomes of Performance
Appraisal

40

35

30
Respondents

25

20

15

10

0
Highly Satisfied Satisfied Neutral Dissatisfied
Opinion

TABLE 26

- 83 -
 TABLE SHOWING THE SATISFACTION TOWARDS THE OVERALL
PERFORMANCE APPRAISAL SYSTEM

Opinion No. of Respondents Percent

Highly Satisfied 31 31

Satisfied 44 44

Neutral 22 22

Dissatisfied 3 3

Highly Dissatisfied - -

Total 100 100

INTERPRETATION
The above table shows that 44% of the respondents are satisfied towards the
overall performance appraisal system, 31% of them are satisfied, 22% of them are neutral
and 3% of them are dissatisfied.

INFERENCE
This reveals that 44% of the employees are satisfied towards the overall
performance appraisal system.

- 84 -
 CHART 26
Satisfaction towards Overall Performance Appraisal System

45
40
35
30
Respondents

25
20
15
10
5
0
Highly Satisfied Neutral Dissatisfied
Satisfied
Opinion

TABLE 27

- 85 -
 TABLE SHOWING THE OPINION OF RESPONDENT TOWARDS THE SELF
MOTIVATION OF PERFORMANCE APPRAISAL SYSTEM

Opinion No. of Respondents Percent

Strongly Agree 25 25

Agree 33 33

Neutral 18 18

Disagree 15 15

Strongly Disagree 9 9

Total 100 100

INTERPRETATION
The above table shows that 33% of the respondents agree that the outcomes of
performance appraisal improve the performance level, 25% of them prefer strongly agree,
18% of them are neutral, 15% of them disagree and 9% of them strongly disagree.

INFERENCE
This reveals that 33% of the employees agree that the outcomes of performance
appraisal improve the performance level

- 86 -
 SELF MOTIVATIONOF PERFORMANCE APPRAISAL
SYSTEM

35

30

25

20

15
R
d
n
o
p
s
e
t

10

0
Strongly Agree Neutral Disagree Strongly
Agree Disagree
Opinion

TABLE 28

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 TABLE SHOWING SATISFACTION TOWARDS MONETARY BENEFITS

Opinion No. of Respondents Percent

Highly Satisfied 16 16

Satisfied 34 30

Neutral 28 32

Dissatisfied 12 12

Highly Dissatisfied 10 10

Total 100 100

INTERPRETATION
The above table infers that 34% of the respondents are satisfied towards the
monetary benefits, 28% of them are neutral, 16% of them are highly satisfied, 12% of
them are dissatisfied and 10% of them are highly dissatisfied.

INFERENCE
This reveals that 34% of the employees are satisfied towards the monetary
benefits

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 CHART 28
Satisfaction Towards Monetary Benefits

35

30

25
Respondents

20

15

10

0
Highly Satisfied Neutral Dissatisfied Highly
Satisfied Dissatisfied
Opinion

TABLE 29

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 TABLE SHOWING SATISFACTION TOWARDS THE NON-MONETARY
BENEFITS

Opinion No. of Respondents Percent

Highly Satisfied 26 26

Satisfied 37 37

Neutral 20 20

Dissatisfied 11 11

Highly Dissatisfied 6 6

Total 100 100

INTERPRETATION
In the total strength of the respondent, the table infers that 37% of the
respondents are satisfied towards the non-monetary benefits, 26% of them are highly
satisfied, 20% of them are neutral, 11% of them are dissatisfied and 6% of them are
highly dissatisfied.

INFERENCE
This reveals that 37% of the employees are satisfied towards the non-monetary
benefits.

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 CHART 29
S a tisfa c ti o n to w a rd s N o n -M o n e ta ry B e n e fi ts

40

35

30

25
Respondents

20

15

10
5

0
H ig h ly S a tis fie d N e u tra l D is s a tis fie d H ig h ly
S a tis fie d D is s a tis fie d
O p in io n

CHI-SQUARE ANALYSIS

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 TABLE 30

ASSOCIATION BETWEEN THE EMPLOYEE’S AGE GROUP AND

SATISFACTION TOWARDS WORK ENVIRONMENT

Aim: To find out the relationship between the employees age group and satisfaction
towards work environment.

Null Hypothesis: The employees age and satisfaction towards work environment are not
related.

Alternative Hypothesis: The employees age and satisfaction towards work environment
are related.

Satisfaction Towards Work Environment

Age Total
Group Highly Satisfied Neutral Dissatisfied Highly
Satisfied Dissatisfied

20-30 9 27 15 1 1 53

31-40 12 16 3 1 - 32

3
Above 5 2 1 1 15
4o years

Total 4 51 20 3 2 100

Degree of freedom =8
Calculated Chi-square value = 10.776

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Table value at 5% level of significance = 15.507

Interpretation:
As the calculated value is less than the table value, the null hypothesis is
accepted.

Inference:
It is inferred that there is no association between the age group and the
satisfaction towards work environment.

TABLE 31

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 ASSOCIATION BETWEEN THE EMPLOYEE’S GENDER AND AWARENESS
OF PERFORMANCE APPRAISAL SYSTEM

Aim: To find out the relationship between the gender of the employees and awareness of
performance appraisal system.

Null Hypothesis: The gender of the employees and awareness of performance appraisal
system are not related.

Alternative Hypothesis: The gender of the employees and awareness of performance

appraisal system are related.

Awareness of performance appraisal system

Gender Total
Highly Highly Not
Aware Aware Neutral Not Aware Aware

Male 22 27 12 13 7 81

Female 3 6 6 2 2 19

Total 25 33 18 15 9 100

Degree of freedom =4
Calculated Chi-square value = 3.587

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Table value at 5% level of significance = 9.488

Interpretation:
As the calculated value is less than the table value, the null hypothesis is
accepted.

Inference:
It is inferred that there is no association between the gender and awareness of
performance appraisal system.

TABLE 32

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 ASSOCIATION BETWEEN THE EMPLOYEE’S LENGTH OF SERVICE AND
OUTCOME OF PERFORMANCE APPRAISAL FOR GOOD PERFORMANCE

Aim: To find out the relationship between the employees Length of service and outcome
of performance appraisal for good performance.

Null Hypothesis: The employees length of service and outcome of performance

appraisal for good performance are not related.

Alternative Hypothesis: The employees length of service and outcome of performance

appraisal for good performance are related.

Length Outcome of performance appraisal for good Total

of performance
Service Promotion Increment Special Incentives
rewards

<2 6 11 11 15 43
Years

2-4 1 4 8 7 20
Years

5-7 2 1 10 14 27
Years

>7 1 3 3 3 10
Years

Total 10 19 32 39 100

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Degree of freedom =9
Calculated Chi-square value = 9.106
Table value at 5% level of significance = 16.919

Interpretation:
As the calculated value is less than the table value, the null hypothesis is
accepted.

Inference:
It is inferred that there is no association between the length of service and
outcome of performance appraisal for good performance.

CHAPTER V

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 FINDINGS, SUGGESTIONS AND CONCLUSIONS

5.1. FINDINGS

 The study reveals that 53% of the employees are in the age group of 20-30.
 The study reveals that 82% of them are male employees.
 The study reveals that 40% of the employees are working in Stores department.
 The study reveals that 57% of the employees are married.
 The study reveals that 43% of the employees have a length of service < 2 years.
 The study reveals that 40% of the employees agree that they are clear about the
nature of the job.
 The study reveals that 40% of the employees agree that they are aware of the
targets and objectives to be achieved.
 The study reveals that 78% of the employees are able to achieve the targets.
 The study reveals that 51% of the employees satisfied towards the work
environment.
 The study reveals that 80% of the employees have sufficient workload.
 The study reveals that 55% of the employees are satisfied towards the training
provided in the concern.
 The study reveals that 45% of the employees do mistake towards the work at
some extent.
 The study reveals that 55% of the employees agree that mistakes at work affect
the performance rating.
 The study reveals that 36 % of the employees are aware of the performance
appraisal system of the concern.
 The study reveals that 60% of the employees are satisfied towards the
performance rate.

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 The study reveals that 47% of the employees accept that the superiors encourage
them to some extent.
 The study reveals that 43% of the employees agree that the present performance
appraisal system motivate to improve their performance.
 The study reveals that 38% of the employees prefer co-operation with the
superiors as the conduct factor to measure the performance.
 The study reveals that. 39% of the employees prefer quality as the work factor to
measure the performance.
 The study reveals that 35% of the employees have preferred both practical skill
and improved performance as the job knowledge factor to measure the
performance.
 The study reveals that 39% of the employees have preferred promotion as the
outcome of performance appraisal for a good performance.
 The study reveals that 42% of the employees prefer training as the outcome of
performance appraisal for a mediocre performance.
 The study reveals that 47% of the employees have preferred disciplinary action as
the outcome of performance appraisal for a bad performance.
 The study reveals that 41% of the employees agree towards the improvement of
performance level through the outcomes of performance appraisal.
 The study reveals that 38% of the employees are satisfied towards the outcomes
of performance appraisal provided by the concern.
 The study reveals that 44% of the employees are satisfied towards the overall
performance appraisal system.
 The study reveals that 33% of the employees agree that the outcomes of
performance appraisal improve the performance level.
 The study reveals that 34% of the employees are satisfied towards the monetary
benefits.
 The study reveals that 37% of the employees are satisfied towards the non-
monetary benefits.

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5.2. SUGGESTIONS

This chapter deals with the suggestion of the researches based findings. The
suggestions and recommendations of the study are presented below:

 Most of the respondents are satisfied with Performance Appraisal System of SRI
VARAHIAMMAN STEELS PRIVATE LTD., Coimbatore.
 Some employees may be educated on the strength and weakness on the
performance.
 Few employees may be made aware of the Performance Appraisal System.
 Motivational factors may be improved in order to improve the Performance Level
of the employees.
 Changes may be made in the work environment.
 Effective training at workplace may be implemented.

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5.3. CONCLUSION

This study has given a wider exposure on the subject of Performance Appraisal
System. The convey of Performance Appraisal System provides opportunity to self-
review and reflection for the career development of employees. From the study it is found
that the Outcomes of Performance Appraisal System has motivated the employees to
improve their Performance Level. This helps in achieving targets and objectives of the
concern.

SRI VARAHIAMMAN STEELS PRIVATE LIMITED, Coimbatore being the

well structured organization may improve the Performance Appraisal System of
employees on the basis of survey and feedback.

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