PERFOEMANCE APPRAISAL AT VVC PVT.LTD.

HYDERABAD

SUBMITTED BY:

ENROLLMENT NO:

UNIVERSITY

YEAR

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 CERTIFICATE FROM THE GUIDE

This is to certify that the project work titled “Performance Appraisal at VVC Pvt.Ltd.” is a

confide work carried out by admission no…………., a candidate for the examination of the

under my guidance and direction.

SIGNATURE OF GUIDE:

NAME:

DESIGNATION:

ADDRESS:

STAMP/STEAL OF THE ORGANIZATION:

DATE:

PLACE:

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 ACKNOWLEDGEMENTS

There are a number of important people I want to thank, without whose support, guidance,
encouragement, and help this work would not have been possible. I would also like to give my
greatest thanks to God who deserves the ultimate praise and credit for all good things in my life.

First and foremost, I want to thank…………..(Guide Name), who has been my advisor and mentor
throughout my studies. Without sir’s patient criticism, continual support, effective teaching, and
constant challenge and encouragement to give my very best efforts to my undertakings, I would
not have learned what I needed to nor been prepared to complete this dissertation and future
work. Much of what I have learned about the craft of research has come from Sir, and I am forever
grateful for the opportunity to have studied under his guidance.

I would not have made it through this research without the support, encouragement, teaching,
and friendship of fellow students in the program

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 TABLE OF CONTENT

Pg.No
Sr. No. CHAPTERS PARTICULARS

1 CHAPTER 1 Introduction 5

2 CHAPTER 2 Objective and Scope of the Study 30

3 CHAPTER 3 Literature Review 33

4 CHAPTER 4 Research Methodology 45

5 CHAPTER 5 Data Analysis & Interpretation 48

6 CHAPTER 6 Finding, Suggestion and Conclusion 68

Bibliography 70

7 Annexure 71

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 CHAPTER 1
INTRODUCTION

Performance Appraisal is the systematic evaluation of the performance of employees and to

understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Human Resources Management:

Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in the
organization. Human Resource Management can also be performed by line managers. Human
Resource Management is the organizational function that deals with issues related to people such
as compensation, hiring, performance management, organization development, safety, wellness,
benefits, employee motivation, communication, administration, and training.
Human resource management (HRM) is the strategic and coherent approach to the management
of an organization's most valued assets - the people working there who individually and
collectively contribute to the achievement of the objectives of the business.
The terms "human resource management" and "human resources" (HR) have largely replaced the
term "personnel management" as a description of the processes involved in managing people in
organizations.
In simple words, HRM means employing people, developing their capacities, utilizing,
Maintaining and compensating their services in tune with the job and organizational requirement.
It helps the managers place the right employees for the right jobs, depending on their skills. Often,
employees are often curious to know about their performance details and compare it with their fellow
colleagues and how they can improve upon it. So every company needs a good performance
appraisal system.
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Performance Appraisal

The basic purpose of performance appraisal is to identify an employees worth and contribution to
the company. Important factors include – attendance, efficiency, attitude, quality of work,
amount of work are just a few important factors.

The physical or objective factors like attendance, amount of work, efficiency can be easily
measured by the records maintained by the Human Resource Department.

However, it gets a bit icky, when it comes to measuring subjective factors like attitude,
behaviour, friendliness etc. But to properly evaluate an individual’s performance, appraisal of
both subjective and objective factors needs to be done.

As Dale Yoder said, “Performance appraisal includes all formal procedures used to evaluate
personalities and contributions and potential of group members in a working organisation. It is a
continuous process to secure information necessary for making correct and objective decisions
on employees. Methods of Performance Appraisal

There are various methods that are used by managers and employers to evaluate the performance
of the employees, but they can be put into two categories:

Traditional Methods of Appraisal

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Modern Methods of Appraisal

Human Resources Development:

Human Resource Development (HRD) is the framework for helping employees develops their
personal and organizational skills, knowledge, and abilities. Human Resource Development

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includes such opportunities as employee training, employee career development, performance
management and development, coaching, mentoring, succession planning, key employee
identification, tuition assistance, and organization development.

The focus of all aspects of Human Resource Development is on developing the most superior
workforce so that the organization and individual employees can accomplish their work goals in
service to customers.

Human Resource Development can be formal such as in classroom training, a college course, or
an organizational planned change effort. Or, Human Resource

Development can be informal as in employee coaching by a manager. Healthy organizations

believe in Human Resource Development and cover all of these bases.

Performance Appraisal System:

Performance appraisal refers to all the formal procedures used to evaluate an individual, his
contributions and potential. In other words, it is to plan and measure the performance of an
individual in terms of the requirement of the job or it is a process of finding out how effective the
organization has been at hiring and placing an employee.

Performance appraisal is a formal system of review and evaluation of individual or team task
performance. While evaluation of team performance is critical when teams exist in an
organization, the focus of performance appraisal in most firms remains on the individual
employees. Regardless of the emphasis, an effective appraisal evaluates accomplishments and
initiates plans for development, goals and objectives.

NEED FOR THE STUDY

Appraising the performance of individuals, groups and organizations is a common practice of all
societies. While in some instances these appraisal processes are structured and formally
sanctioned, in other instances they are an informal and integral part of daily activities.
Consciously of unconsciously evaluate our own actions from time to time. In social interactions,
performance is conducted a systematic and planned manner to achieve widespread popularity in
recent years.

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Performance appraisal is essential to understand and improve the employee's performance
through HRD. In fact, performance appraisal is the basis fore HRD. It was viewed performance
appraisal was useful to decide upon employee promotion / transfer salary determination and the
like. But the recent developments in human resources management indicate that performance
appraisal is the basis for employee development.

Performance appraisal indicates the level of desired performance level, level of actual
performance and the gap between these two. This gap should be bridged through human
resources development techniques like training executive development etc.

According to the past survey it was noticed that the performance appraisal system in this
company was not up to the mark. Hence there would be scope for giving few suggestions as per
my knowledge to improve the performance appraisal system which was quite essential for the
better performance of the employees.

Performance appraisal from employee point of view - "A performance appraisal is meant to
help employees realise their strengths and shortcomings and receive a compensation
accordingly."

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How often should appraisals take place?

Performance appraisal in any organisation will be done at a specific period, like annually or half
yearly or quarterly or maybe regularly. It all depends upon the nature or size of the organisation,
and sometimes necessity of the managers decide the period of performance appraisal of their
employees. Most of organisations are insisting employee appraisal should be a continuous
process and should not be limited to a formal review once a year. The frequency of formal
appraisals will depend on the nature of the organization and on the objectives of the system. For
example, in a high technology organisation objectives may be changing quickly so that formal
appraisals may need to be carried out more than once a year. In an environment which is less
subject to change, annual appraisals may be sufficient. Most employees receive a formal
appraisal annually, although more frequent appraisals are often needed for new employees, for
longer serving staff who have moved to new posts or for those who are below acceptable
performance standards.

Adobe Systems, U.S based software company has abolished annual performance appraisal
system of its employees. Instead company management has introduced regular feedback
method for reviewing regular performance of its employees rather than waiting till year ending
for performance review. Company managers feel regular feedback will improve the performance
of employees as they come to know their regular performance, further managers are considering
these regular feedback in the matter of salary hikes and promotions

IMPORTANCE OF THE STUDY

Performance appraisals provide employees and managers with opportunities to discuss areas in
which employees excel and those in which employees need improvement.

Performance appraisals should be conducted on a regular basis, and they need not be directly
attached to promotion opportunities.

Personal Attention

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During a performance appraisal review, a supervisor and an employee discuss the employee's
strengths and weaknesses. This gives the employee individual face time with the supervisor and
a chance to address personal concerns.

Feedback

Employees need to know when their job duties are being fulfilled and when there are issues with
their work performance. Managers should schedule this communication on a regular basis.

Career Path

Performance appraisals allow employees and supervisors to discuss goals that must be met to
advance within the company. This can include identifying skills that must be acquired, areas in
which one must improve, and educational courses that must be completed.

Employee Accountability

When employees know there will be regularly scheduled evaluations, they realize that they are
accountable for their job performance.

Communicate Divisional and Company Goals

Besides communicating employees' individual goals, employee appraisals provide the

opportunity for managers to explain organizational goals and the ways in which employees can
participate in the achievement of those goals.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by
following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes

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 bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.

Disadvantages of Performance Appraisal

If the factors being used in the performance appraisal are incorrect or not relevant, the appraisal
will fail to provide any useful or effective data.

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Sometimes, equal weightage is not given to important factors when performing an appraisal.

Some objective factors are very vague and difficult to gauge like attitude and initiative. There is
no scientific method to measure these factors.

Managers are sometimes not qualified enough to correctly assess the employees and their
abilities. Thus, these mistakes can be very detrimental to the growth of the company.

Benefits of the Performance Appraisal

From the beginning and through the career, you need to know how good you are in terms of
particular fields of activity. It is difficult to give yourself an objective evaluation. Performance
appraisal system is a useful management tool which helps to gain feedback, review and estimate
whether the performance is effective and discuss what needs to be done for it to become so.
Managers perform evaluations to benefit both employees and the employer. The most significant
benefit of the appraisal system for the manager or the head of department is that it provides a
document of employee performance over a specific period. Here is a list of the benefits of the
performance appraisal system:

Every employee’s individual performance influences how all the team or even the firm
(especially if it is small) is doing.

It clarifies the employee’s role and status in the organization. Some workers like to know where
they stand regarding their job performance and want to see what else (useful) they can do for the
company.

Self-development is the most important benefit for the employee. Performance appraisal allows
you to provide positive feedback as well as identifying areas for improvement. An employee can

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discuss and even create a developmental (training) plan with the manager so he can improve his
skills.

It motivates employees if supported by a good merit-based compensation system. Best

performers get better pay and benefits packages. Similarly, those employees that lag behind get
penalized.

It provides a structured process for an employee to approach the management for discussions,
identify problems, clarify expectations and plan for the future. It lets both manager and employee
set up long- and short-term goals.

The statistics can be used to monitor the success of the organization’s recruitment and induction
practices.

Performance appraisal system also helps the management in deciding about the promotions,
transfers and rewards of the employee.

It is easy to identify the under-performers and decide whether you want to keep them hoping for
improvement or sometimes have to let them go.

Both manager and employee, keep performance appraisal records and can retrospectively review
the changes in the performance in future.

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If you use the performance appraisal system correctly and smartly, the results won’t leave you
indifferent. Undoubtedly, there are disadvantages in the performance appraisal system as nothing
is ideal, but it provides a lot of useful information for the company and employee itself that can’t
be acquired from other sources. Furthermore, years of experience show the efficiency of using
performance appraisal system in practice.

The Post Appraisal Interview:

The post appraisal interview has been considered by most of the organizations, as well as
employees, as the most essential part of appraisal system. This interview provides the employee
the feedback information, and an opportunity to appraiser to explain the employee his rating, the
traits and behavior he has taken into consideration for appraisal etc.

It also gives the opportunity to employee to explain his views about the rates, standards or goals,
rating scale, internal and external environment causes for low level of performance, his resources
responsible for performance etc. further it helps both the parties to review standards, set new
standards based on the reality factors, and helps the appraiser to offer his suggestions, help, guide
and coach the employee for his advancement. Thus, the post appraisal interview is designed to
achieve the following objectives.

1. To let employees know where they stand.

2. To help employees do a better job by clarifying what is expected of them;

3. To plan opportunities for development and growth;

4. To strengthen the superior -subordinate working relationship by developing a mutual

agreement of goals;

5. To provide an opportunity for employees to experience themselves on performance related

issues.

Relating Performance Appraisal to Rewarding:

Management should recognize and performance. The forms of recognizing and rewarding
performance include: (a) Private and public praise, (b) Written commendation, (c) published
commendation, (d) increased autonomy, (e) change in job title, (f) Status symbols like office

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space, furnishings, (g) performance bonuses, (h) salary increases, (i) promotion in grade, or
increase in responsibilities and (j) various forms of supplementary compensation. Managers
should match the rewards both with performance and with the perception and needs of the
employee.

System Of Performance Appraisal:

Performance appraisal is a nine-step process:
1. Establish performance standards.

2. Communicate standards/expectations to employee.

3. Measure actual performance due to the environment influences.

4. Adjust the actual performance due to the environmental influences.

5. Compare the adjusted performance what that of others and previous.

6. Compare the actual performance with standards and find out deviations, if any.

7. Communicate the actual performance to the employee concerned.

8. Suggest changes in job analysis and standard, if necessary.

9. Follow-up performance appraisal report

At the first stage, performance standards are established based on the job description and job
specification. The standard should be clear, objective and incorporate all the factors. The second
stage is to inform these standards to all the employees including appraisers. The third stage is
following the instructions given for appraisal, measurement of employee performance by the
appraisers through observations, interviews, records and reports
Fourth stage is finding out the influence of various internal and external factors on actual
performance. The influence of these factors may be either inducing or hindering the employee
performance. The measured performance may be adjusted according to the influence of external
and internal factors. The performance derived at this stage may be taken actual performance.

Fifth stage is comparing the actual performance with that of other employees and pervious
performance of the employee and others. This given an idea where the employee to the influence

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of external and internal factors. The performance derived at this stage may be taken actual
performance.

Sixth stage is comparing the actual performance with the standards and finding out deviations.
Deviations may be positive or negative. If employee's performance is more than standards, it is
positive deviation and vice-versa is negative deviation.

Seventh stage is communicating, the actual performance of the employee and other employees
doing the same job and discuss with him about the reasons for the positive or negative deviations
from the pre-set standards as the case may be.

Eighth stage is suggestions necessary changes in standards in standards, job analysis, and
internal and external environment.

Ninth stage is follow-up of performance appraisal report. This stage includes guiding,
counseling, coaching and directing the employee or making arrangements for training and
development of the employee in order to ensure improved performance. If actual performance is
very poor and beyond the scope of improvement it is necessary to take steps for demotion or
retrenchment or any other suitable measure.

Checklist of Qualities:

1. Behavior is the employee punctual in attending the office?

A) Yes B)No

2. Does the employee behave courteously with his superiors?

A) Yes B) No

3. Does the employee maintain sound customer relations'?

A) Yes B) No

4. Is the employee sincere in doing his job?

A) Yes B) No

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The rater checks to include if the behavior of an employee is positive or negative to each
statement. Employee performance is rated on the basis of number of positive checks. The
negative checks are not considered in this method. A difficulty often arises because the
statements may appear to be virtually identical in describing the employee. The words or
statements may have different meanings to different raters.

Weighted Checklist:

The weighted checklist method involves weighting different items in the checklist having a
series of statements about an individual, to indicate that some are more important than others.

The rater is expected to look into the questions relating to the employee's behavior, the attached
rating scale (or simply positive /negative statements where such a scale is not provided) and tick
those traits that closely describe the employee behavior. Often the weights are not given to the
supervisors who complete the appraisal process, but are computed and tabulated by someone
else, such as a member of the personnel unit. In this method the performance ratings of the
employee are multiplied by the weights of the statements and coefficients are added up. The
cumulative coefficient is the weighted performance score of the employee. Weighted
performance score is compared with the overall assessment standards in order to find out the
overall performance of the employee.

The weighted checklist, however, is expensive to design to design, since checklist for each
different job in the organization must be produced. This may prove time consuming also in the
end. Though the weighted checklist method is evaluative as well as development, it has the basic
problem of the evaluator not knowing the items, which contribute mostly of successful
performance.

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Key elements of performance appraisal system are presented in figure
below.

Problems in performance appraisal:

Performance appraisal has come under a heavy barrage of criticism. The list of the problems that
have been associated with performance appraisal are as follows:

• A potential weakness of traditional appraisal methods is that they lack objectivity.

• A huge challenge that impedes an effective performance evaluation is the bias, which can be
either positive or negative.

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• Sometimes halo error occurs when a manager generalizes one positive performance feature or
incident to all aspect of employee performance.

• Leniency: - Giving an undeserved high performance appraisal rating to an employee.

Strictness: - Being unduly critical of an employee's work performance.

Establishment of performance appraisal criteria:

The most common appraisal criteria are traits, behaviors, competencies, goal achievement, and
improvement potential. The main objective of establishment of performance criteria is to identify
the aspects of a person's performance that an organization should evaluate.

• Traits: -

Certain employee traits such as attitude, appearance, and initiative are the basis for some
evaluations.

• Behaviors: -

When an individual's task outcome is difficult to determine, organizations may evaluate the
person's task related behavior or competencies. If certain behaviors result in desired outcomes,
there is merit in using them in the evaluation process.

• Competencies: -

This includes a broad range of knowledge, skills, traits, and behaviors that may be technical in
nature, relate to interpersonal skills or be business oriented.

• Goal achievement: -

If organizations consider ends more important than means, goal achievement outcomes become
an appropriate factor to evaluate.

• Improvement potential: -

When organizations evaluate their employees* performance, many of the criteria used focus on
the past. From a performance management view point the problem is that you cannot change the
past.

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Unless a firm takes further steps, the evaluation data become merely historical documents.
Therefore firms should emphasize the future, including the behaviors and outcomes needed to
develop the employee, and in the process achieve the firm's goals. This involves an assessment
of the employee's potential.

Characteristics of an effective appraisal system:

The basic purpose of a performance appraisal system is to improve performance of individuals,

teams, and the entire organization. The system may also serve to assist in the making of
administrative decisions concerning pay increases, transfers, or terminations. In addition, the
appraisal system must be legally defensible. Organizations should seek an accurate assessment of
performance that permits the development of a plan to improve individual and group
performance.

The following factors assist in accomplishing these purposes;

• Job related criteria: -

Job relatedness is perhaps the most basic criteria in employee performance appraisal.

More specifically, evaluation criteria should be determined through job analysis.

• Performance expectations: -

Managers and sub-ordinates must agree on performance expectations in advance of the appraisal
period. On the other hand, if employees clearly understand the expectations, they can evaluate
their own performance and may timely adjustments as they perform their jobs without having to
wait for the formal evaluation review.

• Standardization: -

Firm should use the same evaluation instrument for all employees in the same job category who
work for the same supervisor. Supervisors should also conduct appraisals covering similar
periods for these employees. Regularly scheduled feedback sessions and appraisal interviews for
all employees are essential.

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· Trained appraisers: -

The individual or individuals who observe at least a representative sample of job performance
normally have the responsibility for evaluating employee performance. This person is often the

employee's immediate supervisor. Training should be given to these appraisers to ensure

accuracy and consistency. A training module posted on the internet or company intranet may
serve to provide information for managers as needed.

• Continuous open communication: -

Most employees have a strong need to know how well they are performing. A good appraisal
system provides highly desired feedback on a continuing basis. There should be few surprises in
the performance review.

• Performance reviews: -

A performance review allows them to detect any errors or omissions in the appraisal, or an
employee may simply disagree with the evaluation and want to challenge it. Constant employee
performance documentation is vitally important for accurate performance appraisal.

• Due process: -

Ensuring due process is vital. If the company does not have a formal grievance procedure, it
should develop one to provide a employees an opportunity to appeal appraisal results that they
consider inaccurate or unfair. They must have a procedure for pursuing their grievances and
having them addressed objectively.

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INDUSTRY PROFILE

Introduction

The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent
year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest
manufacturer of commercial vehicles in 2017.

The Two Wheelers segment dominates the market in terms of volume owing to a growing
middle class and a young population. Moreover, the growing interest of the companies in
exploring the rural markets further aided the growth of the sector.

India is also a prominent auto exporter and has strong export growth expectations for the near
future. Automobile exports grew 20.78 per cent during April-November 2018. It is expected to
grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are expected to
make India a leader in the two-wheeler and four wheeler market in the world by 2020.

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Market Size

Domestic automobile production increased at 7.08 per cent CAGR between FY13-18 with 29.07
million vehicles manufactured in the country in FY18. During April-November 2018,
automobile production increased 12.53 per cent year-on-year to reach 21.95 million vehicle
units.

Overall domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18 with
24.97 million vehicles getting sold in FY18. During April-November 2018, highest year-on-year
growth in domestic sales among all the categories was recorded in commercial vehicles at 31.49
per cent followed by 25.16 per cent year-on-year growth in the sales of three-wheelers.

Premium motorbike sales in India crossed one million units in FY18. . During January-
September 2018, BMW registered a growth of 11 per cent year-on-year in its sales in India at
7,915 units. Mercedes Benz ranked first in sales satisfaction in the luxury vehicles
segment according to J D Power 2018 India sales satisfaction index (luxury).

Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017-18.

Investments

In order to keep up with the growing demand, several auto makers have started investing heavily
in various segments of the industry during the last few months. The industry has attracted
Foreign Direct Investment (FDI) worth US$ 19.29 billion during the period April 2000 to June
2018, according to data released by Department of Industrial Policy and Promotion (DIPP).

Some of the recent/planned investments and developments in the automobile sector in India are
as follows:

Ashok Leyland has planned a capital expenditure of Rs 1,000 crore (US$ 155.20 million) to
launch 20-25 new models across various commercial vehicle categories in 2018-19.

Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to
invest US$ 310 million in India.

Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per
year, highest for any luxury car manufacturing in India.

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As of October 2018, Honda Motors Company is planning to set up its third factory in India for
launching hybrid and electric vehicles with the cost of Rs 9,200 crore (US$ 1.31 billion), its
largest investment in India so far.

Government Initiatives

The Government of India encourages foreign investment in the automobile sector and allows 100
per cent FDI under the automatic route.

Some of the recent initiatives taken by the Government of India are -

The government aims to develop India as a global manufacturing centre and an R&D hub.

Under NATRiP, the Government of India is planning to set up R&D centres at a total cost of
US$ 388.5 million to enable the industry to be on par with global standards

The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country
for introduction of electric vehicles (EVs) in their public transport systems under the FAME
(Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme. The
government will also set up incubation centre for start-ups working in electric vehicles space.

Achievements

Following are the achievements of the government in the past four years:

Number of vehicles supported under FAME scheme increased from 5,197 in June 2015 to
192,451 in March 2018. During 2017-18, 47,912 two-wheelers, 2,202 three-wheelers, 185 four-
wheelers and 10 light commercial vehicles were supported under FAME scheme.

Under National Automotive Testing And R&D Infrastructure Project (NATRIP), following
testing and research centres have been established in the country since 2015

International Centre for Automotive Technology (ICAT), Manesar

National Institute for Automotive Inspection, Maintenance & Training (NIAIMT), Silchar

National Automotive Testing Tracks (NATRAX), Indore

Automotive Research Association of India (ARAI), Pune

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Global Automotive Research Centre (GARC), Chennai

SAMARTH Udyog – Industry 4.0 centres: ‘Demo cum experience’ centres are being set up in
the country for promoting smart and advanced manufacturing helping SMEs to implement
Industry 4.0 (automation and data exchange in manufacturing technology).

Road Ahead

The automobile industry is supported by various factors such as availability of skilled labour at
low cost, robust R&D centres and low cost steel production. The industry also provides great
opportunities for investment and direct and indirect employment to skilled and unskilled labour.

Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-

18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers are expected to grow 9 per cent
in 2018.

References: Media Reports, Press Releases, Department of Industrial Policy and Promotion
(DIPP), Automotive Component Manufacturers Association of India (ACMA), Society of Indian
Automobile Manufacturers (SIAM), Union Budget 2015-16, Union Budget 2017-18

Driving the most luxurious car has been made possible by the stiff competition in the automobile
industry in India, with overseas players gathering the same momentum as the domestic
participants.

Every other day, we have been hearing about some new launches, some low cost cars - all
customized in a manner such that the common man is not left behind. In 2009, the automobile
industry is expected to see a growth rate of around 9%, with the disclaimer that the auto industry
in India has been hit badly by the ongoing global financial crisis.

The automobile industry in India happens to be the ninth largest in the world. Following Japan,
South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles.
Several Indian automobile manufacturers have spread their operations globally as well, asking
for more investments in the Indian automobile sector by the MNCs.

Potential of the Automobile industry In 2008, Hyundai Motors alone exported 240,000 cars

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made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by
2011. Similar plans are for General Motors.

COMPANY PROFILE

VVC Motors Pvt. Ltd company is founded by Mr. V V Rajendra Prasad , The total worth of the
company is 1000 Crores The company Activities are Dealership for Automobile and develop
trading initiatives VVC MOTORS a pioneer in Automobile Retail since year 1987, is being
partner with major Manufacturers like

Mahindra & Mahindra,

John Deer India Tractors

Eicher Trucks
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Tata Motors PCBU

Bajaj Auto Ltd.

DIS- Insurance Broking co.

Rama Auto Finance Ltd.

TITAN

Tata Gold Plus

Dasmesh Agri Products

Enfield India Motorcycles

Leyland Deer Construction Equipment- AP&TS;

Having spread over the TS & AP states with a largest Dealer network with more than 2000
strong employee base with 60% employee Retention for more than 10 years.

Continously for the last 7 years member of dealer council and active member of dealer of
tomorrow panel helping company in various future product marketing and service initiatives,
mentoring for the New dealers and motivating their team

Personalized sales and service activity with good customer relationship management has given
us repeat sales and good customer base in our command area giving us incremental sales year
after year.

Our strength

By adopting good dealership management process & good entrepreneurship practices, we have
transformed ourselves from a mere trader to a business leader

We have changed along with times from sellers to buyers’ market by adopting best practices
with strategy to fight the competition.

We are the longest Bajaj dealers in Andhra Pradesh only because of our trusted, educated
manpower with team work, planning with good monitoring and review system with delegation
up to gross route level

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 CHAPTER 2

OBJECTIVE AND SCOPE OF STUDY

OBJECTIVES OF THE STUDY

•To study the need and importance of “Performance Appraisal”.

•To portray the profile of “VVC Motors Pvt.Ltd.”.
•To study the performance appraisal implementation in “VVC Motors Pvt.Ltd.”.
•To make data analysis and interpretation based on the perception of the employee in the
organization.
•To summarize and find certain suggestions for the impotent of Performance Appraisal system in
the company.

SCOPE OF THE STUDY

Performance appraisals provide employees and managers with opportuniti
e s t o discuss areas in which employees excel and those in which employees need
improvement. Performance appraisals should be conducted on a regular basis, and they need
not be directly attached to promotion opportunities.
Personal Attention
During a performance appraisal review, a supervisor and an employee discuss the
employee’s strengths and weaknesses. This gives the employee individual face time with the
supervisor and a chance to address personal concerns.
Feedback
Employees need to know when their job duties are being fulfilled and when there are issues
with their work performance. Managers should schedule this communication on a
regular basis.
Career Path
Performance appraisals allow employees and supervisors to discuss goals that must be m e t
t o a d v a n c e w i t h i n t h e c o m p a n y. T h i s c a n i n c l u d e i d e n t i f y i n g s k i l l s

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t h a t m u s t b e acquired, areas in which one must improve, and educational courses that must
be completed.
Employee Accountability
When employees know there will be regularly scheduled evaluations, they realize that they are
accountable for their job performance.
Communicate Divisional and Company Goals
Besides communicating employees' individual goals, employee appraisals provide the
opportunity for managers to explain organizational goals and the ways in which employees can
participate in the achievement of those goals

Role of HR in Performance Appraisals

Human resource department plays an important role in designing and implementing performance
appraisals. Infact, the HR team acts as mediator between the functional heads or reviewing
authorities and the employee. It is the human resource team’s responsibility to ensure a smooth
implementation of the appraisal process.

Let us go through the role of HR in performance appraisals in detail:

The first and the foremost responsibility of HR team is to design the entire appraisal process.
Make sure the process is simple and does not take too much time. The HR team needs to know
the responsibilities assigned to each and every employee for them to create and design a system
where their overall achievements can be rated with respect to their key responsibility areas. An
individual representing the MIS team cannot rate himself/herself on the KRAs of a marketing
professional. As a HR professional, you need to sit with the functional heads of all departments
so that you exactly know what all tasks have been assigned to which all team members.

The employees need to be fully aware of the performance appraisal process. The criterion of
performance appraisal needs to be very clear and transparent. Provide proper training to
employees so that they take the entire process of performance appraisal gracefully and
sportingly. You need to make them understand that appraisals are done not to downgrade or
insult anyone but help individuals set realistic goals and expectations for themselves and work
towards it. There are employees who do not appreciate the idea of performance appraisal and feel

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it is just a waste of time and energy filling elaborate forms. It is the HR’s responsibility to
change this perception. Performance appraisal is just not a method to increase one’s salary but
provide feedbacks to employees and guide them accordingly. Call employees on a common
platform and make them understand the importance of appraisal process and how would it help
them in their respective careers.

The HR team also needs to sit with the reviewing authorities to ensure appraisals are done on
time and only the deserving employees get the benefits. Appraisals should not be for everyone
but only for those who have worked really hard all through the year. You need to help and
sometimes also guide the managers and supervisors so that a fair appraisal is done and no
deserving employee is at loss. You can also give your valuable feedback to the functional heads
based on your day to day interaction with the employee concerned. Apart from his /her routine
work, how one behaves at the workplace, what is his relation with superiors/ fellow workers,
punctuality, and discipline also play an important role in performance appraisal.

Once the appraisal is done, it is your responsibility to hand over the increment letters or review
reports. Make sure the letter is handed only to the employee concerned and not to anyone else.
Appraisals and increments ought not to be discussed in public. Your role does not end here. As a
HR professional, you need to ensure employees are satisfied with the appraisal process. You
need to explain an individual as to why he/she has got or not got a salary hike .Immediately
arrange a meeting with his superior if you are not able to handle the situation or find a solution.
Many people start looking for a change or quit immediately after the appraisal process.

This happens because either the doubts are not addressed properly or individuals who have got a
decent hike look for better opportunities outside. Take feedbacks from employees as to what they
feel about their appraisal and whether they are satisfied or not?

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 CHAPTER 3
LITERATURE REVIEW

Plessis & Huntley (2009) there has been a move from personnel management PM to human
resource management HRM; more recently to international human resource management IHRM.
Challenges in IHRM involve the same activities as domestic HRM; the main difference is that
domestic HRM is involved with employees within only one national boundary. IHRM assists
organizations to best utilize their HR in the international context. Since multinational activities
are involved in HRM, it is believed that IHRM is more complex than domestic HRM.

Patton (1973) in his paper on “Does performance appraisal work?” states that performance
appraisal can be a powerful force for performance improvement at both the individual and the
corporate level, but few companies in the US and even fewer in Europe have learned to tap its
full potential.

Randell (1973) in his paper titled ““Performance appraisal: purposes, practices and conflicts”,
discusses the collection of information from and about people at work. It attempts to structure the
field, define key problems, expose sources of conflict and point the way to resolving major
difficulties.

Taylor and Wilsted (1974) in their article titled “Capturing Judgment Policies: A Field Study of
Performance Appraisal” used mathematical models of judgment policy for evaluating 625
performance reports during a single rating cycle. Linear and nonlinear analyses are used to
describe the cues most important in determining the overall ratings. In addition, performance
rating policy is compared with stated policy for each of the 40 raters

Bedeian (1976) in his paper titled “Rater Characteristics Affecting the Validity of Performance
Appraisals” states that the task of developing effective performance appraisal systems is one of
the most preferred contemporary problems of personnel administration. An abundance of
literature is available detailing the problems and difficulties inherent in subordinate appraisals.

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Numerous studies have made suggestions for rating format and content changes. Some have even
suggested the elimination of appraisal.

The study of performance appraisal and training programmes has attracted many of the
researchers and practitioners. There has been continuous research in the field of sugar industries
and its methods, appraisal time, appraisal meeting, training programmes and their benefits in the
industry. Though there is no dearth of document any evidence in the field of sugar industries,
studies, particularly in Performance Appraisal and Training Programmes are rare. It is a field in
the preschooler stage in India, when compared to other countries in the west. However, the
available contributions from the following authors and researchers have been reviewed and a
brief account of the review is given in this chapter.

Cummings (1973) in an article titled, “A Field Experimental Study of the Effects of Two
Performance Appraisal Systems”, reported the results of a field experiment designed to test the
effects of manipulating several elements of an operative level performance appraisal system.
First, the multipurposive nature of appraisal in formal organizations is discussed. This is
followed by a brief overview of the literature on performance appraisal. The design and results of
the study at hand are then discussed.

Patton (1973) in his paper on “Does performance appraisal work?” states that performance
appraisal can be a powerful force for performance improvement at both the individual and the
corporate level, but few companies in the US and even fewer in Europe have learned to tap its
full potential. Examining the differences between European and US performance appraisal
practices, the author finds that some European companies have more than caught up with their
American counterparts. He offers guidelines to overcome some difficulties prevalent on both
sides of the Atlantic.

Taylor and Wilsted (1974) in their article titled “Capturing Judgment Policies: A Field Study of
Performance Appraisal” used mathematical models of judgment policy for evaluating 625
performance reports during a single rating cycle. Linear and nonlinear analyses are used to
describe the cues most important in determining the overall ratings. In addition, performance
rating policy is compared with stated policy for each of the 40 raters.

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Bedeian (1976) in his paper titled “Rater Characteristics Affecting the Validity of Performance
Appraisals” states that the task of developing effective performance appraisal systems is one of
the most preferred contemporary problems of personnel administration. An abundance of
literature is available detailing the problems and difficulties inherent in subordinate appraisals.
Numerous studies have made suggestions for rating format and content changes. Some have even
suggested the elimination of appraisal. More recently, an identifiable body of knowledge which
seriously casts doubt on the use of supervisor’s judgment in evaluating employee performance
has begun to emerge. The purpose of this paper is to explore this emerging body of knowledge
and to examine its ramifications for performance appraisal.

Allinson (1977) in his paper describes a study of the effects of a training course on performance
appraisal interviewing. Managers who had attended the course were asked, by means of a postal
questionnaire, to compare their pre-training and post-training interviewing performances. There
were three important findings. First, that the trainees had improved on almost every aspect of
appraisal interviewing; secondly, it is not just the skill of interviewing which is important, but
also an understanding of the role of performance appraisal; and finally, managers in mid-career
may have the most to gain from training of this type.

Decotiis and Petit (1978) in their article titled, “The Performance Appraisal Process: A Model
and Some Testable Propositions”, present a literature-based model of the determinants of the
accuracy of performance ratings. The model indicates that the major determinants of accuracy
are: (a) rater motivation; (b) rater ability; and (c) availability of appropriate judgmental norms.
Several propositions and suggestions for further research are derived from the components of the
model.

Varma and Pichler (2007) in their article titled, “Interpersonal Affect: Does It Really Bias
Performance Appraisals?”, state that interpersonal affect has been found, in prior laboratory
research, to be related to ratings of job performance. Such findings have been taken to mean that
affect creates bias in ratings. The study was conducted to determine if this relationship would
hold up in a field setting. The study was also designed to examine how structured diary-keeping,
and the nature of the appraisal instrument, might be related to affect-appraisal relationships. The
results for 85 raters and 404 ratees, suggested that affect was significantly related to all ratings,
but more strongly related to trait-like ratings than task/outcome-like ratings, and that having

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raters keep performance diaries actually increased the strength of the relationship between affect
and ratings. They concluded that affect may not be a biasing influence on ratings, but may be a
result of better subordinate performance. Results from an analysis of the diary content supported
this conclusion. Implications for the role of affect on ratings and the nature of the relationship
between past performance and interpersonal affect in field settings are discussed.

Addison and Belfield (2008) offered a replication for Britain of Brown and Heywood’s analysis
of the determinants of performance appraisal in Australia. Although there are some important
limiting differences between the two data sets — the Australia Workplace Industrial Relations
Survey (AWIRS) and the Workplace Employment Relations Survey (WERS) — they reached
one central point of agreement and one intriguing shared insight. First, performance appraisal is
negatively associated with tenure: where employers cannot rely on the carrot of deferred pay or
the stick of dismissal to motivate workers, they will tend to rely more on monitoring, ceteris
paribus. Second, employer monitoring and performance pay may be complementary. However,
consonant with the disparate results from the wider literature, there is more modest agreement on
the contribution of specific human resource management practises, and still less on the role of
job control.

Asmu (2008) states that “Performance appraisal interviews” play a crucial role in internal
communication. Most of the research on performance appraisal interviews has focused on
strategic aims and interview design, but less attention has been given to the way in which
performance appraisal interviews actually take place. In this study, the focus will, therefore, be to
investigate how one of the crucial and most delicate activities in performance appraisal
interviews, namely, giving critical feedback, is conducted. The way critical feedback is given is
predominantly through negative assessments. The results indicate that there is an orientation to
critical feedback as a socially problematic action despite the institutional character of the talk.
Moreover, it can be seen that the more the supervisor shows an orientation to negative
assessments as being socially problematic, the more difficult it becomes for the employee to deal
with negative assessments. The study ends by outlining various implications for the workplace.

Chen and Fu (2008) in their article titled “A systematic framework for performance appraisal
and compensation strategy” state that systematical strategic fit benefits organization’s
performance and makes the organization systemic. Researches on performance appraisal strategy

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and compensation strategy are extensive, but most of them only focused on the single subject
without the synergy of them. An extensive literature review is provided in this research to build
up a systematic theoretical framework for performance appraisal and compensation strategy.
Four propositions of the criteria and methods of performance appraisal and compensation
strategy are inferred in this systematic framework. Furthermore, four situations of 2×2
combinations with the criteria and above methods are discussed for the new systematic
performance appraisal and compensation strategy. Through this framework, an organization can
appropriately focus on employees’ representation or individual to evaluate and motivate
employees in a rational or humanistic way.

Herdlein, Kukemelkb and Turk (2008) in their article titled “A survey of academic officers
regarding performance appraisal in Estonian and American universities” state that higher
education in the Baltic Republic of Estonia is experiencing rapid change as the country adjusts to
a market economy in the post-Soviet era and adheres to principles established through the
Bologna Process. Research in the area of performance appraisal, and the most effective
approaches to motivate academic staff, is a key factor influencing change in a rapidly developing
society. Using qualitative research, a survey was submitted to academic officers in 11 Estonian
and four western New York (USA) colleges and universities. A total of 29 individuals completed
surveys in Estonia (a response rate of 69 per cent). A convenience sample of eight academic
administrators returned instruments in western New York, giving a response rate of 100 per cent.
The results of the survey indicated that appraisal systems within American higher education are
similar and based on a long tradition of connecting appraisal to the guidelines governing
permanent appointment (tenure). Appraisal within Estonian universities is still rather basic and
unified systems do not yet exist, as individual institutions employ a variety of procedures. The
study was intended to accelerate the process of performance appraisal in Estonia and Eastern
Europe.

Narcisse and Harcourt (2008) in their article titled, “Employee fairness perceptions of
performance appraisal: a Saint Lucian case study” identified the essential factors which influence
employees’ fairness perceptions of their performance appraisals, and determine the applicability
of these factors to the experiences of employees in a Saint Lucian public service organization.
Fairness perceptions are of three main types. First, distributive justice refers to the perceived

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fairness of an actual appraisal rating. Second, procedural justice refers to the perceived fairness
of procedures used to determine the appraisal rating. Third, interactional justice refers to the
perceived fairness of the rater’s interpersonal treatment of the ratee during the appraisal process.
A qualitative case study method was used to gain a rich understanding of employee perceptions
of the fairness of their performance appraisals. Data were obtained from both completed
appraisal forms and interviews with 20 knowledgeable employees. All interviews were
transcribed and assessed using a thematic analysis. Overall, results show that distributive,
procedural, and interactional justice factors identified in the existing literature influence
employee perceptions of fairness in their appraisals. Results suggest that employees also
consider four additional justice factors, as yet not formally recognized in the justice literature,
one distributive – the consistency in reward distribution – and three procedural – appraisal
frequency, job relevant criteria, and rater and ratee training.

Sanwong (2008) in his article entitled, “The Development of a 360- Degree Performance
Appraisal System: A University Case Study”, examined the functioning of an innovative 360-
degree performance appraisal system among a sample of 75 employees at a Thai university. The
data for the system came from supervisors, colleagues, clients and junior staff as well as from the
employees themselves. The validity of the system was examined on two occasions. While all
employees were satisfied with the system, support and clerical staff in the university were more
satisfied than academic staff. A number of suggestions were made for improving the 'working' of
such a system in a university environment.

Brutus, Fletcher and Baldry (2009) in their article titled, “The influence of independent self-
construal on rater self-efficacy in performance appraisal” extend current knowledge on the use of
performance evaluations in organizations by investigating the influence of self-construal on rater
selfefficacy. Results from a survey completed by 105 experienced managers indicate that
independent self-construal is related to various dimensions of rater self-efficacy. Moreover,
experience with appraisals was found to moderate these relationships. The implications of these
findings for the research and the practice of performance appraisal are discussed.

Zhang and Lovegrove (2009) in their article titled, “Performance appraisal for Chinese state-
owned banking industry” state that performance appraisals, which are used to assist individual
development and organizational planning, are considered an important part of effective human

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resource management. Studies of performance appraisal are invariably based on western
theories, which can create issues when they are applied in different cultures, with China being
identified as one such area. With China’s WTO accession and the entry of foreign banks, the
Chinese banking sector has become an extremely sensitive area of development for the nation’s
economy. It is important, therefore, to understand the factors surrounding performance appraisal
and what does the process add to the efficiencies in the Chinese state-owned banking industry.
This article is based on the data collected from the employees of Chinese state-owned banks
from 2005 to 2007. The findings suggest that the employees’ perception of justice has a positive
relationship to their overall satisfaction with both the performance appraisal process and their
outcomes. However, statistically significant differences were found in relation to whether
employees had received training in performance appraisal or not.

Behavioral Observation Scale (BOS) is one of the best techniques utilized by the managers to
arte the employees. The dilemma was on the peak in the 1960s and 1970s. In the same period
couple of new innovated rating scales were introduced, which was Behaviorally Anchored
Rating Scale (BARS) and the Mixed Standard Scale (MSS). The innovations were dominant one
which condensed the errors and improved the observation skills from the performance appraisal
practice. According to the research of Arvey and Murphy (1998), there were hundreds of
thousands of researches had been taken place between the periods of 1950 to 1980, which merely
focused on the different types of rating scales. Landy and Farr (1980) reviewed and researched
the methods of performance appraisal in totally a different manner, in which they understand the
rater and process in an organizational context. Other Performance appraisal reports include the
rater characteristics in their report like race, gender and likeability.
After the year 1980 the biasness among the performance appraisal system occurred outrageously
and appraisal had been granted on the favoritism or race and gender basis rather examined the
knowledge, skills and style of the work of the employee. The accuracy criteria among the
performance appraisal system clutched its grip in the start of the 1980s, where the researches
were emphasized on common psychometric biases which include the diversified rating errors
like leniency, central tendency and halo, which were termed as rating errors in the appraisal
method. It has been observed that the bias free appraisals were inevitably true or more precisely
we can say more accurate, but the concept was totally refused by the research of Hulin in 1982.

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According to them the biasfree appraisals were not necessarily accurate (Murphy & Balzer,
1989).

Performance evaluations have been conducted since the times of Aristotle (Landy,Zedeck,
Cleveland, 1983). The earliest formal employee performance evaluation program is thought to
have originated in the United States military establishment shortly after the birth of the republic
(Lopez, 1968). The measurement of an employee’s performance allows for rational
administrative decisions at the individual employee level. It also provides for the raw data for the
evaluation of the effectiveness of such personnel- system components and processes as recruiting
policies, training programs, selection rules, promotional strategies, and reward allocations
(Landy,Zedeck, Cleveland, 1983). In addition, it provides the foundation for behaviorally based
employee counseling. In the counseling setting, performance information provides the vehicle
for increasing satisfaction, commitment, and motivation of the employee. Performance
measurement allows the organization to tell the employee something about their rates of growth,
their competencies, and their potentials. There is little disagreement that if well done,
performance measurements and feedback can play a valuable role in effecting the grand
compromise between the needs of the individual and the needs of the organization (Landy,
Zedeck, Cleveland, 1983).

Purpose

Performance appraisals should focus on three objectives: performance, not personalities; valid,
concrete, relevant issues, rather than subjective emotions and feelings; reaching agreement on
what the employee is going to improve in his performance and what you are going to do
(McKirchy, 1998). Both the supervisor and employee should recognize that a strong relationship
exists between training and performance evaluation (Barr, 1993). Each employee should be
allowed to participate in periodic sessions to review performance and clarify expectations. Both
the supervisor and the employee should recognize these sessions as constructive occasions for
two-way communication. Sessions should be scheduled ahead of time in a comfortable setting
and should include opportunities for self-assessment as well as supervisor feedback. These
sessions will be particularly important for new employees who will benefit from early
identification of performance problems. Once these observations have been shared, the

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supervisor and employee should develop a mutual understanding about areas for improvement,
problems that need to be corrected, and additional responsibilities that might be undertaken.
When the goals are identified, a plan for their achievement should be developed. The plan may
call for resources or support from other staff members in order to meet desired outcomes. In
some cases, the plan might involve additional training. The supervisor should keep in contact
with the employee to assure the training experiences are producing desired impact (Barr, 1993).
A portion of the process should be devoted to an examination of potential opportunities to pursue
advancement of acceptance of more complex responsibilities. The employee development goals
should be recognized as legitimate, and plans should be made to reach the goals through
developmental experiences or education (Barr, 1993). Encouraging development is not only a
supervisor's professional responsibility, but it also motivates an employee to pursue additional
commitments. In addition, the pursuit of these objectives will also improve the prospect that
current employees will be qualified as candidates when positions become available. This
approach not only motivates current performance but also assists the recruitment of current
employees as qualified candidates for future positions (Barr, 1993). How to arrive? Reasons why
need to be done Benefits of productive performance appraisals. - Employee learns of his or her
own strengths in addition to weaknesses. - New goals and objectives are agreed upon. -
Employee is an active participant in the evaluation process. - The relationship between
supervisor and employees is taken to an adult-to-adult level. - Work teams may be restructured
for maximum efficiency. - Employee renews his or her interest in being a part of the organization
now and in the future. - Training needs are identified. - Time is devoted to discussing quality of
work without regard to money issues. - Supervisor becomes more comfortable in reviewing the
performance of employees. - Employees feel that they are taken seriously as individuals and that
the supervisor is truly concerned about their needs and goals. (Randi, Toler, Sachs, 1992).

Pitfalls to Avoid

When conducting performance appraisals on any level, it is important to keep in mind the
common pitfalls to avoid.

These pitfalls may include but are not limited to:

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1. Bias/Prejudice. Race, religion, education, family background, age, and/or sex.

2. Trait assessment. Too much attention to characteristics that have nothing to do with the job
and are difficult to measure.

3. Over-emphasis on favorable or unfavorable performance of one or two tasks which could lead
to an unbalanced evaluation of the overall contribution.

4. Relying on impressions rather than facts.

5. Holding the employee responsible for the impact of factors beyond his/her control.

6. Failure to provide each employee with an opportunity for advance preparation (Maddux,
1993).

Ravichandran, Venkataraman and Banumathy (2011) state that the state of Tamil Nadu with
37 operational sugar mills is a significant sugarproducing state of the country, contributing
roughly 9-10 per cent to the national sugar production. The sugar industry has absorbed about 5
lakh rural people in the state. This paper studied the performance appraisal system followed in a
cooperative sugar mill with a sample size of 75 labourers. The study has found that the sugar mill
had adopted a good appraisal system and takes the appraisal at the time of probation period and
further during the career promotion. The study has also found that there is a gap between the
actual and desired performance. Hence, it was suggested to conduct annual performance
appraisal to improve the efficiency of the employees and provide training on dependability,
communication skill and skill development to improve the employee’s management quality.

Pettijohn, Pettijohn and Taylor (2000) in their article titled “An Exploratory Analysis of
Salesperson Perceptions of the Criteria Used in Performance Appraisals: Job Satisfaction and
Organizational Commitment” state that in some sales organizations the performance appraisal is
treated as a bureaucratic exercise required by some "higher-up" executive. As such, sales
managers may essentially conduct appraisals in an arbitrary and perfunctory manner. This

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behavior could be the result of the manager's perception that conducting performance appraisals
requires considerable amounts of time and effort, which provides few rewards, but adds
considerably to the manager's level of conflict and stress. The purpose of this research is to
examine the relationships existing between one aspect of performance appraisals, salesperson
perceptions of the appropriateness of the criteria used, and two other variables, organizational
commitment and job satisfaction. A survey of retail salespeople provided the data required to
evaluate the relationship between satisfaction, commitment, and the perceived appropriateness of
the criteria used. The findings indicate that salesperson satisfaction levels are significantly
correlated with the level of the perceived inappropriateness of the evaluation criteria used.
However, the findings also indicate that the perceptions of the inappropriateness of the
evaluation criteria are not significantly related to the salesperson's level of organizational
commitment. Based on these findings, recommendations are made regarding the salesperson's
role in the development of the performance appraisal process.

Fletcher (2001) in his article titled, “Performance appraisal and management: The developing
research agenda” expresses that performance appraisal has widened as a concept and as a set of
practices and in the form of performance management has become part of a more strategic
approach to integrating HR activities and business policies. As a result of this, the research on
the subject has moved beyond the limited confines of measurement issues and accuracy of
performance ratings and has begun to focus more of social and motivational aspects of appraisal.
This article identifies and discusses a number of themes and trends that together make up the
developing research agenda for this field. It breaks these down in terms of the nature of appraisal
and the context in which it operates. The former is considered in terms of contemporary thinking
on the content of appraisal (contextual performance, goal orientation and self awareness) and the
process of appraisal (appraiser–appraisee interaction, and multi-source feedback). The discussion
of the context of appraisal concentrates on cultural differences and the impact of new
technology. In reviewing these emerging areas of research, the article seeks to explore some of
the implications for appraisal practice at both organizational and individual levels.

Shibata (2002) in her article titled “Wage and Performance Appraisal Systems in Flux: A Japan-
United States Comparison”, states that unionized Japanese and American firms made changes in
their wage and performance appraisal systems during the 1990s that were inspired by features of

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each others' traditional employment systems. Although Japanese firms made greater changes in
the wage-setting process compared to American firms, outcomes in Japan changed little. Even
with these changes, the wage and performance appraisal systems in the two countries retain
distinctive characteristics. In the American firms' "segregation" between white- and blue-collar
employees and high- and low-performers remains a feature of wage and performance appraisal
systems; the Japanese system maintained its characteristic "integrated" form, but underwent
moderate modifications.

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 CHAPTER 4
RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problems. It guides the
researcher to do the research scientifically. It contains of different steps that are generally adopted
by a researcher to study his research problem along with the logic behind them. Data become
information only when a proper methodology is adopted. The research methodology includes the
logic behind the methods we use in the content of our research study.

After the objective of the study has clearly stated, the next step in formal research project is to
determine the source from which the data is required to be collected. The data collection is an
interesting aspect of the study achieving data effectively the information consists of two types of
data. The diagram is as follows:

RESEARCH DESIGN:

A research design is the arrangement of condition for collection and analysis of data in a manner
which may result in an economy in procedure. It stands for advance planning for collection of
the relevant data and the techniques to be used in analysis, keeping in view the objective of the
research availability of time.

There are three types of research designs. They are,

 Exploratory research design.

 Conclusive research design.
1. Descriptive research design.
2. Causal research design.
 Performance monitoring research.

The Research design used in this study was descriptive research design. It includes surveys and
fact-finding enquiries of different kinds. The main characteristic of this method is that the
researcher has no control over the variables; he can report only what has happened or what is
happening.

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Data collections:
a)Primary data:
The primary data are those, which are collected freshly and for the first time, from the employees
directly. It is collected through the following methods.
1. Questionnaire: A structure of questionnaire was prepared and distributed among
the employees & workers.
2. Interview: Personal interviews and interaction with the employees and contractor
labor.
3. Observation: By observing the working environment.

b) Secondary data:
The secondary data are those which have already been collected by someone or
elsew h i c h h a v e b e e n p a s s e d t h r o u g h s t a t i s t i c a l p r o c e s s . S o u r c e s o f s e c o n d
a r y d a t a c a n b e categorized into two broad categories named published and unpublished
statistics. Various sources are available namely books, synergies monthly books etc. and also
collected from various files, records.

STUDY CONDUCTED

The primary data was gathered through personal interaction. The information was gathered from

the structured questionnaire.

SECONDARY DATA:

Secondary data has been collected from the Company Website, Internet etc.

STATISTICAL TOOLS:

The data are analyzed through statistical methods. Simplex percentage analysis are used for
analyzing are used for analyzing the data collected.

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Simplex percentage analysis:

Percentage analysis is the method to represent raw streams of data as a percentage ( a part
in100‐ percent) for better understanding of collected data.

Graphs:

Graphical representations are used to show the results in simple form. The graphs are prepared
on the basis of data that is received from the percentage analysis

STATISTICAL TOOLS:

The data are analyzed through statistical methods. Simplex percentage analysis are used for

analyzing are used for analyzing the data collected.

Graphs:

Graphical representations are used to show the results in simple form. The graphs are prepared

on the basis of data that is received from the percentage analysis.

LIMITATION OF STUDY
 Time is very short for research, so this is very difficult to get the knowledge about
everything.
 Since the filling of questionnaire and interviews need special attention so may be the
employees are less interested in entertaining.
 The information was collected through the questionnaire is subject to willingness of the
respondent to respond.

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 CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

Human Resources are the greatest assets for any organization. These recourses should be
developed to their fullest extent for the efficient functioning of an organization and their
performance needs to appraise continuously.

The present study is aimed at analyzing the “Performance Appraisal system” at VVC Motors
pvt.ltd. at Hyderabad. There is a felt, need and justification to conduct surveys and to know the
perceptions of employees regarding existing practices. A structured questionnaire has been
surveyed among 40 respondents by adopting strata technique. And their perceptions are analyzed
and interpreted in this chapter.

For the purpose of survey, a sample of 40 employees has been taken into consideration with a
view to assess the "Performance Appraisal System" in VVC Motors pvt.ltd. Performance
appraisal helps in the assessment of individual potential

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Table 1 Performance Appraisal is the assessment of individual potential

S.No. Rating Scale No. of In%

Respondents

1 Strongly Agree 7 17.5

2 Neutral 4 10
3 Strongly Disagree 0 0
4 Agree 29 72.5
5 Disagree 0 0
Total 40 100

Analysis:
From the above table-1 it can be known that 72 % of respondents have agreed about the
assessment of individual potential and 17.5 % of them have strongly agreed of the above
statement and 10 % of the employees are in a neutral stage and where none of them have
disagreed for the above statement. So majority of the respondents i.e. 72.5 % of the
respondents have agreed about the assessment of individual potential.

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Interpretation:

From the above analysis we can interpret that, some of the employees were in neutral
position, because the appraisal system in the organization was not in a full fledge way.

Table-2
Performance Appraisal system followed in the organization is rational and fair.

S.No. Rating Scale No. of ln%

respondents

1. Strongly Agree 1 2.5

2. Neutral 12 30
3. Strongly Disagree 1 2.5
4. Agree 22 55
5. Disagree 4 10
Total 40 100

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Analysis:
From the above table-2 it can be known that, 55% of respondents have agreed that die
performance appraisal system followed in the organization rational and fair and 30 of the
respondents are in neutral stage. Where as 2.5pciceiU of the respondents have agreed for th
above statement and 2.5petce&t of the respondents have strongly disagreed, where 10 % of the
respondents have disagreed for the above statement.

Interpretation:

From the above analysis we can interpret that, some of the employees were in neutral position.
Because the organization doesn’t following the company’s policies fairly.

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Table-3

Job expectations are informed and the superiors set the tasks.

15
S, No. Rating Scale No. of respondents In%

1. Strongly Agree 3 7.5

2. Neutral 10 25

3. Strongly Disagree 0 0

4. Agree 24 60

5. Disagree 3 7.5

Total 40 100

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Analysis:
From the above table-4 it is found that, 67.5% of respondents have agreed for the
performance appraisal followed in the organization helps to assess the training and
development needs of employee and I5 % of them have strongly agreed in ID-% of the
respondents are in neutral stage and the remaining 7.5% of the respondents are in disagreed
opinion. Where none of them are is strongly disagreed opinion.

Interpretation: The above analysis states that, majority of the employees opined that a
good performance appraisal system in the organization, helps to train and develop an
employee in all aspects.

Table 5

The Performance appraisal in the organization helps to recognize the competence and
potential of an individual.

S.No. Rating Scale No. of ln%

respondents

1. Strongly Agree 4 10

2. Neutral 3 7.5

3. Strongly Disagree 1 2.5

4. Agree 30 75

5. Disagree 2 5

Total 40 100

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Analysis:
From the above table-5 it is found that, 75% of respondents have agreed for the performance
appraisal in the organization helps to recognize the competence and potential of individual
and 10% of the respondents have strongly agreed, and 7.5% of the respondents are in neutral
stage and 5% are in disagreed opinion where as 2.5% of the respondents strongly disagree for
the above statement

Interpretation:

The above analysis elicits that, some of the employees were in neutral and disagree position.
Because the appraisal process in the organization is not that much effective.

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Table-6
Employees are happy with the assessment of performance followed in the organization

No. of
S.No. Rating Scale ln%
respondents

1. Strongly Agree 3 7.5

2. Neutral 14 35
3. Strongly Disagree 0 0
4. Agree 18 45
5. Disagree 5 12.5
Total 40 100

Analysis:

From the above table-4.6 it is found that, 45% of respondents have agreed that they are happy
with the assessment of performance appraisal followed in the organization. And 35 % of the
respondents are in neutral stage and 12.5% of the respondents are in a disagreed stage where

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7.5% have strongly agreed for the above statement but none of them have strongly disagreed for
this statement.

Interpretation:
We can interpret that, most of the employees were in disagree and neutral position. Because
the assessment system in the organization was not up to the mark.

Table-7

Employees have been appraised fairly according to the company's policies.

S. No. Rating Scale No. of In %

respondents

1. Strongly Agree 2 5

2. Neutral 13 32.5

3. Strongly Disagree 0 0

4. Agree 23 57.5

5. Disagree 2 5

Total 40 100

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Analysis:
From the above table-7 it is found that, 57.5% of respondents have agreed that the employees
have been appraised fairly according to the company policies and 32.5% of the respondents are
neutral stage and 5% of them are strongly agree and where as 5% of the respondents disagree
for the above opinions and none of them have disagree for the above opinion.
Interpretation:
Here we can state that, most of the employees were in disagree and neutral position. Because
performance appraisal was not done fairly according to the companies policies.

Table-8 Advises and suggestions are given to the employees during the appraisal process.

S. No. Rating Scale No. of In%

respondents

1. Strongly Agree 3 7.5

2 Neutral 15 37.5

3. Strongly Disagree 0 0

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 4. Agree 10 25

5. Disagree 12 30

Total 40 100

Analysis:
From the above table4.8 it is found that, 30 % of respondents have disagreed that advises and
suggestions are given to the employees during the appraisal process and 25% of them have
agreed and 7.5% of the respondents strongly agree and majority of the respondents i.e. 37.5%
are in a neutral stage and none of them have disagreed for the above statement.
Interpretation:
The above analysis exhibits that, employees are expecting many more suggestions and advises,
during the appraisal process that would be helpful for their career

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Table-9

The employees accept the appraisal feedback as.

S. No. Rating Scale No. Of %

respondents

1. Positive way 3 7.5

2. Uninteresting 15 37.5
3. Negative way 0 0
4. Neutral 10 25
Total 40 100

Analysis:
From the above table-4.9 it is found that, 50% of respondents have a positive way
regarding acceptance of the appraisal feedback. And 47.55 of them are in a neutral
opinion and 2.5% of the respondents feel it uninteresting on the above statement. And
none of them have a negative acceptance of this statement

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Interpretation:

This analysis shows that, employees are not much interested in taking the appraisal feedback.

Table-10
The appraiser of the company should be.

S.No. Rating Scale No. of In%

respondents

1. Superior 13 32.5
2. HOD 25 62.5
3. Subordinate 1 2.5
4. Peer groups 1 2.5
Total 40 100

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Analysis:
From the above table-4.10 it is found mat, 62.5perecent of respondents feel that their
HOD should be their appraiser and 32.5% of them feel that their superior should be the
appraisal and 2.5% of the respondents feel that their subordinates and peer groups should
be the appraiser.

Interpretation:
This states that, the appraiser should be the head of the department, the employee feel that he is
the right person to evaluate their performance.

Table-11

Employee need to be assessed as.

No. of
S.No. Rating Scale In%
respond

1. Once in 3 months 8 20

2. Once in 6 months 11 27.5

3. Once in a year 21 52.5

Total 40 100

Analysis:

From the above table-4.11 it is found that, 52.5% of respondents feel that their appraisal system
should be once in a year and 27.5% of the respondents feel that it should be twice in a year (6
months) and where as 20% of the respondents feel that it should be for every 3 months.

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Interpretation:
Here, the employees felt that, they need to be assessed once in a year, as they felt it is a right
period of time to assess the performance

Table-12

The performance appraisal followed in the organization makes the employees

S.No Rating Scale No. of In%

Respondents

1 Motivating 38 95

2 De motivating 2 5

Analysis:
From the above table-4.12 it is found that, 95% of respondents are motivated towards
performance appraisal followed in the organization and 5 % of the respondents demotivates for
the above statement.
So majority of the respondents i.e.. 95 % of the respondents have motivated towards the
appraisal system followed in the organization

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Interpretation:

From the above study, employees felt performance appraisal system as a motivating factor.

Table-13

Types of errors / problems have impact on performance rating in the Organization

S. No Rating Scale No of In%

Respondents

1 Influence 9 22.5
2 Attitude 16 40
3 Biased 8 20
4 Personal Grudge 1 2.5
5 Subjectivity 5 12.5
6 Status Effect 1 2.5

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Analysis:
From the above table-4.13 it is observed that, appraisal system is rated by attitude that is 40%
and 22.5% of the respondents by influence and 20% by biased, 12.5% by subjectivity and 2.5%
by personal grudge and remaining 2.5% by status effect.

Interpretation:

The employees opined that, attitude factor have a greater impact on the performance appraisal
system

Table -14

Feedback on Performance is communicated after assessment of the Performance.

S.No Rating Scale No of In%

Respondents

1 Yes 19 47.5

2 No 21 52.5

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Analysis: From the above table-4.14 it is found that, 52.5% of respondents disagree that
feedback on performance is communicated after assessment of the performance appraisal. And
47.5% of the respondents agree for the above statement.
So majority of the respondents i.e. 52.5 % of the respondents have disagreed that the feedback on
performance is communicated after assessment of the performance appraisals

Interpretation:
Here, the some of the employees express their view that, the performance feedback need not
be communicated after the assessment, while some of them felt that it is essentials

Table-15

Employees are aware of 360-degree appraisal

S.No Rating Scale No of Respondents In%

1 Yes 11 27.5

2 No 29 72.5

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Analysis:
From the above table-4.15 it is found that, 72.5% of respondents are aware of 360- degree
appraisal and 27.5% of die respondents are not known of 360-degree appraisal.

So majority of the respondents i.e.. 72.5 % of the respondents have agreed that they were aware
of 360 degree appraisal

Interpretation:

Here from the above study it is known that, the employees are not completely aware of 360-
degrees appraisal system.

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 SUMMARY

Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in the
organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to
people such as compensation, hiring, performance management, organization development,
safety, wellness, benefits, employee motivation, communication, administration, and training.
Performance appraisal refers to all the formal procedures used to evaluate an individual, his
contributions and potential. In other words, it is to plan and measure the performance of an
individual in terms of the requirement of the job or it is a process of finding out how effective
the organization has been at hiring and placing an employee.

Performance appraisal is a formal system of review and evaluation of individual or team task
performance. While evaluation of team performance is critical when teams exist in an
organization, the focus of performance appraisal in most firms remains on the individual
employees. Regardless of the emphasis, an effective appraisal evaluates accomplishments and
initiates plans for development, goals and objectives.

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 FINDINGS
 More than half of the employees (72.5%) agree that Performance Appraisal is the
assessment of individual potential.
 Some of the employees (30%) neutral that Performance Appraisal system followed in the
organization is rational and fair.
 Some of the employees (25%) neutral that Job expectations are informed and the
superiors set the tasks.
 Most of the employees (67.5%) agree that Performance Appraisal followed in the
Organization helps to the Training and development needs of employee.
 Some of the employees (5%) disagrees that The Performance appraisal in the
organization helps to recognize the competence and potential of an individual
 Less than half of the employees (35%) disagrees that they are happy with the assessment
of performance followed in the organization.
 most of the employees (32.5%) neutral that they have been appraised fairly according to
the company's policies.
 Most of the employees (30%) disagrees that Advises and suggestions are given to the
employees during the appraisal process.
 Most of the employees (37.5%) uninterestingly accept the appraisal feedback.
 Most of the employees (62.7%) feel that appraisal should be given by HOD.
 Most of the employees (52.5%) that they need to be assessed as once in a year.
 All most of the employees (95%) feels that the performance appraisal followed in the
organization makes the employees Motivated.
 Most of the employees (40%) think that attitude have impact on performance rating in the
Organization.
 Most of the employees (52.5%) do not agree that Performance is communicated after
assessment of the Performa

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 SUGGESTIONS

As per the study the following are the suggestions:

The Performance Appraisal in the organization should be in a full fledge way so that the others
will be accepting this.

As the Performance Appraisal is helpful to the employees by the assignment of superiors task by
training & development which should be more effective so that the other employees will also be
attracted.

The Performance Appraisal should be assist effectively to the employees as it recognizes the
competence and potential of an individual.

Employee’s appraisal should be fairly done according to the companies policies so that it will
assist the performance of the employees.

The company should give some advises and suggestions to the employees during the process and
should get there feedbacks about the process.

The employees should assess and appraised by their HOD once in a year.

The employees should be aware of 360 degrees appraisal and the organization should follow this
to motivate the employee.

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 CONCLUSION
The options required strong motivation to face the challenges.

Proper training and satisfaction at all levels will be the strongest foundation to launch an assault
on the challenges and convert the challenges to opportunities through effective performance
appraisal measures in the organization

Industry most response like wise

 In future performance appraisal measures will have to be planned in

relation to thechanges taking place.

 The performance measures leads exist both at fresh entry level as

well as to continuing education level for working personnel.

 An effective safety measures based on emerging trends suggests model for

achieving the targets which will make paper industry in India truly comp

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 BIBLIOGRAPHY

Books:
 Donald L. Kirkpatrick, 2006, Improving Employee Performance through Appraisal
and Coaching.
 Richard Rudman, 2003, Performance Planning and Review.
 Roger E. Herman, 1997, The Process of excelling, oak Hill press.
 P. Subba Rao, 2006, Essentials of Human Resource Management and Industrial
Relations, Himalaya Publishing House.

Journals:

 Gitam Journal of Management.

 Journal of Occupational and Environmental medicine.
 Indian Journal of Social Work.
 Indian Journal of Human Resource

o www.deltapapermills.com

o www.google.com

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 ANNEXURE

1. Is Performance Appraisal helps in the assessment of individual potential?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

2. Does the Performance Appraisal system followed in the organization is rational

and fair?
Strongly Agree Agree

Neutral Disagree

Strongly Disagree

3. Whether the Job expectations are informed and the superiors set the tasks?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

4. Does the performance Appraisal followed in the organization helps to

assess the training and development needs of employee?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

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 5. Does the Performance appraisal in the organization helps to
recognize the competence and potential of an individual?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

6. Whether the employees happy with the assessment of Performance

followed in the organization?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

7. Does the Employees appraised fairly according to the company’s policies?

Strongly Agree Agree

Neutral Disagree

Strongly Disagree

8. Does the Advises and suggestions are given to the employees during the appraisal
process?
Strongly Agree Agree

Neutral Disagree

Strongly Disagree

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 9. How do the employees accept the appraisal feedback?

Positive way Negative way

Uninteresting Neutral

10. Who should be the appraiser?

Superior Subordinate

HOD Peer group

11. How often should an employee be assessed?

Once in 3months

Once in 6months

Once in a year

12. How the performance appraisal followed in the organization?

Motivate

Denominative

13. What types of errors / problems have impact on performance

rating in the organization?

Influence Biased Subjectivity Status

Effect Attitude Personal Grudge

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 14. Whether the Feedback on performance communicated after

assessment of the Performance?

Y es No

15. Are you aware of 360-degree appraisal?

Y es No

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