A STUDY ON PERFORMANCE

MANAGEMENT SYSTEM IN MANATEC

ELECTRONIC PRIVATE LIMITED,
PUDUCHERRY

Submitted by

G. BANUPRIYA

Reg No – 421212631004

of
KARPAGA VINAYAGA COLLEGE OF ENGINEERING &
TECHNOLOGY, MADHURANTHAGAM – 603 308

A PROJECT REPORT
Submitted to the
Faculty of Management Studies
In partial fulfillment of the requirements
for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
in
HUMAN RESOURCE
ANNA UNIVERSITY
CHENNAI 600 025

JULY-2014

1
 KARPAGA VINAYAGA COLLEGE OF ENGINEERING
AND TECHNOLOGY,
Depatment of Management Studies
:

BONAFIDE CERTIFICATE

Certified that the Project report titled “A STUDY ON PERFORMANCE MANAGEMENT

SYSTEM IN MANATEC ELECTRONIC PRIVATE LIMITED, PUDUCHERRY IN

PUDUCHERRY” is the bonafide work of MISS. G. BANUPRIYA (Reg. NO:

421212631004), who carried out the research under my supervision. Certified further that to the

best of my knowledge the work reported herein does not form part of any other project report or

dissertation on the basis of which a degree or award was conferred on an earlier occasion on this

or any other candidate.

Mr. SENTHIL KUMAR DR. P. SHALINI

(GUIDE) HEAD OF THE DEPARTMENT

INTERNAL EXAMINAR EXTERNAL EXAMINAR

2
 ABSTRACT
The performance management process is used to communicate
organizational goals and objectives, reinforce individual accountability for meeting
those goals, and tracks and evaluate individual and organizational performance
results. It reflects a partnership in which managers share responsibilities for
developing their employees in such a way that enables employees to make
contributions to the organization. It is a clearly defined process for managing
people that will result in success for both the individual and the organization. This
project entitled study on performance management system in Manatec electronic
private limited, Puducherry, to evaluate the behavior of the employees and to
increase the performance and satisfaction level of the performance in the
organization.
The questionnaire survey and the formal and informal interview cover the
performance management system of the different employees. The sample size
selected for this purpose is 50. The sampling procedure framed is simple random
sampling. Descriptive research design along with exploratory research is been used
for study. Primary data was collected from the employees through a well structure
questionnaire. Secondary data was collected from the employees past records,
company reports.
This data collected were analyzed using appropriate statistical tool like correlation,
weighted average method. The suggestions were drawn based upon the findings.
Most of the employees are satisfied with their opinion about their job given to them
by the organization. The supervisor communication is really good and it leads to
effective communication.

ACKNOWLEDGEMENT
3
 With profound gratitude and due regards I whole heartedly and sincerely acknowledge

with thanks the opportunity provided to me by our Respectful Director Tmt. Meenakshi

Annamalai for allowing me to do this project in partial fulfillment for the degree of Master of

Business Administration under Anna University, Chennai.

I thank our respectable Advisor Prof. V.C. Ravichandran for his effective advice and

support for planning and processing of the project.

I thank our dedicated Principal Prof. Dr. SM. Kannan for his valuable suggestions and

timely advice which helped me in completing this project on schedule.

I thank our Dean (MBA) Dr. P. Uma Rani for her motivation, guidance and useful tips

for completing the project.

I thank our Head of the Department Prof. P. Shalini for her pain taking efforts and very

encouraging and proper guidance without which this project could not have been completed.

I would like to extend my hearty gratitude to Mr. Senthil Kumar for instructing, guiding

and encouraging me in carrying out this project work.

I also thank Mr. who guided me with full-fledged support and help me complete this

work successfully.

I highly indebted to my parents and all my dear ones without whose constant love and

encouragement all these would not have been possible.

4
 TABLE OF CONTENT

S.NO CHAPTER TITLE PAGE NUMBER

I TITLE PAGE I
BONAFIDE CERTIFICATE ii
ABSTRACT iii
ACKNOWLEDGEMENT iv
1 CHAPTER I 1
1.1 INTRODUCTION 1
1.2 OBJECTIVE OF THE STUDY 4
1.3 SCOPE OF THE STUDY 5
1.4 LIMITATION OF THE STUDY 6
1.5 COMPANY PROFILE 7
1.6 INDUSTRY PROFILE 19
CHAPTER II
2.1 REVIEW OF LITERATURE 23
2 2.2 THEORITICAL REVIEW
CHAPTER III
36
3.1 RESEARCH METHODOLOGY
CHAPTER IV
3
4.1 DATA ANALYSIS AND 42
INTERPRETATION
4
CHAPTER V
5.1 FINDINGS 52

5 5.2 SUGGESTIONS AND

53
RECOMMENDATION
5.3 CONCLUSION 54
CHAPTER V

6 BIBLIOGRAPHY 55
QUESTIONNAIRE
56

LIST OF TABLES

5
TABL TITLE OF THE TABLE PAGE
E NO. NO.
4.1 Opinion of respondents regarding strength
and weakness of performance management 51
system
Opinion of respondents regarding achieve
4.2 the goals of performance management 52
system
Opinion of respondents regarding skill,
4.3 knowledge and performance and 53
performance management
Opinion of respondents regarding
4.4 motivates myself development in 54
performance management
Opinion of respondents regarding
4.5 supervisor communicates well in 55
performance management system
Opinion of respondents regarding
4.6 supervisor communicates well in
56
performance management system (using
correlation method)
Analysis of ranking given by respondent
4.7 regarding performance management 59
system (using weighted average method)

6
 LIST OF CHARTS

CHART PAGE
TITLE OF THE CHART
NO. NO.
Opinion of respondents regarding strength and
4.1 weakness of performance management system 51
Opinion of respondents regarding achieve the
4.2 goals of performance management system 52
Opinion of respondents regarding skill, knowledge
4.3 and performance and performance management 53
Opinion of respondents regarding motivates
4.4 myself development in performance management 54
Opinion of respondents regarding supervisor
4.5 communicates well in performance management 55
system

CHAPTER I

7
 INTRODUCTION

1.1 INTRODUCTION OF THE STUDY

The evolution of the concept of Performance Management as a new Human

Resource Management model reflects a change of emphasis in organizations away

from command-and-control towards a facilitation model of leadership. This change

has been accompanied by recognition of the importance to the employee and the

institution of relating work performance to the strategic or long-term and

overarching mission of the organization as a whole. Employees’ goals and

objectives are derived from their departments, which in turn support the mission

and goals of the organization. The performance management process provides an

opportunity for the employee and performance manager to discuss development

goals and jointly create a plan for achieving those goals. Development plans

should contribute to organizational goals and the professional growth of the

employee. The performance management process is used to communicate

organizational goals and objectives, reinforce individual accountability for meeting

those goals, and track and evaluate individual and organizational performance

results. This is a descriptive study looking into the factor leads to Performance

Management System in MANATEC ELECTRONIC.

This toolkit provides sample documents, assessment tools, job descriptions,

standards and measures, strategic plans, and reports to assist state health agencies

8
in implementing the Turning Point Performance Management National Excellence

Collaborative (PMC) model to performance management.

Performance management is the process of creating a work environment or

setting in which people are enabled to perform to the best of their abilities.

Performance management is a whole work system that begins when a job is defined

as needed. It ends when an employee leaves your organization.

Many writers and consultants are using the term “performance management”

as a substitution for the traditional appraisal system. In encourage you to think of

the term in this broader work system context. A performance management system

includes the following actions.

 Develop clear job descriptions.

 Select appropriate people with an appropriate selection process.

 Negotiate requirements and accomplishment – based performance standards,

outcomes, and measures.

 Provide effective orientation, education, and training.

 Provide on – going coaching and feedback.

 Conduct quarterly performance development discussions.

 Design an effective compensation and recognition system that rewards

people for their contributions.

 Provide promotional/career development opportunities for staff.

9
  Assist with exit interviews to understand WHY valued employees leave the

organization

Performance Management Goals

 Document individual unit performance objectives for committed work

 Discuss performance and identify actions to improve

 Manage performance problems

 Recognize and reward outstanding performance

 Institutionalize performance management practices.

10
1.2 OBJECTIVES OF THE STUDY

The following are the objectives of the study

 To study about the performance management system practiced in Manatec

electronic pvt.ltd.

 To identify the factors induced to increase the performance of the employee.

 To know the employee level of satisfaction in their job.

 To identify the communication between supervisor and subordinates.

 To identify the employee motivation and self development.

11
1.3. SCOPE OF THE STUDY

The Study was done about the performance management system. It will

Evaluate and Estimate various sources of the concern organization. This study will

improve the organization Effectiveness Regarding the performance management

system, also it determining the Various Features and New strategies of performance

management system.

12
1.4 LIMITATION OF THE STUDY

 Questionnaires were handed over to the HR manager and he administered

them among the workers.

 The employees in the company were too busy in their work.

 Some employees were not interested in providing information.

13
1.5 COMPANY PROFILE

MANATEC is one of Asia's largest original equipment manufacturers of

automotive garage equipments. Located in Pondicherry, India, the company

manufactures Wheel Aligners, Wheel Balancers, Two Post Lifts, Gas analysers,

Smoke Meters, Head lamp aligners & Digital Air Tire inflators.

Established in the year 1987, as a manufacturer of industrial shaft aligners,

Manatec diversified into garage equipment industry in 1991. The company, through

its in-house R&D, indigenously designed and developed Optical wheel alignment

systems in 1991, to become the first company to design a wheel aligner in the

whole of Asia. Following this the company's R&D dept continuously designed &

developed wheel balancers, tyre changers, exhaust gas analysers, smoke meters,

head lamp aligners, 2 post lifts & automatic tyre inflators. With this, Manatec is

one of very few companies in the world to have design & technology of eight

different garage equipments. Advanced versions of wheel aligners were also

developed in these years simultaneously. Manatec's extensive Wheel Aligner

installations across the world speak for its quality, specialization and lead role we

play in this industry.

Manatec's in-house R&D facility is spread over 10,000 sq.ft with more than 35

electronics, mechanical & software and hardware engineers. All the products are

designed by the R&D are indigenous with proprietary software, hardware and

14
electronics design. The R&D strength of Manatec has enabled the company to

export its products worldwide and provide technical support to its overseas buyers.

Buoyed with increasing export orders and significant growth in domestic

business, Manatec has come up with a new Greenfield manufacturing facility in an

area of 130,000 Sq.ft, near Pondicherry. This facility ensures that the exports and

domestic demands are met by producing garage equipments on a mass scale.

Manatec is ISO 9001:2008 certified, which confirms its commitment to quality

systems within the company that will result in quality products. The entire

organization is driven by fully-integrated ERP system that was introduced in 2007.

Manatec exports to more than 50 countries across the globe through its

distributor network. This was achieved through a unique value proposition Manatec

was able to offer its buyers- Designing garage equipments with world-class

technology & quality and offering at prices competitive to European and Chinese

products. Today Manatec has emerged as a truly global player in the automotive

aftermarket and has evolved its vision and mission for the long term.

1.5.1 PRODUCTION FACILITY

Manatec's production floor is equipped with state of the art manufacturing

facilities to produce garage equipment. The Production floor is spread over an area

of 130,000 sq.ft in our new Greenfield facility. Production techniques such as

Cellular manufacturing, KANBAN & 5S are practiced to ensure quality

throughput.

15
 The infrastructure includes CNC machines, machine shop, tool room,

electronics assembling & testing bays, sub-assembly bays and final-assembly lines.

Stringent Quality Assurance measures in place to control various stages of

production from raw material, sub assembly to final product.

The new Greenfield facility has the production infrastructure with the

capacity to produce the following volumes:

● 3000 wheel aligners 

● 3000 wheel balancers 

● 1500 two post lifts

● 1000 exhaust gas analyzers

● 1000 diesel smoke meters

1.5.2 RESEARCH AND DEVELOPMENT

Manatec established its in-house R&D division in 1987. Manatec through its

R&D strength, has become one of the very few companies in the world to have 100

% indigenously designed 8 different garage equipments (wheel aligners, balancers,

tyre changers, 2 post lifts, gas analyzers, smoke meters, head lamp aligners,

automatic tyre inflators).

The R&D dept houses all required facilities, both Electronics & Mechanical,

to design & develop high quality Garage Equipments. Experienced technical

engineers, hardware & software Specialists work in the R&D dept that designs

16
world-class products. The software of Wheel Aligner and Wheel Balancer has been

copy right protected.

Manatec invests approx. 7% of its annual turnover in Research &

Development every year. Currently Manatec is working in designing advanced

wheel alignment systems, premium wheel balancers to handle heavy-duty wheels

and gas & smoke analyzers to conform to European and UK standards.

1.5.3 CE Marking:

All the products are designed and developed in our R&D Centre to conform

to International quality requirements. Wheel Aligners, Wheel Balancers, and Gas &

Smoke analyzers are already self-certified for CE. The third party certification from

a leading worldwide organization is applied and acquired

1.5.4 Private Labeling:

Manatec’s strong R & D has enabled the company to tie up with famous

global brands to supply Wheel Aligner, Wheel balancer, Pollution Check

Equipments & Two Post Lifts under private label. They find enormous value in

terms of latest technology product at economical cost when they buy from

Manatec.

17
1.5.5 MILESTONE

Product Milestone:
Year Products
1987 Shaft Alignment Computer
1992 Digital Wheel Aligner (Optical Model)
1993 Video graphic Wheel Aligner (Optical Model)
1995 Electronic spirit level
1996 Wheel Balancer (Digital and Video graphic models)
1998 Video graphic Wheel Aligner (CCD technology)
1999 Tyre changer
1999 Head Lamp Aligner
1999 Exhaust Gas Analyzer
2000 Diesel Smoke Meter
2002 Two Post Lift
2005 Automatic Tyre Inflator
2006 RF Wheel Aligner (wireless)
2010 Fox 3D Wheel aligner

1.5.6 Company Milestone:

1987 R. Mananathan, a technocrat in machinery & vibration analysis forms the

: company, Manatec to design and produce industrial shaft alignment

computers. These computers work on micro-processor based design to

measure and display misalignment between the shafts of any industrial prime

mover.

1989 Manatec designs another product electronic spirit level. Both shaft aligner &
18
: electronic spirit level were import-substitute products and received good

response from the Indian market.

1991 In 1991, automotive garage equipment used to be imported into India from

: Italy. Identifying the need for an import-substitute, Manatec with 100%

indigenization, designed a wheel aligner for the first time in India & Asia.

1992 Manatec was awarded with Best productivity performance award for the year

: 1990-1991 from the National productivity council of India.

1992 Manatec’s wheel aligners were approved by major Indian vehicle

: manufacturers like Hindustan motors & TATA motors.

1993 Manatec designed first ever video graphic wheel aligners with attractive and

: user-friendly software design.

1994 Manatec received the coveted national award from the president of India for

: Best entrepreneur and quality products in SSI sector for the year 1993.
1995 Digital toe-aligners were designed to align only the TOE angle. This model

: was exclusively developed for buses & trucks.

1996 Manatec designed wheel balancers in both digital and video graphic versions.

:
1997 Award for Excellence in R&D for the year 1996 was awarded by the Dept of

: science and industrial research, Govt of India

1997 Product approvals from tyre manufacturers followed from JK tyres, Birla

: tyres, Apollo tyres

1998 Manatec applied for ISO 9001 certificate successfully and received from

: KPMG.
1999 Tyre changers were designed in-house through the mechanical R&D division.

:
1999 Exhaust gas analyzers were designed to cater to the rising emissions

19
: conditions in India.
2000 Manatec successfully applied for in-house R&D recognition from the Govt.

: of India.
2000 Best R&D efforts award for the year 1998-1999 was given away by

: Prof.Murali Manohar Joshi

2000 Manatec develops diesel smoke meter

:
2001 Manatec successfully received ISO 9001: 2000 certificate from TUV

: Germany.
2002 Two post lift, model RHINO 3.0 was designed

:
2003 Manatec successfully re-applied for in-house R&D recognition.

:
2007 Manatec received Silver shield award for star performer in exports for the

: year 2005-2006 awarded by Engineering export promotion council of India.

2008 Second time in a row, Manatec received Silver shield award for star

: performer in exports for the year 2006-2007 awarded by Engineering export

promotion council of India.

2008 Manatec was converted into a private limited company and 3 additional

: directors were inducted into the board.

2010 Third time in a row, Manatec received Silver shield award for star performer

: in exports for the year 2008-2009 awarded by Engineering export promotion

council of India.
2011 Manatec's FOX 3D Wheel Aligner; India's first indigenously designed Wheel

Aligner.

20
 Manatec is certified by Ministry of Science & Technology, Department of

Scientific and Industrial Research for its R&D efforts.

2011 Manatec receives Silver shield award for star performer in exports for the

year 2009-2010 awarded by Engineering Export Promotion Council of India,

fourth time in a row

2012 Fifth time in a row, Manatec receives Silver shield award for star performer

in exports for the year 2010-2011 awarded by Engineering Export Promotion

Council of India.
2012 Manatec celebrates 25th Anniversary

21
1.5.7 PRODUCT

     

3D Wheel
CCD Wheel Aligners Wheel Balancers Tyre Changers
Aligners
 
           

     
Nitrogen
Generators Exhaust Gas Paint Spray
Diesel Smoke Meter
Analyser Booths

             

     

Welding A/C Gas

Utility equipments Lifting Equipments
machines Charger
         

22
1.5.8 QUALITY

One of the value propositions Manatec offers its buyers is the Quality of its

equipments. Excellent quality combined with economic prices will offer a unique

value to the buyers and place Manatec competitively against a Western or Chinese

product. Manatec understands the importance of this value and has always

prioritized quality assurance of its products.

Extensive process quality system ensure strict adherence to the norms

prescribed. In-coming raw material or vendor assemblies are subject to quality

checks. With long-established vendor base, on-site self check methods are

established at the vendor premises itself. Custom-designed quality jigs are

established in-house and at the vendor’s premises to check deviations if any.

1.5.9 QUALITY POLICY

“Every Employee of Manatec is responsible for achieving the ultimate

customer satisfaction through effective design, systematic production, timely

delivery and prompt customer service. These are reinforced by periodic updation of

technology, knowledge and systems through proper training and motivation”

23
1.5.10 TOTAL QUALITY MANAGEMENT (TQM) Initiative

1. Manatec launched the TQM initiative in December 2011 by releasing the

TQM Logo & banner during an employee meeting.

2. TQM steering committee has been formed to drive the TQM initiative.

3. MANATEC is working towards achieving the coveted DEMING AWARD

by 2015.

24
1.6 INDUSTRY PROFILE

The automobiles sector is divided into four segments – two-wheelers (mopeds,

scooters, motorcycles, electric two-wheelers), passenger vehicles (passenger cars,
utility vehicles, multi-purpose vehicles), commercial vehicles (light and medium-
heavy vehicles), and three wheelers (passenger carriers and good carriers).

The industry is one of the key drivers of economic growth of the nation. Since
the delicensing of the sector in 1991 and the subsequent opening up of 100 percent
FDI through automatic route, Indian automobile sector has come a long way.
Today, almost every global auto major has set up facilities in the country.

The world standings for the Indian automobile sector, as per the Confederation
of Indian Industry, are as follows:

1. Largest three-wheeler market

2. Second largest two-wheeler market
3. Tenth largest passenger car market
4. Fourth largest tractor market
5. Fifth largest commercial vehicle market
6. Fifth largest bus and truck segment

The auto sector reported a robust growth rate of 26 percent in the last two years
(2010-2012). The BSE AUTO Index outperformed the benchmark Nifty by 79%,
12% and 19% in FY10, FY11 and FY12, respectively. However, the sector has
shown a sluggish growth of 12 percent in 2012. The trend is likely to stay with a 10
percent growth outlined for 2013 citing high ownership costs (fuel costs, cost of
registration, excise duty, road tax) and slow rural income growth. Solid but
cautious growth is expected over the next few years. However, from a long-term
25
perspective, rising incomes, improved affordability and untapped markets present
promising opportunities for automobile manufactures in India.

According to Macquaire equities research, sale of passenger vehicles is expected

to double in the next four years and growth anticipated is higher than the 16 percent
achieved in the past 10 years. Two-wheeler vehicle segment is expected to show
slow growth of 10 percent CAGR over the period of 2012-2016, suggests the
report.

The Government recognizes the impact of the sector on the nation’s economy,
and consequently, the Automotive Mission Plan 2016 launched by it seeks to grow
the industry to a size of US $145bn by 2016 and make it contribute 10 percent to
the nation’s GDP.

1. Rising incomes among Indian population will lead to increased affordability,

increasing domestic demand for vehicles, especially in the small car segment.
2. Fuel economy and demand for greater fuel efficiency is a major factor that
affects consumer purchase decision that will bring leading companies across
two-wheeler and four-wheeler segment to focus on delivering performance-
oriented products.
3. Product innovation and market segmentation will channelize growth.
Vehicles based on alternative fuels will be an area of interest for both consumers
and auto makers.
4. Focus on establishing India as auto-manufacturing hub is reigning in policy
support in form of Government’s technology modernisation fund.
5. Industry will seek to augment sales by tapping into rural markets, youth,
women and luxury segments.

26
 India is emerging as a strong automotive R&D hub with foreign players like
Hyundai, Suzuki, and General Motors setting up base in India. This move is further
enhanced by Government’s support towards setting up centres for development and
innovation. Tata Nano’s successful entry in the Indian market has steamed up the
opportunities of growth available in alternative segments like electric cars, vehicles
run on natural gas, etc.

According to the Confederation of Indian Industry, auto sector currently

employs 787, 7702 people, 58 percent of who are in the passenger car segment.
However, there is an increasing demand for skilled professionals in the domain of
effective service delivery, spares management and support functions. ITIs and
Polytechnics provide 530,000 graduates every year, but there is an urgent need for
updating courses to keep up with changing trends in technology, manufacturing,
and processes.
The Indian automotive industry has emerged as a 'sunrise sector' in the
Indian economy. India is being deemed as one of the world's fastest growing
passenger car markets and second largest two wheeler manufacturer. It is also home
for the largest motor cycle manufacturer and the fifth largest commercial vehicle
manufacturer.

India is expected to become the third largest automobile market in the world.
Ford is looking at India as a major export hub, as per Mr. Joginder Singh, President
and Managing Director, Ford India. By 2020, the luxury car segment is estimated
to be around three per cent of the overall passenger car market in India. So, there is
huge opportunity for growth. India is going to be one of the biggest markets for us,
worldwide, according to Tomas Ernberg, Managing Director, and Volvo Auto
India.

27
 By allowing consumers to commute long distances for work, shopping, and
entertainment, the auto industry has encouraged the development of an extensive
road system, made possible the growth of suburbs and shopping centers around
major cities, and played a key role in the growth of ancillary industries, such as the
oil and travel businesses. The auto industry has become one of the largest
purchasers of many key industrial products, such as steel. The large number of
people the industry employs has made it a key determinant of economic growth.

The industry is one of the key drivers of economic growth of the nation.
Since the delicensing of the sector in 1991 and the subsequent opening up of 100
percent FDI through automatic route, Indian automobile sector has come a long
way. Today, almost every global auto major has set up facilities in the country.

The level of technology change in the Motor vehicle Industry has been high but,
the rate of change in technology has been medium.  Investment in the technology
by the producers has been high. System-suppliers of integrated components and
sub-systems have become the order of the day. However, further investment in new
technologies will help the industry be more competitive. Over the past few years,
the industry has been volatile.

28
 CHAPTER II

2.1 REVIEW OF LITERATURE

2.1.1 Introduction

The most valuable asset for a company is its people. Whist all other assets

depreciate over a period of time, people as an asset appreciate over a period of

time. Longer a person has been with a company; greater is his value in terms of

experience & contribution, and therefore, his price.

An organization’s goals can be achieved only when people put in their best

efforts. How to ascertain whether an employee has shown his or her best

performance on a given job? The answer is performance management system.

2.1.2 DEFINITION

Susan M. Heathfield defines, Performance management as process of

creating a work environment or setting in which people are enabled to perform to

the best of their abilities. Performance management is a whole work system that

begins when a job is defined as needed. It ends when an employee leaves your

organization.

29
 Many writers and consultants are using the term “performance management”

as a substitution for the traditional appraisal system. I encourage you to think of the

term in this broader work system context. A performance management system

includes the following actions.

 Develop clear job descriptions.

 Select appropriate people with an appropriate selection process.

 Negotiate requirements and accomplishment-based performance standards,

outcomes, and measures.

 Provide effective orientation, education, and training.

 Provide on-going coaching and feedback.

 Conduct quarterly performance development discussions.

 Design effective compensation and recognition systems that reward people

for their contributions.

 Provide promotional/career development opportunities for staff.

 Assist with exit interviews to understand WHY valued employees leave the

organization.

30
 Performance management is a forward looking process for setting goals and

regularly checking progress toward achieving those goals. It is a cyclic feedback

loop where by the observed outputs of a system are continually measured and

compared with the desired goals outputs. Any discrepancy or gap is then fed back

into changing the inputs of the process, so as to achieve the desired goals. Any

such management control system involves communicating the required change and

promptly taking action to effect the desired change. This helps the system or

organization being managed to achieve the required goal or the strategic plan

Performance management has a wide variety of applications such as employee

performance, software performance, business or corporate performance and so on.

A key aspect of Performance management is performance measurement.

Whatever the process being driven with Performance management, clear and

concise measures are required in order to properly define the desired goals. Most

performance measurement systems fail to achieve the desired goals of the process

owner or project sponsor because goals measurement is ambiguous, not specific

enough, poorly communicated or because results cannot be measured effectively.

Performance measurement is often confused with performance appraisal, the

latter only forming the final part of the performance measurement cycle.

Performance appraisal is a back wards looking process and a lagging indicator of

financial performance, only measuring what happened in the past. Performance

31
measurement is a forward looking process and a leading indicator of financial

performance because it drives a system or organization towards a desired future

goal.

 Recognize and reward outstanding performance

 Institutionalize performance management practices.

2.1.3 Attributes of Successful Performance Management Systems:

Various Governmental groups, including the National Partnership for

reinventing Government, found that there were certain attributes that set apart

successful performance measurement and management systems, including:

 A conceptual framework is needed for the performance measurement

and management system. Every organization, regardless of type, needs a

clear and cohesive performance measurement framework that is understood

by all lecels of the organization and that supports objectives and the

collection of results.

 Effective internal and external communications are the keys to

successful performance measurement. Effective communication with

employees, process owners, customers, and stakeholders is vital to the

successful development and deployment of performance measurement and

management systems.
32
 Accountability for results must be clearly assigned and well-understood.

High-performance organizations clearly identify hat it takes to determine

success and make sure that all managers and employees understand what

they are responsible for in achieving organizational goals.

 Performance measurement systems must provide intelligence for

decision makers, not just compile data. Performance measures should be

limited to those that relate to strategic organizational foals and objectives,

and that provide timely, relevant and concise information for use by decision

makers – at all levels – to assess progress towards achieving predetermined

goals. These measures should produce information on the efficiency with

which resources are transformed into goods and services, on how well results

compare to a program’s intended purpose; and on the effectiveness of

organizational activities and operations in terms of their specific contribution

to program objectives.

 Compensation rewards, and recognition should be linked to

performance measurements. Performance evaluations and rewards should

be tied to specific measures of success by linking financial and non financial

incentives directly to performance. Such a linkage sends a clear and

unambiguous message to the organization as to what is important.

33
  Performance measurement systems should be positive, not punitive. The

most successful performance measurement systems are not “gotcha”

systems, but learning systems that help the organization identify what works

– and what does not – so as to continue with and improve on what is working

and repair or replace what is not working.

 Results and progress toward program commitments should be openly

shared with employees, customers, and stakeholders. Performance

measurement system information should be openly and widely shared with

an organization’s employees, customers, stakeholders, vendors, and

suppliers.

2.1.4 Mei-I Cheng, Andrew Dainty, David Moore, International Journal of

Productivity and Performance Management, Year: 2007 Volume: 56 Issue: 1

Page: 60 – 75, Emerald Group Publishing Limited

Purpose – The paper seeks to show that implementing change initiatives in

organizations is extremely problematic, particularly in relation to human resource

management (HRM) initiatives. The challenges inherent in implementing new

HRM systems and procedures is arguably more acute in project-based

organizations where temporary teams and geographically dispersed employees

34
render the coherent implementation of new systems and procedures problematic.

This paper presents the findings of case study research in which the implementation

of a new performance management system for improving individual project

manager performance is evaluated. A framework is developed for guiding the

implementation of similar change initiatives in other project-based organizations.

Findings – The paper finds that barriers to implementing new performance

solutions stemmed from a lack of senior management commitment and support

ingrained working practices and an absence of appropriate training interventions.

These are relatively straightforward to overcome as part of a robust implementation

framework.

2.1.5 Performance Management by Anthony McDonnell University of

Newcastle - School of Business and Management, Patrick Gunnigle University

of Limerick - Kemmy Business School September 12, 2008

Performance Management has developed from a very operational focus to a

more strategically oriented concept, i.e. where it plays an integral role in the

formulation and implementation of strategy (Scott-Lennon, 1995). It is this

strategic impetus which differentiates it from performance appraisal. Performance

management seeks to align a number of processes (e.g. performance related pay

systems) with corporate objectives (McKenna and Beech, 2008). Theoretically it

involves a shared process between managers, individuals and teams where goals

35
are agreed and jointly reviewed. Further, corporate, divisional, departmental, team

and individual objectives should all be integrated. Performance appraisal is a

crucial element of the performance management process, involving a formal review

of individual performance. It is contended that performance management represents

possibly the greatest opportunity for a human resource (HR) system to make a

telling contribution to organizational performance (Sparrow and Hiltrop, 1994). It

represents a system that can inform how the firm's human resources contribute to

the organization’s strategic objectives. Unfortunately the extent to which it is an

effective and useful system in practice remains open to question. For example, the

high use of various facets of performance management does not always correlate

with high results regarding perceived effectiveness (CIPD, 2005).

This chapter provides a contemporary review of performance management

which is now believed to be used in some form or other in most organizations

(Lawler, 2003; CIPD, 2005). We begin by defining performance management and

reviewing its evolution. We then consider the performance management process by

applying a critical lens to some of the main approaches set out thus far. Following

this, we consider the primary tool used in performance management systems,

namely performance appraisal. We then discuss some of the more contemporary

envelopments including the use of 360-degree feedback and forced distribution,

before concluding.

36
2.1.6 Treasury Performance Management System, Thursday, 12 September

2002, Content ID: 111

The purpose of Treasury's Performance Management System is to: improve

the work in Treasury by reviewing each employee's work performance; provide the

basis for establishing the base pay of all employees and any temporary payments;

and provide a basis for developing employees in their current roles.

2.1.7 A Performance Management System: Research, Design, Introduction

and Evaluation by Beer, Michael

The Performance Management System (PMS) is used by Corning Glass to

assess its managerial and professional personnel. PMS emphasizes development

over evaluation. It utilizes and measurement and integrates results with behavior

centered appraisal. This paper describes the development, design, operation, and

evaluation of PMS.

2.1.8 Constraints in the Implementation of Performance Management Systems

in Developing Countries by Frank Louis Kwaku Ohemeng School of Political

Studies, University of Ottawa, Canada

Performance management has become a key element in modern public sector

governance. As a result, many developing countries have introduced it as a means

37
to measure organizational and individual efficiency in order to ensure that public

sector organizations meet the needs of the public. However, the implementation of

performance management systems in many of these countries has been affected by

a number of institutional and capacity constraints such as culture, institutional

fragmentation, public apathy, and leadership support, thus making it difficult for

many of them to realize the `benefits' of such a system. This article examines these

constraints with a focus on Ghana. Utilizing information obtained from interviews

of senior bureaucrats and chief executive officers of state-owned enterprises

(SOEs), it is argued that without a critical analysis of these constraints, performance

management no matter how attractive it may be will not achieve the desired results

in developing countries.

2.1.9 PERFORMANCE MANAGEMENT SYSTEM by DUFT, Donald, M.

A performance management system provides performance information of a

communication network. The performance management system receives an

instruction to request the performance information from a user system. The

performance management system processes the instruction to determine the

performance information. The performance management system generates a

graphical format of the performance information. The performance management

system then transmits the graphical format of the performance information to the

user system.
38
2.1.10 IN AN ARTICLE WHAT’S YOUR PERFORMANCE

MANAGEMENT SYSTEM WORRTH? STATS BY MARGERY

WEINSTEIN (NOVEMBER 19, 2008)

Was that performance management program and supporting technology

worth the investment you’ve coaxed form your company’s decision-makers? To

answer that question, Bersin & Associates, a research and advisory firm focused on

enterprise learning and talent management released two new studies. “The

Essentials of Performance Management Practices,” Part 1 and II. Here are some of

the highlights.

 “Once viewed as a standalone employee appraisal process designed to

feed compensation and promotion decisions, performance management

now has become the comer stone of modern talent management”, says

Leighanne Levensaler, director of talent management research and the

study’s primary author. “Our research found this seemingly simple

process is undergoing significant transformation as organizations embark

on automating goal alignment, assessment, coaching, development, and

succession processes.”

39
 “This research demonstrates two important findings,” says Josh Bersin,

president, “ First, effective employee management practices are different

form those in the past and focus on alignment, coaching, development,

and measurement, Second, the red-hot market for performance

management software is paying off for buyers. More than 85 percent of

the organizations we studied are seeing demonstrable positive. This

article reports a study of performance management practices in four

functions across four European Union member states (Finland, the

Netherlands, Sweden, and the United Kingdom). The focus is on how

and to what extent performance indicators influenced the top management

of the agencies concerned and the degree to which performance data were

used by ministries as steering instruments. The research historical

institutionalism perspective combined with a model that identifies

primary task characteristics as a source of significant variation. Thus the

design explores both the influence of task characteristics (through

contrasts among the four different functions) and embedded national

system characteristics (through contrasts among the four countries). I

show that both primary task characteristics and national system

characteristics had some of the theoretically predicted effects on the

management regimes. Equally, however, certain general tendencies

embraced all countries and most functions. These include, first, the

40
incremental growth of more sophisticated performance indicator systems

and, second, the feebleness of ministries in developing performs

effectiveness of training in organization.

41
 CHAPTER – III

3.1 RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research

problem.

3.1.1 RESEARCH – MEANING AND DEFINITION

Research is an art of scientific investigation. The advanced learner’s

dictionaries of current English lay are down the meaning of research as, “a careful

investigation (or) inquiry especially through search for new facts in any branch of

knowledge”. Redmen and Mary define research as a “systematic effort to gain

knowledge”...

3.1.2 RESEARCH DESIGN

A research design is purely and simply the framework or plan for a study that

guides the collection and analysis of data. Generally a research design is a blue

print of the research that is to be followed in completing the study.

In the research initially the researcher used descriptive research to report the

factor as such happen. Later on he used exploratory research to find the cause and

effect.

42
3.2 SOURCE OF DATA

3.2.1 PRIMARY DATA

The primary data are those which are collected afresh and for the first time and thus

happen to be in original character. The primary data for this project is collected

from employees.

3.2.2 SECONDARY DATA

Secondary data are those data available already in the books of records;

Secondary data was collected from company records, annual reports.

3.3 TOOL FOR DATA COLLECTION

The questionnaire was used to collect the data from the employee and

informal interview were also conducted to get the direct responses of the

employees regarding critical factors.

The questionnaire was designed to include all attributes related to

performance management system. Much care taken for construct the questionnaire,

so that it is free from errors and it makes sure that questionnaire are in logical

sequence. The questioner designed add consists of dichotomous questionnaire and

various rating scale.

43
3.4 POPULATION

The population or universe can be defined as aggregate of items possessing

a common trait. In this study population is finite having definite and no. of

employees working in Manatec electronic private limited.

3.5 SAMPLE

Few items selected from the universe for the purpose of study is called

sample. Here the respondents are the employees of Manatec electronic private

limited

3.6 SAMPLE DESIGN

Sample design is a definite plan determined before any data actually for

obtaining for a sample from a given data. The sample was collected from

population. In the sample size considered for the study is 50. The purpose of

selected sample from the given population is called sampling. The simple random

sampling (probability sampling) is used for the study. The simple random sampling

were each and every item in the population as an equal chance of inclusion in the

sample and each one of the possible samples in case of finite universe, has the same

Probability of being selected.

44
3.7 STATISICAL TOOL USED FOR ANALYSIS

The collected data is analyzed using the following statistical tools

 Percentage

 Correlation

 Weighted average method

3.7.1 Percentage Method:

It refers to special kind of ratio. It is used to making comparisons between

two or more series of data. Percentages are used to describe relationships.

Percentage = No. Of Respondents X 100

Total No. Of Respondents

3.7.2 Weighted Average Method

In the Weighted Average Method, the weighted average can be

calculated by the following formula

XW = WX/X

Here XW represents the weighted average

“X1, X2, X3, X4,………..Xn” represents the value for variable values

“W1, W2, W3, W4 …Wn” represents the weight age given to the variable.

45
Steps

 Multiply the weights (W) by the variables (X) to obtain WX

 Add all WX to obtain WX

 Divide WX by sum of the weights (X) to get weighted average.

3.7.3 Correlation:

Correlation measures the average relationship between two ore more

variables. When change in the value of a variable affects the value of another

variables. We say that there is a correlation between two variables. The two

variables may more in the same or opposite direction.

COV (X, Y)

r=

X Y

46
47
 CHAPTER – IV
DATA ANALYSIS AND INTERPERTATION
OPINION OF RESPONDENTS REGARDING STRENGTH AND
WEAKNESS OF PERFORMANCE MANAGEMENT SYSTEM
TABLE 4.1
No. of Percentage
S.No. Opinion Respondents (%)
1 Strongly Agree 10 20
2 Agree 37 74
3 Neutral 3 6
4 Dis Agree 0 0
5 Strongly Dis Agree 0 0
6 Total 50 100
CHART 4.1

OPINION OF RESPONDENTS REGARDING

STRENGTH AND WEAKNESS OF
PERFORMANCE MANAGEMENT SYSTEM
74%
80
60
Percentage

40
20%
20 6%
0
Strongly Agree Neutral Dis Agree Strongly
Agree Dis Agree

INTERPRETATION:
From the table and chart it is inferred that 74% of respondents agree with the
strength and weakness given to them by the organization and 6% of respondent are
neutral
OPINION OF RESPONDENTS REGARDING ACHIEVE THE GOALS OF

PERFORMANCE MANAGEMENT SYSTEM

48
 TABLE 4.2
S.No. Opinion No. of Percentage
Respondents (%)
1 Strongly Agree 25 50
2 Agree 25 50
3 Neutral 0 0
4 Dis Agree 0 0
5 Strongly Dis Agree 0 0
6 Total 50 100

CHART 4.2

OPINION OF RESPONDENTS REGARDING

ACHIEVE THE GOALS OF PERFORMANCE
MANAGEMENT SYSTEM

60 50% 50%
50
Percentage

40
30
20
10
0

Strongly Agree Neutral Dis Agree Strongly

Agree Dis Agree

INTERPRETATION:
From the table and chart it is inferred that 50% of respondents strong agree
with able to achieve the goals of performance management system and 50% of
respondent are agree.

OPINION OF RESPONDENTS REGARDING SKILL, KNOWLEDGE AND

PERFORMANCE OF PERFORMANCE MANAGEMENT SYSTEM

TABLE 4.3
49
 No. of
S.No. Opinion Respondents Percentage (%)
1 Strongly Agree 26 52
2 Agree 23 46
3 Neutral 1 2
4 Dis Agree 0 0
5 Strongly Dis Agree 0 0
6 Total 50 100

CHART 4.3

OPINION OF RESPONDENTS REGARDING

SKILL, KNOWLEDGE AND PERFORMANCE OF
PERFORMANCE MANAGEMENT SYSTEM
60 52%
46%
50
Percentage

40
30
20
10 2%
0
Strongly Agree Neutral Dis Agree Strongly
Agree Dis Agree

INTERPRETATION:
From the table and chart it is inferred that 52% of respondents strong agree
with the level of skill, knowledge and performance and 2% of respondent are
neutral.
OPINION OF RESPONDENTS REGARDING MOTIVATES MY SELF

DEVELOPMENT IN PERFORMANCE MANAGEMENT SYSTEM

TABLE 4.4
No. of Percentage
S.No. Opinion Respondents (%)
1 Strongly Agree 19 38
2 Agree 18 36
50
 3 Neutral 13 26
4 Dis Agree 0 0
5 Strongly Dis Agree 0 0
6 Total 50 100

CHART 4.4

OPINION OF RESPONDENTS REGARDING

MOTIVATES MY SELF DEVELOPMENT IN
PERFORMANCE MANAGEMENT SYSTEM
38% 36%
40
30 26%
Percentage

20
10
0
Strongly Agree Neutral Dis Agree Strongly
Agree Dis Agree

INTERPRETATION:
From the table and chart it is inferred that 38% of respondents strong agree
with the level of motivates my self development and 26% of respondent are neutral.

OPINION OF RESPONDENTS REGARDING SUPERVISOR

COMMUNICATES WELL IN PERFORMANCE MANAGEMENT SYSTEM

TABLE 4.5
No. of Percentage
S.No. Opinion Respondents (%)
1 Strongly Agree 17 34
2 Agree 31 62
3 Neutral 2 4
4 Dis Agree 0 0
5 Strongly Dis Agree 0 0
6 Total 50 100

51
 CHART 4.5

OPINION OF RESPONDENTS REGARDING

SUPERVISOR COMMUNICATES WELL IN
PERFORMANCE MANAGEMENT SYSTEM
70 62%
60
50
Percentage

40 34%
30
20
10
4%
0

Strongly Agree Neutral Dis Agree Strongly

Agree Dis Agree

INTERPRETATION:
From the table and chart it is inferred that 62% of respondents agree with the
level of supervisor communicates well and 4% of respondent are neutral.

ANALYSIS OF OPINION OF RESPONDENTS REGARDING

SUPERVISOR COMMUNICATES WELL AND COMMUNICATION

HELPS TO WORK IN BETTER MANNER.

(USING CORRELATION METHOD)

TABLE 4.6
OPINION
FACTORS SA A N D SDA

SUPERVISOR
COMMUNICATES WELL (X) 17 31 2 0 0

52
 COMMUNICATION HELPS TO
WORK IN BETTER MANNER
X Y XY X2 Y2
(Y) 17 23 391 23 28925 529
2S 0 0
31 25 775 961 625
SA= STRONGLY 2 2 4 4 4 AGREE,
0 0 0 0 0
A=AGREE, N=NEUTRAL,
0 0 0 0 0
DA= DISAGREE, 50 50 1170 1254 1158
SDA=STRONGLY DISAGREE

Co-efficient of correlation can be calculated by using the formula

COV (X, Y)
r=
X Y

Here, COV(X, Y) covariance of X, Y

X and Y are a S.D of X and Y

TABLE 4.6.1

53
COV (X, Y) = (N) ∑XY – XY

= 5850 – 2500

= 3350

X = N∑X2 – X2

= 6270 – 2500

= 61.40

Y = N∑Y2 – Y2

= 5790 – 2500

= 57.35

COV (X, Y)
r=
X Y

54
Co-efficient of correlation (r) r = 0.951

INTERPRETATION:

From this table co-efficient of correlation (r) is calculated is 0.95 almost nearer to
1,it means that both the variables are strongly correlated. Here the supervisor
communicates well and communication helps to work in better manner are strongly
related.

55
 ANALYSIS OF RANKING GIVEN BY RESPONDENT REGARDING

PERFORMANCE MANAGEMENT SYSTEM

(USING WEIGHTED AVERAGE METHOD)

TABLE 4.7

OPINIO

SD TOTA

FACTORS SA A N D A L
MEASURE MY ACTUAL

PERFORMANCE 23 24 3 0 0 50
 RECOGINES THE NEED TO MY

LEARNING 30 13 7 0 0 50
 MOTIVATE PEOPLE 16 27 7 0 0 50
 TO DO BETTER JOB 21 23 6 0 0 50
 MOTIVATE MY SELF DEVELOPMENT 19 18 13 0 0 50

56
 TABLE 4.7.1

FACTORS
MEASUARE RECOGNIZ MOTIVAGTE
MY  ACTUAL ES NEED MOTIVA TO DO MY SELF
PERFORMAN TO MY TE BETTE DEVELOPME
  CE LEARNING PEOPLE R JOB NT
RAN WX X WX
  K W X1 WX1 X2 WX2 X3 3 4 4 X5 WX5
SA 1 5 23 115 30 150 16 80 21 105 19 95
A 2 4 24 96 13 52 27 108 23 92 18 72
N 3 3 3 9 7 21 7 21 6 18 13 39
D 4 2 0 0 0 0 0 0 0 0 0 0
SDA 5 1 0 0 0 0 0 0 0 0 0 0
TOTA
L     50 220 50 223 50 209 50 215 50 206
CW     4.4 4.46 4.18 4.3 4.12
RAN
K     2 1 4 3 5

CW (CALCULATED WEIGHT) = WXn/xN

INTERPRETATION:

From the table it is inferred that employee ranks measure their actual
performance is first, followed by recognizes the need of the learning, motivate
people, to better job motivate their self development, as last.

57
 CHAPTER-V

5.1 FINDINGS OF STUDY

The following are the findings after the data are analyzed and interpreted.

The study reveals that 42% of employees are belonging to the age category

of 20 to 30 years. Majority of the employees are males who are married and having

the educational qualification as UG.

Most of the employees are satisfied with their opinion about their job given

to them by the organization. 62% of the respondents agree that their supervisor

communicate them well. Communication between supervisor and his subordinate

is good.

Majority of the respondents are saying that present job is interesting. Using

coefficient of correlation it is found that the supervisor communication is really

good which leads to effective communication. This helps to do the work in better

manner. Using weighted average method it is found that the actual performance of

the employees is really good and it leads to perform well.

58
5.2 SUGGESTIONS AND RECOMMENDATION

Performance management system being the latest technique the organization

must take all the measures to implement it properly.

Methods and techniques related to employee motivation and employee self

development can be implemented. So, that the performance management system

will be more effective. In order to increase the performance of the employees, the

organization can give special training programme on career development also.

59
5.3 CONCLUSION

This project has been undertaken to study the performance management

system in Manatec electronic private limited. An effective performance

management system sets employees to succeed, so that they can help the

organization to carry out its operation in an effective manner. The performance

management system in the organization is effective. But the organization can

concentrate more on employees self development and motivation to attain the better

performance management system.

60
 BIBLOGRAPHY

BOOKS

 Human Resource Management, Deepak Kumar Bhattacharya, 2nd edition

2006, Anurag gain Publishers, New Delhi.

 Personnel Management by C.B.Mamoria & S.V.Gankar, Published by

Himalaya Publishing House.

 Kothari , C.R. Research Methodology- Methods & Techniques, New Delhi,

New Age International (P) Ltd., Second Edition, 2004.

 Gupta, S.P., and Gupta M.P, Business Statistics, Published by Sultan Chand

& Sons, Thirty Fourth Editions, 2005.

WEBSITE

Www. Humanlinks.com

Www. Padhmam.com

Www. resources.bnet.com

Www. performancemanagementguide.com

Www. developersnet.com

61
 QUESTIONNAIRE

A STUDY ON PERFORMANCE MANAGEMENT SYSTEM IN MANATEC

ELECTRONIC PRIVATE LIMITED, PUDUCHERRY

NAME :

AGE : Bellow 25, 25 – 35,

35 – 45, Above 45,

GENDER : Male Female

DESIGNATION : Upto HSC, UG PG DIPLAMO

LEVEL OF MANAGEMENT : Top Middle

YEARS OF EXPERIENCE : Below 5 yrs 5 yrs – 10 yrs

10yrs – 15 yrs Above 15 yrs

62
 PERFORMANCE MANAGEMENT SYSTEM

(SA = Strongly Agree: A = Agree: N = No Option: D = Disagree: SD = Strongly

Disagree)

SA A N D SD
1. Performance Management system identify my

deficits and new skills received in the year

head.
2. Performance Management system gives a

better understanding of my Strength and

Weakness.
3. I feel motivated after a review meeting.
4. I am able to achieve the goals of the

Performance Management system.

5. I know what is expected of me by my

organization.
6. Performance Management system is helpful to

measure my actual performance.

7. Performance Management system has

improved my skill, knowledge and

performance.
8. Performance Management system recognizes

the need to my learning.

9. Performance Management system motivate

people and makes them fell part of the

organization.
10 Training is so important to an effective

63
. Performance Management system.
11 My organization is committed to training and

. development.
12 Performance Management creates an

. atmosphere of teamwork and improvement.

13 Performance Management system is about

. getting people to work hard.

14 Performance Management system helps

. people to do better job.

15 Performance Management system can help

. reveal the causes of good and poor employee

performance.
16 Personal development plan motivates my self-

. development.
17 Performance Management system helps to

. improve my life Career development.

18 My supervisor communicates well.

.
19 We leave respect for each other in our work

. place.
20 Proper Communication helps me to do the

. work in better manner.

21 Performance Management system was helpful

. to communicate and interact well with each

other thereby improving our performance.

64
65