EFFECTIVENESS OF PERFORMANCE APPRAISAL
A STUDY ON EFFECTIVENESS OF PERFORMANCE APPRAISAL SYSTEM IN
SIDCO
DECLARATION
I, Riju Manaf do hereby declare that this project report in
Effectiveness of Performance Appraisal system in SIDCO submitted by
me in partial fulfillment of the award of degree of MASTER OF
BUSINESS ADMINISTRATION of UNIVERSITY OF KERALA is my original work
and has been prepared under the guidance of Assistant Professor:
Shamini BijoyI also declare that this project has not been
submitted by me fully or partially for the award of any degree
diploma or recognition.
NeyyardamRiju Manaf26-05-2011Reg No.
ACKNOWLEDGEMENTAs a part of the curriculum of the fourth
semester MBA of University of Kerala, it has been my great pleasure
to work in SIDCO. as a project trainee.This project report has been
made possible through the direct and indirect cooperation of
various person to whom I would like to express my deep felt
appreciation and gratitude. First of all I express my profound
gratitude to the Lord almighty for the inspiration and guidance
throughout this project.I hereby extend my sincere gratitude and
thanks to the staff of SIDCO for providing valuable assistance,
information and adequate data. I wish to thank Mr. Anil Kumar,
production manager and all other staffs of SIDCO for their kind
co-operation for the completion of the projects.I am extremely
grateful and indebted to Mr. Shamini Bijoy, Assistant Professor,
Kerala Institute of Cooperative Management, for having consented to
be my project guide and without whose co-operation the project
would have real difficult to complete.Finally I am also highly
indebted to my parents for the financial as well as emotional
support.Riju Manaf
CONTENTSi NoParticularsPage No
Section-I
(a)Declaration1
(b)Certificate From the Company
(c)Certificate From the College
(d)Acknowledgement2
(e)Table Of Content3
(f)List Of Table4
(g)List Of Figures6
Section-II
Chapter 1Introduction9
Chapter 2Research Methodology12
Chapter 3Industry Profile15
Chapter 4Company Profile28
Chapter 5Literature Review41
Chapter 6Data Analysis And Interpretation51
Chapter 7Finding And Suggestions97
Chapter 8Conclusion101
Section-III
Bibliography103
Appendix105
LIST OF TABLES
TABLE NOTITLEPAGE NO
4.1 Distribution of age wise profile of the Employee53
4.2 Distribution of Gender of Employee55
4.3 Distribution of experience of the employee57
4.4Distribution of Income of Employee59
4.5 Distribution of familiarity with the present performance
appraisal system61
4.6Distribution of employees opinion considered for
appraisal63
4.7 Distribution of interval at which performance is
measured65
4.8 Distribution of effectiveness of various attributes67
4.9Distribution of present performance appriasal system helps to
identify the strength and weakness69
4.10 Distribution of weakness of the employee is communicated in
a non threatning manner71
4.11 Distribution of appraisal system provides an opportunity
for self evaluation73
4.12 Distribution of company used to give feedback after the
appraisal of your performance75
4.13 Distribution of present performance appraisal system is
time consuming77
4.14Distribution of system gives idea of what is expected him by
the management79
4.15Distribution shows Chi-Square test (Performance appraisal
increases employee motivation) 81
4.16 Distribution of rater have the clear knowledge of that
employees job82
4.17Distribution of performance appraisal system helps to
improve performance84
4.18 Distribution of rewards are given according to
performance86
4.19Distribution of satisfaction of employees for the appraisal
system88
4.20 Distribution of objectives of performance appraisal are
fair and unclear to the subordinates90
4.21Distribution of management provides counseling after the
appraisal92
4.22 Distribution of management provides training after the
appraisal94
LIST OF FIGURES
FIGURENOTITLEPAGE NO
4.1Diagram showing the distribution of age wise profile of the
Employee54
4.2Diagram showing the distribution of Gender of Employee56
4.3Diagram showing the distribution of experience of the
employee58
4.4Diagram showing the distribution of Income of Employee60
4.5Diagram showing the distribution of familiarity with the
present performance appraisal system62
4.6Diagram showing the distribution of employees opinion
considered for appraisal64
4.7Diagram showing the distribution of interval at which
performance is measured66
4.8Diagram showing the distribution of effectiveness of various
attributes68
4.9Diagram showing the distribution of present performance
appriasal system helps to identify the strength and weakness70
4.10Diagram showing the distribution of weakness of the employee
is communicated in a non threatning manner72
4.11Diagram showing the distribution of appraisal system
provides an opportunity for self evaluation74
4.12 Diagram showing the distribution of company used to give
feedback after the appraisal of your performance76
4.13Diagram showing the distribution of present performance
appraisal system is time consuming78
4.14Diagram showing the distribution of system gives idea of
what is expected him by the management80
4.15Diagram showing the distribution of rater have the clear
knowledge of that employees job83
4.16
Diagram showing the distribution of performance appraisal system
helps to improve performance85
4.17 Diagram showing the distribution of rewards are given
according to performance87
4.18Diagram showing the distribution of satisfaction of
employees for the appraisal system89
4.19Diagram showing the distribution of objectives of
performance appraisal are fair and unclear to the
subordinates91
4.20Diagram showing the distribution of management provides
counseling after the appraisal93
4.21Diagram showing the distribution of management provides
training after the appraisal95
CHAPTER IINTRODUCTION
IntroductionAlmost every organization in one way or another goes
through a periodic ritual, formally or informally, known as
performance appraisal. The formal performance appraisal has been
called a tool of management, a control process, an activity and a
critical element in human resources allocation. Uses for
performance appraisal have included equal employment opportunity
considerations, promotions, transfer and salary increases.
Primarily performance appraisal has been considered an overall
system for controlling an organization. Performance appraisal has
also been called an audit function of an organization regarding the
performance of individuals, groups and entire divisions.Performance
appraisal may be defined as a structured formal interaction between
a subordinate and supervisor, that usually takes the form of a
periodic interview (annual or semi-annual), in which the work
performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as
opportunities for improvement and skills development.
Statement of the problem:Industrial organizations use systematic
performance appraisal procedures for both non-supervisory and
managerial employees. Need for performance appraisal system is as
follows: It helps the supervisor to evaluate the performance of his
employees systematically and assign that work in which they are
best suited.
It helps in guiding and controlling the behavior as well as the
work of the employees.
The ability of the staff is recognised and can be adequately
rewarded.
It provides information to diagnose deficiencies in the
employees skill, knowledge and determine the training and
development need.
Maintain fair relationships with groups.
CHAPTER IIRESEARCH METHODOLOGY
Research Methodology:It is descriptive study based on the survey
method. Data are collected from respondents through the
questionnaire .Descriptive research is used to obtain information
concerning the current status of the phenomena to describe what
exists with respect to variable or conditions in a situation.A
carefully designed questionnaire is used to collect information
from the chosen respondents. The whole universe is made into
different strata and the samples are drawn at random to have a
proportionate representation from each stratum. The questions are
included to know about the respondents opinion about the present
performance appraisal system in SIDCO and to know how much it
affects their performance.
Collection of Data: The research study is a descriptive study
based on survey method. The study is completed by using primary and
secondary data. Primary Data: For the collection of primary data a
set of questionnaires were used from a sample size of 100 in
number. Data also collected through direct interview. Secondary
Data: The secondary data needed for the study was collected from
the records and journals provided by the organisation and from the
website of the organisation.
Sampling Techniques: SIDCO have been selected since it covers
the large population .Only 100 samples from the employees. Primary
data were collected by stratified random sampling techniques.
Scaling Techniques: The researcher used Likert scale for
analyzing the data. The employees were asked to indicate his or her
degree of agreement with the statement. Here five point scale was
used. Likert method of summated rating is the simpler and most
frequently used method to measure attitudes.Data Analysis and
Interpretation: After the collection of data through
questionnaires, the analysis of data and interpretations are made
on the basis of predetermined objectives. Various statistical tools
like pie charts and percentages are used for the analysis of
data.Scope of the study:The study was limited to the employees of
the SIDCO in Trivandrum.Limitations: Research was to be conducted
maintaining the decorum of the company. Employees were busy in
their work and thus did not spare much time to respond openly to
the questions asked. Information and responses given by the
respondents may be a biased due to several reasons. Limited time
span for carrying out study also restricted the research work. As
company is large, as per their tactics and guiding principle
employees were not ready to disclose confidential facets.
CHAPTER IIIINDUSTRY PROFILE
3.1. SMALL SCALE INDUSTRYThe prospect of development in the
sector of small businesses has importance because of its beneficial
impact on the industrial economy of the world. In developing
economies entrepreneurship in small scale industries has special
importance in context to employment potential, equitable
distribution of wealth, balanced regional development and growth
and above all, the preservation and development of ancient culture,
art and craft. In India the size of business criterion is used as a
base of defining small scale business units. The definition of the
small business in India has changed over years. During the year
1991, the Government of India has defined Small Scale Industrial
Unit (SSI) as a unit or an undertaking having an investment in
plant and machinery of not more than Rs. 60 lakhs and not more than
Rs. 75 lakhs in case of ancillary units. Small scale industries,
thus, occupy a prominent position in the development agenda of our
country. This is because of their perceived importance in enhancing
forward and backward linkages throughout the economically diverse
sectors of the economy and their potential in generating employment
and incomes.On the recommendations of the Abid Hussain Committee,
the Government of India raised in 1997 the ceiling for the small
scale industries, including ancillary units and export- oriented
units up to Rs. 3 crores. Thus, a small scale industrial unit is
one engaged in the production, processing and preservation of goods
and rendering of certain services and having an original investment
in plant and machinery not exceeding Rs. 3 crores.The small scale
industrial sector in India comprises of a widely divergent spectrum
of industries, ranging from the micro and rural enterprises- using
rudimentary technology, on the one hand- to modern units using
sophisticated technology on the other hand. The sector, as of today
comprises of 3.4 million industrial units spread throughout the
country providing employment to over 19.2 million people. It
contributes to the socio- economic development of the nation is
therefore significant. Over 7500 different products for domestic as
well as international markets are produced in these units. Even in
the phase of strict and difficult environmental and other
constrains, the sector has been able to register an impressive
growth rate. The small scale sector today contributes about 40% of
the value added in manufacturing sector and 6.7% of GDP of India.
Its share in the national exports stands at over 34%. The sector
accounts for about 95% of the industrial units in the country and
thus is rightly called the growth engine of the Indian economy.The
small scale industrial sector is capable of addressing itself to
the basic problems of Indian economy viz. unemployment and
disparities in the regional development. The process of
liberalization and economic reforms has created wide range of
opportunities for the development of small scale sector. However,
at the same time changes in the world scenario have thrown up new
challenges to the very existence of this sector, as the integration
of global markets has made competitiveness both in terms of quality
and cost vitally important as resorting of quality goods at highly
competitive prices has become the order of the day.Currently,
knowledge-based industries like Information Technology and
Biotechnology are considered to be the thrust areas for the growth.
Industrial output is increasingly becoming knowledge driven, by
developing new ideas and products, based on a strong research- the
small scale industry could make a substantial contribution,
provided they are able to develop a good marketing network.
3.1.1 Nature and CharacteristicsSmall scale industries have some
special features on its own; the main characteristics of small
scale businesses are as follows:1) Personal character: In small
business concerns, the owner himself is considered as the manager.
He actively participates in all aspects of the business such as
planning, organizing, decision-making, etc.2) Limited area of
operation: The operations of small scale industrial units are
generally localized. It may usually cater to the local and regional
demands. Its products may sometimes be exported.3) Labour
intensive: They are labour intensive and so they can provide plenty
of employment opportunities. Capital investment is limited due to
its small size.4) Closely held: A small scale industrial unit is
generally owned by one man. Sometimes it is owned by a group of
persons. These persons supply the required capital.5) Simple
organization: Usually a small scale unit has no division of labour
because of its limited resources. It has only few layers of
management.6) Indigenous resources: These units are indigenous
resources. The required materials and labour are obtained by the
firm locally.7) Limited scale of operation: A small scale unit has
a limited share in the market. The size of the business is small
and it has low gestation period.8) Simple technology: Highly
sophisticated technologies and machineries are rarely employed.
Machinery which can be handled manually is more in use under this
sector.9) Limited investment: Capital investment in small scale
industries is generally limited because they are not capital
intensive, but labour intensive.
3.1.2. Objectives of Small scale Industrial unitsThe main
objectives of developing small industrial units in India are: To
generate large scale employment opportunities with relatively low
capital investment. To eradicate the unemployment problems existing
in the country. To encourage the balanced regional development of
the nation. To bring the backward and rural areas too in the
mainstream of national development. To ensure more equitable
distribution of income and wealth. To improve the standard of
living of the people. To encourage effective mobilization of
countrys untapped capital and human resources. To encourage easy
dispersal of industries all over the country. To reduce the
concentration of economic power and wealth in a few.3.1.3. The
importance of promoting Small Scale IndustriesThe promotion of
small scale industries is important due to the following reasons:
As small scale industrial are labour intensive, it provides the
possibilities for creating employment opportunities. In a country
like India where capital resources are scarce, SSIs which has less
capital requirements is more suitable. They can be successfully
operated in rural and backward areas. They are quick yielding They
can act as a catalyst to enhance the growth of entrepreneurship.
Decentralization of authority is very easy to put into practice in
the management of small scale industrial units.The industrial
policies adopted by the Indian Government maintain certain
arguments in favour of entrepreneurial development in the small
scale sector. Thus small scale industrial units enjoy the following
considerations which make them important to the Indian economy:1)
Price preference offered to small scale industrial units:Fore the
purchases made by the government, semi government institutions and
public companies for small scale units, the government gives the
following price preferences:- 15% on the products of industries,
which are situated out of the state. 5% on the products of medium
scale industries and large scale industries situated inside the
state. 2% additional price to the products of small units with ISI
registration.2) Services rendered by taluk industries offices:The
services rendered by the taluk industries offices are to grant
provisional registration to small scale industrial units, to help
them in their coordination and development etc. these office keep
the entrepreneurs of small scale industries well informed about the
incentives and assistance offered to them by the government. They
also recommend the names of small scale units which deserve to get
incentives and assistance, to the respective District Industry
Office. They also help in promoting new industry units, and provide
leadership in conducting various development schemes in the taluk
level.3) Bridge FinanceBridge finance is an interim finance which
commercial banks provide to entrepreneurs on a short term basis to
enable them to tide over the delay in getting sanctioned term
loans. In case the borrowing entrepreneurs delays in submitting the
necessary document, the commercial banks and other financial
institutions shall also delay in distributing sanctioned term
loans. 4) Green channel clearance:These are several small scale
units each with a capital investment, less than Rs. 10 lakhs. In
order to encourage the growth of such industries, the entrepreneurs
must get prior sanction with retrospective effort. Thus the system
of getting prior sanction is known as Green Clearance Channel.
Industries which are enlisted as of polluting nature by the
Pollution Control Board shall not get this facility.5) Tax holiday
benefit:New industrial enterprises, including small scale
industrial units are exempted from paying income tax up to 6% of
their profits (7.5 in case of companies) from their gross income.
This is according to the section 80J of the Income Tax Act. Now
according to section 80HH and 80HHA the entrepreneur of a small
scale unit established in a rural area is entitled to get exempted
of 20% of his profits. A small scale unit gets this exemption for
ten years from the actual commencement of production.6) Different
types of government incentives:The Central government or the State
Government or both offer the following incentives to entrepreneurs
of small scale industries: Export import subsidies and bounties
Interest free loans Subsidies for research and development
Subsidies for transportation Interest subsidies Financial
assistance for purchasing power generators Exemption from property
tax Subsidies to artisans, craftsmen, and entrepreneurs of
traditional industries including handloom industries Incentives to
non- resident Indians who start business on their own Special
incentives to women entrepreneurs Exemption from paying income
tax
3.2. SMALL SCALE INDUSTRY IN INDIASince the time of
independence, small scale sector in India has been a major
contributor to countrys gross domestic product (GDP). This
traditional sector in India which is considered to have huge growth
prospect with its wide range of products, with 40% share in total
industrial output and 35% share in exports, the small scale
industrial sector in India is acting as the engine of growth in the
new millennium. The definition of small scale industrial
undertakings has changed over years. Initially they were classified
into two categories_ those using power with less than 50 employees
and those not using power with the employ strength being more than
50 but less than 100. However, the capital resources invested on
plant and machinery, building has been the primary criteria to
differentiate the small scale industries from the large and medium
scale industries. An industrial unit can be categorized as small
scale unit if it fulfills the capital investment limit fixed by the
Government of India for the small scale sector.As per the latest
definition which is effective since December 21, 1999, for any
industrial unit to be regarded as small scale industrial unit, the
following conditions must be satisfied:- Investment in fixed assets
like plant and equipment either held on ownership terms on lease or
on hire purchase should not be more than Rs. 10 million. However
the unit in no way must be owned or controlled or ancillary of any
industrial unit.3.2.1. Performance of Small Scale Industries
Employment Production Exports Opportunities Economic Indicators
Employment Generation SSI Sector in India creates largest
employment opportunities for the Indian populace, next only to
Agriculture. It has been estimated that a lakh rupees of investment
in fixed assets in the small scale sector generates employment for
four persons.
Chart number 3.1 Employment in small scale sectorAccording to
the SSI Sector survey conducted by the Ministry and National
Informatics Centre with the base year of 1987-88, the following
interesting observations were made related to employment in the
small scale sector.
Generation of Employment - Industry Group-wiseFood products
industry has ranked first in generating employment, providing
employment to 4.82 lakh persons (13.1%). The next two industry
groups were Non-metallic mineral products with employment of 4.46
lakh persons (12.2%) and Metal products with 3.73 lakh persons
(10.2%). In Chemicals & chemical products, Machinery parts and
except Electrical parts, Wood products, Basic Metal Industries,
Paper products & printing, Hosiery & garments, Repair
services and Rubber & plastic products, the contribution ranged
from 9% to 5%, the total contribution by these eight industry
groups being 49%. In all other industries the contribution was less
than 5%. Per unit employment Per unit employment was the highest
(20) in units engaged in Beverages, tobacco & tobacco products
mainly due to the high employment potential of this industry
particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and
Tamil Nadu. Next came Cotton textile products (17), Non-metallic
mineral products (14.1), Basic metal industries (13.6) and
Electrical machinery and parts (11.2.) The lowest figure of 2.4 was
in Repair services line. Per unit employment was the highest (10)
in metropolitan areas and lowest (5) in rural areas. However, in
Chemicals & chemical products, Non-metallic mineral products
and Basic metal industries per unit employment was higher in rural
areas as compared to metropolitan areas/urban areas. In urban areas
highest employment per unit was in Beverages, tobacco products (31
persons) followed by Cotton textile products (18), Basic metal
industries (13) and Non-metallic mineral products (12). Rural:
Non-metallic products contributed 22.7% to employment generated in
rural areas. Food Products accounted for 21.1%, Wood Products and
Chemicals and chemical products shared between them 17.5%. Urban:
As for urban areas, Food Products and Metal Products almost equally
shared 22.8% of employment. Machinery and parts except electrical,
Non-metallic mineral products, and Chemicals & chemical
products between them accounted for 26.2% of employment. In
metropolitan areas the leading industries were Metal products,
Machinery and parts except electrical and Paper products &
printing (total share being 33.6%).State-wise Employment
Distribution: Tamil Nadu (14.5%) made the maximum contribution to
employment. This was followed by Maharashtra (9.7%), Uttar Pradesh
(9.5%) and West Bengal (8.5%) the total share being 27.7%. Gujarat
(7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%), and Punjab (5.6%)
together accounted for another 27.4%. Per unit employment was high
- 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra &
Nagar Haveli. It was 12 in Maharashtra, Tripura and Delhi. Madhya
Pradesh had the figure of 2. In all other cases it was around the
average of 6.
ProductionThe small scale industries sector plays a vital role
for the growth of the country. It contributes 40% of the gross
manufacture to the Indian economy. It has been estimated that a
lakh rupees of investment in fixed assets in the small scale sector
produces 4.62 lakhs worth of goods or services with an approximate
value addition of ten percentage points.The small scale sector has
grown rapidly over the years. The growth rates during the various
plan periods have been very impressive.
Chart number 3. 2Production from small scale sectorThe number of
small scale units has increased from an estimated 8.74 lakhs units
in the year 1980-81 to an estimated 31.21 lakhs in the year 1999.
From the year 1990-91 this sector has exhibited a comparatively
lower growth trend (though positive) which continued during the
next two years. However, this has to be viewed in the background of
the general recession in the economy. The transition period of the
process of economic reforms was also affected for some period by
adverse factors such as foreign exchange constraints, credit
squeeze, demand recession, high interest rates, shortage of raw
material etc. When the performance of this sector is viewed against
the growth in the manufacturing and the industry sector as a whole,
it instills confidence in the resilience of the small scale sector.
The estimates of growth for the year 1995-96 have shown an upswing.
The growth of SSI sector has surpassed overall industrial growth
from 1991 onwards. The positive trend is likely to strengthen in
the coming years. This trend augurs a bright future for the small
scale industry. Export contributionSSI Sector plays a major role in
India's present export performance. 45%-50% of the Indian Exports
is being contributed by SSI Sector. Direct exports from the SSI
Sector account for nearly 35% of total exports. The number of small
scale units that undertake direct exports would be more than 5000.
Besides direct exports, it is estimated that small scale industrial
units contribute around 15% to exports indirectly. This takes place
through merchant exporters, trading houses and export houses. They
may also be in the form of export orders from large units or the
production of parts and components for use for finished exportable
goods. It would surprise many to know that nontraditional products
account for more than 95% of the SSI exports. The exports from SSI
sector have been clocking excellent growth rates in this decade. It
has been mostly fuelled by the performance of garment, leather and
gems and jewellery units from this sector.
Chart number 3.3 Export from small sectorThe lucrative product
groups where the SSI sector dominates in exports are sports goods,
readymade garments, woolen garments and knitwear, plastic products,
processed food and leather products.
OpportunitiesSmall industry sector has performed exceedingly
well and enabled our country to achieve a wide measure of
industrial growth and diversification.
Chart number 3.4 Small scale unitsBy its less capital intensive
and high labour absorption nature, SSI sector has made significant
contributions to employment generation and also to rural
industrialization. This sector is ideally suited to build on the
strengths of our traditional skills and knowledge, by infusion of
technologies, capital and innovative marketing practices.The
opportunities in the small scale sector are enormous due to the
following factors: Less Capital Intensive Extensive Promotion &
Support by the Government -Reservation for Exclusive Manufacture by
small scale sector Project Profile Funding Finance & Subsidies
Machinery Procurement Raw Material Procurement Manpower Training
Economic IndicatorsThe Small Scale Industry today constitutes a
very important segment of the Indian economy. The development of
this sector came about primarily due to the vision of our late
Prime Minister Jawaharlal Nehru who sought to develop core industry
and have a supporting sector in the form of small scale
enterprises. Small Scale Sector has emerged as a dynamic and
vibrant sector of the economy.- Today, it accounts for nearly 35%
of the gross value of output in the manufacturing sector and over
40% of the total exports from the country. - In terms of value
added this sector accounts for about 40% of the value added in the
manufacturing sector. - The sector's contribution to employment is
next only to agriculture in India. It is therefore an excellent
sector of economy for investment
CHAPTER IVCOMPANY PROFILE
4.1 HISTORY Kerala SIDCO, a promotional agency for small scale
industries, set up as a Public Sector Undertaking of Government of
Kerala which was set up in November, 1975 has four decades of
servicing to its credit. This corporation is rendering assistances
to Small Scale Industries (SSIs ) in the state, like providing
infrastructure facilities, distribution of essential raw materials,
marketing of SSI products, undertaking civil and electrical works
of state and central government owned enterprises and offices.
Moreover SIDCO is supplies Bitumen to local bodies as nodal agency
and paraffin wax to small scale industrial units. SIDCO is actually
an amalgamation of two former companies namely Kerala State Small
Industries Corporation formed in July 1961 and Kerala Employment
promotion Corporation formed in 1947. The authorized share capital
of the company is 13 crores comprising of 12000 equity shares of
Rs.1000 each issued, subscribed and fully paid up capital is
Rs.1244.02 lakhs. At present Kerala SIDCO possess industrial lands
in 12 sites, best suited for industrial purposes. Kerala, the Gods
own country is gifted with abundant natural resources essential for
the establishment of industrial units and SIDCO is glad to promote
and purpose some of the plots for allotment for industrial purpose.
Kerala SIDCO is in the lookout for more suitable areas across
Kerala which will be made available to investors suiting their
requirements. The main objective of the newly formed corporation
which was clearly delineated in the articles of association is
extracted below: To aid, council, finance and protect and promote
the interests of small industries in the state, stabilizes and run
any industrial undertakings, projects or enterprise whether owned
or run by government, statutory body, company ,co-operative
society, firm or individuals by providing them with capital,
credit, means, resources, supply of machinery and equipments on
hire purchase procurement and distribution of scare raw materials,
advise on import control policy and export promote procedures in
marketing and sales of products, revitalization of sick units and
rehabilitation of defunct units, adequate information and
publicity, construction, maintenance and management and
administration of Industrial Estates and Development Plots,
provision for all infrastructural facilities, technical and
managerial assistance for the prosecution of their work and
business.To promote employment and entrepreneurship among the
skilled, semi-skilled, trained, experienced and educated members of
the public by promoting, establishing and undertaking the
development areas and plots, growth centres, common facilities or
service centers or other infrastructural works on its own or as
agents of government or any other body, corporate or co-operative
society or person.To promote and operate schemes for industrial
development and to develop entrepreneurship by providing package
consultancy services, including pre investment services and for
that purpose to prepare and get or cause to be prepared reports,
studies, surveys, procedures, designs, blue- prints, statistical
and other information necessary for successful implementation of
industrial projects.1.1.1. Organizational functions and divisions
From the inception of the new company, SIDCO was assisting the
department of the implementation of 10,000 industrial
programmes.SIDCO started in a big way with the following divisions
Technical consistency Research and development Raw materials
Finance ( Share participation and margin money loans) Import and
export Marketing Machinery Manufacturing Information and
publicity
.1.1.2. Objectives of SIDCO SIDCO aims at Development of small
scale industries in the state by providing: Infrastructure
facilities Raw material Marketing products of Small scale
industries unit Promotional activities for SSI products.1.1.3.
Important activities of Kerala SIDCO Kerala Small Industries
Development Corporation is a fully owned Government Corporation set
up to promote small industries in the state of Kerala. This
corporation is rendering assistance to Small Scale Industries(SSIs)
in the state, like providing infrastructure facilities,
distribution of essential raw materials, marketing of SSI products,
undertaking civil and electrical works of state and central
government owned enterprises and offices. Moreover Kerala SIDCO
supplies Bitumen to local bodies as model agencies and paraffin wax
to small scale industrial units. At present Kerala SIDCO posses 17
industrial estates and 36 industrial parks, best suited for
industrial purpose. SIDCO is in the lookout for more suitable areas
across Kerala, which will be made available to investors suiting
their requirements. In Kerala, SIDCO is the prime institutional
agency providing support facilities to small scale industry. It has
established the prime objective of rendering and promoting schemes
for industrial development and to develop entrepreneurship by
proving consultancy services.
1.1.4. Major functional divisions 1. Raw Material Division2.
Production division 3. Marketing Division4. Construction Division5.
Industrial Estate Division6. Information Technology and
Telecommunication Division7. Import and Export Division8. Super
Check Cell and Quality Inspection1. RAW MATERIAL DIVISION Raw
material division is engaged in the distribution of various raw
aerials to SSI sector and public sector undertaking in Kerala
through the 14 districts Raw material distribution includes Iron
and Steel, Paraffin Wax, Titanium Dioxide, Plastic granules,
cement, a and GI pipes, Aluminium Sheet, coal , petroleum products
like lubricants, Rubber processing oil and Bitumen. Small scale
industrial units can purchase the raw materials fr their units
through the raw material depots are reasonable price. The regional
office of raw material division is situating at Kadavanthra,
Ernakulam.Mode of distribution of raw materials: The raw materials
division distributes materials through 14 district level depots
listed here Trivandrum, Kollam, AlleppeyRaw materials distributed:
Iron and Steel, pig iron, paraffin wax, titanium dioxide, plastic
raw materials, cement, oil and lubricants, bitumen , aluminium
sheets and sections, Galvanised iron pipes, paints.
Field of interest:In the current scenario of globalization and
free trade, this division is looking for import of industrial raw
materials like paraffin wax, furnace oil, fatty acid, cement, iron
and steel, iron scraps, plastic raw materials, bitumen, etc of the
imported prices are competitive.2. PRODUCTION DIVISION Now 8
production units are functioning under Kerala SIDCO in various
districts of the state. Government departments, public sector
undertakings and autonomous bodies are free to purchase all types
of furniture and other equipments produced in these units, without
observing usual tender formalities.3. MARKETING DIVISION Marketing
division of SIDCO provides assistance to small scale units in
canvassing orders from Government departments and public sector
undertakings. Government of Kerala as per the order No GP (Rt) No
54/2008/SPD dated 12.012.09 entrusted public sector undertakings,
Govt departments local self governments institutions and schools
etc can purchase steel, wooden, hospital furniture and lab
equipments from SIDCO without tender formalities. Government has
been renewing the orders from time to time. There are seven sales
emporias and seven marketing centres all over Kerala. SIDCO
participates in exhibitions and trade fairs on behalf of SSI sector
for the promotion of their products. Steps are in progress to
market SSI products in food, plastic, leather, Rubber, Electrical
in addition to wood, steel and hospital furniture and laboratory
equipments. In the light of the Government orders from time to time
SIDCO can supply furniture to Govt. Departments without render. 4.
CONSTRUCTION DIVISIONThe main functions of this division is to
undertake construction and maintenance work of sheds in Industrial
Estates, Industrial Development plots, providing infrastructure
facilities for industrial growth centres, setting up of Industrial
parks etc.
5. INDUSTRIAL ESTATE DIVISIONKerala SIDCO owns Conventional
Industrial Estates and 36 Mini Industrial Estates which are
functioning in different Districts of Kerala. There are 920 factory
sheds in which more than 750 SSI units are functioning. The above
said factory sheds were allotted on Lease basis. A very few sheds
are vacant for allotment preferably on Out Right purchase basis. A
very few sheds are vacant for allotment preferably on Out Right
purchase basis. In addition to these factory sheds, Industrial
plots are being allotted to the entrepreneurs in Industrial
Estates, Mini Industrial Estates and industrial parks for
constructing factory sheds of their own design to rub industrial
units.Considering the importance of Small Scale Industries, as part
of Government policy, the scheme for setting upon on industrial
park in each of the 140 Assembly constituencies of the State is
being implemented by SIDCO. At present 12 sites under possession of
which 7 sites are ready for allotment in various districts of
Kerala.
6. INFORMATION TECHNOLOGY & 8. TELECOMMUNICATION
DIVISIONSIDCO IT &T Division is providing software and hardware
solutions to Central and sate Government Bodies, Autonomous
Institutions and SSI units. The areas identified for business are
Development & maintenance of software solutions & websites
development. IT & Telecom products & services Hardware
products & Services Office Automation products & services
Spares and other consumablesKerala SIDCO Ltd IT &T Division
supplies Hardware (servers, laptops, and Desktop &computer
peripherals) software solutions, Telecom products, Office
automation products Annual Maintenance contract, Third party
maintenance contract and repair and maintenance contract. Kerala
SODCO Ltd has empanelled accredited IT & Telecomm firms to
execute projects undertaken. We are fully equipped to execute any
IT & Telecom implementation as per Government Guidelines.
Though our business partners we are capable of providing any
solution which the clients demand and with the wide repertoire of
qualified service personnel we can provide on all support for all
our future clients located through the length and breadth of the
state. SIDCO have complete the work of digitalization of assembly
proceedings of Kerala Legislative Assembly and web based text books
set ordering and individual text book ordering system of IT at
school. The digitalized proceedings of the 1st Kerala Legislative
Assembly (1957-1959) was unveils by Her Excellency Smt. Pratibha
Devisingh Patil, President on India during the closing ceremony of
Golden Jubilee celebration of Kerala Legislative Assembly.The major
projects undertaken by this division involves setting up a state of
the art Telecom city, one stop shop with all telecom facilities and
services spread over 25 acres at Trivandrum, the state capital with
intelligent buildings and high tech habitat centre with a total
investment of RS 400 to 450 crores. The goal for Telecom city is to
create a state of the art telecommunication centre that will
capitalize all the cutting edge technologies of the
telecommunication industry to position the state for new regional
and international investments. Another prestigious project is the
construction of multi-storied commercial complex at Kochi with a
total estimate of Rs 200 cores
8. IMPORT AND EXPORT DIVISION This is a new division formed with
view to give all possible assistance to the SSI sector by
functioning and channelizing agents for the SSI units in Kerala
both for their new material import and for product export. This
division is an extension of marketing division.
9. SUPERCHECK CELL AND QUALITY INSPECTION The super check cell
with the vigilance officer, SIDCO, as the convener super check of
the articles supplied by the managing division and the production
division with a view to check and ensure quality of the products/
services and to provide better after sales services to the
customers. A special officer (Quality Inspector) has been appointed
exclusively for quality inspection which will be done after the
sale of the products.
4.2 STRATEGIC INTENDVision Serving Small Scale Industry on a
Large Scale MissionTo provide full client satisfaction by adding
value with respect to service quality and service experience that
goes beyond managing time, cost and qualityObjectives Development
of Small Scale Industries in the state by providing Infrastructure
facilities Raw material supplies Marketing SSI products Promotional
activities of SSI products4.3 Product ProfileKerala SIDCO ia public
undertaking. Government have examined the proposal given by the
company in detail and are pleased to appoint Kerala SIDCO as the
agency for procurement supply for the following item to government
department and public sector undertaking in addition to the items
enumerated to the government order.The company supplies, Water
facilities, public water taps, plastic moulded furniture, pipes and
pipe fittings, plastic water tanks and survey equipments. Kerala
SIDCO is functioning 8 production units out there.These units
include Wood working units and 4 Engineering units. Kerala SIDCO is
a sole canalizing agent for procurement supply of selected item
manufactured by Small Scale Industrial Units. SSI products are
Steel furniture, hospital furniture, wooden furniture and lab
equipments and chemicals. The raw material includes Iron and steel,
paraffin wax, titanium dioxide, plastic granules, Galvanized Iron
Sheets and Pipes, Aluminums sheets, Petroleum products like
Lubricants, Rubber process Oil and Bitumen.
To support Kerala SIDCO as agency for the procurement and supply
for the following items1. Tarpaulin2. Electrical Chock, Condensers,
Starters3. Control Panels4. Lab Chemicals 5. Aluminums and Steel
Products6. Man Hole Covers7. Wax Candles8. Rolling Shutters9.
Voltage Stabilizers10. Agricultural Tools and Implements11. Paints
and Varnishes12. Safety MatchesAt present 8 production units are
functioning. All units are depends on job works. The government
departments can purchase various furniture and equipments produced
in these units without any tender formalities.The Indian economy is
passing through the process of globalization, liberalization and
also more as the privatization. This disreputes the control of the
supply of materials among SSI units. Almost all the items dealt in
the division have been de controlled and we have to trade these
like private dealers and to face strict competitors in the market
so companys market share go on diminishing year by year.In order to
give more help and assistance to SSI units to market their
products, government has appointed Kerala SIDCO as a sole
canalizing agency for certain selected items. They have submitted a
proposal to government for implementing the common branding and
marketing of SSI products by their company.
Considering the importance of Small Scale Industries in the
industrialization of the state as part of the government policy,
the task of setting up an Industrial Park each in the 140
Legislative Constituencies in states is being implemented by Kerala
SIDCO. Accordingly proposals from 36 constituencies were received
last year offering land for development as industrial parks.
Through land in 12 sites have been handed over in SIDCO, the land
of Mararikulam have been resumed by government and development
works in Industrial Parks at Shornur and Thiruvarpa were completed.
Plots are being allocated to enterprises on 90 years long term
lease with suitable lease right and at an yearly rent of Rs. 1/ per
cent. CompetitorThere is only one main competitor for Kerala SIDCO
is KINFRA (Kerala Infrastructural Development Corporation). Other
competitors include Local Companies and Foreign Multi National
Companies Customer ProfileThe main customers of Kerala SIDCO are
Government Departments and Public Undertakings. The main customers
of Raw materials produced by Kerala SIDCO are Iron and Steel
Authority of India, Tata Iton and Steel CompanyLtd, Vishakhapatanam
Steel Plant and Madras Refineries Ltd for Paraffin Wax.
4.4 MANAGEMENT OF THE COMPANY Organization structure:The Board
of Directors manages the company and Government of Kerala
constitutes them, unless and otherwise determined by the
government. The number of members shall not be less than two or not
more than nine. The government appoints all the Directors,
including the full time Managing Director. The organization
structure of the company is of pyramid in shape with the Board of
Directors on the top of the cadre. The Managing Director shall
execute the affairs of the company through line managers at
different such as finance, marketing, production, etc. the BODs
responsibility is the overall control and supervision of the
company. The General Manager shall be in charge of the day-to-day
management of the business of the company and in the absence of the
Managing Director , he shall take decision on the financial matters
in consolidation with the Finance controller.Board of directors
consists of: The Chairman Managing Director The General Manager
from SIDBI Two Non-officials Additional Secretary from industrial
Department President of Kerala Small Industries Association
Additional Secretary from Finance Department.
ORGANIZATIONAL STRUCTURE
Chart number 3.1 showing organizations chart
CHAPTER VLITERATURE REVIEW
Concepts & Review of literature:
"Performance, and performance alone,Dictates the predator in any
food chain" -SEAL Team INTRODUCTION The process of HRD helps the
employees to acquire or develop technical, managerial and
behavioural knowledge, skill and abilities and moulds the values,
beliefs and attitudes necessary to perform present and future
roles. The process of performance appraisal helps the employee and
the management to know the level of employees performance compared
to the standard level. Performance appraisal is essential to
understand and improve the employees performance through HRD. In
fact, performance is the basis for HRD. It was viewed that
performance appraisal was useful to decide upon employee
promotion/transfer, salary determination and the like. But the
recent developments in human resource management indicate that
performance appraisal is the basis for employee
development.PERFORMANCE APPRAISAL A poor appraisal is, often worse
than no appraisal at all. Evidence shows that the training of
appraisal can make than more accurate raters. A performance
appraisal (PA) or performance evaluation is a systematic and
periodic process that assesses an individual employees job
performance and productivity in relation to certain pre-established
criteria and organizational objectives. Performance appraisal is
also a technique of HRD. The performance interview and the process
of the performance analysis help the subordinate to interact
closely with his superior. The interaction helps particularly
subordinates learn from his superior the job related and
behavioural related aspects. This process becomes a training and
development and educational process. Thus, performance appraisal is
closely related to HRD. In fact, performance appraisal helps
employee development. Some applications of PA are performance
improvement, promotions, termination, test validation, and more.
While there are many potential benefits of PA, there are also some
potential drawbacks. Before the 1960s, performance evaluations were
designed primarily as tools for the organization to use in
controlling employees (Eichel and Bender, 1981). Eichel and Bender
go on to state that past performance was used to guide or justify
managements actions in dealing with the employee. At the time,
according to these authors, performance appraisal provided the
basis for salary, retention, discharge, or promotional decisions.
Over the past quarter century, the purpose of performance appraisal
has shifted from tools supporting the activities of management to
an increasing trend towards personnel development (Eichel and
Bender,1984). Vroom (1990) states that formal performance appraisal
plans can be designed to meet the following key needs: (a) the
organization; (b) the supervisor; and (c) the employee. He stresses
the need for effective evaluation as it can effectively serve these
critical areas. ICMA (2005) states that almost all employees are
eager to know how well they are doing in their jobs, but many dread
the meetings in which their performance is to be discussed.
Diagrammatic Representation of Performance AppraisalObjectives of
Performance Appraisal: To enable the employees towards achievement
of superior standards of work performance. To help the employees in
identifying the knowledge and skills required for performing the
job efficiently as this would drive their focus towards performing
the right task in the right way. Boosting the performance of the
employees by encouraging employee empowerment, motivation and
implementation of an effective reward mechanism. Promoting a two
way system of communication between the supervisors and the
employees for clarifying expectations about the roles and
accountabilities, communicating the functional and organizational
goals, providing a regular and a transparent feedback for improving
employee performance and continuous coaching. Identifying the
barriers to effective performance and resolving those barriers
through constant monitoring, coaching and development
interventions. Creating a basis for several administrative
decisions strategic planning, succession planning, promotions and
performance based payment. Promoting personal growth and
advancement in the career of the employees by helping them in
acquiring the desired knowledge and skills. 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 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 persons 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.
Definitions:Denhardt (1991) defines performance appraisal as a
specific evaluation with respect to an individuals progress in
completing specified tasks.Devries, Morrison, Shullman and Gerlach
(1981) define performance appraisal as a process by which an
organization measures and evaluates an individual employees
behaviour and accomplishments for a finite period.Moulder (2001)
states that performance appraisals are valued for defining
expectations and measuring the extent to which expectations are
met. She goes on to state that appraisals can make clear to
employees where they are having success and where they need to
improve performance. Moulder indicates that appraisals are useful
in setting goals and in fostering improved communications among
work groups and between employees and supervisors.Dale Yodder
defines performance appraisal refers to all formal procedure used
in working org to evaluate personalities and contribution and
potential of group members.Edward Flippo defines performance
appraisal is the systematic periodic and an impartial rating of an
employees excellence in matters pertaining to his present job and
his potential for better job.Dale.S.Beach definesperformance
appraisal is the systematic evaluation of individuals with respect
to his or her performance on the job and his or her potential for
development.
Performance appraisal methods Performance appraisal methods
include 10 appraisal methods / types as follows:1. Critical
incident methodThis format of performance appraisal is a method
which is involved identifying and describing specific incidents
where employees did something really well or that needs improving
during their performance period.2. Weighted checklist methodIn this
style, performance appraisal is made under a method where the jobs
being evaluated based on descriptive statements about effective and
ineffective behavior on jobs.3. Paired comparison analysisThis form
of performance appraisal is a good way to make full use of the
methods of options. There will be a list of relevant options. Each
option is in comparison with the others in the list. The results
will be calculated and then such option with highest score will be
mostly chosen.4. Graphic rating scalesThis format is considered the
oldest and most popular method to assess the employees performance.
In this style of performance appraisal, the management just simply
does checks on the performance levels of their staff.5. Essay
Evaluation methodIn this style of performance appraisal, managers/
supervisors are required to figure out the strong and weak points
of staffs behaviours. Essay evaluation method is a non-quantitative
technique. It is often mixed with the method the graphic rating
scale.
6. Behaviourally anchored rating scalesThis formatted
performance appraisal is based on making rates on behaviors or sets
of indicators to determine the effectiveness or ineffectiveness of
working performance. The form is a mix of the rating scale and
critical incident techniques to assess performance of the staff.7.
Performance ranking methodThe performance appraisal of ranking is
used to assess the working performance of employees from the
highest to lowest levels. Managers will make comparisons of an
employee with the others, instead of making comparison of each
employee with some certain standards.8. Management by Objectives
(MBO) methodMBO is a method of performance appraisal in which
managers or employers set a list of objectives and make assessments
on their performance on a regular basis, and finally make rewards
based on the results achieved. This method mostly cares about the
results achieved (goals) but not to the way how employees can
fulfil them.9. 360 degree performance appraisalThe style of 360
degree performance appraisal is a method that employees will give
confidential and anonymous assessments on their colleagues. This
post also information that can be used as references for such
methods of performance assessments of 720, 540, 18010.Forced
ranking (forced distribution)In this style of performance
appraisal, employees are ranked in terms of forced allocations. For
instance, it is vital that the proportions be shared in the way
that 10 or 20 % will be the highest levels of performances, while
70 or 80% will be in the middle level and the rest will be in the
lowest one.
Performance appraisal system practiced in SIDCO The Performance
appraisal system practiced in SIDC in 360 Degree Performance
Appraisal. An appraisal made by top management, immediate superior,
peers, subordinates, self and customers is called 360 Degree
Appraisal. Here, the performance of the employee or manager is
evaluated by six parties, including himself. So, he gets a feedback
of his performance from everyone around him. This method is very
reliable because evaluation is done by many different parties.
These parties are in the best position to evaluate the employee or
manager because they are continuously interacting and working with
him. This method is mostly used to evaluate the performance of the
employees. However, it is also used to evaluate other qualities
such as talents, behaviour, values, ethical standards, tempers,
loyalty, etc.360 degree appraisal was first developed by General
Electric (GE), USA in 1992. Today it is used by all major
organisations. In India, it is used by Crompton Greaves, Wipro,
Infosys, Reliance Industries, etc.Six Parties In 360 Degree
Appraisal
The six parties involved in 360 degree appraisal are :-1. Top
ManagementThe top management normally evaluates the middle level
managers. However, in a small organization, they also evaluate the
performance of the lower level managers and senior employees.2.
Immediate SuperiorThe immediate superior is in a very good position
to evaluate the performance of his subordinates. This is because
they have direct and accurate information about the work
performance of their subordinates.3. Peers / Co-workersPeer or
colleagues also evaluate each other's performance. They work
continuously with each other, and they know each other's
performance. Peer evaluation is used mostly in cases where team
work is important.4. SubordinatesThe Subordinates can also evaluate
the performance of his superior. Now-a-days students are asked to
evaluate the performance of their teachers.5. Self AppraisalIn the
self-appraisal, a person evaluates his own performance. He should
be honest while evaluating himself. This results in
self-development.6. CustomersCustomers can also evaluate the
performance of the employees who interacts with them. This
evaluation is best because it is objective. It is also given a lot
of importance because the customer is the most important person for
the business. Organizations use customer appraisals to improve the
strengths and remove the weaknesses of their employees. In addition
to these six parties, appraisal can also be done by an Appraisal
Panel. This panel consists of 5 to 6 different types of members.
Outside Consultants are also used for conducting appraisals. In
some cases, Personnel Department also conducts an appraisal of
employees and managers.Objectives of the Study: To study the
effectiveness of the current performance appraisal system in SIDCO
To assess, whether the current performance appraisal system
motivates the employee. To find out the opinion of the employees
about the present system. To find out whether performance appraisal
system identifies any training needs & development. To propose
suitable suggestion, if required, regarding the performance
appraisal system
CHAPTER VIDATA ANALYSIS&INTERPRETATION
Data Analysis and Interpretation
The term analysis refers the computation of certain measures
along with searching for patterns of relationships that exists
among data groups. Statistical tools used in this study for data
analysis are a) Percentage analysis: Percentage analysis is a
useful tool for data analysis Percentage analysis is calculated as
follows Percentage analysis: Number of respondentsX 100 Total
number of respondentsb) Diagrams: Diagrams are used to represent
the data diagrammatically. It gives a clear idea about information.
Here I have used bar diagrams to represent the raw data.
Table 4.1Distribution of age wise profile of the Employee
Sl. NoAgeNo: of RespondentsPercentage (%)
120-30 yrs00
230-40 yrs1212
340-50 yrs4646
450-60 yrs4242
5Total100100
Table Source: Survey Data
Interpretation:The above table shows that 46 percent of the
employee belongs to the age group of 40-50 yrs, 42 percent belongs
to 50-60 yrs and the rest belongs to 30-40 yrs.
Figure 4.1Distribution showing the distribution of age wise
profile of the Employee
Table 4.2Distribution of Gender of Employee
Sl. NoGenderNo. of respondentsPercentage (%)
1Male4646
2Female5454
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 54 percent of the
employee is Female and the rest is Male employee.
Figure 4.2Diagram showing the distribution of Gender of
Employee
Table 4.3Distribution of experience of the employee
Sl. NoExperience
No. of respondentsPercentage (%)
11-10 yrs
66
210-20 yrs
3434
320-30 yrs
6060
4Total
100100
Table Source: Survey Data
Interpretation:The above table shows that 60 percent of the
employees have experience between 20-30 yrs, 34 percent have 10-20
yrs and rest have 1-10 yrs.
Figure 4.3Diagram showing the distribution of experience of the
employee
Table 4.4Distribution of Income of EmployeeSl. NoIncome (Rs)No.
of respondentsPercentage(%)
1Below 100001616
210000-200002020
320000-300004040
4Above 300002424
5Total100100
Table Source: Survey Data
Interpretation:The above table shows that 40 percent of the
employee have income between Rs 20000-30000.
Figure 4.4Diagram showing the distribution of Income of
Employee
Table 4.5Distribution of familiarity with the present
performance appraisal system
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes8080
2No2020
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 80 percent of the
employees have familiar with the present performance appraisal
system.
Figure 4.5Diagram showing the familiarity of the present
performance appraisal system
Table 4.6Distribution of employees opinion considered for
appraisal.
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes7070
2No3030
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 70 percentage agree to
the statement, 30 percentage disagree to the statement and other
reluctant to say their opinion.
Figure 4.6Diagram showing the distribution of employees opinion
considered for appraisal.
Table 4.7Distribution of interval at which performance is
measured
Sl. NoIntervalNo. of respondentsPercentage(%)
13 Months00
26 Months00
31 year100100
4Others (Specify)00
Table Source: Survey Data
Interpretation:The above table shows that 100 percentage
employees performance is measured at a year.
Figure 4.7Diagram showing the interval at which the performance
is measured
Table 4.8Distribution of effectiveness of the various attributes
in the peformance appraisal.Sl. NoOpinionNo. of
respondentsPercentage(%)
1Strongly Agree88
2Agree7070
3Neutral2020
4Disagree22
5Strongly Disagree00
6Total100100
Table Source: Survey Data
Interpretation:The above table shows that 78 percent employees
agrees that the various attributes used in the appraisal are
effective.
Figure 4.8Diagram showing the distribution of efectiveness of
the various attributes in the peformance appraisal
Table 4.9Distribution of present performance appriasal system
helps to identify the strength and weakness.Sl. NoOpinionNo. of
respondentsPercentage (%)
1Strongly Agree1212
2Agree6262
3Neutral1818
4Disagree88
5Strongly Disagree00
6Total100100
Table Source: Survey DataInterpretation:The above table shows
that 74 percent agree to the statement, 18 percent reluctant to say
the opinion
Figure 4.9Diagram showing the distribution of present
performance appriasal system helps to identify the strength and
weakness.
Table 4.10Distribution of weakness of the employee is
communicated in a non-threatening manner.
Sl.NoOpinionNo. of respondentsPercentage (%)
1Strongly Agree1414
2Agree5858
3Neutral1616
4Disagree1212
5Strongly Disagree00
6Total100100
Table Source: Survey Data
Interpretation:The above table shows that 72 percent agree to
the statement, 16 percent reluctant to say their opinion and rest
disagree to the statement.
Figure 4.10Diagram showing the distribution of weakness of the
employee is communicated in a non-threatening manner.
Table 4.11Distribution of appraisal system provides an
opportunity for self evaluation.Sl. NoResponseNo. of
respondentsPercentage (%)
1Yes8888
2No1212
3No Comments00
4Total100100
Table Source: Survey Data
Interpretation:The above table shows that 88 percent of the
employee agrees to the statement, 12 percent reluctant to say their
opinion.
Figure 4.11Diagram showing the distribution of appraisal system
provides an opportunity for self evaluation.
Table 4.12Distribution of company used to give feedback after
the appraisal of your performance.
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes8484
2No1616
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 84 percent agree to
the statement, 16 percent to their opinion.
Figure 4.12Diagram showing the distribution of company used to
give feedback after the appraisal of your performance.
Table 4.13Distribution of present performance appraisal system
is time consuming.
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes4848
2No5252
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 52 percent says that
the appraisal is not time consuming, 48 percent says that the
appraisal is time consuming.
Figure 4.13Diagram showing the distribution of present
performance appraisal system is time consuming.
Table 4.14Distribution of system gives idea of what is expected
of him by the management
Sl. NoOpinionNo. of respondentsPercentage (%)
1Strongly Agree1313
2Agree6767
3Neutral1515
4Disagree66
5Strongly Disagree00
6Total100100
Table Source: Survey Data
Interpretation:The above table shows that 80 percent agree to
the statement and 15 percent reluctant to say their opinion.
Figure 4.14Diagram showing the distribution of system gives idea
of what is expected of him by the management
TESTING THE EFFECTIVENESS OF PERFORMANCE APPRAISAL ON EMPLOYEE
MOTIVATIONUSING CHI-SQUARE TESTHo: {There is effect of performance
appraisal on employee motivation}H1: {There is no effect of
performance appraisal on employee motivation } TABLE 4.15SI
NoEmployees OpinionObserved Frequency (0)Expected Frequency
(E)0-E(0-E)2(0-E)2/E
1Strongly agree25205251.25
2Agree45202562531.25
3Neither agree nor disagree2020000
4Disagree1020-101005
5Strongly disagree020-2040020
(0-E)2/E = 57.5 Calculated Value = 57.5 Degree of freedom = 0.05
Level of Significance = (n-r-1) = 5-1 = 4 Table value = 9.488 Here,
Calculated Value > Tabled ValueInterpretation:Since the
calcuated value is greater than tabled value, the hypothesis is
rejected. There is an effect of performance appraisal on employee
motivation. Table 4.16 Distribution of rater have clear knowledge
of that employees job.
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes8080
2No2020
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 80 percent agree to
the statement, 20 percent reluctant to say their opinion and the
rest disagree.
Figure 4.15Diagram showing the distribution of rater have clear
knowledge of that employees job.
Table 4.17Distribution of performance appraisal system helps to
improve performance.Sl. NoResponseNo. of respondentsPercentage
(%)
1Yes8888
2No1212
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 88 percent agree to
the statement and 12 percent disagree to the statement.
Figure 4.16Diagram showing the distribution of performance
appraisal system helps to improve performance.
Table 4.18 Distribution of rewards are given according to
performance.Sl. NoResponseNo. of respondentsPercentage (%)
1Yes5252
2No4848
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 52 percent agree to
the statement and 48 percent disagree.
Figure 4.17Diagram showing the distribution of rewards are given
according to performance.
Table 4.19Distribution of satisfaction of employees for the
appraisal system.
Sl. NoOpinionNo. of respondentsPercentage (%)
1Highly satisfied66
2Satisfied6262
3Neutral2121
4Dissatisfied99
5Strongly Dissatisfied22
6Total100100
Table Source: Survey Data
Interpretation:The above table shows that 68 percent satisfied
to the statement, 21 percent reluctant to say opinion and rest
dissatisfied to this.
Figure 4.18Diagram showing the distribution of satisfaction of
employees for the appraisal system.
Table 4.20Distribution of objectives of performance apprisal are
fair and clear to the subordinates.
Sl. NoResponseNo. of respondentsPercentage (%)
1Yes8080
2No2020
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 80 percent employees
agree to the statement and 20 percent employees disagree to the
statement.
Figure 4.19Diagram showing the distribution of objectives of
performance apprisal are fair and clear to the subordinates.
Table 4.21Distribution of management provides counseling after
the appraisal.Sl. NoResponseNo. of respondentsPercentage (%)
1Yes5050
2No5050
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 50 percent agree and
50 percent disagree to the statement.
Figure 4.20Diagram showing the distribution of management
provides counseling after the appraisal.
Table 4.22Distribution of management provides training after the
appraisal.Sl. NoResponseNo. of respondentsPercentage (%)
1Yes7676
2No2424
3Total100100
Table Source: Survey Data
Interpretation:The above table shows that 76 percent agree to
the satement, 24 disagree to the statement.
Figure 4.20Diagram showing the distribution of management
provides training after the appraisal.
CHAPTER VIIFINDINGS & SUGGESTIONS
FINDINGS
Performance appraisal has also been called an audit function of
an organization regarding the performance of individuals, groups
and entire divisions. Performance appraisal also helps in assigning
right job to right person and thus prevents the organization from
money drain in human resources. The following are findings from the
study conducted at SIDCO.
1. An attempt to the age in the study reveals that 46 percent of
the employees belongs to 40-50 yrs.2. An attempt to the gender in
the study reveals that 54 percent of the employee belongs to
female.3. Regarding the experience of the employee, the study
reveals that 60 percent of the employees have 20-30 yrs of
experience.4. Regarding the income of the employee, the study
reveals that 40 percent of the employees have salary between Rs.
20000-30000.5. An analysis of the familiarity with the present
appraisal system reveals that 80 percent of the employees are
familiar.6. An analysis on the employee opinion considered for
appraisal reveals that 70 percent agree to it.7. An analysis of the
attributes rated in the appraisal system shows, 78 percent agree
that it helps to reveal the performance of the employee.8. An
analysis of whether the appraisal helps to identify the strength
and weakness, 74 percent agree to it.9. An analysis on weakness of
the employee communicated in non-threatening manner reveals that 72
percent agree to it.10. Regarding the self evaluation, the study
reveals that 88 percent agree that the appraisal help them in self
evaluation.11. Regarding the feedback, the study reveals that 84
percent agree that feedback is given to them after appraisal.12.
Regarding the time consumption of the system, the study reveals
that 52 percent disagree that it is time consuming.13. The
Chi-Square test shows that there is no effect of performance
appraisal on employee motivation 14. Regarding the raters knowledge
of employees job, the study reveals that 80 percent agree that
rater have clear knowledge.15. Regarding the performance
improvement, the study reveals that 88 percent agree that the
appraisal system helps to improve their performance.16. Regarding
the rewards, the study reveals that only 52 percent agree that
rewards are given according to the performance.17. An analysis on
whether they are satisfied with the appraisal system shows that 68
percent are satisfied.18. An analysis on whether the management
provides counseling after the appraisal reveals that 50 percent
agree and 50 percent disagree to it.19. Regarding the training
after the appraisal, the study reveals that 76 percent agree that
the management provides training if required.
SUGGESTIONS
The employees are not that much confident about the fact that
their performance is been measured correctly, that is because of
the lack of transperancy from the part of the top management. Hence
they should take enough action so that the subordinates does not
have feeling that the wrong person is given merit, which will let
down their morale and performance. Employee participation is
minimum in the performance mangement and the performance appraisal
system in the company. Hence I suggest them to make sure enough
participation of employees in such decision making through meetings
or opinion polls etc. The company should give achiveble goals to
the employees. Many employees feels that proper feedback is not
given after the appraisal. To improve performance, feedback is
necessary so management should take necessary steps for that. To
improve performance, motivation is a factor. Most of the employees
have a positive attitude towarsd learning new things. Mangement
should utilise this and motivate the employee. Previously SIDCO was
using Check List method for appraisal. Recently they have
introduced 360 degree performance appraisa. Since it is new method
for the employees, mangement should take steps to educate them.
CHAPTER VIII CONCLUSION
Conclusion
The study reveals that Apprisal system in SIDCO is somewhat
satisfactory. Most of the employees are familiar with the present
apprasial system in the organisation. They have the opinion that
appraisal help to improve their performance. Main problem revealed
through the study was that, employees are not confident that their
performance is been measured correctly. And other one, employee
participation is minimum in the performance mangement and the
performance appraisal system in the company.Management should take
proper steps to overcome these issues.
BIBLIOGRAPHY
BIBLIOGRAPHY
1. Chhabra TN : Principles & Practice of Management, Dhanpat
Rai & co.(P) Ltd 2008, P-3942. Khanka SS : Human resource
Management, S. Chand & Company Ltd 2008, P-3433. Khanka SS :
Organisational Behaviour, S. Chand & Company Ltd 2009, P-2014.
Gupta C.B: Human Resource Management ,New Delhi ,Sultan &
Chands Publication , 20075. Kothari C.R : Research Methodology ,
New Delhi: New age international Publisher ,20066. Shekaran, Uma:
Research Methods for Business, New Delhi, John Willy India Privatr
Ltd, 20047. Luthans Fred : Organizational Behaviour, Tata Mcgraw
Hill, 2004.
8. Aswathappa.K : Human Resource Management and Personnel
Management, Newdelhi, Tata Mcgraw Hill, 2004.
APPENDIX
QUESTIONNAIRE:
A study on the Effectiveness of the Performance Appraisal System
in SIDCO
Sir/Madam I, Riju Manaf doing MBA program in University of
Kerala. As a part of my academic course I am required to do a
project. I present before you a questionnaire to be answered by you
for the purpose of my study. The data collected from you will be
strictly kept confidential and is used only for study purpose. I
will be grateful if you kindly spend some time to fill up this
questionnaire.[Instruction:-Put tick () mark for appropriate
response and detail if necessary on space provided]1) Name:2) Age:
20-30yrs 30-40yrs 40-50yrs 50-60yrs 3) Gender: Male Female 4)
Experience: 1- 10 yrs 10-20yrs 20-30yrs 5) Income: Below10000
10,000-20,000 20,000-30,000Above 300006) Are you familiar with the
present performance appraisal system? Yes No7) Do you feel that
your opinion are considered for appraising the performance Yes No8)
Interval at which performance is measured3 Month 6 Month l year
Others (Specify)................................ 9) Are you
agreeing that the various attributes rated in the present appraisal
system are effective?Strongly agree Agree Neutral Disagree Strongly
Disagree
10) Current performance appraisal system helps you to identify
your strength and weakness.Strongly agree Agree Neutral Disagree
Strongly Disagree11) Do you feel that the weakness of an employee
is communicated in a non-threatening manner.Strongly agree Agree
Neutral Disagree Strongly Disagree12) Do you feel that the
performance appraisal system provides an opportunity for self
evaluation. Yes No No Comments13) Do you feel that the company used
to give feedback after the appraisal of your performance.Yes No14)
Do you feel that the current performance appraisal system is too
time consuming.Yes No15) The present appraisal system gives each
appraise an idea of what is expected of him by the
managementStrongly agree Agree Neutral Disagree Strongly
Disagree16) The performance appraisal system in SIDCO increases
employee motivation Strongly agree Agree Neutral Disagree Strongly
Disagree17) Do you feel that the rater have clear knowledge of that
employees job.Yes No18) Do you think that the performance appraisal
system helps to improve your performance?Yes No19) Do you feel that
the rewards are given according to your performance.Yes No20) Are
you satisfied with the current performance appraisal system?Highly
satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
21) Do you feel that the objectives of performance appraisal are
fair and clear to the subordinates? Yes No22) Do you feel that the
management provides counselling, if required, after the performance
appraisal for employees? Yes No23) Do you feel that the management
provides training, if required, after the performance appraisal for
employees?Yes No24) Any suggestion
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