A

STUDY

ON

PERFORMANCE

MANAGEMENT

IN

VEL LEATHERS ,VELLORE.

Submitted to Mr. Nicon Raj Sir Project coordinator M B A Department PJCE

submitted by S.Vignesh, Reg No: 36 IVth semester PJCE

INTRODUCTION:
Performance Management is a process that brings together many people management practices including learning and development. It is a process which contributes to the effective management of individuals and teams in order to achieve improved levels of individual and organizational performance and development. Performance management is about establishing a culture where individuals and teams take responsibility for continuous improvement of service delivery and of their own skills, behaviour and contributions. It is therefore a strategic process, long term in nature, aimed at the development of an appropriate culture linking people management, service issues and long term goals. It is not a once off quick fix process. Effective performance management promotes a collaborative approach that influences individual performance, development and organizational outcomes. It pushes us all to think about how we currently manage our working relationships, what we need to do to improve our own performance, our teams performance and the service we provide to patients and service users. Performance Management is A process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success Weiss and Hartle (1997) Performance Management is a key process in any organization and should assist the management and staff to focus on the key issues and business objectives to ensure sustainability.

Performance Management is therefore much more than merely telling a person what to do and policing them until it is done. Rather, it is an integral part of the manager and the employees job it is a joint process. Performance Management is the process of defining clear objectives and targets for individuals and teams, and the regular review of actual achievement and eventual rewarding for target achievement. In the theoretical world, an ideal machine is one that performs perfectly at peak efficiency all of the time. In the workplace of the non-idealized real world however, employees are neither machines nor are they perfect. Therefore, a system of performance management and appraisal is necessary to maximize employee efficiency while assisting employees endeavors in the workplace by providing a consistent framework of rules and expectations with a built-in feedback system in place. Definition According to Indiana University, Human Resources Services, performance management is a holistic approach to optimizing human capital, which enables an organization to implement short, and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned with the business goals. It is an ongoing, continuous process of communicating and clarifying job responsibilities, priorities and performance expectations in order to ensure mutual understanding between supervisor and employee. It involves clarifying the job duties, defining performance standards, and documenting, evaluating and discussing performance with each employee.

Performance management is a system designed to identify the ways to achieve organizational goals through constant assessment and feedback leading to improvement of employee performance. Performance management, unlike the performance appraisal or annual evaluation process, is an ongoing assessment of employees in a manner geared to match their goals to the organizational goals. It also makes strong use of goal-setting and metrics to identify progress and areas of individual strengths.

INDUSTRY PROFILE:
The leather industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. There has been an increasing emphasis on its planned development, aimed at optimum utilization of available raw materials for maximizing the returns, particularly from exports. The exports of leather and leather products gained momentum during the past two decades. There has been a phenomenal growth in exports from Rs.320 million in the year 1965-66 to Rs.69558 million in 1967-97. Indian leather industry today has attained well merited recognition in international markets besides occupying a prominent place among the top seven exchange earners of the country. The Indian leather industry, one the most vibrant sector of the countrys economy, is well-structured and spans various segments, such as tanning and finishing, footwear and footwear components, leather garments, leather goods, including saddles and harness. Well recognized in the international market, the Indian leather goods constitute about 7 per cent of Indias export earnings. Besides being a significant earner of foreign exchange, the leather industry generates employment, ensuring jobs for over 2.5 million people, with 75 per cent of the production from small and cottage sectors. India, with an output of Rs.186.56 billion (3.354 billion Euros) and exports of Rs.125.46 billion (2.225 billion Euros), is placed third, while developed markets such as the US are major consumers of leather products. It is now poised for a big leap to double its global share from the present 3%. The industry covers a vast spectrum of inputs, activities, skills and products i.e. livestock, hides and skins, tanning, leather products and exports. The Indian Leather Industry is growing by leaps and bounds. One must be wondering why India is exporting so much of leather to western countries. 5

Apparently because leatherwear still enjoys a great demand abroad and now-adays even the domestic market is developing and consuming the offerings of this industry. Major production centers in India are Tamil Nadu

Tamil Nadu has a dominant presence in the leather and leather based industries. The tanning industry in India has a total installed capacity of 225 million pieces of hide and skins of which Tamil Nadu alone contributes to an inspiring 70%. Leather industry occupies a pride of place in the industrial map of Tamil Nadu. The major production centers in Tamil nadu are Chennai, Ambur, Ranipet, Vaniyambadi, Trichy and Dindugal. West Bengal

West Bengal is one of the country's top states for export of finished leather goods. Bata India Limited is India's largest manufacturer and marketer of footwear products. It has 5 plants near Kolkata. Main plant is located in Batanagar near Kolkata. Bata India secures its leather supply from two tanneries in Mokamehghat (Bihar) and Batanagar (West Bengal). The number of manufacturing industries engaged in leather products is 538 in West Bengal.

Uttar Pradesh

U.P. is one of the most important states in India holding sizeable population of live stock. Claiming a share of 22% U.P. ranks Ist in case of Buffalo and IInd in case of Cattle having a share of 12% Thus, U.P. has a very strong raw material base and all types of main raw material for leather industry are available.

Major production centers and Number of leather and leather products industries in U.P. are to the tune of approx. 11500 of which Kanpur and Agra are the two famous production centers in the world. Kanpur is a prominent center for leather processing. About 200 tanneries are located in Kanpur. Kanpur tanneries specialize in processing hides into heavy leather (Sole, harness and Industrial leather). This is the only center in India where saddlery products are manufactured. Agra has been the biggest center for shoe-manufacturing in the country. MAJOR PLAYERS Tata International Ltd. :It was established in 1962,one of the largest export house in India

Farida Shoes Ltd. : Based in Chennai, Farida shoes ltd.is the leading leather and leather footwear exporters in India with a turnover of approximately 170 million USD.

Mirza Tanners Ltd. :Mirza International Limited (formerly known as Mirza Tanners Limited) was incorporated on 5th September 1979. The company has its headquarters in Delhi and production unit at Kanpur.Today, the company has emerged as a frontrunner in the manufacturing and marketing of leather and leather footwear.

T. Abdul Wahid &Company :the company is based in Chennai, tamilnadu Hindustan Lever Ltd.:subsidy of Hindustan Unilever Ltd. situated in Chennai. Super House Leather Ltd.: Situated in Unnao near Kanpur RSL Industries Ltd.: the company has its production unit in Chennai Presidency Kid Leather Ltd.: the company has its production unit in Chennai. 7

 STRUCTURE OF THE INDUSTRY The leather industry is spread in four broad sectors, these are Tanning and finishing Footwear and footwear components Leather goods Leather garments

Footwear and footwear components sector

India is the world's second largest producer of footwear; its production estimated over 700 million pairs per annum. At about US $ 300 million per year, footwear accounts for 18 percent share of total exports of leather exports. Various types of shoes produced and exported from India include dress shoes, casuals, moccasins, sports shoes, horacchis, sandals, ballerinas, and booties. Major production centers are Chennai (Madras), Delhi, Agra, Kanpur, Mumbai (Bombay), Calcutta and Jalandhar. Most of the modern footwear manufacturers in India are already supplying to well established brands in Europe and USA. Leather garments sector The Leather Garment Industry occupies a place of prominence in the Indian leather sector. The product classification of leather garments comprise of jackets, long coats, waist coats, shirts, pant/short, children garments, motorbike jackets, aprons and industrial leather garments. The second most important product made out of leather is leather garments.

Modern factories have been established in the small-scale during the last decade, mostly in the vicinity of urban areas of Chennai, Bangalore, Delhi and Hyderabad. Due to increased export demand, the capacity for the leather garment industry has been rising and is presently 18 million pieces per annum.

Indian Leather Goods Industry

Items produced by this sector include, in addition to bags, handbags, handgloves and industrial gloves, wallets, ruck sacks, folios, brief cases, travelware, belts, sports goods, upholstery and saddler goods.

A surfeit of modern units in Chennai, Kanpur and Calcutta employing skilled human resources and equipped with modern and sophisticated machinery account for a diversified range of superlative small leather goods including bags, purses, wallets, industrial gloves etc.

The major market for Indian leather goods is Germany, with an off take of about 25 per cent of the leather goods produced in India followed by USA, UK, France and Italy. With products ranging from designer collections to personal leather accessories, this sector has a share of 20.53 per cent in the leather industry, while maintaining an average growth rate of 11 per cent in the last year.

Indian Saddlery Industry

India is one of the largest producers of saddlery and harness goods in the world. The saddlery industry was established in the 19th century primarily to cater to the needs of military and police. 9

From then on initiatives were taken to develop, the industry and today there are over 150 units in the organized sector, out of which approximately 105 are 100% export oriented units. Kanpur, in the state of Uttar Pradesh, is a major production center for saddlery goods in India accounting for more than 95% of the total exports of saddlery items from India. Kanpur, because of its specialization in tanning and finishing of buffalo hides is the only centre in the country where harness leather, which is major input for saddlery industry, is manufactured.

The major importers of Indian saddlery are Germany, USA, UK, France, Scandinavia, Netherlands, Japan, Australia and New Zealand.

Tanning and Finishing sector The Indian market has been fragmented with about 2200 tanneries of which 2100 are small scale units and over 8000 leather product manufacturing units. The tanning industry is concentrated in three states viz. Tamil Nadu, West Bengal and Uttar Pradesh. Of the total number of tanneries in India, Tamil Nadu accounts for 52%, West Bengal 23% and U.P 12%. The other important states are Maharashtra, Andhra Pradesh and Punjab. Looking from the angle of scale of operations, the tanning industry largely exists in the small-scale sector with a share of 93% in the total number of tanneries in the organized sector.

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COMPANY PROFILE: Mr. V.Sanmugavel and S.Arthi was established VEL LEATHERS in 2010,with a leased tannery in Pernambut, Ambur high road, vellore district. A remarkably short two years later, the company had emerged as the largest exporter of vegetable tanned leather to America and Europe, and wet blue skins to the Soviet Union. Came the seventies, and VEL Leathers diversified into finished leathers. Two ultra modern tanneries, outfitted with equipment from Europe, are capable of producing 2 million square feet every month. By the turn of the last year, was supplying fine kidskin to reputed shoe manufacturers worldwide. The next move was logical. VEL leathers entered into production of shoes for the western markets. Today, its highly sophisticated shoe factories are a pool of American and European footwear manufacturing expertise. LOCATION OF THE COMPANY The firm has been started on 2010, Pernambut, Ambur high road, vellore district, India 635810. For the purpose upper manufacturing it is for about 21 K.M. From Ambur totally 3 acres of land is situated from the shoe purpose. MANAGEMENT This VEL LEATHERS Managing Director V.Sanmugavel. The chief technical Officer is Mrs. S.Arthi. In this company we have go 154 people of the company runs for 2shifts per day worker are the back bone of this company. It is one of the biggest companies in vellore . vel leathers was came to be known as a company its own distinct style and culture and is looked at as plays of excellence.

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PRODUCTION Our important shoe models is oxford moccasin, derby ,etc., companies running 2 shift per day . totally output of pairs per days is 1500 with men power. And the product are upholstly leather, cgupper leather. And the production process is starting from lining , splitting, shaving, drumps, toggle, auto spray, measuring, packing. They are using eco part chemical only they used sweet water for production. MANUFACTURING DONE FOR SOME POPULAR COMPANIES The final production sends to their buyers, mainly Xiamen BG industrial CO., Ltd. Beijing zhongruihengda international Ltd. Talet international Ltd. Derby shoes are produced. MECHANICAL DEPARTMENT They are four supervisors working of the mechanical department. There is a lathe, tools, cutting machine, bench nice welding and other important thinks are available ELECTRICAL DEPARTMENT There is three supervisors working at electrical department. The connections, Circuits, generators, are located at electrical section. There are also many of the electrical components kept at the electrical section. WATER SOURCES AND USAGE There are big wall at the back of the company. One of the well is located at the garden 3 of the wells are completely polluted. One of them got dried and from only one well they are using the water.

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COMPANY BUSINESS Company turnover is about 25-50crs. Its manufacturing capacity is 40crs. RECRUITMENT AND INCENTIVE POLICY Recruitment in the company is done by department heads of respective department and final recruitment done by Mr. V. SANMUGAVEL, Managing Director. In sales, incentive based on performance-with overall achievement of target, volume wise and unit wise. OTHER INFORMATIONS Company name Address : VEL LEATHERS : A-21, Pernambut, Ambur high road, vellore district, India 635810 Level of office Website Industry City State Company type No of Employees Sector : Head Office : www.velleathers.in : Manufacturing industry : vellore : Tamilnadu : Leather Industry : 154 : Private Sector

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OBJECTIVE OF THE PROJECT To study the process and to understand the importance of Performance Management System in VEL Leathers that synchronizes the performance of the employees so as to make the work effective. To study the relationship between management and employees. To analyze the steps taken by the appraisers for the improvement of the performances of the appraisees. Recognise the multiple negative consequences that can arise from the poor design and implementation of a performance management system, which affect all the parties involved employees, supervisors, and the organisation as a whole. Explore the level of employee satisfaction with the process and its link to rewards and recognitions To assess how performance appraisal and its linkage to rewards and recognitions impact on the motivation of employees towards work.

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REVIEW OF LITERATURE Performance management was introduced in the early 1970s in an attempt to put formal and systematic framework on what was formally a casual issue (Maund, 2001). Accurate performance are crucial for the evaluation of recruitment, selection, and training procedures. Performance can determine training needs and occasionally counseling needs. It can also increase employee motivation through the feedback process and may provide an evaluation of working conditions and it can improve employee productivity, by encouraging the strong areas and modifying the weak ones. Further, employee evaluation can improve managerial effectiveness by making supervisors more interested in and observant of individual employees (Auerbach, 1996). Objectives for performance management can thus, best be understood in terms of potential benefits. Mohrman et al (1989) identified the following: Increase motivation to perform effectively Increase staff self-esteem. Gain new insight into staff and supervisors. Better clarify and define job functions and responsibilities. Develop valuable communication among appraisal participants. Encourage increased self-understanding among staff as well as insight into the kind of development activities that are of value. Distribute rewards on a fair and credible basis. Clarify organizational goals so they can be more readily accepted. Improve institutional/departmental manpower planning, test validation, and development of training programs.

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Bandura Bandura (1977) stated that self appraisal of performance set the occasion for selfproduced consequences. Favourable judgments give rise to rewarding self - reactions, whereas unfavourable appraisals activate punishing self-responses. Appraisal has the following as advantages: The appraiser and the appraisee are forced to meet formally. The employee becomes aware of what is expected of him/her. The employee learns or reaffirms his or her exact status. Valuable feedback can be received by both employee and employer. The manager can learn what the employee is actually doing rather than what he/she thinks he/she is doing. Maund According to Maund (2001), Appraisal is the analysis of the successes and failures of an employee and the assessment of their suitability for training and promotion in the future and Performance Appraisal was introduced in the early 1970s in an attempt to put formal and systematic framework on what was formerly a casual issue. employees see a poorly conducted appraisal interview as being worse than not having an interview at all. Ideally, the record of the interview should be written on a special performance appraisal form that is signed by the manager, the employee and often a senior manager. It is good practice to allow the employee to see the completed form and add any comment (s). In Barclays, one method used to get feedback from colleagues of the appraisees is the

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360 degrees feedback system and performance appraisal is done quarterly as part of the performance development process. Torrington and Hall Torrington and Hall (1998) indicated that appraisal can be used to improve current performance, provide feedback, increase motivation, identify training needs, identify potentials, let individuals know what is expected of them, focus on career development, award salary increases, and solve job problems. They further stated that performance appraisals help in a very practical way to manage an organizations staff effectively. They allow one to know; what employees have achieved and can achieve, know what employees weaknesses are, understand how each employees role fits into the overall business, compare the efficiency of different staff members, set realistic goals and identify ways business can be expanded or enhanced. They allow staff to; feel valued, understand what is expected of them, understand the business they are involved in, understand their weaknesses, identify their strengths, identify areas they need further training in as well as offer opinions and insights that may improve the business as a whole. Employee Performance Appraisal, which provides basis for Performance Management or Performance Development , was introduced in Barclays Bank as a goaloriented tool to guide individual performance on the job and to recognize performance at all levels of employment. Performance Development is based on meeting individual role and business requirements and facilitates improved communication and understanding between team leaders and team mates. Performance Development is designed to enable Barclays to recognize and reward top performance. It encourages dialogue between employees and their managers, focusing on both results and importantly, on the values 17

and standards summarized in the Barclays Behaviours. (Barclays PD Learner Guide). This study is designed to investigate the Appraisal procedure(s) and practices and their link to rewards and recognitions in Barclays Bank of Ghana. Human Relations School The Human Relations School (1930-mid 1950s) made the assumption that if employees were happy and satisfied, they would naturally work harder and thus increase their productivity (Maund 2001). The key question of concern to this study is; are the employees of Barclays Bank that motivated by their appraisals and how it is connected to rewards and recognitions or the whole Performance Development system, in order to transform them to increase productivity of the retail sector, in particular and the Bank in general? This research sought, among other things to answer various related sub questions pertaining to the performance appraisal/ performance development system of the Bank, with concentration on the Retail function. The questions that need consideration include; What is the process and practice of Performance Appraisal/ Performance Review in Barclays Bank and how is this connected to rewards and recognitions Are staff satisfied with the appraisal and performance management system of the Bank and how these are linked to rewards and recognitions? Should Barclays Bank continue with the performance appraisal/performance development, what impact will it have on staff motivation and contribution to the achievement of the Banks goals and objectives in Ghana?

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Few issues in management stir up more controversy than performance appraisal. There are many reputable sources - researchers, management commentators, and psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (Derven, 1990). Lawrie At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990). Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it. There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes - such as pay rises and promotions. This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is perceived as judgmental, punitive and harrowing Nor is the desire to distort or deny the truth confined to the person being appraised. Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines. The advocates of this approach say that organizations must have a process by which rewards - which are not an unlimited 19

resource - may be openly and fairly distributed to those most deserving on the basis of merit, effort and results. There is a critical need for remunerative justice in organizations. Performance appraisal - whatever its practical flaws - is the only process available to help achieve fair, decent and consistent reward outcomes (www.performance-appraisal.com, April, April, 2009).

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RESEARCH METHODOLOGY RESEARCH: Research is common parlance refers to search for knowledge. Redman and Mary define research as a systematized effort to gain new knowledge. Research is an academic activity and such the term should be used in technical sense. According to Clifford Woody, Research comprises defining and redefining problem, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and research conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. Research is thus original contribution to the existing stock of knowledge making for its advertisement. It is pursuit of truth with the help of study, observation, comparison and experiment. In short the search for knowledge through objective and systematic method of finding solution to problem is research.

RESEARCH DESIGN A Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In fact research design in the conceptual structure within which research is conducted: it constitutes the blueprint for the collection and analysis of data. It must be able to design clearly what they want to measure and must find adequate method for measuring it along with a clear cut definition of population of study. since the aim is to obtain complete and accurate information in this studies ,the procedure to be used must be carefully planned. The research design must make enough provision for

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protection against bias and must maximize reliability with due concern for the economical completion of the search study.

Definition of research Websters New International Dictionary defined research as, careful or critical inquiry or examination in seeking facts or principles, diligent investigation in order to ascertain something.

DESCRIPTIVE RESEARCH is adopted for this study. It include surveys and fact finding enquiry of different kinds. The major purpose of descriptive research is description of the state affairs as it exists at present. The main characteristic of this method is that the researcher has no control over the variables. He can only report what has happened or what is happened.

SAMPLING DISINE A sample design is a definite plan for obtaining a sample from the sampling frame, it refers to the technique or procedure the researcher would adopt in selecting in some sampling units from which interferences about the population is drawn. sampling type used is simple random sampling technique.

POPULATION AND SAMPLESIZE A decision has to be taken concerning sampling unit before selecting sample. The population for this study includes the employees from three branch of vel leathers the total population of vel leathers is 154.70 employees were undertaken for the study. 22

DATA COLLECTIONS For achieving the specific objective of this study. data were gathered from both primary and secondary sources.

PRIMARY SOURCES Direct conversation with respective officers of the departments Face to face conversation with the employees Employees opinion collected through questions Observation of HR activities.

SECONDARY SOURCES Various record of the company Different Types of system information Website of vel leathers Different news letters Personal files of employees

STATITICALTOOLS Chi-square test Rating point method Percentage analysis Weighted average method

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CHI-SQUARE TEST The chi-square test is an important test among the several tests of significance developed by statisticians. chi-square test is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance. As a parametric test can be used to determine if categorical data shows dependency or the two classifications are independent. The test is, in fact, a technique the though use of which it is possible for all researchers to i. ii. iii. Test the goodness of fit Test the significance of association between two attributes and Test the homogeneity or the significance of population variance. As a test of independent, chi-square test enables us to explain whether or not two attributes or associated in such a situation, we proceed with the null hypothesis that the two attributes are independent. If the calculated value is less then the tabulated value at certain degrees of freedom, the null hypothesis is accepted and vice versa Chi-square is calculated as follow

Chi-square Test= E

Where O= Observed frequency E=Expected frequency The chi- square test depends on the set of observed and expected values and on the degrees of freedom .the chi-square distribution is the limiting approximation designation.

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RATING POINT METHOD: The graphical rating scale is quite simple and is commonly used in practice. Under it the various points are usually put along the line to form a continuum and the rater indicates his rating by simply making a mark at the appropriate point on a line that runs from one extreme to the other. Scale-points with brief description may be indicated long the line, their function being to assist the rater in performance his job. The following is an example of five-points graphic rating scale when we wish to ascertain peoples linking or disliking any product: How do you like the product?

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

PERCENTAGE ANALYSIS: In this project Percentage method test was used. The percentage method is used to know the accurate percentages of the data we took, it is easy to graph out through the percentages. The following are the formula

No of Respondent Percentage of Respondent = Total no. of Respondents From the above formula, we can get percentages of the data given by the respondents. x 100

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WEIGHTED AVERAGE METHOD: Weighted average can be defined as an average whose component items are multiplied by certain values (weight) and the aggregate of the products are divided by the total of weights. One of the limitations of simple arithmetic mean is that it gives equal importance to all the items of the distribution. Certain cases relative importance of all the items in the distribution is not the same. Where the importance of the items varies. It is essential to allocate weight applied but may vary in different cases. Thus weightage is a number standing for the relative importance of the items.

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