A

PROJECT REPORT
ON
PERFORMANCE APPRAISAL SYSTEM
AT Kaira District Co-operative Milk Producers’ Union Limited.

A PROJECT SUBMITTED TO:

The Bhavanagar University of Bhavanagar in partial fulfillment of the
degree of Bachelor in Business Administration.

PREPARED BY: GUIDED BY:

NILESH .K. DHAMELIYA Dr.RACHNA DHRUVA

T.Y.B.B.A (I/C Principal)

ROLL NO: 93

SWAMI SAHAJANAND COLLEGE

OF
COMMERCE AND MANAGEMENT.

BHAVANAGAR UNIVERSITY.
BHAVANAGAR
BATCH: 2006-2009

1
 CANDIDATE’S STATEMENT

I undersigned Nilesh K. Dhameliya, the student of TY BBA here by declare that

the project work presented in this report is my own work carried out under the
guidance of Dr. RACHANA DHRUVA of Swami Sahajanand College of
Commerce and Management.

Date:

Place: Bhavnagar

Signature:

Name: Nilesh K. Dhameliya

2
 PREFACE

True learning is born out of experience and observation practical experience

is one of the best types of leanings that one can remember throughout the
life. And as a student of TYBBA. I got an opportunity to get training in the
industry. The main object of practical training is to develop practical
knowledge and experience and awareness about industrial environment and
business practices in the student as a supplement to theoretical studies of
administration and management in specific area like HRM. It increases the
skill, ability and attitude of a student to perform specific job in industrial
environment.

Fortunately, I got golden opportunity to visit and complete my training at Kaira

District Co-operative Milk Producers’ Union Limited Here, I got chance to see
the functioning HRD departments and imbibe a lot learning of the subjects.

Here, this report will identify effectiveness of performance appraisal system of

employee development at Kaira District Co-operative Milk Producers’ Union
Limited. It will show how performance appraisal as Kaira District Co-operative
Milk Producers’ Union Limited.

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 ACKNOWLEDGEMENT

I would also like to thank specially Mr. Syril Parmar, Personnel Officer, Kaira
District Co-operative Milk Producers’ Union Limited. Who gave me permission
to do this study. I would also like to thank officer of Kaira District Co-operative
Milk Producers’ Union Limited. Who gave me in depth knowledge about this
study and that is beneficiaries, without their support the study would have not
been possible.

Through this acknowledgement, I express specially thanks to Dr.Rachna

Druva Who guided me through out the project and gave me Valuable
suggestion and encouragement. And I would also like to thanks those people
who have helped me directly or indirectly in the preparation of this project,
which has been learning experience.

I appreciate the co-operation by the management and staff of ‘Kaira District

Co-operative Milk Producers’ Union Limited.’ for having given me the
opportunity to training in their office.

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 INDEX

CANDIDATE’S STATEMENT 2

PREFACE 3

AKNOWLEDGMENT 4

EXECUTIVE SUMMARY 7

CHAPTER~1 (INFORMATION ABOUT TOPIC) 8

- 1.1 Meaning and Definition of Performance Appraisal 9

-1.2 History 10

-1.3 Importance Of Performance Appraisal 11

-1.4 Objectives Of Research 11

-1.5 Step Of Performance Appraisal 12

-1.6 Basic Purpose Of Performance Appraisal 15

-1.7 Traditional Performance Appraisal 17

-1.8 Modern Appraisal 18

-1.9 Methods Of Performance Appraisal 19

CHAPTER~2 (INFORMATION ABOUT COMPANY) 28

- Company Profile 29

CHAPTER~ 3 (LITERATURE REVIEW) 31

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CHAPTER~4 (RESEARCH METHODOLOGY) 34

-4.1 what is Research 35

-4.2 Research Methodology 36

-4.2.1 Research Design 37

-4.2.2 Sampling Plan 38

-4.2.3 Objective Of Study 38

-4.2.4 Sources of Data Collection 39

-4.2.5 Limitation Of Study 40

-4.2.6 Data Analyses and Interpretation 41

CHAPTER~ 5 (FINDINGS) 57

CHAPTER~ 6 (SUGGESTION) 59

CHAPTER~ 7 (CONCLUSION) 61

BIBLIOGRAPHY 63

APPENDIXE 65

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 EXECUTIVE SUMMARY

Research is prepared on performance appraisal system this research included

Objectives of performance appraisal, its importance and other belief information
about performance appraisal, name of organisation, history & development of
Kaira District Co-operative Milk Producers Union Limited. Company’s structure,
polices, environment & its achievements etc.

The discovery from the analysis of the data and interpretation. Here we can also
find the conclusion as per the analysis & interpretation. Here there is also
recommendation for the organisation to take the necessary step for the
effectiveness of Performance Appraisal System.

The research undertaken has certain outcomes Employees are very satisfied
with their jobs and the organization is very aware about performance appraisal.

At last, I would like to say that, the experience of visiting company was really
great. The organization is on very strong position. And I hope the organization
will achieve their goals every year.

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 CHAPTER ~1
INFORMATION ABOUT
TOPIC

8
 1.1 Meaning and Definition of Performance Appraisal

Performance appraisal is a formal system that evaluates the quality of a

employee’s performance. An appraisal should not be viewed as an end in itself,
but rather as an important process within a broader performance management
system that links:
• Organizational objectives
• Day-to-day performance
• Professional development
• Rewards and incentives

In simple terms, appraisal may be understood as the assessment of an

individual’s performance in a systematic way, the performance being measured
against such factors as job knowledge, quality, and quantity of output, initiative,
leadership abilities, supervision, dependability, co-operation, judgment,
versatility, health, and the like. Assessment should not be confined to past
performance alone. Potentials of the employee for future performance must also
be assessed.

A formal definition of performance appraisal is:

“It is the systematic evaluation of the individual with respect to his or her
performance on the job and his or her potential for development.”

A more comprehensive definition is:

“Performance appraisal is a formal, structured system of measuring and
evaluating an employee’s job related behaviors and outcomes to discover
how and why the employee is presently performing on the job and how the
employee can perform more effectively in the future so that the employee,
organization, and society all benefit.”

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 1.2HISTORY:

Its roots in ti early 20 century with traced to Taylor’s pioneering time and motion
study. But this is not very helpful for the some many be said about almost
everything in the field of modern HRM.

As a distinct and formal management procedure use din the evaluation of worker
performance appraisal really dates from the time of Second World War not more
than 60 years ago. Yet in the broader sense the practice of appraisal is very
ancient art in the scale of thing historically, it is might be well lay claimed to be
world second older profession.

“A basic human tendency to make judgment about those one is working with, as
well as about one self”. Appraisal it seems to be the inevitable and universal in
the absence of care full structure system of appraisal, peoples will tends to judge
the work performance of other including subordinate naturally, informally &
arbitrarily.

The human inclination to judge and create serious motivational ethical in legal
problems in the workplace, without structured appraisal system there is a little
chances of ensuring that the judgment made with lawful fair, defensible and
accurate yet in a broader sense that practice of appraisal is very special art. In
scale of thing historical it might well lay claim to being the world second oldest
profession.

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 1.3 IMPORTANCE OF PERFORMANCE APPRAISAL

The importance or utility of employee performance appraisal within on

organisation is really great. As employment privilege may be earned by senior
performance, some plans for evaluating performance is being used. These plans
serve as the basis of improving their productive efficiency and supervisory
employee relations. They have other uses like training, compensation, handling
grievance etc.

1.4OBJECTIVES OF RESEARCH

◙ To study the performance appraisal as motivating factor for employees

◙ To understand how the result of performance appraisal system Are used

In training and employee development.

◙ To study the practical application of performance appraisal.

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 1.5.STEP OF PERFORMANCE APPRAISAL

Establish performance standards

Communicate performance expectation from employee

Measure the actual performance

Compare actual performance with standards

Discuss the appraisal results with the employee corrective actions for
deficiencies

Decision Making

Follow up

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ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the
standards, which will be used to as the base to compare the actual performance
of the employees. This step requires setting the criteria to judge the performance
of the employees as successful or unsuccessful and the degrees of their
contribution to the organizational goals and objectives. The standards set should
be clear, easily understandable and in measurable terms. In case the
performance of the employee cannot be measured, great care should be taken to
describe the standards.

COMMUNICATING THE STANDARDS

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

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

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the
actual performance of the employees that is the work done by the employees
during the specified period of time. It is a continuous process, which involves
monitoring the performance throughout the year. This stage requires the careful
selection of the appropriate techniques of measurement, taking care that
personal bias does not affect the outcome of the process and providing
assistance rather than interfering in an employees work.

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COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard

performance. The comparison tells the deviations in the performance of the
employees from the standards set. The result can show the actual performance
being more than the desired performance or, the actual performance being less
than the desired performance depicting a negative deviation in the organizational
performance. It includes recalling, evaluating and analysis of data related
to the employees’ performance.

DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees
on one-to-one basis. The focus of this discussion is on communication and
listening. The results, the problems and the possible solutions are discussed with
the aim of problem solving and reaching consensus. The feedback should be
given with a positive attitude as this can have an effect on the employees’ future
performance. The purpose of the meeting should be to solve the problems faced
and motivate the employees to perform better.

DECISION MAKING

The last step of the process is to take decisions which can be taken either to
improve the performance of the employees, take the required corrective actions,
or the related HR decisions like rewards, promotions, demotions, transfers etc.

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 1.6. BASIC PURPOSE OF PERFORMANCE APPRAISAL

Salary Increase

Performance appraisal plays a role in making decision about salary increase.

Normally salary increase of an employee depends upon on how he is
performing his job. There is continuous evaluation of his performance either
formally or informally. This may disclose how well an employee is performing
and how much he should be compensated by way of salary increase.

Promotion

Performance appraisal plays significant role where promotion is based on

merit and seniority. Performance appraisal discloses how an employee is
working in his present job and what are his strong and weak points. In the
light of these, it can be decided whether he can be promoted to the next
higher position.

Training and Development

Performance appraisal tries to identify the strengths and weakness of an

employee on his present job. This information can be used for devising
training and development Programmes appropriate for overcoming
weaknesses of employees.

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 Feedback

Performance appraisal provides feedback to employees about their

performance. A person works better when he knows how he is working. This
works in two ways, firstly, the person gets feedback about his performance.
Secondly, when the person gets feedback about his performance, he can
relate his work to the organizational objectives.

Pressure on Employees

Performance appraisal puts a sort of pressure on employees for better

performance. If the employees are conscious that they are being appraised in
respect of certain factors and their future largely depends on such appraisal.

Others

a) Identifying systemic factors that are barriers to, or facilitators of,

effective performance.
b) To confirm the services of probationary employees upon they’re
completing the Probationary period satisfactorily.
c) To improve communication. Performance appraisal provides a format
for Dialogue between the superior and the subordinate, and improves
understanding of personal goals and concerns. This can also have the
effect of increasing the trust between the rater and the ratee.
d) To determine whether HR Programmes such as selection, training,
and transfer have been effective or not.

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 1.7Traditional Performance Appraisal

The history of performance appraisal is quite brief. Its roots in the early
20th century can be traced to Taylor's pioneering Time and Motion studies. But
this is not very helpful, for the same may be said about almost everything in the
field of modern human resources management.
During the First World War, appraisals concept was adopted by US army,
which was in the form of merit rating. It was man-to-man rating system for
evaluation of military personnel. From the army this concept entered the
business field and was restricted to hourly-paid workers. During 1920s, relational
wage structures for hourly- paid workers were adopted in industrial units and
each worker was used to be rated in comparison to other for determining wages
rates. This system was called merit rating.
The process was firmly linked to material outcomes. If an employee's
performance was found to be less than ideal, a cut in pay would follow. On the
other hand, if their performance was better than the supervisor expected, a pay
rise was in order.
For example, early motivational researchers were aware that
different people with roughly equal work abilities could be paid the same
amount of money and yet have quite different levels of motivation
and performance.
These observations were confirmed in empirical studies. Pay rates were
important, yes; but they were not the only element that had an impact on
employee performance. It was found that other issues, such as morale and self-
esteem, could also have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively
rejected. In the 1950s in the United States, the potential usefulness of appraisal
as tool for motivation and development was gradually recognized. The general
model of performance appraisal, as it is known today, began from that time.

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 1.8 Modern Appraisal

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.
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or
decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment
and justification of rewards and penalties - is a very uncertain and contentious
matter.

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 1.9 methods of Performance Appraisal

various methods or techniques are used for evaluation the performance of

employee such as strait ranking, grading of employees, critical incident, etc. thus
in regard the estimating work of employees, one measure of worth is the
contribution made by each employee but it is not always possible to measure
employee contribution as an individual’s work is intermixed with that of other.

Different authors and scholars suggested different approaches and classify the
method accordingly. The widely used cauterization is that given by Strauss and
sayles. They have classified performance appraisal methods into two categories,

A. Traditional methods, which lay emphasis on rating of an individual’s

personality traits such as initiatives, dependability drive, responsibity,
creativity, integrity, leadership potentials, intelligence, judgment etc.
B. Modern or newer methods place more emphasis on the evaluation of
work results job achievement than on personality traits.

[A] Traditional Method of performance appraisal

1) Confidential Reports:

Though popular with government departments, its application in

industry is not ruled out. Here the report is given in the form of Annual
Confidentiality Report (ACR). The system is highly secretive and
confidential. Feedback to the assessee is given only in case of an
adverse entry. Disadvantage is that it is highly prone to biases and
regency effect and ratings can be manipulated because the

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 evaluations are linked to future rewards like promotions, good
postings, etc.

2) Rating Scales:

The rating scale method offers a high degree of structure for appraisals. Each
employee trait or characteristic is rated on a bipolar scale that usually has
several points ranging from “poor” to “excellent” (or some similar arrangement).

The traits assessed on these scales include employee attributes such

as cooperation, communications ability, initiative, punctuality and technical (work
skills) competence. The nature and scope of the traits selected for inclusion is
limited only by the imagination of the scale’s designer, or by the organization’s
need to know.
The one major provision in selecting traits is that they should be in some way
relevant to the appraisee’s job.

Advantages

The greatest advantage of rating scales is that they are structured and
standardized. This allows ratings to be easily compared and contrasted - even for
entire workforces.
Each employee is subjected to the same basic appraisal process and rating
criteria, with the same range of responses. This encourages equality in treatment
for all appraises and imposes standard measures of performance across all parts
of the organization.
Rating scale methods are easy to use and understand. The concept of the rating
scale makes obvious sense; both appraisers and appraises have an intuitive

20
appreciation for the simple and efficient logic of the bipolar scale. The result is
widespread acceptance and popularity for this approach.

Disadvantages

Trait Relevance
Are the selected rating-scale traits clearly relevant to the jobs of all the
appraisees? It is inevitable that with a standardized and fixed system of appraisal
that certain traits will have a greater relevance in some jobs than in others.
For example, the trait “initiative” might not be very important in a job that is tightly
defined and rigidly structured. In such cases, a low appraisal rating for initiative
may not mean that an employee lacks initiative. Rather, it may reflect that fact
that an employee has few opportunities to use and display that particular trait.
The relevance of rating scales is therefore said to be context-sensitive. Job and
workplace circumstances must be taken into account.

3) Comparative Evaluation Method (Ranking & Paired

Comparisons):

These are collection of different methods that compare performance with that of
other co-workers. The usual techniques used may be ranking methods and
paired comparison method.

Ranking Method: Superior ranks his worker based on merit, from best to worst.
However how best and why best are not elaborated in this method. It is easy to
administer.

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Paired Comparison Method: In this method each employee is paired with every
other employee in the same cadre and then comparative rating done in pairs so
formed.

4) Check-list Method:

Under this method, checklist of “Statements of Traits” of employee in the form of

Yes or No based questions is prepared. Here, the rater only does the reporting or
checking and HR department does the actual evaluation. The rater concerned
has to tick appropriate answers relevant to the appraises. When the checklist is
completed, it is sent to HR department for further processing. Various questions
in the checklist may have either equal weightage or more weightage may be
given to those questions, which are more important. The HR department then
calculates the total scores, which show the appraisal result of an employee.
• Advantages – economy, ease of administration, limited training required,
standardization.
• Disadvantages – Rater’s biases, use of improper weights by HR Dept, does
not allow rater to give relative ratings.

5) Force Choice Method:

A series of statements arranged in the blocks of two or more are given and the
rater indicates which statement is true or false. The rater is forced to make a
choice. HR department does actual assessment.

• Advantages – Absence of personal biases because of forced choice.

22
• Disadvantages – Statements may not be correctly framed.

6 Critical Incident Method:

In this method, only critical incidents and behavior associated with these
incidents are taken for evaluation. This method involves three steps. A test of
noteworthy on the job behavior is prepared. A group of experts then assigns
scale values to them depending on the degree of desirability for the job. Finally, a
checklist of incidents, which define good and bad employees, is prepared.

• Advantages:
This method is very useful for discovering potential of employees who can be
useful in critical situation.

• Disadvantages:
a) Negative incidents are, generally, more noticeable than positive ones.

B) Overly close supervision may result.

7) Cost Accounting:

In fact this is nothing but Human Resource Accounting. It evaluates the

employees on the basis of what he rarns for the firm. Relationship is established
between the recruitment, placement and training cost and the value benefit to the
firm:

23
 The following points are taken into account while evaluating human
resources of the firm:
(1) Cost of recruitment, placement and training
(2) Average value of units produced or services rendered
(3) Overhead expenses
(4) Loss to the firm due to errors, accidents, wastages etc.

8) Force Distribution Method:

One of the problems faced in large organizations is relative assessment

tendencies of raters. Some are too lenient and others too severe. This method
overcomes that problem. It forces every one to do a comparative rating of all the
employees on a predetermined distribution pattern of good to bad. Say 10%
employees in Excellent Grade, 20% in Good Grade, 40% in Average Grade, 20%
in Below Average Grade and 10% in unsatisfied grade. The real problem of this
method occurs in organizations where there is a tendency to pack certain key
departments with all good employees and some other departments with discards
and laggards. Relatively good employees of key departments get poor rating and
relatively poor employees of laggards’ departments get good rating.

[B] Modern Method of performance appraisal

1) MBO (Appraisal By Results) :

The use of management objectives was first widely advocated in the 1950s by
the noted management theorist Peter Drucker. MBO (management by objectives)
methods of performance appraisal are results-oriented. That is, they seek to
measure employee performance by examining the extent to which predetermined

24
work objectives have been met. The objectives are established jointly by the
supervisor and subordinate. Once an objective is agreed, the employee is usually
expected to self-audit; that is, to identify the skills needed to achieve the
objective. Typically they do not rely on others to locate and specify their strengths
and weaknesses. They are expected to monitor their own development and
progress.
Advantages
The MBO approach overcomes some of the problems that arise as a result of
assuming that the employee traits needed for job success can be reliably
identified and measured. Instead of assuming traits, the MBO method
concentrates on actual outcomes. If the employee meets or exceeds the set
objectives, then he or she has demonstrated an acceptable level of job
performance. Employees are judged according to real outcomes, and not on their
potential for success, or on someone’s subjective opinion of their abilities. The
guiding principle of the MBO approach is that direct results can be observed,
whereas the traits and attributes of employees (which may or may not contribute
to performance) must be guessed at or inferred.

Disadvantages
MBO methods of performance appraisal can give employees a satisfying sense
of autonomy and achievement. But on the downside, they can lead to unrealistic
expectations about what can and cannot be reasonably accomplished.
Supervisors and subordinates must have very good “reality checking” skills to
use MBO appraisal methods.

2) Assessment Center Method:

This technique was first developed in USA and UK in 1943. An assessment

centre is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers. It is more
focused on observation of behaviours across a series of select exercises or work

25
samples. Assesses are requested to participate in in-basket exercises, work
groups, computer simulations, role playing and other similar activities which
require same attributes for successful performance in actual job.

• Advantages – Well-conducted assessment centre can achieve better forecasts

of future performance and progress than other methods of appraisals. Also
reliability, content validity and predictive ability are said to be high in Assessment
Centres. The tests also make sure that the wrong people are not hired or
promoted. Finally, it clearly defines the criteria for selection and promotion.

• Disadvantages – Concentrates on future performance potential. No

assessment of past performance. Costs of employees travelling and lodging,
psychologists. Ratings strongly influenced by assessee’s inter-personal skills.
Solid performers may feel suffocated in simulated situations.

3) Behaviourally anchored rating scales

This is a new method, which was been recently developed. The procedure for
BARS is usually five stepped, a) General critical incidents, b) Develop
performance dimensions, c) reallocation incidents, d) scale of incidents, e)
Develop final instrument.

4) 360o Appraisal:

It is a technique in which performance data/feedback/rating is collected from all

sections of people employee interacts in the course of his job like immediate
supervisors, team members, customers, peers, subordinates and self with
different weightage to each group of raters. This technique has been found to be
extremely useful and effective. It is especially useful to measure inter-personal

26
skills, customer satisfaction and team building skills. One of the biggest
advantages of this system is that assesses cannot afford to neglect any
constituency and has to show all-round performance. However, on the negative
side, receiving feedback from multiple sources can be intimidating, threatening,
expensive and time consuming.

EMPLOYEE PERFORMANCE EVALUATION

In Kaira District Co operative milk producers’ union ltd. Employee performance

evaluation conducting by section wise. There are mainly three sections for
performance evaluation.

Section –1 Competencies

● Communication Skills
● Technical Skills
● Decision-making ability
● Problem-solving attitude
● Leadership
● Teamwork
Above competences measures by 1.Exeptional, 2.stong, 3.fully competent,
4.need to development, 5.poor.

Section – 2 Discussions
● Strengths (Examples of where individual has outstanding merit)
● Developmental Needs (areas that need strenthing)

Section – 3 Overall Ranking

1. Exceptional
2. Strong

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 3. Fully Competent
4. Need to Development
5. Poor

EMPLOYEE COMMENTS:

CHAPTER ~2
INFORMATION ABOUT
COMPANY

28
 1. Company profile

Setting up of Kaira District Co-operative Milk Producers’ Union:

The Kaira District Co-operative Milk Producers’ Union Limited began

pasteurizing milk scheme in June 1948. By the end of 1948, more than 400
farmers joined in more village society, and the quantity of milk handled by one
union increased from 250 to 5,000 liters per day. The success of this industry
was instrumental in launching the White Revolution that resulted in increased
milk production in India. It is officially termed as Operation Food by. The
breakthrough technology of spray drying and processing buffalo milk, developed
by Mr.H.M.DALAYA, was one of the key factors that contributed to the revolution.
Establishment of the Kaira District Co-operative Milk Producers’ Union Limited
which was formally registered on December 14,1946.

29
 Branches in Gujarat are located below:

Valsad District (Vasundhara Dairy)

Mehsana District

Bharuch District (Dudh Dhara Dairy)

Panchmahal District (Panchmut Dairy)

Gandhinagar District (Mother Dairy)

Rajkot Dairy

Surat Dairy

Banaraskantha Dairy

Baroda Dairy

Himmatnagar Dairy

Kaira Dairy (Anand)

30
 CHAPTER ~ 3
LITERATURE REVIEW

31
A FIELD STUDY OF PERFORMANCE APPRAISAL PURPOSE: RESEARCH-
VERSUS ADMINISTRATIVE- BASED RATINGS

MICHAEL M. HARRIS 1 DAVID E. SMITH 2 DENISE CHAMPAGNE 3

1 2
School of Business Administration University of Missouri-St. Louis Anheuser-
3
Busch Companies, Inc. University of Missouri-St. Louis
Correspondence and requests for reprints should be addressed to Michael M.
Harris, School of Business Administration, University of Missouri, St. Louis, MO
63121-4499.
The authors would like to thank Paul Sackett and George Thornton for their
comments.

ABSTRACT

Many researchers have discussed the theoretical and practical importance of

rating purpose. Nevertheless, the body of empirical studies, the majority of which
were conducted in a laboratory setting, focus on leniency. There has been little
research on other effects of rating purpose. The present study examines 223
ratees in a field setting for whom there were both administrative-based
performance appraisal ratings (which were actually used for personnel decisions)
and research-based performance appraisal ratings (obtained for a validation
study). Two of the hypotheses were supported; administrative ratings were more
lenient than research-based ratings. The administrative-based ratings
demonstrated a statistically significant relationship with ratee seniority, while the
research-based ratings did not. There was mixed support for a third hypothesis:
Research ratings were significantly correlated with a predictor, while the
administrative ratings were not. The difference between the validity coefficients,

32
however, was not significant. Contrary to the hypothesis, the rank order between
administrative-based and research-based ratings was relatively high (r= 33).

Nursing center – performance appraisal

By DONNA L.M. MITCHELL AND ESTHER GREEN –

ABSTRACT: To accomplish effective performance reviews and appraisals that

respect employee dignity, managers must cultivate a wide range of
competencies. Systems are required to observe and collect data, cue and
measure observations, and then interpret behavior. Managers regard handling
disciplinary problems and criticizing subordinates' performances as the most
stressful aspects of their work. Evaluating an employee's performance at an
annual meeting is one of the tasks managers most dread. (Added: 24-Apr-2003
Hits: 737)

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 CHAPTER~4
RESEARCH
METHODOLOGY

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4.1 What is Research?

In common words, research refers to a search for knowledge. Research

can be defines as a scientific and systematic search for information on a specific
search for information on specific topic. In short, Research means the search for
knowledge through objective and systematic method of finding solution to the
problem in search.

Definition:
Research:
According to Redman & Mary “ Research is a systematic study of
generating new knowledge”

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 4.2 RESEARCH METHODOLOGY

Methodology is a way to systematically solve the research problem. It may

be under stood as a science of studying how research is done scientifically. It is
necessary for the researcher to know not only the research method but also the
methodology. We can say that research methodology has many dimensions and
research methods do constitute a part of the research methodology. Research in
common parlance refers to a search for knowledge. Once can also define
research as a scientific and systematic search for pertinent information on a
specific topic. In fact, research is an art of scientific investigation.

Research comprises redefining problems, formulating hypothesis or

suggested. Solution, collecting, organizing and evaluating data; making
deduction and reaching conclusions; and at last carefully testing the conclusions
to determine whether they fit the formulating hypothesis. When we take of
research methodology concerning a research problem or study.

36
4.2.1 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. A research design may constitute decisions regarding
what, where, when, how much, by what means concerning an inquiry or a
research study. As such design includes an outline of what the researcher will do
from writing the hypothesis and its operational implication to the final analysis of
data.

1. Exploratory Research

This research is an exploratory type of research. The few reasons

for terming this study as an exploratory study are given as under.

It provides the organization with an idea about the effectiveness of

the program that it was conducting the data for this purpose was to be
gathered a new. Also no substitute data was available.

Many different aspects were to be evaluated & data was to be

collected from all the selected respondents. All the data was to be collected a
new. Thus, it can be concluded that it definitely is as exploratory study

37
4.2.2 Sampling Plan

There are two type of sampling plan

● Probability sampling
[Random sampling]

● Non-probability sampling
[Non- Random sampling]

The Researcher has utilized Simple Random sampling method for this study.

4.2.3 Objective of the study

◙ To study the performance appraisal as motivating factor for employees

◙ To understand how the result of performance appraisal system Are used

In training and employee development.

◙ To study the practical application of performance appraisal.

38
4.2.4 Sources of data collection:

While deciding about the method of data collection to be used for the
study; the researcher should keep in mind two types of data primary data &
secondary data.

• PRIMARY DATA:

The data, which are collected for the first, time & thus happen to be
original in character. There are several methods of collecting the primary data:

- Observation method
- Interview method
- Questionnaire method
- Schedules

• SECONDARY DATA:

The data, which is collected by someone else but is useful for the
current study being conducted.

- This research is based on primary data

- The instrument used for data collection is questionnaire

- A structured questionnaire was used for the purpose of research

39
 - A copy of this structural questionnaire is attached in annexure

4.2.5 Limitation of the study

In this project I have tried to present facts with figure pertaining to my survey skill
it as some limitation, which is there in this project need identification.

◙ Research is based on the information given by the employee. There may be

possibility of getting wrong information.

◙ The information was totally depended on the questionnaire, which may not be,
understand by employee.
.
◙ Some employees were not interested in giving any information.

40
4.2.6 DATA ANALYSES AND INTERPRETATION

1. AGE

AGE IN YEARS

60
50
40
PERCENTAGE 30 60
20
30
10
10
0
20-30 30-40 40-50
YEARS

Interpretation:

From the above graph shows that most of the 60% (20-30 Years), 30% (30-
40Years), 10% (40-50Years) respondents are in the age group.
The majority of the respondents are in the age group of 20-30 years.

41
2. EDUCATION

EDUCATION

60
50
PERCENTAGE

40
30
50
20 40
10
10
0
Graduation Post Graduation Any Other Specified

Interpretation:

From the above graph shows that most of the 50% (Graduation) and 40%
(Post Graduation) 10% (Any Other Specified Degree Like Diploma)
respondents are educated in the organisation.

42
3. EXPERENCE

WORK EXPERIENCE

70
60
PERCENTAGE

50
40
30 65

20
28
10
7
0
0 - 3 Years 3 - 5 Years Up To 5 Years

Interpretation:

From the above graph shows that most of the 65% respondents are having
work experience of 0 - 3 years.28% respondents having work experience
between 3 - 5 years.7% respondents having the work experience up to 5
years.

43
4. You aware about the performance appraisal system?

Awareness about P.A.

100
100
80
60
Percentage
40
20
0
0
YES NO

Interpretation:

From the above table shows that most of the 100% employees are aware
about the performance appraisal system.

44
5. If yes, then whether it is followed-up properly?

Followed the system

100
100

80

60
Percentage
40

20
0
0
YES NO

Interpretation:

From the above table shows that most of the 100% YES, Whether it is being
followed up properly.

45
6. At what frequency performance appraisal carried out your organization?

Frequency performance appraisal carried in

the organisation

80
60
40 80
20
20
0
HALF YEARLY ANNUALY

Interpretation:

From the above graph shows that most of the frequency 80% half yearly 20%
annually performance appraisal carried out in organisation.

46
7. Do you think the performance appraisal system adequately appraises the
potential of employee?

80

60

Percentage 40 75

20
25
0
YES NO

Interpretation:

From the above graph shows that most of the 75% respondents said
performance appraisal system adequately appraises the potential of
employee. And 25% respondents said No.

47
8. According to you, Performance Appraisal is a ------% correct indicator of an
employee’s development.

40
35
30
25
Percentage 20 40
15 30
10 20
5 10
0
100% 75% 50% 25%

Interpretation:

From the above table shows that the 40% respondents said performance
appraisal system is 100% correct indicator for employee’s development. 30%
respondents said performance appraisal system is 75% correct indicator for
employee’s development. 20% respondents said performance appraisal
system is 50% correct indicator for employee’s development. 10%
respondents said performance appraisal system is 25% correct indicator for
employee’s development.

48
9. Good performance appraisal should be rewarded by

REWARD SYSTEM

40

30

Percventage 20 40
25
10 20 15
0
Salary Promotion Advance Cash
Increment Training Reward

Interpretation:

From the above table shows that most of the 20% salary increment and 25%
promotion & enhanced responsibility to employees and 40% advance training
for good performance should be rewarded in organisation.

49
10. The performance appraisal effective in identifying training need?

Effective in identifying training need

100
80
60
Percentage 100
40
20
0 0
YES NO

Interpretation:

From the above table shows that the most of 100 identification training needs
in effective performance appraisal system in organisation.

50
11. Is goal setting a part of your performance appraisal system?

80
70
60
50
Percentage 40 80
30
20
10 20
0
Yes No

Interpretation:

From the above graph shows that most of the 80% respondents said goal
setting is a part of performance appraisal system and 20% respondents said
goal setting is not a part of our performance appraisal system.

51
12. What do you think should be areas covered under the performance
Appraisal?

Area Covered Under the Performance Appraisal

40
35
30
Percentage

25
20 35
15 25
10 22.5
17.5
5
0
Job Knowledge Aknowledgement future Potential Communication
skill

Interpretation:

From the above graph shows that most of the 35% have knowledge and
17.5% acknowledgement, 22.5% future potential and 25% have
communication skill this above areas covered under the performance
appraisal.

52
13. Do you give training to the appraises for the use of the Performance
Appraisal system?

Training for P.A. system

100
80
60
Percentage 100
40
20
0 0
YES NO

Interpretation:

From the above graph shows that most of the 100% respondents said they
get training for the use of the performance appraisal system.

14. Does negative feedback effect on motivation and performance of an

53
 Individual?

Effects on Motivation & Performance of an

Individual
80
80

60

Percentage 40
20
20

0
Yes No

Interpretation:

From the above graph shows that most of the 80% employees a negative
feedback affect motivation and performance of individuals. And 20%
employee a negative feedback effect on motivation and performance of an
individual.

15. On what basis do you appraise an employee?

54
 Appraise an employee

35
30
25
20
Percentage 35 35
15 30
10
5
0
TRAITS RESULTS JOB
BEHAVIOUR

Interpretation:

From the above graph shows that the 35% said Traits and 35% said on the
basis of results. And 30% respondents said on the basis of job behaviour.

16. Is Performance Appraisal is a motivating factor for employees?

55
 100

80

60
Percentage
40 85

20
15
0
All Employee Some Employee

Interpretation:

From the above table shows that most of the 85% respondents said
performance appraisal is a motivating factor for employees. Some 15%
respondents said it is only for some employees.

17. Which method do you follow in these?

( ) Rating method ( ) Interview or discussion

( ) Force choice description ( √ ) MBO

( ) Checklist method ( ) Human asset accounting

( ) Critical Incidents Method ( ) 360 degree appraisal

56
CHAPTER ~5
FINDINS

FINDINGS

57
◙ performance appraisal is effective in identifying training need

◙ This organization have goal setting as part of appraisal. The performance is

evaluated against these targets.

◙ Performance Appraisal is a motivating factor for employees.

◙ The present duration of performance appraisal is half and yearly both.

◙ Job knowledge, Communication skill, performance and communication

Skill these areas covered under the performance appraisal.

◙ All the employee are well knowledgeable and experienced.

◙ Good performance appraisal should be rewarded by salary increment,

Promotion or cash reward.

58
CHAPTER ~6
SUGGESTION

SUGGESTIONS

59
◙ The awareness sessions for the employees/appraises should be made
more interactive and the views and opinion of the appraises regarding
appraisal should be given due consideration.

◙ The employees who have excellent performance should be used as a

experienced for other employees, who would motivate others to perform
better.

◙ The Performance Appraisal should be conducted on regularly basis to be

evaluated much accurately.

◙ Financial and non-financial incentives should be linked to the annual

appraisal system so that employees would be motivated to perform better.

60
CHAPTER ~7
CONCLUSION

CONCLUSION

61
This research is done for knowing the effectiveness performance appraisal
system at Kaira District Co-operative Milk Producers’ Union Limited. By this
above research clear idea about the employee performance mapping system of
the organisation and the employees satisfaction with the system of appraisal.
The systematic implementation of performance appraisal system and its
appropriate feedback in terms of training need identification, achievements, and
career development are the feature of proper system.

62
BIBLIOGRAPHY

Bibliography

63
C. R. Kothari.’research Methodology’ New age international (p) Ltd.

Human Resource And Personnel Management - Aswathappa

Human Resource Management & Industrial Relation - Shah S.P

WEBSITES:

www.humanresource.about.com
www.hrindia.com
www.performance-appraisal.com
www.Indiandairy.com

64
Appendixe

QUESTIONNAIRE

65
1. Age:

O 20-30 years O 30-40 years

O 40-50 years

2. Education:

O Graduation O Post Graduation

O Any Specified Mentioned Degree.

3.Experience:

4.Are you aware about the performance appraisal system?

O Yes O No

5.if yes, then whether it is followed-up properly?

O Yes O No

6.at what frequency performance appraisal carried out your organization?

O Half yearly O Annually

7. Do you think the performance appraisal system adequately appraises the

potential of employee?

O Yes O No

8. According to you, Performance Appraisal is a ------% correct indicator of an

employee’s development.

O 100% O 50%

66
 O 75% O 25%

9. Good performance appraisal should be rewarded by

O Salary increment O Promotion

O Advance training O Cash reward

10. Is the performance appraisal effective in identifying training need?

O Yes O No

11. Is goal setting a part of your performance appraisal system?

O YES

O NO

12. What do you think should be areas covered under the performance
appraisal?

O Job knowledge O Future Potential

O Acknowledgement O Communication skill

13.Do you give training to the appraises for the use of the Performance Appraisal
system?

O Yes O No

67
14.does negative feedback effect on motivation and performance of an
Individual?

O Yes O No

15. On what basis do you appraise an employee?

O Traits O Results

O Job behaviour

16. Is Performance Appraisal a motivating factor for employees?

O For all employees. O For some employees.

17. Which method do you follow in these?

( ) Rating method ( ) Interview or discussion

( ) Force choice description ( ) MBO

( ) Checklist method ( ) Human asset accounting

( ) Critical Incidents Method ( ) 360 degree appraisal

68