A A STUDY OF PERFORMANCE APPRAISAL IN ALLIED NIPPON LIMITED Site-IV, Sahibabad, Ghaziabad (PRODUCTION DEPTARTMENT)

Table of contents

1. Company-Profile 2. Introduction of Study 3. Research Methodology 4. Data Analysis 5. Findings 6. Conclusions. 7. Limitations 8. Recommendation 9. Bibliography. 10. Annexure.

Acknowledgement

This project is the result of the help of the various people who rendered their support and suggestions from time to time. I take this opportunity to thank all of them with a deep sense of gratitude and reverence. Firstly, I wish to express my sincere thanks to Mr. Ajit Kumar Sharma (HRExecutive)and also project guide Allied Nippon Limited, Sahibabad, Ghaziabad for his caring and guiding support and for giving a very patient hearing whenever i needed. He directly made a significant contribution to emerge to this project report. My sincere thank to Ms.Richa Sahani faculty guide who helped me out tremoundously in the successful completion of this project report. I would like to thank my family and friends who directly or indirectly helped me in finishing the project successfully.

THE COMPANY PROFILE

Allied Nippon Ltd (ANL), an ISO/TS 16949:2002 company, that manufactures and markets friction products including Disc Brake Pads, Brake Linings, Brake Shoes, Clutch Facings, and Brake Hydraulics for Cars, Railways, Commercial Vehicles (CV), Off The Road Vehicles (OTR )and various other automotive applications. Allied Nippon Ltd.(ANL) has Joint Venture Collaboration with Japan Brake Industrial Company Limited (JBI), Tokyo, Japan. Vision We want to maintain our leadership position in our chosen area of business in India and to establish it globally. We will endeavor to create new opportunities for growth in our strategic business. MISSION Foresight, enterprise, determination and commitment. Forging ahead with modern technologies. Reaching out to the global market. Progressing with team work. Displaying firm commitment and ready action in our operations

ABOUT OUR PARTNERS JAPAN BRAKE INDUSTRIAL CO. LTD. (JBI) JBI, a Hitachi group company, is a pioneer in the development of Friction Material Technology. It is a major supplier to the worlds leading automobile manufacturers including Honda, Suzuki, Mazda, General Motors and Hyundai.As JBIs Joint Venture partner,ANL continuously receives upto date technical knowledge, and research & development expertise.

NABCO LTD To widen its automotive product range, ANL has signed a Technical Collaboration agreement with NABCO Ltd. to manufacture Railway Brake Blocks. NABCO has been consistently involved in the development of Automotive Brake Systems and Railway Car Brake System in Japan. International Operations With an exhaustive distributor network, ANL has offices, warehousing and customer support centres across the globe. ANLs International Operations are equipped to handle problems and technical queries of customers, build better customer contact and provide superior services. International Locations : - ANL Europe Ltd Bristol (U.K.) - Allied Comline Ltd Middlesex (U.K.) - Nippon Line Ltd Moscow (Russia) - Engineering Office Bristol (U.K.)

ALLIED NIPPON MANUFACTURING A 12, Site IV, Industrial Area, Sahibabad 201010 Distt. Ghaziabad (U.P.) INDIA Tel No.: +91 11 55351409 +91 120 2896686 - 95 Fax No: +91 120 2896685 e.mail : export@alliednippon.net website: http://www.alliednippon.com/ REGISTERED OFFICE (INDIA) ALLIED NIPPON LIMITED 1006, Akashdeep Building 26/A, Barakhamba Road New Delhi 110 001. INDIA Tel No : +91 11 23753575 76 +91 11 26428043 Fax No: +91 11 23753575 e.mail : intertrade@bol.net.in (U.K.) ALLIED COMLINE LIMITED Unit 30, Northfield Industrial Estate Beresford Avenue, Wembley Middlesex HAO INW, England Tel No. : (44) 020 8902 8989 Fax No : (44) 020 8902 9898 e.mail : mailto:%20acl@comline.uk.com website : http://www.comline.uk.com/

(U.K.) ANL EUROPE LIMITED Unit 16 Londonerry Farm Keynsham Road, Willsbridge Bristol BS 30 6EL, England Tel No : (44) 0117 932 1050 Fax No : (44) 0117 932 1059 e.mail : mail@anl-europe.com website : http://www.anl-europe.com/

(RUSSIA) NIPPON LINE LIMITED 307,8, 2nd Roschinsky Proezd, Moscow, Russia - 115419 Tel No : +7 (095) 956 6670 Fax No : +7 (095) 956 6670 e.mail :mailto:grishin@allied-nippon.com website : http://www.allied-nippon.com/

PRODUCT PROFILE
Brake Pads and Brake Shoes

Formulas specially designed in Japan and Europe are responsible for the superior performance of our disc brake pads and brake shoes. This exceptional technology and quality give us the highest market share in India for Two Wheeler friction materials. We also export these materials to over 15 countries. Allied Nippon is an OE supplier to Honda, Hero Honda, Bajaj, Piaggio, Yamaha.

Brake Linings, Shoes, Discs and Hydraulics ANLs Braking range also consists of various products such as Brake Linings, Brake Shoes and Brake Hydraulics. The products have been supplied extensively to manufacturers of Passenger Cars, Suvs, LCVs, Tractors, Two Wheelers and Four Wheelers

Commercial Vehicles - Trucks and Off-The-Road Vehicles Based on increasing product acceptance& recogination ANL has expanded its manufacturing and business activities to include an exhaustive range of Commercial vehicles (CV) and Off-The-Road (OTR) vehicles pads such as heavy earth movers. Customers are assured and guaranteed the safety and reliability of ANL products. The pads are supplied with complete accessories and wear indicators.

Railways ANL is a pioneer in the development and manufacturing of composition Brake Blocks for Railways. It has acquired the latest and most cost effective technology from NABCO, Japan, a worldwide leader in its field and superior quality, Safety being a paramount importance; ANL Brake Blocks are manufactured under the most stringent quality checks MANUFACTURING

Experienced, skilled and trained personnel monitor the entire production process. All raw materials are screened through a rigorous selection process and the manufacturing process ensures zero defect system at every stage. The computerized and fully automated plant uses JBIs proven technology and process methods. Furthermore the critical operations Weighing, Mixing, Pre-forming, Heat Moulding and Finishing are given high priority. ANL, equipped with modern tool room facilities, is in a unique position to design, develop and manufacture tooling for products required by the customer within stipulated time schedules.

REACH & DEVELOPMENT Besides using superior Japanese Technology, ANL has built and developed its own centre for in-house research and development activities, thereby providing it with a solid backing. To conduct and complete in-house testing for newly developed products (ranging from two-wheeler to HCVs), ANLs R & D centre, approved by the Government of India, is equipped with a Dynamometer and the Krauss testing machine. ANLs R & D centre also conducts rigorous tests to ensure that the highest standards are maintained in raw material selection, mix quality and the entire manufacturing process.

QUALITY ASSURANCE Allied Nippon friction materials go through systematically defined Quality Assurance testing procedures and programmes. ANL products consistently guarantee the combination of safety, strength, high endurance, dependability and cost effective performance. All critical and special characteristics are statistically measured and controlled. Well-equipped in-house Quality Control meets the calibration and inspection requirement as per international standards. OEM USERS The Original Equipment Users ANL, a major OEM supplier for renowned Vehicle Manufacturers, caters to the requirement of various Original Equipment Manufacturers which include Honda, Suzuki, Mitsubishi, Mazda, Toyota, Fiat, GM, Ford, Daewoo, Hyundai, International Harvester and Massey Ferguson,and Brake system suppliers including Bendix and Girling. Allied Nippon Bonded Brake Shoes are also used as Original Equipment on two wheelers manufactured by Hero Honda, Yamaha, Kawasaki Bajaj, Royal Enfield, Kinetic Motors in India and Piaggio in Italy.

WHAT IS PERFORMANCE APPRAISAL? Since organizations exist to achieve goals, the degree of success that individual employees have in reaching their individual goals is important in determining organizational effectiveness. The assessment of how successful employees have been at meeting their individual goals, therefore, becomes a critical part of HRM. This leads us to the topic of performance appraisal. People differ in their abilities and aptitudes. These differences are natural to a great extent and cannot be eliminated even by giving the same basic education and training to them. There will be some differences in the quality and quantity of work done by different employees even on the same job. Therefore, it is necessary for management to know these differences so that the employees having better abilities may be rewarded and the wrong placements of employees may be rectified through transfers. The individual employee may also like to know the level of his performance in comparison to his fellow employees so that he may improve on it. Thus, there is a great need to have suitable performance appraisal system to measure the relative merit of each employee. The basic purpose of performance appraisal is to facilitate orderly determination of an employees worth to the organization of which he is a part. However, a fair determination of the worth of an employee can take place only by appraising numerous factors some of which are highly subjective, as for instant, attendance, while others are highly subjective, as for instant, attitude and personality. The objective factor can be assessed accurately on the basis of records maintained by the Human resource or personnel Department, but there is no device to measure the subjective factor

precisely. Notwithstanding this, appraisal of these factors must be done to achieve the full appreciation of every employee merit.

What is Performance Appraisal? Performance appraisal goes by various names such as performance evaluation, progress rating, merit rating, merit evaluation, etc. But in this chapter, we shall use the terms performance appraisal and merit rating to denote the appraisal of the performance of the employees of an organization. Performance appraisal means systematic evaluation of the personality and performance of each employee by his supervisor or some other person trained in the techniques of merit rating. It employs various rating techniques for comparing individual employees in a work group, in term of personal qualities or deficiencies and the requirements of their respective jobs. To quote dale Yoder, performance appraisal includes all formal procedures used to evaluate personalities and contribution and potential of group members in a working organization. It is a continuous process to secure information necessary for making correct and objective decisions on employees. The comparison of performance with job requirements helps in finding out the merit of individual employees in a week group. Supervisor or an independent appraiser may do rating. Performance appraisal is a formal programme in an organization, which is concerned with not only the contribution of the members who form part of the organization, but aims at spotting the potential also. The satisfactory performance is only a part of the system as a whole and the management needs more information than mere performance ratings of the subordinates. There are no two opinions about the necessity of

performance appraisal, which can meet requirements of the management to achieve the organizational goals. Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. Performance appraisal is concerned with determining the differences among the employees working in the organization. Generally, the individuals immediate superior in the organization and whose performance is reviewed in turn by his superior does the evaluation. Thus, everyone in Performance appraisal employs rating techniques for comparing individual employees in the work group, in terms of personal qualities or deficiencies and the requirements of their respective jobs. Purpose of Performance Appraisal: The objective of performance appraisal fall in two categories: 1) 2) 1) a) Administrative; and Self-improvement Administrative Objectives. Promotions: This is the most important administrative use of performance appraisal. It is to the common interest of both the management and employees to promote employees onto position where they can most effectively utilize their abilities. It is mismanagement to promote employees into position where they cannot perform effectively at the time in question. A properly developed and administered performance appraisal system can aid in determining whether individuals should be considered for promotions. The system must rate the

ratee for the present job and his potentialities for the higher job. A person performing the job well does not necessarily mean that he is fit for promotion. b) Transfers:

In an organization, it may be necessary to consider various types of personnel actions such as transfer, layoffs, demotions and discharges. In some cases, such actions are called for because of unsatisfactory performance while in other cases it may be called for due to economic conditions over which the organization has no control because of changes in production process. Such actions can be justified if they are based on performance appraisal. c) Wage and Salary Administration: In some cases, the wage increases are based on the performance appraisal reports. In some cases, appraisals and seniority are used in combination. d) Training and Development: An appropriate system of performance appraisal can be helpful in identifying the areas of skills or knowledge in which certain employees are not up to par, thus pointing out general training deficiencies which presumably should be corrected by additional training, discussions, or counseling. Performance appraisal can also help in spotting the talented employees so as to train and develop them to create an inventory of executive skills. It can also provide the areas where the employees/executives could be further trained and positioned to meet retirement and expansion situations. e) Personnel Research: Performance appraisal helps in research in the field of personnel management. Various theories in human relationship are outcome of efforts to

find out the cause and effect relationship between the personnel and their performance. 2) Self Improvement. The performance appraisals bring out the deficiencies and shortcomings of the employees. Performance appraisal helps human resource development in a way. A promotion minded individual could ask for the target programmes of a position he seeks and use the information given by performance appraisal to prepare him for the job and enhance his candidacy. Performance appraisal also helps to spot out a persons ability to see an organization problem, devise ways of attracting it, translate his ideas into action, incorporate new information as it arises and carry his plans through the results. It highlights a sort of total managerial action in contrast to things they customarily factor out as conceptual entities-things such as planning function, leadership ability, or financial knowledge. The managers selection will often be improved by this emphasis on the whole managerial job.

Why Performance Appraisal? The important reasons or benefits, which justify the existence of a system of performance appraisal in an enterprise, are as under: 1) A good system of performance appraisal helps the supervisor to

evaluate the performance of his employees systematically and periodically. It also helps to assign that work to individual for which they are best suited. 2) Performance rating helps in guiding and correction of employees. The

supervisor may use the results of rating for the purpose of constructively guiding employees in the efficient performance of work. 3) The ability of the staff is recognized and can be adequately rewarded

by giving them special increments. 4) Performance appraisal can be used as a basis of sound personnel policy

in relation to transfers and promotions. If the performance of an employee is better than others, he can be recommended for promotion, but if a person is not doing well in a job, he may be transferred to some other job. 5) Ratings can be used to evaluate the effectiveness of training

programmes. Merit rating reveals weaknesses of employees and the training programmes can be modified accordingly. 6) Performance appraisal provides an incentive to the employees to better

their performance in a bid to improve their rating over others.

7)

Systematic appraisals will prevent grievances and develop confidence

amongst the employees if they are convinced of the impartial basis of evaluation. The record of merit rating is available in permanent form to protect the management against subsequent charges of discrimination, which might be leveled by the trade union leaders. Performance Appraisal has a beneficial effect on both the persons doing the appraisal and being appraised. The appraisal brings prominently to the attention of supervisors or executives the importance of knowing their subordinates as human being. The necessity of performance appraisal leads the appraiser to a thoughtful analysis of people rated and tends to make him more alive to opportunities and responsibilities in developing the subordinates. The objective of appraisal is to derive the point to the appraisee without inviting his resentment or drawing back into the shell or taking defensive attitude.

Limitations of Performance Appraisal: Performance appraisal may not yield the desired results because of the following deficiencies: 1) If the factor included in the assessment is irrelevant, the result of merit

rating will not be accurate. 2) Different qualities to be rated may not be given proper weightage

certain in cases. 3) Some of the factors are highly subjective like initiative and personality

of the employees; so the actual rating may not be on scientific lines. 4) Supervisors often do not have critical ability in assessing the staff.

Sometimes, they are guided by their personal emotions and likes. So the ratings are likely to be biased.

Difference between Performance Appraisal and Job Evaluation:

Performance Appraisal 1 Performance appraisal is concerned with . the differences among the employees in terms of their performance. It is also termed as merit as it is concerned with the comparative merit of individuals.

2 .

3 .

4 .

Job Evaluation Job evaluation is the analysis of various jobs to know the demands, which the normal performance of particular jobs make on average employees. It does not take into account the individual abilities of the job-holder. It considers the abilities and performance It considers the of individuals. requirement of various jobs in terms of jobs description and job specifications. The purpose of merit rating is to appraise The purpose of job the performance of individuals to take evaluation is limited, i.e. decisions like increase in pay, transfer, to determine the worth of promotion, etc. It also serves as guidelines the job on the basis of for the management to consider the type demands made by a of training, which should be imparted to particular job on the the employees. average worker. This facilitates fixation of wages for various jobs. Performance appraisal rates the man and Job evaluation analyses not the job as it is concerned with the job to determine their assessing of the abilities of the relative worth and fix individuals. As a matter of fact, it their wage levels that are measures the worth of different employees fair and equitable. to the organization.

5 Performance appraisal is used as a basis of Job evaluation is used to . personnel policies as regards transfer and shape the wage policy of promotion the organization.

Methods of Appraisal There are various methods of merit rating may be classified into: 1) 2) 1) Traditional Methods and Modern Methods. Traditional Methods

Traditional methods are very old technique of performance appraisal. They are based on trait-oriented appraisal. Evaluation of employees is done on the basis of standards of personal traits or qualities such as attitudes, judgment, versatility, initiative, dependability, leadership, loyalty, punctuality, knowledge of job, etc. There are seven traditional methods of appraisal. They are: Unstructured appraisal. Employee ranking. Forced distribution. Graphic rating scales. Check lists. Critical incidents. Field review. Unstructured Appraisal. Under this, the appraiser is required to write down his impression about the person being appraised in an unstructured way. However, in some organizations, comments are required to be grouped under specific headings such as quality of job performance, reasons for specific job behaviors, personality traits, and development needs. This system is highly subjective and has its merit in its simplicity and is still in use especially in the small firms.

Ranking Method:

Ranking is a simple process of placing in a rank according to their job performance. It permits comparison of all employees in any single rating group regardless of type of work. All workers are judged on the same factors and they are rated on the overall basis with reference to their job performance instead of individual assessment of traits. In this way, the best in placed first in the rank and the poorest occupies the last rank. The difficulty of this system is that the rater is ranked to consider a whole person. Subjectively of the appraiser may enter into his judgments. Asking the appraiser to rank employees on certain desirable traits can reduce the subjectiveness in this method. The other difficulty with this method is that it does not indicate the degree of difference between the first man and the second man, and so on. Paired comparison is an improvement over simple ranking. Under this, every employee in a job family is compared with every other employee to determine which is the better worker. The rater is provided with a little booklet containing two names on each page. Obviously the number of rank order would be n(n 1)/2, where n is the total number of persons to be compared. In this way, every employee is compared with every other employee in the same job family. The paired comparison gives a more reliable rating than the order of ranks although this system is more tedious to construct and use. It cannot be used for periodic employees ratings, as it does not make evaluation of any improvement in the employees that might have been over a period of time. Forced Distribution Method:

Some appraisers suffer from a constant error, i.e., they either rate all workers as excellent, average or poor. They fail to evaluate the poor, average or excellent employees clearly. The forced distribution system is devised to force the appraiser to fit the employees being appraised into predetermined ranges of scales. It has an advantage over the paired comparison system in that two or more employees can be given equal ratings. This system is based on the presumption that employees can be divided into five points scale of outstanding, above average, average below average and poor. In this system, the appraiser is asked to distribute the employees into these categories in such a way that about 10% of the men are in group outstanding, 20% above average, 40% average, and 10% poor. This method obviously eliminates the room for subjective judgment on the part of supervisors. This system is easy to understand and administer. The objective of this technique is to spread out ratings in the form of a normal distribution, which is open to criticism. Many times, this group is comparatively smaller. As a matter of fact, forced distribution of rankings is feasible for a large group. Graphic Rating Scales:

Under this method, scales are established for a number of specific factors and qualities. Five degree are established for each factor and general definitions appear at points along the scale. Generally, the rater is supplied with a printed form, one for each person to be rated. The selection of factors to be measured on the graphic rating scale is an important point under this system. There are two types: 1) Characteristics, such as initiative and dependability, and

2)

Contributions, such as quantity and quality of work.

Since certain area of job performance cannot be objective measured, it is likely that graphic scales will continue to use a mixture of both characteristics and contributions. Graphic scales impose a heavy burden upon the supervisor. He must report and evaluate the performance of his subordinate on scales involving as many as five degree on perhaps ten different factors. The main drawback of this system is that the rater may be biased. However, one means of ensuring that the rater has based his scoring upon substantial evidence is to leave space on the form after each factor and require him to explain the reason for his rating. In effect, he is asked to give example of the ratees behavior that justifies the assigned rating. A supervisor may tend to rate him men high to avoid criticism from them. The graphic rating method is easy to understand and easy to use. It permits the statistical tabulation of scores in terms of measures of central tendency, skew ness and dispersion. It permits a ready comparison of scores among employees. The scores presumably reveal the merit or value of every individual. However, this method has certain serious drawbacks. There is an implication that a high score of one factor can compensate for a low score on another. If a man scores for attendance, attitude, cooperativeness, etc. Frequently, the rating tends to cluster on the high side under this system. A supervisor may tend to rate his men high so that they may receive high share of pay raises in some cases. Check Lists:

It also consists of two techniques:

a)

Weighted check list, and

b) Forced choice. a) Weighted Check List:

Under this method, various statements are prepared in such a manner that they describe various types and levels of behavior for a particular job. Each statement is attached with a scale value. At the time of rating the employees, the supervisor just collects and checks all the statements. After the weights and values are attached to the individual traits, the rating up to this level is gathered on the rating sheet. Then the weights are averaged and employee is evaluated. The weighted check the persons thoroughly acquainted with job and perfect at preparing and weighing statements should prepare list. When this process is over, rating is placed on separate cards. Then raters who actually observed the accomplishment of the work sort these cards. They rank the employee from poor to excellent. Weights are then assigned to the statements in accordance with the way they are ranked by the raters. Under this method, the supervisor is not allowed to accumulate vague impressions as a basis for rating. Because of this, it compels the supervisor to think in terms of very specific kinds of behavior. This method involves a lengthy procedure of evaluating employees. It requires certain qualifications to be met on the part of the supervisor regarding the job he is assigned to look after. Moreover, this method is a relatively costlier affair. It puts more strain on the financial resources of the organization particularly in terms of personnel development time. Financial burden is further increased when diverse jobs are evaluated, as a separate procedure must be established for each job.

b)

Forced Choice:

This method is used particularly with the objective of avoiding scope for personal prejudices. Under this method, the rater is forced to choose between descriptive statements of seemingly equal worth describing the person in question. Statements are chosen of both the sides (favorable as well as unfavorable). For example, the following two pairs of statement from each pair that is represented by supervisor. a) b) c) d) Gives clear instructions to his subordinate. Can be dependent upon to complete any job assigned. Makes promises that he knows he cannot keep. Shows favoritism to some employees.

The rater may feel that neither of the two statements in a pair is applicable, but he must select the one that is more descriptive. Only one of the statements in each pair is correct in identifying the better performances and this scoring key must be kept secret from raters. In this way, bias removed from the appraisal process. The main advantage of establishing this system of performance appraisal is that it has greater objectivity than most other methods. Forced choice method is also not free from drawbacks. They are as follows: Firstly, it is very expensive to install this system. Secondly, this procedure involved is very lengthy and hence more time consuming. Thirdly, it is difficult for a supervisor to discuss rating switch subordinates because the personnel department scores the items.

Critical Incident Method:

A critical incident means a significant act by an employee exceeding or failing any of the requirements of his job. It represents an exceptional behavior of an employee at work, as for instance, Resisted the implementation of change; Became upset over work; Refused to help a fellow worker; Suggested an improvement in the work method Tried to get a fellow worker to accept the management decision; Welcome new ideas. This method requires every supervisor to record all such significant incidents in each employees behavior, which indicate effective or successful action and those, which indicate ineffective or poor behavior. These are recorded in a specially designed notebook, which contains categories or characteristics under which various behaviors can be recorded. Examples of such type of job requirements of worker a are judgment, learning ability, productivity, dependability, accuracy of work, responsibility and initiative. Daily recording of these items seems to be essential because, otherwise, the supervisor may forget the incidents with his subordinates. Under the critical incident method, the supervisor is supposed to refrain from passing overall judgments and concentrate upon discussing facts as he sees them. Theoretically, this should provide a sound and an objective basis for appraisal of performance of an employee. The critical incident method is not a rating method, as it requires the supervisor to pay close attention to what an employee is doing.

This method suffers from the defect that outstanding incident happens so frequently that individuals appraisal may not vary markedly between any two time periods. It has been observed that most of the time the employees have neither positive nor negative incidents. If the critical event does not happens it will be difficult to rate an employee. Moreover, it may be difficult for a supervisor to decide what is the critical or exceptional incident. Her against the human bias may appear in recording the critical incident. To rectify this defect, Gerald Whitlock designed a specimen checklist, which consists of a number of behavior incidents, which are considered to be an example of uncommonly, ineffective, or effective job behavior. The usual procedure in constructing the specimen checklist is to collect behavior incidents from certain experts in this area. The number of such performance behaviors ranges from 80 to 150 incidents, equally divided between effective and ineffective specimens. Field Review Method:

Under this method, an expert from the personnel department interviews the supervisors. The expert questions the supervisor to obtain all the pertinent information on each employee and takes notes his notebook. Thus, there is no rating form with factors or degrees, but overall ratings are obtained. The workers are usually classified into three categories as outstanding, satisfactory and unsatisfactory. The interviewer questions the supervisor about the requirements of each job in his unit and about the performance of each man in his job. He probes to find out only how a man is doing but also why he does that way and what can be done to improve or develop him. The supervisor is required to give his opinion about the progress of his subordinates, the level of performance of each subordinates, his weaknesses, good points, outstanding

ability, promotion ability, and the possible plans of action in cases requiring further consideration. The questions are asked and answered verbally. The success of field review method depends upon the competence of the interviewer. If he knows his job, he can contribute significantly to accurate appraisal. Field review method relieves the supervisors of the tedious writing work of filling in appraisal forms. It also ensures a greater likelihood that the supervisors will give adequate attention to the appraisals because the personnel department largely controls the process. Superficial judgment can be eliminated if the appraiser probes deeply. Criticism of Traditional Methods: The general criticism of traditional performance appraisal systems is that they are two subjective in nature because all of them are on personal judgment of the rater. The personal judgment is always subjected to personal bias or prejudice as well as pressure from certain other areas. The appraiser may not be able to judge the competence of the employees because of lack of training. Because of the judgment role of the supervisors under the traditional system, performance ratings are frequently subject to a number of errors and weaknesses, which are discussed below: Halo Error: This type of error occurs when the rater allows one

aspect of a mans character or performance to influence his entire evaluation. It is the tendencies of many raters to let the rating they rating to one characteristic excessively influence their rating on all subsequent characteristics. Many supervisors tend to give an employee approximately the same rating on all factors. The error can be recognized quite easily on factors scales. The rating

scale technique of performance appraisal is particularly susceptible to the halo supervisor judge all of his subordinates on a single factor or trait before going to the next. In this manner, he can consider all of the men relative to a standard or to each other on each trait. Central Tendency: This error occurs when the rater is in doubt about

the subordinates or has inadequate information about them or is giving less attention and effort to the rating process. Because of these reasons, generally the raters are reluctant to rate people at the outer ends of the scale. The rater knows that he has to appraise his subordinates at periodic intervals but if he is unfamiliar with some of the subordinates or does not have sufficient time to devote to the rating process, he may play it safe by neither condemning nor praising. So he may rate them average. It is possible for this type of rating i.e., all average to be a true rating, but its probability is less than its frequency. Leniency or Strictness: Some supervisors have a tendency to be easy

raters and others have a tendency to be harsh in their ratings. Lenient or easy raters assign consistently high values or scores to their subordinates and strict or harsh raters give consistently low ratings. Both the trends can arise from varying standards of performance among supervisors and form different interpretations of what they observe in employee performance. Recent Behavior Bias: Often some raters evaluate persons on the

basis pf their performance in recent few weeks; average behavior is not checked. Some employees being aware of this tendency show better results when they feel that they are being observed and the report of their performance is to be compiled soon.

Miscellaneous Biases: In many cases, the rater may give higher

ratings because he thinks that it would look bad for him if employees in the other department received higher pay increases than his pay. Supervisors will tend to rate their subordinates near the middle of the spectrum if their bosses put pressure on them to correct the workers average rates or to get rid of the subordinates. Some supervisors show bias against members of the opposite sex or of another caste, religion or nationality. They also give higher ratings to senior employees because they are too ready to admit that they have not improved under their leadership. Many a times, a rater is influenced by organizational positions and may give higher ratings to those holdings the higher positions. Many people have attacked the reliability and validity of traditional systems on different grounds, but the fundamental criticism has been founded upon the judgment role of the supervisor and the antagonistic response of the subordinates. In a study of appraisal systems in General Electric Co. USA, the investigator found that traditional approach of performance appraisal resulted in the following responses: a) b) c) d) Criticism arises from the very nature of the system. Criticism has a negative effect upon achievement of goals. Criticism increases antagonism and defensiveness, which lead to Praise has little effect, one way or other.

interior performance.

In this study, ninety-two appraisal interviews based on traditional measurements were analyzed. Those subordinates receiving above average criticism showed less improvement in ensuring ten to twelve weeks than those

receiving less criticism. When the alternative behavioral approach was introduced by one half of the supervisors, differences in subordinates response pattern remained unchanged. For the appraiser of behavioral supervisor, all reported more favorable attitudes on such items as amount of help received, respectability of their supervisors, ability of the supervisors to plan, the extent to which their abilities were utilized, acceptance of organization goals and value of the appraisal interviews. That is why it was observed: 1) 2) 3) 2) Coaching should be a day to day, not a once - a year activity. Mutual goal setting not criticism improves performance. Participation by the employee in the goals setting procedure helps favorable results. Modern methods There are two important methods of performance appraisal, which are used by the modern concerns. The first is management by objectives, which represents result-oriented appraisal. The second is behaviorally anchored rating scale, which is based on the behaviour of the subordinates. Management by objectives: It was peter drucker who proposed goal setting approach to performance appraisal, which he called management by objectives and self-control. Douglas Mc. Gregor further strengthened this approach. He was concerned with the fact that most traditional appraisal systems involved rating of traits and personal qualities that he felt were highly unreliable. Besides, the use of such trait ratings produced two main difficulties: -

a) b)

The manager was uncomfortable about using them and resisted It had a damaging effect on the motivation and development of the

making appraisal. subordinates. Goal setting approach or management by objectives (MBO) is the same as behavioral approach to subordinate appraisal, actually called Work planning and review in case of General Electric Co., USA. Under this approach, an employee is not appraised by his recognizable traits, but by his performance with respect to the agrees goals or objectives. Thus, the essential feature of this approach is mutual establishment of job goals. The application of goal setting approach to performance appraisal involves the following steps: 1) 2) 3) 4) 5) The subordinate discusses his job descriptions with his superior and The subordinate prepares a list of reasonable objectives for the coming He sits with his superior to discuss the se targets and plans, and a final Check points are established for the evaluation of progress, and the The superior and the subordinate meet at the end of the period to they agree on the contents of his job and the key results areas. period of six to twelve months. set is worked out. ways of measuring progress are selected. discuss the result of the subordinates efforts to meet the targets mutually established. The goal setting approach is based on clear and time bound objectives from the corporate level to the operative level. This approach can be applied with great success if the performance appraisal programme consists of the following elements:

i) ii) and iii)

Good job descriptions are available to help setting of goals for Superiors have trust in the subordinates to establish reasonable goals; There is emphasis on problem solving rather than criticism of the

different positions.

performance of the subordinates. The goal setting approach has done away with the judgmental role of the superiors in the appraisal of their subordinates. It has led to greater satisfaction, greater agreement, greater comfort and less tension and hostility between the workers and the management. This approach is considerably superior to the traditional approach of performance appraisal. It emphasizes training and development of individuals. It is problem-solving approach rather than tell and sell approach. This approach has also got a built in device of self appraisal by the subordinates because they know their goals and the standards by which their performance will be measured. The Goal setting approach suffers from the following limitations: The subordinates can apply this approach only when the goal setting

is possible. It is doubtful if such a procedure can be applied for the blue color workers. This approach is not easy to administer. It involves considerable

time, thought and the superior and the subordinate. If the span of supervision is quite large, it will not be possible for the superior to have discussion with each and every subordinates for setting up mutually agreed goals.

This approach mainly emphasizes

counseling, training and

development. It is argued that critical evaluation and modification to improve are incompatible. But, in practice, it is not possible to forge the critical aspect of performance appraisal. This approach is appropriate for the appraisal of executives and

supervisory personnel who can understand it in a better way. Operative workers cannot understand this approach and moreover, a vast majority of them do not want to take initiative in setting their own goals. Behaviorally Anchored Rating Scales Behaviorally Anchored Rating Scales (BARS) are designed to identify the critical areas of performance for a job, and to describe the more effective and less effective job behavior for getting results. Performance is evaluated by asking the rater to record specific observable job behaviors of an employee and then to compare these observations with a behaviorally anchored rating scale. As a result, the supervisor is in a position to compare the employees actual behavior with the behavior that has been previously determined to be more or less effective. Proponents of BARS claim many advantages of this approach. They argue that such a system differentiates among behavior, performance, and results, and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job- -specific and identifies observable measurable behavior, it is a more reliable and valid method for performance appraisal.

Empirical studies of Behaviorally Anchored Rating Scales (BARS) have provided a fertile ground for study by both theorists and practitioners. The BARS experience has helped to clarify three major controversies of the appraisal process. On was the issue of the rating content (trait vs. job related). The second controversy involved the multidimensional nature of performance. The administrative uses of appraisal had encouraged rating systems to produce an overall measure of performance, which tended to mark difference in performance in the key result areas (performance dimension) critical to job results. The third controversy involved in the issue of the most effective way to anchor the rating scales (numerically or behavioral). By anchoring the scales behaviorally, the BARS approach was expected to produce more valid and reliable results by reducing measurement errors (leniency, halo effect, central tendency, etc.).

Designing an Appraisal Programme Determining the Objective of performance Appraisal. Before any performance appraisal programme is initiated, it is essential to determine its objectives. The objective of the appraisal programme may be either to appraise the actual performance of individuals to higher jobs or both. Sometimes, performance appraisal programmes are associated with specific objectives like training and development, transfer and promotion, increase in pay, etc. Establishing Standards of Performance. For effective rating of employees, it is necessary to establish standard on performance against which their performance should be compared. However, an approach that is more preferable is to establish, in writing, definite standards of accomplishment, which the employee can reasonably be expected to meet. Such a method will take it possible for both supervisor and his subordinate to reach agreement on just what is expected in terms of performance. It should be noted that performance standards are relative to the group and the organization. Not only are the needs of each organization different, but the talents of manpower also vary from organization to organization. The expectation of management is also higher in some organizations than in others.

Who is to do the Appraisal? Generally, the appraiser is the immediate superior of the man to be appraised. He is most familiar with the employees work and is in

contact with him and so he is considered to be able to appraise him well. But there are certain limitations of appraisal by one person. That is why some organizations try to obtain two or more ratings on each employee. But again the difficulty may arise because the second rater may not have the necessary contact with the individual who is to be rated. The possibility is the constitution of a rating committee, which may consist of a number of supervisors and specialists from personnel department and a representative of the worker. The committee will rate each individual collectively. Some people feel that employee should be allowed to rate themselves. When this is done, their immediate superiors may offer their rating in conjunction with ratings. Whosoever the appraiser may be, the subjectivity invariably steps in. A well-adjusted person is less subject to projecting himself into other than a poorly adjusted person and, therefore he is able to judge them better. It is often assumed that qualified psychologists are more capable than laymen of making unbiased judgments since they receive training in the dynamics of the personality and also in the correct manner of making the judgment.

Frequency of Appraisal The frequency of appraisal differs from organization and

with the nature of duties performed. There are not spot appraisals, monthly, quarterly, and six monthly or yearly appraisals. But most of the organizations conduct yearly or half yearly appraisals because more frequent appraisals besides taking away time of the appraiser or raters, may create a sense of fear amongst the ratees. Idea frequency is one, which fits into the objectives of the older ones. Designing of Forms This is an important step in performance appraisal to design the rating forms to be utilized in the programme. The forms should be related to job families such as clerical, mechanical, sales, technical and supervisory. All require a different evaluation form. Performance forms may be classified as those involving comparative ranking and others involving the comparison of each employees actual performance with predetermined standards. The first category of forms is designed to evaluate employee performance for the purpose of making wage adjustments, lay offs, promotions, etc. and second category of forms is used to improve the performance of workers on their present jobs.

Requirements of a Sound Performance Appraisal Programme A sound system of performance appraisal must fulfill the following essentials: 1) The appraisal plan should be simple to operate and easy to understand.

When the appraisal system is complicated, employees may not understand it fully and may look at the plan with suspicion. The plan should not be very time-consuming. 2) The performance appraisal system should be performance based,

uniform and non variable, fair, just and equitable. It should be ensured that the appraisers are honest, rational and objective in their approach, judgment and behavioral orientation. 3) The employees should be made aware of the performance in terms of

goals, targets, behavior, etc. expected of them. A personal between the appraiser and the employee has to be developed to achieve mutual understanding of the criteria of evaluation. 4) The appraisal plan should be devised in consultation with the

subordinates. This will increase their commitment to the plan and their understanding of expected performance.

5)

The appraisal plan should take into account the appraisal practices

prevailing in other units in the industry as well as the latest thinking on performance appraisal. It should fit in the structure and operations of the organization.

6)

The top management must create a climate of reliable appraisal

throughout the organization. Goal orientation, open communications, mutual trust informal relationships, etc. are the basic elements of such a climate. 7) The appraisal plan should be designed to achieve specific objectives.

The objectives of the appraisal programme may be to evaluate current performance on the job and to determine the potential for higher jobs. In some cases, performance appraisal is linked with specific objectives like pay raise, training, promotion, transfer, etc. The number of factors to be considered and the data to be collected should be tailor-made to achieve the objective of the appraisal. 8) The appraisers should be selected and trained properly so that they

have no personal bias and possess the necessary capabilities for objective evaluation of employees. In order to ensure objectivity in appraisal, more persons may rate an individual independently. 9) There should be provision of appeals against appraisals to ensure

confidence of the employees and their associations or unions. The results of appraisal must be discussed with the rates so that they may get an opportunity to express their feelings on their progress reports.

. OBJECTIVES OF STUDY The main objectives of study is to: To study the process through which Performance Appraisal takes place in ALLIED NIPPON LIMITED. To know that how much they are aware about the process? How much they are satisfied with the process.

SCOPE OF STUDY The Project given to me is to study Performance Appraisal in ALLIED NIPPON LIMITED. The scope of Work includes interviewing Senior Production Officers and finds the way Performance Appraisal is conducted in ALLIED NIPPON LIMITED. In this project, I interviewed the Senior Production Officers to find out the way Performance Appraisal is conducted and ultimately made recommendations to improve the process.

RESEARCH METHODOLOGY Research methodology is the selection of an appropriate research method and forming some guidelines according to which the research is carried out. It consists of choosing pattern and a method of collection data, sampling, tabulation and ultimately analysis of data to reach some conclusions, on the basis of which some suggestions are given. RESEARCH DESIGN A research design or a structure is the process done before data collection or analysis can commence. A research design is not just a work plan. A work plan details what has to be done to complete the project but the function of a research design is to ensure that the evidence obtained enables us to answer the initial question as unambiguously as possible. In other words, during designing the research we need to ask: given this research, what type of evidence is needed to answer the question (or test the theory) in a convincing way? In order to design the research it was needed to have perfect design for sufficient data collection from different data sources to meet the objective of the study. For this study I used both the methods of data collection. For collecting the primary data I used questionnaire filled by interview method and I went through the available sources of data like company data base, publications and Internet for getting the secondary data. This collection of data, both primary and secondary helped me to meet my objective of the proposed study. RESEARCH APPROACH

For this study I used Exploratory research method and personally visited the person selected as my sample for the study, randomly selected from the population of the existing customer data base in the company, and collected the required information in the form of data with the help of questionnaire filled with personal interview and the company sources. SAMPLING PLAN This is the stage where the planning is done about the sample size and sampling procedures. According to the sampling plan I opted the following basis for study. SAMPLE SIZE The sample size means how many peoples should be interviewed in order to get the primary data. In this research process the sample size was 100 (5% of the total population), which was selected on judemental sampling basis. SAMPLING PROCEDURES I chose simple random sampling process for my research.

Data collection: -

(a)

Primary data: - Primary data is the data collected specially for a specific purpose.

The methods used for its collection are personal discussion & questionnaire etc. The method used in collecting primary data in my research was personal discussion with the help of a questionnaire. In this I asked a set of predetermined questions in a predefined order, the answers given by the respondents were used to fill up the questionnaire.

Questionnaire: A questionnaire was prepared which consisted of open-ended questions with multiple choices. The questionnaire used was structured type of questionnaire. It was prepared taking into account the factors, which were to be analyzed to know the process of Performance Appraisal. The questionnaire is attached in appendix at the end of the report. This method was preferred as it is economical, given more information and the response is very good.

(b)

Secondary Data: Secondary data consists of information that already exists

somewhere and was collected for another purpose, which may not be the same as the purpose of research. Secondary data used here was the performa of performance appraisal used in ALLIED NIPPON LIMITED.

The secondary data provide a starting point for research and offer advantage of low cost and ready availability.

DATA ANALYSIS By having discussion with senior production officers of Allied Nippon Limited and filling of the questionnaire, the data was collected which is analysed as follows: 1. Type of performance appraisal preferred After analyzing the data, the results shows that 85% of the senior production officers prefer quarterly performance appraisal and 15% prefer half-yearly performance appraisal.

100% 80% 60% 40% 20% Quarterly Half-yearly Monthly Annually

2. Seniors satisfied by subordinates performance After analyzing the data, the results shows that 85% of the senior production officers feel that their seniors are satisfied with their performance and 15% cant say. This analysis shows there is lack of appraisal by the immediate seniors.

- YES - CANT SAY.

3. Satisfied with their own Performance After analyzing the data, the results shows that 85% of the senior production officers are satisfied with their own performance and 15% are not satisfied with their own performance.

-YES -NO This shows that 85% of the senior production officers are satisfied with their own performance and 15% are not satisfied with their own performance. This implies that satisfaction level has to be increased among senior production Officers.

4. Performance appraisal improves performance After analyzing the data, the results shows that 100% of the senior production officers feels that performance appraisal do helps in performing better.

-YES -NO

Through this we come to know that process of performance appraisal is coming out to be positive and it should be continued.

5. Information is submitted timely by the senior production officers to their seniors After analyzing the data, the result shows that 100% of the senior production officers submit all the information timely to their seniors.

-YES -NO This shows that all the senior production officers submit all the information timely to the seniors.

6. Adequate and fair chance provided to defend against adverse entries in your appraisal After analyzing the data, the results shows that 67% of the senior production officers feel that they are provided with a chance to defend them against adverse entries in their appraisal whereas 33% denies it.

- YES - NO This shows that there is lack of chances provided to defend against adverse entries in appraisal. 1. Reason for bad performance After analyzing the data, the results shows that 16% of senior production officers performed bad due to personal reasons, 16% of senior production officers due to official reasons, 16% of senior production officers

due to other reasons and no bad performance from the rest of the 52% of senior production officers.

100% 80% 60% 40% 20% Personal Official Others No Bad Performance

This shows that there are some reasons, which are required to be rectified to improve performance.

8. Awareness of appraisal system. After analyzing the data, the results shows that 67% of the senior production officers are fully aware of the appraisal system and rest 33% are unaware of this system.

- YES - NO This shows that awareness about the performance appraisal system is to be increased.

FINDINGS Based on my analysis of data collected during my study in ALLIED NIPPON LIMITED, SAHIBABAD, I have got the following findings: 1.) Performance appraisal in ALLIED NIPPON LIMITED, SAHIBABAD, is done annually. 2.) For appraisal in Allied Nippon Limited, Sahibabad, a SELFAPPRAISAL form is given to the staff members and they fill it up. And then after according to their self-observation and through the appraisal form filled by the staff members rating is given to the members. Accordingly then incentives and promotions are granted. 3.) In ALLIED NIPPON LIMITED, SAHIBABAD, at the majority senior staff members submit all the information timely to their superiors. 4.) In ALLIED NIPPON LIMITED, SAHIBABAD, there is lack of proper knowledge among senior production officers about the procedure followed in Performance Appraisal. 5.) 6.) There is lack of fair chances provided to defend yourself against adverse entries in your appraisal. All senior production officers agree that performance appraisal system helps them to perform better.

7.)

There is lack of satisfaction level among the senior production level officers regarding to their own work as they have monotony at their work.

CONCLUSION After collecting the information from the senior production officers with the help of personal discussion, filling the questionnaire and analyzing the data, I have derived the following conclusion In ALLIED NIPPON LIMITED performance appraisal is conducted annually. Under this process, a self-appraisal form has been given and senior production officers have to fill that form which throws light on their basic achievements during the past accounting year. After that the immediate boss who has been observing the immediate subordinate throughout the year rates him according to the self appraisal form filled and personal observation under following factorsa) Quality of work. b) Quantity of work. c) Job knowledge. d) Dependability. e) Innovation and creativity. f) Ability to learn. g) Attendance. h) Reactions to criticism. i) Discipline. j) Customer relations. k) Subordinate development. The rating given is confidential and out of the knowledge of their subordinates. Accordingly, promotions and incentives are granted to the deserving ones.

Rating given to the senior production officers is done confidentially and whatever information is been filled in the self-appraisal form is not crossquestioned. The sole objective for taking part in performance appraisal of Senior production officers in Allied Nippon Limited is to be awarded with promotions and incentives but the basic reason why performance appraisal is conducted is to develop the performance and attitude. Senior production officers of Allied Nippon Limited follow the procedure of performance appraisal given by the senior managers because they have monotony in their work and they have no time for any innovation or creativity.

LIMITATIONS According to research undertaken by me, and the results obtained, following are the recommendations to improve the procedure of performance appraisal followed in Allied Nippon Limited: 1) Staff members should be provided with the training about performance appraisal and they should be made very well aware about the thing that this exercise can help them in developing their performance and attitude

which will help them on their own part at majority and company at minority. 2) Senior-Subordinate meetings should be made very regular so that every can keep his point in front without any hesitation and that will add to their innovation and creation. 3) The process of performance appraisal should be made goal-oriented. 4) Staff members should be provided with the well-defined targets.

Recommendations As we know Performance appraisal is a systematic and objective way of judging the relative worth or ability of an employee in performing the task. Performance appraisal helps to identify those who are performing their assigned tasks and those who are not and the reasons for such performance. The company should go for the 360degree performance appraisal. Under this method the person whose performance is to be judged is in between and his peers, supervisor, head and the manager of the company is around him who rate the performance of the employee based upon certain predefined criterias. The system is like: 360-degree Performance Appraisal

Head

Supervisors

Person whose performance to rate

Peers

Manager

The company should appraise the performance of the workers by giving them some incentives, which motivate them to work to their fullest capacity and to motivate them to work more and show good and better results. For the top management of the company it should offer them holiday package, appraise performance by recognizing there work in meetings etc. this will help to raise their moral and they can work better. They dont want financial help as they earn enough to maintain their status. They want their work recognition. For the lower group the company can increase their wages, give them pension schemes, provide them the medical facilities etc because they want financial help from the company to insure their proper living. The should keep changing the raters for the performance appraisal system from time to time so that they dont become bias at anytime for any employee. The method of the company should be changed periodically so that the employees have mo chance to complain for the method. The criteria decided upon which the performance has to be rated should not be fixed it should be changed from time to time. The standards of the rating should be very specific, clear and concise. There should be the feeling of teamwork in the organization. The system should be cost effective and it should suit the budget of the company.

 The performance, which is been measured, should be verifiable and measurable afterwards also. Above are few recommendations, which can be looked over while doing the performance appraisal of the company.

ANNEXURE STUDY OF PERFORMANCE APPRAISAL SYSTEM NAME: 1 What type of performance appraisal you prefer? Annually Monthly Quarterly Half yearly

2 Are your seniors satisfied with your performance? Yes No

3 Are you satisfied with your performance? Yes No

4 If no do you think you can perform better? Yes No

5 Does performance Appraisal help you in performing better? Yes No

6 Do you submit information timely to your superiors? Yes No

7 Do you get adequate and fair to defend your self against adverse entries in your appraisal? Yes No

8 What actually comes as the reason for your bad performance? (if any)

Personal

Official

Other

9 Are you fully aware of the appraisal system followed in your company? Yes No

10 Any suggestion to alter existing Performance Appraisal system of your company? ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ ____________________________________________

BIBLIOGRAPHY

1. Human resources development -T.N. CHABBRA 2. Human resources development - V.S.P. RAO (Text and Cases)

3.

www.alliednippon.com