A

Study On
PERFORMANCE APPRAISAL
With reference to
NAGARJUNA FERTILIZERS AND CHEMICALS LTD
KAKINADA

A Project Report
Submitted to in partial fulfillment of
the requirement for the award of the degree of
“MASTER OF BUSINESS ADMINISTRATION”

Submitted by
V.GANGA LAKSHMI
V.S.M COLLEGE
RAMACHANDRAPURAM
2014-2016
CERTIFICATE
Certified that this dissertation entitled “Performance Appraisal in

Nagarjuna Fertilizers and Chemicals Limited” submitted to

V.S.M College, Ramachandrapuram by V.Ganga Lakshmi, in

partial fulfillment of the award of Master of Business

Administration is a record of bonafied work carried out by her

under my guidance and supervision.

1
 DECLARATION

I here by declare that this project work entitled a study on

“PERFORMANCE APPRAISAL” in “NAGARJUNA FERTILIZERS

AND CHEMICALS LTD, KAKINADA submitted to V.S.M College is

originally done by me.

The findings embodied in this dissertation have not been

submitted to any other university for the award of any degree.

V.Ganga Lakshmi

2
 ACKNOWLEDGEMENT

My special thanks to G V R K Raju, Head- PHPD,

Sri.S.Anwar Basha, Sr. Manager (PHPD) and Sri. M.P. Rama Rao, Sr.

Manager (Training) for their continuous assistance and encouragement for

my project work in the organization.

I take the privilege of thanking my beloved family

members for their entire support in completing my project.

V.GANGA LAKSHMI

3
CHAPTER – 1

 INTRODUCTION

 NEED FOR THE STUDY

 OBJECTIVES OF THE STUDIES

 METHODOLOGY

 LIMITATIONS OF THE STUDY

CHAPTER – II INDUSTRIAL PROFILE

CHAPTER – III COMPANY PROFILE

CHAPTER – IV THEORITICAL FRAME WORK

CHAPTER – V ANALYSIS

CHAPTER – VI FINDINGS AND SUGGESTIONS

CHAPTER – VII BIBLOGRAPHY

APPENDIX

QUESTIONNAIRE

CHAPTER- I
INTRODUCTION

4
 What is HR(Human Resource):

HR refers to “The total knowledge, skills, creative abilities, talents and attitudes of

an organization work force as well as the values, attitudes and beliefs of the

individuals involved”.

What is performance appraisal:

Appraisal is the evolution of worth, quality or merit. In the organization

context, performance appraisal is a systematic elevation of personnel by

superiors or others familiar with their performance. Performance appraisal is also

described as merit rating in which one individual is ranked as better or worse in

comparison 10 others. The basic purpose in this merit ranking is to ascertain an

employee's eligibility for promotion.

"The performance appraisal is the process of evolution the

performance and qualification of the employees in terms of the

requirements of the job for which he is employed, for the purpose

of administration including placement, selection for promotion,

providing financial rewards and other action which require

differential treatment among the members of group as distinguished

from actions affecting all members equally ".

“performance appraisal is a system of review and evaluation of

an individual (or) teams performance”.

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 NEED FOR THE STUDY

There is a degree of unhappiness all around the

performance appraisal .the subordinates complain their bosses try

to rate their performance without really knowing what they are

doing .the top management is unhappy because from this has

become a ritual and there is no improvement in the employee

performance .

An organization needs to have an appraisal system that

is free from bias .being fair and objectives is of utmost importance

for the integrity of the performance review process

.unfortunately ,personal biases ,prejudices and idiosyncrasies,

occurring at the subconscious level can have a negative effect on

an employee‘s evaluation .it has observed that if an employee gets

severely negative feedback he can have a deflated picture of his

performance and development needs and might feel angry ,

alienated , de-motivated and demoralized ending up suffering

from a loss of confidence . On the other hand, when an employee

receives overly positive feedback, there might be ill felling from

other employees who perceive that one employee enjoys preferred

status. There are also chances of clouding an employee

understands of what is actually expected from him.

6
 In view of the above situations one need to have meaningful

insights on the performance appraisal system to understand,

judge, frame and abide it. Hence this chapter reviews and analyses

performance appraisal from the conceptual and theoretical

framework, which are advocated by the pioneers in human

resource development area .in order to know performance

appraisal role in the organization this study need to be carried

and the impact of the this on the organization development and

employee’s performance are to be known .the organization’s

benefits out of performance appraisal system are to be know and

the different methods adopted in doing performance appraisal and

there advantages and disadvantages in adopting them by

organization to be known.

OBJECTIVES OF THE STUDIES

1. To study how the performance appraisal is carried in NFCL.

7
 2. To know the importance of the performance appraisal in the

development of organization.

3. To study the impact of the performance appraisal system on

the employee performance.

4. To analyze the reliability of the” Performance appraisal”.

5. To summarize and to suggest for the better performance

appraisal methods.

METHODOLOGY

Methodology is scientific and systematic search for pertinent

information on specific topic. The reliability of management

8
decisions depends upon the quality of data. Basically we have two

types of data:

1. Primary data. 2. Secondary data.

PRIMARY DATA:-

Primary data can be collected either through experience or

through survey. Those which are collected a fresh and for the first

time thus happen to be original in character that is called primary

data.

We collect primary data during the course of doing

experiments in an experimental research but in case we do

research of the descriptive type and perform surveys, and whether

sample surveys or census surveys, then we can obtain primary

data either through observation or through direct communication

with respondents in one form or another of through personal

interviews, This, in other words, means that there are several

methods of collecting primary data, particularly in surveys and

descriptive researches important ones such as observation

method, interview method, through questionnaires, through

schedules etc.

Primary data can be collected in the following ways:

 By observation.

 Through telephone interviews.

 By mailing of questionnaires.

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  Through schedules.

SECONDARY DATA

Secondary data means data that are already available that is

they refer to the data which have already been collected and

analyzed by some one else and which have already been passed

through the statistical process is called secondary data. Secondary

data may either be published data or unpublished data that data

are available.

Usually published data are available in various publications

of the central, state are local governments; various publications of

foreign governments or of international bodies and their subsidiary

organizations technical and trade journals; books magazines and

news papers etc. are sources of secondary data. Researcher must

be very careful in using secondary data.

LIMITATIONS OF THE STUDY

In the present study of Performance appraisal in the NFCL

plant the following limitations are there:

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 The period of study is limited.

 Due to insufficiency of the time, it becomes difficult for the

detailed study of the Performance appraisal of the company.

 As the managers of the organization are busy with their work

schedule, it was difficult to collect detailed data.

CHAPTER – II
11
 INDUSTRY PROFILE

INDUSTRY PROFILE

INTRODUTION:

India today is the third largest producer of nitrogenous fertilizers in

the world only behind China & USA. At present, there are 56 large size

fertilizer units in the country manufacturing a wide range of nitrogenous,

phosphatic and comples fertilizers. Of these, 29 units produce urea, 20

units produce DAP and complex fertilizers, 7 units produce low analysis

straight nitrogenous fertilizers. There are 9 units that manufacture

Ammonium Sulphate as by-product. Besides, there are about 72 small

and medium scale units in operation producing single super phosphate

(SSP). The total installed capacity of fertilizer production, which was

119.60 LMT of nitrogen and 53.60 LMT of phosphate as on 31.03.2004,

has marginally increased to 120.60 LMT of nitrogen and 56.59 LMT of

phosphate as on 31.01.2007.

In the past, it has been observed that while there was adequate

availability of fertilizers in each state at the macro level there were also

pockets of shortages in some of the districts. To address this concern ,

a new web based Fertilizers Monitoring System (FMS) was launched on

22nd January 2007 to monitor the movement of fertilizers up ;to the

District level. To ensure the adequate availability of fertilizers up to the

12
block level, the dealership network has also been expanded during the

last one year. Under the New Pricing Scheme-Stage-III for urea units

effective from 01.10.2006, the Government will reimburse the actual

cost of transportation of fertilizers up to the block level so that the

fertilizers reach up to the block level without hindrance. Further, it has

also been decided under this scheme that subsidy will be paid to the

manufacturer/ importers only after the fertilizers reach the district as

per the month-wise supply plan drawn up by the respective state

Agriculture Department in consultation with the fertilizer companies.

Monitoring of implementation of these supply plan is being done

through the Fertilizer Monitoring System and is the public domain.

The consumption, indigenous production and imports of fertilizers

in terms of fertilizer nutrients, (NPK) during the period 1998-99 to

2006-2007 are given below:

Year Imports Consumption Production

1998-99 31.45 167.98 136.24

1999-2000 40.75 180.69 142.89

2000-01 20.91 167.02 147.04

2001-02 23.99 175.60 146.28

2002-03 16.74 160.94 144.74

2003-04 20.18 167.98 142.76

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 2004-05 27.50 183.99 154.05

2005-06 52.53 203.40 155.7

2006-07 60.80 220.45 160.95

With the objective of promoting balanced application of all

the three nutrients, i.e., nitrogen, phosphorus and potash and

making available fertilizers to farmers at affordable prices, the

Government provides subsidy on urea, which is the only fertilizer

at present under statutory price control and concession on

decontrolled phosphatic and potassic (P&K).

India has been predominantly considered as an agricultural

dependent economy. Agriculture plays a very dominant role as

more than one-fourth of our GDP come from this sector. Nearly

70% of population depends on the agriculture for their lively-hood.

The basic need for an agricultural dependant economy is fertilizers

and urea is one of the main fertilizers. India is the second largest

manufacturing country in the world.

All fertilizers consist of three main ingredients.

Nitrogen – (N) – which promotes general plant growth

Phosphorous – (P) – which promotes flowering

Potassium – (K) – which promotes strong roots.

The ingredients are mixed in various combinations because

plants have different needs.

The combinations are indicated by a three number code:

14
 The first number is the percent of Nitrogen (N)

The second number is the percent of Phosphorus (P)

The third number is the percent of Potassium (K)

About Fertilizer:

Fertilizer is simply plant food. Just like the human body

needs vitamins and minerals, plants need nutrients in order to

grow. Plants need large amounts of three nutrients – nitrogen,

phosphorus and potassium. These are commonly referred to as

macronutrients. Fertilizer makers take those three nutrients from

nature and put them into soluble forms that plants can easily use.

There are a number of other nutrients plants need in small

amounts. These are referred to as the minor nutrients, or

micronutrients. These many nutrients are typically produced

separately, but end up being mixed together in varying amounts to

match the needs of a particular crop. The analysis found on each

bag or bulk shipment of fertilizer tells the farmer or consumer the

amount of nutrients being supplied. States have a system of laws

and regulations that ensure the fertilizer is properly labeled and

delivers the amount for nutrients stated on the bag.

Our world would be vastly different without commercial

fertilizers. Following world-war II, new technologies allowed for the

rapid expansion of fertilizer production. Coupled with growing food

15
demand and the development of higher-yielding crop varieties,

fertilizer helped fuel the Green Revolution.

Today, the abundance of food we enjoy is just one way fertilizers

help enrich the world around us while fertilizers provide many

important benefits that are necessary for our way of life, the

improper use of fertilizers can harm our environment. We have

used the most recent developments in science to study our

products and make sure safety comes first.

FERTILIZER:

Fuel for growing plants just like humans and animals, plants

need adequate water, sufficient food, and protection from diseases

and pests to be healthy. Commercially produced fertilizers give

growing plants the nutrients they crave in the form they can most

readily absorb and use: nitrogen (N), available phosphate (P) and

soluble potash (K). Elements needed in smaller amounts, or

micronutrients, include iron (Fe), zinc (Zn), Copper (Cu) and boron

(B).

Each crop year, certain amounts of these nutrients are

depleted and must be returned to the soil to maintain fertility and

ensure continued, healthy future crops. Scientists project that the

earth’s soil contains food production needs. Therefore, through the

scientific application of manufactured fertilizers, farmers are

meeting the challenge of the future today.

16
 Another component of plant DNA is phosphate, which helps

plants to use water efficiently. It also helps to promote root growth

and improves the quality of grain and accelerates its ripening. And

potassium, commonly called potash is important because it is

necessary for photosynthesis, which is the production,

transportation and accumulation of sugars in the plant. Potash

makes plants hardly and helps them to withstand the stress of

drought and fight off disease.

Fertilizer Types:

Because every crop is different and the soils and weather

conditions crops are grown in vary dramatically around the world,

commercial fertilizers, which are manufactured from natural

sources come in many formulations.

Combining air with hydrogen using natural gas as the

feedstock makes ammonia, the building block for nitrogen

fertilizers, Ammoniated Phosphates, which include Mono

Ammonium Phosphate (MAP) and Di-ammonium Phosphate (DAP),

are made by reacting ammonia with phosphoric acid. Muriate of

potash also called Potassium Chloride is made from mine ores that

have been processed to remove naturally occurring salts.

Ammonium nitrate is a solid fertilizer containing

approximately 34 percent nitrogen that is water soluble and used

in various fertilizer solutions. Aqua ammonia is another nitrogen-

17
based fertilizer made by combining ammonia with water. It

contains up to 25 percent nitrogen and is either applied directly to

the soil or is used to manufacture phosphate fertilizers.

Nitrogen solutions are water solutions of ammonia,

ammonium nitrate and sometimes urea is solid fertilizer containing

approximately 45 percent nitrogen, and other soluble compounds

of nitrogen. Nitrogen solutions are used in ammoniating super

phosphate, the manufacture of complete fertilizer and for direct

injection into the soil. They vary in composition and nitrogen

content and are sometimes applied under pressure.

NITROGEN (N):

Nitrogen is part of all plant proteins and is a component of

DNA and RNA – the “blueprints” for genetic characteristics. It is

necessary for a plant growth and chlorophyll production. Nitrogen

is the building block for many fertilizers. Where does N come

from? Nitrogen is present in vast quantities in the air, making up

about 78 percent of the atmosphere. Nitrogen from the air is

combined with natural gas in a complex chemical process to make

ammonia.

PHOSPHORUS/ PHOSPHATE (P):

Phosphorus as a nutrient is sometimes most valuable to

plants when put near the seed for early plant health and root

growth. Plant root uptake is dependent on an adequate supply of

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soil P. Phosphorus is relatively insoluble in water. The water in

most soils must replace all of the P in the soil water 2 to 3 times

each day to meet the crop’s demand for P. Phosphorus compounds

are needed in plant photosynthesis to “repackage” and transfer

energy. Phosphate is also a component of DNA, so it is one of the

building blocks of genes and chromosomes. Phosphorus is involved

in seed germination and helps plants to use water efficiently.

Where does P come from? Phosphorus occurs in natural geological

deposits. Deposits can be found in the U.S. and other parts of the

world.

Potassium/Potash (K):

Potassium protects plants against stresses. Potassium

protects plants from cold water temperatures and helps them to

resist invasion by pests such as weeds and insects. Potassium

stops wilting, helps roots stay in one place and assists in

transferring food. Potassium is a regulator. It activates plant

enzymes and ensures the plant uses water efficiently. Potassium is

also responsible for making sure the food you buy is fresh. Where

does K come from? The element potassium is seventh in order of

abundance in the Earth’s crust.

Through long-term natural processes K filters into the

oceans and seas. Over time, these bodies of water evaporate,

leaving behind mineral deposits. Although some of these deposits

are covered with several thousands of feet of earth, it is mined as

19
potash or potassium chloride. Potash ore may be used without

complex chemical conversion; just some processing is necessary to

remove impurities such as common salt.

FOOD FOR THE GROWING WORLD

Industry at a glance:

Since 1883 the industry has worked to promote the advances

in the development and application of fertilizers that have helped to

feed a hungry world. The revolutionary concept of plant nutrition

was born from the discovery of the biological role of chemical

elements in plant nutrition and the need to feed a growing

population concentrated away from the farm in the rising

industrial centers of the world.

Because of modern fertilizers, world food production since

1960 has more than doubled, keeping pace with the population

explosion. Today, the fertilizer industry is poised to help produce

the food that will be needed to fed the world’s projected 9 billion

people in 2025.

The fertilizer industry is essentially concerned with the

provision of three major plant nutrients – nitrogen (N),

phosphorous (P) and potassium (K) – in plant available form. Each

nutrient is responsible for different aspects of plant growth and

health.

Fertilizers:

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 Regulated for quality and safety like other manufactured

goods, fertilizers are regulated for quality and safety at the federal

and state levels. Every state in the country, plus Puerto Rico, has

its own fertilizer regulatory program, usually administered by the

state department of agriculture.

State Regulation:

State regulation is concerned with consumer protection,

labeling, the protection of human health and the environment, and

the proper handling and application of fertilizers. Fertilizers are

regulated at the state level because soil conditions vary

dramatically from state to state across the country. For example,

the rocky, thin soils of New England are vastly different from the

deep, rich black soils of the Midwest Corn Belt. A different level of

fertilizer nutrients in the soil, different crops (potatoes versus corn,

for instance) and different weather and cropping patterns require

state-specific regulation.

Where Science and safety come first the modern commercial

fertilizer industry was founded on the revolutionary scientific

discovery in the last part of the 18 th century that chemical

elements play a direct role in plant nutrition. This initial concept

was supported by direct scientific experiment and opened the way

for industrial-scale manufacturing of fertilizers of all types in the

19th century, beginning with super phosphate in 1843. This was

followed by ammonium sulphate, sodium nitrate and, finally, in the

21
first two decades of the 20th century, the manufacturing of

synthetic nitrogen directly from atmospheric nitrogen.

Assessing Fertilizer Safety:

Fertilizer research and development historically have been

focused on maximizing economic crop yields from given rates of

nutrient application. Since the advent of the modern environmental

movement in the 1960’s research has also been concerned with

minimizing potentially adverse human health and environmental

effects from fertilizer manufacture and application.

As part of its continuing commitment to safety, in 1996. The

fertilizer Institute initiated a comprehensive safety assessment

project to determine the risks, if any, of metals in fertilizer. Small

amounts of metals are found in phosphate and potash fertilizers

due to their presence in the mined or bodies. In addition to

phosphate and potash products, some micronutrient fertilizers.

Which come from both mined ores and recycled wastes, also

contain metals.

Fertilizers Enrich our World:

Improvements in agricultural efficiency through research and

technology increase food output while protecting the environment

and enriching our world in numerous ways.

Fertilizers feed the growing world. As the world’s population

continues to climb toward an estimated 8.5 billion in 2040, experts

22
 estimate that food production must increase more than two

percent annually to even maintain current diets. Commercial

fertilizers will be key in the fight to feed the growing world.

Major Fertilizer Producing Countries:

Million metric tons, years ending June 30*

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07

Nitrogen

China 20.2 21.5 22.8 21.5 22.1

India 10.1 10.5 10.9 10.9 10.7

United-States 13.8 13.5 11.2 9.9 10.6

Russian
4.1 4.1 5.0 5.4 5.5
Federation

Canada 3.7 3.7 4.1 3.9 3.5

Phosphate

United States
9.0 9.0 8.5 7.3 7.6

China 6.4 6.7 6.4 6.7 7.4

India 3.0 3.2 3.4 3.7 3.9

Russian
1.9 1.7 2.0 2.3 2.4
Federation

Brazil 1.4 1.4 1.4 1.5 1.4

Potash

Canada 9.0 9.2 8.2 9.2 8.2

Russian
3.4 3.5 4.0 3.7 4.3
Federation

Belarus 3.3 3.4 3.6 3.4 3.7

Germany 3.4 3.6 3.5 3.4 3.5

Israel 1.5 1.7 1.7 1.7 1.8

Source: Food and Agriculture Association (FAO) and The Fertilizer Institute(TFI

Major Fertilizer Consuming Countries:

23
 Million metric tons, years ending June 30*

COUNTRY 2002-03 2003-04 2004-05 2005-06 2006-07

Nitrogen

China 23.0 22.9 24.1 22.1 22.5

India 11.0 11.4 11.6 10.9 11.3

United
1311.2 11.3 11.2 10.5 10.9
States

France 2.5 2.5 2.6 2.3 2.4

Pakistan 2.1 2.1 2.2 2.3 2.2

Phosphate

China 9.3 9.4 9.0 8.7 8.9

India 4.0 4.1 4.8 4.3 4.3

United
4.2 3.9 3.9 3.9 4.20
States

Brazil 2.0 2.0 2.0 2.3 2.5

Australia 1.1 1.0 1.1 1.1 1.2

Potash

United
4.8 4.5 4.5 4.5 4.5
States

China 3.4 3.5 3.4 3.5 4.0

Brazil 2.4 2.3 2.2 2.6 2.7

India 1.4 1.4 1.7 1.6 1.7

Source: Food and Agriculture Association (FAO) and The Fertilizer

Institute(TFI.

24
 CHAPTER-3

COMPANY PROFILE
``Get all the education you can, but then do something .Don’t just stand their,

make something happen. It is not easy, but if you keep your nose to the grind stone

and work at it is amazing how in a free world you can become as great as you want

to be``

One person forms a perfect example for this statement mr.k.v.k.raju garu.

He was a visionary and a professional technocrat entrepreneur who realized the

importance of core sectors to an economy like India. He has guided the group with

his philosophy.

SERVING SOCIETY THROUGH INDUSTRY

Founder:

Sri.

Kanumuri Venkata Krishnam Raju - An eternal source of inspiration [ Born: 28-11-

1928 ,United with God: 16-06-1993]

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 Sri. KVK Raju was born in a humble agricultural family in Andhra Pradesh

on November 28, 1928.A graduate from Banaras Hindu University and the

Madras Institute of Technology he went on to complete his Master's in

Mechanical and Industrial Engineering frochigan State University and the

University of Minnesota, USA. After a short stint in the American Industry he

returned to India and worked for short periods at Caltex Oil Refinery, Orient

General Industries and Associated Electrical Industries. Finally, he joined Union

Carbide of India and worked with them for 15 years.

While working with Union Carbide, KVK's deep-rooted urge to “serve

society through industry” impelled him to start out on his own. Thus was born

Nagarjuna Group in 1973 with an investment of US$ 23 million. The Group has

since then come a long way to become a diversified conglomerate with an asset

base of US$ 2.5 billion.

A recipient of various awards for his outstanding contribution to the

industry and society, KVK, was a firm believer in the adage "practice what you

preach". A self-made man KVK practiced simple living and high thinking. He

dreamt big and worked with an unstinted focus of mind and body to make his

dreams come true. KVK was a visionary with firm belief in his mission to serve

society through industry. It is this belief, which continues today to be the guiding

light of Nagarjuna Group.

THE NAGARJUNA GROUP:

Nagarjuna Group is the one of the growing business conglomerates in

India. The founder sri k.v.k.Raju laid the foundation of the Nagarjuna Group in

1974 with an investment of Rs.50 millions. The group is poised for quantum

26
growth in investment in core sectors of the country such as steel, power,agri

inputs\outputs, finance services and other proposed new ventures. Nagarjuna

Group will thus have multiplier effect by its presence in the core sectors of the

economy which in turn will have multiplier effect on the industrial as well as the

economic development of the country.

1974: Birth of a business group that pioneered several core enterprises in the

coming decades. Starting with manufacturing steel, Nagarjuna steel Limited was

launched.

1985: With focus on agriculture input business started plant nutrition business

with Nagarjuna Fertilizers and chemicals limited.

1992: Forayed into the crop Protection Business with Investments in Pesticide

Formulations manufacturing followed by Technical Grade Manufacturing in the

year 1994.

1994: Micro irrigation business started to address the irrigation problems of

farmers living in water and energy scarce regions.

1995: Ventured into Energy Sector. Entered into Power generation by setting up

Nagarjuna Power Corporation Limited.

1997: Entered into Petroleum by setting up Nagarjuna oil Corporation Limited.

Consolidating its core activities, today the group’s major operations cover Agri

and Energy sectors.

HISTORY AND ESTABLISHMENT OF NAGARJUNA FERTILIZERS AND

CHEMICALS LIMITED :
The nagarjuna fertilizers and chemicals limited was conceived way

back in 1973. The project which was originally to be implemented by government

27
of Andhra Pradesh and shaw Wallace did not take off. Therefore, the project

which was sought to be implemented, did not work. It was in 1985 that the

Nagarjuna group came on to the scene and the implementation of the prestigious

project which is of a modest size was entrusted to it.

Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the first gas

based fertilizer factory in South India. The plant is based on the latest fertilizer

technology from M/s. Snamprogetti, Italy for Urea process with an installed

capacity of 1500 Mt/day for each unit. The ammonia process is based on

technology from M/s. Haldor Topse, Denmark with an installed capacity of 900

Mt/day per each unit.

The feed stock for unit – I is natural gas and feed stock for unit – II is

NG/Naphtha. The current consumption of natural gas is 2.15 million standard cubic

meters per day and 500 MT of Naphtha per day. The natural gas is being received

through pipe lines from Tatipaka situated 92 Kms. away from the factory and is marketed

by M/s. Gas Authority of India Limited. Naphtha is being supplied by M/s. HPCL. The

water requirement of 6.0 Million Gallons/day is received from Samalkot Summer

Reservoir through two pipeline. The construction of Unit-I was started in 1988 and the

commercial production commenced from August 1, 1992. The construction of Unit-II was

started in 1995 and the commercial production commenced from March, 19, 1998.

Presently the total average production is above 3600 MTs of Urea Per day.

Finance:

The total cost of the existing complex is Rs. 2156 crores (Rs. 1186

crores for Unit – I and Rs. 970 crores for Unit – II). This consists of loan of Rs.

1,162 crores (Rs. 515 crores for Unit – I and Rs. 647 crores for Unit – II)

sanctioned by IDBI, IFCI, ICICI, UTI, LIC, GIC and also Banks. The foreign

28
exchange component of Rs. 781.07 crores was met by the Indian Financial

Institutions like IDBI, IFCI & ICICI and also by Italian Buyers credit. The public

and promoters subscribed the equity portion of Rs. 332.12 crores. The internal

reserves of Rs. 323 crores were utilized for construction of Unit – II.

LOGO SPECIALITY :

The logo exemplifies the Group’s inner strength

through the circles which stand for the core values

of the organization viz., concern, commitment,

quality and integrity towards its stake-holders, viz.,

customers, employees, investors and community.

The central circle symbolizes the Sun, the source

of prime energy for the solar system. The five

G R O U P

circles also symbolize the five elements of the

The new corporate logo of the Universe and the spirit of continuity.

Nagarjuna Group symbolizes a

The triangle represents the planet Mars. Mars,
dynamic and value-based
from time immemorial has symbolized prosperity,
organization, actualizing the
success and abundance of energy. The triangle in
concept of Trusteeship.
the logo represents the upward flow of perennial

energy towards the mission of the group “Serving

Society through Industry”.

NFCL’s Vision Statement:

29
 “To be Global Leaders in Plant Nutrition”

“For close to two decades, we at NFCL have predominantly been in the

business of manufacturing and marketing Urea, a segment of the Plant

Nutrition business space. Given our cumulated experience and strengths

in understanding the farmer, the agriculture, various initiatives taken in the

past, the exposure of Indian agriculture to global economy and therefore

the need for Indian farmers to be globally competitive, have realized the

need to provide innovative and comprehensive Plant Nutrition solutions.

“The leadership we refer to in our Vision Statement is in terms of

providing innovative and creative solutions.”

NFCL’s Mission Statement

 We shall:

 Pioneer transformation in the approach to plant nutrition

 Deliver wholistic plant nutrition solutions to the farmers

 Be the most preferred organization to be associated with

Pioneer transformation in the approach to plant nutrition

We shall develop crop, site and stage specific wholesome plant nutrition

solutions. NFCL shall focus on all necessary initiatives towards this – be it

manufacturing technology, regulatory, logistics and using a mix of several

sciences and skills.

30
Deliver wholistic plant nutrition solutions to the farmers

NFCL would network itself to deliver these plant nutrition solutions to the

farmers in a novel, precise manner that results in overall increase in productivity.

Be the most preferred organization to be associated with

In the process of providing these solutions, NFCL shall delight all the

stakeholders – employees, investors, suppliers, customers and society at large.

The stakeholders would prefer to be associated with us not only for the higher

value we offer, but also shall cherish their relationship with us due to the way we

deal with them – with full commitment, responsibility and accountability.

31
VALUES STATEMENT OF NFCL

Commitment:

We the Associates of NFCL are committed to continuously evoking customer

delight through constant review and monitoring and delivering proactive value added

solutions. We are also committed to strive for satisfaction of all stakeholders in a

balanced manner through sustainable growth and profitability

Excellence:

We shall continuously strive for Excellence in all dimensions of the Company

through teamwork, creativity and other means.

Ethics:

We shall strive for wholesome business relationships by adhering to the

principles of trusteeship, fair play and transparency in all our dealings that we shall

practice a work cultural, which is performance driven and conducive to in proving

discipline, accountability and depth of character, team spirit and honesty in all our

personal and professional relationships.

Learning:

We shall build a learning organization where creativity, innovation, entrepreneurship and

knowledge sharing are encouraged and fostered actively

Concern:

We consciously recognize that the development of associates is inextricably

linked to the sustainable growth and profitability of the organization. Therefore, mutual

care and concern between the associate and the organization shall be our abiding value.

32
NFCL’S PEOPLE AND CULTURE:

NFCL Employees live every moment of life in harmony with nature to create value for our

stakeholders, the society and ourselves.

As Individual they shall always:

 Be Humane
 Be cordial and pleasant
 Be honest and equitable
 Be giving and forgiving
 Be positive

And at work, they shall always:

 Create an environment, where work becomes an enjoyable experiment.

 Align individual goals with original goals
 Share knowledge and information
 Be proactive and Responsible
 Pursue Excellence
 Be committed

They believe in creating a culture that encourages values, teamwork,

innovation, leadership and performance.

33
 The plant site at Kakinada provides several employees friendly facilities like

well managed canteen, club house with most modern recreational facilities

including indoor games, swimming pool, theater etc.

Several programs are regularly organized for employees and their families like

sports and cultural events. A school with most modern facilities is being run for the

children of employees named AKSHARA PUBLIC SCHOOL.

Location /manufacturing of the Plant:

NFCL plant is located at Kakinada the head quarters of

East Godavari district in A.P. The site selected for the location of the project is

about “5 kilometers “from Kakinada town and “3 kilometers” from the port of

34
 Kakinada.

1175

acres of

land have

been

identified for the location of the plant and associated facilities, of which the plant is

located in 380 acres, green belt in an area of 747 acres. The site faces the Bay of

Bengal on the East Side, 300 meters away from the highest high tide line.

Since the plant is located close to the town, a number of

environmental measures have been taken to ensures international standards and

the principal of zero discharge of effluents. Nagarjuna fertilizers and chemicals

limited is thus considered as a promoters and advocator of environmental

protection in chemical industry.

LIVING IN HARMONY WITH NATURE – NFCL’s CONTRIBUTION TO

ECOLOGY:

35
 Environmental protection is an avowed corporate philosophy and the

plant is built on the principle of zero-effluent discharge and is totally eco-friendly.

NFCL’s aim is to maintain ecological harmony which is NATURE’S INVALUABLE

AND BEAUTIFUL GIFT TO MANKIND.

Man can live in harmony with the environment only when mankind is guided

by respect for the Mother Earth and all living things. Nagarjuna Fertilizers and

Chemicals Limited believes that Industry should exist in harmony with nature. In

pursuance of the corporate vision, and as a humble contribution to the Mother

Nature, the complete ecological system in and around the Factory has been

changed by establishing a K.V.K.RAJU SUNDARAVANAMU in an area of 747

acres surrounding the Complex. The entire area has been covered with 4,50,000

plants consisting of 170 species, transforming a once highly saline marshy area

devoid of any vegetation into a lush green arboreal park. The establishment of 1

K.M. wide green belt is an integral part of overall natural ecological system

consisting of eleven water bodies for fish, habitat for animal life and sanctuary for

both indigenous as well as migratory birds with the factory nestled in the most

natural and idyllic surroundings created with dedication.

An integrated Environmental Management Plan (EMP) has been

incorporated in the basic design itself to ensure strict adherence to International

Standards. The investment on pollution control equipment in the Plant is close to

Rs.110 crores of capital investment and a recurring expenditure of 6 crores being

spent annually for operating and maintaining the equipment.

MAIN FEATURES OF ECO-SYSTEM:

Afforestation:

36
 740 acres of area has been planted with 4.5 lakh saplings of 170 species.

Weak areas have been planted with selected species based on criteria like

tolerance to salinity, availability from local sources and their ability to survive with

least maintenance. A full-fledged nursery with mist chamber and sprinkler irrigation

system has been developed for supply of plants to afforestation programme.

Animal Enclosures:

A deer park with spotted deer has been set up in an area of six hectares

with chain-link fence on all sides. Separate enclosures for birds, rabbits and certain

other animals are made available. Some of these animals like jungle cat, fox,

jackals, mongooses, squirrels, bats, snakes, turtles are also being let out freely in

this eco-system as a part of our animal conservation programme.

Use of Treated Effluent:

The total treated effluent generated from the factory is being utilized

through a network of over 17 K.M. of PVC pipeline for sustenance of the eco-

system to show the purity levels of the effluents and the technological efficiency of

the plant equipment.

37
Awareness Programmes:

As a part of NFCL’s sincere endeavour to bring awareness about the

benefits of cleaner environment on the general standards of life, company has

started “GREENING THE ROADS” of Kakinada in phases. As a part of this

programme, flowering trees were planted on either side of the 4 K.M. length of

roads from Bhanugudi Junction to Nagamallithota and from Nagamallithota to

NFCL. This programme is being extended to further areas in phases.

Environment:

The country’s best experts in such diverse disciplines as forestry, horticulture,

soil chemistry, ornithology and landscaping. The underlying motto of the Group is “We give

back more to society than what we take from it”. Going much beyond the statutory

requirement law for environment protection, the company has implemented a

comprehensive environmental protection plan in the plant, resulting in near zero pollution

of air and water through treatment of chemical pollutants, recycling and effluent control. A

team was set up before commissioning of plant to look into environmental issues. Based

on the Environmental Impact Assessment made by the team, utmost care was taken to

incorporate the findings and create a man made forest. The green belt was the outcome of

the combined wisdom and experience of Creating ecology in a barren saline infested

marshy land, over two-thirds of the plant complex (nearly 747 acres) was earmarked and

has been completely developed into a green belt which extends over a kilometer with more

than 0.35 million trees of 170 species, eleven water bodies with marine life, animals and

birds. It is a favourit of nearly 70 species of migratory birds.

In addition to the monitoring stations at Kakinada Plant, an ambient air

monitoring mobile van is also available to monitor the quality of air outside the

factory premises.

38
 The plant has the state of the art facilities for continuous monitoring of
Ambient Air, Soil & Ground water quality and analyses of gaseous emissions and
liquid effluents. The data is continuously analyzed and recorded in the computer
situated in the central laboratory.

Health:

Occupational Health of associates and contract workmen is of paramount

importance at NFCL. At our Kakinada plant premises we have a well equipped

Occupational Health Center with facilities for Spirometry, X-ray, ECG,

Audiometry, testing of blood, urine etc. and availability of Ambulance and medical

assistance round the clock. The Medical officer at the plant is assisted by qualified

assistants.

Medical equipment necessary for medical emergencies is also available.

Annual Medical Checkup, which is mandatory for each associate, is carried out

regularly. The families of associates also undergo the Annual Medical checkup,

which is a part of the Health Management Program.

A counselor appointed by the company constant touch with the families of

39
the associates and provides necessary guidance related to marital, legal or

addiction related problems.

SAFETY IN NFCL:

NFCL is committed to adopt the highest standard in Safety. fertilizer plant at

Kakinada has an excellent safety record with 1 Million safe man hours being

crossed on several occasions in the plant’s history of operations and reaching

about 3 Million safe man hours. Regular internal and external audits are ensured

so as to reduce urea dust in the bagging plant, reduction of noise levels, improved

air quality in working areas. Personal protective equipment and related safety

training is provided by the company to all the concerned associates.

After implementing OHSAS 18001 in the year 2001 in the Kakinada plant, we

offered to British Safety Council’s 5 - Star Occupational Health & Safety Audit and

attained the 5 - Star rating in March 2005. In pursuance of continual improvement,

we chose to implement Process Safety Management System (PSMS).

The Process Safety Management System (PSMS) addresses the inherent

safety in the Chemical Process and enhances the effectiveness of our existing

Safety and Occupational Health Management Systems. The PSMS was evolved as

a code of practice by Occupational Safety and Health Administration (OSHA), USA

and is mandatory for all chemical industries in USA. The Process Safety

Management System (PSMS) focuses on application of management controls to

operations involving hazardous materials in a way that process hazards are

40
identified, understood, and controlled so that process related injuries and incidents

can be eliminated through such a practice is not mandatory in India so far, at NFCL it is a

self-initiative in line with OSHA, USA standards to update our safety systems and

processes.

HUMAN RESOURCE PHILOSOPHY OF THE ORGANISATION:

1. Human resource is a valuable resource of the organization.

2. To achieve effective utilization of human resource in the light of the

organizational goals.

3. High performance profile

4. Delegation of authority

5. Highest importance of human values.

Human Resource Training & Development:

The

company

has

recognized

well in

41
advance the need for training and development of its human resources, to help

them develop their skills to adapt to the changing world business and technological

scenario. It believes is one of the important ways to reach greater productivity in

today’s environment. In that it NFCL there is a separate department to develop

employee skills and performance according to changing environment.

The plant has world class training infrastructure facilities. Spacious

classrooms congenial for learning sessions are well equipped with the latest and modern

gadgets. The Training Programmes are given to employees of all levels of all departments

in NFCL. The faculties for these programmes are both internal and external. The

experienced in various department are the internal faculty and external people of related

event are invited to deliver their experiences to the NFCL employees. For the purpose of

training the organization is having well equipped laboratory and training facilities. Some of

them consist of audio-video aids, well-configured computers and LCD projects etc.

COMMUNITY AND ENVIRONMENT FOCUS:

NFCL aim to become the champions of the environment and the

community, at large, and will demonstrate this commitment by:

* Working as partners with local residents through creation of employment

opportunities.

* Supporting and improving the local ecological system

* Adhering to the principles of sustainable development

* Contributing to the physical, academic and economic well being of the

community.

EMPLOYEE FOCUS:

42
 NFCL aim to have the most satisfied employee base by the turn of

the century through its commitment to:

* Personal and professional development of the individual

* Rewarding teamwork, innovation and quality behaviour

* Thorough job satisfaction

* Creating and sustaining a close-knit family culture wherein every individual

experiences a sense of belonging.

MARKETING :

NFCL is operating in Andhra Pradesh, Orissa, West Bengal,

Maharastra, Karnataka and Pondicherry (Yanam territory). A professional team,

with a wide range of products, that include Urea, traded fertilizers (DAP, MOP,

Complex fertilizers), Micro-nutrients, Pesticides, Organic-fertilizers and Bio-

pesticides, has taken NFCL very close to the farmers and made NAGARJUNA a

household name among the farming community.

43
 Keeping pace with the changes in agricultural practices NFCL has developed organic-

fertilizers and bio-pesticides with support from NARDI. A new concept in fertilizers i.e., Customized

Fertilizer Granules (CFG) has been developed and the product is in trials.

NFCL Development activities focus on imparting training to farmers and dealers on

the latest package of practices in various crops and technology transfer. Training programs are

carried out both on campus at KVK, Kakinada and off-campus at villages and towns. A well-

equipped and trained development team organizes the programs using audio-visual vans, jeeps,

slide projectors and literature on products and crops, etc. State Governments, Agriculture

Universities and the farming community as a whole have acknowledged the effectiveness of

development programs being carried out by NFCL.

CUSTOMER FOCUS:

In recognition that business is based on quality and integrity,

NFCL aim to have the most satisfied customer base by enhancing farmer-

productivity through forward integration on the one hand, and through catering to

industrial needs on the other. Unto this end, NFCL shall:

* Produce high quality products that give value for money

* Offer quality service that engulfs, amongst other things, a package of inputs,

both products and services

* Innovate to satisfy the real needs of customers

* Engage in fair, open and ethical practices.

SHAREHOLDER FOCUS:

NFCL aim to keep its shareholders satisfied by:

* Delivering the best long-term return on investment amongst all companies in the

Indian agri-business industry.

* Continuous growth and excellence in business performance.

44
PERFORMANCE HIGHLIGHTS:

SALES NET
TURNOVER PROFIT
YEAR PRODUCTION SALES
INCLUDING AFTER
SUBSIDY TAX

Ammonia Urea MFG Urea

(Rs. Crores) (Rs,Crores)
(MT) (MT) (MT)

1992-93

(8 188027 308453 251599 364.48 32.11

months)

1993-94 344498 591213 598787 606.51 127.87

1994-95 386357 675149 659094 843.14 192.89

1995-96 413390 708059 689767 882.27 221.18

1996-97 412694 716910 695154 922.49 155.24

1997-98 401627 689648 682836 795.88 122.10

1998-99 699110 1212607 1205376 1214.54 143.73

1999-00 751442 1297510 1283195 1435.96 113.50

2000-01 796024 1364794 1324497 1215.52 46.53

2001-02 706528 1221944 1217629 1062.69 39.70

2002-03 689263 1187259 1101776 748.65 57.47

2003-04 712534 1325467 1265376 1178.26 74.67

2004-05 723525 1382953 1256704 1385.63 85.35

2005-06 788471 1379220 1396927 1452.95 6685

2006-07 756814 1324054 1310856 1815.24 3171

45
 OTHER GROUP COMPANY/INSTITUTION

 Nagarjuna Agrichem Limited

 Nagarjuna Palma India Limited

 Nagarjuna Agricultural Research & Development Institute

 KVK Raju International Leadership Academy

 Nagarjuna Power Corporation Limited

 Nagarjuna Haifa India Limited

 Nagarjuna Oil Corporation Limited

 Bijam Biosciences Limited

 Nagarjuna Foundation

DIVERSIFICATION:

Nagarjuna Group is on the threshold of major growth phase. Nagarjuna’s aim

is not just to meet the challenges of change, but to be the leaders in all the

businesses that we are in, namely, Agri Inputs/Outputs, Energy Sector, Refining

and Financial Services. Nagarjuna Group will thus have significant presence in the

core sectors of the economy, which will have a multiplier effect on the industrial and

socio-economic development of the country.

46
 FUTURE PLANS OF THE COMPANY

1) To improve the capacity utilization and energy efficiency through technology

up gradation.

2) Switching over to 100% natural gas as raw material instead of Napatha in

Ammonia plant II

3) To continue to improve environmental performance under the framework of

ISO 14000 – EMS.

4) To achieve British Safety convenience sword of honor in safety

management.

5) To enhance the standards in the present quality management system (ISO

9002) by adopting the ISO 9001-2000 revision.

6) To enhance the standard in the present quality management system (ISO

9002) by adopting the ISO 9001-2000 rivision.

7) To widen the scope and offer technical services to various external agencies

including over as a excitement.

AWARDS AND HONOURS

47
  “EPIC” Award for Anti-Pollution measures taken by the Industry by

Environment Public Interest Committee, Kakinada in 1993.

 Good Housekeeping Award for 1994 by National Safety Council, A.P.

Chapter.

 Best Industrial Canteen Award for 1994 by National Safety Council, A.P.

Chapter.

 Indian Chemical Manufacturer’s Association (ICMA) Award for

"Environmental Control Strategies and Safety in Chemical Plants" for the

year 1994.

 Award of Merit for 1994-95 by National Safety Council, U.S.A. for

completing 2 Million Accident Free Man Hours.

 ISO 9002 Certification from Bureau Veritas Quality International (BVQI),

Netherlands, in 1995.

 Golden Peacock National Quality Award by Institute of Directors, New

Delhi, India for 1995.

 British Safety Council's National Safety Award for the five consecutive

years 1994, 1995, 1996, 1997 & 1998 and also for the year 2000.

 Rajiv Gandhi Parti Bhoomi Mitra" Award for 1994-96 by Waste Land

Development Board, Government of India.

 National Safety Award for 1996 by National Safety Council, U.S.A.

 Award for Innovative and Purposeful Programme for Social Progress

for the year 1996 by Indian Chemical Manufacturers’ Association (ICMA),

Mumbai.

 Merit Award for 1997 and 1998 by Royal Society for the Prevention of

Accident (Ro SPA).

48
  “Best Workers” Welfare (including Family Planning) effort by an Industrial or

Commercial Unit in the in the State” for the year 1997-98 by Andhra Pradesh

Chambers of Commerce & Industry (FAPCCI).

 Golden Peacock National Award for Environmental Management by World

Environment Foundation for the year 1998.

 Paryavarana Parirakshak Award by Rotary International at Visakhapatnam

for the year 1998.

 VANAMITRA - 1999 from Govt. of A.P. for Developing and Maintaining

Greenbelt.

 Achieved 84% in OH&S - Audit conducted by British Safety Council, U.K. in

January 2000.

 ISO 14001 EMS Certification from BVQI in May 2000

 Best School Industry Linkage Award 2000 by NCERT - an Autonomous

Organization of Government of India - December 2000.

 Bronze Award for Occupational Safety for the year 2000 by Royal Society

for the Prevention of Accident (Ro SPA), UK.

 Best Environmental Management Plan – 2000-01 in Vizag zone by Andhra

Pradesh Pollution Control Board, Visakhapatnam.

 National Safety Award for 2000-01 from British Safety Council, U.K.

 Best Environmental Improvement Effort by Industries located in the State in

2000-2001 from Federation of AP Chamber of Commerce and Industry, Andhra

Pradesh.

 Bronze Award for Occupational Safety for the year 2001 by Royal Society

for the Prevention of Accident (RoSPA), UK.

49
  Commendation Trophy jointly given by National Safety Council, A.P. Chapter

& Director of Factories, A.P. for Implementing OHSAS 18001 in March 2001.

 Occupational Health and Safety Assessment Series (OHSAS-18001)

Certification from BVQI in April 2001.

 ‘Environmental Protection Award’ in Nitrogenous Fertilizer plants category

for the year 2001-02 from Fertilizer Association of India, New Delhi.

 “Perfect Record” in Occupational Safety/Health Award Programme for

operating two million employee hours without occupational injury or illness for the

period from 10.10.2001 to 13.11.2002 from National Safety Council (NSC) of USA.

 Cleaner production Award for good practices for the year 2003-04 by

“APPCB Hyderabad” in 2004

 National Award for “Excellence in water management 2004” by

confederation of Indian industry (cII) in 2004.fi

 Five star health and safety management system Audit by British safety

council, London in 2005.

 Commendation prize awarded on the occasion of first national convention

on “Energy conservation initiatives ” by Andhra Pradesh productivity council,

Hyderabad in 2005.

 Best technical innovation award and prestigious “FAI Environment protection

award in the nitrogenous fertilizer plants category for 2004-05. By FAI, Delhi in

2005.

 “Award for excellence in Natural gas conservation” in the fertilizers sector

category for 2004-05 by GAIL in 2005.

 “Best management award” from labour department of AP state government

in 2006.

50
  Best technical innovation award for 2005-06 by FAI, Delhi in 2006.

 National award for “Excellence in water management 2006” by CII Godrej

GBC, Hyderabad in 2006.

 Environment protection award in Nitrogenous Fertilizer plants category for

the year 2006-07 by FAI, Delhi in 2007.

 Commendation prize under the stream category for its energy conservation

initiatives by Andhra Pradesh productivity council, Hyderabad in 2007.

 National award for “water efficient unit 2007” by confederation of Indian

industry, Hyderabad in 2007.

 Certificate of appreciation for implementing the process safety management

system (PSMS) by national safety council, A.P.chapter, Hyderabad in 2008.

WELFARE MEASURES IN NFCL:

It has taken several welfare measures to improve the general working

conditions. They are given below:

♦ A.C. Facilities

♦Drinking Water Facilities. Lockers given to employees for keeping their

belongings.

♦ Annual Medical Examination

♦ First Aid Boxes at several locations

♦ Cultural Activities

♦ Library Facilities

♦ School for children of NFCL employees

♦ Uniform to all employees

♦ Group’s savings linked Insurance Scheme

♦ Protective wear like helmets

51
 ♦ Transport facilities

♦ Canteen facilities

♦ Housing loan facilities

NFCL OBJECTIVES:

 Performance Management

 High performance potential

 Individual growth potential

 Belief in Youth

 High Result Orientation

 Law procedure Orientation

 Entrepreneurial Development

 Distinct Nagarjuna Group Ethos

 High sense of respect for value of time and money Harmonious employee

relations

 Development of Human Resources on a continuous basis

 Highest importance to human values

 Objectives assessment of individual performance

 Disciplined behavior of all employees

 Belief in system management

 Belief dynamism

 Belief in multi skilled concept

 Continuous monitoring control

SWOT ANALYSIS:

52
 1. STRENGTHS: A broad and modern product range good corporate image

especially in Andhra Pradesh excellent dealer network in most of the other states

open work culture and good working environment qualified trained and motivated

team quality assurance system ISO – 9000 location advantage of plant.

2. WEAKNESS: Broad product range is not synergies yet. In adequate

information system and coordination between area offices and lead offices. In

adequate marketing database/market information. Procedural bottlenecks some

complacency about market retention. Inadequate reporting systems.

3. THREATS: Decontrol, Joint Ventures, International cartels. No availability

of raw materials in future.

4. OPPORTUNITIES: Huge gap between usage outside and inside India.

Expansion object offering double the quantity. New irrigation projects increasing

the demand.

ORGANISATION STRUCTURE AND FUNCTIONS:-

The organization of NFCL is simple and is considered to be a flat structure.

Various departments in NFCL are:

FINANCE DEPARTMENT:-

The role of finance department is basically a staff function. Its major duty is to

look into matters of

 Treasury

 Audit

 Accounting

 Dealing with government.

OBJECTIVES:-

53
 NFCL has highly developed marketing network. Its aim is to spear head the

agricultural revolution in the country and be the most trusted friend of farmers.

Several innovative publicity advertising measures were taken to consolidate the

brand equity of Nagarjuna products.

HUMAN POTENTIAL DEVELOPMNT DERARTMENT:-

The company has separate HPD and HRD departments. The HPD department

plays a vital role from recruitment to separation of an employee. It also maintains

statutory and non-statutory facilities. It acts as, grievance redressal unit maintains

contract employee, and HRD conducts training programmes

FUNCTIONS:-

 Personnel

 Recruitment

 Attendance

 Employee benefits

 Wages and salary administration

 Statutory conferences

 Participative committees

 Labour department and

 Other government agencies.

ADMINISTRATIVE FUNCTION:

 To develop and maintain harmonious industrial relations.

54
  To advice the top management in the formulation of sond personnel

practices.

 To structure and monitor various activities pertaining to HRD.

 To keep changing trends in legislation and their effect personnel policies of

the company.

H R D DERARTMENT:-

 Defining the methods and new techniques for assessing the training needs.

 Conducting training programmes to the employees.

 Evaluating the training programmes.

IT DEPARTMENT:-

IT department looks after all the matters relating to maintaining personnel

records and management information systems.

PRODUCTION DEPARTMENT:-

This department looks into production levels from time to time and prepares

plans to meet the target standard.

TECHNICAL SERVICES DEPARTMENT:-

Safety measures are taken from time to time and safety boards are displayed to

make employees cautions. Fire extinguishers and fire alarms are placed at regular

intervals incase emergency, regular checkup and regular training classes

conducted to employees.

55
 ENGINEERING DEPARTMENT:-

Electrical, instrumental, civil, mechanical services, general engineering are part

of their department.

MATERIAL DEPARTMENT:-

The major function of this department is to look into the purchase of raw

materials. It takes necessary steps and maintains good amount of raw materials

necessary.

Time Office Management:

The Organization maintains strict office timings and

disciplinary rules. All the employees are expected on the site on time and any in-

disciplinary act would be severely looked into.

Shift Timings

A 6:00 AM to 2:00 PM

B 2:00 PM to 10:00 PM

C 10:00 PM to 6:00 AM

GENERAL SHIFT 8:00 AM to 4:30 PM

Network

NFCL’s 170 people strong marketing force is committed to provide

total customer satisfaction through reliability, timeliness, courtesy, honesty and

value for money. This commitment has helped NFCL in achieving the status of the

56
leading player in plant nutrition in the states of Andhra Pradesh, Orissa and West

Bengal, Karnataka and Chhattisgarh. Servicing 5 states, NFCL have 5 zonal

offices and 16 area offices.

ANDHRA PRADESH

NFCL has zonal offices in all the District Head Quarters in ANDHRA

PRADESH.

ORISSA WEST BENGAL

57
CHATISGARH KARNATAKA

58
 CHAPTER-4

THEORITICAL FRAMEWORK
INTRODUCTION

Appraisal of performance is wide used in the society. Parents their

children, teacher evaluate their student and employers evaluate their employee.

However, formal evaluation of employees is believed to have been adopted for

the first time during First World War. At the inlands of Walter Dill Scott the US

army man to man rating system for evaluating military personal. Once the

employee has been selected, trained the motivated, he is then apprised for his

performance. Performance appraisal is the step where the management finds

out how effective it has been at hiring and placing employees if any problems

are identified, steps are taken too communicated to employee and to remedy

them. A performance appraisal is a process of evaluating the performance

appraisal is a process of evaluating the performance and qualification of

employee according to job and its requirement. It is also known as the process

of estimating and judging the value, excellence. Qualities of status of some

object person or things. Individually and collectively, it is the part of all other

staffing process, like recruitment, selection, placement, etc..

59
 TRENDS IN PERFORMANCE APPRAISAL

Item Former Emphasis Present Focus

Terminology Merit-rating Performance appraisal

Determine wage increase, Development of the individual,

Purpose Promotion, transfer, lay off. improved job performance.

For managerial and technical

For rank and file workers
Application personnel.

Factors Performance, result or

Personal traits
rated accomplishments.

Rating scales with Mutual goal-setting, critical

Techniques emphasis upon scores incidents, group appraisal.

CONCEPT OF PERFORMANCE APPRAISAL:

Performance evaluation or performance appraisal is the process of assessing performance and

progress of employee or of a group of employee on a given job and his potential for future

development. In concept of all formal procedure used working organization to evaluate

personality, contribution and potential of employees.

DEFINITION

60
 Performance evaluation or performance appraisal is the process of

assessing the performance and progress of an employee or of a group of

employees on a given job and his potential for future development.

Formal Definition,

“It is the systematic evaluation of the individual with respect to his/her

performance on the job and his/her potential for development.”

According to Flippo,

“Performance Appraisal is the systematic, periodic and an impartial rating of

an employee’s excellence in matters pertaining to his present job and his potential

for a better job.”

The main characteristic of performance appraisal is as follows:

 It is process of consisting of series of steps

 It is the systematic examination of an employee’s strengths and

weaknesses in terms of his job.

 It is a scientific and objective study. Formal procedures are used in this

study.

 It is an ongoing or continuous process there in the evaluations is arranged

periodically according to a definite plan.

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  The main purpose of performance appraisal is to secure information

necessary for making objective and correct decisions on employees.

Objectives:

The main purposes of performance appraisal are as follows:

 To provide feedback to employees so that they come to know where they

stand and can improve their job performance.

 To provide a valid data base for personnel decision concerning placements,

pay, promotions, transfers, punishments, etc,.

 To diagnose the strengths and weakness of individuals so as to identify

further training needs.

 To provide coaching, counseling, career planning and motivation to

subordinates.

 To develop positive superior – subordinates relations and thereby reduce

grievances.

 To facilitate research in personnel management.

 To test the effectiveness of the recruitment, selection, placement and

induction program

Thus, performance appraisal aims at both judgmental and developmental efforts.

Uses:

 It provides valuable information for personnel decisions such as pay

increases, promotions, etc.

 It helps to judge the effectiveness of recruitment, selection, and placement

and orientation system of the organization.

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  It is useful in analyzing training and development needs.

 It can be used to improve performance thought appropriate feedback,

working and counseling to employees.

 It facilitates Human Resource Planning, career planning and succession

planning.

 A competitive spirit is created and employees are motivated to improve their

performance.

PROCESS OF PERFORMANCE APPRAISAL

 Establishing performance standards – the appraisal process begins with

the setting up of criteria to be used for appraising the performance of employees.

The criteria are specified with the help of job analysis, which reveals the contents

of job. This criteria should be clear, objective and in writing.

 Communicating the standards – the standards are conveyed to the

employees and the evaluators. A feedback regarding the standards should be

obtained from the evaluators and the employees for revision or modification.

 Measuring performance – this requires choosing the right technique of

measurement, identifying the internal and external factors influencing performance

and collecting information on results achieved.

 Comparing the actual with the standards – actual performance is

compared with the predetermined performance standards. Such comparison will

reveal the deviation, which may be positive or negative.

 Discussing the appraisal – The results of the appraisal are communicated

to and discussed with the employees. Along with the deviations, the reason behind

63
them are also analyzed and discussed. Such discussion will enable the employee

to know his weaknesses and strengths.

 Taking corrective actions – through mutual discussions with employees,

the step required to improve performance are identified and initiated. Training,

coaching, counseling, etc., are examples of corrective actions that help to improve

performance.

METHODS OF PERFORMANCE APPRAISAL

Several methods and techniques are used for evaluating employee

performance. These may be classified in to Traditional and Modern methods.

Traditional Methods:

 Ranking Method: is technique, evaluator assigns relative ranks to all

employees in the same work unit doing the same job. Employees are ranked from

the best to the poorest on the basis of overall performance. The relative passion of

an employee is reflected in the numerical rank. It is one of the simplest methods. It

is time saving and comparative evaluation technique of appraisal.

 Man-to-man comparison method: In this method, certain factors are

selected for the purpose of analysis and the rater for each factor designs a scale.

A scale of man is also created for each selected for each factor. Then each man to

be rated is compared with the man in the scale, and certain scores are awarded to

him. In other words, a whole man is compared to a “key man” in respect of one

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factor at a time. This method is used in job evaluation and is known as the factor

comparison method.

 Paired comparison method - This is a modified form of man to man

ranking. Herein, each employee is compared with all others in pairs on at a time.

The number of times an employee is judged better then other determines his rank.

Comparison is made on the basis of overall performance.

 Forced distribution method - In these techniques the rater appraises an

employee according to a pre-determined distribution scale. It is assumed that it is

desirable to rate only two factors by this method that is Job performance and promoability.

For this purpose a five poking performance scale is used without any descriptive

statement& employees are placed between two extremes of good and bad performance.

 Graphic rating scales method - It is a numerical scale indicating different

degrees of a particular train. The rater is given a printed form for each employee to

be rated. The form contains several characteristics relating to the personality and

performance of employee. Intelligence, attitude, quality of world, leadership skills

judgment, etc. are some use characteristics. This method is widely used as it is

easy to understand. It allows a statistical tabulation of scores and, a ready

comparison of scores among the employees is possible. The approach is multi-

dimensional as several significant dimensions of the job can be considered in

evaluation.

 Critical incident method - In this method the superior keeps a written

record or critical (either good or bad) events and how different employees behaved

during such events. The rating of the employee depends on the positive or the

negative behaviors during these events. These critical incidents are identified after

through study of the job and discussions with the staff. This method helps to avoid

65
vague impressions and general remarks as the rating is based on actual records of

behavior.

 Group appraisal method - Under this method, a group of evaluators

assess employees. This group consists of the immediate supervisors of the

employee, other supervisors having close contact with the employer’s work, head

of the department and a personnel expert. The group determines the standards of

performance for the job, measures actual performance of an employee, analysis

the causes of poor performance and offers suggestions for improvements in future.

 Grading method - under this method, the rater considers certain factors,

and marks them accordingly to a scale. The selected factor may be analytical

ability, co-operation, dependability self-expression, job knowledge. They may be

grades as ‘A’ – outstanding, ‘B’- very good,’ C’-good/average, ‘D’-fair, ‘E’- poor.

The actual performance of an employee is then compared with these grade

definitions and he is allotted the grade which best described his performance.

 Forced choice Distribution method - In this method, the rating elements

are several sets of pair’s phrases or adjectives relating to job proficiency or

personal qualification. The rater is asked to indicate which of the phrases is most

and least descriptive of the employee.

 Checklist method - In this method, series of questions are presented

concerning an employee’s behavior. Here rater does not evaluate employee

performance; he supplies reports about it and the personnel department does the

final rating

 Free Essay Method - In this method, the supervisor makes a free form,

open-ended appraisal of an employee in his own words and puts down his

66
impression about the employee. The description is always as factual and concrete

as possible.

 Field review method - In this method, a trainer employee from the

personnel department interviews line supervisors to evaluate respective

subordinates. The supervisor is required to give his opinion about the progress of

his subordinates and his plan of action in cases requiring for consideration.

The traditional methods given above focus on the traits of an employee

than an his job performance , In the absence of predefined performance criteria

or standards , the personal bias or subjectivity of the evaluator affects the ratings .

This approach caused the following responses:

 The very nature of the appraisal system led to criticism.

 Criticism exercised a negative impact on goal attainment.

 Criticism increased antagonism and defensiveness among employees

resulting in inferior performance.

 Managers generally are not qualified to assess personality traits.

 Some managers discourage good performances by over emphasizing

shortcomings and almost neglecting good work.

In order to overcome these weaknesses some new techniques of

performances appraisal have been developed.

MODERN METHODS

Assessments center method - An assessments center is a group employee

drawn from different work units. These employees work together on assignments

similar to the one they would be handlings when promoted. The most important

feature of the assessments center is job-related simulations. Evaluators observe

and rank the performances of all participants. This group evaluates all employees

67
are both individually and collectively by using simulations techniques like role-

playing, business games and in-basket exercises? Employees are evaluated on

the basis of job related characteristics considered important for job success. The

evaluators prepare a summary report and feedback is administered on a face-to-

face basis to the employees who ask for it. An assessment center generally

measures interpersonal skills, communicating ability to plan and organize, etc.

Assessments centers are not only methods of appraisal but help to determine

training and development needs of employees and provide data for human

resource planning.

Human resource accounting method - Human resource are a valuable

asset for any organization. This asset can be valued in terms of money. When

competent and well-trained employees leave an organization the human asset ids

decreased and vice versa. Under this method performance is judged in terms of

costs and contributions of employees. Costs of human resources consist of

expenditure on human resource planning, recruitment, selection, induction,

training, compensation, etc. Contribution of human resources is the money value

of labor productivity or value added by human resources. Difference between cost

and contribution will reflect the performance of employees. This method is still in

the transitory stage and is, therefore, not popular at present.

Behavioral Anchored Rating Scales (BARS) - This method combines

graphic rating with critical incidents method. BARS are descriptions of various

degrees of behavior relating to specific performance dimensions. Critical areas of

job performance and the most effective behavior for getting results are determined

in advance. The rater records the observable job behavior of an employee and

68
compares these observations with BARS. In this way an employee’s actual

behavior is judged against the desired behavior. This steps involved are : -

 Identify critical incidents - Persons with knowledge of the identify job to be

appraised describe specific examples of both effective and ineffective job

behaviors.

 Select performance dimensions - The persons then cluster the behavioral

incidents into a smaller set (usually 5-10) of performance dimensions.

 Retranslate the incidents - Another group of knowledgeable persons

assign each incident to the dimension that it best describes. Incidents for which

there is less than 75% agreement with the first group are not retranslated.

 Assign scales to incidents - The second group rates each incident on a 7

or 9 point scale. Rating is done on the basis of how well the behavior described in

the incident represents the performance on the appropriate dimensions. Means

(average) and standards deviations are then calculated for the scale values

assigned to each incident.

 Develop final instrument - A subset of the incidents that meets both the

retranslation and standard deviation criteria is used as a behavioral anchor for the

final performance dimensions. A final BARS instrument typically comprises a

series of vertical scales that are endorsed by the include incidents. Each incident

is positioned on the scale according to its mean value.

360 DEGREES PERFORMANCE APPRAISAL

This is a new concept in performance appraisal, where the

feedback is collected from all around –the employee, the superior, the

subordinates, the peer group, and the customers. The evaluation is very

69
comprehensive in terms of the employee’s skills, abilities, styles, and job-related

competencies. This system has the following advantages:

a) Higher validity and reliability of the evaluation.

b) Self evaluation by the employees gets compared with the perception of

others.

c) Helps in maximizing employee potential in the face of challenges.

Advantages:

 Ratings are likely to be accurate because these are done by experts.

 The method is more reliable and valid as it is job specific and identified

observable and measurable behavior.

 Ratings are likely to be more acceptable due to employee participation

 The use of critical incidents is useful in providing feedback to the employee

being rated.

Limitations:

It is very time consuming and expensive to develop BARS for every job.

Behaviors used are more activity oriented than results oriented.

APPRAISAL BY RESULTS OR MBO (MANAGEMENT BY OBJECTIVES)

The concept of management by objectives was developed by Peter Drucker in

1954. Since then MBO has become an effective and operational technique of

performance appraisal and a powerful philosophy of managing.

MBO has been defined as “a process whereby the superior and subordinate

managers of an organization jointly identify its common goal, define each

70
individual’s major areas of responsibility in terms of results expected of him and

use these measures as guides for operating the unit and assessing the

contributions of each its members.” In other words, MBO involves appraisal of

performance against clear, time bound and mutually agreed job goals.

PROCESS OF MBO

 Set organization goals - Goals of the organization in key areas of

performance are laid down. These goals are defined in clear, precise and

measurable terms. A through analysis of internal and external environment of the

organization is made to set these goals.

 Defining performance targets - On the basis of organizational goals,

performance standards for each employee are defined. Every subordinate writes

down his own performance goals, which are work related, and career-oriented. His

manager also writes down the goals he thinks the subordinate should strive for.

The two then discuss them, reach an agreement and put the agreed goals in

writing. Thus, employees at all levels are involved in goal setting. The goals are

periodically reviewed and revised to keep them flexible and up-to-date.

 Performance reviews - Frequent performance reviews meetings between

manager and subordinate are held. In these meeting progress is assessed,

weaknesses and constrains are identified and steps to be taken to improve

performance are decided. Subordinates actively participate in this process. This

leads to self-control by the employee.

 Feedback - After every performance review feedback on performance is

communicated to the employee so that he can regulate and improve upon his own

performance. On the basis of performance review rewards are decided. New

goals and performance targets are determined for the next period.

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 Advantages

 Ends –means chain

 Role clarity

 Co-ordination

 Objective appraisal

 Motivation and commitment

 Management development

Limitations

 Difficulty in goal setting

 Problem of participation

 Lack of understanding

 Time-consuming and expensive

 Inflexibility

SHORT COMINGS OF PERFORMANCE APPRAISAL

The ideal approach to performance evaluation is that in which the evaluator

is free from personal biases, prejudices, and idiosyncrasies. This is because when

an evaluation is objective, it minimizes the dysfunctional behavioral of the

evaluator, which may be detrimental to the achievement of organizational goals.

The factors which impede objective evaluations are:

The halo effect - The halo effect is a “tendency to let the assessment of an

individual one trait influence the evaluation of that person on other specific traits.”

There is this effect in appraisal when the appraiser assigns the same rating to all

traits regardless of an employee’s actual performance on these traits.

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 The halo effect refers to the tendency to rate an individual consistently high or

low or average on the various traits, depending upon whether the rater’s overall

impression of the individual is favorable or not. This means that the halo effect

allows one characteristic, or occurrence (either good or bad) to influence the rating

of all performance factors.

The halo effect problem can be alleviated by:

 Providing a training programmer to the evaluators.

 Restructuring the questions by requiring the evaluator to consider each

question independently.

Leniency or strictness tendency - Every evaluator has hiss own value system

which acts as a standard against which he makes his appraisals. Relative to the

true or actual performance an individual exhibits, some supervisors have a

tendency to be liberal in their rating, that is they consistently assign ‘high values’ to

their employees, while at other times they may have a tendency to assign

consistently ‘low rating’.

The former tendency is known as ‘positive leniency error’, while the latter

as ‘negative leniency error’. Both these trends usually arise from varying stadards

of performance observed by supervisors and from different interpretations of what

they evaluate in employee performance. The tendency can be avoided by holding

meeting or training sessions for raters so that they may understand what is

requ9red of them in rating.

The central tendency problem - It is the most commonly found error. It

assigns “average ratings” to all the employees with a view to avoiding commitment

or involvement; or when the rater is in doubt or has inadequate information or lack

73
of knowledge about the behavior of the employee, or when he does not have much

time at his disposal. The ranking tools discussed earlier are aimed at avoiding this

problem.

Similarity error - This type of error occurs when the evaluator rates other

people in the same way he perceives himself. This error also washes out if the

same evaluator appraises all the people in the organization.

Miscellaneous biases - Bias against employees on ground of sex, race

religion or position is also a common error in rating. For example, a higher rating

may be given to a senior employee. The rater may also be influenced by

organizational influence and give higher rating to those holding higher positions.

Social differentiation - Rating is sometimes impeded by the evaluator’s style

of behavior. Pious has classified raters as ‘high differentiations”- that is using most

of the scale; or “low differentiators”-that is, using a limited range of the scale. “Low

differentiators tend to ignore or suppress differences, perceiving the universe as

more uniform than it really is.

High differentiators, on the other hand, tend to utilize all available information

to the utmost extent and thus are better able to perceptually deny anomalies and

contradictions than low differentiators.” Social differentiation makes evaluations

using ‘trait’ criteria unreliable.

Spill Over Effect - This type of error occurs when past performance rating

influences the current rating.

STEPS FOR MAKING APPRAISAL SUCCESSFUL

 Existence of an atmosphere of confidence and trust.

74
  The results of performance rather than personality traits should be given

due weight.

 The supervisor should analyze the strengths and weaknesses of the

employee and advise him.

 The appraisal programmed should be less time-consuming and less costly

 The results of appraisal should be immediately communicated to the

employee.

 A post appraisal interview should be arranged.

 Training can be used to improve the standards of performance appraisal.

The right appraisal tools should be chosen to minimize arising problem.

PERFORMANCE APPRAISAL

IN NFCL

INTRODUCTION

Organization are run and steered by people that goals are set and

objectives realized. The success of an organization is thus depends upon the sum

total of performance of its members. A well designed and an well implement

performance appraisal system adds value to the organization. The appraisal

should be based on contribution made by an individual in the accomplishment of

organizational objectives. Performance can be measured by some combination of

quantity, quality, time and cost.

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 Performance appraisal refers to all those procedures that are used

to evaluate the personality, the performance and the potential of its group

members. This process of HPD helps the employees to acquire and/or develop

technical, managerial and behavioral knowledge, skills and abilities that are

necessary to perform present and future roles. Performance appraisal indicates the

level of desired performance and the level of actual performance and the gap

between these 2. this gap should be dredged through human resource techniques

like training, executive development etc.

PERFORMANCE APPRAISAL SYSTEM IN N.F.C.L:-

The total employees of N.F.C.L. is divided into two categories

i.e.,

1. Executive

2. Non-Executive (commercial/technical staff)

Executive:-

For executive cadres appraisal system is “performance management

system”.

This system is for executives only.

Non-Executive:-

76
 For non-executive performance appraisal system is “Grading Method”.

For permanent employees the appraisal was conducted in “May and June” of

every year by the immediate superior.

For probationary employees every 02 months they conduct or review the

appraisal by the immediate superiors.

For management trainers for every three months appraisal conducted by the

“group of appraisers”.

In N.F.C.L. the purpose of appraisal is to:-

1. Identify the appraisers strengths and areas where he needs to improve and

to discuss these aspects in a post appraisal interview to help him improve his over

all performance in the present job.

2. Assist in identifying the training needs of the appraise for performance in the

present job and to prepare him for higher responsibilities.

3. Improve the channel of communication between the subordinates and superior.

4. Assist in deciding on career growth of appraise.

Guide lines for performance appraisal

1. The assessment should be made by the immediate superior and reviewed by

the superiors boss.

2. The performance during the preceding 12 th months or the period the appraise

was under your supervision is required to be assessed against the factors

listed.

77
3. Evaluate how well the appraise had achieved the expected results for the period

under amendment.

4. Your assessment should be based on sufficient evidence reflected during the

review period. Try to make the appraise as fair and accurate as possible.

5. Appraise each factor independently not influenced by the rating of other

factors.

6. They make sure that they evaluate the performance during the course of

the entire view period, and not make the out repeated error of being influence by

the most recent event.

The scale on which the performance is to be appraised is explained

below:-

OUTSTANDING : Exceptional contribution well in excess of job

Requirements rarely achieved by others.

SUPERIOR : Exceeds normal job requirements definite growth

Potential.

GOOD : A good normal job requirement has growth potential.

NORMAL : Effective discharge of all responsibilities to full

Satisfaction Of superior.

BELOW NORMAL: Does not meet minimum requirements of job, must

improve substantially.

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 The superior conducts the appraisal basing on the following

factors/attributes.

1. job knowledge/skill, understanding of all phases of his work and related

matters.

2. Application close through and attention of his work.

3. Work output consistent volume of acceptable work produced with the time

schedules.

4. Quality of work thoroughness neatness, accuracy and general excellence of

work.

5. Initiative ability to originate or develop ideas and to get things started.

6. Inter personal relationship ability to get along with colleagues i.e., sincerity,

conduct and courtesy,

7. Dependability reliability in following entrusted assignment and instructions.

8. Attendance and punctuality; productive utilization of working hours, nature of

absenteeism.

9. Appreciation conformity to company policies attitude and commitment

toward company policies and programmes.

10. House keeping and safety awareness and commitment to safety

and good housekeeping practices.

In these above matters the superior has to frame his choice according to

performance during preceding 12 months. By the superior may disclose that

1. Strengths of appraises

2. Weakness of appraises

3. General remarks

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 After doing above classifications based on his strengths and weakness the

superior does “performance counseling” for improvement of areas of “major

weakness” of appraisers.

Flow Chart indicates the Process of performance appraisal system

in NFCL:

Define objectives and norms

dd
of performance appraisal

Set appraisal
factors/attributes.

Filling necessary details of the

employee in Blank appraisal
forms

Sending appraisal forms

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 Implementing appraisal
programme

Appraisal feedback

Post appraisal action

1. Define objectives and norms of performance appraisal

The first basic step in effective and systematic appraisal system is to

define the objectives / purpose of the performance appraisal system.

NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED uses printed

appraisal forms for the purpose of performance appraisal system to

evaluate the performance of an employee. The form contains objectives,

standards/ norms and various attributes/ factors. The appraisal system

in NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED is very clear.

The method used for appraisal is called “Grading Method”

The appraisal standards serves as bench marks against which

performance is measured. The main objectives of performance appraisal

system is to identify the appraise Strengths, weakness, assessing training

needs, improving superior subordinate relations and communications etc.

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 The appraisal form contains one scale and it may be definitional like

outstanding, superior, good, normal, below normal. The actual

performance of the employees is measured against these grades.

2.Set appraisal factors/attributes

The assessment done one the basis of certain attributes/ factors which

help in define job requirements of a particular job. Such as job

knowledge/ skill, attention of work, work output, quality of work initiative

e, inter personal relationship, dependability, attendance and punctuality,

appreciation/ conformity to company policies, house keeping and safety,

accepting responsibilities positive discipline etc.

The company considers 10 factors for permanent

employees and 12 factors for executive trainees and probationary

employees, 9 factors for trainees. Job performance included quality and

quantity of work performance, responsibility assumed specific targets

achieved regularity of attendance etc.

3. Filling necessary details of the employee

The HUMAN POTENTIAL DEVELOPMANT (HPD) in nagarjuna fertilizers

and chemicals limited fills the necessary details of the each and every

category employees in the appraisal forms at the start of the appraisal

period. This is called “BACKGROUND” information, and it contains name

of the employee, employee number, date of joining, department,

designation, period of appraisal, date of appraisal.

4. Sending appraisal forms

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 The HPD department sends those filled appraisal forms to the

concerned departments HOD ,and than HOD gives ample of time to the

superiors for appraisal. The period of appraisal is different for

commercial/technical staff, trainees, probationary employees.

Annual appraisal are sent to all commercial/technical staff once in a

year, for trainees appraisals are once in three months. Once training gets

over the individual enter the probationary period which is for six months.

During probationary period appraisal are sent once in 2 months.

5. Implementing appraisal programme

It is the most important step in appraisal programme.The appraisal

programme should be made by the immediate superior and reviewed by

the superior boss. The superior appraises the performance of the employee

on the bases of certain norms and factors. After rating the various

attributes of appraise the appraisal will give remarks. The appraiser also

writes the strengths, weakness, and areas where the employee needs to

improve. Finally the superior give overall assessment.

6. Appraisal feedback

perhaps appraisal feedback is the most crucial stage in appraisal

programme. In this step the appraiser discussed with the appraise

regarding his performance during the period under review, highlighting his

areas of major strengths, weakness so as to help him to make improve.

After the discussion with the employee the superior give suggestions for

83
improving of the employee performance. Finally the superior takes

signature of the employee on the form.

The completed appraisal forms sent back to the head of the

department for review and later it is sent to the HPD department in a

confidential cover. The HPD department places the forms in his/her

personal file.

7.Post appraisal action

This is the last step in performance appraisal system in NFCL.

Performance appraisal is not an end in itself but it is a means for long

term performance of personnel by taking appropriate actions based on the

information as revealed by the appraisal. The action may be in the form of

giving suitable rewards for outstanding performance, promotions,

providing training for better performance etc. The appraisal for trainees is

for conformation only.

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 CHAPTER – V

DATA ANALYSIS

DATA ANALYSIS

PERSONAL DATA

Table -1

EDUCATION WISE DISTRIBUTION OF RESPONDENTS

S.NO QUALIFICATION NO.OF.RESPONDENTS PERSONTAGE

1 S.S.C 6 18

2 Intermediate/diploma 11 30

85
 3 Degree/post graduate 18 52

TOTAL 35 100

The above table indicate that 52% of respondents are having higher

qualification, 30% of respondents poses intermediate and other diplomas,

and only18% of respondents have S.S.C qualification.

TABLE-2

EXPERIENCE WISE DISTRIBUTION OF RESPONDENTS

S.NO. QUALIFICATIONS NO.OF.RESPONDENTS PERSONTAGE

1 BELOW 5 YEARS 9 26

2 6 TO 10 YEARS 8 22

3 11 TO 15 YEARS 11 33

4 ABOVE 15 YEARS 7 19

TOTAL 35 100

The above table indicate that 33.3% of respondents are having

experience of 11 to 15 years, 25.9% of respondents having below 5 years

experience, 22.2% of respondents having 6 to 10 years experience, and

only18.5% of respondents have high experience i.e. above 15 years.

86
 TABLE-3

DEPARTMENT WISE DISTRIBUTION OF RESPONDENTS

NO.OF
S.NO DEPARTMENT PERCENTAGE
RESPONDENTS

PRODUCTION PLANT 1&

1 9 26
2

2 BAGGING PLANT 13 37

3 MARKETING 2 7

4 FAIR AND SAFETY 2 7

5 OHC 2 4

HPD

MATERIALS

6 MAINTENCE 7 19

PROCESS

FINANCE

87
 35
TOTAL 100

The above table indicates the department wise distribution of

respondents. Out of 27 respondents majority of samples are taken from

production and bagging plant. Only 10 samples are taken from other

departments.

STATEMENT NO: 1

Your awareness about performance appraisal system in NFCL

is?

NO.OF
SL. NO. RESPONSE PERCENTAGE
RESPONDENTS

1. EXCELLENT 8 22

2. GOOD 23 67

3. NORMAL 2 7

4. BELOW NORMAL 2 4

TOTAL 35 100

88
 Interpretation:

According to 27 samples I conclude that the

awareness of performance appraisal system in NFCL is good.

STATEMENT NO: 2

What is the periodicity of performance appraisal?

NO.OF
S.NO. RESPONSE PERCENTAGE
RESPONDENTS

1 TWO MONTHS 4 11

2 QUARTERLY 7 18

3 HALF YEARLY 1 4

4 YEARLY 23 67

TOTAL 35 100

89
Interpretation:

Out of 27 respondents I conclude that majority of employees are

aware about the periodicity of appraisal system.

STATEMENT NO: 3

By whom you are appraised?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 SUPERIOR 31 89

2 PEER GROUP - -

3 SELF - -

4 GROUP OF APPRAISERS 4 11

TOTAL : 35 100

90
Interpretation:

Out of 100% respondents I observed that 88%

of employees are appraised by their superiors.

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 Training 5 15

2 Promotions 9 26

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 3 Transfers - -

4 Increments 8 22

5 All the above 13 37

TOTAL : 35 100

STATEMENT NO: 4

In your opinion what is the objective/purpose of Performance

Appraisal?

Interpretation:

According to 27 samples I conclude that the majority of respondents feel that

performance appraisal object is promotions and increments.

STATEMENT NO: 5

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 The rate of implementation of Performance Appraisal System in

N.F.C.L?

NO.OF
SL. NO. RESPONSE PERCENTAGE
RESPONDENTS

1. EXCELLENT 1 4

2. GOOD 26 74

3. AVERAGE 8 22

TOTAL 35 100

93
Interpretation:

94
 Out of 100% respondents I observed that 74% of employees viewed

that the rate of implementation of performance appraisal system is good.

STATEMENT NO: 6

Are any Monetary & Non-Monetary benefits given for

outstanding performance?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 YES 12 33

2 NO 8 22

3 SOME TIMES 16 45

TOTAL : 35 100

Interpretation:

95
 Out of 100% respondents I observed that only 44% of employees are

said that sometimes the organization give monetary and non monetary

benefits for outstanding performance.

STATEMENT NO: 7

Do you feel the present performance appraisal system

is more transparent?

SL.N
RESPONSE RESPONDENTS PERCENTAGE
O.

1 FULLY AGREE 14 37

2 PARTIALLY AGREE 19 55

3 FULLY DISAGREE 1 4

PARTIALLY
4 1 4
DISAGREE

TOTAL : 35 100

96
 Interpretation:

According to 27 samples I conclude that the

majority of respondents partially agree that the performance appraisal is

more transparent.

STATEMENT NO: 8

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 Are your Organization give feedback to you about your

performance at the end of the year?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 YES 18 52

2 NO 9 26

3 SOME TIMES 8 22

TOTAL : 35 100

Interpretation:

Out of 100% respondents I observed that only 51% of

employees are said that their superiors give feed back about their

strengths, weaknesses and areas that they needs to improve.

STATEMENT NO: 9

98
 Do you agree that your superior appreciate and encourage your work ?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 FULLY AGREE 14 41

PARTIALLY
2 21 59
AGREE

FULLY
3 - -
DISAGREE

PARTIALLY
4 - -
DISAGREE

TOTAL : 35 100

Interpretation:

Out of 100% respondents I observed that 59% of employees are

partially agree that their superiors appreciated and encouraged their work.

STATEMENT NO: 10

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 Do you agree the performance appraisal updates your training
needs from time to time?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

Totally
1 8 22
AGREE

PARTIALLY
2 24 67
AGREE

Totally
3 2 7
DISAGREE

PARTIALLY
4 1 4
DISAGREE

TOTAL
35 100
:

Interpretation:

Out of 100% respondents I observed that 66.66% of employees are

partially agree that the performance appraisal updates their training needs from

time to time.

STATEMENT NO: 11

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 Do you agree that promotions are based on performance?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 Totally AGREE 14 41

2 PARTIALY AGREE 15 44

3 Totally DISAGREE 5 11

PARTIALLY
4 1 4
DISAGREE

TOTAL : 35 100

Interpretation:

Out of 100% respondents I conclude that only 44.4% of employees

are partially agree that their promotion are based on their performance.

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 STATEMENT NO: 12

What is the level of satisfaction with existing Performance

Appraisal System?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

FULL
1 12 33
SATISFACTION

Partially
2 22 63
satisfaction

3 No satisfaction 1 4

TOTAL : 35 100

Interpretation:

Out of 100% respondents I conclude that majority of respondents

are partially satisfied with existing performance appraisal system.

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 STATEMENT NO: 13

Is there any scope for grievance redressal, if performance appraisal is not

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 YES 19 55
2 NO 9 26

3 SOMETIMES 7 19
TOTAL : 35 100

Interpretation:

Out of 27 respondents I conclude that only majority of employees

are think that there is a scope for grievance redressal if performance

appraisal is not done in fair.

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 STATEMENT NO: 14

Are you motivated by the present Performance

Appraisal System?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 YES 17 48
2 NO 6 18
SOME
3 TIMES 12 34
TOTAL : 35 100

Interpretation:

Out of 27 respondents I observed that majority of employees are

motivated by the present performance appraisal system.

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 STATEMENT NO: 15

Do you get congenial work environment for achieving the highest

Performance?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 Totally AGREE 14 41

2 PARTIALLYAGREE 19 55

3 Totally DISAGREE 2 4

PARTIALLY
4 - -
DISAGREE

TOTAL : 35 100

Interpretation:

Out of 27 respondents I observed that NFCL provides congenial

work environment for achieving the highest performance.

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 STATEMENT NO: 16

Do you agree that present Performance Appraisal System helps

in achieving organization goals?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 Totally AGREE 13 37

PARTIALLY
2 21 59
AGREE

Totally
3 1 4
DISAGREE

PARTIALLY
4 - -
DISAGREE

TOTAL : 35 100

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 Interpretation:

Out of 100% respondents I conclude that only 59% of employees are

partially agree that present performance appraisal system helps in

achieving organization goals.

STAT EMENT NO: 17

Will the performance appraisal system encourage people to plan

their work well in advance?

SL.NO. RESPONSE RESPONDENTS PERCENTAGE

1 Totally AGREE 13 37

2 PARTIALLY AGREE 20 56

3 Totally DISAGREE 2 7

PARTIALLY
4 - -
DISAGREE

TOTAL : 35 100

Interpretation:

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 I observed that only 55% of employees partially agreed that

performance appraisal system encourage people to plan their work well in

advance.

Chapter VI
Findings & Suggestions

FINDINGS

 Employees awareness about performance appraisal system in NFCL is

good.

 Huge majority of respondents know the periodicity of performance

appraisal .

 89% of respondents viewed that the superior as their appraiser.

 The rate of implementation of performance appraisal system is good. .

 Majority of respondents think that performance appraisal system

purpose/objective is for promotions and increments.

 The employees are partially satisfied with the existing performance

appraisal system.

 NFCL provides congenial work environment to their employees.

 The employees are motivated by present performance appraisal system.

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  Employees are partially agree that the performance appraisal system

encourage their work well in advance.

 Huge majority of respondents are partially agreed that their superior is

transparent and fair.

 SUGGESTIONS

 Time schedule for formation and evaluation of performance appraisal

should be maintain strictly.

 The appraisal system has to be followed with true spirit and then

only it helps organization and individual.

 Appraisal linked to promotions and increments will motivates the

employees towards reach the organization goals.

 Congenial work environment will leads to outstanding performance.

Appreciation for good performance and proper guidance for improvement is a

must.

 The performance appraisal system must be more transparent.

 The performance appraisal system must be standardized.

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 CHAPTER – VII
BIBLOGRAPHY and QUESTIONNAIRE

BIBLIOGRAPHY

 K.K AHUJA’s “HUMAN RESOURCE MANAGEMENT”, Kalyani

Publishers.

 ARUN MONAPPA and MIRZA s “PERSONNEL MANAGEMENT”,

Tata Mc Graw-Hill.

 ASWATHAPPA’s “HUMAN RESOURCE AND PERSONNEL

MANAGEMENT” Tata Mc Graw-Hill

 P.SUBBA RAO’s “HUMAN RESOURCE MANAGEMENT AND

INDUSTRIAL RELATIONS” , Himalaya Publishing House.

 V S P RAO and P.S NARAYANA “MANAGEMENT”, Premier Book

Company, New Delhi.

WEB SITES:

 www.nagajunagroup.com

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  www.nagarjuna fertilizers.com

QUESTIONNAIRE

Survey on Performance Appraisal at NFCL, Kakinada

As a part of my curriculum I am required to carry out a project in HR perspective. Therefore, in the above
pursuit, I have chosen the topic, “Performance Appraisal” at NFCL, Kakinada. So, I humbly request you
to spare your valuable time in filling up the questionnaire and help me in carrying out my perspective.

1. Your awareness about Performance Appraisal System in N.F.C.L is?

a) Excellent b) Good c) Normal d) Below Normal (
)
2. What is the periodicity of Performance Appraisal? ( )
a) 2months b) Quarterly b) half Yearly c) Yearly

3. By whom you are appraised? ( )

a) Superior b) Peer Group c) Self d) Group of Appraises

4. In your opinion what is the objective/purpose of Performance Appraisal?

a) Training b) promotions c) Transfers ( )
d) Increments e) All the above

5. The rate of implementation of Performance Appraisal System in N.F.C.L?

a) Excellent b) Good c) Average (
)

6. Are any monetary and non monetary benefits given for outstanding
Performance? ( )
a) Yes b) No c) Sometimes

111
7. Do you feel that present Performance Appraisal System is more
transparent?
a) Fully agree b) Partially agree ( )
c) Fully disagree d) partially disagree

8. Are your Organization give feedback to you about your performance at the
end of the year?
a) Yes b) No c) Sometimes ( )

9. Do you agree that your superior appreciate and encourage your work?
( )
a) Fully agree b) Partially agree
c) Fully disagree d) partially disagree

10. Do you agree the performance appraisal updates your training needs from
time to time?
( )
a) Totally agree b) Partially agree
c) Totally disagree d) partially disagree

11. Do you agree that promotions are based on performance? ( )

a) Totally agree b) Partially agree
c) Totally disagree d) partially disagree

12. What is the level of satisfaction with existing Performance Appraisal

System? ( )
a) Full satisfaction b) Partially satisfaction
c) No satisfaction

13. Is there any scope for grievance redressal, if performance appraisal is

not done in fair? ( )
a) Yes b) No c) Sometimes

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14. Are you motivated by the present Performance Appraisal System? ( )
a) Yes b) No c) Sometimes

15. Do you get congenial work environment for achieving the highest
Performance?
a) Totally agree b) Partially agree ( )
c) Totally disagree d) partially disagree

16. Do you agree that present Performance Appraisal System helps in

achieving organization goals? ( )
a) Totally agree b) Partially agree
c) Totally disagree d) partially disagree

17. Will the performance appraisal system encourage people to plan

their work well in advance? ( )
a) Totally agree b) Partially agree
c) Totally disagree d) partially disagree

18. Do you want to give any suggestions to improve the present performance
appraisal system in NFCL?

a)_________________________________________________________

b)_________________________________________________________

c)__________________________________________________________

113
THANK YOU

114