Performance Appraisal (Rama Krishna Knitter Pvt. Ltd) Final

CHAPTER-1COMPANY PROFILE

About the company:The company was incorporated as Rama Krishna Knitters Private Limited under

the Companies Act, 1956 on February 15, 2007 in the state of Punjab registered

with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh at

Jalandhar vide Corporate Identification No: U17301PB2007PLC030900. The

Registered Office of the Company is situated at 149-150, Preet Vihar, Jassian

Road, Ludhiana-141001, Punjab. The Company has been promoted by Mr. Naresh

Kumar Gupta and Mrs. Shallu Gupta for manufacture and export of readymade

garments.

Business Profile of the Company:

The company manufactures comprehensive range of readymade garments that are

knitted from high quality of polyester and cotton years. Garments are fabricated to

provide wearing comfort to the wearer along with spectrum of colorful & trendy

aura.

The company is a export oriented unit and exporting goods to South American

Countries viz. Belize, Chile, Netherland Antilles, EL Salvador, Panama, Botswana

& UAE, Armenia, Tajakistan, United States of America, Curacao and Uruguay.

India is a favorite destination for garments importers in the international market.

The Company’s product is well accepted in international market. The Company

has built a unique clientele list in T-Shirt business.

The company has also flourished its business in readymade garments by sale to

other major exporters thereby also diversifying its risk in export market and

increasing the customer base. The company is looking forward to explore more

international markets through deemed exports with the existing business and

capabilities.

Earlier company was enjoying a status of “Recognized Export House”, in the last

year this status has been up graded as “Export Trading House” by the office of

Jt. DGFT, Govt. of India.

Over the years, the company has been awarded Export Excellence awards by the

AEPC (Appeal Export Promotion Council), India- a body representing garment &

Export trade in India. The company has been conferred with the following

awards:-

Gold Award for Highest Export in the category of ‘Export of Ready Made

Garments made of Man Made Fibre’- FY 2011-12 & FY 2010-11

Gold ward for Highest Growth in Exports – FY 2009-10

Bronze Award for Highest Growth in Exports – FY 2008-09.

Products & Product Profile:

The company is engaged in manufacturing of knitted readymade garments e.g. T-

Shirt, Shirts, Lowers, Bermudas, Tops and Baby Suits etc. Currently our major

products include the following:

Product Description

Gents Wear T-shirts ranging from short sleeve to long sleeve, hood t-shirt, Sweat shirt, lowers, tracksuits, knitted shirt etc.

Kids Wear T-shirts, single jersey, interlocks, piques etc.

Ladies Wear Ladies T-shirts, Lower, Jerseys Piques, Single & Double Knit Jacquards, Drop Needle Lycra Tops/ ribs etc.

Infrastructure/ Capacity:

The company has two units to manufacture readymade garments. the company’s

main factory unit is at Village Noorpur Bet Ludhiana set up in the land area of

approx 16000 sq.yards and with covered area of 2,00,000 sq.ft. The company’s 2nd

unit is at Jassian Road which provides support to the main unit have covered area

of 25,000 sq.ft.

The company is one of leading manufacturing companies in its category of manufacturer Exporters in

Ludhiana. The company has installed following machines in their above two factories:-

Manufacturing activity No. of machines Capacity per day

Fabric knittingFabric processingCollar knittingGarment stitchingButton hole, stitch & EmbroideryPressing of garment

47038010506080

24 TPD24 TPD60000 Pc/ Day60000 Pc/ Day50000 Pc/ Day50000 Pc/ Day

The capacity mentioned above is flexible and dependent on the product weight and

complexities of design. The company has capacity to manufacture all types of

knitted garments and accordingly company can manufacture 60000 to 65000 Pcs of

Readymade Garments daily along with knitting capacity of 24 tons per day.

5. Brief Financial about the Company & Key Financial Ratios

Within a short span of five years, the turnover of the company has grown to Rs.570

crores in FY 2014 from Rs.109 crores in FY 2010. This shows the increasing

brand image and well acceptability of the products of the company launched in

various markets from time to time.

Sales

0

100

200

300

400

500

600

Rs in

cro

res

Sales 108.5 293.5 365.03 409.2 568.71

2010 2011 2012 2013 2014

6. Key Financial Indicators

Particulars 31.03.2012(Audited)

31.03.2013(Audited)

31.03.2014(Audited)

Revenue/ SalesDomestic SalesExport SalesEBIDTAIntreestDepreciationPBTPATEBIDTA%PAT%Equity Capital (Rs)Net WorthNet Working CapitalCurrent Ratio

365.0360.95

304.0816.859.751.046.065.314.611.458.4927.5813.901.17

409.20152.60256.6021.9312.091.108.746.025.361.4715.3859.5840.321.22

568.71268.17300.5428.2414.721.30

12.228.324.971.46

37.0093.9959.121.23

External Credit Rating:

The company has got its WC borrowing and debt rated from CRISIL for the aggregate bank debt of

Rs.180 crores and rating is as under:-

Facility Rated Rating Date of Rating

CC LimitPacking creditPost Shipment Credit

BB-/ StableA4+A4+

15.10.201315.10.201315.10.2013

COMPETITIVE STRENGTHS:

a. Strong Customer Relationship

The Company has strong customer based in the export as well as local market.

Over a period of time, our Company has built-up a track record for quality

products and timely delivery. Our Marketing and R&D team closely interacts with

the customers, understands their requirements and develops the products as per

their requirements. Our company has been able to retain customers and further

strengthen the relationship by providing them end-to-end solutions for their

requirements.

b. Capability to Manage Multiple and Large Orders

Large orders require capabilities to manage large workforce, complex sourcing,

production planning and ability to ensure timely delivery to the customer. Over

the years, our Company has developed the skills to manage multiple large orders

concurrently. Our company has also developed a diversified product range, which

has helped us to grow.

c. Experience and Qualified Management

The Promoters of the company are experienced and qualified. Further the

company has employed key professionals of Technical and Commercial

backgrounds to oversee the operations of the company. It has been only due to the

highly empathetic management style that our promoters have developed over the

years. Our company provides an environment that induces an employee as an

entrepreneur in his own work area thus our employees have been very happy

working with us and looks at promising long careers.

d. Quality Assurance

All products that leave the factory premise are inspected by the Quality Control

Department. Further, quality check is done at every stage of manufacturing to

ensure the adherence to desired specifications. Since, our company is dedicated

towards quality of products, processes and insputs; we get repetitive orders from

our buyers, as we are capable of meeting their quality standards, which enables

them to maintain their brand image in the market.

CHAPTER-2

OBJECTIVES OF STUDY

To Study the preparation of wages & salary under government laws of Rama Krishna

Knitters Pvt. Ltd..

To Study whether the Employees know about the Laws being followed by the company

for preparation of wages & salary.

To Study principles of pay fixation.

To study the employees satisfaction with wages &salary administration system in Rama

Krishna Knitters Pvt. Ltd..

CHAPTER-3

INTRODUCTION TO PERFORMANCE APPRAISAL

Appraisal of performance is widely used in society. Parents evaluate their

children, teachers evaluate their students and employees evaluate their employees. However,

formal evaluation of employees is believed to have been adopted for the First World War. At the

instant of Walter Dill Scott, the U.S Army adopted the Man to Man rating system for evaluating

military persona. During 1920-30 hourly-paid workers in industrial units were evaluated on the

basis of rating scores. This early appraisal system was called merit rating. In the early fifties,

performance appraisal technique began to be used for technical, professional and managerial

personnel. Since then tremendous changes have taken place in the concept, techniques and

philosophy of employee appraisal.

Once an employee is selected and trained for a job then management would like

to see how he performs his work. It helps in evaluating the performance of employees and in

assessing the hiring and training methods followed in an organization. The employees are

recruited with some objectives in mind, whether these have been achieved or not to be regularly

evaluated. Merit rating is a ‘process of evaluating an employee’s performance of a job in terms

of its requirement’. The rating of a man by another man is as old as mankind, but formal merit

rating systems are of relatively recent origin. Merit rating is also termed as Performance

Appraisal or employee Appraisal.

Understanding Performance Management

What is performance ?

Performance Management

Corporate Goals

Determine Individual Objectves Linked to Corporate Goals

Ensure Responsibility And

Accountability

Performance Appraisal

Performance Linked Increment/

Incentives/Rewards

Performance is synonymous with behavior, it is what people actually do.

Performance includes these action that are relevant to the organizational growth and can be

measured in the terms of each individuals proficiency (level of contribution ). Effectiveness

performance refers to the evaluation of results of performance that is beyond the influence or

control of the individual.

How is Performance managed?

Good performance by the employee creates a culture of excellence, which

benefits the organization in the long run. The activity includes evaluation of jobs and people

both , managing gender bias, career planning , and devising methods of employees satisfaction

etc. the efforts are to make to generate the individual’s aspirations with the objectives of the

organization . organization has to clear the way of career advancements for talented and

hardworking people. Fear of any kind from the minds of the employees should be removed so

that they best to their organization . Allow free flow of information .Communication network

should be designed in such a way no one should be allowed to become a hurdles. This enables he

managers to take correct decisions and that too quickly.

CONCEPT OF PERFORMANCE APPRAISAL

Performance Appraisal is the process of measuring quantitatively and

qualitatively employees past or present performance against the background of his expected role

performance, the background of his work environment, and about his future potential for an

organization. The evaluation of the performance and personality of each employee is done by his

immediate superior or some other person trained in the techniques of merit rating. Various rating

techniques are employed for comparing individual employees in a group in terms of personal

qualities or deficiencies and the requirements of their respective jobs.

“Performance Appraisal is the systematic evaluation of the individual with respect

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

Appraisal involves following steps-

1. Setting work standards.

2. Assessing the employee’s actual performance relative to this standard.

3. Providing feedback to the employee with the aim of motivating the person

Terminate deficiencies or to continue to perform above par.

FEATURES OF PERFORMANCE APPRAISAL

1. Performance appraisal is a systematic process consisting of a number of steps to be

followed for evaluating an employee’s strengths and weaknesses.

2. The appraisal is an ongoing and continuous process where the evaluations are arranged

periodically according to a definite plan. It is not a one shot deal.

3. The performance appraisal seeks to secure information necessary for making Objective

and correct decisions on employees.

4. It is a systematic and objective description of an employee’s strengths and weaknesses in

terms of the job.

5. Performance appraisal may be formal or informal. The formal system is more fair and

objective since it is carried out in a systematic manner using printed appraisal form

OBJECTIVES OF PERFORMANCE APPRAISAL

1. Work-Related Objectives

i) To assess the work of employees in relation to job requirements

ii) To improve efficiency.

iii) To help management in fixing employees according to their capacity, interest, aptitude

and qualifications.

iv) To carry out job evaluation.

2. Career Development Objectivesi) To assess the strong and weak points in the working of the employees and finding

remedies for weak points through training

ii) To determine career potential

iii) To plan promotions, transfers, lay offs etc. of the employees

iv) To plan career goals.

3. Communicationi) To provide feedback to employees so that they come to know where they stand and can

improve their job performance

ii) To clearly established goals i.e. what is expected of the employee in terms of

performance and future work assignments

iii) To provide coaching, counseling, career planning and motivation to employees

iv) To develop positive superior-subordinate relations and thereby reduce grievances.

4. Organizational Objectivesi) To serve as a basis for promotion or demotion

ii) To serve as a basis for wage and salary administration and considering pay increases

and increments

iii) To serve as a basis for planning suitable training and development

programmes.

NEED FOR PERFORMANCE APPRAISAL

Performance appraisals provide employees and managers with opportunities to

discuss areas in which employees excel and those in which employees need improvement.

Performance appraisals should be conducted on a regular basis, and they need not be directly

attached to promotion opportunities.

1. Personal Attention-During a performance appraisal review, a supervisor and an employee discuss the

employee's strengths and weaknesses. This gives the employee individual face time with the

supervisor and a chance to address personal concerns.

2. Feedback-Employees need to know when their job duties are being fulfilled and when there

are issues with their work performance. Managers should schedule this

communication on a regular basis.

3. Career Path-

Performance appraisals allow employees and supervisors to discuss goals that

must be met to advance within the company. This can include identifying skills that must be

acquired, areas in which one must improve, and educational courses that must be completed.

4. Employee Accountability-

When employees know there will be regularly scheduled evaluations, they realize

that they are accountable for their job performance.

5. Communicate Divisional and Company Goals-

Besides communicating employees' individual goals, employee appraisals provide

the opportunity for managers to explain organizational goals and the ways in which employees

can participate in the achievement of those goals.

BENEFITS OF PERFORMANCE APPRAISAL

1. An effective system of performance appraisal helps the supervisor to evaluate the

performance of his employees systematically and periodically, it helps in the placement

of the employees on the jobs for which they are best suited.

2. The results of performance appraisal may be used by the supervisor in constructively

guided the employees in the efficient performance of their jobs.

3. Performance appraisal provides the management an objective basis for discussing salary

increases and special increments of the staff.

4. Performance appraisal can used for transfer and promotions of employees, if the

performance of an employee is better than others, he can be recommended for promotion,

but if he is not doing well, he may be transferred to some other job for which he is best

suited.

5. Appraisals can be used to analyse the training and development needs and evaluating the

effectiveness of existing training programmes. Weaknesses of the employees revealed

through performance appraisals can be removed further training.

6. Performance appraisal facilitates human resource planning and career planning.

7. When achievements are recognized and rewarded on the basis of objective Performance

measures, there is improvement in work environment.

8. Performance appraisal provides an incentive to the employees to better their

performance in a bid to improve their rating over others.

9. Systematic appraisal of performance helps to develop confidence among employees. It

will prevent grievances, if the employees are conceived of the impartial basis of the

evaluation.

PERFORMANCE APPRAISAL PROCEDURE

I. The Performance Appraisal Form is to be completed for all non-union employees noted

on the list(s) sent to you by the Office of Human Resources. There is a form for exempt

and one for non-exempt employees and this information is on the list.

II. The Self-Evaluation Form is to be given to the employee for completion and returned to

the supervisor several days before the performance appraisal meeting. If the employee

does not wish to complete the form he/she is not required to do so. This form can be a

valuable communication tool during the performance appraisal meeting.

III. The Performance Appraisal Form must be completed, including the establishment of

goals and objectives, and reviewed with each employee at a formal performance appraisal

meeting. Forms without goals and objectives for next year will be returned and the

employee(s) will not be eligible for salary increase consideration until goals and

objectives are submitted.

IV. Each completed Performance Appraisal Form (excluding the Self-Evaluation Form) must

be signed by the employee and sent to your Vice President or Senior Staff member by the

due date. A copy should be kept for your files.

V. Complete the Performance Appraisal Form as follows:

1. Complete the entire form indicating the most appropriate performance factor

description. Review last year’s goals and objectives and indicate if they have been

met. If they were not met, indicate why. The goals and objectives section should be

reflected in the overall performance rating of the employee. Identify goals and

objectives for April 1, 2010 – March 31, 2011 upon which next year’s performance

will be based. New goals and objectives must be included or the form will be

returned to you. Check the box for the overall performance rating.

2. A rating of Outstanding requires a minimum one page summary as supporting

documentation.

3. If the employee’s performance is Needs Improvement, written action steps to improve

performance should be included and a follow up review should be performed within

six months.

Performance Appraisal Methods

1.Graphical rating scale method-A graphic rating scale method lists traits, (such as quality and reliability) and range of performance values (from unsatisfactory to outstanding) for each units.

Performance Appraisal-Employee name- ___________ Employee code- __________Department- __________

Reason for review ( ) Annual ( ) Promotion ( ) Unsatisfactory

Performance ( ) Merit ( ) OtherExample-

Quantity of - Unsatis-work Factory Poor Fair Average Good Excellent ___________________________________________________ 0 1 2 3 4 5 Job knowledge - ___________________________________________________ 0 1 2 3 4 5

2. Alternate Ranking Method In alternate ranking method employees are ranked from best to worst on a particular trait,

choosing highest then lowest, until all are ranked.

Steps involved in this method are-

1. All the employees, to be ranked are listed

2. The highest ranking employee’s name is put on line 1

3. Now the lowest ranking employee’s name put on line 10

4. Then the next highest ranking is put on line 2, the next lowest ranking on line 9

And so on until all names are on the scale.

Highest ranking employee

1. _________________

2. _________________

3. _________________

4. _________________

5. _________________ 6. _________________

7. _________________

8. _________________ 9. _________________ 10. ________________

3. Paired Comparison Method

In this method employees are ranked by making a chart of all possible pairs of the

employees for each trait and indicating which the better employee of the paired is. For the trait

“Quality of Work” Employee rated

Note-

+ means better than

- means worse than

In each column +’s are added up to get highest ranked employee.

4. Forced Distribution Method

Force distribution method is grading on a curve. In this method there is a

predetermine percentages of rates into performance categories.The main idea in forced

distribution method is to spread ratings in a number of grades. This method obviously eliminates

the room for subjective judgment on the part of the supervisors. Besides this the system is easy

to understand and administer. Forced distribution of rankings is feasible for a large group of

employees.

For example employees can be distributed as follows-

10% - POOR

20% - BELOW AVERAGE

40% - AVERAGE

20% - GOOD

10% - EXCELLENT

5. Check List Method

A check list is a list of statements that describes the characteristics and

performance of employees on the job. There are two types of check lists that can

be used:

a) Simple Check List – Under this method the supervisors are provided with printed forms

containing descriptive questions about the performance of employees.

The check list may contain such question:-

i) Is the employee hard working? Yes/No

ii) Does he follow instructions well? Yes/No

b) Forced Choice Checklist – In this checklist, 3 to 4 statement are given for each trait. The

main advantage of forced choice check list is that it has greater objectivity than most

other methods. A specimen of forced choice check list is as follow:

Regularity Most Least

i) Always regular

ii) Never regular

iii) Neither regular nor irregular.

6. Confidential ReportIn most of the government departments and public enterprises, performance

appraisal is done through annual confidential reports. These reports differ from department to

department and from level to level. The confidential report is written for a unit of one year and

relates to the performance, ability and character of the employee during that year. A very casual

attitude is found among raters while filling confidential reports of the employees working under

them. The report is not data based but subjective. No feedback is provided to the employee bring

appraised and therefore, its credibility is very low. The method focuses on evaluating rather than

developing the employee. The employee who is appraised never knows his weakness and the

opportunities available for overcoming them. In recent year, due to pressure from courts and

trade unions, the details of a negative confidential report are given to the appraiser.

7. Straight Ranking Method It is the simplest and old method of merit rating. Every employee is judged as a

whole without distinguishing the rates from his performance. A list is then prepared for ranking

the workers in order of their performance on the job so that an excellent employee is at the top

and the poor at the bottom. It permits comparison of all employees in any single rating group

regardless of the types of work. The difficult of this method is that it is very difficult to compare

persons on the Whole when they differ in qualities, attitude, etc. this method only tells us about

the standing of various persons and not the actual difference among them. We can only say who

is number 1, 2, 3 and so on but cannot say how much the person at number one is better than that

at number two. This method is suitable only when there are limited persons in an organization.

8. Critical Incident MethodThis method attempts to measure worker’s performance in terms of certain –

events or incidents that occur in the course of work. The assumption in this method is that the

performance of the employee on the happening of critical incidents determines his failure or

success. The supervisor keeps a record of critical incidents at different times and then rates him

on this basis. Examples of critical incidents are:

a) Refused to accept instructions with a detailed discussion.

b) Refused to accept instructions even when these were clear.

c) Increased his efficiency despite resentment from other workers.

d) Showed presence of mind in saving a worker when there was accidental fire.

e) Performed a difficult task even though it was outside his regular duties.

f) Displayed a courteous behaviour to a supplier.

g) He helped fellow employees in solving their problems.

9. Free Essay Method

Under free essay method, the supervisor writer a report about the employee which

is based on his assessment. The supervisor continuously watches the subordinates and writes his

assessment in the report. While preparing an essay on the employee, the rater generally consider

the following factors:

a) Job knowledge and potential of the employee

b) Employee’s relations with co-workers and supervisors

c) Employee’s traits and attitude

d) Employee’s understanding of the company’s programmes, policies, objectives etc.

e) Development needs for future etc.

Essay evaluation is a non-quantitative technique of appraisal. It provides a good

Deal of specific information about the employee and can reveal even more about the supervisor.

10. Group Appraisal Under the group appraisal method, employees are rated by an appraisal group,

consisting of their supervisor and three or four other persons who have some knowledge of their

performance. The supervisor explains to the group the nature of his subordinates duties. The

group then discusses the standards of performance for that job, the actual performance of the

employee and the causes of their particular level of performance and offers suggestions for future

improvements, if any. This method is devoid of personal bias, since appraisal is done by multiple

judges. Moreover, it is a very thorough and simple method. The only drawback is that this

method is very time consuming.

MODERN METHODS

1. MANAGEMENT BY OBJECTIVES(MBO):

Popularized by Peter Drucker in 1954 in his book called 'The Practice of Management'

the term “Management By Objective” can be simply defined as a participative goal-

setting process that enables the manager or supervisor to construct and communicate the

goals of the department to each subordinate. At the same time, the subordinate is able to

formulate personal goals and influence the department's goals.

Unique features and advantages of the MBO process

The basic principle behind Management by Objectives (MBO) is for employees to

have a clear understanding of the roles and responsibilities expected of them. They can then

understand how their activities relate to the achievement of the organization's goal. MBO also

places importance on fulfilling the personal goals of each employee.

Some of the important features and advantages of MBO are:

1. Motivation – Involving employees in the whole process of goal setting and increasing

employee empowerment. This increases employee job satisfaction and commitment.

http://en.wikipedia.org/wiki/Peter_Drucker

2. Better communication and Coordination – Frequent reviews and interactions between

superiors and subordinates helps to maintain harmonious relationships within the

organization and also to solve many problems.

3. Clarity of goals

4. Subordinates tend to have a higher commitment to objectives they set for themselves than

those imposed on them by another person.

5. Managers can ensure that objectives of the subordinates are linked to the organization's

objectives.

2. HUMAN RESOURCE ACCOUNTING METHOD:

Human resources are valuable assets for every organization. Human resource

accounting method tries to find the relative worth of these assets in the terms of money. In this

method the Performance appraisal of the employees is judged in terms of cost and contribution

of the employees.

The cost of employees include all the expenses incurred on them like their

compensation, recruitment and selection costs, induction and training costs etc whereas their

contribution includes the total value added (in monetary terms). The difference between the cost

and the contribution will be the performance of the employees. Ideally, the contribution of the

employees should be greater than the cost incurred on them.

Why a HRA method?

Improves management by analyzing investment in HR

Considers people as its asset

Attracts and retains qualified and able people

Profile the organization in financial terms.

The main objective of human resource accounting is to facilitate the human.

3. BEHAVIORALLY ANCHORED RATING SCALES (BARS):

http://appraisals.naukrihub.com/

BARS are rating scales whose scale points are defined by statements of effective

and ineffective behaviors. They are said to be behaviorally anchored in that the scales represent a

continuum of descriptive statements of behaviors ranging from least to most effective. An

evaluator must indicate which behavior on each scale best describes an employee's performance.

BARS differ from other rating scales in that scale points are specifically defined

behaviors. Also, BARS are constructed by the evaluators who use them. There are four steps in

the BARS construction process:

1. Listing of all the important dimensions of performance for a job or jobs

2. Collection of critical incidents of effective and ineffective behavior

3. Classification of effective and ineffective behaviors to appropriate performance

dimensions.

4. Assignment of numerical values to each behavior within each dimension (i.e., scaling

of behavioral anchors).

4. ASSESSMENT CENTRE:

It refers to a method to objectively observe and assess the people in action by

experts or HR professionals with the help of various assessment tools and instruments.

Assessment centers simulate the employee’s on the job environment and facilitate the

assessment of their on the job performance.

An assessment centre typically involves the use of methods like social/informal events, tests

and exercises, assignments being given to a group of employees to assess their competencies

and on the job behaviour and potential to take higher responsibilities in the future.

Generally, employees are given an assignment similar to the job they would be expected to

perform if promoted. The trained evaluators observe and evaluate employees as they perform

the assigned jobs and are evaluated on job related characteristics.

PROBLEMS IN APPRAISING PERFORMANCE

The performance appraisal program is susceptible to several problems

1. Halo effect

2. Central tendence

3. Leniency / Strictness

4. Similarity error

5. Miscellaneous Biases

6. Faulty assumptions

7. Compare / Contrast

1.

Halo effect

It is a tendency to evaluate a person on the basis of one trait of

characteristic. The appraiser judges a person on the strength of a

specific trait of and does not base his inference on his overall

performance.

2.

Central tendencyIf employees are assessed as being “about average” which is often

occur due to difficulty in collecting sufficient work performance

information.

3.Leniency / Strictness This problem occurs when the supervisor has a tendency to rate all

subordinates either high or low.

4.

Similarity error

This error arises from the mental make up of an evaluator. The

evaluator uses his own traits as a basis for assessing the employees.

5.

Miscellaneous Biases

Appraise personal characteristics such as age, race, gender, religion,

position can affect their rating which is often quite apart from each

rater.

6.

Faulty assumptions

There are faulty assumptions about the performance appraisal system

both by the superiors and the subordinates. These assumptions work

against the effectiveness of this system.

7. Compare / Contrast Comparing each employee against another in spite of well defined

standards of performance in one of the problem in appraising.

CHAPTER-4

RESEARCH METHODOLOGY

TYPE OF RESEARCH:

The research study is descriptive in nature. Descriptive research includes surveys

and fact-finding enquiries of different kinds. The major purpose of descriptive research is

descriptive of the state of the affairs as it exists in present.

TYPE OF DATA:

The core findings of the study are based on the information collected through

primary data and secondary data both.

PROCEDURE IN COLLECTION OF DATA:

The information was collected from the employees with the help of a structured

questionnaire. Different websites have also been consulted as a secondary source of information.

DESCRIPTION OF QUESTIONNAIRE:

A structured questionnaire was formed for the purpose of obtaining information

from the employees.

STATISTICAL TOOL:

Data collection through survey is analyzed with the help of simple %tabular

method that includes pie charts.

SAMPLING PLAN

SAMPLING UNIT:The employees of Rama Krishna Knitters Pvt. Ltd.

SAMPLE SIZE: 50 employees will be visited for the purpose of the study.

SAMPLING TECHNIQUE:In this study, the respondents are chosen through random sampling.

CHAPTER-5DATA ANALYSIS & INTERPRETATION

1. How long you have been working in this organization?

Options No. of Respondent %age

Less than 3 years 0 0

3-5 years 0 0

More than 5 years 50 100

INTERPRETATION:

The conclusion drawn after surveying 50 people in the company is that they have been in the

organisation for a period more than 5 years signifying their loyalty for the company.

2. How do you feel the working environment?


Excellent 10 20%

Good 20 40%

Satisfactory 20 40%

Not satisfactory 0 0%

INTERPRETATION:

Though no employee in the organisation was dissatisfied with their working environment a

larger group feels satisfied or good about it.

3. How secure do you feel in your job?


High secure 8 17%

Secure 42 83%

Insecure 0 0%

INTERPRETATION:

The study shows more than 80 % of employees feel secured about their jobs and more than 15 %

as highly secured, leaving behind no scope for any employee feeling insecured about loosing

their jobs.

4. Who conducts the performance appraisal?


Intermediate supervision 0 0%

Peer Appraisal 0 0%

Rating committees 0 0%

Self rating 30 60%

Appraisal by subordinates 20 40%

INTERPRETATION:

60% of the employees conduct performance appraisal on their own where as the other 40%

conduct it by their subordinates.

5. Do you have policy for assisting employees on personal issues that affect

their performance of work?


Yes 50 100%

No 0 0%

INTERPRETATION:

The company as per the study evaluates 100% of its employees on the field regularly.

6. Do you evaluate field employees on the regular basis?


Yes 35 70

No 15 30

Interpretation:

Questionnaire filled by different employees showed that 70% field employees

evaluate on the regular basis.

7. Which methods are used to appraise the performance?


Checklist 20 40%

Straight ranking 30 60%

Grading method 0 0%

Pair distribution 0 0%

INTERPRETATION:

Amongst different methods of Performance Appraisal the company uses straight ranking method

60% of the time and checklist method 40% of the time.

8. Is the performance appraisal help you to plan your work well?


Least helpful 10 20%

Somewhat helpful 0 0

Helpful 0 0

Most helpful 40 80%

INTERPRETATION:

Analysing the questioners filled by different employees of the company, it shows that only 20%

of the employees find the appraisal programs to be least helpful whereas 80% find it to be most

helpful when asked, “How helpful is your performance appraisal in planning your work?”

9. Does the system provide you are chance to communicate the support

you need from your subordinate to perform the job well?


Yes 50 100%

No 0 0

INTERPRETATION:

The questionnaire asked “Does the system provide you a chance to communicate the support you

need from your subordinate to perform the job well?” and everyone in the organization was

positive about it.

10. Performance Appraisal Criteria


Quantitative outcome criteria 0 0%

Qualitative outcome creteria 0 0%

Qualitative process creteria 20 40%

Quantitative process cretaria 0 0%

Both qualitative & quantiative process cretaria 30 60%

INTERPRETATION:

The performance appraisal criteria divided into two parts with a 60, 40 ratio determining 60% of

employees using both qualitative and quantitative process and another 40% with qualitative

process criteria. Ensuring that the company focuses more on quality of the product and the way

the quality is achieved rather than the quantity.

11. Which appraisal System is being employed in the company?


Assessment center 30 60%

MBO 20 40%

360 degree feed back 0 0%

Balance score card 0 0%

BARS 0 0%

INTERPRETATION:

Amongst the various traditional and modern ways of Appraisal system the organisation follows

MBO and Balance scorecard in a ratio of 40: 60.

12. Time of Appraisal


Monthly 20 40%

Quarterly 20 40%

Half yearly 10 20%

Annually 0 0%

Any time 0 0%

INTERPRETATION:

The questionnaires filled by different employees showed that 20% of the employees had an

appraisal half yearly, 40% quarterly and the remaining 40% in an annual basis, concluding that

different departments or different levels of employees had an appraisal during different times.

MANAGEMENT

13. Does the appraisal system provide a good communicating between the top

management plan and business goals to staff below?


YES 50 100%

NO 0 0%

INTERPRETATION:

Analysing the data gathered we conclude that 100% of the management feels that the appraisal

system provides a good communication between the top management plans and the business

goals to its subordinates.

14. What do you think is the effect of poor appraisal system?


Demotivation 30 60%

Look for new job 0 0%

Lack of interest in work 20 40%

INTERPRETATION:

A larger group of employees agree that a good appraisal program plays an important role for a

motivated and productive job.

15. Does it give insight to appraise regarding his strength or weakness?


Yes 10 20%

No 40 80%

INTERPRETATION:

A lot of companies follow the culture of giving a feedback to its employees after an appraisal

program to make sure there is transparency in their relation and at the same time the employee is

aware of his strengths and weaknesses. As per the analysis made in this organisation, only 20%

of the appraises agreed that they had a true insight about themselves.

16. Do you given an opportunity to the appraise or rate own performance?


Yes 40 80%

No 10 20%

INTERPRETATION:

Self assessment is the best way for anyone to judge what his potential is. This organisation

follows the system of giving its employees the opportunity of indulging into self assessment

programs to rate their own performances as much as 80%.

17. Do you encourage your employees to give their opinion and suggestions

how they can improve their performance?


Yes 50 100%

No 0 0%

INTERPRETATION:

Not all companies encourage their employees to give their opinion about how they can improve

their performance. But this organisation focuses on employee interest and engagement for a

better performance.

18. How do you rate your overall performance the last 1 year?


Good 0 0%

Fair 30 60%

Poor 20 40%

INTERPRETATION:

As per the management, the overall performance regarding the performance appraisal in the last

year has been decently fair.

CHAPTER-6

FINDING AND CONCLUSION

The conclusion drawn after surveying 50 people in the company is that they have been in

the organisation for a period more than 5 years signifying their loyalty for the company.

Though no employee in the organisation was dissatisfied with their working environment

a larger group feels satisfied or good about it.

The study shows more than 80 % of employees feel secured about their jobs and more

than 15 % as highly secured, leaving behind no scope for any employee feeling insecured

about loosing their jobs.

60% of the employees conduct performance appraisal on their own where as the other

40% conduct it by their subordinates.

The company as per the study evaluates 100% of its employees on the field regularly.

Questionnaire filled by different employees showed that 70% field employees evaluate

on the regular basis.

Amongst different methods of Performance Appraisal the company uses straight ranking

method 60% of the time and checklist method 40% of the time.

Analysing the questioners filled by different employees of the company, it shows that

only 20% of the employees find the appraisal programs to be least helpful whereas 80%

find it to be most helpful when asked, “How helpful is your performance appraisal in

planning your work?” The questionnaire asked “Does the system provide you a chance to communicate the

support you need from your subordinate to perform the job well?” and everyone in the

organisation was positive about it.

The performance appraisal criteria divided into two parts with a 60, 40 ratio determining

60% of employees using both qualitative and quantitative process and another 40% with

qualitative process criteria. Ensuring that the company focuses more on quality of the

product and the way the quality is achieved rather than the quantity.

Amongst the various traditional and modern ways of Appraisal system the organisation

follows MBO and Balance scorecard in a ratio of 40: 60.

The questionnaires filled by different employees showed that 20% of the employees had

an appraisal half yearly, 40% quarterly and the remaining 40% in an annual basis,

concluding that different departments or different levels of employees had an appraisal

during different times.

Analysing the data gathered we conclude that 100% of the management feels that the

appraisal system provides a good communication between the top management plans and

the business goals to its subordinates.

A larger group of employees agree that a good appraisal program plays an important role

for a motivated and productive job.

A lot of companies follow the culture of giving a feedback to its employees after an

appraisal program to make sure there is transparency in their relation and at the same

time the employee is aware of his strengths and weaknesses. As per the analysis made in

this organisation, only 20% of the appraises agreed that they had a true insight about

themselves.

Self assessment is the best way for anyone to judge what his potential is. This

organisation follows the system of giving its employees the opportunity of indulging into

self assessment programs to rate their own performances as much as 80%.

Not all companies encourage their employees to give their opinion about how they can

improve their performance. But this organisation focuses on employee interest and

engagement for a better performance.

As per the management, the overall performance regarding the performance appraisal in

the last year has been decently fair.

CHAPTER-7

LIMITATIONS

The following are the limitation faced by me during the course of the study:

The sample consisted only of employees in the day shift. Employees of the night shift

were not considered for the purpose of study.

There is no concrete basis to prove the response given is the true measure of the opinion

of the all the employees as a whole.

Convenient sampling was used as the mode of conducting the research.

The questionnaire contained mostly multiple- choice questions:

Many respondents may not have given a proper thought before answering the questions.

The response of the respondents may not be accurate thinking that the management might

misuse the data.

Sensitive company information cannot be displayed in the project report.

Most respondents might be influenced by their peers in answering the questions.

BIBLIOGRAPHY

BOOKS

1. Human Resource Management - Shashi k. Gupta,Rosy Joshi

2. Human Resource Management - C.B. Gupta

WEBSITES

www.google.comwww.ramakrishnapvtltd.com

QUESTIONNAIRE Name : _____________________________ Age : _____________________________

Occupation : _____________________________

Gender : _____________________________

1. How long you have been working in this organization?a. Less than 3 b. 3-5 years c. more than 5 years

2. How do you feel the working environment?a. Excellent b. Good c. Satisfactory d. Not Satisfactory

3. How secure do you feel in your job?a. High Secure b. Secure c. Insecure

4. Who conducts the performance appraisal?a. Intermediate Supervisionb. Peer Appraisalc. Rating committeesd. Self-ratinge. Appraisal by subordinates

5. Do you have policy for assisting employees on personal issues that affect their performance of work?a. Yes b. No

6. Do you evaluate field employees on the regular basis?a. Yes b. No

7. Which methods are used to appraise the performing?a. Check list b. Straight ranking c. Grading method d. Pair

distribution

8. Is the performance appraisal help you to plan your work well?

a. Least helpful b. Somewhat helpful c. Helpful d. Most helpful

9. Does the system provide you a chance to communicate the support you need from your subordinate to perform the job well.?a. Yes b. No

10. Performance Appraisal Criteria

a. Quantitative outcome criteria b. Qualitative process criteriac. Quantitative process criteria d. Qualitative process criteriae. Both

11. Which appraisal system is being employed in the company?a. Assessment centreb. MBOc. BARSd. 360 degree feedbacke. Balance scorecard

12. Timing of appraisal.a. Monthlyb. Quarterlyc. Half yearlyd. Annual e. Anytime

(For Management)13. Does the appraisal system provide a good communication between the top management

plans and business goals to staff below ?a. Yes b. no

14. What do you think is the effect of the poor appraisal system?

a. De-Motivationb. Look for new jobc. Lack of interest in work

15. Does it give insight to appraise regarding his strength or weakness?a. Yes b. No

16. Do you give an opportunity to your employees to appraise or rate their own performance?a. Yes b. No

17. Do you encourage your employee to give their opinion or suggestion how they can improve their performance?a. Yes b. No

18. How do rate your overall performance in the last one year ?a. Good b. fair c. poor

SUMMER TRAINING REPORT ON

PERFORMANCE APPRAISAL UNDERTAKEN

IN

RAMA KRISHNA KNITTER PVT. LTD.

Submitted to Panjab University Chandigarh in partial fulfillment for the requirement

of the degree ofMASTER OF COMMERCE

Submitted to: Submitted by:Ms. Preeti Rajni Nagpal(Assistant Professor M.Com (2nd Sem)in Commerce) Roll No.6110

S.D.P. COLLEGE FOR WOMENLUDHIANA

ACKNOWLEDGEMENT

It is indeed a great pleasure and privilege to be able to acknowledge

the generous assistance rendered to me by various intellectuals in the

successful completion of this project work.

No human endeavour can be accomplished without the constant

guidance and support. I required immense help and guidance at every step

during project work. I heartily thankful to Managing Directors, Mr. Naresh

Kumar Gupta and Mrs. Shallu Gupta for their support

As student of SDP College for Women, I would also like to thank the

Ms. Preeti Commerce Incharge and Head of the Department of Mrs. Neel

Kamal Mam who intermediated with the company to allow me have my

training with them.

I am deeply indebted to you all.

Rajni Nagpal

DECLARATION

I Rajni Nagpal student of M.Com from SDP College for Women affiliated to

Panjab University, Chandigarh hereby declare that all the information, facts and

findings furnished in this report are based on my indigenous work and are original

in nature.

Rajni Nagpal

PREFACE

I feel delighted to present my training report on “PREFORMANCE APPRAISAL”

is a matter of honour and pride for me that I got chance to undergo my training in

Rama Krishna Knitter Pvt. Ltd. During this period of eight weeks, I got familiar

with real conditions of the organization and especially the work culture of such a

big and prestigious organization. I have the project “PERFORMANCE

APPRAISAL” so the area for me was The Human Resource Department of the

organization.

The first task was me to know about the concept on which my Report is based.

Then I have to set the criteria on the basis of which the above concept was

valued. The factor on the basis of which the research has been done, analyzed,

evaluated and then presented.

Hence this project has been completed in eight weeks of time. As the time was

limited so there is possibility that some matters might not be taken in to

consideration but every effort has been from my side to include every necessary

parameters and include whole information

CONTENTS

Chapter No. Topics Page No.

1. Company Profile 1-6

2. Objectives of the study 7

3. Introduction to Performance Appraisal 8-26

4. Research Methodology 27-28

5. Data analysis and interpretation 29-46

6. Findings and conclusion 47-48

7. Limitations 49

Bibliography 50

Questionnaire 51-52

Documents

Performance Appraisal (Rama Krishna Knitter Pvt. Ltd) Final