A study on

“PERFORMANCE APPRAISAL”
With Reference to

COROMANDEL FERTILEZERS LIMITED

KAKINADA
A project report submitted to Andhra University, Visakhapatnam
In partial fulfillment for the award of the degree

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

BAILAPUDI RAMA LAKSHMI

M.B.A (final)
Reg.no: 2085410018

UNDER THE ESTEEMED GUIDANCE OF

Mr. .RAMANA MURTHY Mr.AKSHAYA
Assist Professor KASYAP

MBA.

Dy.Manager (HR)
C.F.L
 CERTIFICATE

This is to certify that the project entitled

“PERFORMANCE APPRAISAL” is the confide record of work done during the
period 2008-10 in partial fulfillment of the requirement for the award of the
Degree of MASTER OF BUSINESS ADMINISTRATION in A U M S N P G
CENTER, KAKINADA.

(B.RAMA LAKSHMI)
 DECLARATION
I hereby declare that this project report entitled
“PERFORMANCE APPRAISAL” with reference to “COROMANDAL
FERTILIZERS” submitted by me in partial fulfillment to Human Resources
Management Department of H.R. H.R.M. Programme Andhra University
(Visakhapatnam) is a genuine and bonafide work done, and it is not
previously submitted by me for the award of any degree or diploma in any
other institute or university.

Place: Kakinada, Signature

Date:.
(B.RAMA LAKSHMI)
 ACKNOWLEDGEMENT

I acknowledge the following distinguished personalities who graciously allowed me to

carry out this project work successfully.

I am also thankful to all other members of the staff for their kind cooperation in this
behalf. Mainly I am very much thankful to Mr.KUBERUDU, M.B.A, and Head of the
department of management studies.

I am highly thankful to Mr.RAMANA MURTHI, M.B.A Faculty in management studies

and also project guide, for her valuable advices and encouragement. Iexpress my
deep sense of gratitude to Mr.Prem Kumar & throughout the course.Mr. Akshaya
Kashyap for their kind help and valuable suggestions in preparing this project and also
to office staff members.

I also express my sincere thanks to the entire faculty members of AU PG

CENTER,KAKINADA for this advice in giving a proper shape to my study.

Date: (B.RAMA LAKSHMI)

Place : Regd.no. 2085410018

 CONTENTS

CHAPTER-1 INTERDUCTION

CHAPTER-2 INDUSTRY PROFILE

CHAPTER-3 COMPANY PROFILE

CHAPTER-4 THEORITICAL ANALYSIS

CHAPTER-5 DATA ANALYSIS

CHAPTER-6 FINDINGS

SUGGESTIONS

CONCLUSION

BIBLIOGRAPHY
INTRODUCTION
TO
PERFORMANCE
APPRAISAL
CHAPTER-1
INTRODUCTION TO THE STUDY: -

The history of performance appraisal is quite brief. Its roots in the early 20 th Century

can be traced to Taylor’s pioneering time and motion studies. But this is nots very helpful, for the

same may be said about almost everything in the field of modern human resource management.

As a distinct and formal management used in evaluation of work performance

appraisal really dates from the time of the Second World War –not more than sixty years ago.

In the absence of carefully structured system of appraisal, people will tend to judge

the performance of the others, including subordinates, naturally, informally and arbitrarily. With out a

structured appraisal system, there is a little chance of ensuring that the judgment made will be lawful,

fair, defensible and accurate.

The human inclination to judge can create serious motivational, ethical and legal

problems in the work place. Performance appraisal system began as simple methods of justification.

That is appraisal was used to decide whether or not the salary or wage of an individual employee was

justified.
 The process was firmly linked to material outcomes. If an employee’s performance

were found to be less than ideal, cut in pay would fallow. On other hand, if their performance is better

than supervisor’s expected, then pay raise would be follow. As a result, the traditional emphasis on

reward outcomes was progressively rejected.

In 1950’s in United States of America, the potential usefulness of appraisal as a

tool for motivation and development was gradually recognized. The general model of performance

appraisal as it is known today, began from that time. Performance appraisal has been traditionally

connected to rewards and punishments in the organization.

Concept of Performance Appraisal:

Performance Appraisal can be defined as the process of evaluating the

performance of an employee and communicating the results of the evaluation to him for the purpose

of rewarding or developing the employee. According to Michael Armstrong, “Performance Appraisal is

formal assessment and rating of individual by their managers at usually an annual review meetings”.

An employee in his job can define performance as the degree of

accomplishment of tasks. In some organization, it is the measure of results achieved and targets

accomplished where as in others. It is a measure of employee efforts and behaviour. However, most

organization uses both efforts and results. Performance Appraisal is also termed as Performance

review, annual review or annual appraisal.

 The dictionary meaning of the verb is “to fix a price” or “to value an object or

thing”. The term Performance Appraisal is concerned with the process of valuing an employee’s worth

to an organization, with a view to increasing it. Hence, most appraisal systems are linked to reward

systems .The commitment of the management and acceptance by the employees determines the

success of an appraisal system in any organization. It is also important that the appraisal system

matches the organizational culture. For example, a 360-degree feedback system would not deliver

results if implemented in a traditional organization with rigid hierarchies.

Modern Appraisal:

Performance appraisal may be defined as a structured formal interaction between

a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-

annual), in which the work performance of the subordinate is examined and discussed, with a view to

identifying weaknesses and strengths as well as opportunities for improvement and skills

development.

Monitoring and managing the performance of the individual employee in the

organization manage the performance of an organization. The objectives and goals of individual

performance are determined based on the objectives and goals of the organization. Hence, the

successful performance of an organization is a culmination of individual performance and

contributions. Performance Appraisal management is a critical and sometimes controversial aspect of

organizational management.
 The appraising results are used to identifying the better performing employees

who should get the majority of available merit pay increases, bonuses, and promotions.

Performance Appraisal has been traditionally connected to rewards and

punishments in the organization. In recent times, however the concept of developing employees

based on appraisal has gained popularity. While a system of Performance Appraisal can be very

effective and productive in the organizational context, the problems in the appraisal are related to its

application and implementation. It can therefore be said that a well – designed and well –

implemented Performance Appraisal system adds value to the organization.

Link to rewards:

Recent research (Bannister&Balkin in 1990) has reported that appraises seem

to have greater acceptance of the appraisal process, and feel most satisfied with it , when the process

is directly linked to rewards . Such findings are serious challenges to those who feel that appraisal

results and reward outcomes must be strictly isolated from each other.

There is a group for reward evaluation of employees for reward purposes and

frank communication with them about their performance, are part of the basic responsibilities of

management. The practice of not discussing reward issues while appraising performance is, say critics,

based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice of

having separate wage and salary reviews, in which merit rises and supervisors and managers decide

bonus arbitrarily, and often secretly.

Need for the study:

Performance Appraisal is essential to understand and improve. The appraisal

should be conducted in any organization to know the employees. Because employee’s promotion,

salary and wages increments, are decided on the basis of performance of the employee. If the

performance of the employees is less than the expected performance by the supervisor’s then

training will be provided to the employees. Otherwise if the employee’s performance equals the

expected supervisor’s performance then, some rewards will be given to the employees.

The employee’s performance can be known through HRD. Infact Performance

Appraisal was useful to decide upon employees promotion /transfer salary determine and the like.

Objectives:

Performance Appraisal system facilitates optimization of employee performance

and also helps in identifying areas for development. It is also useful for taking administrative decisions

relating to payment of incentives, promotion etc.,

1. Setting targets and goals as performance standards.

2. To study about career advancement.

3. To conform the services of probation employees.

4. To asses or identifying the training and development needs.

5. To prevent grievances and indisciplinary activities.

6. Provide information, which helps to counsel the subordinates.

7. Performance is linked to payment of salary and wages.

8. To evaluate the Performance system and offer suggestions for effective implementation.

9. To evaluate Performance Appraisal impact on the employee growth and development.

10. To improving performance:

Once the strengths and weaknesses are identified, the employee can be encouraged

to overcome his weaknesses and leverage his strengths to optimize his performance

METHODOLOGY :

Systematic procedure of collecting information in order to analyze and verify the

phenomenon. All the data required for completion of this study has been collected from both primary

and secondary sources.

Primary sources of data :

The primary sources of data required for the study was collected by the personal

interaction with the employees of the GLPIPL of Kondapalli in the area of Human Resource

Development and administrative departments, Questionnaire, Observation/Interviews.

Secondary sources of data:

 Secondary data that has been collected from records, magazines and websites.
 Referring standard texts and referred books collected some of the information regarding
theoretical aspects.
  Method- to assess the performance of he company method of observation of the work in HR
department in followed.

Limitations of the study:

Every study is conducted under certain limitations, which are discussed below.

1.Found difficulty when respondents refused to answer some of the questions because of fear that

the information may be passed to organization.

2.Non Availability and accessibility of resources.

3. Some sections of the respondents have not shown interest in answering questions.

Limitations of time:

The which was available for research ,was only 60days, which was not sufficient to
collect more information or details of the company in the HR department.
INDUSTRIAL
PROFILE
(CHAPTER-2)
 INDUSTRY PROFILE

INTRODUCTION TO FERTILIZERS INDUSTRY:

Fertilizers refer to any materials, which supplies nutrients to plants infields, which can be readily absorbed
by them. Since the essential physiological attribute of seeds is their ability to Convert a great duel of
nutrients into grain. The spread of this variety lead for greater consumption of fertilizers simultaneously
with increasing demographic pressure on the agricultural productivity has assumed more importance. This
also contributed to the raising demand for fertilizers. The fertilizers, which are most widely used, are
classified as under basing the nutrients Available. The most widely nutrients are nitrogen, phosphorus and
potash.

 Straight nitrogenous fertilizers (UREA, A.S, CAN)

 Straight phosphoric fertilizers (SSP, ROCK, PHO)
 NP fertilizers (DAP, 20:20:0, 28:28:0)
 Straight potash fertilizers (MOP, SOP)
 NPK fertilizers (NPK, 17:17:17 etc)
 Other fertilizers (ZS etc).

Consequently fertilizers have become a key agricultural input so that the existence of Domestic fertilizer
industry is crucial to ensure the regular supply of fertilizers and attain goals Self-sufficiency and food
Security Accordingly Government policy has also encouraged the Industry by giving several benefits. India
has made great studies in the development of fertilizer industry and ranks as the fourth largest producer
in the World during 1991-92.

Consumption of fertilizers has gone up marginally to 12 million tones in 1991-1992. On the

Recommendations of Joint Parliamentary Committee on fertilizer pricing and in order to encourage
indigenous manufactures of die-ammonium phosphate to Compete with the imported D.A.P. The Customs
Duty on import of phosphoric acid and ammonia was abolished.

Need of fertilizers:

The primary sector agriculture plays a dominant role in our Indian economy. Nearly 70.6% of population
depends on agriculture for their livelihood. The agricultural sector Contributes 30% of National Income
and 10% of the earth’s surface area is used to grow Agricultural crops now. This is in past nearly all that
can be utilized for the Purpose while the planets population is increasing continually and even greater
quantities of food is required to feed obviously, since the cultivated area cannot be expanded to any
Considerate degree, the only way to supply the needed nutrition is to raise soil fertility.

Fertilizers are mined commercial by products, which contain one or more essential plant Nutrients from a
material to the quantity of fertilizers it should contain nutrients in appreciable Amount and in readily.

In addition, a fertilizer just like any other item should not contain or produce any Substance, which is toxic
to the soil, plants or human being above permissible limits. Many countries Including India has laws as to
what can or cannot be labeled as fertilizers.

Fertilizers are used for improving soil fertility so that it can support Larger invests. Fertilizers represent the
most common currently used by farmers to deposited Plant nutrients into their soil to ensure that
adequate nutrients are available to feed the crop. Fertilizers have played a key role in our much towards
achieving self-sufficiency in food grains Production while we have achieved a great deal towards self
reliance in fertilizers and food that Future is more challenging than was in the past.

India needs about 1 million tones incremental fertilizer nutrient to us per annum in the 90,s to feed our
growing population. The incentive orientation of the administrated pricing system Linked to efficiency had
not only attracted fresh investment but also encouraged the existing Units to improve operational
efficiency and overall better management of resources. The Fertilizers consumption in India has increased
many folds during last two decades most of it is being applied manually; in regard low fertilizer use
efficiency crop production in India has undergone a reasonable change in last 25 years. Modern
agricultural is high energy dependent In addition; this energy input is predominantly based on fossil fuels.

Fertilizers accounts for 50% of total commercial energy input used in modern India Agriculture. The advent
of chemical fertilizers has helped making in solving one of the most Challenging tasks of food production
and sustaining soil fertility. Our country’s requirements of Fertilizers or continuously on the increasing year
after year. Fertilizer use has increase from 4.6k.g/ha in 1965-66 to 50kg/ha in 1984 -85 in India total
fertilizer consumption (N P K) for the Country exceeded 8.72 million tones. The number of farm holding
using fertilizers is above 65%. If remaining farmers are also motivated to come with in the fold of adopters
and fertilizers Use is increased to recommended level; the fertilizers replishment will certainly go much
higher.

Commercial fertilizers are used in modern agriculture to correct known plant nutrient Deficiencies, to
provide high levels of nutrition to maintain optimum soil fertility conditions In addition, to improve crop
quality. In essence, fertilizers are used to make certain that soil fertility is not a liking factor in crop
production. The major factors influencing the selection of the rate And placement of fertilizer are the crop
characteristics and climate especially moisture supply, Yield goal and the cost of fertilizer in relation to the
sale price of the crop.

AGRICULTURE IN INDIA:

The growth of Indian economy is based on food grains consumption it is estimated that India will need 235
million tonnes of food grain by 2000 A.D. During the 1980-81 and 1990-91 Food grain production
increased by about 40 million tonnes over the next 10 years period this has to be increased by about 60
million tonnes, which are, needed a challenging task. Due to population Explosion in India, the net per
capital availability of cultivated land that was just 0.3 hectares in 1950 is reduced to less than 0.14 hectare
by turn of the century, during the past three decades 1960-61 to 1990-91 the total food grain production
increased by about 90 million tonnes of this 90%increase in the production of food grains and has been a
marginal increase in other Commodities further the crops growth is nearly 70% of country’s rain fed areas.
These areas Contributed to production of more than 40% of food grains, 80% of Maize, 90% of pellet and
Sorghum. About 95% of pales and 75% of oil seeds are also grown in these areas.

Nearly 56% of rice is grown in high rainfall areas without supplementary irrigation, similarly, 70% of cotton
and almost whole jute and menthe are grown under rain fed conditions. The average annual growth in
agriculture production during the 8th five-year plan has Addressed, itself to meet due challenge for
agriculture production, agriculture being the most Vital sector of the economy. The strategy for agriculture
Development in the 8th plan aims not Agriculture commodities for export to increase the income level of
the former. The existence of a domestic fertilizers industry is crucial to ensure the regulars supply of
fertilizers and action goals of sufficiency and food security, as fertilizers have become a key agricultural
input .accordingly government policy has also encouraged the industry by giving several benefit India
ranks as the 4th largest producer in the world during 1991-92 as a result of great studies made in the
development of fertilizers industry.

Consumption of fertilizers has gone up marginally to 12 million tones. In 1991-92 on the recommendations
of joint parliamentary committee on fertilizer pricing, potassium Fertilizers had with drawn. In order to
encourage indigenous manufacturers of DI- Ammonium Phosphate to compete with the improved dap the
customs duty on import of Phosphoric acid and Ammonia was abolished. The fertilizers industry in the
core sectors of the economy and rightly, since it is one of the major industries, which provides vital input
for agriculture growth i.e.; fertilizers. The Crucial role and importance of fertilizers have now been from
levy of custom duty. This will have a significant in the cost of production of fertilizers.
 Origin and Development of Fertilizers Industry in India:

The first plant for production of nitrogenous fertilizer was built in 1940, in small capacity which argument
with production of about 50,000 per annum .nitrogen in the form ammonium soleplate 1951 in the first
public sector fertilizer plant in SINDRI since then, the government of India taken the idea to built a
fertilizer plant at every state of the country. The real Expansion of the industry took place in 1960’s and
since then it has been expanded at rapid rate in public, private or joint sector to meet growing demand for
fertilizer, both nitrogenous and phosphoric. The farmer always wanted the fertilizers at low format price.
The procedures always wanted increase the next factory price. In 1977, the Indian government took a
decisive step towards food sufficiency, .the arrived that the best way to increase the fertilizer consumption
and through that food grain, production by keeping fertilizer prices affordable for the farmer. Since
producer would not be willing to sell at that price the government made good differential by paying them
a subsidy.

The Government fixes two prices:

 The price at which the manufacturer should sell fertilizers to farmers. The price fixed at level
affordable to the farmers and is uniform for all manufacturers.
 A fair price at which the manufacturer ought to have received from farmer .the price is based
on prescribed efficiency norms in regard to capacity utilization.
Consumption of raw materials and usage of utilities differ with every plant thus each plant would have
different retention price is so designed that often covers and the mandatory cost the company that
operated at 90% would earn a 12% post tax return or net worth . A unit operator at higher operating rates
would benefits by way of enhanced recovery of fixed operating as also capital related charges. The
government remembers difference between the retention price and the government reimburses the
selling price to the manufacturer as subsidy .The cost of transporting the material form the factory to the
consumption point it is also reimbursable to the producer as equated freight.

The Retention-Pricing Scheme (RPS) was first introduced for Nitrogenous Fertilizers in1977, for phosphoric
fertilizers other than Single Super Phosphate (SSP) in1979, and for SSP in 1982. In the Same year imports
of DAP were canalized through MMTC in order to project the local marketed by 1991.The spiriting
expenditure on Fertilizers as fertilizer subsidy have led to the widening of the Budgetary deficit. The Rao
government then on a tough ride towards economic liberalization, was Under Pressure to knock of
fertilizers subsidies, which as snowballed from Rs.25 core in Fiscal 1978 to Rs.3730 core in fiscal 1991.

In July 1991,3 nitrogenous fertilizers namely ammonium Sulphate (As) Calcium ammonium Nitrate (CAN)
and ammonium chloride (ACP) were Decontrolled while the selling price of all other fertilizers were raised
by 40%. In The din of the political notice that followed, this was reduced to 30%, with small and marginal
formers fully exempted from the like. The exception Abandoned soon. In August 1991 the government
tracked at the nitrogenous segment by putting as, CAN and ACI again under control, reintroduced subsidy,
decontrolling phosphoric and potash Fertilizers, jettisoned the retention pricing and subsidy scheme and
declared DAP. The decontrol sent the price of phosphoric fertilizer very high this led to a sharp fall in the
Consumption of the fertilizers. To partially compensate the increase the government got into the Act. If
introduced a subsidy have Rs.500, to Rs.800, per ton on their complex fertilizers. The idea was that there
would be corresponding reduction in the selling price of these fertilizers. Later it made certain smart
concessions like, it removed customs duty on imported phosphoric acid, allowed import of raw materials
for productions of phosphoric fertilizers.

DAP units in India with annual capacity of production.

Import of DAP:

From countries: - Jordan, Germany, Canada, Rumania, U.K, Japan, U.S.A, Norway, Saudi Arabia, Philippines,
Mexico, Former, U.S.S.R and others. During the period 1981-82 it was 375 cores where the year 1990-91 it
was increased to 4800 Cores. Some of the reasons for increase are agricultural growth, Increase in cost of
Production consumption of fertilizers etc.

The joint parliamentary committee reports 1991 suggested to do control phosphoric and Phosphate
Fertilizers in order to reduce the subsidy burden to the Government, accordingly the same with effect
from 24th of August 1992.
 Major Fertilizer Consuming Countries:

(In million metric tons, years ending June 30*)

Nitrogen

COUNTRY 2003-04 2004-05 2005-06 2006-07 2007-08

China 23.0 22.9 24.1 22.1 22.5

India 11.0 11.4 11.6 10.9 11.3

United States 11.2 11.3 11.2 10.5 10.9

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 States 4.2 3.9 3.9 3.9 4.20

Brazil 2.0 2.0 2.0 2.3 2.5

Australia 1.1 1.0 1.1 1.1 1.2

Potash

United States 4.8 4.5 4.5 4.5 4.5

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

 Major Fertilizer Producing Countries:

(Million metric tons, years ending June 30*)

COUNTRY 2003-04 2004-05 2005-06 2006-07 2007-08

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 Federation 4.1 4.1 5.0 5.4 5.5

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 Federation 1.9 1.7 2.0 2.3 2.4

Brazil 1.4 1.4 1.4 1.5 1.4

Potash

Canada 9.0 9.2 8.2 9.2 8.2

Russian Federation 3.4 3.5 4.0 3.7 4.3

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

COMPANY
PROFILE
CHAPTER-3
 COMPANY PROFILE

Introduction to CFL:

The Government of Andhra Pradesh in its endeavors to serve the farming community set up of a DI-
Ammonium Phosphate (DAP) plant in the state.

The Government of A.P entered into a joint venture partnership with the World’s largest Producer
of fertilizers in the co-operative sector viz. Indian Farmers Fertilizers Co-operative ltd(IFFCO) in pursuance
there of it was agreed, between the chief promoter the government of A.P and the promoter IFFCO, that
while the farmer world subscribe to 25.88% of the equity the latter would subscribe to 24.90% the
balance 49.22% to be offered for public subscription through an open after.

Then the phosphoric fertilizer project of GODAVARI FERTILISERS& CHEMICALS LTD. (GFCL), located At
KAKINADA in The East coast of India. Growth projection of consumption of fertilizers indicates the need for
several plants for production of phosphoric fertilizers. The DAP plant of CFL is one of the planned
phosphoric unities.

GODAVARI FERTILIZERS LTD.(GFCL), was incorporated on 17 th December, 1981 with its registered Office at
SECUNDERABAD. T he company become public limited on 31 st August 1984.It was Further agreed to set
up the plant at Kakinada in East Godavari District with initial outlay of Rs.114 cores and a production
capacity of Rs/- 3 Lakhs MTS per annum.

G.F.C.L became part of the MURUGAPPA GROUP in July 2003 after COROMANDEL FERTILIZERS LTD
acquired the 26%of stake of Government of A.P in the process of Disinvestment. IFFCO, the other major
shareholders and co-promoter of the company divested its Share holding in favour of C.F.L on 12 th
April2007, with this G.F.C.L has become a subsidiary of C.F.L, which holds 74.92% of the share capital. With
the establish GFCL is now COROMANDEL FERTILISERS LIMITED, KAKINADA.
MISSION: To enhance the prosperity of farmer through the supply of quality farm Inputs and related
services to ensure value for money.

VISION: The vision of CFL has been “To be the leader in Phosphoric Fertilizers Industry & Producing High
Quality Fertilizers at Low Cost of giving Satisfaction to all Stake Holders”.

PHILOSOPHY: “The fundamental principle of economic activity is that no man you transact with will lose;
then you shall not.” -ARTHASASTRA

OBJECTIVES OF CFL
TOWARDS NATION:
To conduct profitable and progressive fertilizer products distribution and other related Agricultural input
business for the wealth of the nation.

TOWARDS INVESTORS:
To provide good return on capital to generate internal resources for growth expectation and Diversification
of industry and progress agricultural production.

TOWARDS DISTRIBUTORS:
To promote round commercial policies and competitive marketing efforts in serving Customers.

TOWARDS FARMERS:
Importing required knowledge to farmers for optional use of fertilizers inculcate Proper attitude the
adoption of improved practice in achieving better agricultural productivity Apart from companies , self
interested and national social economic interests.
TOWARDS SOCIETY:
Upholding the rich Heritage, culture and Prestige of the Society and serve towards the Economic growth
and prosperity of the people.

TOWARDS CO-PROMOTERS:

To drive esteemed co-operation of co-promoters in capital and resources Utilization and adoption of
innovative and proper methods production and maintenance.

TOWARDS THE EMPLOYEES:

To evolve the participative style of management which ensures Good work ethics, job Satisfaction had
better wage promotion carrier growths Prosperity.

VALUES AND BELIEFS:

 Adhere to ethical norms in all dealings with shareholders, employees, customers,

suppliers, financial institutions and government.
 Provide value for money to customers through quality products and services.
 Treat our people with respect and concern; Provide opportunities to learn; Contribute
and advance; recognize and reward initiatives; innovativeness and creativity.
 Manage environment efficiency for harnessing opportunities.
 Discharge responsibilities to various sections of society and preserve environment.
 Grow in an accelerated manner, continuous organizational renewal.

Logo of CFL:
 = GROWING MORE

The name of Godavari Fertilizers and Chemicals limited has been changed to Coromandel Fertilizers
Limited and the logo is also changed in which a small difference is noticed. There is a plant which is
secured by the green borders that indicating that the Coromandel Fertilizers protect the plant.

The Coromandel Fertilizers Limited has been under taken by the MURUGAPPA GROUP. This symbol
indicates the peacock in which it shows the raising sun.

Plant Location:

The Plant is located at the Sea Port of Kakinada, Andhra Pradesh, India.

Latitude 16 degrees 57 minutes north.

Longitude 82 degrees 14 minutes east.

Storage Terminal is Located at Visakhapatnam.

MAJOR RAW METERIAL:

Raw material available is one of the major factors in successful operation of a fertilizer company.

CFL has strong raw material supply linkages through long term supply agreement.

 PHOSPHORIC ACID
 AMMONIA
 UREA
 FILLER

CFL MAJOR PRODUCTS:

FERTILISER:

 Gromor 14-35-14
 Gromor 20-20-0-13
 Paramfos 16-20-0-13
 Parrygold
 Parry super (single super phosphate)
 Godavari DAP
 Godavari NPK (14-35-14)
 Godavari NPK (12-32-16)
 Godavari NPK (10-26-26)
 Godavari Nutri+ NPK (19-19-19)
 Godavari Biofertilisers etc.,
PRODUCTION AND PROCESS:
Plant capacity subsequent to expansion:

C.F.L plant capacity is now enhanced to 8, 32,000 M.T‘s per annum in terms of The companies regular
agreed DAP production. Subsequent completion of up gradation in both trains with pipe reactor.

The details of C.F.L’s production the 2006-07 are as under,

Product production (2006-2007 M.Ts)

DAP 6, 10, 612

10:26:26 2, 22,178

12:32:16 92,980

14:35:14 1, 88,205

20:20:0 21,201

Total: 11, 35,176

CF.L acquired capability to manufacture wider range of NPK products subsequent to Refurbishing both the
trains with pipe reactor with INCRO technology and produced NPK Grades like 14:35:14,10:26:26,
12:32:16,part from the DAP and 20:20:0. The production System with augmentation of necessary
balancing facilities is capable of meeting the marketing requirement up to one million tones of NPK
grades.

A case study on “state of art technology” incorporated in new tail gas scrubbing system gas presented by
the company to Tata Environmental Research Institute (TERI), New Delhi which has been appreciated, and
was selected for publication as one of the best case studies in their journal.

PRODUCTION PROFILE OF THE COMPANY

The company is mainly engaged in manufacturing the complex fertilizers DAP, which is having the highest
nutrient value of its grade with 18%, nitrogen and 46% of phosphorous. The major raw materials required
for manufacturing DAP are Ammonia and Phosphoric Acid, the storage tanks for these raw materials are
situated In Kakinada.

AT KAKINADA:

For phosphoric Acid:

 1 Tank of 5000MT capacity.

 2 Tanks of 10000MT capacity.
 2 Tanks of 12000MT capacity.
 2 Tanks of 7500MT capacity.
FOR AMMONIA:

 2 Tanks of 1500MT capacity.

 2 Tanks of 5000MT capacity.

FOR SULPHURIC ACID:

 4 Tanks of a total 2400MT capacity.

PRODUCT PROFILE:

Fertilizers Production:

 DAP (18: 46: 0)

 Complexes (10: 26: 26)
 Complexes (12: 32: 16)
 Complexes (14: 35: 14)
 Complexes (20: 20: 0)
PESTICIDE FORMULATION: Enosulfan, Monocrototphos, Quinolphos, Dimethoate, Butachlore, Acephate,
Carbandazium, Fenvelerae, Cypermethrin and Cloropyriphos.

BIO FERTILIZERS: Ajospirillum for Paddy, Sugarcane, Cotton, Sunflower, Soyabean, Groundnut, Rhyzobium
cullure.

For the production of DAP raw materials required are

 Anhydrous Liquid Ammonia (99%).

 Phosphoric Acid (54 %).
 Sulphuric Acid (98 %).
 Urea Prills (99 %).
 Filler.
For the production of 1 tone of DAP, primary raw materials are

 Phosphoric Acid (p205) – 470kg.

 Liquid NH3 - 208 kg.
 Urea - 40 kg.
ORGANISATION FLOW CHART:
MANAGEMENT:The following are the” BOARD OF DIRECTORS” of the M/S COROMANDEL FERTILIZERS
LIMITED, KAKINADA.

S.NO NAME POSITION HELD ON COMMITTEE

BOARD MEMBERSHIP

1 Mr. A.V.VELLAYAN CHAIRMAN -

2 D.E.UDWADIA DIRECTOR -

3 S. VISWANATHAM DIRECTOR Audit committee

R&N committee

4 M.M. VENKATA CHALAM DIRECTOR Share holders

Grievance committee

5 K.BALASUBRAMANIAM DIRECTOR Audit committee

R&N committee

6 M.K. TANDON DIRECTOR Audit committee

R&N committee

7 DR. B.V.R.M.REDDY DIRECTOR Audit committee

R&N committee

Share holders
committee

8 V .RAVI CHANDRAN MANAGING Share holders

DIRECTOR
 Grievance committee

CFL's real assets are their employees. Their positioning at different locations is as under:

CFL MANPOWER EXECUTIVES STAFF TOTAL

Corporate office, 42 66 108

Secunderabad

Liasion office, New Delhi 1 3 4

Regional Marketing offices 84 52 136

Plant – Kakinada 123 233 356

VST – Vishakhapatnam 12 23 35

Total 257 449 706

TOTAL STAFF IN ALL DEPARTMENTS

Technical 320

Marketing 174

Administration 115

Finance 59

Materials 27

Secretarial 11

Total 706

C F L AWARDS:

 ISO 14001 certified received by CFL for its environment management system.
 Occupational health and safety management system certification under OSMAS-18001.
 Government of Andhra Pradesh labor department-may day award 2007 for best management.
 ISO 9001 certified received for quality management system.
 FAPCCI award received for outstanding contribution of CFL for social welfare.
 FAI award for improvement in overall performance for the year 2004-2005.
THEORITICAL
ANALYSIS
CHAPTER-4
INTRODUCTION TO PERFORMANCE APPRAISAL:

Monitoring and managing the performance of the individual employee in the

organization manage the performance of an organization. The objectives and goals of individual
performance are determined based on the objectives and goals of the organization. Hence, the

successful performance of an organization is a culmination of individual performance and

contributions. Performance Appraisal management is a critical and sometimes controversial aspect of

organizational management.

The history of performance appraisal is quite brief. Its roots in the early 20 th century

can be traced to Taylor’s pioneering time and motion studies. But this is not very helpful, for the same

may be said about almost everything in the field of modern human resource management. As a

distinct and formal management used in evaluation of work performance, appraisal really dates from

the time of the Second World War –not more than sixty years ago.

In the absence of carefully structured system of appraisal, people will tend to judge

the performance of the others, including subordinates, naturally, informally and arbitrarily. Without a

structured appraisal system, there is a little

of ensuring that the judgment made will be lawful, fair, defensible and accurate.

Performance appraisal may be defined as a structured formal interaction between a subordinate

and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which
the work performance of the subordinate is examined and discussed, with a view to identifying

weaknesses and strengths as well as opportunities for improvement and skills development.

After employee selection, performance appraisal is arguably the most important

management tool a farm employer has at her disposal. The performance appraisal, when properly

carried out, can help to fine tune and reward the performance of present employees. In this chapter

we (1) discuss the purpose for the performance appraisal, (2) introduce the negotiated performance

appraisal approach, and (3) talk about the steps to achieving a worthwhile traditional performance

appraisal.

Strengths of the negotiated performance appraisal are its ability to promote candid two-

way communication between the supervisor and the person being appraised and to help the latter

take more responsibility for improving performance. In contrast, in the traditional performance

appraisal, the supervisor acts more as a judge of employee performance than as a coach. By so doing,

unfortunately, the focus is on blame rather than on helping the employee assume responsibility for

improvement.

Does that mean that the traditional performance appraisal approach should be

discarded? Not at all. Experts in the field have often suggested that the performance appraisal should

not be tied to decisions about pay raises. When appraisals are tied to pay raises, they argue,

employees are more defensive and less open to change. So how should pay raise decisions be made,

then, if not through the performance appraisal? I would suggest that the traditional performance

appraisal can still play a critical role in management and is ideal for making pay raise decisions. But it
is in the negotiated approach where employees can truly come to grips with what it is that they need

to do to maximize performance, potential career advancement and earnings.

For the employee to have enough time to respond and improve, the negotiated performance

appraisal should take place at least 9 to 12 months before the traditional one. There are no such strict

time requirements when the traditional approach (used to make decisions about pay) precedes the

negotiated one (used as a coaching tool).

Why Performance Appraisal?

Performance appraisal is a vehicle to (1) validate and refine organizational actions (e.g. selection,

training); and (2) provide feedback to employees with an eye on improving future performance.

Validating and refining organizational action

Employee selection, training and just about any cultural or management practice—such as the

introduction of a new pruning method or an incentive pay program—may be evaluated in part by

obtaining worker performance data.

The evaluation may provide ideas for refining established practices or instituting new ones. For

instance, appraisal data may show that a farm supervisor has had a number of interpersonal conflicts

with other managers and employees. Some options include (1) paying more attention to interpersonal

skills when selecting new supervisors, (2) encouraging present supervisors to attend communication

or conflict management classes at the local community college, or (3) providing the supervisor one-

on-one counseling.
Data from performance appraisals can also help farmers (1) plan for long-term staffing and worker

development, (2) give pay raises or other rewards, (3) set up an employee counseling session, or (4)

institute discipline or discharge procedures.

For validation purposes , it is easier to evaluate performance data when large numbers of workers are

involved. Useful performance data may still be collected when workers are evaluated singly, but it may

take years to obtain significant data trends.

DEFINITIONS OF PERFORMANCE APPRAISAL:

Performance appraisal can be defined as “a systematic evolution of the individual with

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

Performance appraisal can be defined as “degree of accomplishments of tasks by an

employee in his job”.

“Performance appraisal is a formal assessment and rating of individuals by their

management at usually an annual review meeting”

-Michael Armstrong

MEANING:
The dictionary meaning of the verb `to appraise’ is `to fix a price for’ or `to value an
object or thing’. The term performance appraisal is concerned with the process of valuing an
employee’s worth to an organization with a view of increasing it.
CONCEPT:

Most performance system in most companies focus on results of behavior while in

reality people are judged just as much how the get thing done.

APPRAISAL PROCESS:

1. The first step in the appraisal process is the determination of standards of performance based on

the organizational objectives and the job description .The performance standards and objectives have

to be determined by the employee and the supervisor together. These have to be communicated in a

simple and lucid manner to the employee. It is easier to evaluate performance if the goals and

standards are specific and quantifiable.

2. The second step in the process of Performance appraisal is the measurement of employee

Performance against the predetermined goals and standards. At this stage the process of

measurement namely how the Performance components are to be measured has to be determined.

3. The third step is the actual process of measurement. Performance appraisal has to be a continues

process and the feedback should be given to the employee at regular intervals. Making a note of the

critical incidents either positive or negative, helps the manager keep a track of the Employee

performance. Feedback has to be given once in 2 -3 months, depending the need to do so, which

would help the employee in meeting his objectives.

4. The next step is a very critical step and involves communicating the results of the appraisal to the

employee concerned. It is the responsibility of the manager to make the employee feel comfortable
with the whole process. Continous feedback and orientation would ensure a simple final appraisal

discussion with very few differences of opinions.

5. Once the appraisal is finalized, after discussing it with the employee. It has to be put to effective

use. Though most organizations are link to reward system, some prefer to restrict it to the

development of the employees. But, the document of appraisal has to be effectively and immediately

put to use to ensure a better Performance during the next appraisal period.

The maximum utility of performance is to link the Performance standards to reward

system and the competency standards to training and development. The gaps in competency levels

can be identified and necessary training is imparted to the employee.

Contents to be appraised for an officer’s job:

1) Regularity of Attendance
2) Self Expression: written and oral
3) Ability to work with others.
4) Leadership styles and abilities
5) Initiative
6) Technical Skill
7) Technical ability/Knowledge
8) Ability to grasp new things
9) Ability to reason
10) Originality and resourcefulness
11) Creative skills.
12) Area of interest.
13) Area of suitability
14) Judgement skills
15) Integrity
16) Capability for Assuming responsibility
17) Level of Acceptance by subordinates
18) Honesty and sincerity
19) Thoroughness in job and organizational knowledge.
20) Knowledge of systems and procedures
21) Quality of suggestions offered for improvement.

2. Set the performance review period

The formal performance appraisal occurs usually annually on a formalized basis and involves
appraise and appraiser in finding answers to the following questions:

a) What performance was set out to be achieved during the period?

b) Has it been achieved?
c) What has been the shortfall and constraints?
d) What are we going to do now?
e) How will we know that we have done it?
f)What kind of feedback can be expected?
g) What assistance can be expected to improve performance? And
h) What rewards and opportunities are likely to follow from the performance appraisal?
When the employees have this type of information, they know what the organization expects
from them, what assistance is available, and what can they expect when the required level of
performance is achieved. This will increase employee acceptance of the appraisal process and result in
trust that the employee has in the organization.

3.Measure actual performance:

Performance of the employee should be measured continuously by comparing the actual

performance with the set standards.

4.Communicating the results to the appraise:

Communicating the results of appraisal the employee concerned is a very critical step.
5. Use the performance appraisal for the desired purpose:

The clear purpose of conduction performance appraisal should be known before conduction
the appraisal system.

BASIC SYSTEM:

Effective performance appraisal systems contain two basic systems operating in conjunction
an evaluation system and a feedback system.

The main aim of the evaluation system is to identify the performance gap (if any). This gap
is the shortfall that occurs when performance does not meet the standard set by the organization as
acceptable.

The main aim of the feedback system is to inform the employee about the quality of his
performance (However, the information flow is not

exclusively one way. The appraisers also receive feedback from the employee about job problems, etc).

One of the best ways to appreciate the purposes of performance appraisal is to look at it from
the different viewpoints of the main stakeholders. Employee and the organization.

1.Employee view point:

From the employee viewpoint, the purpose of performance appraisal is four folds:

a). Tell me what you want me to do

b). Tell me how well I have done it
c). Help me to improve my performance
 d). Reward me for doing well.

2.Organizational view point:

Form the organization’s viewpoint, one of the most important reasons for having a system
of performance appraisal is to establish and uphold the principle of accountability.

For decades researchers have known that one of the chief causes of organizational failure is
“non-alignment” of responsibility and accountability. “Non-alignment” occurs where employee are
given responsibilities and duties, but are not held accountable for the way in

Which those responsibilities and duties are performed. What typically happens is that several
individuals or work units appear to have over lapping roles? The overlap allows-indeed actively
encourages each individual or business unit to “pass the buck” to the others. Ultimately, in the
Severely nonaligned system, no one is accountable for anything. In this event, the principle of
accountability breaks down completely. Organizational failure is the only possible outcome.

THE APPRAISERS:

Traditionally appraisal has been the job of the supervisor with the employee himself

having no rule to play in the process. However, the whole concept has changed today and the apprise

has an important role in the process. He, in coordination with his superior, determines the

Performance objectives and standards. Again at the end of the appraisal period, the employee

assesses his own Performance, in comparison to the predetermined objectives. The supervisor offers

his opinion at the end of the appraisal and together they finalize the appraisal results. The areas of

developments are identified and future action planned.

 In more recent concepts like 360 degree feed back, the peers/ colleagues of the

employee, his suppliers, his customers /clients and even his subordinates play a role in assessing his

performance. This gives a more historic view of the performance and also helps in easy identification

of problem areas.

The different appraisers are discussed in the following paragraphs:

1) “Self appraisal” is a common practice today, with the employees being given a role in
evaluating their own performance. The employee himself is best equipped to evaluate his
performance his performance because he understands his strengths and weaknesses the best.
2) Supervisors: Supervisors include superiors of the employee, other superiors having knowledge
about the work of the employee and department head or manager. The authority to evaluate the
employee has traditionally been with the supervisors.
3) Peers: Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisal,
because of the competition among peers. Peer appraisal has to be used to assess the
communication and interpersonal skills of the employee, which can affect the team
performance.
4) Customers/clients: The performance of an employee has a direct and immediate impact on his
customers, either, internal or external. Today customer appraisal is becoming extremely
relevant.
5) Subordinates: The concept of the subordinates evaluating the performance of his supervisor is
yet to gain acceptance in most Indian companies. The Indian culture does not encourage the
idea of subordinate appraisal. However, with more and more Macs operating, in the country
today, this concept is likely to gain ground.
PERFORMANCE APPRISAL METHODS:

The different appraisal methods used by the organization are discussed below. The
most commonly used methods are:
1) Management by Objectives of goal-setting
2) Graphic rating scale
3) easy appraisal
4) check lists
5) Critical incident method
6) Forced choice rating methods
7) Point allocation method
8) Ranking methods
9) Behaviorally anchored rating scale(BARS)
10) 360 degree performance appraisal
11) Team appraisals
12) Weighted checklis
13) Balanced Score card method

MANAGEMENT BY OBJECTIVES:

The main aspect of MBO is clear and well-defined goals, a definite time span to

achieve the goals, an action plan and finally, timely and constructive feedback. Also called the goal

setting approach. MBO is more commonly used for managers and professionals .The goals are set with

active participation of the employee and his supervisor. These goals have to be in alignment with the

organizational goals and have to contribute to their achievement. For successful implementation of

MBO, the following are required.

1. Quantifiable and measurable goals that is neither too easy nor too difficult to achieve.
 2. A well – laid out action plan providing for contingencies.
3. Employees who are suitably equipped and motivated to achieve these goals.
4. Continous and constructive feedback and guidance.
5. Objective evaluation of the performance.
6. Identification of area for improvement and corrective action.

GRAPHIC RATING SCALE METHOD:

This method of appraisal required the rater to rate the employee on factors like

quality and quantity of work, job, knowledge, dependability, punctuality, attendance etc. Graphic

Rating Scale includes numerical ranges as well as written descriptions.

There are two disadvantages to the Graphic Rating Scale method. One is regarding

the choice of the employee behaviour categories –the important might ones get missed out and the

irrelevant may get ones included. The second disadvantage is that different people may interpret the

written descriptions in different ways. This might lead to confusion and lose of reliability.

ESSAY APPRAISAL:

In this method the appraiser prepares a document describing the performance of the

employee. Questions or guidelines are provided to the appraiser, based on which he analyses and
describes the employee’s performance. The advantage of the system is that the appraiser can express

all his views on the employee’s performance, without any constraints imposed by the system.

It is difficult to compare the performance of two employees, based on the

descriptions of their performance provided by different supervisors. The writing skills or the lack of it,

of the appraiser can make an inadequate Performance seem to be adequate or an excellent

performance seems merely adequate.

CHECK LISTS:

The term used to define a set of adjectives or descriptive statements. If the rather

believed the employee possessed a trait listed, the rather checked the item; if not, the rater left the

item black. Rating score from the checklist equaled the number of checks.

CRITICAL INCIDENT METHOD:

In this method of Performance appraisal the appraiser makes a note of all the critical

incidents that reflects the Performance of the employee during the appraisal period. These are

recorded as and when they occur and can demonstrate either positive or negative traits of
Performance. At the end of appraisal period, this record forms the basis for evaluation of the

Performance of the employee. This method of appraisal is rarely used because of the ambiguity

involved and the effort required in recording the incidents. The employees might also be not happy

with the manager ‘tracking ‘and ‘recording ‘their Performance in this matter.

FORCED CHOICE RATING METHOD:

In this method the appraiser is required to assign ranks to different attributes of the

employee. These attributes all are seemingly positive, but have different weights, which are unknown

to appraiser. Once the employee attributes are ranked the human resource department applies the

weights and arrives at a score, which is the final appraisal score. The element of subjectivity in this

method is minimized as the appraiser has to assign a unique rank for each of the attributes, however,

this might not be a very pleasant experience for the appraiser and it is not very easy to convince the

employee of the rationale behind the ranking and that the ranks assigned are faired.

POINT ALLOCATION METHOD:

In this method of appraisal, the appraiser has to allocate points to different members

in his team. He has at his disposal, a specific number of points, which he has to distribute among his
team members, based on their performance during the appraisal period. The best performer gets the

highest score and the last one in the group gets the least score. There are two disadvantages to this

method. An appraiser who wants to play it safe can allocate equal points to everyone in the group,

ignoring the differences in their performance. The disadvantage is that the difference in point

allocation might not reflect the differences in Performances across the group might get a score of 30,

while the best performer in another group might get only 25. In such case how do we compare the

performance of the two individuals involved?

RANKING METHODS:

There are three commonly used ranking methods namely, alternation, paired

comparison, and forced distribution. The first three methods are used when there are only a few

employees to be ranked, where as the forced distribution method is used in large companies which

have thousands of employees .

In the first method, namely alternation, the appraiser ranks all his employees from

the most valuable to the least valuable, based on their performance and contributions to the

organization. In the paired comparison method, which is very similar to the alternation method, the

appraiser ranks the employees, based on paired comparison method. Every employee in the group is

compared with every other employee in the group. The employee, who is rated better in each pair the

maximum number of times, is the best employee in the group and the one rated better the least

number of times, the least valuable. The employees are ranked based on the number of times they

emerge the winner in each paired comparison.

 The last method of rating, the forced distribution method, is a very popular method

of appraisal in many big organizations. In this method the employees are categorized as ‘Top’, ‘

Standard’ and ‘ bottom’ and placed under a forced distribution curve. A certain percentage of

employees have to be placed under each category.

BEHAVIORALLY ANCHORED RATING SCALE (BARS):

BARS concentrates on the behavioral traits demonstrated by the employees instead

of his actual performance. Some of the other methods like graphic rating scale and check list also

measure the behavior, based on the assumption that describe behavior results in effective

performance.

There are three steps in implementing a BARS system, they are:

 Determine the relevant job dimensions by the manager and the employee.
 Identification of behavioral anchors by the manager and the employee for each job dimension.
 Determination of the scale values to be used and grouping of anchors for each scale value,
based on consensus.

360-DEGREE PERFORMANCE APPRAISAL:

 A 360-degree appraisal system aims at a comprehensive and objective appraisal of

employee performance. In a 360 degree appraisal system, the employee’s performance is evaluated

by his supervisor, his peers, his internal /external customers, his internal / external suppliers and his

subordinates. This system reduces the subjectivity of a traditional supervisor appraiser. It is also more

comprehensive because the peers, customers, suppliers, and subordinates of the employee, who are

more directly affected by his behavior and his performance, apart from the boss, give the feedback.

TEAM APPRAISALS:

In the new economy era, where teamwork is essential for any venture to succeed,

team appraisals have emerged as one of the best tools for performance management. In the team

appraisal method the individual team members evaluate their colleagues in the team and provide

feedback. This helps in synergizing individual efforts and taking the group performance to higher

levels.

WEIGHTED CHECKLIST:
 The term used to describe a performance appraisal method where supervisors or

personnel specialists familiar with the jobs being evaluated prepared a large list of descriptive

statements about effective and ineffective behavior on jobs.

BALANCED SCORE CARD METHODE:

The balanced score card involves formulating a strategy and deciding what each
employee needs to do to achieve the objective based on the strategy. The HR score card is a part of
the balanced scorecard. Individual responsibilities are assigned based on the strategy. This
assigning the responsibilities to individual and tracking for achievement of objectives is called HR
score card. Each individual in his role will be assigned a set of initiatives and activities, which are
his responsibility. These activities if done well, will contribute to the successful implementation of
the company’s strategy. The HR score card seeks to give online feedback to the employees as to
how they are faring.

PERFORMANCE APPRAISAL:

The term performance appraisal has been called by many names, including

performance review, performance evaluation, personnel rating, merit rating, employee appraisal or

employee evaluation. A performance has been defined as any personnel decision that effects the

status of employee regarding their retention, termination, promotion, transfer, salary increase or

decrease, or admission in to a training program.

RECRUITMENT AND INDUCTION:

 Appraisal data can be used to monitor the success of the organizations recruitment

and induction practices. For example, how well are the employees performing who were hired in the

past two years?

Appraisal data can be used to monitor the effectiveness of changes in recruitment

strategies. By fallowing the yearly data related to new hires (and given sufficient numbers on which to

base the analyses) it is possible to assess whether the general quality of the workforce is improving,

staying steady, or declining.

MOTIVATION AND SATISFACTION:

Performance appraisal can have a profound effect on levels of employee motivation

and satisfaction – for better as well as for worse.

Performance appraisal provides employees with recognition for their work efforts.

The power of social recognition as an incentive has been long noted. Infact, there is evidence that

human beings will even prefer negative recognition at all.

If nothing else, the existence of appraisal program indicates to an employee that the

organization is genuinely interested in their individual performance and development. This alone can

have a positive influence on the individual’s sense of worth, commitment and belonging.The strength

and prevalence of this natural human desire for individual recognition should not be overlooked.

Absenteeism and turnover rates in some organizations might be greatly reduced if more attention

were paid to it. Regular performance appraisal, at least is a good start.

TRAINING AND DEVELOPMENT :

Performance appraisal offers an excellent opportunity – perhaps the best that will

ever occur – for supervisor and subordinate to recognize and agree upon individual training and

development needs.

During the discussion of employees work performance, the presence or absence of

work skills can become very obvious – even to those who habitually reject the idea of training for

them. Performance appraisal can make the need for training more pressing and relevant by linking it

clearly to performance outcomes and future career aspirations.

From the point of view of the organization as a whole, consolidated appraisal data

can form a picture of the overall demand for training. This data may be analyzed by variables such as

gender, department etc. In this respect, performance appraisal can provide a regular and efficient

training needs audit for the entire organization.

EMPLOYEE EVALUATION:

Though often understated or even denied, evaluation is a legitimate and major

objective of performance appraisal.But the need to evaluate (or judge) is also an ongoing source of

tension, since evaluative and developmental properties appear to frequently clash. Yet its most basic

level, performance appraisal is the process of examining and evaluating the performance of an

individual.
 Though organizations have a clear right, some would say a duty to conduct such

evaluations of performance, many still recoil the idea. To them the explicit process of judgment can be

dehumanizing and demoralizing and a source of anxiety and distress to employees.

It is been said by some that appraisal cannot serve the needs of evaluation and

development at the same time. It must be one or the other. But there may be an acceptable middle

ground, where the need to evaluate employees objectively and the need to encourage and develop

them , can be balanced.

THE APPRAISAL INTERVIEW :

The appraisal interview plays a prominent role in the success of performance

appraisal system. A well-designed appraisal system also needs to be implemented well. Employee

evaluates his own performance on various factors and assesses his strengths and weaknesses. This

will help him identify the areas that need training &development inputs. Then he discusses his

appraisal form with his supervisor, who gives his own inputs in the two together finally reach an

agreement on the future course of action.

USES OF PERFORMANCE APPRAISAL:

Apart from evaluating the performance of the employees for rewards /

punishments and development, a good performance appraisal system has many other uses. Some of

these are listed below.

 Training and development needs of the employees can be determined.

  The Performance appraisal system forms the basis for compensation management in the
organization, in addition to other methods like market surveys.
 Can be used as basis for transfers, promotions and other career planning activities of
individual employees.
 An effective Performance appraisal system also helps in succession planning in the
organization.
 Cross –functional transfers and job enrichment exercises etc. can be taken up, based on
inputs from the appraisal system.
 Human resources of the firm can be evaluated based on the competency and skill set and
potential of the workforce. This provides the basis for human resource planning.
 An assessment of the value of the human resources helps in organizational planning.
 The Performance appraisal system also helps in evaluating and auditing the existing plans,
processes and systems in the organization.

For the appraisee:

1. Better understanding of his role in the organization – what is expected and what needs to be
done to meet those expectations.
2. Clear understanding of his strengths and weaknesses so as to develop him into a better performer
in future.

3. Increased motivation, job-satisfaction, and self-esteem.

4. Opportunity to discuss work problems and how they can be overcome.
5. Opportunity to discuss aspirations and any guidance, support or training needed to fulfill these
aspirations.
6. Improved working relationships with the superiors.
7. Performance appraisal provides employees with recognition for their work efforts.
(a) For the Management:
 Identification of performers and non-performers and their development towards better
performance.
 Opportunity to prepare employees for assuming higher responsibilities.
 Opportunity to improve communication between the employees and the management.
 Identification of training and development needs.
 Generation of ideas for improvements.
 Better identification of potential and formulation of career plans.
(b) For the Organization:
 Improved performance throughout the organization.
 Creation of a culture of continuous improvement and success.
 Conveyances of message that people are valued.
 Absenteeism and turn over rates might be greatly reduced.

BASIC APPROACHES OF PERFORMANCE APPRAISAL SYSTEM:

 The first approach –‘A superior’s rating of subordinates’

 The second approach-‘A group of superiors rating subordinates’

 The third approach-‘ Rating of an individual by his peers’

 The fourth approach-Subordinates ‘rating of superiors’

 The fifth approach- ‘Rating by superiors, subordinates, peers,

 Item: Former Emphasis: Present Emphasis:

Terminology: Merit Rating, Performance Employee Appraisal/Performance appraisal

evaluation & control

Purpose: Determine the basis for wage Employee development, team building.
increase, transfer, promotion,
layoff etc.

Application: Four hourly paid/ For technical, professional & managerial

casual/temporary workers. employees.

Factors rates: Heavy emphasis on personal Emphasis on reserves, accomplishment,

traits. performance.

Techniques: Rating scales with emphasis on Management by objectives mutual goal

scores. Statistical manipulation of setting, critical incidents groups appraisal,
data for comparison purpose. mutual consultation. Performance analysis
& human resource development more
qualitative standards.

Post appraisal: Supervisor communicates his Supervisor stimulates employees to analyze

rating to employees & tries to himself /herself & set own objectives in line
sell his evaluation, seeks to have with job requirements. superior
employees confirm to his views. helps&counsels.

Appraisers: Only superiors Superior, subordinates, peers, self, users of

services (customers) consultants (3600
performance appraisal)

Degree openers: Of completely confidential Open appraisal

Leadership Autocratic. Participate and Democratic.

Style of the
appraiser:
 DATA
ANALYSIS
CHAPTER-5
 DATA ANALYSIS

Question 1: Are you aware of the overall objectives/goals of the appraisal system?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 9 14 O 2 O 25
Percentages 36 56 O 8 O 100

Interpretation
Among the 25 employees 36% are strongly agree, 56% are agree and remaining 8% are
strongly disagree with the statement that they are aware of the overall objectives of the
organization.

Question 2: Are you aware of the performance appraisal process in the

organization?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 10 13 2 0 0 25
Percentages 40 52 8 0 0 100
Interpretation

Among the 25 employees 40% are strongly agree, 52% are agree and remaining 8% are
strongly disagree with the statement that they are aware of the performance appraisal
process in the organization.

Question 3: Do you agree that the goals set for you at the beginning of the year are attainable?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 8 15 0 2 0 25
Percentages 32 60 0 8 0 100

Interpretation
Among the 25 employees 32% are strongly agree, 60% are agree and remaining 8% are
strongly disagree with the statement that goals set for you at the beginning of the year
are attainable in the organization.

Question 4: Organization plans for competency improvements of employees on regular

basis?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 10 11 4 0 0 25
Percentages 40 44 16 0 0 100

Interpretation
Among the 25 employees 40% are strongly agree, 44% are agree and remaining 16%
are disagree with the statement that organization plans for competency improvements
of employees on regular basis.

Question 5: Do u agree that your career aspirations are being considered and
appropriate developmental programs are taken up?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 7 16 0 2 0 25
Percentages 28 64 0 8 0 100
+Interpretation

Among the 25 employees 28% are strongly agree, 64% are agree and remaining 8% are
strongly disagree with the statement that career aspirations are being considered and
appropriate developmental programs are taken up.

Question 6: Do you agree that good performance is duly recognized in the

organization?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 14 9 2 0 0 25
Percentages 56 36 8 0 0 100

Interpretation
Among the 25 employees 56% are strongly agree, 36% are agree and remaining 8% are
disagree with the statement that good performance is duly recognized by the
organization.

Question 7: The performance is contributing for the identification of training and developmental
needs?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 7 16 0 0 2 25
Percentages 28 64 0 0 8 100
Interpretation

Among the 25 employees 28% are strongly agree, 64% are agree and remaining 8% are
unable to decide anything about the statement that the performance review is
contributing for the identification of training and development needs.

Question 8: Do you feel the performance will enhance individual skill and
performance?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 7 13 0 0 5 25
Percentages 28 52 0 0 20 100
Interpretation

Among the 25 employees 28% are strongly agree, 52% are agree and remaining 20%
are unable to decide anything about the statement that performance appraisal will
enhance individual skills and performance.

Question 9: Do you agree that performance management system helps in planning for effective utilization of
talents?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 5 16 2 2 0 25
Percentages 20 64 8 8 0 100
Interpretation

Among the 25 employees 20% are strongly agree, 64% are agree 8% are disagree and
remaining 8% are strongly disagree with the statement that performance management
system helps in planning for effective utilization of talents.

Question 10: Employees is to be made confident that their performance would be adequately rewarded by
the organization?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 5 18 2 0 0 25
Percentages 20 72 8 0 0 100

Interpretation
Among the 25 employees 20% are strongly agree, 72% are agree and remaining 8% are
disagree with the statement that performance would be adequately rewarded by the
organization.

Question 11: Is financial incentive motivates employee better rather than other forms of recognition?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 3 5 10 1 6 25
Percentages 12 20 40 4 24 100

Interpretation
Among the 25 employees 12% are strongly agree, 20% are agree, 40% are disagree 4%
strongly disagree and remaining 24% are unable to decide anything about the
statement that financial incentives motivates employees better rather than other forms of
recognition.

Question 12: Do you agree that performance appraisal is to be considered for promotion and increment and
other related aspects?

Options Strongly Agree Disagree Strongly Can’t Total

agree disagree say

Respondents 7 14 0 2 8 25
Percentages 28 56 0 8 2 100
Interpretation

Among the 25 employees 28% are strongly agree, 56% are agree, 8% are strongly
disagree and remaining 8% are unable to decide anything about the statement that the
performance appraisal is to be considered for promotion and increment and other related
aspects.

Question 13: Appraise main objectives in your duties are:

Options Personal To achieve Total

development organization Both
targets
Respondents 0 4 21 25
Percentages 0 16 84 100
Interpretation

Among the 25 employees 16% are agree that appraisal main objectives in his duties are
to achieve the organizational targets and remaining 84% are agree with both personal
development also.

Question 14: Employees performance being appraised by:

Options Superiors Peers & Self 3600 Total

peers appraisal appraisal

Respondents 10 1 8 6 25
Percentages 40 4 32 24 100

Interpretation
Among 25 employees opinions about the statement are as follows:

4% are opined appraised by peers, 32% are opined it is self appraisal and remaining 24% are opined it
is 360o appraisal.

Question 15: How is the relation between superiors and subordinates in your organization?

Options Cordially Friendly Healthy Good Not Total

good
Respondents 11 5 4 5 0 25
Percentages 44 20 16 20 0 100

Interpretation
Among 25 employees opinions about the statement are as follows:

44% opined it is cordially, 20% opined it is friendly, 16% opined it is healthy and remaining 20%
opined it is good.
 CHAPTER-6
FINDINGS
SUGGESTIONS
CONCLUSION
BIBILOGRAPHY

FINDINGS:

Performance appraisal process in an organization should be able to make

employees strength and should be able to motivate employees to exert their maximum
efforts. Specific performance of each and every employee should be evaluated properly
for results and they should be remunerated on the basis of their contribution to the
organization. Some of the findings concluded from the survey as follows:

 Majority of the employees are concluded that the present appraisal system helps
in motivating the employees.
 Employees are well satisfied with setting of key result areas by management.
 Employees are satisfied with present appraisal system as it makes them to know
their strengths as well as weaknesses.
 Outstanding performance is duly recognized by the organization.
 Good encouragement and positive reinforcement makes employees to accept
more responsibilities.
 Employees in the organization are well satisfied with the reward system followed
by the organization.
 Environment in the organization is healthy; relations between superiors and
subordinates are also good.
 Majority of the employees satisfies with financial incentives rather than the other
forms of recognition.

SUGGESTIONS:

 Measurement of performance should be accurate.

  Feedback after measuring the performance should be in a clear, understanding
way to the appraisal.
 Monthly performance reports should be maintained.
 Self review techniques should be implemented in the organization in order to
improve the performance of the employees.
 The efficient and experienced persons should conduct orientation programs.
 By assessing the performance appraisal continuously the employees can improve
their skills.

CONCLUSION

After my thorough observation and analysis, I would like to conclude that the
organization is good in the overall implementation of the performance appraisal process.

All the employees responded very next movement and co-operated a lot in doing my
analysis throughout the project.

The employees were very friendly and helped in doing my project and answered to my
questions very spontaneously and accurately.

My project guide is also very co-operative and has guided me in every step in
completing my project.

BIBLOGRAPHY

Books referred are:

Principles and practices of management

By L.M.Prasad
 Human resource management

By Aswatappa.

Periodicals:

HRD newsletters.

National human resources management.

The Indian management.

Web sites:

www.google.com

www.businessworld.com

www.hrworld.com
www.cflindia.com

www.businessballs.com

www.mbaclubindia.com