INTRODUCTION

Human Resource Management (or personnel) management, in the sense of getting things done
through people, is an essential part of every managers responsibility, but many organizations
find it advantageous to establish a specialist division to provide an expert service dedicated to
ensuring that the human resource function is performed efficiently. People are our most
valuable asset is a clich, which no member of any senior management team would disagree
with. Yet, the realities for many organizations are that their people remain undervalued, under-
trained and under-utilized.

Human Resources Activities

The central focus for HR management must be on contributing to organizational success. As
Figure depicts, key to enhancing
organizational performance is
ensuring that human resources
activities support organizational
efforts focusing on productivity,
service, and quality.
To accomplish these goals, HR
management is composed of
several groups of interlinked
activities. However, the
performance of the HR activities
must be done in the context of
the organization, which is
represented by the inner rings in
Figure. Additionally, all managers with HR responsibilities must consider external environmental
forcessuch as legal, political, economic, social, cultural, and technological oneswhen
addressing these activities. These activities include HR Planning, HR development, staffing,
EEO etc.
What is Performance Management?
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Performance Management is often a misunderstood concept most people associate it with
concepts such as: Appraisal, Performance-related pay, Targets and objectives, Motivation and
discipline yet, performance management is much more than this. Performance management is
about getting results. It is concerned with getting the best from people and helping them to
achieve their potential. It is an approach to achieving a shared vision of the purpose and aims of
the organization. It is concerned with helping individuals and teams achieve their potential and
recognize their role in contributing to the goals of the organization.
A performance management system consists of the processes used to identify, encourage,
measure, evaluate, improve, and reward employee performance at work Employees job
performance is an important issue for all employers.
Strategic link between Strategy, outcomes, and organizational results:
Figure below shows performance management as part of the link between organizational strategy
and results. The figure illustrates common performance management practices and outcomes.

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Performance Appraisal is the process of assessing the performance and progress of an employee
or a group of employees on a given job and his / their potential for future development. It
consists of all formal procedures used in the working organizations to evaluate personalities,
contributions and potentials of employees. Every year employees experience an evaluation of
their past performance. Employees generally see these evaluations as having some direct effect
on their work lives. They may result in increased pay, a promotion, or assistance in personal
development areas for which the employee needs some training. As a result, any evaluation of
employees work can create an emotionally charged event. Because the performance evaluation
is not the simple process it once was, it is now more critical to perform one while simultaneously
focusing on key activities of the job.

Almost every organization in one way or another goes through a periodic ritual, formally or
informally, known as performance appraisal. Performance appraisal has been called many things.
The formal performance appraisal has been called a tool of management, a control process, an
activity and a critical element in human resources allocation. Uses for performance appraisal
have included equal employment opportunity considerations, promotions, transfer and salary
increases. Primarily performance appraisal has been considered an overall system for controlling
an organization. Performance appraisal has also been called an audit function of an organization
regarding the performance of individuals, groups and entire divisions.

The performance appraisal has been defined as any personnel decision that affects the status of
employees regarding retention, termination, promotion, demotion, transfer, salary increases or
decreases, or admission into a training program. For this study, performance appraisal has been
confined to the formal performance appraisal with the above definition. Appraisals have been
cited to range from official, prescribed meetings between an evaluator and evaluate to causal,
change occasions where an evaluator observed work activities and indicated his or her
assessment with an informal comment. The main emphasis of this study has been the use of
performance appraisal as a tool for employee development.

One of the major problems with performance appraisal has been the purposes which performance
appraisal has been used. The study has examined the use of performance appraisal as an

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instrument of appraisal which could be related to the development of personnel. The study also
examined the use of performance appraisal for communicating expectations of both the
organization and the employee. Benefits of communicating with each other were noted.

NCS sugars ltd located at latchayyapeta, Seetanagaram (mandal), Vizianagaram

(dist).NCS sugars limited erstwhile known as Nizam sugars limited was established during 1995
with crushing capacity of 2500 tons sugar processing work carried out till December 16th 2002
the Nizam sugars was a government body. During privatization process Nizam sugars sold this
unit to the NCS group of companies. Basically the sugar industry is a seasonal industry and the
industry will be in operation per a period 6 to 7 months from November to April or May. This
industry is considered as a labor industry.
Before the privatization process that is before December 16 th 2002 it was under NIZAM
sugars limited having the man power strength of 600 workmen approximately(inclusive of
permanent and seasonal employees). After privatization the NCS group absorbs many of their
employees and maintaining till date. During this 6 years period the unit has recorded crushing of
cane in one season is around 2.5 lakh tons. From the above, it is evident that after privatization,
the NCS group absorbed suitable number of labors and utilized the man power in the right
direction in right time with high spirits resulted with better recovery without any enhancement of
man power.

NCS Group of Companies is one of the leading business houses in Andhra Pradesh with
Corporate Head Quarters in Hyderabad city, with their successful existence over the last three
decades. The flagship company of NCS Group is NCS Sugars Limited; they are into
manufacturing of sugar and co-generation of power. The Group has diversified businesses such
as manufacturing of sugar, co-generation of power, manufacturing of ethanol, edible oils, port
based infrastructure, eco-tourism, renewable energy etc. Additionally, the group is dealing with
international trading, by importing and exporting of commodities like molasses, alcohol, sugar
etc.

STATEMENT OF THE PROBLEM:

At NCS Sugars appraisal is conducted twice in a calendar year and the method that is
adopted is Traditional form of appraisal and the method used to assess the employees

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performance is done by using GRAPHIC-RATING-SCALE METHOD where the superior will
evaluate the performance and communicate about the overall excellence of an employee towards
his/her given job. At NCS Sugars appropriate measures are taken to improve the performance of
employees who falls short beyond the expectations. At NCS performance appraisals are mainly
conducted to know the employee where he really stands and acts as a tool to identify his
weaknesses and also suggest with suitable measures to improve his/her overall performance.
After the appraisal each and every employee are provided with an opportunity to discuss
on the areas needed for improvement and also collects a valuable feedback on the total appraisal
conducted at NCS Sugars from their employees.
The first question addressed in the study considered whether a company (called the NCS Sugars
LTD in this study) has been using performance appraisal as a tool for organizational development
or for employee career development. The second question raised has been whether performance
appraisal could be used for both organizational development and employee development. This
third question raised has been whether the use of performance appraisal being used for
developmental purposes made employees more effective, thus making the organization more
efficient.4. And the fourth question addressed in my study is the types of errors generally
neglected by NCS Sugars, while implementing the Appraisal.

If we want to know how well the employees are doing, weve got to measure their performance-
not necessarily an easy task. Many factors go into the performance evaluation process, such as
why do we do them, who should benefit from the evaluation, what type of evaluation should be
used, and what problems might be encountered. In order to be effective and constructive, the
performance manager should make every effort to obtain as much objective information about
the employee's performance as Possible. Performance Appraisal is a review and discussion of an
employee's performance of assigned duties and responsibilities based on results obtained by the
employee in their job, not on the employee's personality characteristics. Personality should be
considered only when it relates to performance of assigned duties and responsibilities.
Appraising the performance of individuals, groups, and organizations is a common practice of all
societies. Appraisal of one individual by another individual is a continuous process and it is
Natural phenomenon in human beings. This is constantly done, consciously or unconsciously in
our day-to-day interaction either in family life or in a social setting or in an organization for that

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matter. While the individual or a group uses appraisal in its own fashion depending upon the
need of the situation, in an organization it becomes necessary to adopt a formal methodology of
appraisal system because of the requirement of measuring the performance for considering
suitable reward or punishment or for assessing the potential of a person to increase the
responsibilities. In short, there is a great requirement for assessing the efficiency to gear up the
productivity of the work force.

Performance Appraisal systems involve a number of activities. They are more than simply
reviewing what an employee has done. These systems must fulfill several purposes. Nearly three
decades ago, performance evaluations were designed primarily to tell employees how they had
done over a period of time and to let them know what pay raise would be given. This was the
feedback mechanism in place. Although this may have served its purpose then, today there are
additional factors that must be addressed. Specifically, Performance evaluations should also
address development and documentation concerns. Performance appraisal must convey to
employees how well they have performed on established goals. Its also desirable to have these
goals and performance measures mutually set between the employee and the supervisor. Without
proper two-way feedback about ones own effort and its effect on performance, we run the risk of
decreasing an employees motivation and their Satisfaction- Levels in an organization.

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 MAIN-OBJECTIVES

The following are the specific objectives of the present study.

To study about the Performance Evaluation process at NCS-Sugar Factory, Bobbili.

To study and know the tools implemented at NCS-Sugar Factory, Bobbili to evaluate
the employees performance.
To know how Performance evaluation plays as a motivating factor to increase the
overall organizational and employees performances at NCS Sugar Factory, Bobbili.
To study and identify the major errors during the time of performance appraisal
evaluation at NCS Sugar Factory, Bobbili.
To summarize and suggest with suitable suggestions wherever required.

NEED AND SIGNIFICANCE

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The project is to infer about the Performance Appraisal process at NCS Sugars LTD and to
describe how the company will identify the performance standards and core competencies of its
employees and how it will communicate that to their employees.
Importantly Performance Appraisal process would help in measuring the strengths and
weaknesses of the employees in the company which would facilitate in the development of both
the Organization and the employee. Performance appraisal will evaluate the role of each
employee in the development of NCS Sugars LTD and also monitoring the standards,
expectations, objectives, efficiency in handling task and responsibilities in a period of time.

Performance Appraisal is needed and plays a significant role at NCS-SUGARS, BOBBILI is due
to the following reasons:
Provides information about the performance ranks basing on which decision regarding
salary fixation, confirmation, promotion, transfer and demotion are taken.
Provide feedback information about the level of achievement and behavior of
subordinate. This information helps to review the performance of the subordinate,
rectifying performance deficiencies and to set new standards of work, if necessary.
Provide information to diagnose deficiency in employee regarding skill, knowledge,
determine training and development needs and to prescribe the means for employee
growth provides information for correcting placement.
To prevent grievances and in-disciplinary activities.
Document human resource decisions with regard to performance and its related issues.
Determine promotion of employees.
Determine transfers and change in job assignments.
Identify poor performance areas of employees.
Decide retention and termination.
Validate selection criteria relating performance scores to selection test and interview
scores.
Identify individual skills, core competencies, strengths and weaknesses.
Recognize individual performance levels.

RESEARCH METHODOLOGY

Introduction:

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A research methodology defines what the activity of research is, how to proceed, how to measure
progress, and what constitutes success. Research as the manipulation of things, concepts of
symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that
knowledge aids in construction of theory or in the practice of an art.
The Research Methodology followed for further work can be primarily classified into two stages
namely Exploratory and Descriptive. The stepwise details of the research are as follows:
Stage -I
Exploratory Study: Since we always lack a clear idea of the problems one will meet during the
study, carrying out an exploratory study is particularly useful. It helped develop my concepts
more clearly, establish priorities and in improve the final research design.

Exploratory study will be carried out by conducting:

Secondary data analysis which included studying the website (www.ncsgroup.in) of the
company and also going through the various articles published in different sources (magazines,
books, internet, newspapers) on Small and Medium Scale Enterprises and Training and
development process.
Experience surveys also conduct with Assistant-Manager Human Resources and the General-
Manager and Personnel Officer of M.D.Khadary to gain knowledge about the nature of
Performance-Appraisal process followed in the organization.
Stage II
Descriptive Study: After carrying out initial Exploratory studies to bring clarity on the subject
under study, Descriptive study will be carried out to know the actual Performance-Appraisal
process, methods being followed at NCS Sugars LTD Bobbili. The knowledge of actual
Performance-Appraisal process is needed to document and to suggest improvements in the
current system to make it more effective. The tools used to carry out Descriptive study included
both monitoring and Interrogation.

Research design:

The research design in the basic frame work which provide guideline for the rest of research
process. It is a map of blue print according to which the research is to be conducted. The research
design specifies the method for data collection and data analysis of the research product. The

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research design adopted for the project is the cross section studies which are, under the
descriptive research. (It also known as statistical research, describes data and characteristics
about the population or phenomenon being studied. Descriptive research answers the questions
who, what, where, when and how)
Population size:

This study was conducted in NCS-SUGARS only.

Sample size: The total sample size is45 Employees.

Total employees in the Organization are 497 (Administration -24, Accounts-9, Computers-3,
Cane-106, Engineering-165, Processing-98, Sales-5, Stores-8, Purchase-3, and General-76).

Sampling: Simple random sampling

Simple random sampling is a common probability method. The researcher selects the sample
randomly. Under this sampling design, every item of the universe has an equal chance of
inclusion in the sample. It is, so to say, a lottery method in which individual units are picked up
from the whole group not deliberately but by some mechanical process. Here it is blind chance
alone that determined whether one item or the other is selected. The results obtained from
probability or random sampling can be assured in terms of probability i.e., we can measure the
errors of estimation or the significance of results obtained from random sampling.
Source of data:

Primary data: The primary source of data is collected from the respondents.

Secondary data: Secondary data were collected from various sources like company profile,
internet and so on. The practical approach was adopted to determine the sample size of the study
the sample size is 45 Employees.

Total employees in the Organization are 497 (Administration -24, Accounts-9, Computers-3,
Cane-106, Engineering-165, Processing-98, Sales-5, Stores-8, Purchase-3, and General-76).

Research approach:

Survey method: It is mostly used by the of primary data collection in this research the purpose
of survey research is to facilitate understanding of some aspect of behavior of the employees
being surveyed.

METHODS OF DATA COLLECTION

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While deciding about methods of data collection to be used for the study, the researcher should
keep in mind two types of data.

Primary Data

Secondary Data

Primary Data:

The primary data are those, which are collected afresh and for the first time and thus happen to
be original in character.

Secondary data:

The secondary data, on the either hand are those which have already been collected by someone
else and which have been already passed through the statistical process.

Collection of primary data

There are several methods of collecting primary data in descriptive research but for this project
primary data is going to be collected through questionnaires.

Collection of secondary data

Secondary data are generally published sources which have been collected originally for some
other purpose. Such sources are internal company records, reports and journals, records,
advertising media and library.

Data collection for our project:

The basic forms of data collection in Questionnaire method

The questionnaire method was administered in this project. A structured Questionnaire with
suitable options is provided to collect the required data.

Data analysis and interpretation:

The collected data has been analyzed with the help of tables and graphs, frequency and
percentage tables were formulated for the response of all questions. The tabulated data is
graphically represented with the help of graphs.

Statistical tools and analysis:

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 Percentage analysis

For the purpose of data analysis, Percentage Method is used for calculation and result was
interpreted.

No. of Respondents

Percentage = ---------------------------100

Total Respondents

Definition: Percentage analysis is the method to represent raw streams of data as a percentage (a
part in 100 percent) for better understanding of collected data.

METHOD USED FOR ANALYSIS

For our study the basic concept of BUSINESS RESEARCH METHODS will be applied.

The basic concepts are,

Questionnaire method

Data analysis method

LIMITATIONS OF THE STUDY

The major limitations while conducting my study at NCS Sugars LTD are as follows:

The survey is limited only to NCS- Sugars limited and comparison with the other similar firms
in Bobbili is not possible, because most of the firms do not want to disclose their Performance-
Related-Information.

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 The study does not consider all the employees of NCS Sugar LTD Bobbili, but only the major-
departments were selected for conducting of my Project-Study.

Some respondents are totally afraid of their senior-officials, so they completely hesitated to
disclose the complete information that is really useful to my study conducted and the Employer
thinks that it will affect their business & employee motivational levels so they are not interested
to answer the questions.

The participation of the respondents in providing the information was found difficult as they
were quite busy with their schedules and maximum respondents are not interested to answer
questions and the Time available to conduct my study on this selected topic became very
difficult, as a result complete information is not collected accurately.

FRAME-WORK OF THE STUDY

The complete study conducted is presented in the following chapters.

CHAPTER I

This chapter deals with Introduction, Objectives of the study, Need for the study,

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Methodology of the study and Limitations of the study conducted.

CHAPTER -II

This chapter deals with Industry profile which is Sugar Industry, Company profile and
various aspects related to NCS Sugars LTD.

CHAPTER III

This chapter provides a theoretical framework of Performance Appraisal system and

other related aspects of performance appraisal process.

CHAPTER IV

This chapter provides a detailed Data analysis and Interpretation of performance appraisal
process at NCS Sugars LTD.

CHAPTER V

This chapter presents findings and suggestions based on analysis and a detailed summary
of the study is also presented.

INTRODUCTION TO SUGAR INDUSTRY IN INDIA

The Sugar Industry is stated to be second largest among Indian processing industries next
to textile industry. Around 400 sugar factories operate in India. In India during 1991-1998 nearly
134 thousand tons of sugar was produced. Out of 80 countries that produce sugar, India occupies
11th position in the matter of yield per hector and 7 th position in the recovery of sugar. At
Industrial level after textile it plays a very vital role in the agricultural economy of the country.

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The important sugar growing countries of the world are Australia, British, West Indies, South
Africa, South America, India, Indonesia etc. In the world Asia is the largest producer and Africa
is the least producer of sugar. In Asia nearly 32.5 million tons of sugar is produced and in Africa
about 9.1 million tons is produced.

The Sugar Industry in India today is at the cross roads, the sudden
dissimulating of various controls has given it a tremendous opportunity, as also a challenge in the
form of a free competitive market. However the industry is still subject to several controls the
price of cane are statutorily fixed by the central government and arbitrary enhanced further by
the state government 40% of the production of every unit taken over by the government at
control price for distribution through public distribution outlets.

The sugar produced in India is usually exported to different countries. The

exporting capacity of sugar is increasing year by year. This year the value of exports is around
1500 crores.

Sugar Industries in Andhra Pradesh :-

The Sugar cane is a major commercial crop grows in 18 districts Pradesh. It is an

irrigated crop throughout the state. The sugar cane is cultivated in different parts of the state i.e.
east coast, North West region and south west region. It is mainly grown in zone wise like
Nizamabad, Medak and Karimnagar zones.

Today, there are 41 sugar factories out of which 21 are private and 20 are co-
operative sugar factories. In olden days government purchases only 40% of sugar from different
sugar factories as a levy sugar and sold to different types of customers, but today it is serving as
the sugar to those customers who has white ration card.

In order to promote export of sugar and to liquidate surplus stock of sugars relevant
measures has been taken.

In order to improve the viability of sugar industry the government has taken the
following major steps:

1. The obligation has been reduced to 15%.

2. The import duty on imported sugar has been raised to 60% in February 2000

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 along with the continuation of the counter valuing duty of rs 859/- per million
tons to restrict the flow of imported sugar.
India is the largest consumer of sugar in the world and Indian sugar industry
is the 2nd largest agro- industry located in the rural India. With 453 operation sugar mills in
different parts of the country, Indian sugar industry has been a focal point for socio-economic
development in the rural areas. About 50 million sugarcane farmers and a large number of
agricultural laborers are involved in sugarcane cultivation and ancillary activities, constituting
7.5% of the rural population. Besides the industry provides employment to about 2 million
skilled/semi-skilled workers and other workers mostly from the rural areas. The industry not only
generates power for its own requirement but also surplus power for export to the grid based on
byproduct. It also produces ethanol, an eco-friendly and renewable energy for blending with
petrol. The average cane crushing capacity in India, Brazil and Thailand is given below.

Country Avg. Capacity(TCD)

Thailand 10300

Brazil 9200

India 3500

Growth in Capacity: Indian Sugar industry has grown horizontally with large number of
small sized sugar plants set up throughout the country as opposed to the consolidation of the
capacity in the rest of the sugar producing countries, where great emphasis has been laid on
larger capacity of sugar plants. Following gives the details of impressive contribution of the
Indian sugar industry to the national economy.

The government of India licensed new units with an initial capacity of

1250 TCD up to 1980s which was subsequently increased to 2500 TCD. Government de-licensed
the sugar sector in august 1988, thereby removing the restrictions on expansion of existing
capacity as well as on establishment of new units, with the only stipulation that a minimum
distance of 15 kms would continue to be observed between an existing sugar mill and a new mill.
The number of sugar mills and the growth in capacity over decennial period 1980-81 to 2000-01
and in the year 2001-02 to 2003 to 2003-04 is given in table no. II.

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 GROWTH IN AVERAGE CAPACITY OF SUGAR MILLS

Decennial Period ending No. of Units Average Capacity per

unit(TCD)

1980-81 299 1650

1990-91 377 2030

2000-01 423 3000

2001-02 437 3200

2002-03 433 3350

2003-04 453 3500

Cane Acreage & Production

Sugarcane occupies about 2.7% of the total cultivated area and it is one of the
most important cash crops in the country. The area under sugarcane has gradually increased over
the years mainly because of much larger diversion of land from other crops to sugarcane by the
farmers for economic reasons. The cane area has, however, declined in the year 2003-04 mainly
due to drought and pest attacks.

Unlike sugarcane, where the farmers are assured of a minimum price by way
of a statutory order issued by the government, in the respect of all other agricultural crops
including food grains, the government of India only announces the minimum support prices. On
the other hand, with statutory protection, sugarcane farmers receive the price as statutorily
notified from the sugar mills even when it resulted in sizable loss to the undertakings.

Apart from fixation of statutory minimum price for sugarcane, the industry
is also required to share 50% of the extra realization on free sale sugar over the levy price with
the cane farmers. Delay in making the cane price payment over15 days also attracts 155 penal
interests. For the reason 2003-04, the average sugarcane price paid being Rs.950/- per tons, is
much higher than the cane prices, paid in the major sugar producing and exporting countries,

17
where it is linked to sugar sales realization and is also disbursed in 2 to 3 installments.

Tempted by such securitization of price, farmers preferred to increase area under cane
causing spurt in cane acreage and sugarcane production significantly. From a level of 154 million
tons in 1980-81, the cane production increased to 241 million tons in 1990-91 and further to 296
million tons in 2000-01. Since then it has been hovering around 300 million tons until last year.
In the season 2003-04, however, sugarcane production declined to 236 million tons mainly due
to drought.

Cane Utilization:

Not only cane acreage and cane production has been increasing, even drawal of cane by
the industry has also been increasing over the years. For, in India sugarcane is utilized by sugar
mills as well as traditional users like gur and khandsari producers. In early 1980s, the proportion
of cane drawn by the sugar industry was hovering around 35% which went up to 50% in 1990s
and to as high as 69% in the year 2002-03. In the year 2003-04, percentage drawal of cane,
however, declined a bit due to more intense competition from the alternate sweeteners gur and
khandsari.

Consumption Trends:

Apart from white sugar, India also consumes alternate sweeteners jaggery and
khandsari, which are placed at about 9 million tons per annum. Taking into account all the 3
sweeteners i.e. white sugar, jaggery and khandsari, on a per capita basis, Indian consumption
stands at a reasonable figure. This would be evident from data of per capita consumption of sugar
in various countries calculated.

The consumption of white sugar in India is generally urban based, in rural areas
the alternate sweeteners gur and khandsari are consumed predominately. The consumption of
sugar in urban areas in some of the states of Indian union with higher GDP and income levels,
matches favorably with various developed countries.

Cogeneration of power by sugar mills in India began a decade back in the year 1993-94
with the Ministry of Non- Conventional Energy Sources formulating its guidelines for fixation of
the rate of power supplied by sugar mills to the electricity boards. With a small beginning by 8

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sugar mills generating 50 MW power, today, 48 units have set up their power plants generating
680 MW power.

According to information currently available, an equal number or say 50 sugar

mills are in the process of putting up power plants to produce yet another 700 MW, taking the
total generation to about 1400 MW against an assessed full industry potential of 3500 MW.
Though there have been problems mainly related to acceptance and continuation of the power
rates as per the MNES guidelines as also with regard to actual payment against power supply to
the electricity boards. Yet as would be evident, there has been appreciable growth and this trend
is likely to continue in future as well because of growing demand for power in the country.

Encouraged by the success of the pilot projects in the year 2000-01, the
Ministry for petroleum and Natural gas announced in Indian Parliament in December 2001 to
implement the mixed fuel program with ethanol in three phases. The implementation of first
phase (5% blends) was further sub-divided into two parts, it was first taken up in 9 states and 4
union territories with effect from 1st October, 2003, where sugarcane crop is being extensively
grown. In the second part the rest of the country is to be covered. Under this program the
requirement of fuel ethanol worked out to roughly 350 million liters to go up to 500 million liters
when the entire country is covered. The government has also indicated the second and third
phases of the ethanol program. In the second phase, the objective is to increase the blending of
ethanol to 105 with petrol. Apart from ethanol, work had also begun on blending ethanol with
diesel.

India in the World Market

Indian approach towards export of sugar is vastly different and market friendly. India has
been exporting sugar occasionally in periods of sugar surpluses. Whereas, most other countries
dump their excess sugar in the international market despite easy accessibility to funds carrying
low rate of interest, the Indian sugar industry has observed considerable constraint by limiting its
exports. In the last five years it exported 4.07 million tons sugar. India had an average exportable

19
surplus of 6.23 million tons during the last 5 years. As against this, on an average, the sugar
exported was only 0.81 million tons or 7.69% of the total exportable surplus as would be evident
from the data.

Sugar exports, in a limited manner, were mostly confined to the neighboring

countries. If India were to liquidate its huge stocks in the international market, the world sugar
prices would have nose-dived affecting all exporting nations. Disciplined Indian approach
towards exports deserves consideration so as to bring about order in the world sugar market,
rather than resorting to subsidized exports.

Indian sugar sector having a large stake in the world sugar economy, like on several
occasions in the past, once again found it at cross roads. From an era of large production, high
surpluses and virtually unmanageable stocks, India has turned into an importer of sugar, albeit of
raw sugar, to meet the gap between supply and demand thereof, following two consecutive years
of exceptionally low sugar output. Severe drought conditions in southern and western India, in
particular, coupled with attack of pests and diseases, took heavy toll of sugarcane crop during the
year 2003-04 and 2004-05, with sugar output plummeting from over 20 million tons to 14
million tons in 2003-04 and to 12.5 million tons in 2004-05. Not with standing such a steep
decline in production, large opening stock of sugar once considered as unbearable burden came
in handy to reduce the real deficit to around two million tons, which has been met with raw sugar
imports of equivalent quantity.

Indian Sugar Industry An Overview:

1. On the domestic front, the Indian sugar industry has a turnover of Rs. 700 billion per
annum(US $14.6 billion)
2. There are 553 installed sugar mills in the country with a production capacity of 180 lakh
Mt of sugar.
3. These mills are located in 18 states of the country, with Maharashtra contributing over
one-third of it. About 60% of these mills are in the co-operative sector, 35% of the total
are in the private sector and rest in the public sector.
4. Until the mid-50s, the sugar industry was almost wholly confined to the states of Uttar
Pradesh and Bihar. After late fifties or early sixties the industry dispersed into southern

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 India, western India and other parts of North India.
5. Almost 75% of the sugar available in the open market is consumed by bulk consumers
like bakeries, candy makers, sweet makers and soft drink manufacturers.
6. The crushing season in the country starts from October and reaches its peak in January
before finally ending in March or April of the next year.
7. Mr. Samir S Somaiya is the current president of Indian Sugar Mills Association (ISMA)
and Managing director of Godavari Sugar Mills Ltd.

Government policies and interventions:

1. Statutory Minimum Price (SMP) and State Administered Price(SAP):

As Sugar falls under essential commodities, it is being regulated by the state
government in coordination with the Centre. For the season 2009-10, the regime is
under tremendous pressure for declaring SMP as this crop has fallen from surplus to
deficit category.

2. Subsidies:
The Government has given transportation subsidy to sugar
exporters in order to release excess stocks piled up at a millers end, but has ended last
September.

3. Huge Capex
During 2004-05 government had flooded sops for inviting
investments in UP which have seen overwhelming response. The state was able to garner
around Rs 30,000 crores in form of various investments. The sugar millers have also
undergone huge debt lead expansion based on the investment slabs dictated by regime. It
is these debts only which the millers are still tackling.

4. Levy Sugar
The Government is planning to increase levy quota from current
10% to 20-25% due to concern of increasing sugar price.

5. Stock limits
Sugar may be subjected to stock limits this whole year, which are
being imposed in essential commodities in India.

21
Indian Sugar Industry SWOT Analysis:

Strengths-

Higher End Product Prices: Sugar is the main product of sugar mills,
which is most likely to fetch record prices this year. The mills that are able
to secure cane supply will be the biggest beneficiaries. In recent past the
mills have undergone capacity expansion, which will increase their
processing capacity leading to higher productivity.

Favorable Policy: Like any other industry, sugar companies too have
liquidity crunch which can be meet through sugar development fund of the
government of India under special case schemes.

Weaknesses-

Fall in derivatives: The fall in the prices of derivatives like ethanol,

baggage, waste of manure etc. will also have an adverse impact on almost
all the companies.
Currency Risk: Most of the companies which have exposure in form of
overseas loans, imports etc. will be vulnerable to the forex losses in advent
of rupee depreciation.

Opportunities-

Seasonally: Sugar follows 3-5 years cycle, which is a function of prices.

We have already witnessed the bearish phase following excess supply.
Now the situation is of lower production and higher consumption, which
calls for higher remuneration to the farmers for attracting higher acreage
coverage under sugarcane.

22
 Crude oil revival: The revival in crude oil prices will throw this industry
into limelight again. The derivative products of cane would be in demand
and supply constraints are clearly visible to push prices higher.
Threats-

Low cane availability: Limited or non-availability of cane will

eventually lead to early closer of mills.

Unfavorable policy: The call for change in policy will now be via
inflation route only, since for securing supplies government has already
relaxed norms for imports, which are acceptable at zero duty.

Higher debt: The fund raising capabilities of most of the existing

companies in this sector are under serious threat amid ongoing tight
liquidity.

Alternate crops: Alternate crops to sugarcane are more profitable.

COMPANY PROFILE

Profile of NCS Sugar PRIVATE Limited:

23
 NCS sugars ltd located at latchayyapeta, Seetanagaram (mandal), Vizianagaram
(dist).NCS sugars limited erstwhile known as Nizam sugars limited was established during 1995
with crushing capacity of 2500 tons sugar processing work carried out till December 16th 2002
the Nizam sugars was a government body. During privatization process Nizam sugars sold this
unit to the NCS group of companies. Basically the sugar industry is a seasonal industry and the
industry will be in operation per a period 6 to 7 months from November to April or May. This
industry is considered as a labor industry.
Before the privatization process that is before December 16 th 2002 it
was under NIZAM sugars limited having the man power strength of 600 workmen
approximately(inclusive of permanent and seasonal employees). After privatization the NCS
group absorbs many of their employees and maintaining till date. During this 6 years period the
unit has recorded crushing of cane in one season is around 2.5 lakh tons.
After privatization, the NCS management did some technical
modifications inside the plant when even necessary and they could be able to increase the
capacity from 2.5 lakh tons to 3.22 lakh tons. During the season 2003-04 they crushed 3.24 lakh
tons with same man power. In general when we look on to the sugar industry organization
structure, the following departments can be seen
Cane department
Process department
Maintenance- Engineering department
Administration department

As explained above the cane department is the most important department in the sugar
industry. Because for sugar industry the raw materials are sugar cane produced in the field. The
cane department should be organized very well and they should ensure to produce the allotted
quantity of cane with expected recovery quality from the fields.

After privatization, NCS group of companies given the higher priority to the cane
department and introduced new variety of sugar cane seeds for higher output having better

24
resistant of pests and cane withstand drought situations.

With the above, by planting the latest variety of sugarcane in the field the raw materials
quantity will be multiplied by one and half of two times than the existed. The before last season
i.e.2006-07 season this unit has crushed 3.22 lakh tons of cane and established a new record of
production with the man power of 336 with slight modification in production area.

From the above, it is evident that after privatization, the NCS group absorbed suitable
number of labors and utilized the man power in the right direction in right time with high spirits
resulted with better recovery without any enhancement of man power.
NCS Group of Companies is one of the leading business houses in Andhra Pradesh with
Corporate Head Quarters in Hyderabad city, with their successful existence over the last three
decades.

The flagship company of NCS Group is NCS Sugars Limited; they are into
manufacturing of sugar and co-generation of power. The Group has diversified businesses such
as manufacturing of sugar, co-generation of power, manufacturing of ethanol, edible oils, port
based infrastructure, eco-tourism, renewable energy etc. Additionally, the group is dealing with
international trading, by importing and exporting of commodities like molasses, alcohol, sugar
etc.
Narayana Chelamayya & Sons(NCS):

NCS group of companies are well established multi crore business group over the
last two decades with corporate headquarters in Hyderabad. The group is engaged in diverse
business activities like manufacture, International trading and development of port based
infrastructure, Bulk transportation, information technology etcNCS estates private ltd. One of
group of companies owns a distillery at samarlakota, E.G district engaged in manufacture of
extra neutral alcohol which uses in manufacture Indian made liquor. The distillery has an
installed capacity of 20 kilo per day.

Gowthami Agro industries private ltd, situated at Eluru is engaged in manufacture of

25
Indian made liquor with an installed capacity of over 1 lakh cases per month through an
automatic and semi-automatic bottling line.

Two of the Group of companies, NCS storage systems private ltd and Gowthami Liquid
storage ltd both are located at Kakinada. Deep water port provide storage infrastructure for
handling and storage of liquid commodities including petroleum A,B & C class products and
other hazardous and non-hazardous chemicals, edible oils etc..

The group also operates a similar facility under the name and the style of konkan
storage system private ltd at karwar port in Karnataka and Cochin port in Kerala for handling and
storage of host liquid products. All the storage tank terminals have the good infrastructure to
handle multi products.

NCS Sugars Limited, the flag ship company of the NCS Group of Companies, was
incorporated on the 6th June, 2002. NCS Sugars Limited is one of the sugar factories of the
erstwhile Nizam Sugars Limited, a state-owned sugar factory, acquired by the NCS Group. The
factory operations under the new management of NCS Sugars had commenced on 17th January
2003.
After taking over, NCS Sugars Limited has registered a phenomenal growth in terms of
production and yield. During the year 2006-07, the company expanded its existing capacity of
2500 TCD to 6000 TCD and commissioned a 20 MW Co-generation plant. A 240 KLPD Ethanol
Plant is in the pipeline, thereby it becomes a sugar complex where many activities related to
sugar manufacturing and its by-products would happen.

The plant has been allotted a zone of about 43 000 acres of agricultural land consisting 17
mandals, 820 villages and about 22 000 potential farmers in the zone. The major thrust is given
for cane development and uplifting farmers living standards by increasing their per capita
income. This in turn will result in sufficient quantity of cane needed for optimum utilization of
our facility to crush up to 6000 MT per day, during the seasons.
NCS Sugars Limited is the first company to import Raw Sugar to India for the first time
during 2004-05 and processed into white sugar, which has predominantly compensated the

26
domestic need as well. Thus, NCS has changed the Sugar Manufacturing business from seasonal
to throughout the year.

NCS Sugars Limited is the recipient of Best Cane Development award for 2007,
presented in R & D workshop at Vijayawada by Acharya NG Ranga Agricultural University &
Commissioner of sugar, Government of Andhra Pradesh and 2nd place in Best Cane
Development Award by SISSTA-2007. This is the FIRST Sugar Factory to have associated with
22000 farmers covering half the district of Vizianagaram

Due to heavy losses incurred during the construction period the company has not
overcome the debts and hence the government has taken decision to privatize the entire NIZAM
sugar factories. Accordingly the process of privatization and other matters entrusted to call
tenders and finalization of privatization process as per the guide lines of the World Bank. The
NCS estates ltd has quoted highest bid and taken over the NIZAM sugar factory at latchayyapeta
in the name and style of the NCS Sugars ltd and was inaugurated the factory on 18 th December
2002 under the new management.
It is seasonal and agro based industry. The aim is to develop nearby villages
economically, provide employment to the rural people and to develop cane crop.

Work force of the Factory

Officers 51
Permanent 85
Seasonal 213
Apprentices 40

Shift system:
The factory is running with three shifts during season, each shift is of 8 hrs

27
 1. A Shift 4 A.M to 12 P.M
2. B Shift 12 P.M to 8 P.M
3. C Shift 8 P.M to 4 A.M

In the off season general shift runs with permanent employees

Time : 8 A.M to 5 P.M

Lunch break : 12 noon to 1.00 P.M

Quality Policy
We are committed to achieve continual improvement and enhance satisfaction of customers
through:

Manufacture and supply of consistent quality of sugar and its by-products at an optimum
cost complying with customer requirements.

Generation of reliable power with maximum plant load factor.

Extending necessary support to cane growers to optimize per acre yield that would result
in larger volumes of supply.

Continually improving the effectiveness of management systems and practices.

Compliance with applicable statutory and regulatory requirements.

Seeking participation of employees at all levels, to inculcate total quality culture.

WELFARE FACILITIES PROVIDED BY THE COMPANY

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STATUTORY SAFETY FACILITIES:-

a. Staff shoes

b. Uniforms

c. Other safety equipment

STATUTORY WELFARE FACILITIES

a. Washing facilities

b. Canteen facilities

c. Restrooms and lunch rooms

d. Dispensary

e. Facilities for sitting

NON-STATUTORY WELFARE FACILITIES:-

a. School bus

b. Arranging picnics

OTHER BENEFITS AND ALLOWANCES:-

a. Bonus

b. Gratuity

c. Workmen compensation

d. Medical expenses for insured persons

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 e. Retaining allowances

f. Provident fund

TRADE UNIONS
In NCS sugars limited there are four unions. All unions are registered. There is no recognition of
any union since the establishment of new plant. Elections are not held between the unions since
a long time. The details of various unions are furnished below:-

1. The NCS sugar factory staff and workers union latchayyapeta registered.NO-D/11/7/90-
CITUC

2. The NCS sugar karmic sangh union Regd.no- 3/11/76 BMS

3. The NCS sugar workers and employee union Regd.no-1558/96 Independent union

4. Sri Rama sugar mills labor union Regd.no-715/47 - AITUC

30
 INTRODUCTION:
Performance appraisal entails assessment of an employees performance on the job. It
involves measuring quantitatively and qualitatively, an employees past and present performance,
with reference to his specified role and the potential he imparts to an organization. What is
important is the human factor under judgment. Criteria for adjudging performance have to be
carefully devised and employed prudently to ensure a just assessment of employee performance.
Needless to assert, there is a difference between checking a machine for repairs and assessing
human capacity for work. Performance appraisal is recognized as an important aspect of human
resource management. Appraisal is the process of obtaining, analyzing and recording
information about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future potential
of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performance

appraisal is the systematic, periodic and an impartial rating of an employees excellence in the
matters pertaining to his present job and his potential for a better job." Performance appraisal is a
systematic way of reviewing and assessing the performance of an employee during a given
period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to
analyze his achievements and evaluate his contribution towards the achievements of the overall
organizational goals. By focusing the attention on performance, performance appraisal goes to
the heart of personnel management and reflects the management's interest in the progress of the
employees. Scholars use different terminologies to denote it. Meggioson (1967) prefers to use the
term employee appraisal while Cunning (1972) uses the term, staff assessment.

Performance appraisal, on the other hand, is the ongoing process of evaluating employee
Performance. Performance appraisals are reviews of employee performance over time, so
appraisal is just one piece of performance management.

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 MEANING AND DEFINITION:
In simple terms performance appraisal may be understood as the assessment of an individuals
performance in a systematic way, the performance being measured against such factors as job
knowledge, quality, quantity of output, initiative, leadership abilities, supervision, dependability,
co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past
performance alone. Potentials of the employee for future performance must also be assessed.

Meaning:
Performance in a job is a matter, which needs to be considered both in terms of results achieved and
behavior demonstrated. Results required in relation to quantity, quality or timing can be established in
most aspects if a large number of jobs. Comparing results reached to results required is essential in
evaluating the performance. Reviewing results in the context of actions and behavior is necessary to
develop a full understanding of individual performance. In determining what actions have led to success
or the lack of it, this aspect of examining performance will represent a significant element in forming
plans for the future, so that strengths can be built upon and weakness addressed. There are, of course,
certain jobs or features of certain jobs, where it is not always possible to state a required result or standard
that clearly. In these instances considering behavior assumes a greater significance when appraising the
performance. The manager for the home for the elderly, for example would be able to show ability in
controlling budgets in a tangible manner by keeping within certain financial guidelines. The most
important part of such job however, would concern the health and wellbeing of residents. Apart from
being difficult to measure, these aspects could be somewhat beyond the managers control, and it would
be unfair to make an assessment on the amount of medicines used or the mortality rate. Therefore it
follows that the managers actions in promoting the good health and well- being of the residents are the
most relevant factor in evaluating performance, rather than the results. In this case, examples of such
action might be ensuring that specialized help is summoned when necessary, listening to residents who
want to talk about their problems, or perhaps arranging appropriate diversions and entertainment.
Performance appraisal appraises performance of an operating unit, like department or section, or of an
individual. The Government of India may appraise the performance of the BARC as an organization. The
Director of BARC may appraise the performance or any department of division. These appraisals start
from facts/data, lead to opinions on adequacy/ appropriateness and should lead further to some decisions
being made on whether any changes are necessary in the manner or direction of work of the appraised

32
unit, individual. At the operating unit level the decision may relate to the allocations of resources. The
decisions may also relate to the continuance.
In the case of the individual, the appraisal may be of
a. His outputs (how well has the work been done) or of
b. Inputs (what are his skills, behavior patterns, motivation etc.)
The appraisal of outputs helps in deciding on rewards, commendations etc. The appraisal of inputs helps
in deciding on development, including promotion transfer (job or location) or both. These decisions have
implications in terms of the careers of persons and therefore the quality of appraisal is major concern in
organization all over the world. Some of these controversies and the suggested remedies will be discussed
during the session.

Definition:
A formal definition of performance appraisal is:
It is the systematic evaluation of the individual with respect to his or her performance on the
job and his or her potential for development.
A more comprehensive definition is:
Performance appraisal is a formal structured system of measuring and evaluating an
employees job, related behavior, and outcomes to discover how and why the employee is
presently performing on the job and how the employee can perform more effectively in the
future so that the employee, organization, and the society all benefit.

The second definition includes employees behavior as part of the assessment. Behavior can be active
or passive do something or do nothing. Either way behavior affects job results. The other terms
used for performance appraisal are: performance rating, employee assessment, employee
performance review, performance appraisal, performance evaluation, employee evaluation and merit
rating. In a formal sense, employee assessment is as old as the concept of management.

33
PERFORMANCE APPRAISALS AS A NATURAL PROCESS OF MANAGEMENT:
Performance appraisal as a natural process of management for three reasons:

a) Measuring Performance:
Performance can be used as a means of measuring performance in accordance with the adage: If you
cannot measure it you cant manage it. But the purpose of measurement is to indicate not only where
things are not going according to the plan (i.e. there is a negative variance from the anticipated result) but
also to identify where things are going well (a positive variance) so that steps can be taken to build on
success. Performance appraisal is means for creating and maintaining a climate of success in the
organization. Have a success oriented strategy does not only mean expecting people to succeed but also
if they do not succeed, helping them to succeed.

b) Improving Performance:
Building a climate of success involves taking specific steps to improve the performance of individuals
or teams. Because managers depend on that performance, they have a major and continuing responsibility
to take whatever action is necessary to improve it. This is an entirely natural process of management and
whenever anyone completes a task or project good managers will consciously or unconsciously consider
the following points:
How well was that done?
Could it have been better?
Was the right person selected for the job?
In what ways, if any, does the person need to improve?
What guidance or help can be provided to this person to ensure that better results are achieved
next time?
c) Exercising Leadership:
There are many ways of defining leadership. Basically, however it is about getting things done through
people. Leaders point out the way and ensure that everyone gets there. Leadership is about encouraging
and inspiring individuals and teams to give their best to achieve a desired result. Managers as leaders have
to achieve the task. That is why they and their teams exist. The leaders role is to ensure that the teams

34
purpose is fulfilled. If it is not, the result is frustration, disharmony, criticisms and, eventually perhaps
disintegration of the group.
Achieving the task involves leaders in getting answers to the following questions:
What needs to be done and why?
What results have to be achieved?
What problems have to overcome?
Is the solution to these problems straightforward or is there a measure of ambiguity?
Is this a crisis situation?
What is the time-scale for completing the task?
In the light of this analysis leaders have to take whatever steps are necessary to motivate the individuals in
their team and also, importantly; to develop good teamwork.
Motivating individuals is a matter of:
o Understanding their needs are they interested primarily in money, security, status, advancement,
achievement, or what?
o Remembering that money is not the only reward that most people need and want. People can also
be motivated by recognition, praise, and the opportunity to make the best use of their skills and
abilities and, indeed, to enhance them.
o Bearing in mind the importance of expectations as an influence on motivation. A reward, whether
financial of non-financial, will be much more effective when people know what they can get if
they work well enough.
o Creating conditions where individuals can best satisfy their own needs by directing their efforts
towards achieving the success of their team, department and, ultimately, the organization. This is
why one of the arts of leadership is to get people to think for themselves about what they can and
should do and by getting them to understand and agree to the standards and targets they are
expected to achieve.
o Recognizing the fact that people can be motivated by the work itself if it satisfies their need for
responsibility and achievement. This can be done by :
Increasing individual responsibility, empowering them ;
Giving them more scope to vary the methods, sequence and pace of work;
Giving people a complete natural unit of work, thus reducing specialization;

35
 Giving people the control information to monitor their own performance.
The process of performance appraisal is essentially a means for managers to develop and improve
their leadership skills in each of the areas described above.
OBJECTIVES OF PERFORMANCE APPRAISAL:
Performance appraisal is potentially useful for managers in many ways. At base however there are
two fundamental reasons for developing such systems.
Assessing past, which outlines the evaluative aspect of performance appraisal.
Improving future performance, which highlights the development aspect of performance
appraisal.
OTHER OBJECTIVES ARE AS FOLLOWS:
a) Promotion, separation, and transfer decisions.
b) Feedback to the employee regarding how the organization viewed the employees
performance.
c) Evaluation of relative contribution made by individuals and entire departments in achieving
higher level organization goals.
d) Criteria for evaluating the effectiveness of selection and placement decisions, including the
relevance of the information used in the decisions within the organization.
e) Reward decisions, including merit increases, promotions and other rewards.
f) Ascertaining and diagnosing training and development decisions.
g) Criteria for evaluating the success of training and development decisions.
h) Information upon which work scheduling plans, budgeting, and human resources planning can
be used.
i) Provided employees the opportunity to formally indicate the direction and level of the
employees ambition.
j) Show organizational interest in employee development, which was cited to help the enterprise
retain ambitious, capable employees instead of losing the employees to competitors.
k) Provided a structure for communications between employees and management to help clarify
expectations of the employee by management and the employee.
l) Provide satisfaction and encouragement to the employee who has been trying to perform well.

36
 PURPOSE:
The purpose can be highlighted by way of the following chart:
General application Specific purpose

Development Uses: Identification of individual needs.

Performance feedback.
Determining transfers.
Identification of individual strengths and developmental needs.
Administrative uses: Salary.
Promotion.
Retention of individual performance.
Recognition of individual performance.
Lay-offs.
Identification of poor performers.
Organizational maintenance / HR planning.
objectives Determining organizational training needs.
Evaluation of organizational goal achievement.
Information for goal identification.
Evaluation of HR systems.
Reinforcement of organizational development needs.

BENEFITS OF PERFORMANCE APPRAISAL:

The benefits of performance appraisal are twofold. The employees develop themselves while the
organization gets the benefit of improved workforce. A few benefits are stated below:
a) Benefits to the organization:
Facilitates the achievement of organization goals and strategies.
Contributes to improved staff morale.

37
 Facilitates continuous performance improvement, organization development and culture
change.
Assists in establishing a performance culture of quality, efficiency and achievement.
Provides a formal means of discussing competency gaps and how to address these
leading to more competent work force.
Helps build a climate of openness and trust.
Adds to a participative work culture.
Forms part of the legal process in addressing persistent poor performance.
Provides the basis for fair remuneration based on actual performance, so employees can
see and experience a clear link between their performance and the rewards they receive.
Also provides systematic judgments to back up transfers, demotions or terminations, in
extreme cases.

b) Benefits to employees:
An opportunity to get formal feedback from line managers on how their performance is
viewed so that they can learn what they do well and what needs to improve.
Ensures clarity regarding work expectations and standards, reducing anxiety / stress and
conflict with line managers.
An opportunity to discuss their job competencies (or lack thereof) leading to targeted
training and development helping them to realize their full potential.
Provides a forum to share new idea and to air views.
Can be used as a base for coaching and counseling the individual by the superior.

THE APPRAISAL PROCESS

a) Setting the objectives of performance appraisal
b) Establishing job expectations
c) Designing the appraisal program
d) Performance interview

38
Appraisal process:
a) Setting the objectives of performance appraisal:
The purpose for evaluating the performance of the employee can be for:
Training (finding the deficiency in the performance and imparting training
accordingly).
Promotions (finding the most suitable employee from the cluster so that he can face
the new challenges posed by the promotions).
Transfers (finding out the employees potential, interests and accordingly transferring
him to the most suitable job in order to get the best out of him and retain him in the
organization).
Giving pay increases (finding out the employee who is efficient and effective in
performing his tasks at work he does).
Thus depending on the necessity of appraisal the performance objectives will be designed.
The objectives should enable the employees to know exactly the standards of performance they have
to maintain. It helps the organization to set standard of performance against which the actual
performance of the employees would be rated and thus the organizations goal would be met in an
efficient and effective manner.

b) Establishing job expectations:

After formulating the performance objectives a discussion is held with the employees whose
performance is to be rated. The supervisor makes the job expectations, duties and what is expected
out of him clear to the employees.

c) Designing the appraisal program:

In order to design the appraisal system various aspects are to be considered in order to satisfy the
purpose of the appraisal system. This would include;
i. The person whos performance would be assessed,
ii. The person who will assess the performance,

39
 iii. The possible problems that would be faced,
iv. The possible solutions that would solve the problem.
v. The methods to be used to appraise the performance.
vi. The period when the performance is to be appraised.

The decision regarding whether the appraisal would be done in a formal way, i.e. once in a year or
twice or it can be done on informal basis i.e. whenever there is a need to appraise the performance
depending on the needs of the organization.
For example, for promotion or transfer or when there is an emergency situation. It is however better
to have a formal appraisal system in order to know whether the performance standards are met, in
addition informal appraisal system would help to go to the deeper aspects like, when the employee is
not able to perform to the standards of completing the job on time, then he can be asked for the
reason which can be personal or organizational, this can help to identify the cause of the deficiency
and coming up with appropriated solution in order to make the employee complete his job on time.
Ratees and Raters:
A ratee may be defined as an individual, work group, division, or an organization whose
performances need to be rated. Raters can be immediate supervisors, specialists from the HR
department, subordinates, peers, committees, clients, self-appraisal, or a combination of several.
The choice of raters is done according to the category of the ratee whose performance is evaluated.
For instance:
Immediate supervisors are fit to appraise the performance of their subordinates as
they might be more familiar with his or her performance.
Peers are better position to evaluate facts such as contribution to work groups
projects, interpersonal effectiveness, communication skill, reliability and initiative of
job performance.
Clients that are within the organization who have direct contact with the ratee or the
external clients can also be used for rating the employee performance.
Rating Committees comprises of immediate supervisors and other supervisors who
are in contact with the ratee are adopted where employee performs variety of tasks in
different environment.

40
 In self-appraisal employee himself or herself evaluates his or her own performance.
This may be best suited where self-development is the main purpose of evaluation.

Criteria for Rating Performance:

It includes the basis or criteria for performance appraisals. It should be determined on the basis of the
employees perform. The criteria should be such that it enables the assessment of the jobholders
performance in a fair and accurate manner. Depending upon the job the employee does, the standard
for the criteria would be determined. For example, a shop floor worker should be more proficient in
technical skills hence his performance appraisal should emphasize more on technical skills. While for
a managerial position the emphasis should be more on social skills.
The current approach in setting the criteria is to make them SMART:
Specific
Measurable
Achievable
Relevant
Timed
Keeping the smart approach in mind performance can be assessed depending on the following
criteria;
Quality: This answers the question, how well? When an employee is given a task, a certain
level of quality is expected. If the employee exceeds the expectations then the quality of
work performed is considered to be excellent and if it is below the expectation, it is
considered poor in quality.
Quantity: This answers the question, how much? For example, measuring the performance
based on the number of units produced, volume of sales achieved or the number of activity
cycles completed.
Timeliness: This answers the question, by what time? For every activity, sometime is
required to complete it as per the standards. The less the time taken by the employee to
perform the activity, maintaining the standard quality of work, the higher he is rated for
timeliness.

41
 Cost effectiveness: This answers the question, at what cost? It refers to optimum utilization
of organizational resources, be it human, financial, technological or material. That is, the
organizations resources are used in such a way that the returns are maximum.
Need for supervision: This answers the question, What level of self-sufficiency? This
means how well an employee can carry out his job without seeking his superiors help. How
self-sufficient and independent the employee is, in carrying out any task given to him.
Interpersonal impact: This answers the question, How social he is? That is how well the
employee co-ordinates and co-operates with his superiors, colleagues and customers and
maintains a good rapport with all and fosters a feeling of goodwill.
Skills: This answers the question, How efficient he is? That is does he poses personal, social,
technical skills. Personal skills include such things as to listen, to question, to debate, to
experiment etc. Social skills include such skills as the ability to encourage, motivating other,
to meet people, to support people, to train others and so on. Technical skills include area
which covers all the aspects of work that require people to do something specific. For
example, wide technical knowledge of companys product with specialist knowledge of
some.
Knowledge: This answers the question, How much a person knows and how well can he
retain the information? That is how a person keeps himself/ herself aware of what is
happening around and to use his /her knowledge whenever needed.
Experience: This answers the question, How experienced a person is? That is whether a
person has done the same thing over and over again or they have done many different things.
Absenteeism/Tardiness: An employee is obviously not performing when he or she is not at
work. Other employees performance may be adversely impacted by absences, too.
Creativity: It can be difficult to quantify creativity as a performance indicator, but in many
white-collar jobs, it is vitally important. Supervisors and employees should keep track of
creative work examples and attempt to quantify them.
Adherence to Policy: This may seem to be the opposite of creativity, but it is merely a
boundary on creativity. Deviations from policy indicate an employee whose performance
goals are not well aligned with those of the company.
Personal Appearance/Grooming: Most people know how to dress for work, but in many
organizations, there is at least one employee who needs to be told. Examples of inappropriate

42
 appearance and grooming should be spelled out, their effects upon the employees
performance and that of others explained, and corrective actions defined.
The first four- quality, quantity, time and cost are objective and the next two- supervision and social
relationship are subjective. Hence the appraisal criteria are either person oriented (subjective) or
results oriented (objective).

d) Performance Interview:
The performance interview is the formal face-to face meeting between the employee and the
appraiser. In such interviews the information, which is obtained from the appraisal form, is discussed.
This discussion is important as the employees receive feedback about where they stand in the eyes of
supervisors. After this important decision regarding salary, promotion and training, etc. are made.
Feedback is necessary in order to bring improvement in the performance especially when
performance is not as expected. Performance interview has following goals:
To change behavior of employees whose performance does not meet organizational
requirements or their own personal goals.
To maintain the behavior of employees who perform in an acceptable manner.
To recognize superior performance behavior so that they will be continued.
To provide a rationale for salary reviews.
To improve communication between superior and subordinates.
Raters offer feedback to ratees through several methods. The most popular methods include tell and
sell, tell and listen, problem solving and mixed.
In tell and sell (direct interview ) the manager tells the subordinate how well he is doing and
persuades him to accept what has been decided for him in terms of specific goals for
improvement.
In the tell and listen interview the manager tells the subordinate how he is doing but then sits
back and listens to the individuals point of view both about the appraisal and about any
follow-up action required. This provides the subordinates with chances to participate and
establish a conversation with his superior.
In problem solving (participative interview) an active and open conversation is established
between the superior and the subordinates. Here the superior puts aside his role as a judge,

43
 rather he openly discusses with his subordinate. They mutually reflect on the progress and
further action required. Solution to problems are presented, discussed and sort.
Mixed interview is combination of tell and sell and problem solving interviews. Here the
superior shares the problems and solution with the subordinates keeping their side of story in
mind.

METHODS OF APPRAISALS:
PAST-ORIENTED APPRAISALS METHODS
FUTURE ORIENTED APPRAISALS METHODS

METHODS OF APPRAISALS

Past Oriented Future Oriented

Rating Scales - MBO

Checklists - 360Appraisal
Forced Choice Method - Psychological Appraisal
Critical Incident Method - Assessment Centers
Behaviorally Anchored Method
Field Review Method
Performance Test and Observations
Annual Confidential Reports
Essay Method
Cost Accounting Approach
Comparative Evaluation Approach

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 PAST ORIENTED METHODS:

a)Rating scales:

This is the simplest and most popular technique for appraising employee performance. The typical
rating-scale system consists of several numerical scales, each representing a job related
performance criteria such as dependability, initiative, output, attendance, attitude, co-operation, etc.

Each scale ranges from excel linked to salary increase, whereby so many points equal a rise often to
poor. The appraiser checks the appropriate performance level on each criterion, and then computes
the employees total numerical score. The number of points scored may be linked to salary increase,
whereby so many points equal a rise of percentage.

Instruction : For the following performances factors please indicate on the rating
Scale your evaluation of the employee named below.
Employees Name: Department :
Raters Name: Date:
Excellent Good Acceptable Fair Poor
5 4 3 2 1
Dependability - - - - -
Initiative - - - - -
Overall - - - - -
output
Attendance - - - - -
Attitude - - - - -
Co-operation - - - - -
- - - - -
- - - - -
Quality of - - - - -
work
Total - - - - -
Total score - - - - -

45
Rating scales offer the advantages of adaptability, relatively easy use and low cost. Nearly every
type of job can be evaluated with the rating scale, the only requirement being that the job
performance criteria should be changed. This way, a large number of employees can be evaluated
in a short time, and the rater does not need any training to use the scale. The disadvantages of
this method are several. The raters biases are likely to influence evaluation and the biases are
pronounced in subjective criteria such as co-operation, attitude and initiative. Moreover,
numerical scoring gives an illusion of precision that is really unfounded.
b) Checklist:
In this method, a checklist of statements on the traits of the employee and his or her job is
prepared in two columns viz. a Yes column and a No column. All that the rater (immediate
superior) should do is tick the Yes if the answer to the statement is positive and in the column
No if the answer is negative. After ticking off against each item, the rater forwards the list to
the HR department where the actual assessment of the employee takes place and the actual
evaluation is done by the HR department. The HR department assigns certain points to each
Yes ticked. Depending on the number of Yes the total score is arrived at. When points are
allotted to the checklist it becomes weighted checklist. The advantages of this method are
economy, ease of administration, limited training of rater, and the standardization. The
disadvantages include, susceptibility to raters biases, use of personality criteria instead of
performance criteria, misinterpretation of checklist items, and the use of improper weights by the
HR department, it also does not allow the rater to give up relative ratings.

Yes No
1. Is the employee really interested in the job? - -
2. Does he/ she possess adequate knowledge about the job? - -
3. Is his/her attendance satisfactory? - -
4. Does he/she maintain the equipment in a good condition? - -
5. Does he/she co-operate with co-workers? - -
6. Does he/she observe safety precautions? - -
7. Does he/she complete what he/she commences? - -
8. Does he/she evade the responsibility? - -

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c) Forced Choice Method:
In this the rater is given a series of statements about an employee. These statements are arranged
in blocks of two or more, and the rater indicates which statement is most or least descriptive of
the employee. Typical statements are:
1) Learns fast..Works hard.
2) Work is reliable..Performance is a good example for.
3) Absents often..Others usually tardy.
The rater is simply expected to select statements, which are readymade. The advantage of this
method is the absence of personal bias in rating. The disadvantage is that the statements may not
be properly framed- they may not be precisely descriptive of the ratees traits.
d) Forced Distribution Method
One of the errors in rating is leniency-clustering a large number of employees around a high
point on rating scale. The forced distribution method seeks to overcome the problem by
compelling the rater to distribute the ratees on all points on the rating scale. The method
operates under assumption that the employees performance level conforms to a normal
statistical distribution. Generally, it is assumed that employee performance level conforms to a
bell shaped curve.
The major weakness of the forced distribution method lies in the assumption that employee
performance level always conform to a normal (or some other) distribution. In organizations that
have done good job of selecting and retaining only the good performers, the use of forced
distribution approach would be unrealistic as well as possibly destructive to the employee
morale.
e) Critical Incidents Method:
The critical incidents method of employee assessment approach focuses on certain critical
behaviors of an employee that make all the difference between effective and non-effective
performance of a job. Such incidents are recorded by the superiors as and when they occur.
One of the advantages of the critical incidents method is that the evaluation is based on actual
job-behavior. Giving job-related feedback to the employee is also easy. However, the following
drawbacks are there:
Negative incidents are generally more noticeable than the positive ones.

47
 The recording of incidents is a chore to the supervisor and may be put off and
easily forgotten.
Overly close supervision may result.
f) Behaviorally Anchored Scale:
In this approach, broad categories of practice are identified, ideally through collaborations
between supervisors and staff. Specific job behaviors are then linked to the categories. Measures
of staff member behavior are rated on a scale in relation to specific behavior items, such as
understands department functions. Job dimensions usually yield similar broad categories, such
as planning, setting priorities, and responsiveness to supervision. Categories such as these may
be useful in framing evaluation criteria in this approach to appraisal.
Another means of approaching behavior- based appraisal is the behavioral frequency scale.
Here, desired behaviors are described and the staff member is evaluated on how often those
behaviors occur.
g) Field Review Method:
This is an appraisal by someone outside the assessors own department, usually by someone from
the corporate office or the HR department. The outsider reviews employee records and holds
interviews with the ratee and his/ her superior. The method is used primarily for making
promotional decisions at the managerial level. Field reviews are also useful when comparable
information is needed from employees in different units or locations.
The disadvantages of this method are:
1. An outsider is usually not familiar with the conditions in an employees work
environment that may affect the employees ability or motivation to perform.
2. An outsider review does not have the opportunity to observe employee behavior of
performance over a period of time and in a variety of situation but only in an artificially
structured interview situation which extends over a very short period of time.
h) Performance Tests and Observations:
With a limited number of jobs, employee assessment may be based upon a test of knowledge or
skills. The test must be reliable and validated to be useful. Even then, performance tests are apt
to measure potential more than actual performance. In order to test to be job related, observations
should be made under circumstances likely to be encountered. Practically it may suffer from the
costs of test development or cost of administration.

48
 i) Essay Method:
In the essay method, the rater must describe the employee within a number of broad categories,
such as:
i. The raters overall impression of the employees performance.
ii. The promotability of the employee.
iii. The jobs that employee is now able or qualified to perform.
iv. The strengths and weakness of the employee.
v. The training and assistance required by the employee.
This method is useful in filing the information gaps about the employees that often occur in the
better-structured checklist method. However, the major drawback can be that many raters do not
have good writing skills. They become confused about what to say, how much they should state
and the depth of narration. Another problem with this method is that the ratees may be rated on
the quality of the appraisal that they give. The quality standard for the appraisal may be
influenced by appearance rather than content. Thus, a high quality appraisal may provide little
useful information about the performance of the ratee.
j) Cost Accounting Method:
This method evaluates performance from the monetary returns the employee yields to his/ her
organization. A relationship is established between the cost included in keeping the employee
and the benefit the organization derives from him or her. Performance of the employee is then
evaluated based on the established relationship between the cost and the benefit.
k) Comparative Evaluation Approaches:
There are two methods that are used to compare one workers performance to that of his or her
co-worker.
o Ranking Method:
In this, the superior ranks his or her subordinates in the order of their merit, starting from the best
to the worst. All that the HR department knows is that A is better than B. The how and why
are not questioned. No attempt is made to fractionalize what is being appraised into component
elements. To avoid the biases, two or more people can do rankings and then average can be
taken. Its advantages include ease of administration and explanation.

49
 o Paired-Comparison Method:
Under this method, the appraiser compares each employee with every other employee, one at a
time. For example, there are five employees named A, B, C, D and E. The performance of A is
first compared to B and a decision is made about whose performance is better. Then A is
compared with C, D and E in that order. The same procedure is repeated for other employees.
The number of comparisons may be calculated with the help of a formula: N (N-1)/2, where N
stands for the number of employees to be compared. If there are 10 employees, the number of
comparisons will be 10(10-1)/2=45. After the completion of the comparison, results can be
tabulated and rank is created from the number of times each person is considered to be superior.

Future Oriented Appraisals Methods:

a) Management By Objectives (MBO):
MBO emphasizes participation by all organization members. The following core elements in
MBO:
Formation of trusting and open communication throughout the organization
Mutual problem solving and negotiations in the establishment of objectives
Creation of win-win relationships
Organizational rewards and punishments based on job-related performance and achievement.
Minimal uses of political games, forces and fear.
Development of a positive, proactive, and challenging organizational climate.
Following are the 6 steps in the MBO process:
i. Formulate long range goals and strategic plans
ii. Develop overall organizational objectives
iii. Established derivative objectives for major operating units
iv. Set realistic and challenging objectives and standards of performance for members of the
organization.
v. Formulate action plans for achieving the stated objectives
vi. Implement the action plans and take corrective action when required to ensure the attainment
of objectives.

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MBO evaluation report for a call center person:
Objectives set Period Accomplishments variance
objectives
Number of calls 100 104 104
Number of new customers 20 18 90
contacted
Number of deals cracked 30 30 100
Customer complaints 34 11 66.66
Number of reports in home 12 10 80
office
Number of sales 4 2 50
correspondence courses
successfully completed
Deals failed 2 0 0

b) Psychological Appraisals:
Large organizations employ full-time industrial psychologist. When psychologists are used for
evaluations they assess an individuals future potential and not past performance. The appraisal
normally consists of in-depth interviews, psychological tests, discussions with supervisors and a
review of other evaluations. The psychologist then writes an evaluation of the employees
intellectual, emotional, motivational and other related characteristics that suggest individual
potential and may predict future performance. From these evaluations, placement and
development decisions may be made to shape the persons career.

c) Assessment Centers:
An assessment center is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers. The principle idea is to
evaluate managers over a period of time, say by one to three days, by observing and evaluating
their behavior across a series of selected exercises or work samples. Assesses are requested to
participate in work groups (without leader), role-playing and other similar activities, which
require the same attributes for successful performance, as in the actual job. After recording their

51
observation of ratee behaviors, the raters meet to discuss these observations. The decision
regarding the performance of each assesse is based upon this discussion of observations.
d) 360 Degree Feedback:
Where multiple raters are involved in evaluating performance, the technique is called 360 o
appraisal. The 360o technique is understood as systematic collection of performance data on an
individual or group, derived from a number of stake holders- stakeholders being the immediate
supervisors, team member, customers, peers, and self. In fact, anyone who has useful information
on how an employee does the job may be one of the appraisers. It enables an employee to
compare his or her perceptions about self with the perceptions of others. However, receiving
feedback on performance from multiple sources can be intimidating. It may also take a long time
on selecting the rater, designing questionnaire, and analyzing the data.

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REQUIREMENTS OF PERFORMANCE APPRAISAL:- Requirements of
performance appraisal could be specifically stated thus:

Employees should be apprised of expected standards and level of performance articulated

specifically, both quantitatively and qualitatively, in terms of goals, targets, behavior, etc.,
expected at their particular levels. This helps them match personal contributions to
expected output.
Personal equation of trust and compatibility is important for good informal interface
between the employer and the employee. There should also be broad agreement over
criteria to be adopted for appraisal.
Employees should be encouraged to express themselves freely about performance reports.
The organization should ensure that the appraisal system is job-related, performance-based,
uniform, consistent, fair, just and equitable and that appraisers are honest, rational and
objective in their approach and judgment and have the desirable behavioral orientation for
ethical judgment.
Supervisors responsible for performance appraisal should be well trained in the art and
science of performance appraisal to ensure uniformity, consistency and reliability of the
process. Success of the evaluation ultimately depends on the evaluator and not on any
system however perfect a support it may provide.
Performance appraisal reports should be examined meticulously, before any action, positive
or negative, is proposed to be initiated.
To promote consistency and uniformity regarding performance standards, line and staff co-
ordination is vital.
There should be provision for appeals against appraisals to ensure confidence of the
employees and their associations and unions.
Performance appraisal is a continuous activity which also evolves over time. Continuous
study and review are therefore a must.
If an appraisal system is to achieve objectives academically delineated ideal, the content
should include both work- related and trait- related components. It should highlight
significant achievements or any special traits exhibited at work with due emphasis on

53
 ethical behavior; spirit of humanism and enquiry, demonstrated learning capability and
enthusiasm for work shown by the employee. There should be an equal emphasis on the
process of performance appraisal. Procedural justice is a recognized factor in job
satisfaction at the work place. The process should stimulate two way communication of
appraisal content between superiors and subordinates;

PRE-REQUISITES FOR EFFECTIVE &SUCCESSFUL APPRAISAL

The essentials of an effective performance system are as follows:

Documentation means continuous noting and documenting the performance. It also

helps the evaluators to give a proof and the basis of their ratings.

Standards / Goals the standards set should be clear, easy to understand, achievable,
motivating, time bound and measurable.

Practical and simple format - The appraisal format should be simple, clear, fair and
objective. Long and complicated formats are time consuming, difficult to understand, and
do not elicit much useful information.

Evaluation technique An appropriate evaluation technique should be selected; the

appraisal system should be performance based and uniform. The criteria for evaluation
should be based on observable and measurable characteristics of the behavior of the
employee.

Communication Communication is an indispensable part of the Performance appraisal

process. The desired behavior or the expected results should be communicated to the
employees as well as the evaluators. Communication also plays an important role in the
review or feedback meeting. Open communication system motivates the employees to
actively participate in the appraisal process.

Feedback The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the employees
and the manner of giving feedback should be such that it should have a motivating effect
on the employees future performance.

Personal Bias Interpersonal relationships can influence the evaluation and the
decisions in the performance appraisal process. Therefore, the evaluators should be
trained to carry out the processes of appraisals without personal bias and effectively.

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CHALLENGES OF APPRAISAL
An organization comes across various problems and challenges of Performance Appraisal in
order to make a performance appraisal system effective and successful. The main Performance
Appraisal challenges involved in the performance appraisal process are:

Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the top
management. The performance data to be considered for evaluation should be carefully selected.
For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms

Create a rating instrument

The purpose of the Performance appraisal process is to judge the performance of the employees
rather than the employee. The focus of the system should be on the development of the
employees of the organization.

Lack of competence

Top management should choose the raters or the evaluators carefully. They should have the
required expertise and the knowledge to decide the criteria accurately. They should have the
experience and the necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the
evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater
should exercise objectivity and fairness in evaluating and rating the performance of the
employees.

Resistance
The appraisal process may face resistance from the employees and the trade unions for
the fear of negative ratings. Therefore, the employees should be communicated and
clearly explained the purpose as well the process of appraisal. The standards should be
clearly communicated and every employee should be made aware that what exactly is
expected from him/her.

55
SOME TYPICAL RATING ERRORS
o First impressions
o Stereo typing
o Halo effect
o Horn effect
o Central tendency
o Cookie cutter effect
o Follow up and feedback
First impressions
Raters may identify some specific qualities or features of the appraisee and quickly form an
impression about him or her.
Stereo typing
It is a standard mental picture that an individual holds about a person. It can be of that persons
gender, caste, age, physical characteristics or features. Stereo typing results in over simplified
view of the individual and may blur the raters perception and assessment of the persons
performance on the job.
Halo effect
Basing the entire appraisal on the basis of own perceived positive quality feature or trail in the
individual. Affiliation with views may result in a higher rating than it should be.
Horn effect
Basing the entire appraisal on the own negative quality or feature of an individual. These results
in an overall low rating than what it should be.
Central tendency
Most of the appraisal forms require the rater to justify if the assessment is outstanding or poor.
Therefore, some of the raters may think of rating the most of the appraisees as average
performers to avoid giving any justification or clarification.
Cookie cutter effect
Not focusing on individual specific performance and rating all the employees or groups of the
employees the same.

Follow-up and Feedback:

56
 Following up action plans agreed at appraisal assists in keeping the processes a continuous
one. Follow-up is important to maintain the credibility of the appraisal scheme, the
management of the organization and the individuals who carry out the appraisals.
The responsibility for individual follow-up rests firmly with managers, who should
incorporate their efforts to maintain the momentum of appraisal into their normal priorities.
Individuals must be given recognition and feedback about their progress in carrying out the
action plans.
Potential failure should be picked up and dealt with before it causes serious de-motivation.
Senior managers should review the departments and managers. They are responsible for
picking up and act on trends, and to consider the abilities of their managers as appraisers.
Feedback about the appraisal scheme also should be co-ordinate from all levels, so that it can
be considered in the light of making any necessary changes to keep the scheme as effective
as possible.
The test of the effectiveness should be whether or not the appraisal has met its stated
objectives, if it is not so, then concerns must be competently addressed to ensure the
continued validity of performance appraisal in the organization.

OVERCOMING THE PROBLEMS OF PERFORMANCE APPRAISAL

o Appraisal is a time consuming exercise if carried out properly, but should be considered as an
investment.
o Managers ability to appraise will inevitably vary throughout the organization. This
emphasizes the needs for thorough training and monitoring.
o Resistance to form filing may be encountered and any paper work must be user friendly.
o The greatest resistance is often to the use of job description. These are desirable to keep
appraisal on an objective footing. Where it is deemed inappropriate to use them, the burden of
maintaining objectivity is heavier.
o Often, negative attitude within the organization, run deep and are difficult to overcome. It is
important that something is seen too happened as a result to appraisal, as soon as possible.
o Certain problems of structure may create difficulties in carrying out appraisal :
Teams that are geographically disparate;

57
 Teams that are too big ;
Individual who work for more than 1 boss or who move from project to project;
Certain production jobs may be seen as too basic to warrant appraisal;
Opportunities for development and promotion are sometimes very limited.
o A lack of commitment on the part of appraisers should be addressed by stressing benefits and
ensuring that managers are consulted as to how their responsibilities for staff development can
be carried out.

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PERFORMANCE APPRAISAL PROCESS AT NCS SUGARS

The working processes at NCS Sugars have been analyzed and understood as the following.
The Performance Appraisal process provides a mechanism for employees to contribute to the
achievement of NCS SUGARs vision and organizational objectives. It facilitates
communication between employees and their immediate supervisor by providing a structure
for feedback on performance. This document has been designed to clarify the performance
measures of the appraisal and take you step by step through the completion of the
appropriate forms and provide answers to questions that you might have about the appraisal
process.

We are committed to the success of the process in order to:

1. Fully develop employee potential and improve communication relating to
performance.
2. Provide a method to reward employees on a merit basis (Based on overall budget
considerations).
3. Improve productivity and the performance of the organization.

The success of the process depends on your understanding and use of the performance appraisal
as an opportunity to improve productivity and develop the full potential of the employees you
supervise. The appraisal process works only when employees know what is clearly expected of
them. Defining the expectations is the joint responsibility of the employee and the supervisor.
Using the job description as a starting point, employees and supervisors must develop a mutual
understanding of the roles, responsibilities and expectations of the position. The objectives of the
performance appraisal are to provide feedback on the past performance of employees, to agree
on standards for future performance, and to develop goals and objectives for personal and
professional growth. For these objectives to be achieved, both managers and their staff must have
a good understanding of the process and fully support it. The performance appraisal, however, is
not a substitute for periodic and continuous review of an employees job performance.
Supervisors should conduct reviews regularly during the year in order to discuss the employees
progress toward accomplishing desired results and to address on-going issues.

Good employee relations are built upon fair and equitable treatment. We must base our
treatment of employees on definite standards, applied fairly and without discrimination. The
Performance Appraisal is a tool to honestly and objectively evaluate performance.

THE PERFORMANCE APPRAISAL FORM

59
The Performance Appraisal Form at NCS is used to evaluate an employees performance
using defined factors and levels of performance applied fairly and consistently to all
employees.

PERFORMANCE FACTORS
Performance Factors represent areas of individual performance that are essential to success in the
position and to the success of the NCS SUGARS organization. Each position and functional area
within NCS SUGARS has specific job expectations associated with these Performance Factors.
There are seven performance factors identified for all employees and one additional optional
factor. The seven performance factors are:

Communication
Cooperation/Teamwork
Quality
Productivity/Core Organizational/Business Skills
Job Knowledge/Technical Proficiency
Professionalism.
The three additional Performance Factors have been identified for employees in positions
with supervisory responsibility are:

Performance Management
Leadership
Unit Achievement.

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PERFORMANCE METHOD &LEVELS AT NCS SUGARS

The method that is used to evaluate the performance of the employees at NCS Sugars is
GRAPHIC-RATING-SACLE. Under this method appraiser lists traits such as teamwork,
communication and a range of performance values from unsatisfactory to outstanding or below
expectations to role model for each trait. The appraiser rates each subordinate by circling or
checking the score that best describes the employees performance for each trait.
At NCS Sugars rating of each Performance Factor, on a scale of 1 to 5, as it relates to the
employees performance. Specific, objective comments should be included to support the
ratings. You must include specific supporting comments for each specific rating which is
particularly high or low. Managers and employees must share a common understanding of what
each rating signifies, and use them consistently.

The five Performance Levels are:

5 Outstanding: Reserved for the individual whose work performance clearly and consistently
superior to the standards required for the position. This caliber of performance is easily
recognized by others in related areas as well as outside of the individuals own group or
function. The individual is successful in unusual and adverse situations, meets extraordinary
business challenges with little or no guidance and sets a positive example for others. Results
significantly exceeded performance standards/objectives over a sustained period.

4 - Exceeds Expectations: This individual exceeds most requirements of the position, including
all key areas. This rating demonstrates a level of accomplishment that goes beyond reasonable
and demanding standards, particularly in key knowledge, skills and abilities. Performance is
characterized by high achievement and the individual demonstrates planning and execution of all
routine functions and most major functions with minimal guidance.

3 Achieves Expectations: This individual demonstrates a level of accomplishment that

clearly fulfills expectations and at times exceeds them. It reflects good, solid and consistent
performance. Has demonstrated ability to execute and control routine functions and several
major functions with occasional guidance.

2 - Minimally Meets Expectations: This individual demonstrates a level of accomplishment

that is below the standards of performance and does not meet or marginally meets the
requirements. This individual demonstrates an inconsistent level of achievement and requires
more direction and guidance than normally expected for routine functions.

1- Needs Significant Improvement: This individuals performance does not meet expectations
and is not acceptable. Requires close supervision and direction. This individual has been
counseled yet fails to remedy deficiencies in required skill and knowledge. Corrective action is
needed.

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PERFORMANCE APPRAISAL RATING

In this section, the performance appraisal rating will be calculated. First total all the points
assigned in the Performance Factor section. Next, divide by the number of Performance
Factors used to evaluate the employee to determine the overall Performance Appraisal Rating.
APPRAISERS OVERVIEW EVALUATION
The Appraisers Overview Evaluation is a composite statement of the employees performance.
The comments should be consistent with the ratings and remarks made in the previous sections
of the form. It is a narrative overview of the employees work performance during the review
period. Your comments should convey an overall sense of value and performance.
PERFORMANCE OBJECTIVES
In this section, you will evaluate goals/objectives from the previous period. This can be done
with bullet points; a numerical rating is not needed. Specify whether or not the objective was
accomplished, to what degree, and whether or not it was completed within the timeframe
established.
NEW PERFORMANCE OBJECTIVES
In the new Performance Objectives section, you will identify specific expectations, objectives, or
development plans for the next review period. Each objective/goal must pertain to a function or
task specified in the employees job description, a strategic initiative, or operational
enhancement. Objectives must be measurable and observable. You must complete this prior to
the appraisal interview; however, you may wish to revise or add to the list during the appraisal
interview. The objectives should be jointly agreed upon by you and your employee. Performance
objectives may also need revising during the review period as the position expectations change.
An objective is a highly specific statement about what needs to be accomplished, and reflects a
significant end result that is not part of an ongoing day-to-day job responsibility. Objectives are
achieved within specific time and resource constraints. Objectives should be:
Expressed in terms of end results rather than in the tasks that go into meeting those
end results.
Challenging yet achievable.
Aligned with the goals of the functional group and the Organization.
Take into account conditions that exist, i.e., tenure in position, controllable factors,
etc.

TRAININGANDDEVELOPMENT AT NCS SUGARS:

62
The training and development program designed at NCS Sugars is understood as follows
In this section, you and your employee will jointly assess training needs and development
assignments or activities for the next review period to help them in their job and their career
growth.
You should discuss the rationale for the training and ask the employee how they think
they will benefit from the training and apply it to their jobs.
Be realistic in terms of budget and time constraints. Do not promise something that
you will not be able to follow through on later.
Focus on activities that enhance current performance or prepare the employee for
greater challenges or career advancement.
List specific activities to be carried out by the employee and indicate a date or time
frame for the activity to be completed.

Training and/or development can be internal or external and on or off-the-job. On-the-job

resources include:
Training with a senior member of your team, a member of management, or a person
from another department.
Company training session
Staff meetings
Special assignments
Reading selected periodicals/trade publications
Meetings with selected in-house professionals

Off-the-job resources include:

Seminars/workshops
Correspondence courses
Professional/technical associations
Personal improvement courses public speaking, business writing
University courses/adult education

EMPLOYEE POST REVIEW COMMENTS

This section is for the employee to add hand-written comments following the performance
appraisal interview. Statements provided could address comments about their performance or
other aspects of the performance appraisal and/or process.

SIGNATURES
The signature of the immediate supervisor on the completed form indicates that this is the
immediate supervisors fair and accurate appraisal of the employees performance and that the
immediate supervisor has communicated their feedback to the employee. The employees
signature indicates neither agreement nor disagreement with the appraisal. It does indicate that
the supervisor has reviewed the information; the employee has read the document; and that the
supervisor and the employee have discussed the appraisal.
GENERAL PROCEDURES FOR SUPERVISORS

63
Below are general procedures that Supervisors should review in preparation of their
employees performance appraisal interviews:
1. Schedule the interview with the employee in advance. Be sure to allow adequate time to
prepare (1-2 weeks) and adequate time for the interview itself (a minimum of 1 hour is
recommended).
2. Ask the employee to complete the Employee Self-Appraisal Form.
3. Review any notes that you have kept on the employee during the year to remind
yourself of earlier observations about the employees performance. Re-familiarize
yourself with the employees position description.
4. Evaluate and document the employees performance on the appraisal form.
5. If a second review is desired, give the completed evaluation form to your next level
manager.
6. Conduct the performance appraisal interview with the employee on the scheduled
date and time. Select a location which will provide privacy with no interruptions.
7. After the appraisal interview is conducted and both you and the employee have signed
the document, give a copy of the appraisal to the employee. Forward the completed
form along with the Employee Self-Appraisal form to Human Resources.

CONDUCTING THE APPRAISAL INTERVIEW

The appraisal interview should be a conversation with the purpose of providing feedback on
performance, establishing objectives for the upcoming review period, defining development
opportunities, and exchanging information.

Although each manager may conduct the appraisal in a slightly different manner, these are the
basic steps in conducting the appraisal interview:
1. Establish a rapport; put the employee at ease, your goal should be an atmosphere in
which both you and your employee can relax and be yourselves.
2. Review the purpose of the interview, pointing out the benefits of the appraisal
process
3. Encourage the employee to participate; ask questions, or bring up issues at any
time; be prepared to address any questions that arise; this must be a two-way
conversation.
4. Review the job itself before you zero in on individual performance in that job.
5. Have the employee share their Employee Self-Appraisal with you; discuss any areas of
performance you have also noted as well as those that differ. Provide the employee
feedback on the areas for development indicated.
6. Provide the employee a copy of the completed appraisal or review a document
together.
7. Whenever possible, begin the discussion on a positive not by recognizing
accomplishments achieved.
8. Discuss the Performance Factors one by one and the assigned rating to make sure the
employee understands what they mean and what you have documented. Discuss and
reflect on areas where performance can be improved, and identify areas were desired
results were not achieved.
9. Review the overall rating and the Appraisers Overview Evaluation.

64
 10. Examine objectives from previous appraisal period and assess accomplishments of
those goals.
11. Seek agreement on areas where performance can be improved.
12. Set objectives for the next appraisal period and define the plan to achieve those
objectives, offer your help by asking what you can do to help the employee carry out
these plans.
13. Invite the employee to make comments in the Employee Comments section of the
appraisal form if they wish; end the interview on a positive note.
14. Ask the employee to sign and date the form in the space provided; make it clear that
their signature does not mean that they agree with every detail of the appraisal, it only
indicates that the appraisal has been discussed with them.

Data Analysis and Interpretation

65
The purpose of data analysis and interpretation phase is to transform the data collected into
credible evidence about the development of the intervention and its performance. The purpose of
analyzing data is to obtain usable and useful information. The analysis irrespective of whether
the data is qualitative or quantitative may describe and summarize the data, identify the
relationships between the variables, compare variables, identify the difference between the
variable and forecast outcomes. And Interpretation demands fair and careful judgments. Often
the same data can be interpreted in different ways.

The working processes of the organization could be understood by analyzing the processes which
can be achieved by conducting research and collecting data to find out the effectiveness of the
processes that are being carried out in the organization. Here a research has been conducted to
understand and analyze the performance appraisal process at NCS Sugars limited. Every
organization will conduct their own way of performance appraisal process to improve employee
performance and achieve organization objectives. Hence for the successful outcome of the
performance appraisal process it should first effectively designed and implemented.

Research is carried out at employee level of different cadres for identifying their satisfaction
levels and reactions about the existing performance appraisal process and its execution by
collecting information from employees using questionnaire.

The major objectives of analysis of data are:-

o Evaluate the quality of information to enhance it.

o Evaluate impact and importance of the process being implemented.
o Seek further insight into the process for improvement.
o To provide any suggestions if required.
o Find out the exact responses and reactions from the employees.

For this research to be carried out a simple and clearly understandably questionnaire will be
designed that would cover all the aspects on which the research is to done. The questionnaire
should consist of simple questions and suitable options so that the respondent feels comfortable
to respond and choose apt option. And a suitable sample size should selected as per the
requirement as survey on entire population is difficult. The data will be of two types i.e., primary
data and secondary data. Once the questionnaire is filled by the entire sample size, the collected
will be analyzed and converted into information which can give understandable meaning. Now
the information so prepared is represented in the graphical way to get clear understanding of the
responses. Then the graphical form of information will be interpreted into simple and meaningful
words. At NCS Sugars the sample size chosen is 45 employees who have shown great co-
operation and support to respond to the questionnaire. In this project research is done on how
performance appraisal process is conducted at NCS Sugars limited.

Section A: General Profile of Respondents

66
 1. Gender Classification

Response Male Female Total

No. of Respondents 41 4 45

Gender Classification

9%

Male
Female

91%

Interpretation

From the above table we can identify that the total sample size selected is 45 members and
from graph it can be interpreted that out of total respondents selected, 91% of the employees are
male and the remaining 9% are female employees who have responded to the analysis process.
The reason for more male employees is that the organization deals with manufacturing and
processing of sugar cane which require high energy levels and hard work. As well as the work
timings of the company vary from day shift to night shift.

2. Age Group

67
 Age group(years) 25-35 36-45 Above 46 Total

No. of 22 18 5 45
Respondents

Age Group(years)

25

20

15

10

0
25-35 36-45 Above 46

Interpretation

It can be identified that the total respondents are falling between three classified
age groups of 25-35, 36-45 and above 46. The table when analyzed it can be interpreted
that 48% of the total respondents at NCS Sugars are between the age group of 25-35,
40% of the respondents are between the age group of 36-45 and 12 % of the respondents
are above the age of 46. The main reason for more employees between the age group 25-
35 is that as NCS Sugars is a sugar manufacturing company and it requires higher energy
levels and hardworking nature from employees and hence mostly young people will be
recruited who work enthusiastically and competitively.

3. Experience

68
 Experience Less than 1 year 2-4 years 5-7 years Above 7 years

No. of 18 14 13 0
Respondents

0
above 7 years

5-7 years 13

2-4 years 14

less than 1 year 18

0 2 4 6 8 10 12 14 16 18

Experience

Interpretation

It can be interpreted that experience of the respondents in the company NCS

Sugars has been tabulated. And graph has been plotted based on the tabulated data from
which it can be interpreted that 29% of the respondents are having an experience of 5 to 7
years, 31% of the respondents are having an experience of 2 to 4 years and 40% of the
respondents are having an experience of less than 1 year. The reason for more number of
people with less than one year experience is as the company will be continuously
recruiting young people who can work at higher energy levels.

Section B: Nature of current performance appraisal process

69
 4. Does your Organization operate a formal performance appraisal system?

Response Yes No Total

No. of Respondents 38 7 45

no 7

Yes

38
0 5 10 15 20 25 30 35 40

No. of responses

Interpretation

From the above table it can be observed that the responses have been tabulated
regarding in what way the performance appraisal process is conducted at NCS Sugars.
The performance appraisal process can be conducted in two ways either Formal way or
Informal way. From the graph it can be interpreted that 85 % of the respondents have
opinioned that a formal way of appraisal process is conducted at NCS Sugars limited and
the remaining 15% of the respondents have opinioned that the appraisal process is
conducted in an Informal way in the company. Here the reason for more responses to
formal way of appraisal process is the company usually believes and follows the already
existing structured and designed appraisal process present in the company.

5. Time period of the Appraisal process in the organization

70
 Response Annually Bi- annually Quarterly Weekly Total

No. of 18 27 0 0 45
respondents

30
27
25

2018

15

10

0
Annually
bi-annually 0
quarterly 0
weekly

Time period of the appraisal process

Interpretation

It can be observed that the responses have been tabulated regarding the time
intervals at which the appraisal process is conducted at NCS Sugars limited. And the
graph have been plotted based on the tabulated data from which it can be interpreted that
60 % of the respondents have opinioned that the performance appraisal process is
conducted at their organization twice in a year i.e., performance appraisal process is done
bi-annually and 40% of the respondents have opinioned that the performance appraisal
process is conducted once in a year i.e., annually. No individual respondent have
opinioned that the performance appraisal process is conducted quarterly or weekly a year.

6. Please indicate which of the following methods of performance appraisal form a part of
your system?

71
 Respons Written Graphi Rankin 360 Critical Behaviora Paired
e Essay c g degree Incident l Compari
method Rating Method appraisa assessmen assessmen son
Scale l t t method
No. of 0 45 0 0 0 0 0
Respond
ents

Method of Appraisal process

45

0 0 0 0 0 0
l
d

d
d

t
sa
e

en

en
ho

ho

ho
al

ai

m
sm
Sc
et

et

et
pr

ss
M
m

m
es
ap
g

se
tin

g
ay

on
ss
in

ee

as
Ra
s

ta

ris
nk
Es

gr

al

pa
ic

Ra

en
de

or
n

ph

m
id
te

vi
0
ra

nc

Co
rit

ha
36
G
W

lI

Be

d
ca

ire
iti

Pa
Cr

Interpretation

It can be depicted that the responses have been tabulated regarding the method of appraisal
process that is conducted at NCS Sugars limited. And the graph have been plotted based upon the
respondents data and from which it can be interpreted that 100 % of the respondents have
opinioned that Graphic rating scale method is the method used to evaluate the performance of
their employees. In this method appraiser lists traits such as teamwork, communication and a
range of performance values from unsatisfactory to outstanding or below expectations to role
model for each trait. The appraiser rates each subordinate by circling or checking the score that
best describes the employees performance for each trait.

72
 7. Are the following processes a part of your performance appraisal systems?

Response Coaching Training and Career Succession

Development management and planning
development
No. of 6 23 12 4
respondents

23
25
20 12
15 6 4
10
5
0
ng

ng
t

t
en

en
hi

ni
m

pm
ac

an
op
Co

lo

pl
el

ve

n
ev

io
de
D

s
es
nd
d
an

cc
ta

Su
ng

en
ni

em
ai
Tr

ag
an
m
er
re

No. of respondents
Ca

Interpretation

It can be identified that the responses have been tabulated regarding the existence
of the few processes as a part of performance appraisal system in the organization. And
the graph have been plotted based on the tabulated data from which it can be interpreted
that 13 % of the respondents have opinioned that coaching is a part of the performance
appraisal process, 52% of the respondents have opinioned that Training and development
is a part, 27% have opinioned that career management and development is a part and 8 %
have opinioned that succession planning is a part of the appraisal process. The reason for
more responses for training and development as a part of the performance process is, as
any organizations one of the main objectives of appraisal process would be to provide
training to poor performers and enhance development.

73
 8. Who sets the performance goals/requirements for individuals?

Response Senior Line HR Appraiser Appraisee others

Manager manager professionals &
Appraisee
No. of 26 10 4 5 0 0
respondents

Performance goal setter

Performance goal setter

Senior Manager
40
26
others Line manager
20
10
04
50

Appraisee HR professionals

Appraiser & Appraisee

Interpretation

It can be identified that the responses have been tabulated regarding who will be
setting the goals for the performance appraisal process that is conducted at NCS Sugars.
And the graph have been plotted based on the tabulated data from which it can be
interpreted that 58 % of the respondents have opinioned that senior managers set the
goals for the appraisal process, 22% of the respondents have opinioned that the line
manager set the goals, 8 % of the respondents have opinioned that the HR Professionals
set the goals and 12 % of the respondents have opinioned that both Appraiser and
appraisee together set the goals. No one of the respondents have opinioned that appraisee
alone will set the goals.

74
 9. Why do you have performance appraisal systems in your organization ?(Please tick as
many boxes as appropriate)

Respons Retenti Rewar Identificat Promotio To Identifyi Motivatio

e on d ion of ns, Clarify ng nal
Strateg allocati training & Transfers employee barriers strategy
y on developm & s job to
ent needs terminati requirem performa
on ents nce
decisions
No. of 2 6 14 10 5 5 3
responde
nts

Purpose of Performance
14
appraisal
10
6 5 5
2 3

y
gy

ts

eg
ed

en
te

at
ne

m
ra

tr
ire
St

ls
en

qu
n

na
pm
io

re

io
nt

lo

at
b
te

jo
ve

iv
Re

ot
de

s
ee

M
&

oy
ng

pl
em
ni
ai
tr

ify
of

ar
Cl
n
tio

To
ca
tif
en
Id

Interpretation

From the above table it can be observed that the responses have been tabulated regarding
the purpose for existence of the performance appraisal system in the organization. And the graph
have been plotted based on the tabulated data from which it can be interpreted that 4% of the
respondents have opinioned that retention strategy is the purpose for the existence of the
appraisal process, 13% have opinioned that Reward allocation is the purpose, 31% have
opinioned that Identification of training & development needs is the purpose, 22% have
opinioned that Promotions, Transfers & termination decisions is the purpose, 12% have
opinioned that to Clarify employees job requirements is the purpose, 12% have opinioned that

75
 Identifying barriers to performance is the purpose, 6% have opinioned that motivational strategy
is the purpose for carrying out performance appraisal process.

10. How are individual, team and organizational objectives linked?

Response Cascading of By enabling Comparing others

Goals(Top- down employees to employee
approach) know how their performance with
job contributes to work groups
achieve
Organization
goals
No. of responses 6 22 17 0

No. of responses

0
others

Comparing employee performance with work groups 17

y enabling employees to know how their job contributes to achieve Organization goals 22

Cascading of Goals(Top- down approach) 6

Interpretation

It can be observed that the responses have been tabulated regarding the process of linking of
the objectives of the Individuals, Teams and organization at NCS Sugars. And the graph have
been plotted based on the tabulated data from which it can be interpreted that 38 % of the
respondents have opinioned that the objectives of the employees, teams and organizations are
linked by comparing the employee performance with that of the work groups, 49% of the
respondents have opinioned that the linkage is done by enabling employees to know how their
job contributes to achieve Organization goals and 13 % of the respondents have opinioned that

76
the linkage of goals is done by Cascading of Goals i.e., by Top- down approach. The reason for
more number of responses to linkage by enabling employees to know how their job contributes
to achieve Organization goals is because by this an understanding and co-ordination will be
formed between employee and organization goals.
11. What are the determinants for job performance in your organization?

Response Target Technology Competency Intelligence Attitude Aptitude

achievement knowledge of employee

No. of 8 6 20 5 3 3
respondents

25
20
20
15
108
6 5
5 3 3

0
ee
t

ce

e
en

ud
dg

ud
en
oy
em

tit

tit
le

pl

llig
ow

Ap
At
ev

em

te
kn
hi

In
of
ac

gy

y
lo
et

nc
no
rg

te
Ta

ch

pe
Te

m
Co

Determinants of job performance

Interpretation

It can be identified that the responses have been tabulated regarding the
determinants considered for evaluating the job performance of an employee in the
organization. And the graph have been plotted based on the tabulated data from which it
can be interpreted that 19 % of the respondents have opinioned that target achievement is
considered as the determinant of job performance in NCS Sugars, 13% of the respondents
have opinioned that Technology knowledge is a job performance determinant,44 % of the
respondents have opinioned that Competency of an employee is a job performance

77
 determinant,12% of the respondents have opinioned that Intelligence is a job performance
determinant,6% of the respondents have opinioned that Attitude is a job performance
determinant and at the same time 6 % of the respondents have opinioned that Aptitude is
considered as a job determinant at NCS Sugars.

12. What according to you is the most challenging aspect of performance appraisal process?

Response Determining Creating a Lack of Errors in Resistance others

the rating competence rating and
evaluation instrument evaluation
criteria
No. of 8 13 8 11 5 0
respondents

Challenge in Performance appraisal

14
13
12
11
10
8 8 8
6
5
4
2
0 0
ce
ria

e
nc

an
ite

te

st
cr

pe

si
n

Re
tio

m
co
ua

of
al
ev

ck
e

La
th
g
in
in
m
er
et
D

Interpretation

It can be depicted that the responses have been tabulated regarding most challenging aspect
of performance appraisal process that is conducted at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 18 % of the respondents
have opinioned that Determining the evaluation criteria is a challenge in the appraisal process,
28% of the respondents have opinioned that Creating a rating instrument is a challenge, 18% of

78
the respondents have opinioned that lack of competence is a challenge, 24% of the respondents
have opinioned that Errors in rating and evaluation is a challenge, 12% of the respondents have
opinioned that Resistance is a challenge in conducting the performance appraisal process. Errors
in rating and evaluation would include biased ratings, giving favored rating to an ineligible
person, choosing wrong parameter for evaluating the performance of the employee.

13. What is the difference between Performance appraisal and Performance management?

Response They are same Performance management has

wider scope
No. of respondents 18 27

30

25

20

15

10

0
They are same Performance management has wider scope

Interpretation

From the above table it can be observed that the responses have been tabulated regarding the
awareness of the employees at NCS Sugars about the difference between performance appraisal
and performance management processes which are two different processes. And the graph have
been plotted based on the tabulated data from which it can be interpreted that 53 % of the
respondents have opinioned that both the processes performance appraisal and performance
management are same and 47% of the respondents have opinioned that performance
management has a wider scope than performance appraisal and both are different processes.

79
Performance appraisal is a part of performance management and performance appraisal
concentrates on the performance of an individual only but whereas performance management
concentrates on the performance of all the individuals, teams and organization together. But most
of the people think that both the processes are same because of lack of awareness and knowledge
about the processes and their scope that are carried out in the organization.

14. Success of Performance appraisal system depends on

Response Alignment of Individual goals Choosing the right method of

to Organization goals appraisal
No of respondents 27 18

Criteria for success of performance appraisal

Alignment of Individual goals to Organization goals
Choosing the right method of appraisal

40%

60%

Interpretation

It can be observed that the responses have been tabulated regarding the criteria for the
success of performance appraisal process conducted at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 60 % of the respondents
have opinioned that Alignment of Individual goals to Organization goals will be a criteria for the
success of the performance appraisal process conducted and 40% of the respondents have
opinioned that Choosing the right method of appraisal will be a criteria for the success of the
performance appraisal process conducted. There will be many factors that will contribute to the
success of the performance appraisal process and which have to be considered and carried out

80
carefully for successful results of performance appraisal process. The reason for most of the
responses to choosing the right method of appraisal as criteria for the success of the performance
appraisal process is because the method of appraisal choosing will be the first step and will
decide the efficiency of the appraisal process

15. How is, performance linked pay related to performance management in your
organization?

Response Performance Promotions Provision of Providing

linked incentives coupled with fringe benefits ESOPs
salary increase
No of 13 23 6 3
respondents

Performance linked incentives

40

20

Providing ESOPs Promotions

0 coupled with salary increase No of respondents

Provision of fringe benefts

Interpretation

It can be identified that the responses have been tabulated regarding how the performance
linked pay is related to performance management at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 13 % of the respondents
have opinioned that performance linked incentives will be there, 52% of the respondents have
opinioned that Promotions coupled with salary increase will be there, 28% of the respondents
have opinioned that Provision of fringe benefits will be there, 6% of the respondents have
opinioned that Providing ESOPs will be there. The reason for more number of responses for

81
Promotions coupled with salary increase will be there in the performance management because
one of the main objective of conducting performance appraisal process in the organization is to
identify the best performer and promote him to eligible job role as per his competency and
provide increase in his salary for his contribution towards achieving organization goals.

16. Who should own the Performance appraisal system?

Response Line managers HR managers Employee

No of respondents 23 16 6

25
23

20

16
15

10

6
5

0
Line managers HR managers Employee

No of respondents

Interpretation

It can be depicted that the responses have been tabulated regarding who should own the
performance appraisal system at NCS Sugars. And the graph have been plotted based on the
tabulated data from which it can be interpreted that 52 % of the respondents have opinioned that
Line managers should hold the performance appraisal system, 35% of the respondents have

82
opinioned that HR managers should hold the performance appraisal system and 13% of the
respondents have opinioned that employees should hold the performance appraisal system. The
reason for more number of responses for Line managers should hold the performance appraisal
system is because line managers will be the one who will be closely watching the performance,
strengths and weaknesses of the employees working under him than the HR professional. But
owning of appraisal system by HR manager can reduce the biased rating because of any dispute
between superior and subordinate.

17. Do performance appraisals get done because the system requires it in your organization
(i.e. is it a bureaucratic chore)?

Response Yes no

No of respondents 33 12

35

30

25

20

15

10

0
Yes no

Interpretation

From the above table it can be observed that the responses have been tabulated regarding
whether performance appraisals are conducted because the system requires it in your
organization at NCS Sugars. And the graph have been plotted based on the tabulated data from
which it can be interpreted that 73 % of the respondents have opinioned that yes the organization
conducts the performance appraisal process as the organization requires it and 27% of the

83
respondents have opinioned that no the organization does not conduct appraisal process because
of bureaucratic approach.

18. Does Performance appraisal distract people from more important activities?

Response Yes No

No of respondents 7 38

40

35

30

25

20
No of respondents
15

10

0
0.8 1 1.2 1.4 1.6 1.8 2 2.2

Interpretation

It can be observed that the responses have been tabulated regarding whether the performance
appraisal process conducted in the organization distracts from the important activities to be

84
carried out. And the graph have been plotted based on the tabulated data from which it can be
interpreted that 16 % of the respondents have opinioned that yes the performance appraisal
process do distract the people from carrying out other important activities, and 84% of the
respondents have opinioned that no the performance appraisal process do not distract the people
from carrying out other important activities. The reason for more number of responses
expressing that performance appraisal process do not distract people from other important things
to be carried out because performance appraisal will try to identify and improve employees
competency levels and knowledge and in accordingly which will develop the organizations
growth.

19. According to you Performance appraisal involves

Response Looking Filling forms Focuses on others

backwards development and
fostering
communication
No of respondents 9 7 29 0

30
25 29
20
159
10 7
5
0
s

0
rd

s
wa

rm

n
ck

io
fo

rs
at
ba

he
ic
lin
g

un

ot
Fil
in

m
ok

m
Lo

co
g
in
er
st
fo
nd
ta
en
pm
lo
ve
de
on

No of respondents
es
s
cu
Fo

85
Interpretation

It can be identified that the responses have been tabulated regarding what does
performance appraisal process involves in an individual employees view at NCS Sugars limited.
And the graph have been plotted based on the tabulated data from which it can be interpreted that
20 % of the respondents have opinioned that performance appraisal process involves looking
backward, 15% of the respondents have opinioned that performance appraisal process involves
filling the forms and 65% of the respondents have opinioned that performance appraisal process
involves Focuses on development and fostering communication. The performance appraisal
process analyses the competency and performance levels of the employees and provides a way to
develop their competency and skills through training and development programs and will enable
employees to work competitively and enhance their skills.

20. Do you give an overall rating for performance?

Response Yes No

No of respondents 38 7

No of respondents

7
No

38
Yes

Interpretation

It can be depicted that the responses have been tabulated regarding whether an overall
rating for performance is conducted at NCS Sugars. And the graph have been plotted based on
the tabulated data from which it can be interpreted that 84 % of the respondents have opinioned
that yes an overall rating is done in the performance appraisal process and 16% of the

86
respondents have opinioned that no an overall rating is done in the performance appraisal
process. The overall rating in the performance appraisal would focus on all the dimensions of the
employee at work along with his strengths and weaknesses which would help in further
enhancing his strengths and reducing his weakness which in general will provide growth in both
individual and organization. Not an individual aspect will provide the overall success of
organization and hence focus should be kept on all the important aspects that would influence the
performance and growth of the organization.

21. If yes, what sort of feedback do you give?

Response Numerical/alphabetica Verbal(all Verbal(positive Combination others

l positive) and negative) of the above
No of 5 2 6 32 0
respondents

No of respondents

Numerical/alphabetical

40

20
others Verbal(all positive)
5
02
06

32

Combination of the above Verbal(positive and negative)

87
Interpretation

From the above table it can be observed that the responses have been tabulated regarding
when an overall rating is given in performance appraisal process what type of feedback would be
given to employees at NCS Sugars. And the graph have been plotted based on the tabulated data
from which it can be interpreted that 12 % of the respondents have opinioned that Numerical or
Alphabetical feedback is given to the employees,4 % of the respondents have opinioned that
Verbal feedback with all positive aspects is given to the employees, 13% of the respondents have
opinioned that Verbal feedback with both positive and negative aspects is given, 71% of the
respondents have opinioned that Combination of all the above mentioned feedback types would
give. The reason for more number of responses for a combination of all the feedbacks is because
feedback is as important as the process as it will communicate on what we need to concentrate
more and hence feedback should be provided in a clear way.

22. Documentation of performance reviews is the function of

Response HR department Line manager/ Individual others

project manager
No of 11 34 0 0
respondents

40
35 34
30
25
20
15
10 11
5
0 0 0
No of respondents
al
er
t

rs
en

du

he
ag
m

vi

ot
an
rt

di
pa

In
de

ct
je
R

ro
H

/p
er
ag
an
m
ne
Li

Interpretation

88
 The table shows that the responses have been tabulated regarding whose function is to
document the performance reviews of appraisal process at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 24% of the respondents
have opinioned that HR department should document the performance reviews of the appraisal
process,76% of the respondents have opinioned that Line manager or project manager should
document the performance reviews of the appraisal process. The reason for more number of
responses that line manager or project manager should document the performance reviews of the
process is because the line manager will be closely observing the performance and competency
levels of the employees working under him than HR personnel.

23. Do you have a separate appraisal system for evaluating teams?

Response Yes no

No of respondents 33 12

35
33
30

25

20
No of respondents
15
12
10

0
Yes no

Interpretation

89
 It can be identified that the responses have been tabulated regarding whether they have a
separate appraisal system for evaluating teams at NCS Sugars. And the graph have been plotted
based on the tabulated data from which it can be interpreted that 73% of the respondents have
opinioned that yes they have a separate appraisal system for evaluating teams,27% of the
respondents have opinioned that no they have a separate appraisal system for evaluating teams.
The reason for more number of responses that a separate appraisal system will be there for
evaluating teams is because when a separate appraisal system is designed for teams then it would
be effective as it will provide growth and development to teams and organization together and
will provide efficient outcomes out of it.

24. Do you undertake performance planning?

Response Yes No

No of respondents 39 6

occurrence of performance planning

Yes No

13%

87%

Interpretation

90
 It can be depicted that the responses have been tabulated regarding the occurrence of
performance planning at NCS Sugars. And the graph have been plotted based on the tabulated
data from which it can be interpreted that 87% of the respondents have opinioned that yes
performance planning occurs in the organization,13% of the respondents have opinioned that no
performance planning does not occur in the organization. The reason for more number of
responses that performance planning is carried out in the organization is as performance planning
is first and foremost step in the performance appraisal process to be carried out. First the
organization would need to plan for the performance it needs to achieve depending on the
organization goals and then it should make clear performance planning.

25. If yes, when is performance planning carried out?

Response Hiring or transferring Business plans are Annual performance

employees newly developed and development
reviews have been
completed
No of respondents 6 12 27

30

25

20

15
No of respondents

10

0
0.5 1 1.5 2 2.5 3 3.5

Interpretation

91
 It can be observed that the responses have been tabulated regarding when performance
planning is carried out at NCS Sugars. And the graph have been plotted based on the tabulated
data from which it can be interpreted that 13% of the respondents have opinioned that during
Hiring or transferring employees performance planning is carried out, 27% of the respondents
have opinioned that when Business plans are newly developed performance planning is done and
60% of the respondents have opinioned that when Annual performance and development reviews
have been completed performance planning is done. The reason for more number of responses
that when Business plans are newly developed performance planning is done is because when
organization ventures into new business plans it would need effective plans and strategies that
would make the new venture successful and hence a proper performance planning is needed to
be done.

26. How many meetings are scheduled in a year to discuss employee performance?

Response 1 in year 2 in year 3 or more

No of respondents 6 32 7

35
30 32
25
20
15
10
6
5
0
1 in year 7

2 in year

3 or more

No of respondents

92
Interpretation

The table shows that the responses have been tabulated regarding how many meetings are
scheduled in a year to discuss employee performance at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 13% of the respondents
have opinioned that meetings are scheduled once in a year to discuss the performance of the
employees, 72% of the respondents have opinioned that meetings are scheduled twice in a year
to discuss the performance of the employees and 15% of the respondents have opinioned that
three or more meetings are scheduled in a year to discuss the performance of the employees. The
organizations usually carry out meetings twice in a year to discuss the performance of the
employees which would be sufficient and will reduce the wastage of time and if required they
would conduct one more meeting if they feel required.

27. Did the following people receive training in performance management techniques?
(please tick as many boxes as appropriate)

Response All Head of HR team Other Appraisers None

employees department managers/
s team
leaders
No of 4 5 17 11 8 0
respondent
s

93
 No of respondents

0
None

Appraisers 8

Other managers/ team leaders 11

HR team 17

Head of departments 5

All employees 4

Interpretation

It can be depicted that the responses have been tabulated regarding who all will be receiving
training on performance management techniques at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 19% of the respondents
have opinioned that appraisers will be receiving training on performance management techniques
at NCS Sugars, 23% of the respondents have opinioned that managers and team leaders will be
receiving training on performance management techniques,38% of the respondents have
opinioned that HR team will be receiving training on performance management techniques,12 %
of the respondents have opinioned that Head of the departments will be receiving training on
performance management techniques and 8% of the respondents have opinioned that all the
employees will be receiving training on performance management techniques.

28. Are the trade unions working in the organization?

Response Yes no

No of respondents 43 2

94
 50

45
43
40

35

30

25 No of respondents
20

15

10

5
2
0
Yes no

Interpretation

It can be identified that the responses have been tabulated regarding the existence of the trade
unions at NCS Sugars. And the graph have been plotted based on the tabulated data from which
it can be interpreted that 96% of the respondents have opinioned that trade unions do exist at
NCS Sugars and 4% of the respondents have opinioned that trade unions do not exist in the
organization. Trade unions focus on meeting the needs of the workers and support the workers
group. Trade unions will represent the entire workers group in dealing with the top management
of the organization and protecting them from any injustice or exploitation and hence every
organization must have trade unions to create harmonious working conditions in the
organization.

29. If yes, were the current performance appraisal arrangements agreed with the union?

Response Yes No
No of respondents 36 9

95
 No; 9

Yes; 36

Interpretation

From the above table it can be observed that the responses have been tabulated regarding
whether the performance appraisal arrangements existing in the organization have been agreed
upon by the trade unions present in NCS Sugars if there are any. And the graph have been plotted
based on the tabulated data from which it can be interpreted that 80% of the respondents have
opinioned that the performance appraisal arrangements followed in the organization have been
agreed upon by the trade unions that are present in the organization and 20% of the respondents
have opinioned that the performance appraisal arrangements followed in the organization have
not been agreed upon by the trade unions that are present in the organization. The practices and
processes that exist and that are followed in the organization should be discussed and agreed
upon by the trade unions as well to have a harmonious working environment in the organization.

30. What was the attitude of the union(s)?

Response Positive Negative neutral

No of respondents 24 13 8

96
 Attitude of trade unions

24

13

Positive Negative neutral

Interpretation

The table shows that the responses have been tabulated regarding the attitude of the trade
unions existing at NCS Sugars. And the graph have been plotted based on the tabulated data from
which it can be interpreted that 53% of the respondents have opinioned that the attitude of the
trade unions is positive, 28% of the respondents have opinioned that the attitude of the trade
unions is negative and 19% of the respondents have opinioned that the attitude of the trade
unions is neutral. The attitude of the trade unions will depend on the relation maintained between
the top management of the company and the trade unions. The management of the company
should always try to involve trade unions in all the decisions and processes that will be carried
out in the organization. Good relations maintained between work groups and management will
always help in uninterrupted production processes and good work environment.

31. What in your opinion are the causes for failure of performance appraisal system?

Response Lack of role Interval of Lack of Errors & Any other

clarity appraisals communication biased
by superiors evaluation
No of 7 8 9 21 0

97
 respondents

Causes of failure of performance appraisal process

25

20

15

10

0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Interpretation

It can be observed that the responses have been tabulated regarding the causes for the failure
of performance appraisal system that is conducted at NCS Sugars. And the graph have been
plotted based on the tabulated data from which it can be interpreted that 15% of the respondents
have opinioned that Lack of role clarity is the cause for the failure in performance appraisal
process at NCS Sugars, 18% of the respondents have opinioned that the Interval of appraisals is
the cause for the failure in performance appraisal process, 20% of the respondents have
opinioned that the Lack of communication by superiors is the cause for the failure in
performance appraisal process and 46% of the respondents have opinioned that the Errors &
biased evaluation is the cause for the failure in performance appraisal process. The errors and
biased evaluation includes biased and favored ratings towards few employees and choosing
wrong parameters of performance measures in evaluating appraisal process.

32. What are the stages of performance management during which you communicate with
your employees?

Responses Goal setting Data- gathering Mid- term Annual reviews

stage stage reviews

98
No of 35 4 3 3
respondents

40
35
30
25
20
15
10
5 No of respondents
0
e

s
ew

ew
ag
ag

vi

vi
st

st

re

re
g

g
in
in

al
m
er
tt

nu
er
se

th

-t

An
l

ga

id
oa

M
a-
G

at
D

Interpretation

It can be depicted that the responses have been tabulated regarding the stages of performance
management during which the superiors communicate with their subordinates at NCS Sugars.
And the graph have been plotted based on the tabulated data from which it can be interpreted that
78% of the respondents have opinioned that superiors communicate with their subordinates
during their Goal -setting stage,8% of the respondents have opinioned that superiors
communicate with their subordinates during Data- gathering stage, 7% of the respondents have
opinioned that superiors communicate with their subordinates during Mid- term reviews stage
and 7% of the respondents have opinioned that superiors communicate with their subordinates
during Annual reviews stage. The reason for more number responses that superiors communicate
with their subordinates during their goal setting stage is because it would be better to
communicate in the starting stage of the performance appraisal process i.e., the goal setting stage
so that the employees can get clear understanding about what activities they have work on and
what are their target goals.

33. Do you use any of the following to reduce subjectivity and bias in the performance
appraisal system?

99
Response Multiple Critical Continuous Peer review Selective Training
raters incidents observation outcomes evaluation evaluators
No of 16 2 12 8 3 4
respondent
s

Multiple raters

20
Training evaluators Critical incidents
10

0 No of respondents

Selective evaluation Continuous observation

Peer review outcomes

Interpretation

The table shows that the responses have been tabulated regarding the methods followed to
reduce subjectivity and bias in the performance appraisal system at NCS Sugars. And the graph
have been plotted based on the tabulated data from which it can be interpreted that 35% of the
respondents have opinioned that multiple rating method is followed to reduce subjectivity and
bias in the performance appraisal system at NCS Sugars, 4% of the respondents have opinioned
that Critical incidents method is followed to reduce subjectivity and bias in the performance
appraisal system, 27% of the respondents have opinioned that Continuous observation method is
followed,19% of the respondents have opinioned that Peer review outcomes method is followed
to reduce subjectivity and bias in the performance appraisal system, 7% of the respondents have
opinioned that selective evaluation method is followed to reduce subjectivity and bias in the
performance appraisal system, 8% of the respondents have opinioned that training evaluators
method is followed to reduce subjectivity and bias in the performance appraisal system. Multiple
rating will reduce biased ratings.

34. What do you do when you identify poor performers post your review session?

100
Response Training Improvement Relocation Dismissal/discharge
coaching
No of 29 8 3 5
respondents

Action on identifying poor performance

29

8
5
3

Training Improvement coaching Relocation Dismissal/discharge

Interpretation

From the above table it can be observed that the responses have been tabulated regarding the
steps taken when poor performers are identified post review session at NCS Sugars. And the
graph have been plotted based on the tabulated data from which it can be interpreted that 64% of
the respondents have opinioned that training is provided to the poor performers when they are
identified post review session, 18% of the respondents have opinioned that improvement
coaching is provided to the poor performers when they are identified, 6% of the respondents
have opinioned that relocation is done to the poor performers when they are identified, 12% of
the respondents have opinioned that the employee will be dismissed or discharged from the
duties when poor performance is identified from him. The main objective of conducting
performance appraisal process by any organization is to identify the competency levels of the
employees and improve the competencies by providing training to the employees whoever
requires it.

35. As an appraiser which role do you think you perform better?

101
Response Judge Helper both

No of respondents 13 21 11

25

21
20

15
13
No of respondents
11
10

0
Judge Helper both

Interpretation

It can be observed that the responses have been tabulated regarding the role an appraiser
thinks that he can perform in a better way. And the graph have been plotted based on the
tabulated data from which it can be interpreted that 28% of the respondents have opinioned that
appraiser thinks that he can perform the role of a judge in a better way, 48% of the respondents
have opinioned that appraiser thinks that he can perform the role of a helper in a better way and
24% of the respondents have opinioned that appraiser thinks that he can perform the role of both
judge and helper in a better way. As a judge the appraiser would need to identify the performance
appraisal method to be followed, evaluation criteria and parameters to be considered have to be
decided by the appraiser and conduct the performance appraisal process at the most satisfying
levels to both him and the employee and hence most of the appraisers think that it is a tough
work to be carried out than being a helper.

36. Do you believe that the entire process can be carried out objectively?

102
Response Yes No

No of respondents 18 27

No of respondents

Yes
40%
No

60%

Interpretation

From the above table it can be observed that the responses have been tabulated regarding if
the entire process can be carried out objectively or not. And the graph have been plotted based on
the tabulated data from which it can be interpreted that 40% of the respondents have opinioned
that yes the entire process of appraisal can be conducted objectively and 60% of the respondents
have opinioned that no the entire process of appraisal cannot be conducted objectively. The
organization should design the performance appraisal process in a way that it can give clear
understanding and overall outcome required to evaluate the employees performance.

103
 37. Your opinion on self-appraisal?

Response Highly beneficial Beneficial to a Tends to be Not beneficial at

certain degree inflated all
No of 26 10 6 3
respondents

Opinion on Self-appraisal
26

10
6
3

ll
l

d
ee
ia

ta
te
fc

gr

fa

la
de
ne

in

ia
be

fc
be
ai

ne
y

rt
hl

to
ce

be
ig

s
H

nd
a

ot
to

Te

N
l
ia
fc
ne
Be

Interpretation

It can be depicted that the responses have been tabulated regarding the opinion on the process
of self-appraisal. And the graph have been plotted based on the tabulated data from which it can
be interpreted that 58% of the respondents have opinioned that self-appraisal is highly beneficial,
23% of the respondents have opinioned that self-appraisal is beneficial only up to certain degree,
13% of the respondents have opinioned that self-appraisal tends to be inflated and 6% of the
respondents have opinioned that self-appraisal is not at all beneficial. Self-appraisal will help the
employee to analyze and the tasks he has carried out to achieve his goals and what else is needed
to be carried out and the employee can put his view of ratings he is expecting to get but
sometimes self-appraisal may get inflated.

104
 38. In which of the following situations do you find yourself uncomfortable in: (please tick as
many options as appropriate)

Response Appraising Appraising The older, The highly Dealing Coping with
distant technically highly compensate with employee
subordinat superior experienced d individual unrealistic defensivenes
e subordinat subordinate expectation s
e s s
No of 7 12 6 5 7 8
respondent
s

No of respondents

Appraising distant subordinate

20

Coping with employee defensiveness Appraising technically superior subordinate

710
12
8

7 0 6
5

Dealing with unrealistic expectations The older, highly experienced subordinates

The highly compensated individual

Interpretation

It can be identified that the responses have been tabulated regarding the situations in which
the appraiser feels uncomfortable in. And the graph have been plotted based on the tabulated data
from which it can be interpreted that 15% of the respondents have opinioned that appraising a
distant subordinate creates an uncomfortable situation,27% of the respondents have opinioned
that appraising technically superior subordinate creates an uncomfortable situation, 13% of the
respondents have opinioned that appraising the older, highly experienced subordinates creates an
uncomfortable situation, 12% of the respondents have opinioned that appraising the highly
compensated individual creates an uncomfortable situation,15% of the respondents have
opinioned that dealing with unrealistic expectations creates an uncomfortable situation and 18%
of the respondents have opinioned that Coping with employee defensiveness creates an
uncomfortable situation.

105
 39. What according to you would constitute psychological barriers to effective performance
appraisal?

Response Feelings of insecurity Being too skeptical or Worrying that

modest performance appraisal
might cause
resentment to
subordinates
No of respondents 10 12 23

25 23
20
1510 12
10
5
0
y

es
es
rit

at
cu

od

in
se

rd
in

bo
or
of

su
al
tic
gs

o
tt
in

ep
el

en
sk
Fe

m
o
to

nt
se
g
in

re
Be

e
us
ca

No of respondents
ht
ig
lm
sa
ai
pr
ap
ce
an

Interpretation
rm
rfo
pe

The table shows that the responses have been tabulated regarding the factors constituting
at

psychological barriers to effective performance appraisal. And the graph have been plotted based
th
g
in

on the tabulated data from which it can be interpreted that 22% of the respondents have
ry
or
W

opinioned that feeling of insecurity creates psychological barrier to effective performance

appraisal, 27% of the respondents have opinioned that Being too skeptical or modest creates
psychological barrier to effective performance appraisal and 51% of the respondents have
opinioned that worrying that performance appraisal might cause resentment to subordinates
creates psychological barrier to effective performance appraisal.

106
 40. Do you believe that linking rewards to performance would:

Response Motivate employees Compound problems

No of respondents 33 12

35

30

25

20

No of respondents
15

10

0
0.8 1 1.2 1.4 1.6 1.8 2 2.2

Interpretation

It can be depicted that the responses have been tabulated regarding the outcome of linking
the rewards to performance would result in. And the graph have been plotted based on the
tabulated data from which it can be interpreted that 73% of the respondents have opinioned that
linking rewards to performance would motivate the employees and 27%of the respondents have
opinioned that linking rewards to performance would compound problems. When rewards are
linked with better performance it would definitely motivate the employee to improve his
performance and show better results but if the evaluation of the performance of an employee is
not done in a proper way and if the reward is not given as result it would result in employee
dissatisfaction that would compound problems.

107
 SUMMARY
The history of performance appraisal is quite brief. Its roots in the early 20th century can
be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the
same may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance,
appraisal really dates from the time of the Second World War - not more than 60 years ago.
In many organizations - but not all - appraisal results are used, either directly or directly, to
help determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses and
promotions.
By the same token, appraisal results are used to identify the poorer performers who may require
some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.
Organizations need to be aware of laws in their country that might restrict their capacity to
dismiss employees or decrease pay.
The purpose of this study has been to determine whether the performance appraisal was
used for employee development and whether the appraisal was emphasized as an important part
of the performance appraisal process and also whether the performance appraisal helps in
increasing companys profitability.
NCS sugars ltd located at latchayyapeta, Seetanagaram (mandal), Vizianagaram (dist).NCS
sugars limited erstwhile known as Nizam sugars limited was established during 1995 with
crushing capacity of 2500 tons sugar processing work carried out till December 16 th 2002 the
Nizam sugars was a government body. During privatization process Nizam sugars sold this unit
to the NCS group of companies. Basically the sugar industry is a seasonal industry and the
industry will be in operation per a period 6 to 7 months from November to April or May. This
industry is considered as a labor industry.
The motive of the study is to understand and analyze the Performance appraisal process
conducted at NCS Sugars limited, Bobbili with reference to the employees working at the
company. The main purpose of the study is to find out the method of performance appraisal

108
method conducted at NCS Sugars, its effectiveness and employee satisfaction with the existing
performance appraisal process.
The study is done with the help of primary data given by respondents during survey and
secondary data from company website, various other websites & books to know the Appraisal
process and employee satisfaction levels at NCS Sugars, Bobbili was conducted. And also to
understand what are the various measures taken by the management to improve the performance
of low performers at NCS Sugars and also how the top performers are rewarded. This study is
done with the help of structured questionnaire which covers all the aspects relating to
performance appraisal. Primary data is collected through personal interview using structured
questionnaire and secondary data is collected from management of the NCS Sugars private Ltd,
various books, journals and from NCS Sugars website.
At NCS Sugars the traditional form of performance appraisal is conducted by using Graphical
rating scale method. By using this method the management categorizes their employees
performance into 5 five levels: - 5 Outstanding, 4 - Exceeds Expectations, 3 Achieves
Expectations, 2 - Minimally Meets Expectations, 1- Needs Significant Improvement. Once
the performance is evaluated the employees performance is matched with the above set
standards. The main reason of using this method is because it is very easy to understand and
implement. The performance of the employees should be evaluated based on the performance
parameters that are set while designing the performance goals and they should not judge the
employee based on the parameters which were not mentioned in the process. The major error that
is identified at NCS Sugars performance evaluation is stereo typing: it is a standard mental
picture that an individual holds about a person. It can be of that persons gender, caste, age,
physical characteristics or features. Stereo typing results in over simplified view of the individual
and may blur the raters perception and assessment of the persons performance on the job.

It is identified that Majority of the employees at NCS Sugars limited, Bobbili are male
employees and are between the age group of 25-35. A formal way of performance appraisal
process is conducted at NCS Sugars twice in a year. The main purpose of conducting appraisal
process at NCS Sugars is to identify training and development needs and by using performance
ratings promotions and salary increases are provided. Multiple raters and continuous observation

109
are the techniques used in the company to reduce subjectivity and bias in performance appraisal
system.

Company can enhance its business or increase its sales by doing these above mentioned things;
and also to gain the hearts of their employees. This study helped me a lot for analyzing &
understanding what really Appraisal in a organization its Role & importance in improving the
overall performance of their employees and organization. Findings and
suggestions/recommendations of this report might be helpful for the company to improve its
overall employees performance and business-performance.

110
 FINDINGS
Here are some important findings drawn from the study, Performance Appraisal System at NCS
Sugars limited

Majority of the employees at NCS Sugars limited, Bobbili are male employees.
Majority of the employees at NCS Sugars are between the age group of 25-35.
Employees with less than one year experience are more at NCS Sugars.
The method of conducting performance appraisal in the company is formal way.
Appraisals are conducted in the company twice in a year.
Graphic rating scale is the majorly used method of evaluating performance at NCS
Sugars.
It is found that training and development is the major process as a part of performance
appraisal system at NCS Sugars.
Majority of the employees have felt that senior managers set the goals for the individuals.
The main purpose of conducting appraisal process in the company is to identify the
training & development needs.
It is found that the objectives of employees, teams and organizations are linked by
enabling employees to know how their job contributes to achieve organization goals.
It is identified that competency of employees is majorly considered as a determinant for
the job performance.
Most of the employees have felt that creating a rating instrument is the most challenging
aspect of performance appraisal process.
Majority of the employees have felt that performance management has a wider scope and
is different from performance appraisal.
A good number of employees have felt that Alignment of Individual goals to
Organization goals will result in success of the performance appraisal system.
Majority of the employees have felt that promotion along with increase in salary is
provided for showing better performance at work.
It is found that line managers should own the performance appraisal system.
Performance appraisal is conducted as the system requires it in the organization.
Most of the employees feel performance appraisal process doesnt distract them from
important activities.
It is found that performance appraisal involves focus on development and fostering
communication.
It is identified that overall rating is given for the performance at NCS Sugars.
A good number of respondents are getting feedback both orally and verbally in both
positive and negative aspects.
It is identified that documentation of performance reviews is the function of line manager
or project manager.

111
 Majority of the employees have felt that a separate performance appraisal is designed for
evaluating team performance.
It is identified that performance planning is conducted at NCS Sugars.
A major number of employees feel that when Annual performance and development
reviews are completed then performance planning is carried out.
It is found that meetings are conducted twice in a year to discuss the performance of the
employees.
It is identified that that majority of the team leaders and HR teams receive training on
performance management techniques.
It is identified that trade unions are working the organization.
It is also found that the existing trade unions are agreed with the performance appraisal
arrangements followed in the company.
Majority of the employees have felt that the attitude of the trade unions is positive.
It is felt that errors and biased evaluation can be the major cause for the failure of the
performance appraisal system.
A good number of employees feel that goal setting is the stage during which appraiser
communicates with the employees.
Multiple raters and continuous observation are the techniques used in the company to
reduce subjectivity and bias in performance appraisal system.
It is identified that training is provided when poor performance is observed post review
session.
It is found that appraisers feel, they can perform better as a helper.
Majority of the employees have felt that the performance appraisal process cannot be
carried out objectively.
A good number of people feel that self-appraisal is highly beneficial.
It is identified that an appraiser feels uncomfortable while appraising technically superior
subordinate.
Majority of the employees have felt that worrying that performance appraisal might cause
resentment to subordinates is the major psychological barrier to effective performance
appraisal.
A good number of respondents have felt that liking rewards to performance would
motivate the employees to perform better.

112
 SUGGESTIONS

It would be appropriate to offer some useful suggestion in the light of the above
conclusion drew from the analysis of the different aspects of the performance appraisal of
the company. The following are the suggestions offered for consideration.

Appraisal at proper time intervals: It is suggested to conduct the performance appraisal

regularly and to give proper feedback to the employees and, the result of the performance
appraisal may be linked to training programs conducted in the organization. At NCS
appraisal is conducted not at frequent intervals where in a year they conduct either once
or twice it depends upon the decision of the top management. So it is required at NCS
Sugars to conduct appraisal at regular intervals whether it may be quarterly, half yearly or
annually.

Implement 360 degrees method: A quite young variant of performance appraisal is 360-
degree performance appraisal. According to Wise in the typical 360-degree process,
supervisor(s), subordinates, peers and (less frequently) internal or external customers
provide feedback on performance for each target ratee, using some type of standardized
instrument. The ratee is then expected to use the data, along with a self-rating, to make
appropriate changes to improve performance. The purpose of 360-degree performance
appraisal is generally the same as for normal performance appraisal, but it is assumed that
the new process offers some advantages. Although it is a complicate process to
implement this 360 degrees method at NCS Sugars management has to conduct a sample
appraisal by using this method and explain the advantages to their employees and also
collect possible suggestions from their employees before finally implementing this type
of appraisal method at NCS Sugars.

Performance based Pay: One widely accepted notion for improving individual
performance at NCS Sugars is tying pay to performance in order to increase productivity.
Performance based pay is a system which specifically seeks to reward employees for
their contribution as individuals or as a part of a group, or to reward employees on

113
 account of the organizations overall positive performance. There are various types of
schemes which fall within the description of performance-based pay. But all of them are
designed to share with or distribute to employees the financial results of organizational
performance. The schemes fall into the following broad categories: individual-based
incentive schemes, profit sharing, and gain sharing, employees share option scheme or
skill/competence based pay. Performance based pay system should be implemented in the
organization so that it will motivate employees to perform better.

Rating accuracy, errors and bias: At NCS Sugars while conducting performance
appraisal process accuracy should be maintained in ratings to reduce errors and biased
rating should be avoided. Parameters which were decided should only be considered for
evaluating the performance of the employees. The accuracy of ratings is determined by the
reliability and validity of the measurement at hand. Reliability refers to the relative absence
of random measurement error in a measurement instrument or precision of a measurement
instrument. According to research theory a measurement is always formed out of a true score
plus some error score. But the goal is of course to keep the error component minimal. To
measure reliability mainly three different methods exists. The first is the inter rater-reliability
which assesses the consistency of ratings across different raters. Consistency over time is
referred to as retest-reliability. Internal reliability describes if statements are consistent.
Rothstein suggests that the reliability of ratings may be increased by providing sufficient
opportunity to observe which will also improve the accuracy of ratings. Unfortunately, there
are several different error phenomena which all poses a threat to the accuracy of ratings. In
general, these errors can be differentiated as being related to (1) inadequate observations, (2)
faulty standards or expectations about performance, and (3) difficulties in using a rating
scale. Recency error is an example for observational errors. It refers to situations in which
rater may neglect to pay much attention to an employee until just shortly before the
performance appraisal is due. The caused evaluation is likely not to fully represent the ratee`s
performance. Harrell and Wright examined the influence of cognition on performance ratings
as an explanation for such observational error. They found that the fact that individuals have
cognitive limits to information processing forms a great obstacle for raters. To deal with it
raters often form their own reality on the basis of information available to them, selectively
attending to some behavior while ignoring others. Leniency and central tendency errors are

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 examples of distributional errors. Leniency error is a tendency to rate higher than ratees
deserve.

Performance Feedback: A written form of feedback about the performance appraisal

may be given to each employee for his future reference. A clear measure should be
mentioned that will be followed on identifying poor performance. To feedback to the
employee generally aims at improving performance effectiveness through stimulating
behavioral change. Thus is the manner in which employees receive feedback on their job
performance a major factor in determining the success of the performance appraisal system at
NCS Sugars.

Training: Continuous training programs should be designed for both strong and weak
performers to enhance and develop their skills further which would improve both
employee and organization performance. Nearly all authors agree in the fact that rater must
be trained to observe, gather, process, and integrate behavior-relevant information in order to
improve performance appraisal effectiveness. For example proposes that training should aim
at three goals: First, it should familiarize judges with the measure they will be working with.
Second, it must ensure that judges understand the sequence of operations that they must
perform. Third, it should explain how the judges should interpret any normative data that
they are given. Because errors are well-ingrained habits, Tziner and Kopelman state that
extensive training is necessary for avoiding such errors. Therefore, the training should
provide trainees with broad opportunities to practice the specified skills, provide trainees
with feedback on their practice appraisal performance, and that a comprehensive
acquaintance with the appropriate behaviors to be observed. Continued training is needed in
areas such as goal-setting and monitoring performance on a frequent basis, and personal and
interactional skills.

Employee Participation in the Appraisal Process: Employees of the organization

should also be allowed to participate in the performance appraisal process to make the
process effective and reduce employee dissatisfaction. At NCS Sugars genuine employee
participation in several aspects of the appraisal process because it has the potential to mitigate
may of the dysfunctions of traditional performance appraisal systems as well as to engender a
more human and ethical human resource management decision-making process. The first
participation should according to him take place during the development of reliable, valid,

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fair and useful performance standards. Second, there should be employee participation during
designing the rating format and measurement scales. Employee participation is a key element
of intrinsic motivational strategies that facilitate worker growth and development.
Furthermore, employees attain ownership over the performance appraisal process and
employees` acceptance is enhanced that way. Third, it generates an atmosphere of
cooperation and employee support which reduces appraisal related tension, defensive
behavior and rater-ratee conflict.

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 CONCLUSION

What became clear is that the performance appraisal system of the target company is not
perceived as bad as it could have been, but unfortunately also not as good as it could have been.
The effectiveness of the performance appraisal system is as a consequence probably limited.
Thus, the results revealed at least that there is room for improvement in all factors. Furthermore,
the results provide some ideas how these improvements could look like: First of all, it should be
decided if the integration of more appraisal sources could be useful. According to the findings
peers and customers are seen as valuable information sources. How these sources are integrated
into the appraisal process, for example if their rating should influence performance-based pay
results, should be subject to further investigation. It is important to always keep in mind that the
acceptance of users is the key determinant for performance appraisal effectiveness. A second
implication which is relatively easy to implement should be that raters receive more or better
training in the development of objective and relevant objectives. What the exact reasons for this
problem are must be analyzed by further research. The training material and-task should be
investigated as well as the amount of time which is spent with training. At the moment, this part
of the performance appraisal process is only one of three learning objectives for the first training
day. The third idea for improvement concerns the frequency of feedback. Informal, each rater can
also easily implement more feedback. A solution could be that raters integrate so called
achievement updates on a weekly basis which then touch upon good and bad issues, while so
called achievement assessments take place bi-monthly, are more formal and aim at getting a
more clear depiction of issues troubling both sides. More formally, it could be decided if
quarterly a short performance review with objective updating is integrated into the performance
appraisal process. But the most important implication is that the performance-based pay system
and the opinion of employees about it must be analyzed urgently. Then of course the system
needs to be adjusted according to the results. Otherwise the target organization runs risk in the
long term to destroy all positive motivational effects that such a system can have if it is well
designed. It might be important, too, that the target organization eliminates the impact of age.
This could for example be done by giving employees some form of performance appraisal
training as they enter the organization. This training must not be as detailed as for raters but
should inform about the goals, the process and introduce the instrument. By doing this, the target

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organization would make use of the chance that a completely new understanding and support for
the performance appraisal system could grow from bottom upwards. Furthermore, it should be
thought about implementing regular feedback-checks with regard to performance appraisal. This
is especially important before developing and implementing a new component. Otherwise one
learns not until it is in praxis that money and time spend were actually useless. Such negative
after-effects could be overcome with the help of surveys, good ideas and suggestions could be
gathered and employees feel that the target organization attaches great importance to their
opinion. Thus, the quality of the performance appraisal and the acceptance of its users could
easily be improved. The study has two major shortcomings which limit the generalizability of the
results: First, results may be specific for the department of the target organization where the
questioning was conducted. This department has a quite specific task and employees there often
have a bank-untypical educational background. Thus, it is possible that the results are not
representative for whole bank. Second, especially the raters` results may not be taken too serious
because of the small amount of respondents. 15 respondents are far from being a reliable group.

BIBILOGRAPHY

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Journals:

SL.NO TITLE AUTHOR NAME JOURNAL REFERRED

1 The Social context Paul E.Levyand Journal of management,2004

of performance Jane R.Williams -jom.sagepub.com
Appraisal: A
Review and
framework for the
future
2 Subjective Christian Applied Economics, 2012-
performance Grund&JudithPrzemeck Taylor & Francis
appraisal and
inequality aversion

Books:

SL.NO AUTHOR NAME TITLE

1 Ashwatappa Human Resource Management

2 Dipak Kumar Bhattacharya Human Resource Management

3 Dessler Varkkey Human Resource Management
4 T.V.Rao Performance Management & Appraisal system

5 Michael Armstrong Performance management- Key strategies & Practical

&Kogan Page guidelines

Websites:

1. www.ncsgroup.in
2. www.google.com
3. www.ebsco.com

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APPENDIX

Section A: General Profile of Respondents:

1. Gender: Male Female

2. Age group: 25 35 36-45 46+

3. Experience
a. Less than 1 year b. 2-4years c. 5-7 years d. More than 7 years

Section B: Nature of performance appraisal:

4. Does your organization operate a formal performance appraisal system?

a) Yes b) No

5. Time period of the Appraisal process in the organization?

a) Annually b) Bi-annually c) Quarterly d) weekly

6. Please indicate which of the following methods of performance appraisal

Form a part of your system?

a) Written Essay method f) Critical Incident assessment

b) Graphic rating scales g) Behavioral Assessment (BARS)

c) Ranking method h) Paired Comparison Method

d) 360 degree appraisal i) Forced distribution method

e) Self-appraisal j) Balance Score card

k) Any other pls. specify_______________

7. Are the following processes a part of your performance appraisal systems?

a) Coaching b) Training and development

c) Career management & development d) Succession planning

Plans

8. Who sets the performance goals/requirements for individuals?

a) Senior Managers b) Line managers/Team leaders

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 c) HR professionals d) Appraisee

e) Appraiser & Appraisee e) others (pls. specify)

9. Why do you have performance appraisal systems in your Organization? (Please tick as
many boxes as appropriate)

Retention strategy Reward allocation

Identification of training and development needs Facilitates Promotions

& Transfers & Termination decisions

To clarify an employees job requirements identifying barriers to

performance

Motivational Strategy

10. How are individual, team and organizational objectives linked?

a. Cascading of goals(Top down approach)

b. By enabling employees to see how their job contributes to the overall objectives of the
organization through frequent interactions.
c. Comparing employee performance with work groups
d. Other.___________________________________________

11. What are the determinants for job performance in your organization?

Organizational Culture Technology

Competency of the employee Intelligence

Attitude Aptitude

12. What according to you is the most challenging aspect of performance appraisal?
a) Determining the evaluation criteria
b) Creating a rating instrument
c) Lack of competence
d) Errors in rating and evaluation
e) Resistance
Others._____________________________________________

13. What is the difference between performance appraisal and performance management?

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 a. They are the same b) Performance management has a wider scope.

14. Success of performance appraisal systems depend on:

a. Alignment of individual goals to organizational goals
b. Choosing the right method of appraisal

15. How is performance -linked pay related to performance management in your

organization?
a. Performance Linked incentives
b. Promotions coupled with salary increase
c. Provision of Fringe Benefits
d. Providing ESOPs

16. Who should own the performance appraisal system?

a. Line managers
b. HR Managers
c. Employees
17. Do performance appraisals get done because the system requires it in your organization? (
i.e. is it a bureaucratic chore)?a) Yes b) No

18. Does performance appraisal distract people from more important activities?
a) Yes b) No

19. According to you performance appraisal involves:

a. Looking backwards
b. Filling forms
c. Focuses on development and fostering communication
d. Any other, pls. specify______________

20. Do you give an overall rating for performance?

a) Yes b) No

21. If yes, what sort of feedback do you give?

a) Numerical/alphabetical b) Verbal (all positive)

c) Verbal (positive and negative) d) Combination of the above

e) Others (pls. specify)

22. Documentation of performance reviews is the function of:

a) HR department b) Line Manager/ Project Manager

c) Individual d) others (pls. specify)

23. Do you have a separate appraisal system for evaluating teams?

a) Yes b) No

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 24. Do you undertake performance planning?

a) Yes b) No

25. If yes, when is performance planning carried out?

a) Hiring or transferring employees

b) Business plans are newly developed.
c) Annual performance and
Development reviews have been completed
26. How many meetings are scheduled in a year to discuss employee Performance?

a) 1 b) 2 c) 3 or more

27. Did the following people receive training in performance management Techniques?
(Please tick as many boxes as appropriate)

All Employees Other Managers/team leaders

Heads of departments Appraisers

HR Team None

28. Are there trade unions operating in your organization?

a) Yes b) No

29. If yes, were the current performance appraisal arrangements agreed with the union?

a) Yes b) No

30. What was the attitude of the union(s)?

a) Positive b) Neutral

c) Negative

31. What in your opinion are the causes for failure of performance appraisal System?

a) Lack of role clarity b) Interval of appraisals

c) Lack of Communication by superiors d) any other pls.

specify______________________________

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 32. What are the stages of performance management during which you communicate with
your employees?

a. Goal-setting stage
b. Data-gathering stage
c. Mid term reviews
d. Annual Reviews
33. Do you use any of the following to reduce subjectivity and bias in the performance
appraisal system?
a) Multiple raters b) Critical Incidents

c) Continuous Observation d) Peer review outcomes

e) Selective evaluation f) Training evaluators

34. What do you do when you identify poor performers post your review Session?

a) Training b) Improvement coaching

d) Relocation e) Dismissal/discharge

35. As an appraiser which role do you think you perform better?

a) Judge b) Helper c) Both

36. Do you believe that the entire process can be carried out objectively?

a) Yes b) No

37. Your opinion on employee self-appraisal?

a) Highly beneficial b) Beneficial to a certain degree

c) Tends to be inflated d) Not beneficial at all

38. In which of the following situations do you find yourself uncomfortable in:

(Pls. tick as many options as appropriate)

a) Appraising distant subordinate

b) Appraising technically superior subordinate

c) The older, highly experienced subordinates

d) The highly compensated individual

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 e) Dealing with unrealistic expectations

f) Coping with employee defensiveness

39. What according to you would constitute psychological barriers to effective Performance
appraisal?

a) Feelings of insecurity
b) Being too skeptical or modest
c) Worrying that performance appraisal might cause resentment to subordinates.

40. Do you believe that linking rewards to performance would:

a) Motivate employees b) compound problems

41. Are there any other comments you would like to make about your performance appraisal
arrangements not covered in the questions above?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________

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