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INTRODUCTION

An organization’s goals can be achieved only when people put in their best efforts. How to
ascertain whether an employee has shown his or her best performance on a given job? The
answer is performance appraisal. Employee assessment is one of the fundamental jobs of
HRM.

A performance appraisal, is a method by which the job performance of an employee is

evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor. A performance appraisal is a part of guiding and
managing career development. It is the process of obtaining, analyzing, and recording
information about the relative worth of an employee to the organization. Performance
appraisal is an analysis of an employee's recent successes and failures, personal strengths and
weaknesses, and suitability for promotion or further training. It is also the judgment of an
employee's performance in a job based on considerations other than productivity alone.

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Meaning and Definition

In simple terms, performance appraisal may be understood as the assessment of an

individual's performance in a systematic way, the performance being measured against such
factors as job knowledge, quality and 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.

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

employee’s job related behaviors 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 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. Employees performance review, personnel appraisal, performance
evaluation employee evaluation and (perhaps the oldest of the terms used) merit rating. In a
formal sense, employee assessment is as old as, the concept of management and in an
informal sense; it is probably as old as mankind. Nor performance appraisal is done in
isolation.

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 OBJECTIVES OF STUDY

Data relating to performance assessment of employees are recorded, stored. And used for seven
purposes. The main purposes of employee assessment are:

1. To effect promotions based on competence and performance.

2. To confirm the services of probationary employees upon their completing the probationary
period satisfactorily.

3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been
fixed.

5. To let the employees know where they stand insofar as their performance is concerned and to
assist them with constructive criticism and guidance for the purpose of their development.

6. To improve communication. Performance appraisal provides a format for dialogue between the
superior and the subordinate, and improves understanding of personal goals and concerns. This can
also have the effect of increasing the trust between the rater and the rate.

7. Finally, performance appraisal can be used to determine whether HR programmes such a selection,
training, and transfers have been effective or not.

Broadly, performance appraisal serves four objectives-

(I) Developmental uses,

(ii) Administrative uses/decisions,

(iii) Organizational maintenance/objectives, and

(iv) Documentation purposes.

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 SCOPE OF STUDY

The scopes of performance appraisal include the following:

 Provide employees with a better understanding of their role and responsibilities.

 Increase confidence through recognizing strengths while identifying training needs to

improve weaknesses.

 Improve working relationships and communication between supervisors and

subordinates.

 Increase commitment to organizational goals.

 Develop employees into future supervisors.

 Assist in personnel decisions such as promotions or allocating rewards; and allow

time for self-reflection, self-appraisal and personal goal setting.

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 LIMITATIONS OF STUDY

The following are the limitations faced by me during the course of the study.

 The sample consisted only of employees in the day shift. Employees of the night shift
were not considered for the purpose of study.

 There is no concrete basis to prove the response given is a true measure of the opinion
of all the employees as a whole.

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

 The questionnaire contained mostly multiple-choice questions; therefore many

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

 The response of the respondents may not be accurate thinking that the management
might misuse the data.

 Almost all of the questionnaires had the open-ended question no. 8, left unanswered.

 Sensitive company information cannot be displayed in the project report.

 Due to the fact that most of the respondents were young, the questions might not have
been answered with due sincerity.

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 RESEARCH METHODOLGY

RESEARCH

Research comprises defining and redefining problems, formulating hypothesis or suggested

solutions, collecting, organizing and evaluating data, making deductions and reaching
conclusions and at last carefully testing the conclusions to determine whether they fit the
formulating hypothesis.

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the problems. It is a way of studying

how research is done scientifically. It consists of various steps that are generally adopted by
the researcher in studying his research problems along with the logic behind them.

RESEARCH DESIGN

Research design is a framework or the blue print for conducting the research project.
Research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure. It
includes an outline of what the researcher will do from writing the hypothesis and its
operational implications to the final analysis of data.

TYPES OF RESEARCH DESIGN

 Exploratory research design

 Descriptive research design
 Experimental research design

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EXPLORATORY RESEARCH DESIGN

It is also termed as formulate research design. The main purpose of the study is to formulate a
problem for more precise investigation.

DESCRIPTIVE RESEARCH DESIGN

In descriptive research design, those studies are taken which are concerned with describing
the characteristics of a particular individual or a group.

EXPERIMENTAL RESEARCH DESIGN

In this casual relationships between the variables are tested. It is also known as hypothesis
testing research design.

The present project is exploratory in nature. The main objective of the exploratory research
design is to define the problem into researchable one and transformation of discovered
problem into defined one. So the data is being adjusted according to the need.

 Primary Data
 Secondary Data

PRIMARY DATA

Primary data are those data, which is originally collected. It is of following type’s
questionnaire, interview, observation etc.

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SECONDARY DATA

Secondary data are those data which are collected and which has been passed through
statistical research.

In this project, secondary data has been collected from following sources:-

 Annual Reports
 Books
 Internet
 Other material and report published by company

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 RESEARCH METHODOLOGY ADOPTED

Research Design : Descriptive research

Research Instrument : Structured Questionnaire

Sampling Plan

I) Sample Method : Non-Probability

Sampling
(Convenience Sampling)

ii) Sample Size : 50

iii) Sample Unit : Employees who do not

hold a Supervisory
position

Sampling Design

Convenience sampling, as the name implies, is based on the convenience of the researcher
who is to select a sample. Respondents in the sample are included in it merely on account of
their being available on the spot where the survey was in progress.

Source of Data

a) Primary Data : Structured Questionnaire

b) Secondary Data : Journals, Booklets, Company Data, etc.

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11
 MEANING
Performance Appraisal has been considered as the most significant an indispensable tool for
an organization, for an organization, for the information it provides is highly useful in making
decisions regarding various personnel aspects such as promotion and merit increases.
Performance measures also link information gathering and decision making processes which
provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting,
selection, training and compensation. Accurate information plays a vital role in the
organization as a whole. They help in finding out the weaknesses in the primary areas.

Formal Performance Appraisal plans are designed to meet three needs, one of the
organization and the other two of the individual namely:
O They provides systematic judgments to back up salary increases, transfers, demotions or
terminations.

O They are the means of telling a subordinate how he is doing and suggesting needed
changes in his behavior, attitudes, skills or job knowledge. They let him know where he
stands with the Boss.

O Superior uses them as a base for coaching and counseling the individual. On the basis of
merit rating or appraisal procedures, the main objectives of Employee Appraisal are:
 To enable an organization to maintain an inventory of the number and quality of all
managers and to identify and meet their training needs and aspirations.

 To determine increment rewards and to provide reliable index for promotions and
transfers to positions of greater responsibility.

 To suggest ways of improving the employee s performance when he is not found to be

up to the mark during the review period.

 To identify training and development needs and to evaluate effectiveness of training

and development programmes.

 To plan career development, human resource planning based potentials.

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 SUMMARY OF THE PERFORMANCE APPRAISAL

Setting performance standards, observing and providing feedback, and conducting appraisals
enables the Team Leader to achieve the best results through managing employee
performance.
To begin the process, the Team Leader and the employee collaborates on the development of
performance standards. The Team Leader then develops a performance plan that directs the
employee's efforts toward achieving specific results, to support organizational growth as well
as the employee's professional growth. Discussion of goals and objectives throughout the
year provides a framework to ensure that employees achieve results through One on One and
mutual feedback. At the end of the rating period, the Team Leader appraises the employee's
performance against existing standards, and establishes new goals together for the next rating
period.
As the immediate supervisor, the Team Leader plays an important role; his closest interaction
with the employee occurs at this level.

There are four key elements in the appraisal system:

1. Set objectives - Decide what the Team

Leader wants from the employees and
agree these objectives with them. Manage
Set objectives
performance
2. Manage performance - Give
employees the tools, resources and
training they need to perform well.
Carry out the Provide
3. Carry out the appraisal - monitor and
appraisal rewards/remedies
assess the employees' performance,
discuss those assessments with them and
agree on future objectives. KEY ELEMENTS IN APPRAISAL SYSTEM

4. Provide rewards/remedies - Consider pay awards and/or promotion based on the

appraisal and decide how to tackle poor performance.

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Performance standards

How does the Team Leader decide what's acceptable and what's unacceptable performance?
The answer to this question is the first step in establishing written standards. Performance
expectations are the basis for appraising employee performance. Written performance
standards let the Team Leader to compare the employee's performance with mutually
understood expectations and minimize ambiguity in providing feedback. Having performance
standards is not a new concept; standards exist whether or not they are discussed or put in
writing. When the Team Leader observes an employee's performance, he usually makes a
judgment about whether that performance is acceptable. Standards identify a baseline for
measuring performance. From performance standards, the Team Leader can provide specific
feedback describing the gap between expected and actual performance.

360 Degree Performance Appraisals

It is the process of systematically gathering the

Manage
data on a person, skills, abilities, and behaviors r
from a variety of sources and the manager
peers, subordinates and even customers and
clients.
Other
In this method appraisal of an employee is done s Self Peers
by his superior peer’s subordinates and clients
or outsiders with whom he interacts in the
course of his job performance. In this method
Subordinat
besides appraising the performance of an e

employee his other attributes such as talents

behaviors values and technical considerations
are also appraisal.

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Guiding Principles

 Effective performance standards:

 Serve as an objective basis for communicating about performance.
 Enables the employee to differentiate between acceptable and unacceptable results.
 Increase job satisfaction because employees know when tasks are performed well.
 Inform new employees of your expectations about job performance.

Key Responsibility Areas (KRA)

The Team Leaders in association with the Project Manager write performance standards for
each key area of responsibility on the employee's job description. The employee actively
participates in its development. Standards are usually established when an assignment is
made, and they are reviewed if the employee's job description is updated. The discussions of
standards include the criteria for achieving satisfactory performance and the proof of
performance (methods the Team Leader will use to gather information about work
performance).

Characteristics of Performance Standards

Standards describe the conditions that must exist before the performance can be rated
satisfactory. A performance standard should:
-Be realistic, in other words, attainable by any qualified, competent, and fully trained person
who has the authority and resources to achieve the desired result.
-Describe the conditions that exist when performance meets expectations.
-Be expressed in terms of quantity, quality, time, cost, effect, manner of performance, or
method of doing
-Be measurable, with specified method(s) of gathering performance data and measuring
performance against standards

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 PERFORMANCE APPRAISAL PROCESS

ESTABLISHING PERFORMANCE
STANDARDS
Establishing performance
The first step in the process of performance appraisal is standards
the setting up of the standards which will be used to as
the base to compare the actual performance of the
employees. This step requires setting the criteria to judge Communicating the
the performance of the employees as successful or standards
unsuccessful and the degrees of their contribution to the
organizational goals and objectives.

Measuring the actual

performance
COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to

communicate the standards to all the employees of the Comparing the actual with
organization. The employees should be informed and the the desired performance
standards should be clearly explained to them. This will
help them to understand their roles and to know what
exactly is expected from them.
Discussing results

MEASURING THE ACTUAL

PERFORMANCE
The most difficult part of the Performance appraisal Decision making
process is measuring the actual performance of the
employees that is the work done by the employees during the specified period of time.

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COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards set.
The result can show the actual performance being more than the desired performance or, the
actual performance being less than the desired performance depicting a negative deviation in
the organizational performance.

DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on one-to-
one basis. The focus of this discussion is on communication and listening. The results, the
problems and the possible solutions are discussed with the aim of problem solving and
reaching consensus. The feedback should be given with a positive attitude as this can have an
effect on the employees’ future performance. The purpose of the meeting should be to solve
the problems faced and motivate the employees to perform better.

DECISION MAKING

The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR
decisions like rewards, promotions, demotions, transfers etc.

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 LIMITATIONS OF PERFORMANCE APPRAISAL

Halo Effect

The rater may base the full appraisal on the basis or one positive quality which was found out
earlier. For e.g. if a person is evaluated on one quality i.e. emotional stability and if he scores
very high in the case of emotional stability, then the rater may also give him high scores
(marks or grades) for other qualities such as intelligence, creativity etc., even without judging
these characteristics.

In this case the superior appraises the person on certain positive qualities only. The negative
traits are not considered. Such an appraisal will not give a true picture about the employee.
And in some cases employees who do not deserve promotions may get it.

Problem of Leniency or Strictness

Some bosses are lenient in grading their employees while some are very strict. Employee who really
deserves promotions may lose the opportunity due to strict bosses while those who may not deserve
may get benefits due to lenient boss.

Many raters are too lenient (not strict) in their ratings. High scores may be given to all
employees, even if they have no merit. Also a reverse situation may take place, where all
employees are rated very strictly and very low scores are given.

Central Tendency

In this case the superior gives an appraisal by giving central values. This prevents a really talented
employee from getting promotions he deserves and some employees who do not deserve anything
may get promotion.

Sometimes a rater gives only middle range scores to all individuals. Extremely high or low
scores are avoided. This is called Central Tendency.

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Personal Bias

Performance appraisal is affected by personal bias of the rater. If the rater has good relations
with the rate (an employee who is getting rated), he may give higher scores to the rate, even
though the rate does not deserve such high scores. So personal bias may lead to favored
treatment for some employees and bad treatment to others.

Paper work

Some supervisors complain that performance appraisal is pointless paper work. They
complain because many times, performance appraisal reports are found only in the files. It
does not serve any practical purpose. In other words, the performance appraisal reports are
not used by some organizations. They are conducted just as a formality or for the name sake.

Fear of Spoiling Relations

Many bosses do not wish to spoil their relations with their subordinates. Therefore when they appraise
the employee they may end up giving higher grades which are not required. This is an injustice to
really deserving employees.

Performance appraisal may also affect superior-subordinate relations. An appraisal makes the superior
more of a judge than a coach. So, the subordinate may have a feeling of suspicion and mistrust, about
the superior.

Evaluate performance not person

The rater should evaluate the performance, i.e. output, new ideas, extraordinary efforts, etc.
and not the person. In reality, the person is evaluated and not his performance. It should be
noted that failure is an event and a not a person.

Horn Effect

In this case only the negative qualities of the employee are considered and based on this appraisal is
done. This again will not help the organization because such appraisal may not present a true picture
about the employee

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Sometimes the raters may evaluate on the basis of one negative quality. This results in overall
lower rating of the particular employee. For e.g. "He does not shave regularly. Therefore, he
must be lazy at work."

Spillover Effect

In this case the employee is judged positively or negatively by the boss depending upon the
past performance. Therefore although the employee may have improved performance, he
may still not get the benefit.

In this case, the present performance appraisal is greatly influenced by past performance. A
person who has not done a good job in the past is considered (assumed) to be bad for doing
present work.

Latest Behavior Effect

The rating is also influenced by the most recent behavior. The rater may ignore an average
behavior during the full appraisal period.

Goodwill and techniques to be used

Sometimes a very strict appraisal may affect the goodwill between senior and junior.
Similarly when different departments in the same company use different methods of appraisal
it becomes very difficult to compare employees.

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Expressing Standards

Quantity

Quality

Timeliness

Effective Use of Resources

Effects of Effort

Manner of Performance

Method of Performing Assignments

The terms for expressing performance standards are:

Quantity: Specifies how much work must be completed within a certain period of time.

Quality: Describes how well the work must be accomplished. Specifies accuracy, precision,
appearance, or effectiveness.

Timeliness: Answers the questions, by when? , How soon? , Or within what period?

Effective Use of Resources: Used when performance can be assessed in terms of utilization
of resources: money saved, waste reduced.

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Effects of Effort: Addresses the ultimate effect to be obtained; expands statements of
effectiveness by using phrases such as: so that, in order to, or as shown by.

Manner of Performance: Describes conditions in which an individual's personal behavior

has an effect on performance, e.g., assists other employees in the work unit in accomplishing
assignments.

Method of Performing Assignments: Describes requirements; used when only the officially
prescribed policy, procedure, or rule for accomplishing the work is acceptable.

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Performance Measurements
Since one of the characteristics of a performance standard is that it can be measured, the
Team Leader identifies how and where evidence about the employee's performance will be
gathered. Specifying the performance measurements when the responsibility is assigned will
help the employee keep track of his progress, as well as helping the Team Leader in the
future performance discussions. There are many effective ways to monitor and verify
performance, the most common of which are:

-Direct observation
-Specific work results (tangible evidence that can be reviewed without the employee being
present)
-Reports and records, such as attendance, safety, inventory, financial records, etc.
-Commendations or constructive or critical comments received about the employee's work.

Direct observation Results

Performance
Measurements

Reports and records Commendations

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24
About the Company

Company Name : Genesis International ltd

Business Type : Manufacturer/supplier

Product supplies and manufactures : male footwear and leather shoes

Genesis International ltd located in NAND NAGAR INDUSTRIAL AREA MAHUAKHERA GANJ is a
manufacturing unit which manufactures male footwear and leather shoes it also exporting and
supplying the product. Genesis international ltd is a branch of Mirza International Ltd.

Mirza International Limited (formerly known as Mirza Tanners Limited) was incorporated on 5th
September 1979. Today, the company has emerged as a frontrunner in the manufacturing and
marketing of leather and leather footwear. Headquartered in the Indian capital of New Delhi, the
company markets its products across the globe to countries like the UK, Europe, South Africa and the
Middle East, to name a few. The company is listed on the NSE, BSE and UP Stock exchanges and is
ISO 9001, 9002 and 14000 certified.

HISTORY
Mirza’s journey began in the year 1979 with a small tannery for manufacturing finished leather at
Magarwara near Kanpur. The company, established by Mr. Irshad Mirza and Mr. Rashid Mirza, was
then called ‘Mirza Tanners Private Limited’.

The company focused on supplying high quality leather and leather products to the overseas
markets and gradually became one of the largest exporters of finished leather in the country.

During this phase, Mirza took a significant leap, by venturing into newer areas which were
extensions of its existing competencies. The global shoe market was then looking upon outsourcing
of leather footwear in a big way. To take advantage of this opportunity, Mirza diversified into
manufacturing of shoes. Very swiftly, four state-of-the-art manufacturing units were setup at Unnao
and Noida.

Having made a foothold in the footwear business, Mirza quickly reorganized itself by setting up In-
house Design and Development studios, Marketing offices and a strong Distribution and Logistics
network. After successfully reorganizing itself, Mirza moved a step ahead of others by launching its
own brands ‘Red Tape’ and ‘Oaktrak’.

Having firmly established its product lines and market geographies, the company spread its wings to
several other countries through its marketing companies and networking associates. Some of

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countries where Mirza has a significant presence are U.K., Portugal, South Africa, USA, Germany,
France, Scandinavian Countries and UAE.

Today, Red Tape has emerged as the one of the most stylish lifestyle brands available. Through
growing scale of operations, the brand has reached markets in USA, U.K., Canada, France, Germany,
Belgium, Holland, South Africa, Australia, New Zealand, South East Asia and the Middle East.

VISION

MISSION

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BRANDS
RED TAPE

Known for its unparalleled comfort, international styles and finesse, Red Tape the flagship brand of
Mirza International Limited, was launched in the year 1996. The brand has today become
synonymous with hi-fashion & lifestyle, owing to its unmatched quality, skilled craftsmanship and
trendy products. Endorsed by the style icon Salman Khan, Red Tape has become India’s most loved
premium lifestyle brand.

Red Tape - Fashion for Your Feet

Red Tape has emerged as a leader in the high-end fashion footwear segment. The Red Tape
footwear range is designed in company-owned design studios in the UK and Italy and manufactured
using international quality materials from European countries. Having become India’s favorite men’s
footwear, the brand has now diversified into Women’s footwear.

Red Tape- Fashion for You

Red Tape has recently forayed into the apparel sector and unveiled men’s clothing and accessories
line up. This new range offers an eclectic mix of casual wear including shirts, jackets, denims, tees,
pants/shorts and accessories such as belts, socks and wallets.

Red Tape- Fashion for the World

Red Tape is an international brand, present across the US, UK, France, Germany, West Asia and
South Africa. The Red Tape products are being sold globally through the company's extensive global
distribution channel.

Red Tape – Fashion that is Truly Global

The Red Tape range of shoes, apparel & accessories reflect the latest fashion tends across the globe.
These are designed in company-owned design studios in the UK and Italy and manufactured using
international quality materials from European countries , in order to produce a truly global product.

Red Tape – Fashion in Your Reach

Red Tape products are available across India through multiple brand outlets, chain stores and
exclusive Red Tape showrooms. Its countrywide network of exclusive showrooms spans 30 cities in
India.

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OAKTRAK

Oaktrak is a niche brand of formal footwear, designed exclusively for the upwardly mobile
executives and businessmen. The range is both casual and urban, with the emphasis on comfort with
style. Oaktrak is sold through independents, small retailers and multiples. Primary markets for the
brand are UK and South Africa.

MANAGEMENT TEAM
The company is managed by professionally qualified personnel with extensive experience in their
respective fields. The company offers freedom of operation to its people. As a result, the company
has been able to develop a truly dynamic set of senior level leaders and functional heads.

Mr. Irshad Mirza (78) is the Executive Chairman of the Company. Mr. Mirza a
graduate in B.Sc , Leather Technologist and having a expertise in Industrial &
Leather Technocrat having rich & vast experience of around 50 years in the field of Leather
Technology & Business Management. Mr. Mirza has held directorships with Shoe max Engineering
Ltd., Shoe max Leather Tech Engineers Ltd., Industrial Infrastructure Services (India) Ltd., Mirza
Agrotech Pvt. Ltd., and Azad Multispecialty Hospitals & Research Centre Pvt. Ltd. He received the
‘Padma Shri’ Award in 2010 from Honorable Smt. Pratibha Devi Singh Patil, President of India for
recognize their contribution in Trade and Industry.

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 Mr. Rashid Ahmed Mirza (57) is the Managing Director of the Company. He
is a Promoter of the Company and commences his employment since 1979. He holds a Diploma in
Leather Technology, London and having a expertise in Industrial & Leather Technocrat having rich &
vast experience of around 37 years & knowledge in areas of Leather Technology & business
management.

He is responsible for the overall management of the company. He is actively involved in Export
Marketing and development of quality leather and modernization of Tannery Division of the
Company

Mr. Shahid Ahmad Mirza (56) is the Whole-time Director of the Company.
He is a Promoter of the Company and commences his employment since 1979. He holds a Diploma
in Leather Goods Technology U.K. and having a expertise in Leather Technologist having a vast
experience of 3 decades in the Leather goods & overall charge of Shoe Division of the Company and
for the purchase of local raw materials and equipments for the Shoe Division.

He holds directorships with Mirza Holdings Pvt. Ltd. and Emgee Projects Pvt. Ltd. & Shoemac Leather
Tech Engineers Ltd.

Mr. Tauseef Ahmed Mirza (44) is the Whole-time Director of the company.
He holds a Diploma in Shoe Technology, London and having a experience of around 25 years in the

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field of Leather Industry looking after all manufacturing operations at Shoe Division of the company
at Noida & Greater Noida.

His responsibilities include the management of design, development, implementation and support of
manufacturing of Shoes at different units of the Company. Further, he is actively involved in setting
up of ultra modern Shoe manufacturing unit at Greater Noida and also engaged in the overseas
marketing operations of the Company.

Mr. Tasneef Ahmed Mirza (41) is the Whole-time Director of the company.
He holds Degree in Leather Technology, from renowned Nene College, Northampton, U.K. He is an
Industrialist and a Technologist having good experience of around 17 years in his line of business and
looking after core operations of the Company (manufacturing of high quality leather) & is overall
incharge of Tannery Division of the Company at Magarwara, Unnao.

Mr. N.P. Upadhyaya (64) is the Whole-time Director of the company. He is a

B.Tech in Mechanical Engineering and subsequently a Post-graduate Diploma in Business
Management. He is the Director of the company since April 1997 and over the years has run the
business.

He is responsible for the working of Shoe Units of the Company and have a rich and a vast
experience of the around 41 years in the field of Engineering, Cement & Chemicals apart from
working of Leather industry.

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Mr. Subash Sapra (71) is an Independent Director of the Company since March 2008. He is B.Tech in
Mechanical Engineering and has a vast experience in the field of Water/ Waste Water Sewage
Treatment Systems.

He is a member of the Audit Committee and Remuneration /committee of the company.

Mr. Islamul Haq (78) is Commerce graduate and is a Director of the company
since March 2008 with a vast experience of around 4 decades in the field of Leather Industry &
business management. He is a member of the Remuneration Committee of the Company.

Mr. Q.N. Salam (69) is an Independent Director of the Company. He is a

leading Advocate in Kanpur and has been appointed as the Director of the Company since July 1994.
He has a rich and varied experience of around 41 years in the Legal Profession.

He is a Chairman of the Remuneration Committee and member of the Share Transfer and Investor’s
Grievance Committee.

Mr. Yashvir Singh (66) a Post-graduate in M.Sc and subsequently holds a degree in M.Phil, PhD. He is
a scientist and has an experience of more than two decades in the Industry, Government Bodies and
Institutions. He is an Independent Director of the Company since September, 1994.

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 Mr. P.N. Kapoor (77) is an Independent Director of the Company since July
1994. He is B.Tech (Mech.), IIT & M.S. (Mech.), Chicago, having a vast experience of around 47 years
in the engineering industry and business in India and abroad.

Further, He is a chairman of the Share Transfer and Investor’s Grievance committee and a member
of the audit Committee and the Remuneration Committee.

Mr. Sudhindra Kumar Jain (56) is an Independent Director of the Company since
30.07.2008. He is a Practicing Chartered Accountant having wide experience of more than
30 years in the field of Income Tax, Accountancy etc. Besides regular Statutory Audits, Tax
Audits etc., Mr. Jain also conducted over 70 regular Inspections of PNB branches spreading
over whole of India. Apart from that, Mr. Jain was also appointed by Commissioner of
Income Tax (Central Circle), Kanpur for conducting various special audits. He also worked
as paper writer and speaker in over 50 Seminars on various subjects in Direct Taxes and
also represented more than 3000 appeals under Direct Taxes before various Appellate
Tribunals and Appellate Authorities. He also appointed as Independent Director of
Nationalized Banks.

Further, He is a chairman of the Audit committee and a member of the Shareholders and
Investor Grievance Committee.

32
33
Median Age Analysis

The above graph is a logarithmic representation of the employee age data and clearly shows
the median age of the sample population taken for the survey as 29. This is mainly due the
expansion policy of the company that has taken on board a large number of new and young
employees to fuel its growth plans. Due to this a large group of creative employees have been
inducted into the Organization. This helps in maintaining the creative talent in the
Organization, as the job profile requires them to be creative. Lohia Auto Industries will be
continuing their expansion plans in the coming months and this will lead to a further decease
in the average age of the employees in the Organization.

34
Years of experience within the organization

20 19
18
16
14
14
12
10
8 7
6 5 5
4
2
0
Less than a year One year Two years Three Years Four + Years

Years

Data
1) Less than a Year -5 2) One Year -19 3) Two Years-14
4) Three Years -5 5) Four + Years -7

Analysis

Most of the employees in the Organization are relatively new because a majority of them (i.e.
66%) have between one and two years of experience in the Organization. This is mainly due
to the fact that the Organization is in a constant mode of growth and is therefore recruiting in
a big way. The expansion plans are done keeping in mind the proposed growth in business in
the near future. Another reason is the fact that finding new talent for the required skills is a
tough task because market awareness about the career growth in this sector is very limited.
Due to this, Lohia Auto Industries has inducted a lot of employees after providing them with
training to ensure that their Human resource requirements are met.

35
1) Have you worked in any other Company prior to joining this
Organization?

35
32

30

25

20 18

15

10

0
yes No

Options

Data
1) Yes -32
2) No -18

Analysis

Thirty-two employees (i.e. 64%) have some amount of prior work experience before joining
Lohia Auto Industries. Most of them were not aware of the existence of such an industry. They
came to know about the same only after seeing the advertisements of the company in the
newspaper. This also means that even though most of them have worked prior to joining
Lohia Auto Industries, they do not have any hands-on experience of the kind of work carried
out by Lohia Auto Industries. This fact can also be interpreted as having no valid work
experience at all prior to joining the Organization.

36
2) Were you informed about the Performance Appraisal model, used in the
Organization, during your induction?

28
27
27

26

25

24
23
23

22

21
Yes No

options

Data
1) Yes -27
2) No -23

Analysis

Due to the fact that most of the employees have got no experience in this sector before, they
did not ask about the Performance Appraisal model used in the Organization. The
respondents that said that they were informed of the model during the interview were told so
at the discretion of the interviewer. The company has however made it a point to inform the
employee about the model before he signs the acceptance letter. This prevents any
ambiguities and misunderstanding about what is expected of the employee before he joins the
Organization.

3) How do you find the Performance Appraisal Model in this

Organization? (Mark the relevant options)

37
 40 37
35 33 32
30

25

20 17 18

15 13

10

0
Simple Complicated Objective Subjective Efficient Inefficient

Options

Data
1) Simple -37 2) Complicated -13 3) Objective -17
4) Subjective -33 5) Efficient -32 6) Inefficient -18

Analysis

From the above chart it can be inferred that, a majority of the sample respondents have found
the Appraisal Model to be simple and efficient on one hand but also subjective on the other
hand. The Appraisal model has been thoroughly dealt with during the training so the
employees know exactly what is expected of them. The HR department follows an open door
policy which ensures that any queries regarding the policy can be clarified to the employee s
satisfaction. But the employees are of the opinion that the subjective nature of the Appraisal
system is one of the main disadvantages. The fact remains that due to the kind of work
carried out by Lohia Auto Industries, it becomes quite irrelevant to appraise on an objective
basis.
4) In your opinion, does the Performance Appraisal System give a proper
assessment of your contribution to the Organization?

38
 28

27

26

25

24 27

23

22 23

21
Yes No

Options

Data
1) Yes -27
2) No -23

Analysis

About 54% of the respondents say that the Performance Appraisal System does give a true
and fair view of their contribution to the Organization. This does include employees who
think that their rating does not always turn up to be correct as per their opinion. The groups of
respondents, who have replied in the negative, also include candidates who say that the
appraisal does not turn out to be right most of the times but do show a fair view sometimes.
Since the appraisal is done o a quarterly basis and most of the candidates have not gone
through more than 2-3 rounds of appraisals, the data may not be entirely sufficient to reach
any conclusions.

5) What is your Satisfaction level with the current Appraisal System?

39
 30

25

20

15
28

10

13
5

4 5
0 0
Very Low Low Average High Very high

Series 1

Data
1) Very Low -0 2) Low -4 3) Average 13
4) High - 28 5) Very High - 5

Analysis

The satisfaction level of the Appraisal system is quite high as can be seen from the graph.
This is a good sign as increased level of satisfaction is the main emphasis of any appraisal
system. The curve tops at the rating of high and this includes about 56% of the population.
The bell curve shows that 92% have rated the Appraisal system as average, high or very high.
The high Satisfaction level in the System could also be due to various reasons like monetary
or non-monetary incentives or growth parameters. The satisfaction level also brings to light
the efficiency of the management in devising an acceptable Appraisal system.

6) Which are the areas that should be improved upon?

40
 30

25
25 23

20

15
12

10

5 3

0
Standards Monetary Incentives Freq of Appraisal Appraiser

Areas

Data
1) Standards -12 2) Monetary Incentives -25
3) Freq of Appraisal - 23 4) Appraiser -3

Analysis

This question breaks up the different phases of the appraisal system and tries to come to
derive a conclusion as to the areas of improvement in the process of evaluation. Fifty percent
of the respondents say that there should be a change on the aspect of monetary incentives.
This does not refer to an increase in the monetary incentives but a more reasonable incentive
structure that will properly reward increased and efficient performance. The frequency of
appraisal is another aspect that needed review. The present system is a quarterly one and the
general opinion is that informal appraisals should be held on a more regular basis. Standards
of performance (i.e. benchmarks) should be improved according to 24% of the respondents.
Only 6% have stated the there should be change in the appraiser, which is an inevitable sign
of the operational efficiency of the system.
7) How important do you think is Performance Appraisal to your
Performance?

41
 25
22

20

15 14
12

10

5
2
0
0
Not Important Less Important Important Very Important Most Important

Importance

Data
1) Not Important -0 2) Less Important -2 3) Important -14
4) Very Important -22 5) Most Important -12

Analysis

This question was put in to find out and analyze the importance of the Appraisal system to
the productivity of the employee. The data clearly shows that the recognition of the employee
s performance does have a direct impact on his efficiency. A vast majority of the respondents
(i.e. 68% which includes ratings of very important or most important) affirm that their
performance is directly influenced by recognitions of their performance by the appraisal
system. None of the respondents have stated that the appraisal system had no effect on their
productivity. It is very important for any Organization to devise their Performance Appraisal
System carefully.

8) Transparency rating of the Performance Appraisal system

Transparency Rating.

42
 18
16
16

14

12
10
10 9
8
8

6 5

4
2
2

0
4 Points 5 Points 6 Points 7 Points 8 Points 9 Points

Points

Data
1) 4 Points -10 2) 5 Points -16 3) 6 Points -9
4) 7 Points -8 5) 8 Points -5 6) 9 Points -2

Analysis

This question is an attempt to analyze the perceived transparency of the rating among the
employees of the Organization. A majority of the employees have given a transparency rating
of 5. The perception of the employees is since the appraisal is done on a quarterly basis, the
employee is not in a position to actually evaluate the basis of the rating he has received. This
causes a lot of ambiguity in the ratings. This is the primary concern due which almost 70 %
have given a rating of 6 and below. The respondents who have given a rating of 7 and above
have mostly given this rating because they have got good ratings in the past and feel that
there is not much required in terms of transparency as long as they get good ratings
themselves.
9) Do you feel comfortable discussing any difference of opinion about your
Performance rating with your appraiser?

43
 35

30 29

25
21
20

15

10

0
yes No

Series 1

Data
1) Yes -2
2) No -29

Analysis

The major reason for the decreased transparency rating might be due to the fact that 58 % of
the respondents did not feel free to express their displeasure, if any, to the rating given to
them. This can be due to decreased comfort levels with the appraiser. The appraisal system
can only be efficient if it takes into consideration the employee s side of the appraisal. There
might be various aspects that the appraiser might have accidentally overlooked or certain
circumstances misinterpreted which can be clarified if the employee is more open and
comfortable with the employer.

10) Performance Appraisal Model Rating Overall Rating

44
 18
16
16
14
14
12
12

10

8
6
6

4
2
2

0
5 Points 6 Points 7 Points 8 Points 9 Points

Points

Data

1) 5 Points -2 2) 6 Points -6 3) 7 Points -14

4) 8 Points -16 5) 9 Points -12

Analysis

The respondents were specifically told to rate the Appraisal system by setting aside any kind
of human intervention present in it by just evaluating its inherent structure and not efficiency
in its execution. This helps to ascertain whether there are any flaws in the Performance
Appraisal system. About 80 % of the sample has given a rating of 7 points and above. This
shows the system is generally acceptable to the employees and is a good sign for Lohia Auto
Industries The concern of the Organization should be to find out why the remaining 20 % are
not very highly satisfied with the system and find out ways and means to increase their
acceptability of the system.

45
 LIMITATIONS
The following are the limitations faced by me during the course of the study.

 The sample consisted only of employees in the day shift. Employees of the night shift
were not considered for the purpose of study.

 There is no concrete basis to prove the response given is a true measure of the opinion
of all the employees as a whole.

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

 The questionnaire contained mostly multiple-choice questions; therefore many

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

 The response of the respondents may not be accurate thinking that the management
might misuse the data.

 Almost all of the questionnaires had the open-ended question no. 8, left unanswered.

 Sensitive company information cannot be displayed in the project report.

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

 Due to the fact that most of the respondents were young, the questions might not have
been answered with due sincerity.

46
47
 RECOMMENDATION AND CONCLUSION

The following are the suggestions and conclusions derived from this particular research
study.

Objectivity

One manager's idea of "self-starting ability" can be quite different than another's idea. The
question then arises as to how does one objectively evaluate “creativity”? If greater amount
of objectivity can be infused into the Appraisal system, it can help to bring more
transparency.

Effective Communication

One function of performance appraisals is to help employees develop so they can contribute
more effectively. In order for the employees to develop and learn they need to know what
they need to change, where (specifically) they have fallen short, and what they need to do. If
a manager assigns a 1 (unsatisfactory) on a scale of 5, it does not convey much information to
an employee. It just says the manager is dissatisfied with something. In order to make it
meaningful and promote growth, far more information must be added to the appraisal process
and the related information should be transparently shared with the employee.

Fairness

Most employees resist being classified at the low end of the scale. Employees who are low
rated are more likely to resist the evaluation of the superior and argue, claiming that personal
bias was involved in the ratings.

Managerial Efficiency

The implementation of a Performance Appraisal System rests on the shoulders of the

manager and he must ensure that it is done properly. A good manager can make an average
appraisal system work and vice-versa.

48
49
 BIBLIOGRAPHY

1. BOOKS:

K.Aswathappa, 2nd edition, human resource

Flippo Edwin-human resource management

2. WEBSITES:

www.lohia-group.com

www.lohiaauto.com

50
51
 ANNEXURE

Dear Respondent,
I would be grateful if you could spare some of your time to respond to the following
questions. Your response will be treated as confidential and would only be used for the
purpose of study.

Gender

Male Female

Age

21-25 25-30 30-35 35+

Yrs of experience in this Organization -

Less than a Year 1 yr 2 yrs

3 yrs 4 yrs+

1) Have you worked in any other Company prior to joining this Organization?

Yes No

2) Were you informed about the Performance Appraisal model, used in the
Organization, during your induction?

Yes No

52
3) How do you find the Performance Appraisal Model in this Organization? (Mark the
relevant options)

Simple Complicated Objective

Subjective Efficient Inefficient

4) In your opinion, does the Performance Appraisal System give a proper assessment of
your contribution to the Organization?

Yes No

5) What is your Satisfaction level with the current Appraisal System?

Very Low Low Average

High Very High

6) Which are the areas that should be improved upon?

Standards Monetary Incentives

Freq of Appraisal Appraiser

7) How important do you think is Performance Appraisal to your Performance?

Not Important Less Important Important

Very Important Most Important

53
8) Transparency rating of the Performance Appraisal system Transparency Rating.

4 Points 5 Points 6 Points

7 Points 8 Points 9 Points

9) Do you feel comfortable discussing any difference of opinion about your Performance
rating with your appraiser?

Yes No

10) Performance Appraisal Model Rating Overall Rating

5 Points 6 Points 7 Points

8 Points 9 Points

11) How do you rate the Performance Appraisal System in your Organization? (On a
scale of 1 to 10 with 1 being the lowest and 10 being the highest).
___________________________________________________________________________

12) Any Suggestions.

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

54