INTRODUCTION
Human resource management is rather difficult to say spontaneously what management
means though we have studied a course in management. But it is necessary to recall what
management is before studying of human resource management. Management has been the art of
getting things done through people. The term human resource is quite popular in India with the
institution of ministry of human resources development in the union cabinet. But most people
may not know what exactly the term human resource means.
The term human resource management can be thought of as the knowledge, skills,
creative abilities, talents and aptitudes of an organization workforce, as well as the value,
attitudes and beliefs of the individuals involved it can also be explained in the sense that is
resource like any natural resources. It does mean that the management can get and use the skills,
tapping and utilizing them again and again. Thus, it is long- term perspective where as personnel
is a short- term perspective. Human resources are also regarded as human factor, human asset,
human capital and the like. The terms labor and manpower had been used widely denoting
mostly the physical abilities and capabilities of employees. The term personnel had been used
widely in the employee as a whole but it does not clearly denote various components of human
resources like skill, knowledge, values.....etc.
In simple sense, human resource management means employing people, developing their
resources, utilizing, maintaining and compensating their services in tune with the job and
organizational requirements.
Human resource plays a crucial role in the development process of modern economics. There
are great differences in development between countries which seem to have roughly equal
resources, so it is often felt that, though the exploitation of natural resources, availability of
physical and financial resources and international aid play prominent roles in the growth of
modern economics, none of these factors is more e significant that efficient and committed
manpower. It is in fact, said that all development comes from the human mind.
The objectives of the economic institutions are mostly to earn profits, and of the
educational institutions are mostly impact education and/ conduct research so on and so forth.
However, the fundamental objectives of nay organization is survival. Organizations are not just
satisfied with this goal. Further the goal of most of the organizations is growth and / or profits.
Institutions procure and mange various resources including human to attain the specific
objectives. Thus, human resources are managed to divert and utilize their resources towards and
for the accomplishment of organizational objectives.
The other objectives of HRM are to meet the needs, aspirations, values and dignity of individual
employees and having due concern for the socioeconomic problems of the community and the
country.
The created and utilize an able and motivated work force, to accomplish the best
organizational goals.
The establish and maintain sound organizational structure and desirable work in
relationships among all the members of the organization.
To secure the integration of individual and groups with in the organization by To create
facilities and opportunities for individual or group development so as to match it with the
growth of the organization.
To attain an effective utilization of human resources in the achievement of organizational
goals
To maintain high employee morel and sound human relations by sustaining and
improving the various conditions and facilities.
To strength and appreciate the human assets continuously by providing training and
development Progammes.
To provide an opportunity for expression and voice in management.
MEANING:
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job and his
potential for future development.
DEFINITIONS:
It is the systematic evaluation of the individual with respect to his/her performance on
the job and his/her potential for development.
--Flippo
It is process of evaluating the performance and qualifications of the employees in terms
of be requirements of the job for which he is employed for purposes of administration including
placement selection for promotions, providing financial rewards.
--- Heyel
Performance appraisal is the systematic, periodic and an impartial rating of an employees
excellence in matters pertaining to his present job and his potential for a better job.
Performance appraisal is not job evaluation. Performance appraisal refers to how well
someone is doing the assigned job. Job evaluation determines how much a job is worth to
the organization and therefore, what range of pay should be assigned to the job.
Performance appraisal is a continuous process in every large scale organization.
5. 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.
6. 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.
THE APPRAISERS:
Self-appraisal
Superiors
Peers
Customers
Subordinates
Self-appraisal
Self-appraisal is a common practice today, with the employees being given a role in
evaluating their own performance. The employee himself his best equipped to evaluate his
performance because he understands his strengths and weaknesses the best. He can easily
identify the problem areas that need training and development.
Supervisor
It is the responsibility of the supervisor to ensure that his subordinates perform their
jobs well. Hence, the authority to evaluate the employee performance has traditionally been with
the supervisor has a very important role to play in the appraisal of his subordinates
Peers
Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,
because of the competition among peers. The organization has to reach an advanced stage of
development before it can handle peer appraisal. Peer appraisal has to use to assess the
communication and interpersonal skills of the employee, which can effect the team performance.
Customers
The performance of an employee has a direct and immediate impact on his customers
either internal or external. In service organization like banks and hotels, customer feedback has
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Sub-ordinates
The concept of the subordinates evaluating the performance of his supervisor is yet to
gain acceptance in most Indian companies. The Indian company dose not encourages the idea of
sub-ordinate appraisal.
.
WHAT SHOULD BE RATED WHEN EVALUATING THE PERFORMANCE:
One of the steps in designing an appraisal programmed is to determine the evaluation
criteria. It is obvious that the criteria should be related to the job. The seven criteria for assessing
performance are.
Quality:
The degree to which the process or result of carrying out an activity approaches
perfection his terms of either conforming to some ideal way of performing the activity, of
fulfilling the activitys intended purpose.
Quantity:
The amount produced, expressed in monetary terms, number of units, or numbers of
completed activity cycles.
Timeliness:
The degree to which an activity is completed or a result produced, at the earliest time
desirable from the stand points of coordinating with the outputs of others and of maximizing the
time available for other activities.
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Cost effectiveness:
The degree to which the use of the organizations resources is maximized in the sense
of getting the highest gain of reduction in loss from each unit or instance of use of resources.
Need of supervision:
The degree to which a job performer can carry out a job function with either having
to request supervisory assistance or requiring supervisory intervention to prevent an adverse
overcome.
Interpersonal impact:
The degree to which a performer promotes feeling of self-esteem, good will and cooperation among co-workers and subordinates.
Community service:
Firms are increasingly emphasizing on employees community involvement. This is
particularly true in educational institution.
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process. This requires that employees think about their strengths and weaknesses. It is useful
when the manager an the employee discuss and jointly establish future performance goals. This
method became popular because it was assumed that if employees are involved in the appraisal
process, they may be committed to their jobs and that it could also reduce role conflict. However,
this system is subject to systematic biases and distortions. Due to the above problem, another
variation of self-appraisal came into existence, that is, self initiated appraisal, which is gaining
popularity. In this system, an employee is free to ask for review from his manager anytime he
wants. The drawback of this system is that it can be useful for small organizations but not for
large ones, as this activity takes additional time.
4. Peer Review:
Peer review has been in existence since 1920s.The system is based upon the assumption
that co-employees who perform similar tasks are more knowledgeable about the work than a
manager and are in a better position to evaluate work. However, there is a natural conflict of
interest inherent in a peer review, which can result in either positive or negative bias, depending
on the situation. Therefore, peer review is prone to lacking fairness. Bohalander and snell
(2001), give the following shortcomings of the peer review system:
Peer review may be simply a popularity contest;
Managers are reluctant to give up control over the appraisal process;
Those recording low ratings might retaliate against their peers; and
Peers rely on stereotypes in ratings.
5. Upward appraisal:
Employees by virtue of their frequent dealings and interactions with their manager can
evaluate them better. However, using this system, employees may harm or backstab their
managers. Another drawback of the system is that employees may not have access to all the
dimensions of managerial performance and employees may not always evaluate performance
objectively or honestly.
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6. Multi-source assessment:
This system provides employees with as objective information as possible by obtaining
input from all angles such as superiors, subordinates, peers and customers (internal and external)
whereby different aspects of the work can be assessed by different people. For example,
superiors can judge leadership ability, subordinates management style, peers can judge good
teamwork, and customers service quality. Thus, each employee is appraised in four different
ways and the same applies to everyone. Bohalander, snell and Sherman (2001), cite the
following safeguards used by Intel corporations:
Assured anonymity;
Make respondents accountable;
Prevent gaming on them system;
Use statistical procedures; and
identify
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Employees generally require more feedback and more frequently, than can be provided in
an annual appraisal sessions more that once or twice a year, performance management should
be viewed as an ongoing process.
METHODS OF
PERFORMANCE APPRAISAL
MODERN
METHODS
TREDITIONAL
METHODS
STRAIGHT RANKING
METHOD
MANAGEMENT BY
OBJECTIVES
PAIRED COMPARISON
METHOD
360 DEGREE
PERFORMANCE
APPRAISAL
ASSESMENTS
CENTER METHOD
BEHAVIORAL
ANCHORED
RATING SCALE
METHOD
HUMAN
RESOURCE
ACCOUNTING
METHOD
GRADING METHOD
FORCED DISTRIBUTION
METHOD
CRITICAL INCEDENT
METHOD
ESSAY APPRAISAL
METHOD
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TRADITIONAL METHODS:
1. Straight Ranking Method:
It is the oldest land simplest method of performance appraisal by which the man
and his performance are considered as an entity by the rater. No attempt is made to
functionalize the rate or his performance . Ranking method is a technique; evaluator assigns
relative ranks to all employees in the same work unit doing the same job. Employees are
ranked from the best to the poorest on the basis of overall performance. The relative passion
of an employee is reflected in the numerical rank. It is one of the simplest methods. It is time
saving and comparative evaluation technique of appraisal.
The workman is compared with the whole man that is the ranking of man in a
work group is done against that one of another. But this greatest limitation of this method
used for paired comparison technique. As per the technique every employee to compare a
single individual having various behavioral traits. The task ranking individuals is difficult
when a large number of persons are rated.
comparing Whole mantoWhole man personnel is compared to the key man in respect of
one factor at a time. This method is used in a job evaluation and is known as the factor
comparison method.
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15
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No interest in work
Carelessness
10
Interested in work
15
20
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4. Grading Method:
Under this method, the rater considers certain factors and marks them accordingly to a
scale. The selected factor may be analytical ability, co-operation, dependability selfexpression, job knowledge. They may be grades as A-outstanding, B-very good, Cgood/average, D-fair, E-poor. The actual performance of an employee is then compared
with these grade definitions and he is allotted the grade which best described his
performance.
Under this system the rater considers certain features and marks them accordingly to a
scale.
A
- Outstanding
- Very Good
Good or Average
Fair
Poor and
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15
20
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The selected may be analytical ability, co-operative ness, dependability, self-expression, job
knowledge, judgment leadership and organizing ability. The actual performance at an employee
is then compared with this grade definition and he is allotted the grade which describes his
performance.
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to avoid vague impression and general remarks as the rating is based on actual records of
behavior.
The method was developed and conducted by the armed forces in the United States
during World War II. The essence of this system is that if attempt to measure workers
performance in terms of certain events or episodes that occur in the performance of the rates
job. These events are known as critical incidents.
The supervisor keeps a written record of the events (either good or bad) that
can easily be recalled and used in the courses of a periodical or formal appraisal. Feed back
is provided about the incident during performance review session.
The critical incident is discovered after a through study of the personnel
working on a job. The collected incidents are than tanked in a order of frequency and
importance. This approach reduces the regency effect of most performance ratings.
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8. Checklist Method:
In this method, series of questions are presented concerning an employees behavior.
Here rater does not evaluate employee performance; he supplies reports about it and the
personnel department does the final rating.
Under this method does not evaluate employee performance, he supplies reports
about it and the final rating is done by the personnel dept. a series of questions are presented
concerning employee to his behavior. The rater than checks to indicate if the answer to
question about an employee is yes or no.
This is the one of the method of traditional methods in the performance appraisal
method. And in this method check the all the records of the employees and he supplies
reports to the personal department are done by the final rating about the employees.
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MODERN METHODS:
The modern methods are as follows
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Advantages:
Role clarity
Objective appraisal
Co-ordination
Limitations:
Problem of participation
Lack of understanding
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Inflexibility
Customers
360 degree
Performance appraisal
Supervisors
Sub ordinates
Supervisor
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It is the responsibility of the supervisor to ensure that his subordinates perform their
jobs well. Hence, the authority to evaluate the employee performance has traditionally been with
the supervisor has a very important role to play in the appraisal of his subordinates
Peers
Peers evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,
because of the competition among peers. The organization has to reach an advanced stage of
development before it can handle peer appraisal. Peer appraisal has to used to assess the
communication and interpersonal skills of the employee, which can effect the team performance.
Customers
The performance of an employee has a direct and immediate impact on his customers
either internal or external. In service organization like banks and hotels, customer feedback has
become the most important to in evaluating employee performance. In manufacturing the
internal customer evaluate the performance of the employee.
Sub-ordinates
The concept of the subordinates evaluating the performance of his supervisor is yet to
gain acceptance in most Indian companies. The Indian company dose not encourages the idea of
sub-ordinate appraisal.
Advantages of 360 degree performance appraisal:
The method is more reliable and valid as it is job specific and identified observable and
measurable behavior.
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The use of critical incidents is useful in providing feedback to the employee being
rated.
To measures potential for first level supervision, sales and upper management
positions; and also for higher levels of management for development purposes.
To determining individual training and development needs of employees.
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appraised describe specific examples of both effective and ineffective job behaviors.
Select performance dimensions: The persons then cluster the behavior incidents into
a smaller set (usually 5-10) of performance dimensions.
Retranslate the incidents: Another group of knowledge persons assign each incident
to the dimension that it best describes. Incidents for which there is less than 75%
agreement with the first group are not retranslated.
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Assign scales to incidents: The second group rates each incident on a 7or 9 point
scale. Rating is done on the basis of how well the behavior described in the incident
represents the performance on the appropriate dimensions. Means (average) and
standard deviations are then calculated for the scale values assigned to each incident.
Develop final instrument: A subset of the incidents that meets both the retranslation
and standard deviation criteria is used as a behavioral anchor for the final
performance dimensions. A final BARS instrument typically comprises a series of
vertical scales that are endorsed by the include incidents. Each incident is positioned
on the scale according to its mean value.
key casual variables include the structure of organization management policies, decisions
business leader ship strategies, skill and behavior.
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Social Differentiation
Rating is sometimes impeded by the evaluators style of behavior. Pious has classified
raters as high differentiators- that is using most of the scale or low differentiators-that is
using a limited range of the scale. Low differentiators tend to ignore or suppress
differences, perceiving the universe as more uniform than it really is.
High differentiators on the hand tend to utilize all available information to the utmost
extent and thus are better able to perceptually deny anomalies and contradictions than low
differentiator makes evaluations using trait criteria unreliable.
The results of performance rather than personality traits should be given due weight.
The supervisor should analyze the strengths and weaknesses of the employee and advise
him.
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To know the relationship between performance appraisal and training and development in
Maddi Lakshmaiah & Co.Ltd
To know the rewards given by the superior to the subordinates for good performance.
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To identify the merits and demerits of performance appraisal in M.L & CO. LTD.,
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Data Collection:
To get information about the satisfaction level of employees from performance appraisal
system and its effectiveness a simple random sampling survey was conducted. For the present
study the data has been collected by the following ways.
Primary Data
Secondary Data
Primary Data :Data observed or collected directly from first-hand experience is called primary data.
Responses through questionnaires
Conducted Personal interviews with the respondents.
Secondary Data:
Published Data and the data collected in the past or other parties are called Secondary
data.
Secondary data is collected through the
Company Websites
News papers
Journals
Textbooks
Sample Size :
Samples are taken 100 only.
To bridge the gap between the existing performance and desired performance.
It provides legally defensible reasons for making promotion, transfer, reward, & discharge
decisions.
They can assist in a variety of personnel decisions by generating data about each employee
periodically.
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This study is useful to provide information about the performance ranks based on which
decision regarding salary fixation, confirmation, promotion, transfer and demotion are
taken.
This study is useful to provide information which helps to council the subordinate.
It helps the company knowing whether the performance appraisal techniques are used to the
full extent or not.
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4. because of the small size survey may or may not reflect the ideas and opinions of all
employees in Maddi Lakshmaiah & Co.Ltd
5. The information/data which is gathered from the study is not reliable because of personal
bias of employees.
INDUSTRY PROFILE
HISTORY:
Tobacco is a plant that grows natively in north and South America. It is in the same
family as the potato, pepper and the poisonous nightshade, a very dead plant. The seed of a
tobacco plant is very small. A 1 ounce sample contains about 300,000 seeds.
It is believed that tobacco began growing in the America about 6,000 B.C. As early as 1
B.C., American Indians began using tobacco in many different ways, such as in religious and
medicinal practices. Tobacco was believed to be a cure-all, and was used to dress wounds, as
well as a pain killer. Chewing tobacco was believed to relieve the pain of a toothache.
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Soon after, sailors brought tobacco back to Europe, and the plant was being grown all
over Europe. The major reason for tobaccos growing popularity in Europe was its supposed
healing properties. Europeans believed that tobacco could cure almost anything, from bad breath
to cancer.
In 1571, a Spanish doctor named Nicolas Monardes wrote a book about the history of
medicinal plants of the new world. In this he claimed that tobacco could cure 36 health problems.
In 1588, a Virginian named Thomas Harriet promoted smoking tobacco as a viable way
to get ones daily dose of tobacco. Unfortunately, he died of nose cancer (because it was popular
then to breathe the smoke out through the nose).
During the 1600s, tobacco was so popular that it was frequently used as money! Tobacco
was literally as good as gold! This was also a time when some of the dangerous effects of
smoking tobacco were being realized by some individuals. In 1610 sir Francis Bacon noted that
trying to quit the bad habit was really hard.
In 1632, 12 years after the mayflower arrived on Ply moth Rock, it was illegal to smoke
publicly in Massachusetts! This had more to do with moral beliefs of the day, than health
concerns about smoking tobacco.
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no demand outside the country. There is only an export demand for flue_ cured tobacco, which is used
for cigarette manufacturing.
If India adopted a rational tax polity for the tobacco industry that encouraged the
growing of export tobacco, Tobacco farmer income would income would increase and export revenue
would grow. If India adopted chinas tax policy on tobacco, tax revenue could rise from the current rs.6,
031 cores to rs.54,000 cores. Chinas economy_ oriented tax policies have given cigarettes 100% share
of domestic tobacco consumption. This strong domestic base has proved to be conducive to exports as
well as revenue generation.
Tobacco is a commodity product similar in economic terms to foodstuffs in that the price is
set by the fact that crop yields vary depending on local weather conditions. The price varies by specific
species grown, the total quantity on the market ready for sale, the area where it was grown, the health
of the plants, and other characteristics individual to product quality. Laws around the world now often
have some restrictions on smoking but, still 5.5 trillion cigarettes are smoked each year.
The tobacco industry comprises those persons and companies engaged in the growth,
preparation for sale, shipment, advertisement, and distribution of and tobacco-related products. It is a
global industry; tobacco can grow in any warm, moist environment, which means it is farmed on all
continents except Antarctica.
GROWTH:
In 1776, during the American revolutionary war, tobacco helped finance the revolution by
serving as collateral for loans the Americans borrowed from France! Over the years, more and
more scientists began to understand the chemical in tobacco, as well as the dangerous health
effects smoking produces.
In 1826, the pure form of nicotine was finally discovered. Soon after, scientists concluded
that nicotine was dangerous poison.
In 1836, New Englander Samuel Green stated that tobacco was an insecticide, a poison,
and can kill a man.
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In 1847, the famous Phillip Morris was established, selling hand rolled Turkish cigarettes.
Soon after in 1849, J. E. Leggett and Brother were established in St. Louis, Mo. (the company
that has settled out of the big lawsuits recently). Cigarettes became popular around this time
when soldiers brought it back to England from the Russian and Turkish soldiers.
Cigarettes in the U.S. were mainly made from scraps left over after the production of
other tobacco products, especially chewing tobacco. Chewing tobacco became quite popular at
this time with the cowboys of the American West.
In 1875, R. J. Reynolds Tobacco Company (better known for its Reynolds wrap
aluminum foil) was established to produce chewing tobacco. It wasnt until the 1900s that the
cigarette became the major tobacco product made and sold. Still, in 1901 3.5 billion cigarettes
were sold, while 6 billion cigars were sold. Along with the popularity of cigarettes however, was
a small but growing anti-tobacco campaign, with some states proposing a total ban on tobacco?
WAR & CIGARETTES: A DEADLY COMBO:
The cigarette exploded during world war (1914-1918), where cigarettes were called the
soldiers smoke. By 1923, Camel controls 45% of the U.S. market! In 1924, Phillip Morris
began to market Marlboro as a womans cigarette that is a Mild as May!
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In 1987, congress banned smoking on all domestic flights lasting less than 2 hours. In
1990, smoking is banned, except to Alaska and Hawaii. In 1990, Ben & Jerry's (of ice cream
fame) boycotts RJR / Nabisco, and dropped Oreos from its ice cream products.
During the 80s and 90s, the tobacco started marketing heavily in areas outside the U.S.,
especially developing countries in Asia. Marlboro is considered the worlds no.1 most valuable
brand of any product with a value over $30 billion! Over this period, there is a battle between
Coca Cola and Marlboro as the No.1 brand in the world.
In the recent years there is growing evidence that the tobacco industry has known all
along that cigarettes are harmful, but continue to market and sell them. There is also evidence
that they know that nicotine was addictive and exploited this hidden knowledge to get millions of
people hooked on this dangerous habit!
Tobacco industry is an agro based industry. Tobacco is cultivated mainly in the states of
Andhra Pradesh and Karnataka most of the tobacco is used for the manufacture of cigarettes and
for exports. Tobacco is also grown in Tamilnadu, West Bengal, Uttar Pradesh, Gujarat, Madhya
Pradesh, Maharashtra and Orissa also.
However the tobacco grown in these states is of very less quality and is not used for
manufacture of cigarettes and exports. Several varieties of tobacco such as Virginia flue cured
,Virginia air cured light soil burley, sun cured Virginia ,nature, chewing. Tobacco, HDBRG,
wrapper tobacco, beedi tobacco and hookah tobacco etc. are grown in India. Virginia flue cured
is a major variety grown in India. More than 80% of Indian tobacco crop belongs to this variety.
Tobacco board issues licenses to the farmers who are permitted to grow tobacco. The
licenses regulate the cultivations area the farmers have to restrict the cultivation to the given area
and must sell the grown tobacco through tobacco board auctions only any violation is an offence
and is punishable.
This is simple technical process by which the green leaf exposed to hot air at high
temperature and cooled slowly over a period of time. After the curing process, the primary leaf
tobacco turns into lemon yellow color, gold colour, brownish yellow colour, brown colour and
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dark brown colour. This tobacco is called katcha tobacco leaf and is ready for sale. The formers
pack different colours as a separate grade which has a separate price in the market.
Tobacco must be sold only through tobacco board auction platforms under strict rules and
regulations. Farmer or buyer is permitted to transact in tobacco board auction platforms. Central
government has also established several tobacco research institutes for betterment of quality of
tobacco in India. The other varieties of tobacco are not regulated by tobacco board.
After stripping/threshing, the tobacco will be further processed for stabilization of
moisture. And this process is called REDRYING. In this process the tobacco first of all will be
dried completely then it will be given steam at the required temperature.
After retrying process the tobacco will be packed in the required packing say bale
packing /case packing etc. The packed tobacco is ready for export. In India, the first threshing
plant which is working uninterruptedly for the last 25/30 years an imported one by Maddi
Lakshmaiah &co ltd. This was installed at GANAPAVARAM and the plant is still running at
high efficiency levels in the country with 98% average efficiency level for the last 3 years. There
are two plants owned by ITC which can be compared with this plant in the country. ITC uses
their threshing plants for their own consumption.
Occupation
47
% of business in India
50%
Cigarette manufacturing & un
ITC ltd
12%
6%
8%
The consumption is linked with the habits of the people; the tobacco usage cannot
be eradicated, even in countries like USA where anti tobacco campaign started in 1962, the
production of cigarettes and consumption of cigarettes is still progressing.
Exporters:
Name of the
S.No
company
% of business in
Occupation
48
India
ML group
un manufactured tobacco
5%
exports
Cigarette manufacturing &
B
Polisetty group
un manufactured tobacco
5%
exports
Cigarette manufacturing &
C
Bommidala group
un manufactured tobacco
3%
exports
Cigarette manufacturing &
D
Mittapalli group
un manufactured tobacco
3%
exports
Cigarette manufacturing &
E
Other companies
un manufactured tobacco
8%
exports
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Traditional/NCOs/My sore
ISB Tobacco
ISB tobacco
IAC Tobacco
10 million
Veleswaram/Warangal
VAC Tobacco
200 million
HDBRG
25 million
12 million
COMPANY PROFILE
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HISTORY:
The highly competitive tobacco market represented tremendous growth potential to Mr.
Maddi Lakshmaiah. Foreseeing the and for quality Indian tobacco a long term strategy was
formulated. Right from its inception, the company adhered to international standards and made
rapid in roads to global tobacco markets.
A sophisticated threshing plant of international standards was commissioned in 1976 first
in Andhra Pradesh. It created a revolution in tobacco processing and led to a huge upsurge in
demand. This led to the commissioning of two modern plants with threshers, redryers and other
sophisticated equipment for the processing of quality tobacco.
ML Group has taken its credo of total quality to the furthest, whether in the quality of
process, products or working conditions for the vast workforce. The foresighted innovation of Sri
Maddi Lakshmaiah has given the group strong edge. The personal involvement of the directors in
all aspects of the business has resulted in high quality operational parameters.
The quantum growth in ML Co: Spread of investment in infra structure and
diversification into other business.
ML GROUP under its umbrella, various companies have an annul turnover of Rs 1550
million and an asset base of Rs 2000 million. A real estate development wing was setup to
develop and lease commercial properties with working environment that rival the best
internationally.
The information about the establishment of the group which consists of five concerns as
displayed on the preceding pages, let us have a look on the various concerns of ML Group
individually:
ML group of companies (ML group) was founded by Mr.Maddi Lakshmaiah in 1970.
He joined in his family business in 1952 after completing his engineering degree. The joint
family business started payback in 1943 dealing with tobacco exports, well before India.
Maddi Lakshmaiah & Co Ltd was set up at Chilakaluripet, a village in Andhra Pradesh
that produces some of the best tobacco in the country. Today it has evolved into a diversified,
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multi products conglomerate known as ML Group that is recognized world over for its
excellence. The company processes tobacco and another agro based products that are used both
in the country and exported to the most quality conscious world markets.
An emphasis on total quality and dedication to the interests of its clients world wide is a
hallmark of ML group. The group is performing excellently well from the date of its
incorporation and has been exporting large volume of tobacco to Russia, CIS countries, U.K,
Europe, African countries, China, Latin American countries, Middle East countries,
Bangladesh & Nepal etc. The group established its branches in Russia & European countries
and has strong tie up with African and Latin American countries and especially with the
neighbor giant China.
Maddi Lakshmaiah & Co Ltd (MLCO)
ML Agro Products (MLAP)
K.S Subbaiah Pillai & co ltd (KSSP)
ML Exports (MLE)
Coramandal Agro Products & Oils Ltd (CAPOL)
Vision:
The company is going for sheet tobacco plant in joint venture with on of the Indian best
tobacco cigarette manufacturer.
The company is also contemplating for 100% tobacco joint venture association with one
of the best cigarette manufacturer.
The company exports with second strongest country china, Russia and Germany.
Mission:
52
The company has well defined policies for exports the quality tobacco.
This company shall maintain quality leadership by providing products and services that
completely and consistently meet the agreed.
Requirements of all customs and unsure fitness for use of all products there by ensuring
total confidence to every customer.
Future plans: The company (Maddi Lakshmaiah) for an ECB for 50 million dollars and development
of regular trade and also infrastructure projects in India.
Maddi Lakshmaiah Company is also working on joint venture basis with UK based
Commodities Company for supply of agri products to South Asian countries.
The company already entered into joint venture with an US based company by name
CARGIL for the south Indian needs.
They have worked for joint venture arrangements with Yugoslavian government for
their requirement for India.
53
54
LAND MARKS: Maddi Lakshmaiah Company was the first Indian company to join with China to do
business.
It was the first company to import tobacco and export tobacco.
Ambassadors have already come here and 4th one is coming in this august.
GRADING POINTS:Maddi Lakshmaiah Company has three grading points at Chilakaluripet i.e. Martur,
Muppavaram and some other on national highway between Guntur and Chilakaluripet and three
more in Guntur city.
MADDI LAKSHMAIAH & CO LTD:ML & company Limited, the fore runner of all the companies of ML group, the company
enjoys a pre eminent standing in the world of tobacco, exporting to China, Russia, Western
Europe, Africa and Bangladesh among others.
Supported by a team of experts, technicians, engineering and a skilled world force, the
company has forged a head setting standards that have become benchmarks in the industry.
Today Chilakaluripet is a well known name in the global tobacco business in no little measure
due to the pioneering efforts of the intrepid founder, Sri Maddi Lakshmaiah.
ML AGRO PRODUCTS LTD:ML agro products ltd was born of a increase in demand for quality tobacco in both the
domestic and foreign markets. Building on the rich experience of running a profitable operation,
a new plant was set up in 1976 at Martur, Prakasam district.
It is fully self sufficient with modern threshers, lamina redryers, and automatic double
ram press, sophisticated quality control laboratory and mammoth ware houses. It ranks among
the largest threshing units in the country apart from its export commitments.
55
K.S.S.P & Co Ltd was acquired in 1982 with all its assets K.S Subbaiah
Pillai & Co (India) Ltd is the group with leading tobacco exporting unit. In a field that is
extremely competitive, the excellent performance of the company is an indicator of the trust that
it enjoys across the globe.
ML EXPORTS:
ML exports is a totally export oriented unit, with clients in a variety of markets around
the world. The company enjoys a reputation for excellent delivery schedules and transparent
business practice in global markets.
56
INCORPORTATION:
ML Company is a limited company (m/s Maddi Lakshmaiah and Company Limited)
which was originally incorporated on 8th day of October 1970 under the name, Maddi
Lakshmaiah and Company Private Limited having passed the necessary special resolution on the
23rd day of March 2002, in terms of Sec 31(1)/44 of the Companies Act 1956 the name of the
company changed to Maddi Lakshmaiah and Company Limited.
NATURE OF ACTIVITY:
o
FINANCIAL STRUCTURE;
The initial investment of ML Company is 10, 00,000.
57
SNO
NO OF YEARS
AMOUNT IN RS IN LAKHS
2004
109
2005
270
2006
203
2007
312
2008
262
2009
134
2010
103
2011
123
58
59
BOARD OF DIRECTORS:
Managing Director
Director
Director
Director
Executive Director
Executive Director
MANAGEMENT TEAM:
Managing Director
M. Venkateswara Rao
Director
M. Lakshmaiah
General Director
Personnel Manager
B. Babu Rao
Leaf Manager
Finance Manager
M. Shekhar
Export Manager
M. Shekhar
Production Manager
Circle Manager
Anji Babu
Factory coordinator
P. Subba Rao
60
ORGANIZATION STRUCTURE:
The company (ML Company) is under the complete administrative control of the
managing director and he are reported by the director and he is reported by general manager.
Managing director
Deputy Managing
director
General Managing
director
Personal
manager
Financial
manager
Leaf
manager
Personal
officer
Circle
manager
Factory
coordinato
r
Accounts
officer
Welfare
officer
Branch
manager
Shifting in
charge
Staff
Safety
officer
Buyers
Staff
Staff
Export
manager
Export
officer
Production
manager
Plant
engineer
Assistengineer
Supervisors
Staff
workers
Staff
workers
61
Type of workers
permanent
seasonal
Temper\Daily total
wage
Officers
16
16
Staff(including boys)
154
70
224
Scavengers
Female workers
223
74
307
Male workers
Security
21
21
Engineering Daily
50
50
Wages
8
Apprentice
10
10
Carpenters
10
Gunnies
11
Meithei
105
105
Total
527
80
145
752
62
The M.L Company managing director M.Venkateswara Rao is under the complete administrative
control of the managing direction and he is reported by the director and he is reported by general
manager
The general manager of ML Company is M. Ram Mohan Rao assisted by fine general
manager i.e., personal manager, leaf manager or department manager, finance manager, exports
manager and production manager.
The personal department manager B. Babu Rao is headed by who reports directly to G.M.
he looks after the areas of personnel & administration under there may be a personal offices
welfare officer and a safely officer.
The finance manager M.Shekhar is assisted by a team of experienced management and
non management staff who takes care of the finance is accounts activities of the organization.
The export manager M.Shekhar deals all the matters regarding the export departments
and directly reports to managing director.
The production manager K.S.Rami Reddy is headed by the G.M. is assisted by a plant
engineer and staff of the production department.
63
64
Once the business/ functional scorecard is frozen the superior and the employee should
meet to clarify expectation from their key customers/shareholders and others. This input should
be converted into performance goals to be met during the review period.
The goals articulated are not merely a routine set of activities, but ideally should result in
value creation for the organization through either continuously improving or reducing gaps in the
existing products, process and services. To improve organizational performance, the goals must
necessarily incorporate performance stretch i.e. they need to be significantly higher than the
goals of the previous year. Measurement criteria are for tracing performance against the goals.
The superior/employee is free to freeze the criteria as relevant to their nature of work.
Possible criteria may be quantity, quality, Cost, time and human reaction. The goals can be
added/deleted/modified with mutual consent in response to changing business priorities.
2. Performance coaching
Performance coaching is an ongoing process and based on continuous dialogue
between the superior and employee. It is important to spend time preventing performance
problems rather than evaluating them at the end of the year. The superior and the employee
should meet periodically to review performance; learnings and progress against set goals.
Regular dialogue enhances employees engagement and is the foundation of coaching.
3. Performance Review
(A).Half yearly Review:
A formal half-yearly review is important for superior and employee to take stock of the
progress made and to make course corrections. The focus during the review should primarily be
on overcoming constraints and planning for the rest of the performance cycle. The superior
collects feedback from the customers, suppliers and peers and collates this feedback. The
superior calls project managers to the review if the employee has the project goals. The superior
is expected to give feedback on achievement of goal and behavioral aspects for the period under
review. Employees are also provided with an opportunity to give their feedback and seek
clarifications from the superior.
65
In addition to these regular discussions, the superior need to conduct and document
an interim review if the employee is being transferred to another department. This must also be
done if the employee demonstrates any extreme performance.
(B). Annual review:
Self-Review:
The annual review starts with a self-review. The employee fills sections-II. A with the
status of achievements on goals for the review period. In sections III, the employee has to
briefly describe his/her contribution towards organization building if any and identifies
development needs in both behavioral and function areas. The onus of development is on the
employee. The employee also mentions short and medium term career aspirations at M.L.
&Co.Ltd based on current skill and competencies required to fit into the aspired role. The aspired
role may not necessarily be hierarchically superior but it may envisage horizontal career
movements within and across functions, which may help in long-term development of the
employee.
66
Employees are expected to clarify expectations from their key stakeholders who may
be their immediate superior, customers peers and subordinates at the beginning of the review
period and use the same as an input for framing the goals in section II.
Employees are also expected to proactively seek performance feedback from key
stakeholders. During the half yearly formal review, the onus is on employee to seek clarification
on the expectations and give an honest feedback to his superior in the appraisers feedback
column and resolve issues of resources/constraints/support if any. The employee is also required
to give his honest input at the end of the review period about the quality of the process/feedback
and the improvement areas in section VIII. The employee should proactively seek the execution
of the development plan in section VII with both his /her superior and the concerned HR.
2. Role of the superior:
Superiors are expected to ensure that goals are set and signed off as per organizational
timelines. Even if, in departments/SBUs
changing upstream priorities ,the event that the employee has project goals , the superior needs to
involve the project manager at the time of goal setting. The superior has to proactively follow the
perfect schedule and complete goal setting/half yearly review/annual review in time .The
superior should use the half-yearly review for clarifying expectations and sorting out issues of
resources/constraints. While assessing, the superior has to honestly and fairly apply the rating
template.
The superior should give sufficient comforts to the employee so that he/she is able to give
honest feedback in section VII. However, it must be made clear by the superior that the ratings
given in section VI are non-negotiable and cannot be altered following the final discussion and
closure unless it is prima facie evident that a gross miscarriage of justice has been committed.
The superior may call the employee during the review period to understand what the
employee had written in section III and seek clarification whenever require
3. Role of the Reviewer:
The reviewer is expected to help the superior in coming to a fair and unbiased
assessment of the employee and provide key development inputs. The reviewer is required to
67
question the superior as to why a certain rating has been proposed as per the guidelines in the
rating template. The reviewer is also expected to completely brief the superior of the proceedings
at the Apex review committee and the rationale if the ratings get altered. The reviewer should at
no point directly communicate with the employee over performance ratings, which might
confuse the employee and the ownership of the superior.
4. Role of HR:
HR has to support and facilitate the line managers {superior and reviewers} in all
administrative and technical areas like coaching and feedback as well as dealing with
performance problems. HR would facilitate discussion at the apex review committee, ensure
implementation of perfect philosophy and monitor overall quality of perfect.
HR would also help in implementing the development plan in section VII and
analyze the closure section for monitoring quality of feedback. HR would assist in reminding
line managers about the timelines on goals setting/half-yearly feedback /final review and would
and follow up for the same. HR shall also carry audits on the perfects process periodically.
TABLE: 1
68
OPINION
NO. OF RESPONDENTS
PERCENTAGE
YES
100
100
NO
TOTAL
100
100
CHART: 1
INTERPRETATION:
The above chart indicates that most of the respondents are i.e. 100% of employees
are expressed the performance appraisal system is essential in an organization. So from the above
analysis the performance appraisal system is the aware about the organization.
69
NO. OF RESPONDENTS
OPINION
SATISFIED
PERCENTAGE
76
76
15
15
DISSATISFIED
TOTAL
100
100
PARTIALLY SATISFIED
CHART: 2
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 76% of respondents
are expressed satisfying with the annual performance appraisal. Where as 15% of employees are
partially satisfied and 9% of employees are dissatisfied about annual performance appraisal.
3. What is your satisfaction level with the performance appraisal system in M.L. Company?
TABLE: 3
70
OPINION
EXCELLENT
NO. OF RESPONDENTS
PERCENTAGE
60
60
23
23
AVERAGE
17
17
TOTAL
100
100
GOOD
CHART: 3
INTERPRETATION:
From this above chart indicates that 60% of respondents are expressed the satisfaction
level is excellent in the organization. Where as 23% of respondents are good and 17% of
respondents are expressed average to the performance appraisal in the M.L Company.
TABLE: 4
71
NO. OF RESPONDENTS
OPINION
H
RT
4
PERCENTAGE
YES
87
87
NO
13
13
TOTAL
100
100
C
A
:
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 87% of respondents are
expressed that the performance appraisal system is essential where as 13% of respondents are the
responded that the performance appraisal system is some extent not essential in the organization.
TABLE: 5
72
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
70
70
NO
30
30
TOTAL
100
100
CHART: 5
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 70% of respondents are
expressed the performance appraisal is conducted periodically. Where as 30% of employees are
feel that the performance appraisal is not to be conducted periodically.
73
TABLE: 6
OPINION
NO. OF RESPONDENTS
QUARTERLY BASIS
HALF-YEARLY BASIS
ANNUAL BASIS
TOTAL
PERCENTAGE
13
13
11
11
76
76
100
100
CHART: 6
INTERPRETATION:
From the above chart indicates that 13% of respondents are feeling
performance should be on quarterly basis. Where as 11% of respondents feel about half-yearly
basis. And most of the respondents i.e., 76% of respondents are expressed their interest to annul
basis of the performance appraisal.
7. What is your opinion regarding performance appraisal system helps in identifying strengths
and weaknesses of an individual on his job?
74
TABLE: 7
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
80
80
NO
20
20
TOTAL
100
100
CHART: 7
INTERPRETATION:
From the above chart most of the respondents, i.e. 80% of respondents are
feel the performance appraisal system helps the identifying the strengths and weaknesses of an
individual on his job. Where as 20% of employees are feel about the performance appraisal
system is not fully identifying the strengths and weaknesses of individual on the job.
TABLE: 8
75
OPINION
NO. OF RESPONDENTS
PERCENTAGE
GRADING METHOD
60
60
20
20
BOTH
20
20
TOTAL
100
100
CHART: 8
INTERPRETATION:
The above chart indicates that most of the respondents, i.e. 60% of respondents are
expressed that the present appraisal system using grading method. And where as 20% of
respondents are expressed about check list method is used and 20% of respondents are expressed
that both the grading and check list methods are used in the organization.
TABLE: 9
76
CHART: 9
OPINION
NO. OF RESPONDENTS
PERCENTAGE
GRADING METHOD
30
30
20
20
BOTH
50
50
TOTAL
100
100
INTERPRETATION:
The above chart indicates that 30% of employees are said that previously the
organization used grading method and 20% of respondents are expressed check list method.
Most of the respondents are 50% of respondents are expressed both the grading method and
check list methods of performance appraisal used in the organization
77
TABLE: 10
OPINION
BEHAVIOUR
NO. OF RESPONDENTS
PERCENTAGE
10
10
PERFORMANCE
40
40
BOTH
50
50
TOTAL
100
100
CHART: 10
INTERPRETATION:
The above chart indicates that 10% of respondents are expressed the ir
view about the behavior is basis for performance appraisal and 40% of respondents are feeling
the performance of employee is basis for performance appraisal system. Where as most of the
respondents i.e. 50% of respondents are expressed the both behavior and performance are basis
for performance appraisal system.
78
11. Do you think performance appraisal system plays a role in advanced work plan?
TABLE: 11
NO. OF RESPONDENTS
OPINION
PERCENTAGE
STRONGLY AGREE
75
75
AGREE
15
15
10
10
100
100
DIS AGREE
TOTAL
CHART: 11
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 75% of respondents are
strongly agree to the performance appraisal system plays a key role in advanced work plan.
Whereas 15% of respondents are feel agree and 10% of respondents are expressed disagree about
performance appraisal system plays a role in advanced work plan.
79
12. What is your opinion regarding there is a link between organization goals and performance
appraisal system?
TABLE: 12
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
80
80
NO
20
20
TOTAL
100
100
CHART: 12
INTERPRETATION:
From the above chart 80% of respondents are expressed that the appraisal is
linked to the organization goal. 20% of respondents are expressed that there is no link between
the performance appraisal system and organization goals.
80
TABLE: 13
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
95
95
NO
TOTAL
100
100
CHART: 13
INTERPRETATION:
From the above chart most of the respondents i.e. 95% of respondents are
expressed performance feedback allows the employees to improving efficiency. Where as 5% of
employees are expressed the feedback is not allowed improving efficiency of individual.
81
14. Do you think counseling is essential for employees in connection with performance
appraisal?
TABLE: 14
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
100
100
NO
TOTAL
100
100
CHART: 14
INTERPRETATION:
From the above chart all of the respondents i.e. 100% of respondents expressed
that counseling is essential in connection with performance appraisal system in the Maddi
Lakshmaiah.Company Ltd.
82
TABLE: 15
NO. OF RESPONDENTS
OPINION
PERCENTAGE
FORMAL
80
80
IN FORMAL
20
20
100
100
TOTAL
CHART: 15
INTERPRETATION:
From the above chart 80% of respondents are expressed their interest about
formal counseling is essential. Whereas 20% of respondents are expressed Informal counseling
should be occur in an organization.
16. Does the organization provide training & development programs after appraising period?
83
TABLE: 16
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
100
100
NO
TOTAL
100
100
CHART: 16
INTERPRETATION:
From the above chart all of respondents are expressed that the organization is
providing the training and development programs after performance appraisal period.
17. Is Training & Development programs improving the quality work of the employees?
84
TABLE: 17
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
70
70
NO
30
30
TOTAL
100
100
CHART: 17
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 70% of respondents
are expressed that the training and development programs improve the quality work of employee.
Where as 30% of respondents are expressed there is no any improvement of the quality of
employee with the T&D programs.
85
TABLE: 18
NO. OF RESPONDENTS
OPINION
EXCELLENT
PERCENTAGE
60
60
GOOD
25
25
MODERATE
15
15
100
100
TOTAL
CHART: 18
INTERPRETATION:
From the above chart 60% of respondents are expressed that the present
performance appraisal system is excellent and 25% of respondents are expressed Good. Where as
15% of respondents are feeling present appraisal system is moderate in the organization.
19. Does your company giving a greater feedback after apprising of employee performance?
TABLE: 19
86
NO. OF RESPONDENTS
OPINION
PERCENTAGE
YES
90
90
NO
10
10
TOTAL
100
100
CHART: 19
INTERPRETATION:
The above chart indicates that the most of the respondents i.e. 90% of
respondents are expressed that the organization giving a greater feedback after appraising. Where
as 10% of respondents are expressed that the company has not giving a greater feedback after
appraising of employee performance.
20) What is your satisfaction level with the feed back of appraiser regarding your performance?
TABLE: 20
87
CHART: 20
NO. OF RESPONDENTS
OPINION
EXCELLENT
PERCENTAGE
60
60
GOOD
30
30
BETTER
10
10
TOTAL
100
100
INTERPRETATION:
The above chart indicates that most of the respondents i.e. 60% of respondents are
expressed their satisfaction level is excellent with the feedback. Where as 30% of respondents
are expressed their satisfaction level about feedback is good. And 10% of respondents are
expressed their satisfaction level with the feedback of appraiser regarding performance is better
in the organization.
FINDINGS
88
It was observed that most of the employees have satisfied with annual performance
appraisal.
It was observed that most of the employees feeling the performance appraisal system is
very essential for identifying strengths and weaknesses.
It was observed that the M.L.Company has conducting performance appraisal system on
annual basis
It was observed that the M.L.Company is being used both the grading and check list
method of performance appraisal.
It was observed that most of the employees feel about counseling is essential for
employee in connection with performance appraisal system.
It was observed that for conducting of performance appraisal system. The organization is
considered not only the performance of the employee and also behavior aspects of the
employee.
It was observed that the performance appraisal helps in assessing the training needs of the
subordinates.
It was observed that the employee strongly believed that the training and development
programs will improve the quality of their works.
It was observed that most of the employees have satisfied with the present (check list
method and grading method) performance appraisal system.
89
SUGGESTIONS
Based on the findings of the study the following suggestions are recommended for
improving the performance of the employees and organization.
There is
a
need to modify the performance appraisal system in MADDI
LAKSHMAIAH & CO.LTD
The company should conduct performance appraisal system periodically like twice or
trice in a year.
The company should encourage participation of employees in their appraisal.
The M.L.Company must concentrate on personal counseling programs in addition to
formal counseling.
It is better to take another performance appraisal like 360 degree performance appraisal.
The organization need to increase the satisfaction level in giving of feedback to
employees regarding their performance.
The employees need to get the idea about the performance appraisal system helps in
identifying strengths and weaknesses of themselves on their work.
90
CONCLUSION
The Performance appraisal system plays an important role in the development of
human resource in every organization. The study reveals that majority of the employees are
having awareness about the performance appraisal conducted in their organization and they felt
that performance appraisal is helpful for the organization growth. The organization evaluates the
performance of the employees regarding their job knowledge and the quality of work. The
majority of employees are greater feedback on their performance.
The M.L. Company presently following for appraising Performance of the
employees is GRADING AND CHECK LIST METHODS and majority of the employees are
satisfied with the present appraisal system. Majority of the employees felt that the performance
appraisal system is useful for identifying their abilities, strengths and weaknesses. From the
study it is suggested that the company has to provide proper mechanism to convey the employee
suggestions to top management. It is better to evaluate the performance of the employees for
frequently. Then there is a probability of employees to improve their skills and knowledge in
their working conditions.
91
BIBLIOGRAPHY
Books:
Ahuja K.K
Amstrong.M
Jhon Ivancevich
92
Performance