A summer training PROJECT REPORT

ON

Performance appraisal system

in
parag dairy

A Report Submitted in partial fulfillment of the Requirements for the award of MBA

Submitted By:
Anuradha gupta
MBA 3rd semester
1302970017
Under the guidance of
Mr. Manish Singh (Manager EDP)
2013-2015

KIET School of
Management
Krishna institute of
engineering and technology
13km stone,Ghaziabad-
meerut Road,Ghaziabad-
201206(U.P.)

1
 CERTIFICATE OF THE HoD

To whom it may concern

This is to certify that Mr./Ms Anuradha gupta, Roll no1302970017 is the student
of MBA III semester and has successfully completed his/her project on
performance appraisal system at parag dairy

Date. HOD

2
 Declaration

I, Rollno.,studentofMBAIIISemesterofKIET,School
of Management Ghaziabad hereby declare that the project report on
.., is an original and authenticated work
donebyme.Ifurtherdeclarethatithasnotbeensubmittedelsewherebyanyotherperson
inanyoftheuniversityfortheawardofanydegreeordiploma.

Date Name of student

Faculty Guide

3
 ACKNOWLEDGEMENT

I am very thankful to Mr. S.K PRASAD (General Manager), Lucknow milk union
(L.M.U) for his co-operation.

I am also highly obliged to Mr. A.K PAN DEY (Manager Administration), L.M.U
for giving me his valuable time & interest for my project.

I am also very thankful to Mr. MANISH SINGH (MANAGER EDP) for giving
me guidance & valuable information.

I would also give special thanks to all the outlet holders to whom, I have visited for
their support, information, co-operation, advice to complete my project details. I
would also like to give special thanks to all staff and the member of Lucknow
Producers co-operative Milk Union Ltd. Parag Dairy Lucknow.

`I am also thankful to my Institute Of Management & Research for giving such

opportunity to do summer training in Parag (L.M.U).

PREFACE
4
 Post Graduate Diploma in Management is a two year full time programme. It is being
carried out by k.i.e.t. Ghaziabad in third semester. It has a provision for summer training by the
students from any recognized organization. The study & report is based on Performance
Appraisal of the organization.It presents some information regarding the basics of Performance
Appraisal along with details of character role (C.R) Entries as a tool for evaluation of
performance.

DECLARATION

I Anuradha gupta daughter of Mr. manoj gupta, hereby declared summer training report
entitled PERFORMANCE APPRAISAL SYSTEM IN PARAG is an original work done by

5
me & Submitted to Department of KIET school of Management for the Award of POST
GRADUATE IN MBA for further Declaration that this report has been purely and truly
submitted to the respective college.

6
 INDEX

Chapter Name Pag

e no.
Table of content
Abstract
Chapter I
Introduction

Importance of study

Literature review

Objectives / Hypothesis
Chapter II
Brief introduction about company & its product

Research design/methodology
Chapter III
Data Analysis
Result discussion
Chapter IV

Conclusion and

7. Suggestion

7
8. Limitation
9. Conclusion
10. Bibliography
11. Annexure

8
9
10
 INTRODUCTION TO DAIRY CO-OPERATION

During the early 1920s military dairy farms were established for adequate supply of milk to
the army station.

Establishment of the imperial Indian council of agricultural research in 1929 and transfer of the

office if the imperial dairy expert and the institute at Bangalore to the central government of

India was on the right path of giving due importance to animal husbandry and dairying.

Subsequently N.C. Wright, Director, Dairy Research Institute Scotland, was invited to review
the progress of dairying in India.

His four-year stay (1936-1940) gave a remarkable impetus to dairy development. Even to this

day we realize the importance of D.R. Wright recommendation, which he made in his report

towards dairy development Imperial Dairy Research Institute (IDRI) in 1941.

Later on it was renamed as Indian Dairy Research Institute and regional stations subs regional

station equity as National Dairy Research Institute (NDRI) in 1955 with Regional station.

Academic Training Programme and research in dairy technology and dairy husbandry were

accelerated under the director of dairy research, a top senior official position first held by

KOTHWALAOR THE DAIRY DEVELOPMENT advisor to the GOVERNMENT OF INDIA in

1944.

11
The polson Dairy at ANAND bridged the gap between the market at Bombay and milk products

in Karia district by supplying pasteurized and chilled milk to Bombay milk scheme and military

cantonment in Bombay in 1943.

some of the points emphasized by him were:-

A. Lack of an organized milk industry in India and ready and remunerative market for milk
produced in rural areas

B. In the absence of ready and assured market the chance of proper impact of development
input were very remote
.
C. India has to develop its own technology and technologist to solve the problem of Dairy
industry.

D. Being a country of village, inhabited by marginal farmers and landless laborers.

E Dairy development in India had to involve these wide spread rural pockets to
promote dairy development on co-operative lines. That was the only way .
towards tangible progress

The farmers co-operative complex were established in Karia district at Anand in 1946 and after

independence the Arey milk colony and Amul set together a fast pace of dairy development with

emphasis on developing technique of processing and marketing, suitable to Indian condition .

Between 1948 and 1957 the Karia union expanded its working from 5 village societies to 9000

village societies. It was therefore inevitable that they attracted growing attention of policy

makers.

Toward the end of 1960 the lessons of the Gujarat dairy co-operative movement thus began to
gete incorporated in the officials policy towards dairy development.

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The government of India entrusted the NATIONAL DAIRYDEVELOPMENT BOARD (NDDB)
with the task of implementing operation flood which involved creation of Anand pattern or Amul
type unions in it districts of the country.
Development under flood programme (OFP) Launching of OFP in 1970 was the first step taken
towards milk production at the rural level through the pattern of co-operative milk was
efficiently procured and canalized to the consumer in the far flung cities.

13
14
 Dairy industry

OPERATION FLOOD PHASE ONE (1970-81)

Phase -1

Involving an investment of 95.4 crores, was formally launched on July 1, 1970.

This was the time the largest dairy development programmed was launched any where in the
world. The project was originally formulated for five years, but it suffered delay and was
therefore create on the foundation built by phase-1, a viable dairy industry to serve the nation
need for milk and milk product in 1980s. To achieve this, the programmed of work was set out in
two parts, July, 1978 to July 1979 was used to carry out the preprogram action required prior to
launching of phase

Phase -2
The originally of phase-11 project proposal with an outlays of rest 485.5 cores was finally
approved by the planning commission and the Government of India with revised targets and
outlay of Rs. 273 cores which was to be carried over to phase-III.

The phase-II was implemented during the 6th five year plan.

(1) Expansion of existing dairies in metropolitan cities.

(2) New dairies in 4 metropolitan cities.

(3) Milk collection / chilling centers.

(4) Storage and long distance transport of milk.

(5) Feeder / balancing dairy plants

15
(6) Co-operative organization.

(7) Project of skim milk powder and butter oil donated.

OPERATION FLOOD PHASE - 2 (1981-85)

The success of phase-I clearly demonstrated the reliability of Anand and pattern in milk sheds.
Thus, phase-11 launch on October 11, 1979 was designed.

OPERATION FLOOD PHASE III

Operation flood was a continuous programme. The phase-III during the 7th five year plan period
was for a period from April 1986 to March 1990, but the program was intended further. The key
physical target of phase-111 is as follows:-

(1)No of Anand co-operative societies.

(2) No of Anand pattern DCS under 25,000.

(3) Milk animals under co-operative ambit, lakh lpd 152.9

(4) Milk procurement peak, lakh lpd 183.3

(5) Build up of dairy capacity lakh lpd 200.0

16
(6)DCS membership, lakh 100.2

(7) Urban centers to be covered for marketing 200.

Thus Indian dairy industry is progressing well. The tremendous strides taken towards

modernization of dairy provided effective boost to indigenous, manufacture of dairy equipment,

veterinary medicines and vaccines and long distance transport vehicles for milk.

SOME UNIQUE FEATURES OF THE ORGANIZATION

Pradeshik co-operative Dairy federation LTD. is more than four decades old in the Indian Dairy

Industry. A quasi government organization in the co-operative sectors, it is the leading

organization in the dairy sector in the Northern India. PCDF-a cohesive body successfully does

away with the exploitative force of yester years, the eventual middlemen, foregoing a direct link

between the producer and the ultimate consumer. To achieve this noble aim, a three tier

cooperative structure has been eve loved comprising of primary societies at the village level,

Milk union in the district and finally the main focal Apex Federation the PCDF at the State

level.

World Bank aided prestigious operation programme in the state has been implemented by PCDF
in three phases beginning 1997 to the year 1995.
Nearly all the potential milk belts of the state were gradually covered in the three phases of
Operation Flood Programmed . PCDFs operation combine the basic guiding principle of Anand
pattern Milk co-operative with the business skill of todays industrialized society
.

17
Giving rise to an organization, which injects corporate skills and dynamic professionalism into

what, is traditionally a fundamental institution. The Rural milk co-operative draw their inherent

strength from the farmers committed participation. More than 5.5 lakhs rural milk producer

families of 10865-village level dairy co-operative reaffirm their faith by selling surplus milk to

PCDF.

OTHER PROGRAMMES

The federations unfailing reputation has won it the task of implementing various
development and promotional programmers sponsored by state/central government.

Due to reputation, efficiency and wide network with quality manpower, PCDF is currently

implementing following developmental and promotional programmers supported by central

/state govt.

Integrated mini Dairy project (MIDP)

women Dairy project (WDP)

Capturing a dominant shares of the urban milk market, hitherto served by multitude of small
milk vendors, Creating a procurement network to link numerous co-operative producer societies
in different milk shed areas to the organized urban dairy industry, Upgrading the milk production
capacity of Indian bovine stock through a programme of cross-breeding, veterinary services and
auxiliary activities.

GENERAL IMPACT (O.F.PROGRAMME)

Real ground work in dairying has been done by the co-operatives.
Due awareness has been created in the minds of producer and urban of the state.Co-operative
have succeeded in the social and economical upliftment of women and downtrodden in the rural
18
society. Rural migration to the cities curtailed because of continuous and sustainable
employment generation at village level.
Rural Family Welfare Project (RFWP) .
Uttar Pradesh Diversified Agriculture Support project (UPDASP)
The programmed achieved hitherto under this programme has own many laurels for PCDFC
adding further to its reputation.

ENCOURAGING RURAL PEOPLE IN DIRYING- A PRIORITY

Towards upliftment of rural poor, PCDFC has emerged as the leading institution in the state.

Small and marginal farmers and landless laborers have been able to participate in draying on an

appreciable scale only since the launching of various developmental programmers.

Darying is a labour intensive activity governed largely by availability of female labour; hence
rural women are also actively participating in dairy.
Through its consistent efforts PCDF has ensured that the rural women remains indispensable
parts of darying in the states.

MANAGEMENT ---The Force With in (Our forte)

The organization boasts of around more than three thousand employees that covers a whole

gamut of highly qualified and motivate professionals MBAs, C.A.s Engineers, Dairy

Technologist, Chemist, and vetinarians.

The staff has been trained for special function being performed by the Federation.
INFRASTRUCTURE (PLANT& MACHINERY)

The organization is equipped with sophisticated Plat & Machinery Ghee, Butter Milk Powder,
and other Dairy product on a big scale. The manufacturing capacity covers approximately 37mt.
Ghee, 30mt.Butter, and 55mt. Of Milk powder on per basis.

19
 PCDF has also the distinction of having the post sophisticated and computerized

first vertical dairy in Varanasi. This is a state of Art project within its various

sections located in the basement and three floors of the building.

The total capacity available with the affiliated milk unions including the newly

acquired Parag Dairy, Varanasi 1530 TLPD. Besides the dairy plants various new

projects have been commissioned At Lucknow, Allah bad, Aligarh, and Kanpur as

well.

Equipped central Quality control Laboratory based at Lucknow which Checks

orgenolepetic chemical and microbiological quality of the products

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 BRIEF HISTORY OF PARAG

Lucknow is the capital city of Uttar Pradesh. Total area of district is 2528 square km. 91588
hectare is cultivated land. Wheat and rice is the main agriculture production of district. 69% of
farmers are small and medium level farmers who have about 1 acre land each. Lucknow

21
Producers Cooperative Milk Union Ltd. (Parag Dairy Lucknow) was established in 1938.
Lucknow Milk Union is the first Co-operative Dairy established in India. Very few people know
the fact that the process developed by Lucknow Milk Union was later used in spirit in Gujarat
co-operative milk movement and is now famous as Anand Pattern. Lucknow Milk Union was
then chosen as one of the model dairy to implement Operation Flood Programme started by the
National Dairy Development Board (NDDB) in 1970 .Present handling capacity of plant is 1,
50,000.

The aim of Lucknow Milk Union is to provide reasonable price to farmers thereby
defending them from exploitation of milk vendors and earn supplementary income apart from
agriculture. On the other hand the Milk Union supplies high quality pure Milk & Milk Products
at reasonable prices to urban consumers under the brand name PARAG. The Milk Union has
been running Clean Milk and Breed Conservation Programmes under UPDASP where milk
producers have been educated in producing and supplying milk under clean and hygienic
conditions and provided the producers with semen of pure Indian breed for the improvement of
the present breed of animals. Lucknow Milk Union is establishing Auto Milk Collection Units
(AMCU) in societies for giving transparent payment system for milk given by farmers. By the
establishment of these machines farmers are getting full price and actual detail of fat & snf of
their milk.

Presently AMCU are running successfully in 259 societies. 21 BULK MILK COOLERS are
established in various rural areas of Lucknow for keeping high quality of milk procured in those
areas by milk societies

Lucknow Milk Union has set up of teams for Quality Check and Health Awareness
Programme for the urban consumers of milk. The teams visit different localities in city, tests
their milk and provides on the spot results to the consumers. The Milk Union also organizes
school childrens visit to its dairy plant to create awareness on milk processing and other related
systems amongst them. The Milk Union has obtained ISO & HACCP certification in year
2007.

22
For coming months, Lucknow Milk Union has committed itself to provide a minimum of 1,
60,000 liters of high quality Parag milk per day to the urban consumers. Apart from selling
milk in pouches, the Milk Union is also gearing itself to provide fresh loose milk to the city
consumers. Towards this end, the milk supply vehicles insulated with Japanese eco-friendly
standards have already been introduced in various areas of the city. 87 All Time Milk Booths
(ATM) are established for supply of high quality milk to the consumers round the clock.

Lucknow Milk Union is able to maintain high quality standards in its Milk and Milk products
through close monitoring of processes in all its stages of production, processing and packaging.

The constant increase in the sale figures of the Milk Union are a reflection of our sincere efforts
and the growing confidence of the consumers in PARAG Milk Products.

The organization has a chain of around 2000 agents providing employment to the unemployed
youths. Door to Door Milk Delivery System through mini insulated tanker thru commission
agents with attractive commission rates has been started in the city. The requirement for this
system is to have a mini insulated tanker for which one has to arrange finances up to Rs.50000/-
himself and rest amount comes through bank finance.

The steady sales progress of the Milk Union is reflected from the fact that from an average sale
of 94,460 lit. Of liquid milk per day in the year 2002-03 the sale grew to 1, 30,333 lit. Per day in
the year 2009-10 and during the year i.e. 2010-11 the sale stands at 129144 lit. Per day till
31st may-10.The sales turnover of the Milk Union has grown from Rs. 64.07 Crores in the year
2002-03 to Rs. 146.52 Crores in the year 2008-09.

The march of Lucknow Milk Union (PARAG DAIRY) towards success and excellence continues.

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The history of co-operative dairy industry In U.P dates back to 1917 when the Karta Co-
operative Milk Society, Allahabad was established. LPMU was established in 1938 as the first
step towards organized dairy development programme all over India. At the time of
independence four milk supply schemes were operating in Lucknow, Allahabad, Varanasi, and
Kanpur cities. The Agra co-operative dairy came into existence in second five year plan while
dairies at Bareilly, Gorakhpur and Mathura were adopted later on.

The apex institution of dairy co-operative was registered under the name PCDF (Pradeshik Co-
operative Dairy Federation) in the year 1962 during the fourth five year plan. Aligarh and Meerut
were also proposed to be included in the scheme. The Govt. of U.P also entrusted PCDF with the
responsibility of implementing the operation flood. It was to establish co-operative structure in
some of the best milk sheds located in ten states in U.P being of them.

24
COMPANY PROFILE

25
ESTABLISHED : 1938

REGISTERED : 23rd March 1938

FIRST DAIRY INSPECTOR Mr. N.K PANDEY

BOARD OF DIRECTORS Mr. Gopal Lal Pandey

Mr. Nirma Chandra

chaturvedi

Mr. Tej Shanker

Mr. Pushkar Nath Bhatt

INITIAL CAPITAL INVESTMENT Rs.100/-

PRESENT CAPITAL State Government 90%

Co-operative 10%

LOCATION Jopling Road, Ghokle marg

AREA OF DITRIBUTION Initial Bakshi ka Talab,

PRESENTLY The Entire District.

Tiwariganj

OPERATION FLOOD 1ST ,2ND AND 3RD WERE STARTED IN U.P WITH
THE FOLLOWING OBJECTIVES:

Removing the middlemen between the producers and consumers by the procurement of
the milk by the producers directly through village co-operative.

To increase the production of milk from milking animals by providing Inputs to the
producers.

To arrange the supply of liquid milk in the major cities of U.P.

26
 For carrying out the whole programme successfully by proper planning, implementation,
follow-up maintenance etc, an effective organization structure has been charted out.

DAIRY INDUSTRY PROFILE

DAIRY INDUSTRY PROFILE

PRODUCTS
1. MILK

BUTTER HUMAN POPULATION :953 MILLION (70 MILLION DAIRY

FARMER)

MILK PRODUCTION : 74.3 MILLION TONNES (20.5 MILLION IPD)

AVERAGE ANNUAL GROWTH RATE (1995-2000): 5.6%

PER CAPITA MILK AVAILIBILITY : 214G/DAYS OR 78 KG/YEAR

MILK ANIMAL : 57 MILLION COWS; 39 MILLION BUFFALOES

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 MILK YEILD PER BREED ABLE BOVINE IN MILK : 1,250KG

CATTLE FEED PRODUCTION (ORGANIZED SECTOR ) : 1.5 MILLION

TONNES

TURN OVER OF VETERINARY PHARMATEUTICALS: RS. 550 CRORES

DAIRY PALNT THROGHTOUT : 20 MLPD

THROGHT PUT AS PERCENTAGE OF TOTAL MILK OUTPUT : 10

VALUE OF OUTPUT OF MILK GROUP (2007-08)* : RS.50,051 CRORES

VALUE OUTPUT OF DAIRY INDUSTRY ** : RS 105,500 CRORES

*BASED ON PRODUCERS PRICE

* BASED ON RETAIL PRICE

2.

3. WHITE BUTTER

4. DAHI

5. PANEER

6. PEDA

7. GHEE

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 8. GULAB JAMUN

9. CHHENA

1o. CREAM

11. KHEER

12. BESAN LADDU

13. RAS GULLA

14. FLAVOURED MI

15. MATTHA

16. CHHACHH

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 MILK

MILK

GOLD MILK :

Orange colour pouch product name is gold milk

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INGREDIENTS :

( S.N.F.) =SOLIDS NOT FAT

FAT : 6.0 %

S.N.F. : 9.0%

TAAZA MILK :

Blue colour pouch product name taaza milk also known as

TONNED MILK
INGREDIENTS:

FAT : 3.0 %

S.N.F. : 9.0 %

LITE MILK :

Purple colour pouch product name lite milk

FAT : 0.5 %

S.N.F. : 8.7 %

Flavoured milk :

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 company also produced flavoured milk .

Process flow chart for liquid milk packing

Milk reception in cane or tankers

Weighment

Unload through strainer

Chilling

Raw milk storage tank

Balance tank of pasteurizer

Pasteurization (78 *c to 2 *c) for15 seconds

Milk chiller

Pasturised milk storage tank

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 Pouch machine balance tank

Pouch filling

Crating

Cold storage max 5 *c when closed

Dispatch

BUTTER

Process flow chart for liquid milk packing

storage tank

loading to churn

churning

washing with pasteurized water

preworking

unloading in trolleys

packaging in polythene liner & box hardening in cold storage

storage for self consumption

DEPARTMENTS & FUNCTIONS

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H.R. & ADMINISTRATION
L.M.V. = 159 EMPLYEES

P.C.D.F. = 99

OFFICERS = 32

COTRACT BASE =275

FUNCTIONS :

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Employees related work like recruitment selection,training,performance
appraisal,paying salary,emergency problem ect.

RECRUITMENT as Govt. norms

Finance Department :

No. of Employees = 24

STORE DEPARTMENT
divided into three parts

1. Central store

2. Engineering store

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HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGEMENT

36
Human resource management (HRM) is the strategic and coherent approach to the
management of an organization's most valued assets - the people working there whom
individually and collectively contribute to the achievement of the objectives of the business.

The terms "human resource management" and "human resources" (HR) have largely replaced the
term "personnel management" as a description of the processes involved in managing people in
organizations.

Human Resource management is evolving rapidly. Human resource management is both an

academic theory and a business practice that addresses the theoretical and practical techniques of
managing a workforce.

Its features include:

Personnel administration

Personnel management

Manpower management

Industrial management

But these traditional expressions are becoming less common for the theoretical discipline.
Sometimes even industrial relations and employee relations are confusingly listed as synonyms,
although these normally refer to the relationship between management and workers and the
behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees are individuals
with varying goals and needs, and as such should not be thought of as basic business resources,
such as trucks and filing cabinets.

37
The field takes a positive view of workers, assuming that virtually all wish to contribute to the
enterprise productively, and that the main obstacles to their endeavors are lack of knowledge,
insufficient training, and failures of process.

Practitioners in the field see HRM as a more innovative view of workplace management than the
traditional approach.

As such, HRM techniques, when properly practiced, are expressive of the goals and operating
practices of the enterprise overall.

HRM is also seen by many to have a key role in risk reduction within organizations.

COMPONENTS OF HRM

Recruitment and Selection Process

Performance Appraisal
Training and Development
Industrial Relations
Employee Remuneration

PERFORMANCE APPRAISAL in PARAG

Introduction of the topic

38
Human Resource (or personnel) management, in the sense of getting things done through people,
is an essential part of every managers responsibility, but many organizations find it
advantageous to establish a specialist division to provide an expert service dedicated to ensuring
that the human resource function is performed efficiently.

People are our most valuable asset is a clich, which no member of any senior management
team would disagree with. Yet, the reality for many organizations are that their people remain
undervalued, under trained and underutilized.

Performance Appraisal is the process of assessing the performance and progress of an employee
or a group of employees on a given job and his / her potential for future development. It consists
of all formal procedures used in the working organizations to evaluate personalities,
contributions and potentials of employees.

RATIONALE OF THE STUDY

Performance Appraisal is the important aspect in the organization to evaluate the employees
performance. It helps in understanding the employees work culture, involvement, and
satisfaction. It helps the organization in deciding employees promotion, transfer, incentives, and
pay increase.

39
40
41
 PERFORMANCE APPRAISAL

WHAT IS PERFORMANCE APPRAISAL?

Performance Appraisal is defined as the process of assessing the performance and progress of an
employee or a group of employees on a given job and his / their potential for future development.
It consists of all formal procedures used in working organizations and potential of employees.

According to Flippo,

Performance Appraisal is the systematic, periodic and an important rating of an employees

excellence in matters pertaining to his present job and his potential for a better job.

CHARACTERISTICS

1. Performance Appraisal is a process.

2. It is the systematic examination of the strengths and weakness of an employee in terms

of his job.

3. It is scientific and objective study. Formal procedures are used in the study.

4. It is an ongoing and continuous process wherein the evaluations are arranged

periodically according to a definite plan.

5. The main purpose of Performance Appraisal is to secure information necessary

for making objective and correct decision an employee

42
PROCESS

The process of performance appraisal:

1. Establishing performance standards

2. Communicating the Standards

3. Measuring Performance

4. Comparing the actual with the standards

5. Discussing the appraisal

6. Taking Corrective Action

LIMITATIONS

1. Errors in Rating

2. Lack of reliability

3. Negative approach

4. Multiple objectives

43
 5. Lack of knowledge

METHODS OF PERFORMANCE APPRAISAL

The foregoing list of major program pitfalls represents a formidable challenge, even considering
the available battery of appraisal techniques. But attempting to avoid these pitfalls by doing
away with appraisals themselves is like trying to solve the problems of life by committing
suicide. The more logical task is to identify those appraisal practices that are (a) most likely to
achieve a particular objective and (b) least vulnerable to the obstacles already discussed.

Before relating the specific techniques to the goals of performance appraisal stated at the outset
of the article, I shall briefly review each, taking them more or less in an order of increasing
complexity.

The best-known techniques will be treated most briefly.

Essay appraisal

In its simplest form, this technique asks the rater to write a paragraph or more covering an
individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly
those involving professional, sales, or managerial positions, essay appraisals from former
employers, teachers, or associates carry significant weight.

GRAPHIC RATING SCALE

This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work (is he
outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that
vary with the job but usually include personal traits like reliability and cooperation. It may also
include specific performance items like oral and written communication.

44
FIELD REVIEW

The field review is one of several techniques for doing this. A member of the personnel or central
administrative staff meets with small groups of raters from each supervisory unit and goes over
each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the
group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. .

FORCED-CHOICE RATING

Like the field review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a third
party.

MANAGEMENT BY OBJECTIVES

To avoid, or to deal with, the feeling that they are being judged by unfairly high standards,
employees in some organizations are being asked to set - or help set - their own performance
goals. Within the past five or six years, MBO has become something of a fad and is so familiar to
most managers that I will not dwell on it here.

RANKING METHODS

For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individual statements, ratings, or appraisal forms are not particularly
useful. Instead, it is necessary to recognize that comparisons involve an overall subjective
judgment to which a host of additional facts and impressions must somehow be added. There is
no single form or way to do this.

The best approach appears to be a ranking technique involving pooled judgment.

The two most effective methods are alternation ranking and paired comparison ranking.

45
1. Alternation ranking:

Ranking of employees from best to worst on a trait or traits is another method for evaluating
employees. Since it is usually easier to distinguish between the worst and the best employees
than to rank them, an alternation ranking method is most popular. Here subordinates to be rated
are listed and the names of those not well enough to rank are crossed. The employee who is
highest on the characteristic being measured and the one who is the lowest are indicated. Then
chose the next highest and the next lowest, alternating between highest and lowest until all the
employees to be rated have been ranked.

2. Paired-comparison ranking:

This technique is probably just as accurate as alternation ranking and might be more so. But
with large numbers of employees it becomes extremely time consuming and cumbersome.

Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or
more people are asked to make independent rankings of the same work group and their lists are
averaged), are among the best available for generating valid order-of-merit rankings for salary
administration purposes.

ASSESSMENT CENTERS

So far, we have been talking about assessing past performance. What about the assessment of
future performance or potential? Placement decision and even more so in promotion decisions,
some prediction of future performance is necessary. How can this kind of prediction be made
most validly and most fairly?

360 DEGREE FEEDBACK

Many firms have expanded the idea of upward feedback into what the call 360-degree feedback.
The feedback is generally used for training and development, rather than for pay increases.

Most 360 Degree Feedback system contains several common features.

Appropriate parties

46
peers, supervisors, subordinates and customers, for instance complete survey, questionnaires
on an individual. 360 degree feedback is also known as the multi-rater feedback, whereby ratings
are not given just by the next manager up in the organizational hierarchy, but also by peers and
subordinates. Appropriates customer ratings are also included, along with the element of self
appraisal. Once gathered in, the assessment from the various quarters are compared with one
another and the results communicated to the manager concerned.

Another technique that is useful for coaching purposes is, of course, MBO. Like the critical
incident method, it focuses on actual behavior and actual results, which can be discussed
objectively and constructively, with little or no need for a supervisor to "play God."

Advantages

Instead of assuming traits, the MBO method concentrates on actual outcomes. If the employee
meets or exceeds the set objectives, then he or she has demonstrated an acceptable level of job
performance. Employees are judged according to real outcomes, and not on their potential for
success, or on someone's subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed easily. The
MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.MBO advocates claim that the performance
of employees cannot be broken up into so many constituent parts, but to put all the parts together
and the performance may be directly.

Disadvantages

47
This approach can lead to unrealistic expectations about what can and cannot be reasonably
accomplished. Supervisors and subordinates must have very good "reality checking" skills to use
MBO appraisal methods. They will need these skills during the initial stage of objective setting,
and for the purposes of self-auditing and self-monitoring.

Variable objectives may cause employee confusion. It is also possible that fluid objectives may
be distorted to disguise or justify failures in performance.

Benefits of Performance Appraisal

Measures an employees performance.

Helps in clarifying, defining, redefining priorities and objectives.

Motivates the employee through achievement and feedback.

Facilitates assessment and agreement of training needs.

Helps in identification of personal strengths and weaknesses.

Plays an important role in Personal career and succession planning.

Clarifies team roles and facilitates team building.

Plays major role in organizational training needs assessment and analysis.

Improves understanding and relationship between the employee and the reporting

Manager and also helps in resolving confusions and misunderstandings.

Plays an important tool for communicating the organizations philosophies, values, aim,
strategies, priorities, etc among its employees.

48
 Rating Errors in Performance Appraisals

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to as
'rating errors'. These errors can seriously affect assessment results. Some of the most common
rating errors are: -

Leniency or severity: -

Leniency or severity on the part of the rater makes the assessment subjective. Subjective
assessment defeats the very purpose of performance appraisal. Ratings are lenient for the
following reasons:

a) The rater may feel that anyone under his or her jurisdiction who is rated unfavorably will
reflect poorly on his or her own worthiness.

b) He / She may feel that a derogatory rating will be revealed to the rate to detriment the
relations between the rater and the ratee.

c) He / She may rate leniently in order to win promotions for the subordinates and therefore,
indirectly increase his/her hold over him.

Central tendency: -

This occurs when employees are incorrectly rated near the average or middle of the scale. The
attitude of the rater is to play safe. This safe playing attitude stems from certain doubts and
anxieties, which the raters have been assessing the rates.

49
Halo error: -

A halo error takes place when one aspect of an individual's performance influences the
evaluation of the entire performance of the individual. The halo error occurs when an employee
who works late constantly might be rated high on productivity and quality of output as well as on
motivation.

Similarly, an attractive or popular personality might be given a high overall rating. Rating
employees separately on each of the performance measures and encouraging raters to guard
against the halo effect are the two ways to reduce the halo effect.

Rater effect: -

This includes favoritism, stereotyping, and hostility. Extensively high or low score are given only
to certain individuals or groups based on the rater's attitude towards them and not on actual
outcomes or behaviors; sex, age, race and friendship biases are examples of this type of error.

Primacy and Regency effects: -

The rater's rating is heavily influenced either by behavior exhibited by the rate during his early
stage of the review period (primacy) or by the outcomes, or behavior exhibited by the rate near
the end of the review period (regency). For example, if a salesperson captures an important
contract/sale just before the completion of the appraisal, the timing of the incident may inflate his
or her standing, even though the overall performance of the sales person may not have been
encouraging. One way of guarding against such an error is to ask the rater to consider the
composite performance of the rate and not to be influenced by one incident or an achievement.

Performance dimension order: -

Two or more dimensions on a performance instrument follow each other and both describe or
rotate to a similar quality. The rater rates the first dimensions accurately and then rates the
second dimension to the first because of the proximity. If the dimensions had been arranged in a
significantly different order, the ratings might have been different.

Spillover effect: -

50
This refers lo allowing past performance appraisal rating lo unjustifiably influence current
ratings. Past ratings, good or bad, result in similar rating for current period although the
demonstrated behavior docs not deserve the rating, good or bad.

ROLES IN THE PERFORMANCE Appraisal PROCESS

Reporting Manager

Provide feedback to the reviewer / HOD on the employees

behavioral traits indicated in the PMS Policy Manual

Ensures that employee is aware of the normalization /

performance appraisal process

Address employee concerns / queries on performance rating,

in consultation with the reviewer

b) Reviewer (Reporting Managers Reporting Manager)

51
 Discuss with the reporting managers on the behavioral
traits of all the employees for whom he / she is the reviewer

Where required, independently assess employees for the

said behavioral traits; such assessments might require
collecting data directly from other relevant employees

c) HOD (In some cases, a reviewer may not be a HOD)

Presents the proposed Performance Rating for every

employee of his / her function to the Normalization
committee.

HOD also plays the role of a normalization committee

member

Owns the performance rating of every employee in the

department

d) HR Head

Secretary to the normalization committee

Assists HODs / Reporting Managers in communicating the

performance rating of all the employees

e) Normalization Committee

Decides on the final bell curve for each function in the

respective Business Unit / Circle

52
 Reviews the performance ratings proposed by the HODs,
specifically on the upward / downward shift in ratings, to
ensure an unbiased relative ranking of employees on overall
performance, and thus finalize the performance rating of each
employee.

KEY CONCEPTS IN PMS

In order to understand the Performance Management System some

concepts need to be explained which play a very important role in using the
PMS successfully. They are:

KRAS (KEY RESULT AREAS): The performance of an employee is

largely dependent on the KRA score achieved by the employee during that
particular year. Thus, it is necessary to answer a few basic questions i.e.

O What are the guidelines for setting the KRAs for an

employee?

O How does an employee write down his KRAs for a particular

financial year?

O KRAs: The Four Perspectives.

How is the KRA score calculated for an employee on the basis of

the targets sets and targets achieved?

BEHAVIORAL TRAITS: Some of the qualitative aspects of an

employees performance combined with the general behavioral traits
displayed by the employee during a year constitutes his behavior

53
 traits. An employee is assigned the rating on the basis of the intensity
of the behavior displayed by him. They play a very important role in
the deciding the final performance rating for an employee as is even
capable of shifting the rating one level upwards/downwards.

THE PERFORMANCE RATING PROCESS: The rating

process tries to explain the four different types of rating that an
employee can achieve i.e. EC, SC, C and PC. It also explains the
criteria, which is considered for awarding any of these ratings to the
employee.

PROMOTION AND RATING DISRTRIBUTION GUIDELINES :

The promotion and normal distribution guidelines provide the
framework within which the performance appraisal process has to
work. It is very important that the HR department pays due attention
to these guidelines while preparing the bell curves for various functions
and the consolidated bell curve for all the functions. These guidelines
also help in deciding upon the promotion cases in a year.

54
 PERFORMANCE RATING PROCESS

EXCEPTIONAL (SC SIGNIFICANT

CONTRIBUTOR (EC)
CONTRIBUTOR)

Performs consistently and

Performs above
substantially above
expectations in all areas
expectations in all areas
Achieves final score
Achieves a final score greater
between 100-114%
than or equal to 115%
Versatile in his/ her area of
Consistently delivers on
operation
stretch targets
Develops creative solutions
Is proactive
and require little / minimal
Spots and anticipates
supervision
problems, implements
Sets examples for others
solutions
Take ownership of own
Sees and exploits
development
opportunities
Coaches others
Delivers ahead of time
Demonstrates business
Sees the wider picture-
impacts across business
initiative

55
 Is self motivated

Focuses on whats good for the Supportive team player

business Leads own team very

Seen as role model by others effectively

Recognized as exceptional by Demonstrate functional

other functions as well initiative

Motivates others to solve

problems

Develops others

Provides open and honest

feedback

Able to establish and lead

cross-functional teams

56
57
 OBJECTIVE

The project work is one of the subjects of management courses. It is a vocational training for a
student that immensely helps to get him acquainted with the actual working of an organization &
in particular the functions of Personnel & Administrative or Human Resource Department of an
organization.

It also facilitates him to have an observational experience for gaining in depth knowledge of
various functions undertaking by the management of an organization. It includes number of
activities to be performed by the students like selection of the topic, collection of relevant data,
and presentation of the data in a systematic manner & to find out some logical conclusions.

58
 RESEARCH METHODOLOGY

(3)

RESEARCH METHODOLOGY

59
RESEARCH METHODOLOGY

A 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. Research design stands for advance
planning of the method to be adopted for collecting the relevant data the techniques to be used in
their analysis, keeping in view the objective of research. The ideal research design is which
minimizes the bias and maximizes the reliability of the data collected and analyzed. A research
design would act as a guide and help the researcher move towards the right direction.

Research concerns itself with obtaining information through empirical observation that can be
used to systematically develop logically related proposition so as to attempt to establish casual
relationships among variables.

Data Collection:-

There are two types of data viz. primary data and secondary data. Primary data are those, which
are collected fresh and for the first time, and thus happened to be original in character and the
secondary data, on the other data are those which have already been collected by someone else
and which already have passed through statistical process.

Primary data for the project is collected by using different methods like questionnaires,
interview, informal talks and observation, primary data is collected.

Sources of Data:-

There are different sources used to collect data. The data for this project is collected by
conducting a survey within the organization, through questionnaire, discussions, library books
and websites.

Secondary data for the project is collected by using library books, websites, and organizations
report etc.

The data was collected through questionnaire survey, which was given to various respondents.

60
Sample Size:-

A sample size is 50 employees whose services are employee by Lucknow Milk Producer Union
Ltd, LUCKNOW was considered.

Stastical Tools for Data analysis:-

Tangent Population

The target population of LUCKNOW MILK PRODUCERS UNION LTD is the employee of
across various departments.

Sampling Method

Random Sampling

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62
 SWOT Analysis

It is one thing to discern attractive opportunities in the environment; it is another to have

the necessary competencies to succeed in these opportunities. Each business needs to evaluate
strengths and weaknesses periodically. In examining its pattern of strengths and weaknesses,
clearly the business does not have to correct all of its weakness nor gloat about all of its
strengths. The big question is whether the business should limits itself to those opportunities
where it now possesses the required strengths or should consider better opportunities where it
might have to acquire or develop certain strengths.

A market opportunity is an area of need in which a company can perform profitably.

Opportunities can be listed and classified according to their attractiveness and the success
probability. The companys success probability depends on whether its business strengths not
only match the key success requirements for operating in the target market but also exceed those
of its competitors. Mere competence does not constitute the competitive advantage. The best
performing company will be one of that can generate the greatest customer value and sustain it
over time.

Some development in the external environment represents threats. An environmental threat is a

challenge posed by an unfavorable trend or development that would lead, in the absence of
defensive marketing action, to sales or profit deterioration

63
SWOT:

Analysis is important technology by the company can reap its position future and can over comes
its negative aspects. Therefore, swot analysis plays an important role of formulating the business
strategies for any company, which is obvious best on its strength, weakness, opportunity and
threat.

Strength of the organization

1. Respected management and reasonable competitive advantages

2. Strong position in the segment of its business

3. Emerging businesses and companies staging a turnaround etc

4. Vast customer base.

5. Extensive distribution network

6. Government support

Weakness of the organization

1. Reduction in quality of the product.

2. Dissatisfaction among customer due to lack of service.

3. No after sales service

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Opportunity for the organization

1. Rising level of urbanization and education creates opportunity.

2. Increasing awareness in safe and packed milk among people.

3. Growing market of health conscious people in urban .

4. Increasing demand of milk products among all segments.

Threat for the organization

1. Economic environment.
2. Government policies

3. Political environment

4. Social environment

5. AMUL

65
DATA ANALYSIS AND INTERPRETATIONS

66
 DATA analysis

Question no 1: Are you aware about the modern techniques used in

performance appraisal?

(a) Yes (b) No

Question Yes No

Sample Size 60 40
100
Employees

YES NO

Interpretation: Near about 60% of the employees had not

aware about modern performance appraisal technique

67
Question no 2: Performance appraisal techniques make you better
eligible for promotion, demotion, & transfer.

(a) Agreed (b) Not Agreed

Agreed Not agreed

Question
Sample Size 100 80 20
Employees

Interpretation: The 80% of the respondents shows that

PARs as a good strategy to go ahead with promotion while 40% of
respondents do not agree with it.

68
Question 3 : Are you aware about your performance appraisal or
any evaluation done by your superior

(a) Yes (b) No

Yes No
Question
Sample Size 100 80 20
Employees

yes no

Interpretation: 80 % the employees had responded

in favor of that they were aware about performance appraisal.

69
Question no 4: Performance appraisal techniques make you better
eligible for promotion, demotion, & transfer.

(a) Agreed ( 80 ) (b) Not

Agreed (20 )

Agreed Not agreed

Question
Sample Size 100 80 20
Employees

agreed not agreed

Interpretation: The 80% of the respondents shows that

P.A. as a good strategy to go ahead with promotion while 40% of
respondents do not agree with it.

70
Question no 5: Do you think performance appraisal is useful or just
a waste of time?

(a) Useful ( 92 ) (b) Waste of time ( 08 )

Question
Useful Waste of
time
Sample Size 100 92 8
Employees

Interpretation: More than 90% of the employees say that

performance appraisal is useful for their self-assessment and
promotions. Thus, they cannot ignore it. And rest of the
employees thinks it as a waste of time.

71
Question no 6: Proper and adequate performance appraisal plays a
crucial role in your career development.

(a) Agreed ( ) (b) Not Agreed ( )

Yes No
Question
Sample Size 100 92 8
Employees

Interpretation: 92% of the responses show that

Performance Appraisal Report helps a lot in the promotional
activities.

72
Question no 7: Does performance appraisal report is helpful in
identifying Training and Development need or it lay development
plan for you? )

(a)To a large extent (b) To some extent (c) Not at all

Question To a large To some Not at all

extent extent
Sample Size 60 30 10
100
Employees

large extent some extent not at all

73
Interpretation: 50% of the respondents are satisfied by
the performance appraisal report as it helps them to understand
the job profile and helps in training need identification.

Question no 8: Performance appraisal is most of the time fair and

unbiased.

(a) Agreed ( 85 ) (b) Not Agreed ( 15 )

Agreed Not
Question
agreed
Sample Size 100 85 15
Employees

agreed not agreed

74
Interpretation: 85 % of the respondents show that
Performance Appraisal report is time fair & unbiased.

Question no 9: Have you understood clearly, as to what is expecting

from you?

(a) Yes (b) No (c) Cant say

YES No Cant say

Question
Sample Size 100 40 22 38
Employees

yes no can't say

75
 Interpretation: There is a close response from the
respondents on Performance appraisal report where on one hand
(near about 40%) say that it makes feel refreshed & know there
better responsibility. On the other hand some say that it has
helped them in improving their skills not to define their future
responsibility and performance

76
77
 FINDINGS

FINDINGS

For employees its one of the major hindrance is delivering

job performance & so its the prime responsibility of the
company to provide every necessary infrastructure.
Performance appraisal in PARAG is done on an annual basis.
This should be done quarterly to make it more effective.
It is also observed that basic infrastructure facilities like P.C,
Printer are not up to the mark.
Relation of the employees with the superiors is supportive.
Maximum support is given to the employees for their
innovative ideas for process improvement.
Maximum employees are favorable with the internal
environment of the organization.
Majority of the employees are satisfied with their increment
through monetary motivation.
Proper training programs on safety from hazardous &
inflammable material are conducted to avoid accidents.
Majority of the employees are satisfied with the medical
support given by the organization through this their
performance can increase.
Maximum employees are satisfied with the recreational
activities provided by the organization.
78
 Feedback is provided to the employees though in a very few occasion.

79
80
 SUGGESTIONS

Performance Appraisal should be experience, work skill,

labourism sincerity.

Evaluation should be as per performance and shall not be

biased.

Valuation of performance should be done in each quarter.

Appraisal should not be Bell Curve. It should be based on

department/ individual either 1005 or 0%.

Employee is the key resource of the organization. Hence

employee satisfaction is the key to success for the organizational
growth. For employee satisfaction there should be good
incremental and promotional policies.

Things carried out on paper should be followed/ implemented or

at least can be tried.

Performance Appraisal should be done by MBO (Management by

Objective) /M&M method of appraisal.

Every employee should have a right of justification for his own

roles, responsibilities and designation.

Organization must use 360 degree appraisal method because

this method not only includes the performance of an employee
but his interpersonal skills also

81
82
83
Limitations of study

1. Lack of expertise trainer handed in the prosecution of

Performance Appraisal programme.

2. Lack of feeling in people of against the awareness for the

Performance Appraisal programme.

3. Search for the exact Appraisal was also difficult to define.

84
CONCLUSION

85
It is truth that no work is completed in itself. In fact, completion of
one job is actually the beginning of another job. Likewise,
performance Appraisal is never ending process. It is essential for
personal & professional development.

This project has been considering all possible aspects mentioned

in the project booklet. The project is made very clear and precise
with the help of the relevant data gathered from the company,
company website & through various annexure.

In the concluding remark of my project report, I would like to state

that at LUCKNOW PRODUCERS CO-OPERATIVE MILK UNION
LTD, LUCKNOW the employees are considered as most valuable
assets & strength for sustained growth & development of the
company.

They believe in investing continuously in human resource for their

growth. The company is led by young professionals. They have an
open work environment which is achievement oriented.

In spite of these merits, there are some demerits also in the

company that the goals of the company are not decided in
advance and no feedback fixed for workers and executives in
LUCKNOW PRODUCERS CO-OPERATIVE MILK UNION LTD,
LUCKNOW.

86
87
88
Books:

Ashwathappa .K

Human Resources Management Tata MC Graw hill,

New Delhi -7th edition.

Prasad L.M. Human Resource Management Sultan Chand

& Sons , 2nd edition.

Gupta C.B. Human Resource Management Sultan Chand &

Sons,
New Delhi ,13th edition.

Sharma R. Human Resource Management Tata MC Graw hill

,New Delhi.

Klleiman Lawrence S. Human Resource Management

Biztantra publishers,3rth edition

Dessler Gary Human Resource Management Prentice Hall,7th

edition

Websites:

www.managementparadise.com

89
 www.humanresource.net.in

www.citehr.com

www.dairydevelopment.up.nic.in

Magazines & Newspaper

HRM Review

Human Capital

MBA Review

CSR

ICFAI

90
 ANNEXURE

QUESTIONNAIRE:

91
TO STUDY PERFORMANCE APPRAISAL SYSTEM:

Is the promotional policy well defined in your organization

Yes b) No c) Cant say

Do you know the objectives of the Performance Appraisal System. If

yes. Kindly specify.

How often the Performance Appraisal form is filled or Performance

Appraisal is done.

Fortnightly b)Monthly c) Six monthly d) Annually e) Not fixed

On what basis is the Performance Appraisal done

Merit cum seniority b) Seniority cum merit c) merit only d) seniority

e) Any other

5) Who appraises you?

92
 a) Appraisal committee b) Your immediate Supervisor c) Self
Appraisal

d) 360 degree appraisal e) any other

6) What methods are being used for performance appraisal?

a) Fixed choices distribution method b) essay method c) checklist

method d) any other

7) In your opinion does it identify the training needs?

a) To a large extent b) To some extent c) cant say d) not at all

8) Is the promotional policy linked with performance appraisal system?

a) yes b) no c) cant say

9) Are the issues like career planning and succession planning a part of
company policy?

a) Yes b) No c) Cant say

10) What type of remedial measures are taken

a) Job rotation b) sent to training programmes c) counseled d)

any other

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