RESEARCH REPORT

ON

Study of Performance
Appraisal System
AT YAMAHA

A REPORT SUBMITTED TOWARDS THE FULFILLMENT OF THE REQUIREMENT

OF THE TWO YEAR FULL TIME MBA PROGRAM
SESSION: 2006-2008

SUBMITTED TO SUBMITTED BY:

Ms. Snehlata Verma Amir Ali
HOD-MBA Deptt. MBA – IVSem
Roll No. 0509970006

HARLAL INSTITUTE OF MANAGEMENT AND TECHNOLOGY

GREATER NOIDA

1
 ACKNOWLEDGEMENT

I would like to express my heartfelt gratitude to my Faculty Guide

Ms. Snehlata, HIMT, Greater Noida. without whom the completion of this

project would not have been possible.

I also thank my friends who helped me a lot while doing the research

work.

Last but not the least, I would like to thank persons for putting in their time

and effort in completion of project who helped me in various ways, directly

or indirectly.

Amir Ali

2
 PREFACE

The importance of personnel management is being increasingly realized in

industrial and non-industrial organization both in India and abroad. This
realization has come about because of increasing complexity of the task of the
managers and administrators. So far the personnel function was confined to
recruitment, salary administration and industrial relations. It was regarded as a
necessary evil. However, organizations today have realized the human resources
as more valuable than any other resource and their proper management can
tremendously help organizations to maximize the utilization of other resources.

One step forward in this direction is the proper maintenance of a proper

performance appraisal system in an organization. Performance appraisal is a
step where management finds out how effective it has been hiring and placing an
employee. The appraisal plans serve as a basis for counseling employees about
their strengths and weaknesses, for improving the productivity, efficiency and for
enhancing employee relations through development of mutual confidence among
them.

The basic need of the study is to analyze how far the performance appraisal in
this organization has been successful in assessing the effectiveness and
efficiency of the employees and to what extent it has helped in linking
professionalism and commitment to the organization. With this objective the
research has been undertaken.

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 INDEX

 Acknowledgement

 Preface

 Company Profile

• A journey from YMEL to YMIPL

• Yamaha’s Philosophy

• Mission of the Company

• Wage and Salary Administration

• Environmental Policy

• Functions of Various departments

• Functions of Personnel Department.

 Objective of the Study

 Research Methodology

 Introduction to performance appraisal

 Study of performance appraisal in the organization

 Major Findings.

 Suggestions

 Bibliography

4
 Annexure

5
Company Profile

6
 COMPANY PROFILE

Yamaha Motors Escorts Ltd. was a joint venture company formed by the alliance
of Escorts Ltd. and Yamaha. The flagship company of Rs. 3600 crore Escorts
group a major plant in the engineering industry in India including two wheeler
business and Yamaha Motors Corporation, Japan. 26,400 crore global giant in
two wheeler with 60 facilities in 45 countries.

The company started operating in 1985 as Escorts Ltd. (Yamaha Motor Cylinder)
its first product in road. In 1996 it became a joint venture with equal share of
50:50 with Escorts group. India and YMC, Japan and was named Escorts
Yamaha Ltd. In August 2000, Escorts group sold its 24% stakes to YMC Japan
and the joint venture again changed to one sided domination and the name of the
company became Yamaha Motors Escorts Ltd. Though not an ISO certified
company but still the company has kept and sustained very good quality
standards in its working and products.

The company became 100% Japanese on 1st August 2001 and the name finally
changed to Yamaha Motor India Pvt. Ltd.

Important facts about Surajpur and Faridabad Plant.

1. Surajpur plant was established in 1985.

2. Faridabad plant was established in 1965.

3. The turnover of Surajpur plant is around 702 crores as compared to 208

crores in Faridabad plant.

4. The volume of Motorcycles procured in numbers is 211913 in Surajpur

plant in the year ending 31st Dec 2001 and in Faridabad plant it was
77,200.

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5. Manpower in Surajpur plant is 1048 and compared to 1946 in Faridabad
plant.

6. The average age of employee in Surajpur is 35 years where as 45 years

in Faridabad plant.

7. There are about 950 machines used in Surajpur plant whereas 600
machines in Faridabad plant.

8. Total land area in Surajpur is 351385 sq.mtrs. in Faridabad it is 1,21,674

sq.mtrs.

9. The building area of Surajpur in 54,815 mts. And the building area of
Faridabad plant is 50678 sq.mtrs.

OBJECTIVES OF THE COMPANY

1. Chief profitable conditions in mid term plan.

2. No further investment in mid term.

3. Continuous improvement in daily production (quality distribution and cost).

4. Motivated and charged up employees.

The strength of YMIL lies in being a customer driven company. The country’s
largest network of nearly 10958 dealers in two wheeler industry starting with RX-
100, RXG, RZ-135, YBX 125, YD125, YD110 (Crux) it came up with a recently
launched model Enticer & Frazer

8
 YAMAHA'S PHILOSOPHY

YMIPL is committed to creating a higher level of customer satisfaction using our

ingenuity and enthusiasm to enrich people's life.

What is KANDO ?

Kando is a Japanese word for the simultaneous feelings of deep satisfaction and
intense excitement that we experience when we encounter something of
exceptional value.

At Yamaha Motors we believe that Kando can be generalized by products and

services that surpass customer's expectations.

Yet for all the emotional elevation Kando provides, the feeling can be short lived,
and people may be touched only for a moment. There fore, our challenge is to
make sure that all our products and services genuinely thrill, impress and touch
customer's heart at the first time and every time. We strive to achieve our
corporate mission by adhering to these principles.

We must remain keenly aware of customer evolving needs company provided

them quality products and services of exceptional value that surpass their
expectations. We can and will earn a fair profit by putting forth a superior effort to
satisfy our customers.

As a good corporate citizen we act from a world wide perspective and in

accordance with global standards. We will work locally to better the social
environment and think globally in helping and preserve the natural environment.

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 YAMAHA'S MISSION

THE MORE HEARTS YOU REACH. THE MORE HEARTS YOU TOUCH

YMIPL is a new company serving the customer needs by following Yamaha

Motors corporate mission of creating "Kando"- a Japanese word that means
-"Touching people's Hearts".

It is best way to describe an experience that both moves and inspires. Kando
also describes our spirit of challenge to create new value surpassing customer
expectations.

YMIPL is committed to make products that benefit from the skills and technology
used by the Yamaha world wide. To fulfill customer satisfaction and meet the
needs of Indian market YMI plans to produce one or more model in the first year,
four models in three years.

To achieve this goals YMI will pursue 3 major objectives within the company.

The first is customers satisfaction. YMI is trying to do whatever is necessary to

improve their dealer network to make its customers comfortable while dealing
with Yamaha Motors.

The second is strengthening research and development It is the mission of YMI

to constantly produce what customers are looking for by analyzing market trends
and changes.

In this regard its motto is "Speed, Quality, Yamaha's original design”.

The third objective is optimizing the internal working system. One of the policy of
YMI is that all its employee work together as one, aiming at a common goal.

YAMAHA : The Kando Company is aiming to make a significant contribution to

the Indian society and create products that the people of India will take to their
hearts.

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The company strive to be the strongest and most respected engineering concern
in the country.

This is achieved by clearly positioning itself in a competitive environment

enhance its brand equality products, market leadership, enlarged customer base,
better cost controls and pricing opportunities.

They feel responsible towards their employees. They believe to respect their
dignity and recognize its merit. Each employee upholds the core values of
professionalism, commitment and integrity in keeping with the highest traditions
of the company

11
Wage and Salary Administration of YMIL

At YMIL there are two types of employees

1. The hourly rated workers (HRW's)

2. The monthly rated employees (MRE's)

The HRW's are given salary on the basis of the number of hours they work.

They are further divided into :-

1. Direct HRWs

2. Indirect HRWs

Direct HRWs are those which are directly involved with the production. Indirect
HRWs are those employees who are not directly involved with the production.

The HRWs belong to the bargainable category. They are workers and the
contract labourers who come under the trade unions.

The MREs are given the salary on the basis of the number of days they work.

The MREs bargainable are the peons, clerks and junior workers. The MREs non-
bargainable are staff members, managers and officers.

The Wages and Salary of the workers depend on their basic. The HRWs and
MREs are given grades as per the OB done by them. At YMIL, the basic for
every grade is increased after negotiations with the trade union of the company
and the management. The basic wages and salary can be computed as follows.

HRW Basic Wages = No. of hours of work * Wages/Hour.

MRE Basic Salary = No. of days of work * Salary/Day.

No. of hours of work in a month for HRW is 208.

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No. of hours work for MRE is 196 hours.(certain departments) and for some it is
208 hours.

The following are the grades given to employees along with their wage scales.
Salary Scales of MRE

Grade Basic Salary/month

E2 2224

E3 2714

E4 2714

E5 2681

E6 2717

E7 2717

E8 2622, 2852

E9 2719

E10 3153, 3471

2894

2988

Statement showing Emoluments:

Workmen and staff:

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s.no Particulars Amount (Rs.)
1. Basic (/month)

2. Night Shift Allowance(/day) 15

3. Washing Allowance (/month) 20

4. Tea Allowance (/month) 25
5. Milk Allowance (/month) 35
6. DA 2386.85
7. Personal Pay (/month) 1. Direct Link With

Production = 600

2. Indirect Link With

Production = 423
8. Incentives (/month) 1. Direct Link With

Production (100%) =

3850

2. indirect Link With

Production (70 %) =

2695
9. HRA (/month) 1610/1620/1630
10. Conveyance Allowance (/month) 740
11. Eqva. Allowance 550
12. Educational Allowance (/month) 200
13. LTA (/annum) 5112
14. Medical Allowance (/annum) 3300
15. Overtime Twice of Basic + PP + DA (as

per factory act)

16. Bonus As per the company

performance.
17. Canteen Allowance NA
18. Monthly Attendance Bonus NA
19. Uniform – cotton 3 pairs a year.
20. Shoes 2 pairs a year.

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Supervisors :

S.no Particulars Amount(Rs.)

1. HRA 50 % of the basic +DA +PP
2. Conveyance Allowance (/month) 1800
3. Night shift Allowance 50 (10 PM – 5 AM)
4. DA (/month) 3700
5. Medical Allowance (/annum) One month basic
6. LTA (/annum) 1 ½ of basic
7. Bonus As per company

performance

Environment Policy

Protection of the environment is an essential part of the company policy. In line

with YMIL GUIDING PRINCIPLES, they will continue to Integrate environmental
protection systematically into. their operations. Their aim is to protect the
environment we live in and to make spare use of natural resources.

The Board of YMIL considers itself responsible for implementing an effective

environmental management as defined by the EU Environmental Audit
Regulation EN ISO 14001.

Environmental Objectives of the YMIL Group:

1. YMIL is committed to effective environmental protection, which is

promoted by and is the responsibility of the board.

2. Natural resources are used sparingly in all areas, from product

development and environmental -friendly production processes to
recycling of the products.

3. We promote the environmental awareness of our staff at all levels. To

improve mutual understanding we ensure an open, objective dialogue with
our customers, suppliers, authorities and the public at all YMIL locations.

Environmental Guidelines of the YMIL

15
1. Strengthening environmental awareness.
2. Preventive action by organizational management.

3. Dialogue with the public.

4. Systematic documentation.

5. Environmental friendly technology.

6. Systematic Environmental production reduce risks.

7. Checking and monitoring.

8. Information to our customers.

9. External companies committed to our environmental policy.

Departmental Functions

One has to know the functions of each department.

Plant functions have been divided into the following groups:

1. Future projects

This group comprises of product engineering design(PED), product

engineering testing (PET),value engineering and projects department.
.Product engineering design.

The complete product design composed of assemblies, sub-assemblies

with hardware are designed by Product Engineering Design department.
Then the proposed design undergoes a feasibility study(making of
prototype from the product design, testing, aesthetics, evaluation etc.) by
Product Engineering Testing Section. After successful testing of the
prototype the final design documents known ~ "design drawing release" is

16
 released for information and necessary action to the following
departments.

a). Industrial Engineering.

b). Manufacturing Engineering (tool and design, process engineering)

c). Materials / projects.

d). Production, Planning, Control

e). Quality Control and Inspection.

I). Marketing/Service.

• Product Engineering Testing

All product design before being released are completely tested on prototype for
endurance and other functional aspects in this department.

• Value Engineering

The main functions of this department are to suggest ways to reduce the cost
of the product without affecting the quality.

• Projects

All new projects undertaken by this organization are planned and

implemented by this department. The department comprises of two sections:

a). Project Planning

b). Vendor Development.

Project planning involves technology transfers, coordination with the

foreign collaborators, investment planning, govt. approvals, site selection,

17
 imports, coordination with various agencies like architects, contractors for
building, state electricity board, machinery selection etc.

Vendor Development involves developing new vendors, giving them

technical assistance procuring bought out parts, semi bought out parts,
jigs and fixtures etc. from outside parties.

2. Manufacturing Operations

This group comprises of manufacturing engineering, industrial

engineering, product planning and control, material manufacturing, quality
control and inspection, plant engineering/maintenance and personnel.

• Manufacturing Engineering.

• Manufacturing engineering comprises of process engineering, tool

design, tool room, tool maintenance, NC machine and toolings, SPM
and capital budgeting.

• Process Engineering Section

This section prepares operation sequence sheets for manufacturing

components, details of machines, fixtures, cutting tools, speeds, feeds,
coolant gauges for inspections etc. and are released to the following
departments for information and necessary action:

a). Production Planning and Control.

b). Tool Design

c). Quality Control and Inspection

d). Industrial Engineering

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 Further, this department prepares a five year investment plan taking into
consideration capacity enhancement, replacement of old machines and
technology upgradations.

• Industrial Engineering Department.

This department plays a vital role in the complete manufacturing activities VII.

a). Plant Layout

b). Installation and Commissioning of machines
c). Time and method study
d). Material handling equipment
e). Component cost estimation
f). Civil Maintenance and new construction
g). Ensure proper working conditions

• Production Planning Control

Production Planning and Control comprises of two sections:

a). Master Planning

This section further has two sub-sections, project planning and tool planning.
Project planning involves implementation of new projects, material planning
and deciding on own manufactured parts and bought out parts, release of
monthly and annual production targets to shop planning and manufacturing
department. This section also implements process alterations made by
process engineering sections.

Tool Planning involves planning tool loading / reloading, tool modification. tool
storage and tool reworking.

b). Shop Planning

This section performs the following functions.

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 A). Scheduling and loading.

B). Material Feeding.

C). Maintaining production records.

D). Material Handling from store to production line.

E). Spare Parts Planning

The operation sequence is tried out in the shop by the process engineers and
problems which arise are sorted out Necessary alterations are made in
process specifications sheets and released to all concern departments for
necessary actions.

The section also prepares "Purchase Purpose Drawings" of bought out parts
and assist vendors in solving their technical problems which arise from time to
time. Process engineering section also approves design of machinery
conducts machine trial, cutting tool trials and scrap analysis.

• Tool Design Section

The activities of this department are subdivided into three sections as

follows:-

a). Machine Shop Tool Design

This section designs jigs, fixture, cutting tools, functional gauges, dimensional
gauges, tool setting gauges, tool layouts as required in the process
sequence. The design drawing are released for tool fabrication in tool room
through process engineering and production planning and control.

b). Allied Shop Tool Design and Tool Try Out

This section designs press tools, welding fixtures, assembly fixtures,

functional gauges, setting templates etc. required in allied shop. The design

20
 drawing are released for tool fabrication in tool room through process
engineering and production planning and control. The tools manufactured by
the tool room are tried out by the try out section for their performance and if
the necessary information for tool modification is .conveyed to the tool design
section and tool room. The tools are handed over to the production planning
and control department, which then issues the tool to the respective
production shops.

c). Estimation, Scheduling and Achieves

This section prepares cost and time estimates of the toolings to be

manufactured in the tool room or from the outside parties. It also prepares
complete schedule of tool manufacturing, working out its priorities on the
basis of projects in hand. This section also maintains proper upkeep of all
drawings and provides necessary blue prints of the drawings to the
concerned departments and sections. The library service of both technical
and non-technical nature is also provided by the section.

• Tool Room

Tool room manufactures various tools, design by the tool design section like
press tools, jigs and fixtures, gauges, templates, games, boring bars, quill
assembly etc.

• Tool Maintenance

Tool Breakdown wears out after certain amount of production. The tool are
repaired in this section, if beyond economical repair, information is fed to
production planning and control for new loading of tools.

• N.C. Machine and Tools

The section has been created to take care of all CNC machines in the plant
covering the following aspects:

21
 I. Process Planning

II. Tool Try Out and Tool Setting

III. Fixtures and clamping devices

IV. Manual/Computer Aided Part Programming

V. Program providing

VI. Trial of CNC machines

VII. CNC machines services

VIII. Installations and commissioning of CNC machines

• SPM section

This section design and fabricates special purpose machines identified by

capital budgeting on the basis of cost and agency.

• Capital Budgeting Section

This section plans and procures the machine identified in the process
specification sheet. These machines are mostly purchased from outside
sources such as HMT, XLO, Electro pneumatics, Coopers etc. or imported
from abroad if no suitable indigenous resources exist. In addition, some of the
machines are also developed In our SPM section depending on cost,
sophistication and urgency.

• Manufacturing

22
• Manufacturing comprises machine shop, heat treatment shop, magneto shop,
engine room, welding shop, chassis shop, press shop and sheet metal shop,
paint shop and assembly line.

The departments ensures complete manufacturing activities on the basis of

targets given by the production planning and control for each month and on
annual basis, specification sheet with the help of service facilities by
coordination of shops. To meet the set targets this departments keeps a
constant check on the losses due to material delays, machine breakdown,
tools, jigs and fixtures and non- availability, power/compressor failures etc.
and tries to keep them as low as possible. Also man-machine utilization kept
at the optimum level to get a good efficiency of work.

• Plant Engineering! Maintenance department

This department is responsible for upkeep and maintenance of all equipments

and machinery installed in the plant. As and when any machine undergoes
break down: it is attended by breakdown maintenance group. In order to
discharge its functions in most scientific way the department regularly plans
and executes the preventive maintenance program of costly and vital
equipment and machinery in the plant. In order to facilitate the job, the
department is sub-grouped into Mechanical Maintenance and Electrical
Maintenance. Besides, department is also responsible for power
generation/distribution and installation of new machines. This department also
houses machine tool rebuilding/ reconditioning wing which is responsible for
restoring the worn out old machine tools to near original accuracies and
cutting capacities.

• Quality Control and Inspection

The main function of this department is to ensure that the quality of the
product is maintained. It is the responsibility of this department to see that
what has been produced meets the product specifications before assembly or

23
 dispatch. In order to maintain the quality of the product, they also keep a
constant check on all the activities responsible for manufacturing.

• B.O.P Inspection

This sub section comprises of vendor validation, sample validation and

receiving inspection. All bought out parts are inspected by this su b section.

1. Laying down marketing policies.

2. Publicity of product.

3. Sales forecasting.

4. Sales distribution.

5. Ensuring spares availability.

6. Dealers development.

24
• Finance

This department controls the flow of cash and provides the means to carry out
the objectives and meet company obligations. It is divided into the following
sections to meet its objectives:

1. Sales Accounting and Excise.

2. Payroll.
3. Cost Accounting.
4. Financial Accounting- Balance Sheet, Budget, P/L etc.
5. Bills Payable
6. Insurance and T AIDA Bills.

Functions of Personnel Department

Various Functions carried out under the personnel department at Escorts ltd.

(Yamaha Motor Cycle division, Surajpur) are as follows :

1. Man Power Planning

It is one of the most important functions of the personnel department.

Human resources or manpower planning is the process by which
management determines how an organization should move from current
manpower position to the desire manpower position. It analyzes the
present and future vacancies that may occur as a result of transfers,
promotions, sick leaves, leave of absence, or other reasons and analysis
of present and future expansion or curtailment in various department
Through planning, management strives to have right no. and right kind of
people at right places and the right time to do the things which result in
both the organization and the individual receiving the maximum long range
benefits.

25
 The planning of manpower as carried out by Escorts YMD is done with the
job analysis that is procedure by which pertinent information obtained
about a job or It can also be said that it is a detailed and systematic study
of information relating to the operations and responsibilities of specific
jobs. This process of obtaining all pertinent job fact is carried out through
job description and job specification. Job description and specification is
written record where in job description responsibility and requirements of a
particular job where as in job specification the requirement sought in an
individual worker in a given job.

2. Employment

It is another impol1ant operative function of the personnel department and

carried out by internal and external sources. The internal sources are
within the organization" where ever all vacancy occurs, somebody within
the organization is upgraded, promoted and transferred. The external
sources are those who are new entrants to the labour force or some who
are retired and experienced persons such as for security of unemployed
persons. Employment of manpower is carried through a number of private
employment agencies or state agencies. The process of employment
starts from giving job advertisement It involves three stages viz.
recruitment, selection and placement It is the determination of the job to
which an accepted candidate is to be signed and his assignment to that
job.

3. Induction and Orientation

It means the introduction of an employee to the organization and the job

by giving him all possible information about the organization history,
objectives, Philosophy. Policies. future development opportunities.
products. goodwill in the market and community and by introducing him to
other employees with whom and under whom he has to work. This
program is carried out by the personnel department Here the new entrants

26
 are sent to every department to introduce himself to the staff that
department, to get him accustomed to the work environment and providing
him an insight of how work is done in that department.

4. Training and Development

It is a complex process and is concerned with increasing the capabilities of

individuals and groups so that they may contribute effectively to the
attainment of organization goals. The term training development and
education training is a process of learning a sequence of programmed
behaviour. It is an application of knowledge which gives people an
awareness of rules and procedures to guide their behaviour and to
improve their performance on the current job. Development is a related
process which also brings about growth of the personality, help individual
progress towards maturity and actualization of his potential capacities.
Training and development is carried out after assessing. the training
needs of an employee. It is carried out by conducting in the company
training programs and by coordinating training of various categories of
trainees with the help of various resp. shop in charge. Evolution of this
training program is done so as to make sure that the trainee has
improved.

5. Personnel Research

• This is carried out by the personnel department which conducts

study and survey on :

i. Employment turn over(exit interview)

ii. Absenteeism

iii. Wage survey

1. Personnel Budget

27
 This budget is prepared by the personnel department which takes into
account all the costs, expenses and profits to be generated in the year.

2. Compiling Skill Inventory

The personnel department look out the following functions:

1. Performance Appraisal
2. Confirmation/Increment/Promotion
3. Maintain personal files of all employees
4. Data bank of all employees and individual history sheet

6. Industrial Relations

Industrial relations refers to the dynamic developing concept which not

only unites the complex relation between trade unions and management
but also refers to the general web of relationship. It poses one of the most
delicate and complex problem to the modern industrial society. Normally
obtaining between employer and employee web much more complex than
the labour concept of "labour capital conflict". The concept of IR has been
extended to denote the relation of state with employer, worker and their
organization. The subject therefore includes individual relations and join
consultation between employer and worker at their place of work,
collective relation between employer and their organization and trade
union, a part played by state in regulating these relation

The function of IR is carried out through the following way in Escorts

YMD:-

1. Labour laws are industrial and statutory registers are maintained

according to these laws.

2. Liaison with labour department and other civic authorities are

maintained so as to carry out different functions relating to industrial
peace.

28
 3. Submission of returns under various labour laws.

4. Implementation of standing order and Contract Act.

5. Formation of various statutory committees such as :

• Workmen Committee
• Canteen
• Safety

6. Negotiations with union

7. Disciplinary Proceeding

8. Attending Conciliation/labour court

9. Grievance handling/counseling

10. Conducting workmen classes

The welfare activities carried out by the personnel department of YMIPL are

1. Canteen

The canteen is run on the contractual basis under the supervision of

personnel and administration department of the company. The canteen
has a capacity to accommodate 200 people at a time. The meal which is
served in the canteen are at very subsidized rate and of very good quality.
To maintain euphoric environment, it has an air condition system and a
music system.

2. Uniform

The company has made a provision of distributing 3 pairs of uniform and 2

pairs of shoes along with one pullover every year.

3. Medical Facilities

29
 The company gives free medical facilities to all its employees. It has a
dispensary with in the premises of the company. The dispensary has all
basic emergency equipment, medicine, oxygen facility with four beds
capacity dorm. There are two doctors and four male experienced
compounders who are always present during the working hours. In case of
serious Illness, there is an ambulance which can take the patient to one of
the best hospitals located in Delhi engaged by Escorts YMD.

4. Cultural Activities

The company conducts sports activities and cultural or picnic tours for its
employees.

5. Other Welfare Activities

Fair price shop, rest room, welfare fund scholarship are some of the
welfare activities which are carried out by the company.

6. Transport Office

This office of the company provides transport facility to all its employees
for coming and going to or from the company.. This office manages 44
buses which are on contractual basis. It makes sure that the buses
operate at the right time to and from the company and also welcome
suggestions and complaints regarding the buses. This futility has been
provided to the employees on subsidized rates.

7. Security

The security department of the company is responsible for the following

functions:

• Security of Factory/Elimination of Leakage and Theft.

• Intelligence report-Internal/External

30
 • Liaison with police/Fire station and local administration

• Fire fighting -upkeep of training

• Statutory license for chemical store/explosive equipment

• Records of gate meeting and analysis

• Records of visitors

• Records of incoming and outgoing materials

• Control on Entry and Exit of manpower

• Horticulture

8. Industrial Relation, Safety and Health

The senior manager, industrial relation, safety and health occupies a very
critical position in the company. His function starts from supervisors of
safety heads of man and material to the provision of various accessories
and their maintenance. Some of his important functions are:

• Pollution Control

• Safety Head

• Sale of scrap

• In case of accident in the plant, finding of the exact reasons and

contacting the different authorities and taking decisions

In addition to this, he makes sure that medical examination is carried out for
those who are operating in such places or who are handling such materials or
tools which might be hazardous to health like workers of paint shop, welding
shop, nickel shop etc.

31
In case of fire fighting, he coordinates with chief security officer for supply of
various fire fighting equipment and material and also investigate into the cause of
fire etc.

9. Time Office

Time office is an office under personnel department and the main function
of this office is to mark the attendance of the workers to make -the record
regarding leave, absenteeism, overtime etc.

In Yamaha the time office performs following functions:

• Daily Attendance

The name of every worker shall be 'entered on the muster roll clearly
indicating the classification to which he belongs. Every workmen is given
an attendance card which contains his particulars. It will be the
managements discretion to categorize and designate the classes of
employees either on clock punch card system or have them mark their
attendance on the attendance register or define any other media.

The employees on the punch card system shall punch in their cards for
marking attendance and shall punch out at the close of shift and during
the lunch break if going out. The employees are required to sign in the
attendance register at the time of coming in and going out. All workmen
shall be at their respective workstations at the timings notified and
commence their work with the commencement of shift timings.

• Leave Records

The time office maintains the leave records of the workers. This record is
maintained basically to calculate pay. This is in the case of any employee
taking leave more than what is authorized.

• Overtime Records

32
 It also maintains the records of the workers for the overtime.

• Salary and Wages Data

The time office prepares the reports of salary/wages with the help of data
provided in the attendance register, leave records, overtime and out pass
records

• Out Pass Records

This record is maintained for those employees who go out of the factory
on official duty/personal work. If an employee goes out on a out pass for
more times, then corresponding deduction on the basis of the duration he
is going out of the factory on the personal gate pass will be calculated and
deducted and from his salary

10. Distribution of Dress at the Mail Room

The distribution of uniform and maintaining the record there by is a

function of the mail room.

11. Other functions

There is a function for provision of daily worksheet. In this, departmental

head or supervisor sends out worksheet to the time office indicating the
number of workers and the number of hours. It acts as cross check
instrument that verifies the attendance and to avoid any manipulation or
mistake.

The other job of the timekeeper is the allocation of casuals. After making
the attendance, he counts the number of employees absent and then
absenteeism report is prepared by the time office in charge who then
sends it to all the departmental heads and the industrial engineering
casuals. This department require authorization from department head.
Advance payment forms (for employees) are also given by the timekeeper

33
 to the employees. Some times, the personnel department may ask him to
prepare some statements. He has to do some weekly and monthly jobs.

• Weekly Jobs

a) Weekly report of attendance for personnel and factory manager

b) Notice for working Sundays and weekly offs and posting of these
into booking sheets

c) Maintain and check the leave records of all employees

d) Prepare weekly incentive sheet and acting allowance sheet

• Monthly jobs

a) Collecting of total working hours of all employees and to prepare wage

slips of workers to receive the wage

b) Prepare monthly leave records.

c) Statement for casual workers indicating name, no. of days he worked

and department

d) Preparing the attendance register for the next month for both casuals
and permanent staff

e) Complete the PF for casual workers

f) The payment made by the contractors to the labour under the

supervision of the timekeeper and he puts his seals and signs on such
statements

Leave

1. Casual Leave:

34
 a. Intended for urgent work or unforeseen circumstances.
b. It is of7 working days

2. Sick Leave

Application of sick leave for more than 2 days must be supported

by a medical certificate issued by a registered doctor. It can be
entitled for a maximum period of seven days.

3. Earned Leave.

It can be availed to a minimum of three days at a time to a total

of21 days in a calendar year.

House Loan

Eligibility: Minimum 5 years continuous service in the company

Scholarship Scheme
Applicable to the employees up to grade of M8
To recognize the performance and subsidized the cost of education of children
of all regular employees.

PF Scheme
Provident Fundable salary = basic salary + special allowance

Pension Scheme
It is a part of PF act.

The rate of contribution towards employees pension scheme is 8.33% of the pay
which is diverted from lD employees share of PF.

Pensionable salary is the average of monthly salaries for 12 months proceeding

the date of exit.

35
Pesionable service is a service rendered by the workers for which contributions
have been received in employee's pension scheme.

Gratuity

Gratuity is payable to all employees who have been in continuous service or

company for a minimum of5 years.

Gratuity payable – (Basic 8alary + special allowance) * 15* no. of years of

service}/26(no. of working days)

Normal Retirement Pension = Pesionable salary A Pensionable service A

Pension Factor.

36
Objective of the Study

37
 OBJECTIVE OF THE STUDY

The main objective of the study is:

1. To critically analyze the performance appraisal system in Yamaha Motors

India Pvt. Ltd.

2. To gain familiarity with the organizational environment and the work

culture existing in the organization.

3. To study the personnel environment

4. The purpose of the study is to evaluate the impact of performance

appraisal system carried out in this organization.

5. It is to see how the present performance appraisal system has contributed

to the efficiency and effectiveness of the employees in the organization.

6. The objective of the study is also to feel the pulse of the employees views
and other suggestions.

Finally, to observe the short comings of the appraisal system in the organization
and suggest ways to overcome them so as to enhance the performance of the
employees in the organization.

38
Research Methodology

39
 RESEARCH METHODOLOGY

The research was carried out by keeping in mind the objective of the study for
this purpose both the primary data and the secondary data was collected so that
a proper analysis can be done.
For secondary data the reference from the previous years research files &
employees handbook, and the material provided by the company was taken but
for primary data a questionnaire was prepared and distributed both to the
managers and workers. A sample of 50 was collected more over some personal
interviews were also done with the employees to get the proper insight of the
system.

40
 Introduction to
Performance Appraisal

41
 INTRODUCTION TO PERFORMANCE
APPRAISAL

HISTORY OF PERFORMANCE APPRAISAL SYSTEM

Employee appraisal techniques are said to have used for the first time during the

first world war, when at the instance of Walter Dill Scott, the US army adopted

the man to man rating system for evaluation of military personnel. During 1920-

30 period, relational wage structures for hourly paid workers were adopted in

industrial units. Under this system, the policy of giving grades wage increments

on the basis of merit was accepted. These early employee plans were called

"Merit rating programs" which continued to be so called up to mid -50s. By then,

most of these plans were of the rating scale type, where emphasis was given to

factors, degrees and points. In the early 50s however, attention began to be

devoted to performance appraisal of technical, professional and managerial

personnel. Since then, as a result of experiments and a great deal of study, the

philosophy of performance appraisal has under gone a tremendous change.

Consequently, a change has also taken place in the terminology used. Now, the

older phrase "Merit rating" is largely restricted to the rating of hourly paid

employees and is used frequently in developing criteria for salary adjustments,

promotions, transfers etc.. The later phrase, "Personnel appraisal place

emphasis on the development of the individual as and widely used to evaluate,

technical, professional and managerial personnel.

42
MEANING

Performance appraisal is a method of evaluating the behaviour of employees on

the work spot, normally including both the quantitative and qualitative aspects of

job performance. Performance here refers to the degree of accomplishment of

the task that make up an individuals job. It indicates how well an individual is

fulfilling the job demands. Some of the important features of performance

appraisal may be captured as follows:

1. Performance Appraisal is a systematic description of an employee's job

relevant strengths and weaknesses.

2. The basic purpose is to find out how well an employee is performing the

job and establish a plan of improvement.

3. Appraisals are arranged periodically according to a definite plan.

4. It is a continuous process in every large scale organization.

DEFINITIONS

"Performance Appraisal has many facets. It is an exercise in observation and

judgment. It is a feedback process and it is organizational intervention. It is a

measurement process as well as an intensely emotional process. Above all, it is

an inexact, human process. While it is fairly easy to prescribe how the process

should work, descriptions of how it actually works in practice are rather

discouraging."

43
 Wayne F. Cascio

Managers often believe that the most significant performance of HR outcome

involves the contribution employees make to the organization's goal attainment

These contributions are called employee performance, meaning how effectively

employees carry out their job responsibility"

Herbert G. Heneman

Performance appraisal includes all formal procedures used to evaluate

personalities and contributions and potentials of group members in a working

organization. It is a continuous process to secure information necessary for

making correct and objective decisions of employees"Dale Yoder

44
NEED OF PERFORMANCE APPRAISAL

Performance appraisal is needed in order to :

1) Provide information about the performance ranks basing on which

decisions regarding salary fixations, confirmation, promotion, transfer and

demotion are taken.

2) Provide feedback information about the level of achievement and

behaviour of subordinates. This information helps to review the

performance of subordinates, rectifying performance deficiencies and to

set new standards of work, if necessary.

3) Provide information which helps to counsel the subordinates.

4) Provide information to diagnose deficiency in employees regarding skill,

knowledge, determine training and developmental needs and to prescribe

the means for employee growth, provides information for correcting

placement

5) To prevent grievances and indisciplinary activities.

45
PURPOSE

Performance appraisal aims at attaining different purposes. They are:

1) To create and maintain a satisfactory level of performance.

2) To contribute to the employees growth and development through training,

self and management development programs.

3) To help the superiors to have a proper understanding about their

subordinates.

4) To guide the job changes with the help of continuous ranking.

5) To facilitate fair and equitable compensation based on performance.

6) To facilitate for testing and validating selection tests, interview techniques

through comparing their scores with performance appraisal ranks.

7) To provide information for making decisions regarding layoff, retrenchment

etc.

8) To ensure organizational effectiveness through correcting employee for

standard and improved performance, and suggesting the change in

employee behaviour.

46
CONTENT OF PERFORMANCE APPRAISAL

Every organization has to decide upon the content to be appraised before the
program is approved. Generally content to be appraised is determined on the
basis of job analysis. Certain contents to be appraised for an officer's job are:

1) Regularity of attendance

2) Self expression -written and oral

3) Ability to work with others

4) Leadership styles and abilities

5) Initiative

6) Technical skill

7) Technical ability/knowledge

8) Ability to grasp new things

9) Ability to reason

10) Originality and resourcefulness

11) Creative skills

12) Area of interest

13) Area of suitability

47
14) Judgment skills

15) Integrity

16) Capability for assuming responsibility

17) Level of acceptance by subordinates

18) Honesty and sincerity

19) Thoroughness in job and organizational knowledge

20) Knowledge of systems and procedures

21) Quality of suggestions offered for improvement

48
METHODS OF PERFORMANCE APPRAISAL

With the evolution and development of appraisal system, a number of methods or

techniques of performance appraisal have been developed.

METHODS OF PERFORMANCE APPRAISAL

Traditional Methods Modern Methods

Graphic rating scales Behaviourally anchored rating scales

(BARS)

Ranking method Assessment center

Paired comparison method Human resource accounting

Forced distribution method Management by objectives (MBO)

Management by objectives

Checklist methods Psychological appraisal

a) Simple
checklist
b) Weighted
checklist
c) Critical
Incident method

Essay or free from appraisal

Group appraisal

49
Confidential reports

USES OF PERFORMANCE APPRAISAL

1) Performance improvement

Performance feedback allows the employee, manager and personnel

specialist the employee, manager and personnel specialist to intervene
with appropriate actions to improve performance.

2) Compensation adjustment

Performance evaluation helps decision makers determine who should

receive pay rises. Many firms grant part or whole of their pay increases
and bonuses based upon merit which is determined mostly through
performance appraisal.

3) Placement decisions

Promotions, transfers and demotions are usually based on past and

anticipated performance. Often promotions are a reward for past
performance.

4) Training and development needs

Poor performance may indicate the need for retraining. Like wise good
performance may indicate untapped potential that should be developed.

5) Career planning

Performance feedback guides career decisions about specific career

paths one should investigate.

6) Staffing process deficiencies

50
 Good or bad performance implies strengths or weaknesses in the
personnel department's staffing procedures.

7) Informational inaccuracies

Poor performance may indicate errors in the job analysis information,

human resource plays or other parts of personnel management
information system. Reliance on inaccurate information may have led to
inappropriate hiring, training and counseling decisions.

8) Job design errors

Poor performance may be a symptom of ill conceived job designs.

Appraisals help diagnose these errors.

9) Equal employment opportunities

Accurate performance appraisals that accurately measures job related

performance ensure that internal placement decisions are not taken
inaccurately.

10) External challenges

Sometimes performance is influenced by factors outside the work

environment such as family, financial, health or personal matters. If
uncovered through appraisals, the human resource development may be
able to provide assistance.

11) Feedback to human resources

Good/bad performance through out tile organization indicates how well the
human resource function is performing.

51
LIMITATIONS OF PERFORMANCE APPRAISAL

The major problems in performance appraisal are:

I. The halo effect or error

The halo effect is a tendency to led the assessment of an-individual one

trait influence the evaluation of that person on other specific traits. There
is this effect in appraisal when the appraiser assigns the same rating to all
traits regardless of an employees actual performance on this traits.

II. Leniency or strictness tendency or constant errors

Every evaluators has his own value system which acts a standard against
which he makes his appraisals. The leniency bias crops when some raters
have a tendency to be liberal in their ratings by assigning high rates
considerably. Such ratings do not serve any purpose.

III. Central tendency problem

It is the most commonly found error. It assigns average ratings to all

employees with a view to avoiding commitment or involvement or when
the rater is in doubt or has inadequate information or lack of knowledge
about the behaviour of the employee.

IV. Similarity error

This type of error occurs when evaluators rates other people in the same
way he perceive himself. For e.g., the evaluator who perceives himself as
aggressive may evaluate others by looking for aggressiveness. Those
who show this characteristic may be benefited while others may suffer.

52
V. Personal prejudice

If the rater dislikes any employee or any group, he may rate them at a
lower end which may distort the rating purpose and effect the career of
this employees.

VI. The regency effect

The raters generally remember the recent actions of the employee ate the
time of rating and rate on the basis of these actions, favourable or
unfavourable rather than on the whole activities.

VII. Social differentiation

Rating is sometimes impeded by the evaluators style of rating behaviour.

There can be high differentiators who use all or most of the scale or low
differentiators -who use a limited range of the scale

53
 LAUNCHING AND APPRAISAL PROGRAM

Performance appraisal form a line responsibility to be accomplished with advice

and help of personnel department. It is likely to be an utter failure if it lacks the
support of management, if the superiors are not adequately trained or have no
trusts in its value, if the results of performance appraisal is not used to serve the
purpose for which it is meant. Therefore, several steps may be taken to develop
and administer the program effectively.

1. The personnel department may attempt to obtain the maximum agreement

of line management in respect of needs and objectives of the program.

2. The personnel department has to examine the plans of other

organizations as well as the relevant literature applicable in the field to
formulate the most suitable plan for the appraisal program.

3. Attempt should be made to obtain the cooperation of supervisors in

devising the appraisal form and to discuss with them different factors to be
incorporated, weights and points to be given to each factor and
descriptions or instructions to be indicated on the form.

4. The personnel manager should tend to explain the purpose and nature of
the program to all superiors and subordinates, to be involved and affected
by it. Care should be taken to take into confidence the trade union
representatives of the company.

5. Attempt should be made to provide intensive training to all the supervisors

with a view to obtain unbiased, uniform appraisal of their subordinates.

6. Care should be taken to acquire line and staff coordination and mutual
checking of appraisals to obtain intra departmental and inter-departmental
consistency and uniformity.

54
7. There should be an arrangement for periodic discussion for appraisal by
the superiors with each of the subordinates where attempts may be made
to stress good points, indicate difficulties and encourage improve
performance.

8. As soon as the appraisal has been duly discussed attempt may be made
to recommend for salary increases and promotions.

9. There should be a provision for challenge and review of the appraisal if

the employees or their union representative are dissatisfied with the
personnel decisions which the management has taken on the basis of
these appraisals.

These steps if followed carefully are likely to help the superiors to evaluate their
subordinates effectively.

55
Study of Performance

Appraisal in the

Organization

56
 STUDY OF PERFORMANCE APPRAISAL IN THE
ORGANIZATION

PERFORMANCE AND POTENTIAL DEVELOPMENT SYSTEM

(PPDS PHILOSOPHY)

PPDS is based on the following philosophy and premises:

1. Performance appraisal is the most crucial element off the overall process
of performance planning both at organizational level and at level i.e.
between the appraiser and appraisee.

2. Achievement of results by itself is only half the picture unless the appraisal
is benched marked against appraisee's contribution to the company.

3. The process of achieving results is as important as the achievements

themselves to keep in focus both the short term and long term costs and
benefits.

4. Unleashing the human potential in any collaborative endeavour rests on

the process of opening opportunities, providing challenges, involvement,
continuing feedback and guidance. This, however, must be in conjunction
with the assumption of responsibility for: development and growth by the
individual himself.

PERFORMANCE REVIEW AND POTENTIAL ASSESSMENT

1. All confirmed employees as at the end of the financial year will be

appraised by their designated appraiser.

2. Where an employee has worked under two or more officers in any

financial year, the appraisal will be done by the last officer subject to the
minimum service under the appraiser being 3 months. Otherwise, the

57
 appraisal will be done by the previous reporting officer. Where the
previous reporting officer has left the service of the company and the
appraisee-appraiser relationship is less than3 months, the appraisal will
be done jointly by the current reporting officer and his superior.

3. Performance review is a joint process between the appraisee and the

appraiser. This joint process will also focus on the emerging training
needs and development plans.

PERFORMANCE COUNSELLING

In the above context, the role of performance feedback and counseling is the
most critical component of the appraisal process in enhancing the effectiveness
of the total exercise for triggering higher levels of performance. It is therefore
envisaged that the performance reviewed will not be complete until and unless
counseling has taken place. The appraiser and appraisee may record their
reactions to the counseling process, if they wish so.

PERFORMANCE OBJECTIVES

The climate of sharing arrived in performance counseling will be used for at least
tentatively identifying the, next years performance objectives, these objectives
however may be revisited and fine tuned incase of delayed finalization business
plans or any other factor subsequently necessitates so. This must be followed by
at least one mid-year review.

To distinguish performance objectives from the various activities being carried

out by an individual during the course of his work, it is necessary that these
objectives be restricted to a maximum of five.

To assist managers, a sample list of indicators on the basis of which these

objectives should be firmed up in various functions is being enclosed in Annexure
"A". This list is only illustrative and not exhaustive. Nor is it applicable every
where. Identification of objectives for each positions will take into account the

58
specific nature of the job, performance expectations and so on. Care must also
be taken to include at least one performance objective which should focus on
some innovative effort, for e.g. modifying the system/process and the like.

PERFORMANCE RATING

Performance rating will be, done on the following scale:

VERY GOOD-A

The employee has far exceeded acceptable levels of performance with

excellence and creativity. His contribution to the company far exceeds
targets/expectations and such an employee is a very valuable asset to the
company.

GOOD -B

The employee generally exceeds acceptable levels of performance. His

contribution generally exceeds targets/expectations. Such an employee
contributes substantially to the company.

ACCEPTABLE-B

The employee meets acceptable level of performance. His contributions meets

expectations but needs occasional guidance/follow up. Such an employee
contributes reasonably to the company.

BARELY ACCEPTABLE -C+

The employee needs urgent improvement to achieve acceptable levels of

performance. Work is often accomplished by unduly relying on others to solve
Problems and requires considerable guidance, supervision and follow up.

NOT ACCEPTABLE -C

59
The employee slips despite guidance and follow up. He is clearly a burden on the
company in the sense that his contribution does not justify his cost to the
company.

POTENTIAL ASSESSMENT

Potential assessment will be based on certain key competencies relevant to the

appraiser’s present job and the likely higher responsibilities he may occupy.
These competencies are as follows. Even though all competencies may not be
relevant for all positions/functions and wherever the appraiser is convinced that
any particular competency is not relevant, he may choose not to appraise on the
same. The appraiser may also add any other relevant competencies not listed.
The appraiser should rate appraise in terms of high/medium/low and should also
give specific reasons for such ratings.

1. Achievement orientation

The degree to which an employee is result focused and has the desire to
achieve in the face of difficulties/obstacles, through creative use of mind,
time and resources.

2. Leadership/man-management ability

The degree to which an employee has the capability to motivate and

energize his subordinates and colleagues for achievements of goals -the
degree to which he is able to resolve man management problems of his
group. Leadership ability will be specially more important than man
management ability at relatively senior levels.

3. Decisiveness

The extent to which the employee has the willingness and the ability as
well as the track record of taking his own decisions, rather than waiting for
guidance/instructions from higher ups.

60
4. Developing others

To what extent does the employee take appropriate steps to develop his
subordinates including delegating challenging task, counseling, mentoring,
and involving them in developing team goals.

5. Team work and networking

How good is the employee a team player rather than a soloist? Does he
have a good network of productive contacts within and outside the
organization which may help ill achievement of his work goals?

6. Optimism

To what extent the employee essentially and Instinctively focuses on the

brighter side of the possibilities rather than getting upset. .

7. Pro-action/Initiative

How good is the employee's anticipation of developments and how does

he initiates preventive! Pre-emptive actions to better manage emergent
situations.

8. Listening skills

How active and patient listener the appraisee is? How do his subordinates
and colleagues perceive his competency as a listener?

9. Presentation skills

To what extent is the employee able to effectively, vividly and persuasively

present his ideas to superior, subordinates, colleague and customer.

10. Striving for learning

61
 To what extent the employee has insatiable desire to learn more on
aspects related to his job and beyond? Does he have been inquisitive
mind?

11. Analytical Ability

To what extent is employee able to see the big picture and analyze
most/all implications in detail?

62
12. Customer orientation

To what extent is the employee oriented to the needs of his

internal/ultimate customer rather than focusing on achievement of his
results only.

13. Limiting factors.

Does the employee suffer from any physical/mental infirmity which may be
a handicap in performance of higher responsibility? For e.g. if his future
responsibilities may require extensive touring, does he suffer from any
health! personal problems which may prevent him from doing so? If his job
involves public dealing then is he quickly irritated.'

The appraiser may also note down for consideration of the concerned, if
he feels that the employee is adversely placed vis-a-vis colleagues in view
of his capabilities, qualifications, experience etc. due to historical or any
other reasons.

SAMPLE INDICATORS FOR DEVELOPING PERFORMANCE

OBJECTIVES

Marketing:

1. Sales quantity.

2. Extra/short fall in contribution.

3. Revenue realization in average no. of days.

4. Hit rate(conversion of prospects into orders)

5. Territory/channel development

63
Service:

1. Customer complaint satisfaction ratio.

2. Response time.

3. Return ratio of defects rectified in field.

4. Service camps

6. Mechanical training

Production:

1. Quantity

2. Rejection quantity/cost percentage.

3. Manpower utilization per equipment/product.

4. Material utilization.

5. Delivery schedules.

6. First time pass rate.

HR/IR:

1. Response time for services/facilities rendered.

2. Man hour lost due to unrest/work stoppage.

3. Labour cost

4. Absenteeism/discipline/turnover.

5. Statutory compliances.

64
Finance:

1. Response time and error rate in services rendered.

2. Statutory compliances.

3. Accounts closing schedule.

4. Budget formulation/adherence.

5. Timely MIS

6. Funds management- cost of procurement, funds availability.

7. Tax saving/planning

8. Audit checks/compliance

R&D:

1. No. of ideas generated/converted based on feedback/own ideas. 2. Value

engineering -savings made.

3. Prototype/product development

4. Patents applied.

5. Documentation

Quality:

1. Quality cost Including man power.

2. Defect rate in passed quality

3. Warranty cost

4. Gauges/instruments calibration

65
5. New system/process development for better quality

6. Turn out rate for incoming quality inspection.

Maintenance:

1. MTBF

2. Machine down -time percentage.

3. Average turn out time.

4. Adherence to schedule.

5. Defect rate attributable to poor maintenance

6. Maintenance cost including spares inventory.

Legal:

1. Percentage cases lost.

2. No of litigation pending

3. Legal payouts

4. Process improvement/monitoring for reducing the above

Security:

1. Response time

2. Theft/pilferage control

3. Intelligence sources developed

4. Gate movement control

5. Night round frequency

66
Secretarial:

1. Response time error rate in typing / word processing, filing,

telecommunication, information retrieval etc.

2. New software packages learnt. .

3. Percentage rate of independent correspondence.

4. Executive time management

General:

1. Cost reduction percentage.

2. Succession schedule.

3. Savings/process improvements/innovation.

67
FACTORS TAKEN INTO ACCOUNT WHILE APPRAISING AN
EMPLOYEE

The employees in the organization are appraised taking into account the
following factors:

1. Performance level.

2. Competence level.

3. Contribution to last three years profits of the organization

4. Qualification

5. Age

Then a suitable rating of all the employees is done (i.e. A,B+,B,C+,C). Also,
important decisions relating to transfer, promotion and demotion are taken only
after assessing the employee's performance on a regular basis.

PERFORMANCE EXCELLENCE A WARD

It is awarded to employees who have performed extraordinarily through out the

year. "

THE WHO OF APPRAISAL

“360 degree performance appraisal" is carried out in Yamaha Escorts. The

appraiser may be any person who has a thorough knowledge of the job content,
contents to be appraised, standards of contents and who observes the employee
while performing a job. Typical appraisers are:

1. Supervisors

68
 Supervisors include superiors of the employees, other superiors having
knowledge about the work of the employee and the departmental head or
manager. The immediate supervisor appraise the performance which in
turn is reviewed by the departmental head/manager.

2. Peers

Peers appraisal may be reliable if the work group is stable reasonably for
a long period of time and performs tasks that require interaction

3. Subordinates.

Subordinates ratings can be quite useful in identifying competent

superiors.

4. Self appraisal

If the individuals understand the objectives they are expected to achieve

and the standards they are to be evaluated on, they are to a great extent
in the best position to appraise their own performance. Also, since
employee development means self-development, employees who
appraise their own performance become highly motivated.

5. Users of services

Employee performance in service organizations relating to behaviours,

promptness, speed in doing the job and accuracy can be better judged by
the customers.

6. Consultants

Sometimes consultants may be engaged for appraisal when employees or

employers do not trust supervisor appraisal and management does not
trust the self appraisal or peer appraisal. Head of the department verifies

69
 the appraisal from time to time so as to comply with the specified
standards required for the appraisal system to be in the organization.

THE WHEN OF APPRAISAL

For DGM's: Increments/promotions from 1st July to 31st June.

For grades M2 to M8 : lit April to 311t March.

For supervisory staff and M2/M3 grade: lit Jan

Informal appraisals are conducted whenever the supervisor or personnel

managers feel it necessary. However, systematic appraisals are conducted on a
regular basis of one year.

Appraisal of employees on deputation

In case one is working on a deputation in a different company or a division of

Escorts, his appraisal will be carried out by the company or division and not by
the present company.

CONFIRMATION APPRAISAL

Trainees on completion of training period and employees on completion of

probation period are appraised for confirmations.

70
 MD (M.Shibuya)

Executive Director
Mr. S.Taneja

Vice President
Mr. D.Koley

Chief G.M. HR &

Personal G.G.M. - Finance G.G.M. – Mktg.
Mr. M.L. Deepak

DGM - Personnel
Mr. B.P. Sharma

Chief Mgr. – HR
Mr. R.K. Chellani

Manager Asst. Mgr.

Junior Mgr.

71

Staff
Major Findings

72
 ANALYSIS/FINDINGS OF THE SURVEY

A survey was conducted among a sample size of 50 workers. The objective of

the survey was to highlight the performance appraisal policy of the company and
the feedback of the employees regarding it. The survey brings to light the grass
root level awareness of the workers regarding the P.A. policy. The findings of the
survey is environmented as follows:

Q. Are you aware of the performance appraisal system being carried

out by the company?

Analysis: The survey brought to light that the awareness level of the
employees towards the performance appraisal system is low. 40%
of the workers are not aware about it and the rest 60% said that
there were aware of the system.

Aware
NotAware Not Aware
40%

Aware
60%

Q. According to you , which is the most important performance factor

among the following in performance appraisal?

73
Analysis: 40% of the workers agreed that productivity / output in the most
important factor which influence performance appraisal. 30%
believed that quality of output to be the most important factors rest
30% were divided between attendance (20%) and punctuality 10%.

Quality of
Output Productivity
30% output Productivity output
40%
Punctuality
Attendance
Attendance Punctuality Quality of Output
20% 10%

Q. In your opinion, how important in attendance, punctuality,

Quantity/productivity, quality of output a factor for performance
appraisal.

Analysis: The graph below depicts the result of the survey.

Attendance Puncutality Productivity Quality of

output Ouput

74
Q. Are the attitudinal factors desire to learn new techniques, skills and
practices, cooperation with others, contribution of new ideas, saving
consciousness mentioned in your format sufficient for judging your
appraisal, if not then what other factors should be included.

Analysis: To this question 80% of the workers thought that the above
parameter were sufficient in measuring the performance appraisal
while 20% of the workers said that the parameters were not
sufficient.

20%
Insufficient

Series1
Sufficient 80%

0% 20% 40% 60% 80%

Q. Do you think performance appraisal adopted by the company is

baised in any way?

Analysis: Most of the workers (90%) agreed that the performance appraisal
system adopted by the company is baised and only miniscule (10%
thought otherwise).

75
 Not Agreed
10%

Agreed
Not Agreed
Agreed
90%

Q. If you have been positively appraised, which recommendation you

personally identify with?

Analysis: The following diagrams elucidate, which recommendation you

personally identified with?

Special
Increment Annual
10% Increment
30% Annual Increment
Promotion
Special Increment

Promotion
60%

76
Q. Is the performance appraisal sheet shown to you or discussed with
you?

Analysis: 65% of the workers said that the performance appraisal sheet is not
shown to them, where as 35% said that it is shown and discussed
with them.

PA Sheet
Shown
35%
PA Sheet Shown
PA SheetNo PA Sheet No Shown
Shown
65%

Q. Do you think performance appraisal should have a negative

recommendation, if yes, which one do you suggest the most.

Analysis: 50% of the workers were in favour of increment being stopped and
the rest 50% suggested that promotion could also be stopped
where as no one was in favour of demotion or separation

77
 Shouldnotbe Increment
stopped stopped
50% 50%
Increment stopped
Should not be stopped

Q. In your opinion your performance should be required (a) quarterly.

(b) Bi-annually (c) Annually.

Analysis: Nearly all the workers believed that the performance should be
reviewed quarterly.

Q. Are you satisfied with your performance appraisal?

Analysis: 80% of the workers said that they were not satisfied with their
performance appraisal system whereas only 20% of the workers
were satisfied with the performance appraisal system being carried
out by the company.

20%
Satisfied

Series1
Not
80%
Satisfied

0% 20% 40% 60% 80%

78
 JUNIOR MANAGEMENT

A similar survey was conducted among 50 junior management cadre to get a feel
of their opinion regarding the performance appraisal policy of the company. The
observations are as follows:

Q. Are you aware of the performance appraisal system being carried

out by the company?

Analysis: Almost every manager is aware about their performance appraisal

system.

Unaware
5%

Aware
Unaware

Aware
95%

Q. Awareness of the system of performance appraisal being carried

out by the company?

Analysis: 70% of the management cadres were aware of the system of the
performance appraisal being carried out the by the company.

79
Q. Is the performance appraisal sheet shown to you or discussed with
you?

Analysis: The diagram would demonstrate the results.

Shownbutnot
discussed
Shown & Discussed
30%
Shown&
Discussed Neither Shown nor
Discussed
50%
Neither Shown Shown but not
nor Discussed discussed
20%

Q. If you have been positively appraised which recommendation you

personally identify with?

Analysis: 50% of the management cadres favoured in response to this query.

Whereas 40% & 10% favoured annual increment & special
increment respectively.

Annual
Increment
40%
Promotion
50%

Special
Promotion
Increment
Special Increment
10%
Annual Increment
80
Q. Do you think performance appraisal adopted by the company is
biased in any way?

Appraisal: 80% of the management cadres feel the performance appraisal

system of the company is biased whereas only 20% a think
otherwise.

Q. Do you think performance appraisal should have a negative

recommendation, if yes, which one do you suggest the most?

Analysis: 70% managers said that there should be a negative

recommendation whereas 30% managers said that there should not
be a negative recommendation. Out of 70% who supported
negative recommendation were 20%. Who believed increment
should be stopped and 10% who believed promotion should be
stopped.

No Negative
Recommenda
tion
30%
Negative
Recommendation
No Negative
Negative Recommendation
Recommenda
tion
70%

81
 10%
Increment Stopped
Promotion Stopped
20%

Q. Are you satisfied with the present performance appraisal system?

Analysis: The following diagram would demonstrate the results.

60%
Satisfied

Series1
Not
40%
Satisfied

0% 20% 40% 60%

Q. Do you think the present performance appraisal system is effective?

If not then what changes would you suggest.

82
Analysis: Most of the employees were of the opinion, that the present
performance appraisal was effective but wanted some changes to
be made. The changes are as follows:

1. The performance appraisal system should be more performance

oriented.

2. Quarterly assessments of individual should be done rather than

yearly.

3. It should be more transparent in its operation.

4. Efforts should be made to reduce chances of biasness while

appraising an employee.

Q. Do you know the Yardsticks according to which you are appraised?

Analysis: The following diagram depicts the result.

60%
Aware

Series1
Unaware 40%

0% 20% 40% 60%

83
Q. Do you think the weightage given to various factors baised?

Analysis: 70% of the management cadre agrees that the weightage given to
various performance factors are baised whereas 30% believe that
they are not baised.

Q. In your opinion your performance should be reviewed?

Analysis: To this query, 80% of the managers strongly felt that their
performance should be reviewed quarterly and the rest 20% of
them annual and bi-annual system of performance appraisal.

Q. Once you have been positively appraised, does the

recommendation come to you immediately?

Analysis: 90% of the sample size were of the opinion that the
recommendation of the performance appraisal follow immediately
were as only 105 were of the view that recommendations are slow
to follow.

84
Suggestions

85
 SUGGESTIONS

After analyzing the collected data, the following suggestions are recommended to
improve the present performance review scenario in the organization:

1. The performance appraisal system should be more performance oriented.

2. Quarterly assessments of individuals should be done rather than yearly.

3. Individual should be informed about the actual criteria on the basis of

which their work potentiality is assessed.

4. The salary structure of the employees should be revised from time to time.

5. The appraisal system should promote two way communication between

the assessor and assessee.

6. It should be more transparent in its operations.

7. Efforts should be made to reduce the chalices of biasness while

appraising an employee

8. An employee's appraisal should be discussed with him in order to remove

his weaknesses.

9. The HR policies should be clear to all employees i.e. the policies should
be more result oriented in approach.

10. There should be uniformity of appraisal process in all departments.

11. The employee's interest should be taken into account while allocating the"
work department to him.

12. Data and information which an employee. enters in the appraisal form
should be correct and true i.e. entered honestly.

86
13. Employee should take the entire discussion of feedback session positively
and look at the opportunity to improve.

14. Prior to feedback and counseling session the manager should remember
that performance appraisal is the most important thing for an employee.

15. Appraisal discussion also gives an opportunity to the managers to get a

constructive feed back of their own performance from their team
members.

16. The managers should not delay the discussion as it loses value.

17. The results of performance rather than personality trait." should be given
due weight.

18. The existence of an atmosphere of confidence and trust should prevail

between the supervisor and employee.

19. The supervisor should analyze the strengths and weaknesses of an

employee and advice him on correcting the weaknesses.

20. The appraisal program should be less time consuming and costly.

21. It should be used as a motivational tool.

87
Bibliography

88
 BIBLIOGRAPHY

C.B Mamoria: "Personnel Management"

P. Subba Rao: "Essentials of Human Resource Management and Industrial

Relations"

Edwin B. Flippo: "Personnel Management"

Handbook for Managers: "Escorts motors India Ltd."

EYMIL Reporter, magazines.

89
Annexure

90
 Questionnaire For Workmen

Q.1 ARE YOU AWARE OF THE PERFORMANCE APPRAISAL

SYSTEM BEING CARRIED OUT BY THE COMPANY ?

( a ) YES ( b ) NO
Q.2 WHICH SYSTEM OF PERFORMANCE APPRAISAL IS
CARRIED OUT BY THE COMPANY ?

( a ) BARS ( b ) WEIGHTED AVERAGE

( c ) RANKING METHOD ( d ) 360 DEGREE

Q.3 ACCORDING TO YOU , WHICH IS THE MOST IMPORTANT

PERFORMANCE FACTOR AMONG THE FOLLOWING IN
PERFORMANCE APPRAISAL ?

( a ) ATTENDANCE ( b ) PUNCTUALITY
( c ) PRODUCTIVITY / OUTPUT (d ) QUALITY OF OUTPUT

Q.4. IN YOUR OPINION, HOW IMPORTANT IS ATTENDANCE A FACTOR FOR

PERFORMANCE APPRAISAL ?

( a )VERY IMPORTANT ( b ) IMPORTANT

(c) SOMEWHAT IMPORTANT (d) LOOSELY IMPORTANT
(e)UNIMPORTANT

Q.5. IN YOUR OPINION, HOW IMPORTANT IS PUNCTUALITY A FACTOR

91
 FOR PERFORMANCE APPRAISAL ?

( a )VERY IMPORTANT ( b ) IMPORTANT ( c ) SOMEWHAT IMPORTANT

( d ) LOOSELY IMPORTANT (e)UNIMPORTANT

Q.6 .IN YOUR OPINION, HOW IMPORTANT IS QUANTITY/PRODUCTIVITY

OF OUTPUT A FACTOR FOR PERFORMANCE APPRAISAL ?

( a )VERY IMPORTANT ( b ) IMPORTANT ( c ) SOMEWHAT IMPORTANT

( d ) LOOSELY IMPORTANT (e)UNIMPORTANT

Q.7. IN YOUR OPINION, HOW IMPORTANT IS QUALITY OF OUTPUT A

FACTOR FOR PERFORMANCE APPRAISAL ?

( a )VERY IMPORTANT ( b ) IMPORTANT ( c ) SOMEWHAT IMPORTANT

( d ) LOOSELY IMPORTANT (e)UNIMPORTANT

Q.8. ARE THE ATTITUDUNAL FACTORS, DESIRE TO LEARN NEW

TECHNIQUES, SKILLS AND PRACTICES , CO- COPERATION WITH
OTHERS , CONTRIBUTION OF NEW IDEAS, SAVING CONSCIOUSNESS
MENTIONED IN YOUR FORMAT SUFFICIENT FOR JUDGING YOUR
APPRAISAL, IF NOT , THEN WHAT OTHER FACTORS SHOULD BE
INCLUDED
SUFFICENT--------------IN SUFFICENT

NOTE:

92
Q.9. DO YOU THINK PERFORMANCE APPRAISAL ADOPTED BY THE
COMPANY IS BAISED IN ANY WAY ?

(a) YES (b) NO

Q.10. IF YOU HAVE BEEN POSITIVELY APPRAISED, WHICH

RECOMMENDATION YOU PERSONALLY IDENTIFY WITH ?

(a) PROMOTION (b) SPECIAL INCREMEMNT

(c) ANNUAL INCREMENT

Q.11. IS THE PERFORMANCE APPRAISAL SHEET SHOWN TO YOU OR

DISCUSS WITH YOU ?

(a) YES (b) NO

Q.12. DO YOU THINK PERFORMANCE APPRAISAL SHOULD HAVE A

NEGATIVE RECOMMENDATION, IF YES, WHICH ONE DO YOU
SUGGEST THE MOST ?

(a) INCREMENT STOPPED (b) PROMOTION STOPPED

(c) DEMOTION (d) SEPRATION

Q.13. IN YOUR OPINION YOUR PERFORMANCE SHOULD BE REVIEWED .

(a) QUARTERLY (b) BI-ANNUALLY (c) ANNUALLY

Q.14. ONCE YOU HAVE BEEN POSITIVELY APPRAISED, DOES THE

RECOMMENDATION COME TO YOU IMMEDIATELY?

(a) YES (b) NO

93
Q.15. ARE YOU SATISFIED WITH YOUR PERFORMANCE APPRAISAL ?

(a) YES (b)NO

Q.16. IF NO , THEN WHAT CHANGES WOULD YOU SUGGEST ?

NOTE:

FOR OPTIMUM RESULT KINDLY FILL US WITH THE

FOLLOWING DETAILS :

1. NAME :
…………………………………………………………………
….
2. DESIGNATION:
……………………………………………………………
3. DEPARTMENT:
……………………………………………………………
4. DATE OF JOINING:
……………………………………………………….

94
 Questionnaire for Junior Management
Cadre

1 ARE YOU AWARE OF THE PERFORMANCE APPRAISAL

SYSTEM BEING CARRIED OUT BY THE COMPANY ?

( a ) YES ( b ) NO

Q.2 WHICH SYSTEM OF PERFORMANCE APPRAISAL IS

CARRIED OUT BY THE COMPANY ?

( a ) BARS ( b ) WEIGHTED AVERAGE

( c ) RANKING METHOD ( d ) 360 DEGREE

Q.3. IS THE PERFORMANCE APPRAISAL SHEET SHOWN TO YOU OR

DISCUSS WITH YOU ?

(a) YES (b) NO

Q.4. IF YOU HAVE BEEN POSITIVELY APPRAISED, WHICH

RECOMMENDATION YOU PERSONALLY IDENTIFY WITH ?

(a) PROMOTION b) SPECIAL INCREMEMNT

(c) ANNUAL INCREMENT

95
Q.5. DO YOU THINK PERFORMANCE APPRAISAL ADOPTED BY THE

COMPANY IS BAISED IN ANY WAY ?

(a) YES (b) NO

Q.6. DO YOU THINK PERFORMANCE APPRAISAL SHOULD HAVE A

NEGATIVE RECOMMENDATION , IF YES , WHICH ONE DO YOU

SUGGEST THE MOST ?

(a) INCREMENT STOPPED (b) PROMOTION STOPPED

(c) DEMOTION (d) SEPRATION

Q.7. ARE YOU SATISFIED WITH THE PRESENT PERFORMANCE

APPRAISAL SYSTEM ?

(a) YES (b) NO

96
Q.8. DO YOU THINK THE PRESENT PERFORMANCE APPRAISAL SYSTEM IS

EFFECTIVE ? IF NOT THEN WHAT CHANGES WOULD YOU SUGGEST

NOTE :

Q.9. IS YOUR PERFORMANCE APPRASAL SYSTEM LINKED WITH

M.B.O. SHEET, IF YES THEN WHETHER IT SHOULD BE LINKED OR

YOU SUGGEST ANY CHANGES ?

NOTE:

Q.10. DO YOU KNOW THE YARDSTICKS ACCORDING TO WHICH YOU

ARE APPRAISED ?

(a) YES (b) NO

97
Q.11. DO YOU THINK THE WEIGHTAGE GIVEN TO VARIOUS FACTORS

BAISED ?

(a) YES (b) NO

Q.12. IN YOUR OPINION YOUR PERFORMANCE SHOULD BE REVIEWED .

(a) QUARTERLY (b) BI-ANNUALLY

(c) ANNUALLY

Q.13. ONCE YOU HAVE BEEN POSITIVELY APPRAISED, DOES THE

RECOMMENDATION COME TO YOU IMMEDIATELY?

(a) YES (b) NO

FOR OPTIMUM RESULT KINDLY FILL US WITH THE

FOLLOWING DETAILS :

1NAME :
…………………………………………………………………….
2DESIGNATION:
……………………………………………………………
3DEPARTMENT:
……………………………………………………………
4.DATE OF JOINING:…………………………

98
Questionnaire for Junior Management
Cadre.
Q.1 ARE YOU AWARE OF THE PERFORMANCE APPRAISAL
SYSTEM BEING CARRIED OUT BY THE COMPANY ?

( a ) YES ( b ) NO

Q.2 WHICH SYSTEM OF PERFORMANCE APPRAISAL IS

CARRIED OUT BY THE COMPANY ?

( a ) BARS ( b ) WEIGHTED AVERAGE

( c ) RANKING METHOD ( d ) 360 DEGREE

Q.3. IS THE PERFORMANCE APPRAISAL SHEET SHOWN TO YOU OR

DISCUSS WITH YOU ?

(a) YES (b) NO

Q.4. IF YOU HAVE BEEN POSITIVELY APPRAISED, WHICH

RECOMMENDATION YOU PERSONALLY IDENTIFY WITH ?

(a) PROMOTION b) SPECIAL INCREMEMNT

(c) ANNUAL INCREMENT

Q.5. DO YOU THINK PERFORMANCE APPRAISAL ADOPTED BY THE

COMPANY IS BAISED IN ANY WAY ?

(a) YES (b) NO

Q.6. DO YOU THINK PERFORMANCE APPRAISAL SHOULD HAVE A

NEGATIVE RECOMMENDATION , IF YES , WHICH ONE DO YOU
SUGGEST THE MOST ?

(a) INCREMENT STOPPED (b) PROMOTION STOPPED

(c) DEMOTION (d) SEPRATION

99
Q.7. ARE YOU SATISFIED WITH THE PRESENT PERFORMANCE
APPRAISAL SYSTEM ?

(a) YES (b) NO

Q.8. DO YOU THINK THE PRESENT PERFORMANCE APPRAISAL SYSTEM IS

EFFECTIVE ? IF NOT THEN WHAT CHANGES WOULD YOU SUGGEST

NOTE :

Q.9. IS YOUR PERFORMANCE APPRASAL SYSTEM LINKED WITH

M.B.O. SHEET, IF YES THEN WHETHER IT SHOULD BE LINKED OR
YOU SUGGEST ANY CHANGES ?

NOTE:

Q.10. DO YOU KNOW THE YARDSTICKS ACCORDING TO WHICH YOU

ARE APPRAISED ?

(a) YES (b) NO

Q.11. DO YOU THINK THE WEIGHTAGE GIVEN TO VARIOUS FACTORS

BAISED ?

(a) YES (b) NO

Q.12. IN YOUR OPINION YOUR PERFORMANCE SHOULD BE REVIEWED .

(a) QUARTERLY (b) BI-ANNUALLY

(c) ANNUALLY

Q.13. ONCE YOU HAVE BEEN POSITIVELY APPRAISED, DOES THE

RECOMMENDATION COME TO YOU IMMEDIATELY?

(a) YES (b) NO

100
FOR OPTIMUM RESULT KINDLY FILL US WITH THE
FOLLOWING DETAILS :

1 NAME :
…………………………………………………………………….
2DESIGNATION:
……………………………………………………………
3 DEPARTMENT:
……………………………………………………………
4 DATE OF JOINING:
……………………………………………………….

101