INTRODUCTION

I have selected the topic of Performance Appraisal in Human Resources

Management. performance review is a systematic process in which employee performance at
work is evaluated in relation to the projects on which employee has worked and his
contribution to the organisation. It is also known as an annual review or performance review.

Concept of Human Resources Management:

Human resource management, or HRM, involves coordinating, managing,

and allocating human capital, or employees, in ways that move an organization’s goals
forward. HRM focuses on investing in employees, ensuring their safety, and managing all
aspects of staffing from hiring to compensation and development.

HRM careers may specialize in compensation, training, or managing

employees. Most HRM professionals hold a bachelor’s degree and some go on to pursue a
master's degree. HRM professionals at all levels can also earn professional certifications to
help build knowledge and increase earning potential. HRM’s goal is to build a company
culture and carry out its mission and overall goals through the management of employees.

Definition of Human Resource Management (HRM):

Human resource management is organizing, coordinating, and managing

employees within an organization to carry out an organization’s mission, vision, and goals.
This includes recruiting, hiring, training, compensating, retaining, and motivating employees.

HRM staff also develops and enforces policies and procedures that help ensure
employee safety. The HRM team manages adherence to federal and state laws that may work
to protect employees’ private information and ensure their physical safety and mental and
emotional well-being. Organizations of varying sizes and industries rely on HRM to keep
business running smoothly and efficiently.

Purpose of human resource management (HRM):

Companies use HRM to invest in employees to boost job satisfaction and

improve employee performance. The methodology behind HRM recognizes the value

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employees bring to an organization, also known as human capital. Investing in employees
and strategically supporting their needs can improve job satisfaction and, therefore, greater
success in their role within an organization. Employees who are well trained, competent,
valued, and supported by their employers will likely have the skills and motivation necessary
to carry out the organization’s goals. This might look like tuition reimbursement programs,
on-the-job training, or mentorships within an organization that can help employees develop
their talents and boost productivity. HRM aims to create a highly skilled workforce and boost
confidence and competence so that employees are motivated to contribute. HRM has a
strong focus on company culture and job satisfaction. Much of what motivates employees
comes from the culture in which they work. Building and maintaining company culture can
be challenging to measure and quantify, but it’s an important function of HRM to retain and
recruit employees.

HRM also protects employees. Human resource (HR) professionals manage

legal documents, policies, and regulations, identify what applies to their organization, and
find effective ways to educate employees and enforce company policy. HRM aims to be an
ally or partner to employees. HRM emphasizes employee development while protecting
employees from discrimination, workplace hazards, and unfair compensation.

Generations of the Evolution Of HRM:

Human Resource Management (HRM), being the department responsible for

maintaining discipline, has come a long way. The term HRM is relatively a very new term for
handling employees in every organization. It is still evolving and will keep on evolving to
keep up with the changing world. The evolution of HRM (Human Resource Management)
terms is of very recent origin. It began revolving around the 1980s. During the ancient period,
for a long time, goods were produced mainly by skilled craftsmen and artisans. They were
responsible for handling all the processes, generating it, producing it, and finally selling it.
Human Resource Management (HRM) has evolved over time to meet the changing needs of
organizations and the workforce. Here are some of the key types of the evolution of HRM,
those are;

Administrative HRM

Behavioural HRM

Strategic HRM

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 International HRM

Digital HRM

Administrative HRM:

The earliest form of HRM was administrative, where HR was primarily

responsible for record-keeping and compliance with employment laws and regulations. This
approach focused on transactional activities, such as hiring, payroll, and benefits
administration.

Behavioural HRM:

In the 1950s and 1960s, HRM evolved to focus on the behavioural aspects of
managing employees. This approach emphasized employee motivation, communication, and
leadership development. It also saw the emergence of performance management systems,
employee training and development programs, and team-building initiatives.

Strategic HRM:

Strategic HRM emerged in the 1980s and 1990s as a response to the changing
business environment. This approach focuses on aligning HR strategies with business
strategies and objectives. It emphasizes the development of high-performance work culture,
the evolution of human behaviour, talent management, and workforce planning.

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International HRM:

With globalization and the rise of multinational corporations, HRM has evolved
to include an international dimension. International HRM focuses on managing employees
from different cultures, in different countries, and with different legal requirements.

Digital HRM:

In recent years, The evolution of HRM includes digital technologies and

analytics. Digital HRM encompasses the use of HR information systems, online recruitment,
e-learning, social media, and data analytics to enhance HR operations, improve decision-
making, and optimize the employee experience.

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OBJECTIVES OF THE STUDY:

employees.

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 NEED FOR THE STUDY
Evaluation of an employee’s performance helps to take management
decisions on transfers, promotions, increments, etc. Performance appraisal helps to ascertain
the training and development needs of the employer. Performance appraisal or an individual
performance evaluation helps in designing the reward system. The feedback presided after
evaluating performance of an individual acts as a motivator. The performance appraisal acts
as a validation of the selection procedure.

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 SCOPE OF THE STUDY
It is an ongoing process of obtaining, researching, analyzing and recording
information about the worth of an employee. The main objective of performance appraisal is
to. Measure and improve the performance of employees and increase the future potential and
value to the company.

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 RESEARCH AND METHODOLOGY
Every research work is based on certain methodology, which is a way to
systematically solve the problem or attain its objectives. It is a very important guideline and
lead to completion of any project work through observation, data collection and data analysis.

Selection of sample size:

In order to take a reasonable sample size and not to disturb the functioning of
the organization from a simple size of reasonable strength of the company has been taken in
order to arrive. At the present practices of training in the company. Accordingly, 100 people
have been selected at random from all the departments of the organization and feedback
forms have been obtained.

Statistical tools used:

The main statistical tools used for the collection and analyses of data in this study are:

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 Limitations of the study
 Bias of Appraiser
 Ambiguity in Standards
 Insufficient Evidence
 Several Qualities Remain Without Appraisal
 Leniency or Strictness Tenancy
 Influence of Man’s Job
 Similarity Error.

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 INDUSTRY PROFILE:

A dairy is a place where milk is stored and where butter, cheese and other dairy products are made,
or a place where those products are sold.[1]: 325 [2]: 284  It may be a room, a building or a larger
establishment.[2]: 284  In the United States, the word may also describe a dairy farm or the part of a
mixed farm dedicated to milk for human consumption,[2]: 284  whether from cows, buffaloes, goats,
sheep, horses or camels.

The attributive dairy describes milk-based products, derivatives and processes, and the animals and
workers involved in their production, for example dairyman, dairymaid, dairy cattle or dairy goat. A
dairy farm produces milk and a dairy factory processes it into a variety of dairy products. These
establishments constitute the global dairy industry, part of the food industry Terminology.

Terminology differs between countries. In the United States, for example, an entire dairy farm is
commonly called a "dairy". The building or farm area where milk is harvested from the cow is often
called a "milking parlor" or "parlor", except in the case of smaller dairies, where cows are often put
on pasture, and usually milked in "stanchion barns". The farm area where milk is stored in bulk tanks
is known as the farm's "milk house". Milk is then hauled (usually by truck) to a "dairy plant", also
referred to as a "dairy", where raw milk is further processed and prepared for commercial sale of
dairy products.

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In New Zealand, farm areas for milk harvesting are also called "milking parlours", and are historically
known as "milking sheds".[citation needed][3] As in the United States, sometimes milking sheds are
referred to by their type, such as "herring bone shed" or "pit parlour". Parlour design has evolved
from simple barns or sheds to large rotary structures in which the workflow (throughput of cows) is
very efficiently handled. In some countries, especially those with small numbers of animals being
milked, the farm may perform the functions of a dairy plant, processing their own milk into saleable
dairy products, such as butter, cheese, or yogurt. This on-site processing is a traditional method of
producing specialist milk products, common in Europe.

In the United States a dairy can also be a place that processes, distributes and sells dairy products, or
a room, building or establishment where milk is stored and processed into milk products, such as
butter or cheese. In New Zealand English the singular use of the word dairy almost exclusively refers
to a corner shop, or superette. This usage is historical as such shops were a common place for the
public to buy milk products.

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History
Milk producing animals have been domesticated for thousands of years. Initially, they were part of
the subsistence farming that nomads engaged in. As the community moved about the country, their
animals accompanied them. Protecting and feeding the animals were a major part of the symbiotic
relationship between the animals and the herders.

In the more recent past, people in agricultural societies owned dairy animals that they milked for
domestic and local (village) consumption, a typical example of a cottage industry. The animals might
serve multiple purposes (for example, as a draught animal for pulling a plow as a youngster, and at
the end of its useful life as meat). In this case, the animals were normally milked by hand and the
herd size was quite small, so that all of the animals could be milked in less than an hour—about 10
per milker. These tasks were performed by a dairymaid (dairywoman) or dairyman. The word dairy
harkens back to Middle English dayerie, deyerie, from deye (female servant or dairymaid) and further
back to Old English dæge (kneader of bread).

With industrialisation and urbanisation, the supply of milk became a commercial industry, with
specialised breeds of cattle being developed for dairy, as distinct from beef or draught animals.
Initially, more people were employed as milkers, but it soon turned to mechanisation with machines
designed to do the milking.

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Farmer milking a cow by hand
Historically, the milking and the processing took place close together in space and time: on a dairy
farm. People milked the animals by hand; on farms where only small numbers are kept, hand-milking
may still be practised. Hand-milking is accomplished by grasping the teats (often pronounced tit or
tits) in the hand and expressing milk either by squeezing the fingers progressively, from the udder
end to the tip, or by squeezing the teat between thumb and index finger, then moving the hand
downward from udder towards the end of the teat. The action of the hand or fingers is designed to
close off the milk duct at the udder (upper) end and, by the movement of the fingers, close the duct
progressively to the tip to express the trapped milk. Each half or quarter of the udder is emptied one
milk-duct capacity at a time.

The stripping action is repeated, using both hands for speed. Both methods result in the milk that
was trapped in the milk duct being squirted out the end into a bucket that is supported between the
knees (or rests on the ground) of the milker, who usually sits on a low stool.

Traditionally the cow, or cows, would stand in the field or paddock while being milked. Young stock,
heifers, would have to be trained to remain still to be milked. In many countries, the cows were
tethered to a post and milked.

Thirteen EU member states including France and Spain have introduced laws on compulsory or
mandatory written milk contracts (MWC's) between farmers and processors. The Scottish
Government published an analysis of the dairy supply chain and the application of mandatory
written contracts across the European Union in 2019, to evaluate the impact of the contracts where
they have been adopted.] In the UK, a voluntary code of best practice on contractual relationships in
the dairy sector was agreed by industry during 2012: this set out minimum standards of good
practice for contracts between producers and purchasers. During 2020 the UK government has
undertaken a consultation exercise to determine which contractual measures, if any, would improve
the resilience of the dairy industry for the future.

The Australian government has also introduced a mandatory dairy code of conduct.

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 COMPANY PROFILE
Heritage is recognized as one of the India’s largest and reputed FMCG
companies, since 1992. The Heritage Group, founded in the year 1992 by Mr. Nara
Chandrababu Naidu, is one of the fastest growing Public Listed Companies in India, with
two-business divisions-Dairy and Renewable Energy under its flagship Company Heritage
Foods Limited (Formerly known as Heritage Foods (India Limited). Currently Heritage's
milk and milk products have a market presence in Andhra Pradesh, Telangana, Karnataka,
Kerala, Tamil Nadu, Maharastra, Odisha, NCR Delhi, Haryana, Rajasthan, Punjab and

Uttarakhand.

The heritage company Mission Statement:

To affect positively the quality of life of persons and families served by our nonprofit client
organizations.

The heritage company Vision Statement:

To conduct the most professional, effective, cost-efficient fundraising and public awareness
campaigns possible through our ongoing dedication to building quality relationships with
each client.

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The heritage company Values:

 Quality
 Integrity
 Customer focused
 Integration
 Diversity.

The Dairy Brand – Heritage:

Heritage by choosing Chittoor district of Andhra Pradesh as its primary

procurement base of milk, had taken full advantage of the large, high yielding and cross-
bred cow population found in the area. Today Heritage has network in the states of
Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra and Delhi for
procurement and distribution of quality milk and milk products. Heritage products are
also distributed in the state of Kerala. Heritage has drawn plans to be a pan-India player
in the dairy.

Products:

Heritage's dairy range of products among others include milk, curd, ice
cream, buttermilk, flavoured milk, dairy whitener, skim milk powder. The Fresh range of
products include 177 sku's of fresh fruits and vegetables, 150 sku's of in house bakery
products and the private labels Farmers' Pride like cereals, pulses, staples, and spices.

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Heritage wants:

 To be a nationally recognized brand for Healthy and Fresh products with a revenue of
INR 6000 Crores
 To anticipate, understand and respond to our Customers needs by creating high-
quality products and making them available through innovative and convenient
channels
 To embrace the right technology to delight our Customers.
 Advocating the balancing of economic, social and environmental aspects to create a
better tomorrow
 Empowering the farmer community through our unique 'Relationship Farming'
Model.

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Heritage Commitments:

Milk Producers:

Effecting change in the standard of living for dairy farmers in terms of:

 Regular income through co-operative efforts

 Women’s participation in income generation

 Protecting farmers from price exploitation by the un-organized sector
 Providing remunerative prices for milk

 Increasing milk productivity through input and extension activities

 Credit facilitation for purchase and insuring of cattle
 Cattle healthcare activities
 Supplying high-quality cattle feed at reasonable prices.

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 Customers;

 Timely supply of pure & fresh products

 Supply of high-quality milk and milk products at affordable prices

 More than 15 lakh happy customers

 High customer satisfaction
 Customer care centre.

Employees:

 Enhancing the technical and managerial skills of employees through continuous

training and development

 Instituting the best appraisal systems to motivate employees
 Fostering incentive, bonus and reward systems to encourage employees
 Providing fair opportunities to all for career development.

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Shareholders:

 Returns
 Dividend Payment since Public Issue (January 1995)

Service:

 Highest importance to investor service; no notice from any regulatory authority since
2001 in respect of investor service
 Very transparent disclosures

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 THEORITICAL FRAMEWORK

Performance Appraisal
A performance appraisal, also referred to as a performance review, performance
evaluation, (career) development discussion,[2] or employee appraisal, sometimes shortened
[1]

to "PA",[a] is a periodic and systematic process whereby the job performance of

an employee is documented and evaluated. This is done after employees are trained about
work and settle into their jobs. Performance appraisals are a part of career development and
consist of regular reviews of employee performance within organizations.
Performance appraisals are most often conducted by an employee's
immediate manager or line manager.[3] While extensively practiced, annual performance
reviews have also been criticized [4] as providing feedback too infrequently to be useful, and
some critics argue that performance reviews in general do more harm than good. It is an
element of the principal-agent framework, that describes the relationship of information
between the employer and employee, and in this case the direct effect and response received
when a performance review is conducted.[5]

Performance appraisal is also known as employee evaluation, merit rating,

employee assessment, etc. It is a systematic process of appraising an employee’s current and
past performance relative to his/her performance parameters. The employee’s performance
should be based on organizational expectations and employee’s actual performance. The idea
that performal evaluation improves employee’s performance is not a new one but it is seen in
the roots of development of mankind. Each person is motivated when he is told about his
actual perormance and accepts what were his/her previous mistakes. Performance appraisal
process may be held annually or monthly as per needed.
Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job and his
potential for future development.” It is the systematic evaluation of the individual with
respect to his /her performance on the job and his/her potential for development”.

According to Flippo:

“ Performance Appraisal is the systematic , periodic and an impartial rating of an employee’s

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

Concept of Performance Appraisal:

Performance evaluation or performance appraisal is the process of assessing

performance and progress of employee or of a group of employee on a given job and his
potential for future development. In concept of all formal procedure used working
organisation to evaluate personality,contribution and potential of employee.

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Objectives of Performance Appraisal:
 To assist in promotions, transfers and lay off decisions.
 To make aware the employee about his actual performance.
 To meet organizational expectations with employees objectives.
 To assess the training and development needs of the employees.
 To plan job rotation.
 To improve communication between managers and subordinates.

Characteristics of Performance Appraisal:

 It is the systematic examination of employee”s strength and weakness interms of
jobs.
 Performance Appraisal is the scientific or objective study. Formal procedure is used in
the study the same approach is adopted for all job holders for that result is
comparable.
 It is an organizing or continous process where in the valuation is arranged periodically
according to a definite plan.
 Main process performance appraisal is to secure information necessary for making
objective and correct decision on employees.

Uses:
 It provides valuable information for personnel decisions such as pay increases ,
promotions,etc.
 It helps to judge the effectiveness of recruitment , selection and placements
orientation system of the organization.
 It is useful in analyzing training and development needs.
 It can be used to improve performance thought appropriate feedback ,working and
counseling to employees.
 It facilitates Human Resource Planning ,career planning and succession planning.

A performance appraisal is a systematic, general and periodic process that assesses

an individual employee's job performance and productivity in relation to certain pre-
established criteria and organizational objectives. [6][7] Other aspects of individual employees
are considered as well, such as organizational citizenship behavior, accomplishments,
potential for future improvement, strengths and weaknesses, etc.

To collect PA data, there are three main methods: objective production, personnel,
and judgmental evaluation. Judgmental evaluations are the most commonly used with a large
variety of evaluation methods.[1] Historically, PA has been conducted annually (long-cycle
appraisals); however, many companies are moving towards shorter cycles (every six months,

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every quarter), and some have been moving into short-cycle (weekly, bi-weekly) PA.
The interview could function as "providing feedback to employees, counseling and
developing employees, and conveying and discussing compensation, job status, or
disciplinary decisions".

Performance management systems are employed "to manage and align" all of an
organization's resources in order to achieve highest possible performance [1] and to eliminate
distractions procured from individual agents that neglect the companies goals. [5] "How
performance is managed in an organization determines to a large extent the success or failure
of the organization. Therefore, improving PA for everyone should be among the highest
priorities of contemporary organizations".[13]

Some applications of PA are compensation, performance improvement,

promotions,termination, test validation, and more.[14] While there are many potential benefits
of PA, there are also some potential drawbacks. For example, PA can help facilitate
management-employee communication; however, PA may result in legal issues if not
executed appropriately, as many employees tend to be unsatisfied with the PA process, as
well as, the misuse of PA's can incur apathy towards organizational goals and
values.[1][15][16] PAs created in and determined as useful in the United States are not
necessarily able to be transferable cross-culturally.[17]

A central reason for the utilization of performance appraisals (PAs) is

performance improvement ("initially at the level of the individual employee, and ultimately at
the level of the organization").[14] Other fundamental reasons include "as a basis for
employment decisions (e.g. promotions, terminations, transfers), as criteria in research (e.g.
test validation), to aid with communication (e.g. allowing employees to know how they are
doing and organizational expectations), to establish personal objectives for training"
programs, for transmission of objective feedback for personal development, "as a means of
documentation to aid in keeping track of decisions and legal requirements"[14] and in wage
and salary administration.[1] Additionally, PAs can aid in the formulation of job criteria and
selection of individuals "who are best suited to perform the required organizational
tasks".[6] An appraisal can be part of guiding and monitoring employee career
development.[18] PAs can also be used to aid in work motivation through the use of reward
systems.[6]

 Methods:

The management by objectives method is an approach that focuses on improving an

organization’s performance across the board by articulating clear objectives for the
business. The entire team, both management and employees, sets those objectives.

In this approach, an employee and manager work together to identify and plan goals for
the employee to reach, usually within a specific time frame. The manager and employee

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then meet regularly to discuss the employee’s progress and make any adjustments
necessary toward the goals and objectives.

1) 360 degree feedback:

The 360 degree feedback method is designed to get feedback from all the key players an
employee impacts in their day-to-day activities — managers and supervisors, peers,
subordinates, and even clients and customers. The employee also completes a self-
evaluation.

This method is highly regarded because multiple people are involved in evaluating the
employee’s performance.

2) Behaviorally anchored rating scale:

This is considered one of the most effective modern methods of performance appraisal
because it relies on both quantitative and qualitative forms of measurement. In this
approach, the employer compares each employee’s performance with specific behavioral
examples that are anchored to numerical ratings.

3) Psychological appraisal:

This approach to performance appraisal attempts to evaluate how an employee might perform
in the future rather than assessing how they have performed in the past.
The psychologist analyzes components such as interpersonal skills, cognitive abilities,
intellectual traits, leadership skills, personality traits, emotional quotient, and other factors.

4) Assessment center:

In the assessment center method, an organization tests its employees on both job
capabilities and social interaction skills. Written tests help evaluate ability, while
situational exercises and role-playing scenarios assist with determining an employee’s
likelihood of success in carrying out responsibilities that are part of their day-to-day role.

Potential benefits
There are a number of potential benefits of organizational performance management
conducting formal performance appraisals (PAs). There has been a general consensus in the
belief that PAs lead to positive implications of organizations. Furthermore, PAs can benefit
an organization's effectiveness.[] One way is PAs can often lead to giving individual workers
feedback about their job performance.] From this may spawn several potential benefits such
as the individual workers becoming more productive
Other potential benefits include:

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 Facilitation of communication: communication in organizations is considered an essential
function of worker motivation.[] It has been proposed that feedback from PAs aid in
minimizing employees’ perceptions of uncertainty.] Fundamentally, feedback and
management-employee communication can serve as a guide in job performance

 Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or

issues may distract employees from their work, and trust issues may be among these
distracting factors.[21] Such factors that consume psychological energy can lower job
performance and cause workers to lose sight of organizational goals. [15] Properly
constructed and utilized PAs have the ability to lower distracting factors and encourage
trust within the organization.[

2]

 Goal setting and desired performance reinforcement: organizations find it efficient to

match individual worker's goals and performance with organizational goals. [15] PAs
provide room for discussion in the collaboration of these individual and organizational
goals.[23] Collaboration can also be advantageous by resulting in employee acceptance
and satisfaction of appraisal results.[24]

 Performance improvement: well constructed PAs can be valuable tools for

communication with employees as pertaining to how their job performance stands with
organizational expectations.[18] "At the organizational level, numerous studies have
reported positive relationships between human resource management (HRM)
practices"[15] and performance improvement at both the individual and organizational
levels.

 Determination of training needs: “Employee training and development are crucial

components in helping an organization achieve strategic initiatives”. [15][25] It has been
argued that for PAs to truly be effective, post-appraisal opportunities for training and
development in problem areas, as determined by the appraisal, must be offered. [26] PAs
can be especially instrumental for identifying training needs of new employees. [9] Finally,
PAs can help in the establishment and supervision of employees’ career goals. [18]
Potential complications
Despite all the potential advantages of formal performance appraisals (PAs), there are also
potential drawbacks. It has been noted that determining the relationship between individual
job performance and organizational performance can be a difficult task. [25] The ones
conducting performance appraisals, such as line managers also often face
complexities (Tyskbo, 2020). Generally, there are two overarching problems from which
several complications spawn. One of the problems with formal PAs is there can be
detrimental effects to the organization(s) involved if the appraisals are not used appropriately.

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The second problem with formal PAs is they can be ineffective if the PA system does not
correspond with the organizational culture and system.[15]
Potential complications that may arise:

 Detrimental impact to performance improvement: It has been proposed that the use of PA
systems in organizations adversely affects organizations’ pursuits of quality
performance.[27] It is believed by some scholars and practitioners that the use of PAs is
unnecessary if there is total quality management.[

 Subjective evaluations: Subjectivity is related to judgement based on a supervisor's

subjective impressions and opinions, which can be expressed through the use of
subjective performance measures, ex post flexibility in the weighting of objective
performance measures, or ex post discretional adjustment, all of which are based on
factors other than performance measures specified ex ante. Traditional performance
appraisals are often based upon a manager's or supervisor's perceptions of an employee's
performance and employees are evaluated subjectively rather than objectively. Therefore,
the review may be influenced by many non-performance factors such as employee
'likeability', personal prejudices, ease of management, and/or previous mistakes or
successes. Reviews should instead be based on data-supported, measurable behaviors and
results within the performers control.[28]

 Negative perceptions: "Quite often, individuals have negative perceptions of

PAs".[19] Receiving and/or the anticipation of receiving a PA can be uncomfortable and
distressful[18] and potentially cause "tension between supervisors and subordinates".[20] If
the person being appraised does not trust their employer, appraiser or believe that they
will benefit from the process it may become a "tick box" exercise.

 Central Tendency: This is where the evaluator fails to make extreme ratings to either
direction-low or high but remains at the intermediate. The evaluator fails to use extremes
of the scale and uses the central points e.g. rating all employees as average.[

 Inflationary pressure: this is where there is low differentiation with the upper range of the
rating choices defining outstanding performance as 90 or above good as 90 or above,
average or above 70 or above and inadequate performance as anything below 70 leaves
one wonder for a promotion.[31]

 Errors: Performance appraisals should provide accurate and relevant ratings of an

employee's performance as compared to pre-established criteria/goals (i.e. organizational
expectations).

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 Legal issues: when PAs are not carried out appropriately, legal issues could result that
place the organization at risk.[20] PAs are used in organizational disciplinary
programs[18] as well as for promotional decisions within the organization. The improper
application and utilization of PAs can affect employees negatively and lead to legal action
against the organization.
 Performance goals: performance goals and PA systems are often used in association.

Negative outcomes concerning the organizations can result when goals are overly
challenging or overemphasized to the extent of affecting ethics, legal requirements, or
quality.[34] Moreover, challenging performance goals can impede an employees’ abilities
to acquire necessary knowledge and skills.] Especially in the early stages of training, it
would be more beneficial to instruct employees on outcome goals than on performance
goals.[15]

 Derail merit pay or performance-based pay: some researchers contend that the deficit in
merit pay and performance-based pay is linked to the fundamental issues stemming from
PA systems.[26]

Steps for Making Appraisal Successful :

1. Existence of an atmosphere of confidence and trust
2. The supervisor should analyze the strengths and weakness of the employee and advise
him.
3. The appraisal programmed should be less time-consuming and less-costly.
4. The results of appraisal should be immediately communicated to the employee.
5. Training can be used to improve the standards of performance appraisal.

Effectiveness
Leadership development coach Jack Zenger urges companies to find alternatives to annual
performance reviews, and says that research supports the following:[37]

 Frequent discussions with employees are better than annual reviews

 Talking about future goals is more productive than past performance, especially with
clear targets, deadlines, and the participation of the employee
 Negative feedback can cause defensiveness and worsen productivity
 Positive feedback does little to improve productivity, though does improve the
interpersonal relationship with the person giving the feedback
 Neither managers nor employees like performance reviews
 Higher-level employees receive performance reviews less frequently.

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 DATA ANALYSIS AND INTERPRETATION:

1. DO YOU THINK PRFORMANCE APPRAISAL IS ESSNTIAL?

Necessity of performance appraisal

S.NO OPINION NO.OF PERCENTAGE

RESPONDANCE
1 yes 45 90

2 no 5 10

total 50 100

RESPONDENTS

Sales
YES NO

10%

90%

Interpretation:
From the above data ,it’s evident that maximum of respondents feel that performance
appraisal is essential in the organization.

27
2 . DO YOU AGREE THAT THE OBJECTIVES OF THE APPRAISAL SYSTEM ARE
CLEAR TO ALL EMPLOYEES?

Clarity of performance appraisal

S.NO OPINION NO. OF PRCENTAGE

RESPONDENTS
1 strongly agree 23 46
2 agree 19 38
3 disagree 8 16
total 50 100

RESPONDENTS

Sales
strongly agree agree disagree

16%

46%

38%

Interpretation:

From the above data it’s evident that forty six percent of employees strongly agree that the
objectives of appraisal system are clear, and only sixteen percent of employees think that
objectives are not clear.

28
3 ARE YOU AWARE OF THE HERITAGE FOODS PERFORMANCE APPRAISAL
SYSTEM?

Awareness of performance appraisal system

S.NO OPINION NO OF PERCENTAGE

RESPONDNTS
1 yes 50 100
2 no 0 0
total 50 100

RESPONDENTS

Sales
YES NO

0%

100%

Interpretation

From the above data, it’s evident that Hundred percent of employees are

aware about the organization performance appraisal system.

29
4 . ARE YOU SATISFIED WITH EXISTING SYSTEMS INHERITAGE FOODS ?

S.NO OPINION NO OF PERCNTAGE

RESPONDENTS

1 satisfied 45 90

2 dissatisfied 5 10

total 50 100

RESPONDANTS

Sales
dissatisfied
10%

satisfied
90%

Interpretation

About 90 % of employees are satisfied with existing performance appraisal system in the
organization, and only 10 % are dissatisfied with existing performance appraisal system in
heritage foods..

30
5 . ON WHAT BASIS PERIODICITY OF PERFORMANCE APPRAISAL SHOULD BE?

Periodicity of performance Appraisal

S.NO OPINION NO OF PERCNTAGE

RESPONDENTS
1 monthly 8 16
2 Quarterly 12 24
3 Annually 30 60
total 50 100

RESPONDENTS

Sales
monthly quarterly annually

16%

24%
60%

INTERPRETATION

From the above data it’s evident that most of the employees feel that performance appraisal
should b done on annual basis.

31
6 . DOSE PERFORMANCE APPRAISAL IS IMPROVING EMPLOYEE MOTIVATION
AND JOB SATISFACTION?

S.NO OPINION NO OF PERCENTAGE

RESPONDENTS

1 yes 40 80

2 no 10 20

total 50 100

RESPONDENTS

Sales
1st Qtr NO

20%

80%

INTRPRETATION:

From the above pie chart it can be informed that 80 % of the employees believe that
performance appraisal is improving their motivation and job satisfaction , but 20% of
employees believe that performance appraisal is not improving their motivation and job
satisfaction.

32
7 . GENDER WISE CLASSIFICATION OF RESPONDENTS?

S.NO OPINION NO OF PERCENTAGE

RSPONDENTS

1 male 89 89

2 female 11 11

total 100 100

RESPONDENTS

Sales
MALE FEMALE

11%

89%

INTERPRETATION

From the above table, it can be informed that 89% of male and 11% of female.

33
8 . IS THERE ANY SCOPE FOR BIAS IN THE EVALUATION PROCESS DUE TO
PERSONAL ACQUAINTANCES BETWEEN THE APPRAISERS AND APPRAISE?

S.NO OPINION NO OF PERCNTAGE

RESPONDENTS
1 yes 19 38

2 no 31 62

total 50 100

Sales
YES NO

38%

62%

INTERPRETATION

From the above information its evident that only 38% of the employees are informed about
the performance appraisal at beginning of the appraisal period and about 62% are not
informed about this at the beginning of the appraisal period.

34
9 . HOW OFTEN DID YOU SPEAK, TALK OR DISCUSS ABOUT YOUR
PERFORMANCE WITH SUPERIORS?

S,NO OPINION NO OF PERCENTAGE

RESPONDENTS
1 frequently 16 32
2 sometimes 19 38
3 rarely 9 18
4 never 6 12
total 50 100

RESPONDENTS

Sales
frequently sometimes rarely never

38%

12%
30%
18%

32%

INTERPRETATION

From the above information its evident that 32% of the employees frequently speak or talk
with their superiors about their performance ,38% sometimes they speak,18% rarely and 12%
they never talk or speak.

35
10. PERFORMANCE FEEDBACK ALLOWS EMPLOYEES TO IMPROVE
EFFICIENCY?

S.NO OPINION NO OF PRCENTAGE

RESPONDENTS
1 Strongly agree 39 78
2 Agree 9 18
3 Disagree 2 4
total 50 100

RESPONDENTS

Sales
strongly agree agree disagree

4%
18%

78%

INTERPRETATION

From the above information its evident that 78% of the employees strongly agree that
performance feedback allows employees to improve their work efficiency and only 4%
disagree with this statement.

36
11 . WHICH METHOD OF PERFORMANCE APPRAISAL IS IMPLEMENTED IN THE
ORGANIZATION?

S.NO OPINION NO OF PRCENTAGE

RESPONDENTS
1 merit 20 40
2 grading 32 64
3 ranking 6 12
4 othres 2 4
total 50 100

RESPONDENTS

Sales

merit
grading
ranking
others

INTERPRETATION

From the above data its evident that Grading method is being used in Heritage foods

for performance appraisal.

37
12 .DO YOU RECEIVE ANY INCREMENT IN YOUR SALARY AFTER
PERFORMANCE APPRAISAL?

S.NO OPINION NO OF PERCNTAGE

RESPONDENTS
1 yes 35 70
2 no 15 30
total 50 100

RESPONDENTS

Sales
YES NO

30%

70%

INTERPRETATION

From the above data its is evident that 70% of the employees agreed that they receive
increment after performance and 30% think that they do not get that.

38
13 . DO YOU THINK THAT PERFORMANCE APPRAISAL HELP TO PROVIDE AN
ATMOSPHERE WHERE ALL ARE ENCOURAGED TO SHARE ONE ANOTHER
BURDEN?

S.NO OPINION NO OF PERCENTAGE

RESPONDENTS
1 YES 36 72
2 NO 14 28
TOTAL 50 100

RESPONDENTS

Sales
YES NO 4th Qtr

28%

72%

INTERPRETATION

From the above data its is evident that 72% of the employees agreed that performance
appraisal helps to provide an atmosphere where all are encouraged to share one anther burden
and 28% think that they do not agree with that.

39
14 . DO YOU THINK PERFORMANCE APPRAISAL GIVE CONSTRUCTIVE
CRITICISM IN A FRIENDLY AND POSITIVE MANNER?

S.NO OPINION NO OF PERCENTAGE

RESPONDENTS

1 YES 30 60

2 NO 20 40

TOTAL 50 100

RESPONDENTS

Sales
YES NO

40%

60%

INTERPRETATION

From the above data its is evident that 60% of the employees agreed that they receive
increment after performance appraisal and 40% think that they do not get that.

40
15.PERFORMANCE APPRAISAL IS USEFUL CONTRIBUTION TO ENCOURAGE
PEOPLE TO PERFORM BETTER ON THEIR JOBS?

S.NO OPINION NO.OF PERCENTAGE

RESPONDENTS
1 strongly agree 9 18
2 agree 28 56
3 disagree 11 22
4 strongly disagree 2 4
total 50 100

RESONDENTS

Sales
strongly agree agree disagree strongly disagree

4%

18%
22%

56%

INTERPRETATION

From the above information its evident that 56% of the employees agree with the statement
that ‘performance appraisal is useful contribution to the employees for the encouragement
towards the work’ and 22% disagree with that.

41
 FINDINGS

 I found out that some of the employees are not receiving their appraisal feedback in
regular intervals.
 Some higher officials are biased towards some employees in appraising their
performance.
 Performance Appraisal techniques are not implemented in an effective way that may
lead employees to have negative impact on the Management.
 Clear Feedback is not provided for employees.
 Appraisal methods lacks proper guidance and monitoring from Management in some
cases.

42
 SUGGESTONS
 Management must provide regular feedbacks to all the employees. So, that they can
increase their performance.
 Biased feedback should be avoided.
 Should implement the techniques in an effective way.
 Clear and clean feedback should be provided.
 Management should concentrate more on guiding and monitoring the process of
performance appraisal.

43
 CONCLUSION
I conclude that performance appraisal of HERITAGE FOODS INDUSTRIES is quite
effective as compared to other companies in footwear industries but we all know that every
coin has two sides like that it does have some drawbacks in performance appraisal that may
be in selecting the appropriate appraisal techniques or in its implementation or in its
guidance.

44
 BIBILOGRAPHY

BOOKS:

S.NO NAME OF THE NAME OF THE AUTHER YEAR

BOOK PUBLISHER

1 Human Resource Excel books V.S.P. Rao 2006

Management Text and
Cases
2 Human Resource Akansha Publishing Harish Chandra 2006
Development
3 Essentials of Human Himalaya Publishing P. Subbarao 1999
Resource Management House
and Industrial Relations

WEBSITES:

 WWW.Wikipedia.com
 WWW.heritagefoods.in

45
 QUESTIONNAIRES

1Q . DO YOU THINK PRFORMANCE APPRAISAL IS ESSNTIAL?

a) Yes
b) No

2Q . DO YOU AGREE THAT THE OBJECTIVES OF THE APPRAISAL SYSTEM ARE

CLEAR TO ALL EMPLOYEES?

a) Strongly agree
b) Agree
c) Disagree

3Q . . ARE YOU AWARE OF THE HERITAGE FOODS PERFORMANCE APPRAISAL

SYSTEM?

a) Yes
b) No

4Q . . ARE YOU SATISFIED WITH EXISTING SYSTEMS IN HERITAGE FOODS?

a) satisfied
b) dissatisfied

5Q . . ON WHAT BASIS PERIODICITY OF PERFORMANCE APPRAISAL SHOULD BE?

a) Monthly
b) Quarterly
c) Annually

46
6Q . DOSE PERFORMANCE APPRAISAL IS IMPROVING EMPLOYEE MOTIVATION
AND JOB SATISFACTION?

a) Yes
b) No

7Q . . GENDER WISE CLASSIFICATION OF RESPONDENTS?

a) Male
b) Female

8Q .IS THERE ANY SCOPE FOR BIAS IN THE EVALUATION PROCESS DUE TO
PERSONAL ACQUAINTANCES BETWEEN THE APPRAISERS AND APPRAISE?

a) Yes
b) No

9Q HOW OFTEN DID YOU SPEAK, TALK OR DISCUSS ABOUT YOUR

PERFORMANCE WITH SUPERIORS?

a) Frequently
b) Sometimes
c) Rarely
d) Never

10Q. PERFORMANCE FEEDBACK ALLOWS EMPLOYEES TO IMPROVE

EFFICIENCY?

a) Strongly agree
b) Agree
c) Disagree

47
11Q . . WHICH METHOD OF PERFORMANCE APPRAISAL IS IMPLEMENTED IN THE
ORGANIZATION?

a) Merit
b) Grading
c) Ranking
d) Others

12Q . .DO YOU RECEIVE ANY INCREMENT IN YOUR SALARY AFTER

PERFORMANCE APPRAISAL?

a) Yes
b) No

13Q . . DO YOU THINK THAT PERFORMANCE APPRAISAL HELP TO PROVIDE AN

ATMOSPHERE WHERE ALL ARE ENCOURAGED TO SHARE ONE ANOTHER
BURDEN?

a) Yes
b) No

14Q . . DO YOU THINK PERFORMANCE APPRAISAL GIVE CONSTRUCTIVE

CRITICISM IN A FRIENDLY AND POSITIVE MANNER?

a) Yes
b) No

15Q . .PERFORMANCE APPRAISAL IS USEFUL CONTRIBUTION TO ENCOURAGE

PEOPLE TO PERFORM BETTER ON THEIR JOBS?

a) Strongly agree
b) Agree
c) Disagree
d) Strongly disagree

PREPARED BY: N.Rajeswari

Group: BBA

48