A STUDY ON PERFORMANCE APPRAISAL AT YAMAHA MOTORS

CHAPTER - 1

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CHAPTER -1
1.INTRODUCTION AND RESEARCH DESIGNING

The term “performance appraisal” refers to the regular review of an

employee’s job performance and overall contribution to a company.
Also known as an annual review, employee appraisal, performance
review or evaluation, a performance appraisal evaluates an
employee’s skills, achievements, and growth, or lack thereof.
Companies use performance appraisals to give employees big-
picture feedback on their work and to justify pay increases and
bonuses, as well as termination decisions. They can be conducted at
any given time but tend to be annual, semi-annual or quarterly.

Performance appraisals are usually designed by human resources

(HR) departments as a way for employees to develop in their
careers. They provide individuals with feedback on their job
performance, ensuring that employees are managing and meeting
the goals expected of them and giving them guidance on how to
reach those goals if they fall short.
Performance appraisals also help employees and their managers
create a plan for employee development through additional training
and increased responsibilities, as well as to identify ways that the
employee can improve and move forward in their career.

A performance appraisal is a regularly scheduled formal process

evaluating an employee’s overall performance and contribution to
the company with the goal of improving that performance. It can also

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A STUDY ON PERFORMANCE APPRAISAL AT YAMAHA MOTORS

be referred to as the performance review, performance evaluation,

or employee appraisal.

Performance appraisals are a platform to provide feedback, offer a

formal moment in time to evaluate job performance, and help
distribute raises and bonuses among employees. Usually, this
happens once or twice a year, taking place at the start of the year
and around the half-year point. These are formal sit-downs in which
the direct manager or supervisor evaluates performance on the main
tasks and responsibilities of the employee.

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2. literature review
A literature review is a description, summary, and critical evaluation
of scholarly works on a certain topic. A literature review combines
both summary (a recap of important information) and synthesis (a
reorganization of that information which reflects your approach to a
research problem). You may be asked to write a literature review on
a certain topic for a class, or you may need to include a literature
review as one part of a research paper, thesis, or dissertation.

1. As per A. Monappa and M. S. Saiyadain Douglas Mc Gregor

(1957)– Formal appraisal plans are designed in such a manner
that they will be meeting one need of the organization and two of
the individuals.
1. Systematic judgments for supporting an increase in salary,
transfers, demotions or terminations.
2. Means of informing the subordinates about their
performance, and suggesting the required changes in their
skills, attitudes, behaviour, or job knowledge. Clear
information will be given about their position.
3. For further training, coaching and counselling these
appraisals are used.

2. Venclova Katerina, Salkova Andrea Kolackova Gabriela on their

research stated about the classification of employee performance
appraisal methods based on the time factor according to the time
factor according to the authors are shown on the table below. The
differences of time horizon are divided into three which are past,
present, and future. Methods focusing on the past are mentioned
as past events, methods focusing on the current situation are the
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present situation and methods focusing on the future are

mentioned as future forecasts (Hronik, 2006). Dvorakova (2012)
also divides the methods based on the time criterion and
differentiate the methods between the methods that is
concentrating on the works which is already done (on the past)
and methods concentrating on the future and identifying the
development potential of employees.

3. Cummings (1973) in an article titled, "A field experimental study

of the effects of two performance appraisal system", reported the
results of a field experiment designed to test the effects of
manipulating several elements of an operative level performance
appraisal system. First, the multi-purposive nature of appraisal in
formal organization is discussed. This is followed by a brief
overview of the literature on performance appraisal. The design
and results of the study at hand are then discussed.

4. Taylor And Wilsted (1974) in their article titled “capturing

Judgment Policies: A Field Study of Performance Appraisal” used
mathematical models of judgement policy for evaluating 625
performance reports during a single rating cycle. Linear and
nonlinear analyses are used to describe the cues most important
in determining the overall ratings. In addition, performance rating
policy is in compared with stated policy for each of the 40 raters.

5. Herbert and Doverspike (1990) in their article titled,

"Performance Appraisal in the Training Needs Analysis Process: A
Review and Critique" state that a literature review leads to a
model for using performance appraisal information in the process
of analyzing training needs. The model identifies performance
discrepancies, determines causes, and choose interventions
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A STUDY ON PERFORMANCE APPRAISAL AT YAMAHA MOTORS

based on internal (employee) and external (work environment)

factors.(SK)

6. Miller and Thornton (2006) in their article titled "How Accurate

Are Your Performance Appraisals?" state that accuracy of
performance appraisals is very important in public personnel
management. they provide "benchmark" data from the research
literature. They also provide a method for correcting error in the
data so that practitioners' data may be more accurately evaluated.
They also demonstrate the degree to which multiple raters will
improve the accuracy of appraisals. Finally, They make
suggestions as to how the PPM professional may improve the
accuracy of performance ratings based on the research
concerning rating versus ranking performance, the supervisors'
knowledge of the employee and the number if dimensions being
appraised.

7. Peter R. Scholtes (1993) the research is based on a comparison of

total quality or performance appraisals. TQM and performance
appraisal, according to the author, are incompatible. Customer
awareness, systems thinking, a grasp of variance, teamwork
appreciation, mastery of improvement methodologies, and a
comprehension of the process of personal motivation and
learning are all required for TQM. TQM's very requirements are
thwarted by performance appraisal. TQM necessitates that we
comprehend, control, and improve processes in order to benefit
the consumer. The goal of performance appraisal is to ensure that
an individual's behaviour is controlled to the satisfaction of his or
her boss. Managers must choose between the two approaches:
one or the other, but not both.

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8. Rocio de Andres (2010) looked into Distance function approaches

are used to evaluate performance. Some companies use
performance appraisal to analyse their employees' efficiency and
production in order to plan their promotion, wage, and layoff
policies, among other things. Initially, only the executive staff
carried out this procedure, but it has since grown into an
evaluation process based on the opinions of many reviewers,
supervisors, collaborators, consumers, and the employees
themselves (360-degree method). Reviewers analyse several signs
connected to an employee's performance appraisal in such a
process. The authors of this research proposed an evaluation
system in which diverse groups of reviewers participate in the
evaluation process. Given that reviewers have varying levels of
knowledge about the employee being evaluated, it appears
reasonable to provide a flexible framework in which reviewers can
express their opinions on multiple finite scales based on their
expertise. The ultimate goal is to create a global appraisal for each
employee that the management team may use to make decisions
about human resources strategy. In this way, the authors
suggested a mechanism for aggregating individual valuation in a
framework measure in order to achieve a global evaluation for
each employee. The underlying optimization problems can be
simplified to a fairly simple Extended Goal Programming
formulation in this application.

9. Yee C. C. and Y. Y. Chen (2009) The Multifactorial Evaluation Model

was studied in relation to the Performance Appraisal System.
Employee performance evaluation is critical in managing an
organization's human resource. Maintaining talented knowledge
workers is crucial as the economy shifts to information-based
capitalism. However, deciding whether a performance is
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"excellent," "bad," or "average" is a difficult issue for

management. Furthermore, in the absence of a formal appraisal
system, superiors may prefer to rate their subordinates' work
performance informally and arbitrarily. The authors of this work
suggested a performance appraisal system that uses a
multifactorial evaluation model to deal with appraisal grades that
are frequently expressed in ambiguous linguistic ways. The
proposed methodology is for assessing employee performance
based on predetermined performance appraisal criteria. The
project was a partnership with one of Malaysia's leading
information and communication technology companies on its
performance rating procedure.

10.Angelo DeNisi & Caitlin E. Smith(2014)Researched the design and

implementation of performance assessment and management
systems to improve efficiency. The study focuses on a model that
demonstrates how enhanced performance requires solid HR
practises, fair assessment systems, effective performance
management, and a clear understanding of an organization's
overall strategic goals. The model is supported by three pillars:
motivation, evaluation, and results management. The model
depicts a perception of a relationship between effort put in and
expected outcomes, as well as a perception of a relationship
between the achieved result and the expected level of
assessment, and a perception of a link between the level of
evaluation and the evaluation's outcome. These connections lay
the groundwork for figuring out how assessment and input might
lead to better results. After analysing the academic and practise
classes, the researcher determined that utilising a motivating
method was the best way to incorporate the numerous minutes
and parts that had been obtained, and offered a research
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framework based on the findings. Using an expectancy based

motivational model, a set of study plans centred on contextual
and system variables that would help with appraisals and
performance management, resulting in increased individual
performance, were established.

11.Badawy (2007) reports on appraising performance of technical

professionals for the last 50 years that technicals professional
generally believe R&D cannot be controlled in the traditional
managerial scale it can only be monitored measured measured
and evaluated. They further believe that only other technical
professional can monitors measures and evaluate R&D
performance properly.

12.Landy et al(1978) studied employee perception of the fairness

and accuracy of a performance appraisal system the researchers
found that frequency of evalvation identification of goals to
eliminate weaknesses and supervisory knowledge of a
subordinates levels of performance and job duties were
significantly related to perception fames and accurancy of
performance appraisal.

13.Horvath & Andrews (2007) researchers have found that fairness

perceptions relates to many different outcomes however they
cannot predict when an employee will react against a specific
individual or against the organization itself .to address this
questions the authors integrated the fairness and blame
attribution literature, they predicted that blame attribution would
strengthen the relationship between fairness perceptions and
reaction to specific organizational agents.
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14.Walsh (2003) conducted study of employee perception of fairness

of performance appraisal in two large government organizational
based on four-factors model of organizational justice.

15.Robert and reed (1996) found evidence of a positive relationship

between satisfaction and acceptance of performance appraisal
outcomes with employee perception that their supervisor
encouraged participation assisted in goal setting and provided
frequently feedback.

16.Ashima Aggarwal, Gour Sundar Mitra Thakur (2013) conducted a

review on the methods of performance appraisal. After the
research, the authors came to the conclusion that determining
whether one methodology is better than another is challenging
because it relies on the nature and size of the organisation. Every
methodology has its own pros and cons.

17.Lawler et al, (1984) have concluded that in order to check the

effectiveness of any performance appraisal system, two
perspectives must be taken into consideration. One is two check
the efficiency and effectiveness of system from management
point of view. Muhammad Shaukat Malik, Surayya Aslam 181
Second is to check the performance appraisal system from
subordinate or appraise’s perspective.

18. Matlala (2011) ‘Employee Fairness Perceptions of a Performance

Management System’ concluded that employees at the
organization have a negative perception of the fairness of their
organizations performance management system. It is also clear
that employees’ perceptions of fairness are influenced by
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distributive, procedural and interactional justice factors as

outlined.

19.Rajput, et al, (2015) in their article titled ‘Performance Appraisal

System’ explain that performance appraisal is conducted on an
annual basis for existing employees whereas for trainee and new
recruits it is done on quarterly basis in many organizations. Thus,
Employees who have relatively less competition or lenient
appraisers have higher appraisal than to equally competent
employee.

20.Muhammad Shaukat Malik et al. (2013) determined performance

appraisal’s impact on attitudinal outcomes and employee
development. This investigation aims to fill that void. Human
resource management is a priority for technology-intensive
organizations in developing countries such as Pakistan, and the
telecom sector is one of these sectors. This empirical study
investigated the relationship between what employees perceive
about performance appraisal and the impact this perception has
on their work motivation in the Pakistan telecom sector. They
gather information by asking 120 respondents. Perceive fairness is
identified as a critical dimension of the performance appraisal for
employee motivation. They conclude that performance appraisal
is helpful to employees' motivation.

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3.NEED OF THE STUDY

I. Provide information about the performance ranks basing

on which decisions regarding promotion and demotion
are taken.

II. Provide feedback information about the level of

achievement and behaviour of subordinates.

III. Provide information which helps to counsel the

subordinates.

IV. Provide information to diagnose in employees regarding

skill, knowledge, developmental needs.

V. To prevent grievances and in disciplinary activities.

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4. OBJECTIVES

I. To evaluate the performance of the employee.

II. To facilitates the training and development for employee.

III. To measure the level of transparency in performance

appraisal system of the organisation.

IV. It is to view that how the present appraisal system has

contributed towards the efficiency and effectiveness of
the employees in the organization.

V. The objective of the study is also to feel the pulse of the

employee’s views and their suggestions

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5. SCOPE OF THE STUDY

I. In the present study an attempt has been made to know the

actual implementation of performance appraisal techniques.

II. A thorough analysis of the performance appraisal system will

help the management to know the short comings, if any.

III. It helps to understand whether the employees are aware about

the performance appraisal.

IV. It facilitates the efficient flow of information within the

organisation between employer and employee.

V. To know the employee perception towards the appraisal

system.

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6. Research methodology

Research methodology is a way of explaining how a researcher

intends to carry out their research. It's a logical, systematic plan to
resolve a research problem. A methodology details a researcher's
approach to the research to ensure reliable, valid results that
address their aims and objectives. It encompasses what data they're
going to collect and where from, as well as how it's being collected
and analysed.

A research methodology gives research legitimacy and provides

scientifically sound findings. It also provides a detailed plan that
helps to keep researchers on track, making the process smooth,
effective and manageable. A researcher's methodology allows the
reader to understand the approach and methods used to reach
conclusions.

The study is related to primary data.

This data has been taken from the company with the help of the
manager and by the survey the data which number of respondents.
While designing data collection procedure, adequate safeguards
against bias and unreliability have ensured. The collected data has
been examined for completeness, comprehensibility, consistently
and reliability.
Here in this study sampling method has been used.
The size of sampling is 30.

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7. LIMITATION OF THE STUDY

I. Bias In Performance Appraisal

One of the most significant issues and limitations of
performance appraisals is the possibility of bias. Personal
biases, race, gender, or age may influence evaluations. This can
result in unfair treatment, low morale, and a negative work
environment.

II. Limited Perspective

Performance appraisal is typically based on evaluating a single
individual, such as a supervisor or manager. This limited
perspective may not consider other factors, such as team
dynamics or external factors that impact performance.

III. Lack of Comprehensive Assessment

An employee who excels at impressing their superior could
receive a favorable evaluation, even if their reputation within
their own department is less than stellar. In these instances,
the performance appraisal may be superficial and not reflective
of true capabilities.

IV. Inaccurate Assessment

Performance appraisal can be inaccurate due to a lack of clear
criteria or subjective measures. This can result in an unreliable
evaluation of employee performance, leading to
misunderstandings and confusion.

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V. Issue with Average Ratings

Top managers need to justify when they assign extremely low
or high ratings, leading to a common pitfall in performance
appraisal where all employees receive average ratings.
VI.

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