CHAPTER-1

INTRODUCTION

Performance appraisal

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Performance appraisal, also known as employee appraisal, is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career developmentPerformance appraisals are regular reviews of employee performance within organizations

It is useful if these goals can be quantified. For example, one goal for a brand manager could be that his brand must have at least X per cent awareness in the market Making the goals quantitative in nature makes evaluation easier and less subjective; and therefore less susceptible to suspicions of “unfairness”.

However, it is not a good idea to get caught up in making all goals quantitative. It is a fact of life that not all things can be measured or quantified; for instance, courtesy.

If a front desk’s performance is to be evaluated on the level of courtesy shown to visitors, then this cannot be quantified very easily but certain pointers can be got from the number of complaints about discourtesy and general observations about the person’s deportment, among others .Such non-quantifiable measures will involve a certain amount of subjectivity.

Subjectivity need not automatically mean bias. There are steps that ensure that subjectivity does not degenerate to bias in the performance appraisal context one such step is periodicity. It is useful if some form of appraisal can be done every three months.

This would tell the person whether he / she is going in the right direction, and what extra efforts / course correction are required to improve the performance .Another crucial requirement is transparency. Too often, people are told something like “your performance has been good, but I wouldn’t say excellent” and that they need to try harder. Such

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feedback is little better than useless as it offers no direction whatsoever to the individual. The individual needs to know what scores he / she is being given and why. One of the main reasons why transparency is a casualty in most appraisals is that most managers are not comfortable giving negative feedback .Maybe it is a cultural issue, but pointing out problems or giving negative feedback in a one-on-one face-to-face setting and in a calm matter-of-fact manner is not something most managers are comfortable doing. For that matter, most individuals are not comfortable receiving this either. This can only be tackled through extensive counselling and this too needs to start well before appraisal time.

Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.

2. The supervisor analyses the factors behind work performances of employees.

3. The employers are in position to guide the employees for a better performance

Objectives of Performance Appraisal. Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

2. To identify the strengths and weaknesses of employees to place right men on right job.

3. To maintain and assess the potential present in a person for further growth and development.

4. To provide a feedback to employees regarding their performance and related status.

5. To provide a feedback to employees regarding their performance and related status.

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6. It serves as a basis for influencing working habits of the employees.

7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.

4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.

5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:

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a. Through performance appraisal, the employers can understand and accept skills of subordinates.

b. The subordinates can also understand and create a trust and confidence in superiors.

c. It also helps in maintaining cordial and congenial labour management relationship.

d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Performance appraisal

Performance appraisal is a part of career development. Performance appraisals are regular reviews of employee performance within organizations. The aims of a performance appraisal are to Give feedback on performance to employees. Identify employee training needs.Document criteria used to allocate organizational rewards Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc Provide the opportunity for organizational diagnosis and development . Facilitate communication between employee and administrator .Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employ yees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360° appraisal.

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The most popular methods that are being used as performance appraisal process are: 1) Management by objectives2) 360 degree appraisal3) Behavioural Observation Scale4) Behaviourally Anchored Rating Scale

Trait based systems, which rely on factors such as integrity and conscientiousness, are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two-fold:1) Because trait based systems are by definition based on personality traits ,they make it difficult for a manager to provide feedback that can cause positive change in employee performance2) Trait based systems, because they are vague, are more easily influenced by office politics, causing them to be less reliable as a source of information on an employee's true performance.

Effective performance appraisalA tricky issue facing most organizations is the carrying out of effective andfair performance appraisal. Far too often companies find that many employees are left grumbling about “unfairness” and bias.While first accepting that there is probably no system which is close to perfect, let us look at some key criteria that an appraisal system must satisfy.At a macro-level, the aim of the performance appraisal from the company’s point of view cannot be to just determine increments or promotions. Yes ,that is how it affects the individuals, but it cannot be the organization’s aim .The organization’s aim has to be to put in place a system that actually improves performance.The first step must be to understand clearly what is expected from each employee / position in the organization. And this must be done well before appraisal time, even before the appraisal year starts, in fact.For instance, if the job of the Corporate Communications manager is to ensure that all mass communication about the brands and about the company is effective and in cohesion, then these should be laid out as her

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primary performance appraisal criteria. Once the criteria are clearly laid out,they should be communicated to her in unambiguous fashion so that she knows what to work towards and how she is going to be evaluated.

Following are the tools used by the organizations for Performance Appraisals of their employees.

1. Ranking2. Paired Comparison3. Forced Distribution4. Confidential Report5. Essay Evaluation6. Critical Incident7. Checklists8. Ranking Method

The ranking system requires the rater to rank his subordinates on overall performance. This consists in simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is tested in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group.

Advantages of Ranking Method

1. Employees are ranked according to their performance levels.

2. It is easier to rank the best and the worst employee.

Limitations of Ranking Method

3. The “whole man” is compared with another “whole man” in this method. In practice, it is very difficult to compare individuals possessing various individual traits.

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4. This method speaks only of the position where an employee stands in his group. It does not test anything about how much better or how much worse an employee is when compared to another employee.

5. When a large number of employees are working, ranking of individuals become a difficult issue.

6. There is no systematic procedure for ranking individuals in the organization. The ranking system does not eliminate the possibility of snap judgements.

9. Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates to certain categories (eg: superior, above average, average) or percentiles (eg: top 10 percent, bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted to each category are a function of performance appraisal design and format. The workers of outstanding merit may be placed at top 10 percent of the scale; the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10 % fair.

Advantages of Forced Distribution

1. This method tends to eliminate raters bias2. By forcing the distribution according to pre-

determined percentages, the problem of making use of different raters with different scales is avoided.

Limitations of Forced Distribution

3. The limitation of using this method in salary administration, however, is that it may lead low morale, low productivity and high absenteeism. 

Employees who feel that they are productive, but find themselves in lower grade(than expected) feel frustrated and exhibit over a period of time reluctance to work.

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10. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective behaviour of an employee. These critical incidents or events represent the outstanding or poor behaviour of employees or the job. The manager maintains logs of each employee, whereby he periodically records critical incidents of the workers behaviour. At the end of the rating period, these recorded critical incidents are used in the evaluation of the worker’s performance. Example of a good critical incident of a Customer Relations Officer is : March 12 - The Officer patiently attended to a customers complaint. He was very polite and prompt in attending the customers problem.

Advantages of Critical Incident techniques

1. This method provides an objective basis for conducting a thorough discussion of an employees performance.

2. This method avoids recency bias (most recent incidents are too much emphasized)

Limitations of Critical Incident techniques

3. Negative incidents may be more noticeable than positive incidents.

4. The supervisors have a tendency to unload a series of complaints about the incidents during an annual performance review sessions.

5. It results in very close supervision which may not be liked by an employee.

6. The recording of incidents may be a chore for the manager concerned, who may be too busy or may forget to do it.

12. Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each statement has a weight or scale value attached to it. While rating an employee the

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supervisor checks all those statements that most closely describe the behaviour of the individual under assessment. The rating sheet is then scored by averaging the weights of all the statements checked by the rater. A checklist is constructed for each job by having persons who are quite familiar with the jobs. These statements are then categorized by the judges and weights are assigned to the statements in accordance with the value attached by the judges.

Advantages of Checklists and Weighted Checklists

7. Most frequently used method in evaluation of the employee’s performance.

Limitations of Checklists and Weighted Checklists

8. This method is very expensive and time consuming9. Rater may be biased in distinguishing the positive

and negative questions.10. It becomes difficult for the manager to

assemble, analyze and weigh a number of statements about the employee’s characteristics, contributions and behaviours.

Generally, the aims of a performance appraisal are to:

1) Give feedback on performance to employees.

2) Identify employee training needs.

3) Document criteria used to allocate organizational rewards.

4.) Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.

5) Provide the opportunity for organizational diagnosis and development.

6) Facilitate communication between employee and administrator.

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7) Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360° appraisal.

It is useful if these goals can be quantified. For example, one goal for a brand manager could be that his brand must have at least X per cent awareness in the market Making the goals quantitative in nature makes evaluation easier and less subjective; and therefore less susceptible to suspicions of “unfairness”.

However, it is not a good idea to get caught up in making all goals quantitative. It is a fact of life that not all things can be measured or quantified; for instance, courtesy. If a front desk’s performance is to be evaluated on the level of courtesy shown to visitors, then this cannot be quantified very easily but certain pointers can be got from the number of complaints about discourtesy and general observations about the person’s deportment, among others.

Such non-quantifiable measures will involve a certain amount of subjectivity .Subjectivity need not automatically mean bias. There are steps that ensure that subjectivity does not degenerate to bias in the performance appraisal context one such step is periodicity. It is useful if some form of appraisal can be done every three months.

This would tell the person whether he / she is going in the right direction, and what extra efforts / course correction are required to improve the performance. Another crucial requirement is transparency.

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Too often, people are told something like “your performance has been good, but I wouldn’t say excellent” and that they need to try harder. Such feedback is little better than useless as it offers no direction whatsoever to the individual.

The individual needs to know what scores he / she is being given and why! One of the main reasons why transparency is a casualty in most appraisals is that most managers are not comfortable giving negative feedback .Maybe it is a cultural issue, but pointing out problems or giving negative feedback in a one-on-one face-to-face setting and in a calm matter-of-fact manner is not something most managers are comfortable doing. For that matter, most individuals are not comfortable receiving this either.

This can only be tackled through extensive counselling and this too needs to start well before appraisal time Employees also need to be counselled that the amount of increment given is dependent on the appraisal score, but is equally dependent on the company’s financial performance and outlook. This again has to be handled with a certain degree of tact. In many companies, such decisions are veiled in secrecy and there is talk of “normalization” which no one really understands. Transparency is again crucial to dispel lingering doubts of bias. Effective performance appraisal clearly needs a lot more than the few points outlined here, but attention given to these points will go a long way indeed.

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CHAPTER-2 – INDUSTRY PROFILE

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The automotive industry is a term that covers a wide range of companies and organisations involved in the design, development, manufacture, marketing, and selling of motor vehicles, towed vehicles, motorcycles and mopeds. It is one of the world's most important economic sectors by revenue.

The term automotive industry usually does not include industries dedicated to the maintenance of automobiles following delivery to the end-user, such as repair shops and motor fuel filling stations.

The term automotive was created from Greek autos (self), and Latin motivus (of motion) to represent any form of self-powered vehicle. This term was proposed by SAE member Elmer Sperry.

History

Karl Benz made the 1886 Benz Patent Motorwagen in Mannheim, Germany, widely regarded as the first automobile

The first practical automobile with a petrol engine was built by Karl Benz in 1885 in Mannheim, Germany. Benz was granted a patent for his automobile on 29 January 1886, and began the first production of automobiles in 1888, after Bertha Benz, his wife, had proved with the first long-distance trip in August 1888 (104 km (65 mi) from Mannheim to Pforzheim and back) that the horseless coach was absolutely suitable for daily use. Since 2008 a Bertha Benz Memorial Route commemorates this event.

Soon after, in 1889, Gottlieb Daimler and Wilhelm Maybach in Stuttgart designed a vehicle from scratch to be an automobile, rather than a horse-drawn carriage fitted with an engine. They also are usually credited as inventors of the first motorcycle, the Daimler Reitwagen, in 1885, but Italy's Enrico Bernardi, of the University of Padua, in 1882, patented a 0.024 horsepower (17.9 W) 122 cc (7.4 cu in) one-cylinder petrol motor, fitting it into his son's tricycle, making it at least a candidate for the first

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automobile, and first motorcycle. Bernardi enlarged the tricycle in 1892 to carry two adults.

For many decades, the United States led the world in total automobile production. In 1929 before the Great Depression, the world had 32,028,500 automobiles in use, and the US automobile industry produced over 90% of them. At that time the U.S. had one car per 4.87 person. After WWII the U.S. issued 3/4 of world's auto production. In 1980 the U.S. was overtaken by Japan and became world's leader again in 1994. In 2006, Japan narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8 million units. By producing 18.4 million units in 2011, China produced more than twice the number of second place the U.S. with 8.7 million units, with in Japan third place with 8.4 million units.

Safety

Today’s vehicles are graded on stricter and more precise parameters than ever before from weight to safety to durability and anywhere and everywhere in between. New materials have brought out new techniques for construction and vehicle design.

The introduction of plastics has advanced the technology used for making newer vehicles. New plastics technologies allow manufactures to answer to the call for advancements. Plastics can be used in various technologies on vehicles for structural safety to visual appearance.

These new plastic innovations allow new technologies to be used in vehicles for safety to comfort purposes. Plastics also allow for cost effective changes to be made to newer vehicle while still maintaining high safety and comfort requirements of the industry. These advancements in plastic material usage in

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modern vehicles are the footholds for the future of the automotive industry.

ECONOMY

Around the world, there were about 806 million cars and light trucks on the road in 2007, consuming over 260 billion US gallons (980,000,000 m3) of gasoline and diesel fuel yearly. The automobile is a primary mode of transportation for many developed economies. The Detroit branch of Boston Consulting Group predicts that, by 2014, one-third of world demand will be in the four BRIC markets (Brazil, Russia, India and China). Other potentially powerful automotive markets are Iran and Indonesia.

Emerging auto markets already buy more cars than established markets. According to a J.D. Power study, emerging markets accounted for 51 percent of the global light-vehicle sales in 2010. The study expects this trend to accelerate.

By year

Global production of motor vehicles

(cars and commercial vehicles)

Year Production Change

1997 54,434,000  

1998 52,987,000 -2.7%

1999 56,258,892 6.2%

2000 58,374,162 3.8%

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2001 56,304,925 -3.5%

2002 58,994,318 4.8%

2003 60,663,225 2.8%

2004 64,496,220 6.3%

2005 66,482,439 3.1%

2006 69,222,975 4.1%

2007 73,266,061 5.8%

2008 70,520,493 -3.7%

2009 61,791,868 -12.4%

2010 77,857,705 26.0%

2011 79,989,155 3.1%

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 Automotive industry in India

The automotive industry in India is one of the larger markets in the world and had previously been one of the fastest growing globally, but is now seeing flat or negative growth rates. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011.

 According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France and Brazil), grew 16 to 18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars.

As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world in that year. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected.

The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%.[7] Chennai, is also referred to as the "Detroit of India" with the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, and PSA Peugeot Citroën is about to begin their operations by 2014. Chennai accounts for 60% of the country's automotive exports.[9] 

Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is

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based.[ The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors,Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the area.

Nashik has a major base of Mahindra & Mahindra with a UV assembly unit and an Engine assembly unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat .Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.

History

The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers.

An embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles. Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry.

However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. Total restrictions for import of vehicles were set and after 1970 the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters.

Cars were still a major luxury. Eventually multinational automakers, such as, though not limited to, Suzuki and Toyota

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of Japan and Hyundai of South Korea, were allowed to invest in the Indian market ultimately leading to the establishment of an automotive industry in India. A number of foreign firms also initiated joint ventures with Indian companies.

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CHAPTER-3- COMPANY PROFILE

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Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured in Pakistan and other South Asian countries.[citation needed]

The company exports more than 50,000 cars annually and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts but Maruti Suzuki's Swift has taken over this titles by 19000 models in April 2012.The company imports diesel engines for all maruti Suzuki cars from the fiat motors the great Italian company.The German car company Volkswagen has a 19.9% non-controlling shareholding in Suzuki Motor Corporation.[citation needed]

Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi. Maruti Suzuki’s Gurgaon facility has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually. More than half the cars

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sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India.[citation needed]

During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 15 models, Maruti 800, Alto, Maruti Alto 800, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi and the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built units(CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.[citation needed] The company is believed to be moving towards introduction of a new version of Maruti 800 by November 2012, which will be more fuel efficient, though slightly costlier than Alto and existing Maruti 80 Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzuki’s technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific. Maruti Suzuki will be introducing new 800cc model by Diwali in 2012.The model is supposed to be fuel efficient.

Joint venture related issues

Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media till Suzuki Motor Corporation gained the controlling

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stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have a tenure of five years.

R.C. Bhargava was the initial managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five-year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. In 1987 he was promoted as Chief General Manager. In 1988 he was named Director, Productions and Projects. The next year (1989) he was named Director of Materials[clarification needed] and in 1993 he became Joint Managing Director.

Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board with the reason of it being called on a short notice. Later Suzuki Motor Corporation went on record to state that Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki sources that Bhaskarudu was interested to indigenise most of components for the models including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for

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the Government and would not let it increase its stake in the venture.[15] If Maruti Suzuki would have been able to indigenise gear boxes then Maruti Suzuki would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press.

Industrial relations

Since its founding in 1983, Maruti Udyog Limited experienced few problems with its labour force. The Indian labour it hired readily accepted Japanese work culture and the modern manufacturing process. In 1997, there was a change in ownership, and Maruti became predominantly government controlled. Shortly thereafter, conflict between the United Front Government and Suzuki started. Labour unrest started under management of Indian central government. In 2000, a major industrial relations issue began and employees of Maruti went on an indefinite strike, demanding among other things, major revisions to their wages, incentives and pensions.

Employees used slowdown in October 2000, to press a revision to their incentive-linked pay. In parallel, after elections and a new central government led by NDA alliance, India pursued a disinvestments policy. Along with many other government owned companies, the new administration proposed to sell part of its stake in Maruti Suzuki in a public offering.

The worker's union opposed this sell-off plan on the grounds that the company will lose a major business advantage of being subsidised by the Government, and the union has better protection while the company remains in control of the government.

The standoff between the union and the management continued through 2001. The management refused union demands citing increased competition and lower margins. The

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central government prevailed and privatized Maruti in 2002. Suzuki became the majority owner of Maruti Udyog Limited.

Manesar violence July 2012

On 18 July 2012, Maruti's Manesar plant was hit by violence as workers at one of its auto factories attacked supervisors and started a fire that killed a company official and injured 100 managers, including two Japanese expatriates. The violent mob also injured nine policemen. The company's General Manager of Human Resources had both arms and legs broken by his attackers, unable to leave the building that was set ablaze, and was charred to death. The incident is the worst-ever for Suzuki since the company began operations in India in 1983.

Since April 2012, the Manesar union had demanded a three-fold increase in basic salary, a monthly conveyance allowance of 10,000, a laundry allowance of 3,000, a gift with every new car launch, and a house for every worker who wants one or cheaper home loans for those who want to build their own houses.

Initial reports claimed wage dispute and a union spokesman alleged the incident may be caste-related. According to the Maruti Suzuki Workers Union a supervisor had abused and made discriminatory comments to a low-caste worker.These claims were denied by the company and the police. The supervisor alleged was found to belong to a tribal heritage and outside of Hindu caste system; further, the numerous workers involved in violence were not affiliated with caste either. Maruti said the unrest began, not over wage discussions, but after the workers' union demanded the reinstatement of a worker who had been suspended for beating a supervisor.

The workers claim harsh working conditions and extensive hiring of low-paid contract workers which are paid about $126 a month, about half the minimum wage of permanent employees.

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Maruti employees currently earn allowances in addition to their base wage. Company executives denied harsh conditions and claim they hired entry-level workers on contracts and made them permanent as they gained experience. It was also claimed that bouncers were deployed by the company.

India Today claimed that its interviews of witnesses present at the plant confirm the dispute was over the suspended worker. The management insisted that they must wait for completion of inquiry underway before they can take any action on the employee suspended for beating up his supervisor. The management was then told, "You will be beaten up after we get a signal." Thereafter, the workers broke up into groups, went on to set the shop floor as well as all offices afire.

They searched for management officials and proceeded with a barbaric beating of the officials at the site with iron rods.

The police, in its First Information Report (FIR), claimed on 21 July that Manesar violence may be the result of a planned violence by a section of workers and union leaders. The report claimed the worker's action was recorded on close circuit cameras installed within the company premises. The workers took several managers and high ranked management officials hostage.

The responsible Special Investigative Team official claimed, "some union leaders may be aware of the facts, so they burnt down the main servers and more than 700 computers." The recorded CCTV footage has been used to determine the sequence of events and people involved. Per the FIR, police have arrested 91 people and are searching for 55 additional accused.

Maruti Suzuki in its statement on the unrest, announced that all work at the Manesar plant has been suspended indefinitely. A

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Suzuki spokesman said Manesar violence won't affect the auto maker's business plans for India.

The shut down of Manesar plant is leading to a loss of about Rs 75 crore per day. On July 21, 2012, citing safety concerns, the company announced a lockout under The Industrial Disputes Act, 1947 pending results of an inquiry the company has requested of the Haryana government into the causes of the disorder.

Under the provisions of The Industrial Disputes Act for wages, the report claimed, employees are expected to be paid for the duration of the lockout On July 26, 2012, Maruti announced employees would not be paid for the period of lock-out in accordance with Indian labour laws. The company further announced that it will stop using contract workers by March 2013.

The report claimed the salary difference between contract workers and permanent workers has been much smaller than initial media reports - the contract worker at Maruti received about 11,500 per month, while a permanent worker received about 12,500 a month at start, which increased in three years to 21,000-22,000 per month. In a separate report, a contractor who was providing contract employees to Maruti claimed the company gave its contract employees the best wage, allowances and benefits package in the region.

Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki India, said this kind of violence has never happened in Suzuki Motor Corp's entire global operations spread across Hungary, Indonesia, Spain, Pakistan, Thailand, Malaysia, China and the Philippines.

Mr. Nakanishi went to each victim apologising for the miseries inflicted on them by fellow workers, and in press interview requested the central and Haryana state governments to help

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stop such ghastly violence by legislating decisive rules to restore corporate confidence amid emergence of this new 'militant workforce' in Indian factories. He announced, "we are going to de-recognise Maruti Suzuki Workers’ Union and dismiss all workers named in connection with the incident.

We will not compromise at all in such instances of barbaric, unprovoked violence." He also announced Maruti plans to continue manufacturing in Manesar, that Gujarat was an expansion opportunity and not an alternative to Manesar.

Labour disputes are endemic in the auto industry of India and have affected other manufacturers. India has strict labour laws, but their application is widely sidestepped by hiring low-wage contract workers. Manesar violence adds to India's recent incidents of labour disputes turning to violence.

Analysts claim recent incidents like Manesar violence suggest a need for urgent reform of archaic Indian labour laws, the rigid rules on hiring and layoffs, which harm the formal sector and discourage investment in India.

Government mandated procedures for labour dispute resolution are currently very slow, with tens of thousands of cases pending for years. The government of India is being asked to recognise that incidents such as Manesar violence indicate a structural sickness which must be solved nationally.

The company dismissed 500 workers accused of causing the violence and re-opened the plant on August 21, saying it would produce 150 vehicles on the first day, less than 10% of its capacity. Analysts said that the shutdown was costing the company 1 billion rupees ($18 million) a day and costing the company market share.

The previous week company officials had announced that Maruti would scrap the practice of hiring contract workers and that the workers currently on temporary contracts would be

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made permanent. It would begin the process of hiring new workers on a permanent basis from September 2, 2012.

Services offered

Red Bull Maruti Suzuki Alto

Red Bull Maruti Suzuki Swift

Maruti Omni

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India's Corps of Military Police personnel patrolling the Wagah border crossing in thePunjab in a Maruti Gypsy.

Maruti Alto

Maruti Suzuki Swift

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Maruti Suzuki Zen Estilo

Suzuki SX4

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7th Generation Suzuki Alto is sold as Maruti Suzuki A-Star in India.

Maruti Suzuki Swift DZire

Suzuki Splash is sold as Maruti Suzuki Ritz in India.

1. 800  (Launched 1983)2. Omni  (Launched 1984)3. Gypsy  (launched 1985)4. WagonR  (Launched 1999)5. Alto  (Launched 2000)6. Swift  (Launched 2005)

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7. Estilo  (Launched 2007)8. SX4  (Launched 2007)9. Swift DZire  (Launched 2008)10. A-star  (Launched 2008)11. Ritz  (Launched 2009)12. Eeco  (Launched 2010)13. Alto K10  (Launched 2010)14. Maruti Ertiga (Launched 2012), seven seater MPV R3

designed and developed in India, will compete with Toyota Innova, Mahindra Xylo, and Tata Sumo Grande. In early 2012, Suzuki Ertiga will be exported first to Indonesia in Completely Knock Down car.

15. Maruti XA Alpha  based compact SUV to compete with the Ford EcoSport & Renault Duster will be launched in the year 2014

16. Maruti Alto 800 (Launched 2012), Maruti Alto 800 is finally out with a price tag of Rs.2.44 lakh (ex-showroom New Delhi). Maruti has rolled out three standard variants-Alto 800 Base, Alto 800 LX and Alto 800 LXi and three CNG variants -Alto 800 CNG Base,Alto 800 CNG LX and Alto 800 CNG LXi. The 0.8 litre of petrol engine is very fuel efficient and pushes the car to produce high class mileage of 17 to 22 km per litre. The 45.7BHP of peak power produced by the engine is also successful on road by delivering top-notch performance.

Imported

Suzuki Grand Vitara

1. Grand Vitara  (Launched 2007)2. Kizashi  (Launched 2011)

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[edit]Discontinued car models

1. 1000  (1990–2000)2. Zen  (1993–2006)3. Esteem  (1994–2008)4. Baleno  (1999–2007)5. Versa  (2001–2010)6. Grand Vitara XL7  (2003–2007)

Manufacturing facilities

Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a combined production capacity of 14,50,000 vehicles annually. During a recent meeting of the Gujarat chief minister with Suzuki Motor Corp chairman & CEO Osamu Suzuki,the Chairman had said that the work on car manufacturing plant at Mandal near Ahmedabad would be started soon. Maruti Suzuki to set up second plant in Gujarat; acquires 600 acres

Gurgaon Manufacturing Facility

The Gurgaon Manufacturing Facility has three fully integrated manufacturing plants and is spread over 300 acres (1.2 km2). All three plants have an installed capacity of 350,000 vehicles annually but productivity improvements have enabled it to manufacture 900,000 vehicles annually.

The Gurgaon facilities also manufacture 240,000 K-Series engines annually. The entire facility is equipped with more than 150 robots, out of which 71 have been developed in-house. The Gurgaon Facilities manufactures the 800, Alto, WagonR, Estilo, Omni, Gypsy, Ertiga and Eeco.

Manesar Manufacturing Facility

The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 600 acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this was increased to 300,000 vehicles annually in October 2008. The production capacity was further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles annually. The Manesar Plant produces the A-star, Swift, Swift DZire, SX4 and Ritz.

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Government Notice to Pay Rs 235 Crore for Manesar Plant Land allotment

On June 25, 2012, Haryana State Industries and Infrastructure Development Corporation demanded Maruti Suzuki to pay an additional Rs 235 crore for enhanced land acquisition for its Haryana plant expansion. The agency reminded Maruti that failure to pay the amount would lead to further proceedings and vacating the enhanced land acquisition.

Sales and service network

As of 31 March 2011 Maruti Suzuki has 933 dealerships across 666 towns and cities in all states and union territories of India. It has 2,946 service stations (inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,395 towns and cities throughout India.[ It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India.

Service is a major revenue generator of the company. Most of the service stations are managed on franchise basis, where Maruti Suzuki trains the local staff. Other automobile companies have not been able to match this benchmark set by Maruti Suzuki. The Express Service stations help many stranded vehicles on the highways by sending across their repair man to the vehicle.

Maruti Insurance

Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited

This service started as a benefit or value addition to customers and was able to ramp up easily. By December 2005 they were able to sell more than two million insurance policies since its inception.

Maruti Finance

To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and

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Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan. Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance.

Again the company entered into a strategic partnership with SBI in March 2003 Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.

"Maruti Finance marks the coming together of the biggest players in the car finance business. They are the benchmarks in quality and efficiency. Combined with Maruti volumes and networked dealerships, this will enable Maruti Finance to offer superior service and competitive rates in the marketplace". — Jagdish Khattar, Managing director of Maruti Udyog Limited in a press conference announcing the launch of Maruti Finance on 7 January 2002

Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti Udyog Limited its primary business stated by the company is "hire-purchase financing of Maruti Suzuki vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti Suzuki holds the remaining 26%. GE Capital, HDFC and Maruti Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims that its finance program offers most competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates.

Maruti TrueValue

Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with the help of this service in India. As of 31 March 2010 there are 341 Maruti True Value outlets.]

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N2N Fleet Management

N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporates. Clients who have signed up of this service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management service include end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience services and Remarketing.

Accessories

Many of the auto component companies other than Maruti Suzuki started to offer components and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti Suzuki.

Maruti Suzuki started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products. These products are sold through dealer outlets and authorized service stations throughout India.[

Maruti Driving SchoolAs part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving School in Delhi. Later the services were extended to other cities of India as well. These schools are modelled on international standards, where learners go through classroom and practical sessions. Many international practices like road behaviour and attitudes are also taught in these schools. Before driving actual vehicles participants are trained on simulators.

"We are very concerned about mounting deaths on Indian roads. These can be brought down if government, industry and the voluntary sector work together in an integrated manner. But we felt that Maruti should first do something in this regard and hence this initiative of Maruti Driving Schools." — Jagdish

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Khattar, at the launch ceremony of Maruti Driving School, Bangalore

Issues and problems

On 24 February 2010, Maruti Suzuki India announced recalling of 100,000 A-Star hatchbacks to fix a fuel leakage problem. the company will replace the gaskets for all 100,000 A-Star cars.

Exports

Maruti Exports Limited is the subsidiary of Maruti Suzuki with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignment of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country Maruti Suzuki crossed the benchmark of 300,000 cars.

Since its inception export was one of the aspects government was keen to encourage.[citation needed] Every political party expected Maruti Suzuki to earn foreign currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Nepal, Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti Exports.[citation needed]

Awards and recognition

The Brand Trust Report published by Trust Research Advisory has ranked Maruti Suzuki in the seventh position in 2011 and the sixth position in 2012 among the brands researched in India.

Bluebytes News, a news research agency, rated Maruti Suzuki as India's Most Reputed Car Company in their Reputation Benchmark Study conducted for the Auto (Cars) Sector which launched in April 2012.

ORGANISATIONAL STRUCTURE

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PERFORMANCE APPRAISAL IN MARUTI SUZUKI

APPRAISAL

· New Appraisal System based on KRAs & Targets· Review of Targets done at regular Intervals with special relevance to People Development an important KRA practise.

REWARD

· Promotions based on Performance· Productivity & Profit-linked IncentiveSchemes· Training including Long-term SMC Japan Trg

· Highest paid workforce in the Industry, if not the Country

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CAREER DESIGN

• Performance & Potential based Appraisals• Fast Track Option for High-performers• Promotions after Managers Vacancy based• Interviews for promotions above Managers• Selection of Supervisors:– Performance / Attendance / Discipline record– Written Test & Interview• Job Rotation - including Inter-functional

RETENTION & EMPLOYEE WELFARE· Employee Welfare

- Residential Colonies for Employees – Chakkarpur & Bhondsi- Hospitalisation Reimbursement – on actuals without Ceiling- Vehicle Loans- Household Equipment Loans- House Building Advance- Annual Advance· MUL PF Trust – for better Mgt., Service & speedy redress· Proposed MUL Pension Scheme

· Learning Opportunity - Benchmark in Auto Technology· Professional Value addition through Training· Opportunity for foreign training at SMC, Japan· Job Rotation & Job enrichment

EMPLOYEE ENGAGEMENT -ESOPs

• Maruti Udyog Ltd. Employees Mutual Benefit Fund Scheme• Managed by a 10-member Trust• Fixed Equity of 0.26%• Lock-in period of 3 years• Transferable Internally

SUGGESTION SCHEME & QUALITY CIRCLES

• For better quality and productivity. Through involvement of all employees and teamwork. During the year 1999-2000 :-i) Suggestions Implemented - 52,054ii) Cost Saving (in crores) - Rs. 131.69 Crores iii) Number of QC Groups - 510iv) QC Meetings held - 7189• Target for SS & QC for 2000-01,Suggestions Implemented - Prod. & VI - 1implmented/employee/month Other areas - 8.4 implemented/employee/month Cost Saving Rs. 165 crores (25%)increase for the Company QC Meeting - 13 meetings/QC Gp./ Year Target • Company-wide QC Groups (8-15 members

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per group)• Monthly QC Meetings on the First Wednesday each Month• Company-wide QC Competitions - Best Team sent to SMC• MD’s lunch with Best QC Team & Best Suggestion Winner

FUTURE CHALLENGES

- HR INITIATIVES

• REALIGNING ORGANISATION CULTURE BASED ONNEW VISION & VALUES

• OBJECTIVE PERFORMANCE MANAGEMENT & DEVELOPMENT SYSTEM

• TRANSPARENT JOB ROTATION & JOB ENRICHMENT

• PERFORMANCE LINKED REWARD AND RECOGNITION SYSTEM• CAREER PLANNING & PROMOTION POLICY

• REVISED RECRUITMENT POLICY

• COMPETENCY MAPPING

• STRONG FUCUS ON TRAINING INITIATIVES

- BUILD A LEARNNG ORGANISATION

- CONTINUOUS VALUE ADDITION TO PROFESSIONAL SKILL

- CUSTOMISED TRAINING

- TRAINING TO THE PERSONNEL OF BUSINESS PARTNERS

• INTERNAL COMMUNICATION

• UNION ALIGNMENT

• EMPLOYEE INVOLVMENT & PARTICIPATION

MUL to change gear on performance appraisal -- 100% link between pay, productivity

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RENEWING its efforts at cutting costs and improving productivity, Maruti Udyog Ltd (MUL) has drawn up a new human resources policy, which for the first time, entirely links performance to pay packets for all its executives and managers.

MUL has traditionally had a performance-based component of about 30 percent in its compensation package for its executives. But now it has gone the whole hog and decided that in addition to the hike in individual perquisites increments to even the basi c salary will now depend on the employees' performance during the year.

The new performance appraisal and compensation system is likely to affect over 1,000 employees -- executives and senior and middle level managers .Company officials said the changeover to a completely performance-based compensation system has been under discussion amongst MUL's senior management and directors for quite sometime now.

So, the new appraisal process has not come as a surprise for most of the employees and has been accepted by them, the official said. ``Over the past week, the principle underlying the new system has been communicated at length throughout the company and feedback has been obtained,'' theofficial said.In the run-up to the new remuneration system, the company has also developed a new performance measurement and development method along with the noted consultant, Mr M.B. Athreya.

The performance measurement process will complement the new remuneration s ystem.MUL sources said rather than appraise employees through confidential reports, the new performance measurement system involves an interactive process of goal setting, review and counselling by managers throughout the year.

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It incorporates qualitative aspects, along with quantitative targets.The employees are being put through workshops to train them on the various aspects of the system developed with Mr Athreya. The new system will take effect from this year.The new system is expected to help enhance managerial performance and skills, while making the organisation more capable of assessing its costs and returns.

The move is also indicative of the company's renewed stress on increasing per employee productivity.MUL, which has been beleaguered by low margins and a falling bottom line,has also been forced to take a hard look at its costs this year. For the first time, MUL has slipped into the red and recorded a loss during the year 2000-01.

MUL has also drawn up a voluntary retirement scheme (VRS) forits employees. The VRS programme received in-principle approval from the board last month. While the VRS proposal is yet to be formally notified and offered to the company's employees, it is expected to apply equally to all the staff members, including the shop floor workers, company sources said.

Maruti adopts `360 degree' appraisal system ( February '5,2007,HBL)

Maruti has introduced a unique 360-degree feedback system, starting with its senior leadership. The new system has been co-developed with Ernst & Young and has been put in place recently.

Under the 360-degree feedback system, the employee is rated not just by his superiors, but also by his peers and subordinates."We are starting the 360-degree feedback process with employees in the top management such as chief general managers and general managers, whose performance will now

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be assessed based on feedback from their peers and junior management employees within the same department.

Till last year,their performance was being appraised only by the Directors and the Managing Director," says Maruti's Chief General Manager (HR), Mr S.Y.Siddiqui.Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies that are expected in a general manager.

Based on that, it has prepared a questionnaire to which peers and subordinates can respond online.Although acknowledged as an effective tool for leadership development in the West, Indian companies have been shy of introducing such a feedback system for fear of disturbing traditional hierarchical structures.

HR consultants feel that the critical issues in implementing such a system include assuring respondents that their feedback will remain confidential and convincing the person receiving the feedback that this is a development tool and not an appraisal tool.

Maruti has handled this by getting E&Y and other consultants to make detailed presentations to the senior management personnel before the process got under way.

The company has a committee of general managers, called Human Resource Inter Divisional Committee(HRIDC), which is consulted on all major HR issues.The initiative has been unveiled with an e-mail by Maruti's Managing Director, Mr Jagdish Khattar, asking people to support the online questionnaire process.

The 360-degree feedback system will also include a self-appraisal by the general manager. At the end of the process,he can compare his self-appraisal with the assessment of his subordinates and peers.

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One of the benefits that Maruti is hoping to get out of the 360-degreefeedback process is the sense of empowerment and importance felt by subordinates, when they are asked to offer their feedback about their superiors. Maruti currently has over 4,000 employees on its rolls.

CHAPTER-4- SWOT ANALYSIS

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SWOT ANALYSIS

Maruti Suzuki is the market leader in India and has an amazing brand equity. Maruti is known for the service it provides and is synonymous with Maruti 800 – the longest running small car in India. Here is a SWOT of maruti suzuki, its strengths, weaknesses, opportunities and threats.

Strengths Maruti Udyog limited (MUL) is in a leadership position in the

market with a market share of 48.74

Major strength of MUL is having largest network of dealers and after sales service centers in the country.

Good promotional strategy is adopted by MUL to transfer its thoughts to the people about its products.

Maruti Suzuki recorded highest number of domestic sales with 9,66,447 units from 7,65,533 units in the previous fiscal. It recently attained the 10million domestic sales mark.

Strong Brand Value and Loyal Customer Base are big strengths for MUL

There are around 15 vehicles in Maruti Product portfolio. Has good product lines with good fuel efficiency like Maruti Swift, Diesel, Alto etc

Alto still beats the small car segment with highest number of sales

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MUL is the first automobile company to start second hand vehicle sales through its True-value entity.

MUL has good market share and hence it’s after sales service is a major revenue contributor.

Weaknesses Low interior quality inside the cars when compared to quality

players like Hyundai and other new foreign players like Volkswagen,Nissan etc.

Government intervention due to having share in MUL.

Younger generations started getting a great affinity towards new foreign brands

The management and the company’s labor unions are not in good terms. The recent strikes of the employees have slowed down production and in turn affecting sales.

Maruti hasn’t proved itself in SUV segment like other players.

Opportunities MUL has launched its LPG version of Wagon R and it was a good

move simultaneously

MUL can start R&D on  electric cars for a much better  substitute of the fuel.

Maruti’s cervo 600 has a huge potential in tapping the middle class segment and act as a strong threat to Nano

New DZire from Maruti will capture the market share and expected to create the same magic as Maruti Esteem(currently not available)

Export capacity of the company is giving new hopes in American and UK markets

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Economic growth of the country is constantly increasing and the government is working hard to increase the gdp to double digit.

Threats MUL recently faced a decline in market share from its 50.09%

to 48.09 % in the previous year(2011)

Major players like Maruti Suzuki, Hyundai, Tata has lost its market share due to many small players like many small players like Volkswagen- polo. Ford has shown a considerable increase in market share due to its Figo.

Tata Motors recent launches like Nano 2012, Indigo e-cs are imposing major threats to its respective competitor’s segment

China may give a good competition as they are also planning to enter into Indian car segment

Launch of Hyundai’s H800 may result in the decline of Alto sales

CHAPTER-5- RESEARCH DESIGN

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STATEMENT OF THE STUDY:

The statement of the study is to find out exactly how effective performance exactly is in studying the nature of the productivity and efficiency of the employee. The study will also enable us to understand the level of job satisfaction of the employee.

In addition to this it also helps the human resources department in maruti Suzuki to take decisions regarding promotions, demotions, payhikes, transfers, layoffs etc.

OBJECTIVE OF THE STUDY

1.The study aims to project the employee job satisfaction with the performance appraisal system existing in maruti Suzuki.

2. To see how effective the appraisal is in improving productivity.

3. To see what kind of appraisal methods the employees prefer.

4.To see what kind of apparaisal methods employees.

5. To see the overall effect of the appraisal system on the company as a whole.

SCOPE OF THE STUDY:

The purpose of this study has been to determine whether the performance appraisal was used for employee development and whether the appraisal was emphasized as an important part of the performance appraisal process. Also whether the performance appraisal helps in increasing company’s profitability. By the same token, appraisal results are used to identify the poorer performers who may require some form of support or training.

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SOURCES OF DATA:

There are two types of data, which are-

1.Primary data

2.Secondary data

PRIMARY DATA:-

Primary data is a term for data collected from a source. Raw data have not been subjected to processing or any other manipulation, and are also referred to as raw data.

Raw data is a relative term. Raw data can be input to a computer program or used in manual procedures such as analyzing statistics from a survey. The term can refer to the binary data on electronic storage devices such as hard disk drives (also referred to as low-level data).

In computing, raw data may have the following attributes: possibly containing errors, not validated; in different (colloquial) formats; encoded or unformatted; and suspect, requiring confirmation or citation. For example, a data input sheet might contain dates as raw data in many forms: "31st January 1999", "31/01/1999", "31/1/99", "31 Jan", or "today". Once captured, these raw data may be processed stored as a normalized format, perhaps a Julian date, so as to be easier for computers and humans to interpret during later processing.

Raw data (sometimes called "source" data or "eggy" data) are the data input to processing. A distinction is sometimes made between data and information to the effect that information is the end product of data processing.

SECONDARY DATA:-

Secondary data, is data collected by someone other than the user. Common sources of secondary data for social science include censuses, organisational records and data collected through qualitative methodologies or qualitative

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research. Primary data, by contrast, are collected by the investigator conducting the research.

Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data, provides larger and higher-quality databases that would be unfeasible for any individual researcher to collect on their own. In addition, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments.

As is the case in primary research, secondary data can be obtained from two different research strands:

Quantitative: Census, housing, social security as well as electoral statistics and other related databases.

Qualitative: Semi-structured and structured interviews, focus groups transcripts, field notes, observation records and other personal, research-related documents.

A clear benefit of using secondary data is that much of the background work needed has already been carried out, for example: literature reviews, case studies might have been carried out, published texts and statistics could have been already used elsewhere, media promotion and personal contacts have also been utilized.

This wealth of background work means that secondary data generally have a pre-established degree of validity and reliability which need not be re-examined by the researcher who is re-using such data.

Furthermore, secondary data can also be helpful in the research design of subsequent primary research and can provide a baseline with which the collected primary data results can be compared to. Therefore, it is always wise to begin any research activity with a review of the secondary data.

Qualitative data re-use provides a unique opportunity to study the raw materials of the recent or more distant past to gain insights for both methodological and theoretical purposes....

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In the secondary analysis of qualitative data, good documentation can not be underestimated as it provides necessary background and much needed context both of which make re-use a more worthwhile and systematic endeavour. Actually one could go as far as claim that qualitative secondary data analysis “can be understood, not so much as the analysis of pre-existing data; rather as involving a process of re-contextualising, and re-constructing, data

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Sampling design

In statistics and survey methodology, sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate characteristics of the whole population. Two advantages of sampling are that the cost is lower and data collection is faster.

Each observation measures one or more properties (such as weight, location, color) of observable bodies distinguished as independent objects or individuals. In survey sampling, weights can be applied to the data to adjust for the sample design, particularly stratified sampling (blocking). Results from probability theory and statistical theory are employed to guide practice. In business and medical research, sampling is widely used for gathering information about a population.

The sampling process comprises several stages:

1.Defining the population of concern

2.Specifying a sampling frame, a set of items or events possible to measure

3.Specifying a sampling method for selecting items or events from the frame

4.Determining the sample size

5.Implementing the sampling plan

6.Sampling and data collecting

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Population definition:

Successful statistical practice is based on focused problem definition. In sampling, this includes defining the population from which our sample is drawn. A population can be defined as including all people or items with the characteristic one wishes to understand. Because there is very rarely enough time or money to gather information from everyone or everything in a population, the goal becomes finding a representative sample (or subset) of that population.

Sometimes that which defines a population is obvious. For example, a manufacturer needs to decide whether a batch of material from production is of high enough quality to be released to the customer, or should be sentenced for scrap or rework due to poor quality. In this case, the batch is the population.

Although the population of interest often consists of physical objects, sometimes we need to sample over time, space, or some combination of these dimensions. For instance, an investigation of supermarket staffing could examine checkout line length at various times, or a study on endangered penguins might aim to understand their usage of various hunting grounds over time. For the time dimension, the focus may be on periods or discrete occasions.

In other cases, our 'population' may be even less tangible. For example, Joseph Jagger studied the behaviour of roulette wheels at a casino in Monte Carlo, and used this to identify a biased wheel. In this case, the 'population' Jagger wanted to investigate was the overall behaviour of the wheel (i.e. the probability distribution of its results over infinitely many trials), while his 'sample' was formed from observed results from that wheel. Similar considerations arise when taking repeated measurements of some physical characteristic such as the electrical conductivity of copper.

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This situation often arises when we seek knowledge about the cause system of which the observed population is an outcome. In such cases, sampling theory may treat the observed population as a sample from a larger 'superpopulation'. For example, a researcher might study the success rate of a new 'quit smoking' program on a test group of 100 patients, in order to predict the effects of the program if it were made available nationwide. Here the superpopulation is "everybody in the country, given access to this treatment" - a group which does not yet exist, since the program isn't yet available to all.

Note also that the population from which the sample is drawn may not be the same as the population about which we actually want information. Often there is large but not complete overlap between these two groups due to frame issues etc. Sometimes they may be entirely separate - for instance, we might study rats in order to get a better understanding of human health, or we might study records from people born in 2008 in order to make predictions about people born in 2009.

Time spent in making the sampled population and population of concern precise is often well spent, because it raises many issues, ambiguities and questions that would otherwise have been overlooked at this stage.

Sampling frame:

In the most straightforward case, such as the sentencing of a batch of material from production (acceptance sampling by lots), it is possible to identify and measure every single item in the population and to include any one of them in our sample. However, in the more general case this is not possible. There is no way to identify all rats in the set of all rats. Where voting is not compulsory, there is no way to identify which people will actually vote at a forthcoming election (in advance of the election). These imprecise populations are not amenable to

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sampling in any of the ways below and to which we could apply statistical theory.

As a remedy, we seek a sampling frame which has the property that we can identify every single element and include any in our sample. The most straightforward type of frame is a list of elements of the population (preferably the entire population) with appropriate contact information. For example, in an opinion poll, possible sampling frames include an electoral register and a telephone directory.

Sampling frame

In the most straightforward case, such as the sentencing of a batch of material from production (acceptance sampling by lots), it is possible to identify and measure every single item in the population and to include any one of them in our sample.

However, in the more general case this is not possible. There is no way to identify all rats in the set of all rats. Where voting is not compulsory, there is no way to identify which people will actually vote at a forthcoming election (in advance of the election). These imprecise populations are not amenable to sampling in any of the ways below and to which we could apply statistical theory.

As a remedy, we seek a sampling frame which has the property that we can identify every single element and include any in our sample.[1] The most straightforward type of frame is a list of elements of the population (preferably the entire population) with appropriate contact information. For example, in an opinion poll, possible sampling frames include an electoral register and a telephone directory.

Probability and non- probability sampling :

A probability sampling is one in which every unit in the population has a chance (greater than zero) of being selected

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in the sample, and this probability can be accurately determined. The combination of these traits makes it possible to produce unbiased estimates of population totals, by weighting sampled units according to their probability of selection.

Example: We want to estimate the total income of adults living in a given street. We visit each household in that street, identify all adults living there, and randomly select one adult from each household. (For example, we can allocate each person a random number, generated from a uniform distribution between 0 and 1, and select the person with the highest number in each household). We then interview the selected person and find their income. People living on their own are certain to be selected, so we simply add their income to our estimate of the total. But a person living in a household of two adults has only a one-in-two chance of selection. To reflect this, when we come to such a household, we would count the selected person's income twice towards the total. (The person who is selected from that household can be loosely viewed as also representing the person who isn't selected.)

In the above example, not everybody has the same probability of selection; what makes it a probability sample is the fact that each person's probability is known. When every element in the population does have the same probability of selection, this is known as an 'equal probability of selection' (EPS) design. Such designs are also referred to as 'self-weighting' because all sampled units are given the same weight.

Probability sampling includes: Simple Random Sampling, Systematic Sampling, Stratified Sampling, Probability Proportional to Size Sampling, and Cluster or Multistage Sampling. These various ways of probability sampling have two things in common:

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Every element has a known nonzero probability of being sampled and

involves random selection at some point.

Nonprobability sampling is any sampling method where some elements of the population have no chance of selection (these are sometimes referred to as 'out of coverage'/'undercovered'), or where the probability of selection can't be accurately determined. It involves the selection of elements based on assumptions regarding the population of interest, which forms the criteria for selection.

Hence, because the selection of elements is nonrandom, nonprobability sampling does not allow the estimation of sampling errors. These conditions give rise to exclusion bias, placing limits on how much information a sample can provide about the population. Information about the relationship between sample and population is limited, making it difficult to extrapolate from the sample to the population.

Example: We visit every household in a given street, and interview the first person to answer the door. In any household with more than one occupant, this is a nonprobability sample, because some people are more likely to answer the door (e.g. an unemployed person who spends most of their time at home is more likely to answer than an employed housemate who might be at work when the interviewer calls) and it's not practical to calculate these probabilities.

Nonprobability sampling methods include accidental sampling, quota sampling and purposive sampling. In addition, nonresponse effects may turn any probability design into a nonprobability design if the characteristics of nonresponse are not well understood, since nonresponse effectively modifies each element's probability of being sampled.

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In this research only representation technique was used. The sample size was hundred respondents and for collection of data about hundred respondents were used.

Tools of analysis:

The data collected is analysed using statistical tools for the purpose of knowing the employees attitude towards the performance appraisal. The collected information is then presented in tables using softwares such as MS WORD and MS EXCEL etc.

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CHAPTER-4- DATA ANALYSIS AND INTERPRETATION

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TABLE -1

Showing duration since when the employees were working in maruti Suzuki.

CATEGORY NO. OF REPONDENTS

PERCENTAGE

LESS THAN 1 YEAR 9 9%

1YR<2YRS 39 39%

2YRS<5YRS 22 22%

ABOVE 5 YRS 30 30%

TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS: This table shows that majority of 39%workers have been in working in the bracket of 1yr<2yrs and a minority of 9% have been working in the organization for less than a year.

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GRAPH-1 SHOWING THE DURATION SINCE WHEN THE EMPLOYEES HAVE BEEN WOKING IN MARUTI SUZUKI

LESS THAN ONEYEAR1YR<2YR2YR<5YRABOVE 5YRS

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TABLE -2- SHOWING SATISFACTION OF EMPLOYEES WITH WORKING HOURS

CATEGORY NO. OF EMPLOYEES PERCENTAGE

HIGHLY SATISFIED 63 63%

SATISFIED 16 16%

BARELY SATISFIED 12 12%

NOT SATISFIED 5 5%

TOTAL 100 100

SOURCE- SURVEY DATA

ANALYSIS:- The above table shows the level of satisfaction of employees with the amount of work hours that they put in the firm. And it shows that majority of them are satisfied with the work hours.

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GRAPH-2- SHOWING EMPLOYEES SATISFACTION WITH WORK HOURS

HIGHLY SATISFIED SATISFIED BARELY SATISFIED NOT SATISFIED TOTAL0

10

20

30

40

50

60

70

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TABLE-3- SHOWING IF OR NOT THEY WERE GIVEN INITIAL TRAINING

CATEGORY NO. OF EMPLOYEES PERCENTAGE

YES 77 77%

NO 23 23%

TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS:

The above information shows that most of them were given training prior to joining their respective jobs.

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GRAPH-3- SHOWING THE NO OF EMPLOYEES WHO WERE GIVEN INITIAL TRAINING

Column1

YESNO

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TABLE-4- SHOWING THE KIND OF TRAINING RECIEVED

CATEGORY NO. OF EMPLOYEES PERCENTAGEON THE JOB TRAINING

36 36%

OFF THE JOB TRAINING

15 15%

FIELD TRAINING 8 8%

INTERNSHIP 12 12%

ASSISTANCE 29 29%

TOTAL 100 100

SOURCE- SURVEY DATA

ANALYSIS- The above table shows that different methods of training were practised. But on the job training was most sought after.

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GRAPH-4- SHOWING THE KIND OF TRAINING RECEIVED

EMPLOYEES

ON THE JOBOFF THE JOBFIELD TRAININGINTERNSHIPASSISTANCE

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TABLE-5- SHOWING HOW PERFORMANCE APPRAISAL IS DONE

CATEGORY NO OF EMPLOYEES PERCENTAGEKRA 23 23%

360 DEGREES 47 47%

REWARD SYSTEM 13 13%

INDIVIDUAL APPARAISAL

3 3%

GROUP APPRAISAL 14 14%

TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS:-It shows that the recently adopted 360 degrees is the most favoured appraisal technique.

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GRAPH-5- SHOWING THE METHODS OF PERFORMANCE APPRAISAL TECHNIQUES USED

KRA 360 REWARD SYSTEM

INDIVIDUAL APPRAISAL

GROUP APPRAISAL

0

5

10

15

20

25

30

35

40

45

50

EMPLOYEES

EMPLOYEES

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TABLE-6- SHOWING WHETHER THE ABILITY AND TALENT OF AN EMPLOYEE IS JUDGED

CATEGORY NO. OF EMPLOYEES PERCENTAGE

YES 63 63%

NO 37 37%

TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS: From the above table it can be seen that most employees feel that their abilities are rightly judged with the methods of performance evaluation techniques.

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GRAPH-6- SHOWING WHETHER THE ABILITY OF THE EMPLOYEE IS RIGHTLY JUDGED

EMPLOYEE

YESNO

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TABLE-7- SHOWING THE SATISFACTION OF THE EMPLOYESS BASED ON THE JUDGING FACTORS

CATEGORY NO. OF EMPLOYEES PERCENTAGESATISFACTORY 38 38%AVERAGE 55 55%UNSATISFACTORY 7 7%TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS-The above table shows that majority of the employees were satisfied with the judging factors.

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GRAPH-7- SHOWING THE SATISFACTION OF THE EMPLOYEES BASED ON ABILITIES

PERCENTAGE

SATISFACTORYAVERAGEUNSATISFACTORY

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TABLE-8- SHOWING THE PROMOTIONAL AVENUES

CATEGORY NO. OF EMPLOYEES PERCENTAGEMERIT 57 57%EXAMS 25 25%SENIORITY 18 18%TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS- From the above analysis if the table it can be easily understood that the company gives first Preference to merit.

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GRAPH-8- SHOWING THE PREFERENCE OF PROMOTIONAL AVENUES

employees

meritexamsseniority

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TABLE-9- SHOWING OPINION OF POTENTIALITIES IN EMPLOYEES

CATEGORY NO.OF EMPLOYEES PERCENTAGEGOOD 35 35AVERAGE 42 42BAD 23 23TOTAL 100 100

SOURCE- SURVEY DATA

ANALYSIS- The above data shows that the potentialities if the employees are judged on the basis of their performance appraisal reports.

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GRAPH-9- SHOWING OPINION OF POTENTIALITIES IN EMPLOYEES

Sales

GOOD AVERAGEBADTOTAL

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TABLE-10-SHOWING THE FEED BACK FACILITY IN THE COMPANY

CATEGORY NO. OF EMPLOYEES PERCENTAGEGOOD 31 61%AVERAGE 25 25%BAD 44 14%TOTAL 100 100%

SOURCE- SURVEY DATA

ANALYSIS- Most of the respondents feel that the company has an adequate feedback system in place.

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GRAPH-10- SHOWING THE FEEDACK FACILITY IN THE COMPANY

EMPLOYEES

GOODAVERAGEBADTOTAL

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CHAPTER-6- SUMMARY OF FINDINGS

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SUMMARY OF FINDINGS-

1. : This table shows that majority of 39%workers have been in working in the bracket of 1yr<2yrs and a minority of 9% have been working in the organization for less than a year.

2. The above table shows the level of satisfaction of employees with the amount of work hours that they put in the firm. And it shows that majority of them are satisfied with the work hours

3. The above information shows that most of them were given training prior to joining their respective jobs

4. - The above table shows that different methods of training were practised. But on the job training was most sought after.

5. It shows that the recently adopted 360 degrees is the most favoured appraisal technique

6. From the above table it can be seen that most employees feel that their abilities are rightly judged with the methods of performance evaluation techniques.

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7. The above table shows that majority of the employees were satisfied with the judging factors

8. The above analysis if the table it can be easily understood that the company gives first Preference to merit.

9. The above data shows that the potentialities if the employees are judged on the basis of their performance appraisal reports.

10. Most of the respondents feel that the company has an adequate feedback system in place.

CHAPTER-7- SUGGESTIONS AND CONCLUSIONS

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SUGGESTIONS:

After carefully analysing the feedback forms from the concerned parties its clearly seen that the employees are satisfied with their job profile and work environment, atleast a majority is, but it had its share of disagreements for which the following suggestions have been drawn up.

1.The employees should be made aware of the benefits that they stand to gain with this appraisal system as its one of the finest in the country,

2. Its seen that a vast majority were not given on the job training in comparision to people who received it.

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3.A balance between the formal and informal system is to be achieved and maintained.

4. Drawbacks of the feedback forms should be corrected.

CONCLUSIONS:

During the survey many interesting facts came up which is highlighted in the findings.marutisuzuki is a full fledged company which is a pioneer in field of the industry. The business definitely has huge amount of scope.

Kudos to the highly efficient HR team for their expertise in the field in order to help both the company and its employees work at par to achieve their goals.

CHAPTER-8- LIMITATIONS

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LIMITATIONS1.The accuracy of the data obtained form the survey cannot be totally relied upon as not every one can be telling the truth.

2. it doesn’t take into consideration the entire employee body of maruti Suzuki , but just a sample.

3. The relevance of the questions asked pertaining to the objectives of study.

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CHAPTER-9- BIBLIOGRAPHY

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BIBLIOGRAPHY

BOOK- AUTHOR

HUMAN RESOURCE MANAGEMENT ASHWATHAPPA.K

HUMAN RESOURCE DEVELOPMENT ASHWATHAPPA.K

WEBSITE:

www.wikipedia.com

www.scribed.co.in

www.managementanswers101.com

www.google.com

www.marutisuzuki.co.in

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ANNEXURE-

QUESTIONNAIRE

MARITI SUZUKI PERFORMANCE APPRAISAL IN RELATION TO PRODUCTIVITY AND JOB SATIFACTION

NAME-

AGE-

SEX-

QUALIFICATION-

DESIGNATION-

DEPARTMENT-

1.How long have you been working in maruti Suzuki?

a. less than a year

b. 1yr<2yrs

c.2yrs>5yrs

d. 5yrs and more

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2. Do you feel the working hours are satisfactory?

a. yes

b. no

3.Were you given initial training?

a. yes

b. no

4. If yes, then what kind?

a. on the job

b. off the jo

c. field training

d. assistance

e. internship

5. How is performance appraisal done in your department?

6. is the ability of the employees judged by your company?

A. yes

b. no

7. if yes then what do you feel about the judgement?

A. satisfactory

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b. averge

c. poor

8. what are the avenues of promotion in your company?

a. senority

b. merit

c. examination

9. is there any feedback facility in place?

A. yes

b. no

10.How efficient is the feedback facility according to you?

A. good

b. average

c. poor

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