Report Initial Draft

7/28/2019 Report Initial Draft

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1. INTRODUCTION OF THE STUDY

1.1BACKGROUND OF THE STUDYThe concept of Performance Appraisal dates back to the First World War and was then called

Merit Rating Programme. Over a period of time, this concept has been through an ocean of

change. The areas of evaluation have also changed.

According to Carl Heyel, author/editor on management, philosopher and teacher,

performance appraisal is the process of evaluating the performance and qualifications of the

employees in terms of job requirements, for administrative purposes such as placement, selection

and promotion, to provide financial rewards and other actions which require differential treatment

among the members of a group as distinguished from actions affecting all members equally.

This study is conducted at Hindustan Newsprint Ltd, Kottayam to identify the effectiveness

of performance appraisal system of the company. This project intends to study the performance

appraisal system of the firm.

1.2 NEED AND SIGNIFICANCE OF THE STUDY

Appraising the performance of individuals, groups and organizations is a common

practice of all societies. While in some instances these appraisal processes are structured andformally sanctioned, in other instances they are an informal and integral part of daily activities.

Consciously or unconsciously evaluate our own actions from time to time. In social interactions,

performance is conducted a systematic and planned manner to achieve widespread popularity in

recent years.

Performance appraisal is essential to understand and improve the employee's

performance through HRD. In fact, performance appraisal is the basis for HRD. It was viewed

performance appraisal was useful to decide upon employee promotion / transfer salarydetermination and the like. But the recent developments in human resources management

indicate that performance appraisal is the basis for employee development. Performance

appraisal indicates the level of desired performance level, level of actual performance and the

gap between these two. This gap should be bridged through human resources development

techniques li ke training executive development etc.


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Performance Appraisal has different measures to judge the capabilities and efficiency of

an individual in an organization- how far the targets have been achieved, how has his

performance been! It plays a very important role in their analysis as it keeps the employees

motivated towards their jobs. This assessment also helps in the overall growth of the

organization. So Performance Appraisal today plays a very important role in keeping a track of

various employees for different kinds of jobs in the organization.

For many organizations the primary goal of an appraisal system is to improve

individual and organizational performance. There may be other goals; however, in fact,

performance appraisal data are potentially valuable for virtually every human resource

functional area.

1.3 STATEMENT OF THE PROBLEM

Todays working climate demands a great deal of commitment and effort from

employees, who in turn naturally expect a great deal more from their employers. Performance

appraisal is designed to maximize effectiveness by bringing participation to more individual

level in that it provides a forum for consultation about standards of work, potential, aspirations

and concerns. It is an opportunity for employees to have significantly greater influence upon the

quality of their working lives. In these times of emphasis on quality, there is a natural

equation: better quality goods and services from employees who enjoy better quality goods and

services from their employers.

Performance appraisal must be seen as an intrinsic part of a managers responsibility and

not an unwelcome and time-consuming addition to them. It is about improving performance and

ultimate effectiveness. It is widely accepted that the most important factor in organization

effectiveness is the effectiveness of the individuals who make up the organization. If every

individual in the organization becomes more effective, then the organization itself will become

more effective.


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1.4 OBJECTIVE OF THE STUDY

Main objective:

To study the current performance appraisal system of the organization and its strategies

adopted by the company.

Specific Objectives:

To take the response of employees towards the Performance Appraisal activities carriedon upon them and to study the implications of an effective performance appraisal system

on the productivity of employees

To identify the relation between performance appraisal and employee motivation To analyze the employee expectations and responsibilities towards the organisation.

2. INDUSTRY PROFILE

Etymologically the word paper owes its origin to Papyrus (cypress Papyrus), a plant

that grew in abundance in the delta of Egypt. The barks and leaves of this plant were woven and

pressed into a sheer to be used as writing material by ancient Egyptians (3000BC).

There is a degree of consensus that the art of making paper was first discovered in chinaand its origin in that country is traced back to 2nd Century. In about 105 A.D. TsaiLun, an

official attached to imperial court of China, created a sheet of paper using Mulberry and other

best fibers along with fishnets, old rags and hemp waste.(2nd Century B/C)

Chinese considered paper a key invention and kept this a closely guarded secret for over

five centuries until the technology slowly made it way westward. Chinese city containing a paper

mill in the early 700s and from this started their own paper making industry (Early 700s).

Paper is one of the important industrial products used for the production of books, magazines

and newspaper. Educational, government and industrial sectors cannot operate without paper.

Other important paper products include cardboard, which is used in packing and adsorbent paper

such as tissue and towels. The different type of the paper being produced is paper, paperboards

and newsprint. Newsprint is a major material input into production of newspapers. During the


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course of analysis of the paper industry there is an imperative need to study the prospects of

newsprint industry.

2.1 WORLD SCENARIO

International trade in the paper industry has not been significant. In the world, UnitedStates consumption of paper and cardboard averages about 300 kilogram per person each year.

Nearly 64 million metric tons of paper and cardboard are produced in the United States annually.

Paper industry tends to be concentrated in those countries that are industrially advanced and have

abundant supplies of fibrous raw material wood.

There is large-scale international trade for wood pulp; pulpwood is flowing from those

countries with large forest resources to those countries that are under-developed. The Chinese are

credited with the invention of paper in AD 105. From China the knowledge of papermaking

traveled gradually westward and the Arabs are known to have made paper in the eighth century.

As the art progressed westward through Morocco and through Spain in Europe, the process was

constantly improved.

The major restructuring programmes embarked upon worlds leading paper companies in

2005 will not begin to be reflected in full year results until the end of the 2006 financial year.

Hence International Paper, Stora Enso and Svenska Cellular (SCA) retained their one-two-three

spot in Paper and Pulp International top 100 for 2005 and each with an increase in net sales. For

the top 100 as a whole, net sales from pulp paper and converting operations were up 3.7% and $

281, 175.6 million. Earning however remained depressed at a combined total of $ 17, 905.1

million, compared to $ 19,764.4 million for same for same top 100 companies year earlier.

The future of this industry is very bright. Word paper and board demand has grown

rapidly over three consecutive years reaching to a record of 359 million tons in 2004. The growth

has been in the east and south, namely Asia-Pacific, Eastern Europe and South America. The

new forecast for long term paper demand and supply looks at what seems contradictory-a

slowing demand but an explosive growth. The shift in growth from west to east and from north

to south was particular dramatic in 2001 to 2004. In this period Asia accounted for 64% of the

global demand growth, while North America and Western Europe contributed only 11% and


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10% respectively. Eastern Europe only has 4% of global market, but earned 9% of the global

demand growth in that period.

If prospects are modest in the industrial west, they are dramatic in the BRIC countries

with Asias share of global production raising from 35% to 42% Asia will be responsible for60% of the growth of which china and India will be the leaders.

2.2 INDIAN SCENARIO

The paper industry in India is more than a century old. At present there are over 600

paper mills manufacturing a wide variety of items required by the consumers Newsprint is a

special type of paper used in newspaper and magazines. At present there are 22 newsprint-

manufacturing units in our country with a total capacity of 600000 TPA, of which 5 publicsectors unit alone constitutes 63% of the total capacity. Demand for newsprint, which is

dependent on the literacy rate and growth of newspaper and magazines publishing industry has

increased every year. Imports have a significant impact on the industry. Newsprint pricing is

expected to grow by around 6.5% per annum while supply may grow at a much slower pace..

These paper mills are manufacturing industrial grades, cultural grades and other specialty

papers. The paper industry in India could be classified into 3 categories according to the raw

material consumed.

1. Wood based2. Agro based &3. Waste paper basedWood based units constitute about 58% of the total capacity while agro and waste paper

based units accounts for 23% and 19% of the newsprint capacity respectively. While the

numbers of wood based mills are around 20 and balance 580 mills are based on non-

conventional raw materials.

The Govt. of India has relaxed the rules and regulations and also relicensed the paper

industry to encourage investment into this sector and joint ventures are allowed and some of the

joint ventures have also started in India. The paper industry in India is looking for state-of-art
http://www.paperex-india.com/paperscene.html


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technologies to reduce its production cost and to upgrade the technology to meet the international

standards.

It is estimated that the paper industry would be growing at the present rate of 7-8% of

compounded rate and would require 9.5-10 million MT by the end of the decade from the

existing production of around 6.7 million tones resulting in increased imports.

The Indian paper industry has been exposed to direct competition from international players

in the recent times after import duties where lowered to favor the entry of such competitors.

From a height of 140%, the duties were reduced to a low of 20% in as span of 5 years. The

import duties have been currently fixed at 30%. The newsprint mills have been adversely

affected by this decision of the government. Due to overall all rise in costs, the paper mill began

activities to generate the economies of scale .Several of the mills went on a cost cutting measure

by generating their own power and electricity via co-generation. The medium sized paper mills

too followed the suit observing the success of the large scaled mills. In spite of these measures

being taken, the Indian paper industry still confronts various other challenges, such as uncertain

market condition. Due to these reasons some small companies are compelled to shut down as

they could not meet the rising cost of operation and could not confirm to the norms and standards

set by Pollution Control Board.

Over the 25 years, production, imports, exports and consumption of newsprint in India have

all had rising trends . Some computed trend growth rates indicated that the average annual

growth rate of production was 7.6 per cent, imports 5.4 per cent and consumption 6 per cent. In

the first half of the period, the consumption growth rate was 3.8 per cent a year; the rate more

than doubled to 8.8 per cent in the second half, indicating acceleration in newsprint consumption

by India's newspapers.

2.3 STATE SCENARIO

Hindustan Newsprint Limited is a government company in the central public sectors.

Hindustan Newsprint Ltd was incorporated as a wholly owned subsidiary of the Hindustan Paper

Corporation limited (HPC) on June 07, 1983. HNL produces exceptional quality newsprint for

the Indian and International market. The strength properties of HNL newsprint are comparable to


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the best in world market. In 1998, HNL became the first newsprint manufacturers in the country

to achieve the coveted ISO-9002 certification.

3.COMPANY PROFILEHindustan Newsprint Limited (HNL) is a Government of India Enterprise under the

administrative jurisdiction of the Department of Heavy Industries, Ministry of Heavy Industries

and Public Enterprises. HNL was incorporated as a wholly owned subsidiary of the Hindustan

Paper Corporation limited (HPC) on June 07, 1983.

The Government of India had established HPC on May 29, 1970 for developing

indigenous capacity in production of paper and newsprint with a view to reduce dependence onimports. HPC launched the Kerala Newsprint Project (KNP) in 1976. The Kerala Newsprint mill

rolled out the first newsprint reel on February 26, 1982 and went into commercial production

with effect from November 01, 1982. HNL took over the business of KNP with effect from

October 01, 1983.


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The core competency of HNL lies in its highly skilled technical manpower, which is

rated as the best in the domestic Newsprint industry and the quality of its product, which is

comparable with international standards. The fact that HNL maintains its profitable track record

in a very challenging post-liberalized business environment characterized by abysmally low

import duties (3%) which is quite lower than even the WTO bound rates (25%) without any

protection, support or preferential treatment stands testimony to the international competitiveness

of the company.

Vision & Mission

Vision

To be the dominant player in the mass consumption segment of writing & printing paper To be the foremost and largest producer of quality newsprint

Mission

To operate large capacity integrated newsprint/paper mills on sound commercialprinciples

To continuously upgrade plant and equipment, upscale production output and enhancemarket share within the country and outside

Quality & Recognition

In 1998, HNL became one of the first newsprint manufacturers in the country to achieve the

coveted ISO-9002 certification. The Quality Management System has been recertified to ISO

9001: 2000 in November 2002. HNL is also certified to ISO 14001: 1996 in October 2000 for itsEnvironment Management System. The EMS was recertified in 2003. HNL has been awarded

with Occupational Health and safety Assessment System(OHSAS 18001:2007) certification

from Bureau Veritas Certification (India) Private Limited in July 2008.


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Presently, the company is in the process of implementing a strategic business plan for up

scaling its production capacity with up gradation of the product portfolio. Cabinet committee on

economic affairs (CCEA), Government of India has accorded approval for the project on May 9,

2006. The expansion cum diversification project(EDP),includes a 1,70,000 tons per annum paper

machine ,100 tons per day De-inking plant and a power block consisting of a 150 tons per hour

boiling and a 25 MW Turbo generator with all the associated facilities.

EDP is a brown field project. It would closely integrate the present manufacturing facility

with the proposed one. The EDP configuration is tightly optimized by maximizing the utilization

of present space, land, infrastructure, and auxiliaries etc. Environment-friendly and state -of -the

-art technology solutions are formulated as part of the process configuration. The product grades

from the EDP are slated to compete with the best in class. Maphlitho/non-surface sized paper,

copier paper and film coated varieties are included in the product portfolio of EDP.

With the launch of EDP, HNL expects to seize the emerging opportunities in the writing

and printing segments of the industry. In addition, EDP will upscale the capacity to reasonable

levels while significantly mitigating the risks inherent with a single product.

The Company has established an OH&S Management system in accordance with the

requirement of OHSAS standard, 18001:2007. The Occupational Health and Safety Assessment

Series (OHSAS) specification gives requirement for an Occupational Health and Safety

Management System to enable the organization to control its OH&S risk and improve its

performance. A system of this kind enables an organization to develop an OH&S policy,

establishes objectives and processes to achieve the policy commitments, take action needed to

improve its performance and demonstrate the conformity of the system to the requirements

OHSAS standards to support good OH&S practices, in tune with Socio-Economic needs.

AWARDS

MOU Excellence Award National Energy Conservation Award State Pollution Control Board Award Productivity Award


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CERTIFICATIONS

ISO-9001- International recognition ISO-14001- International recognition OHSAS 18001:2007-International recognition

Production Process

a) I nput Requirements Fibrous raw materials like wood, reed, bamboo etc. Old Newspaper (ONP) and Old Magazines (OMG) for De-Inking Plant Chemicals used in pulp and paper making like caustic soda, hydrogen peroxide etc. Packing materials like kraft paper, grey board etc. Imported machineries and spares General spares like motors, bearings etc. Fuels like coal, furnace oil etc.

F ibrous raw materi al:

HNL meets a major portion of its requirement for fibrous raw materials from forest sources. The

credit for the superior quality of HNL newsprint goes to the unique raw material: Reed

(Ochlandra Travancorica) which is a specialty of Kerala forests. The company has a long-term

agreement with the Government of Kerala for the supply of Eucalyptus wood and Reed from

state forests. Dwindling forest resources has led to this supply getting diminished in the past few

years.


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HNL has developed appropriate alternatives by:

Raising captive plantations using own resources and technical know-how on land allotted forthat purpose by Govt. of Kerala, and also on vacant land made available by various

institutions like Railways.

Encouraging pulp wood cultivation on agricultural land through implementation of farmforestry schemes.

Procuring raw materials from neighbouring states where they are available. Buying Eucalyptus, Bamboo and other 'pulpable' raw materials from local suppliers and

farmers directly under "Purchase at Gate" scheme.

Farm forestry scheme is implemented with the active participation of voluntary /Nongovernmental Organizations (NGOs). Pulp wood seedlings of various species such as

Eucalyptus, Acacia, Mangium, Bamboo, Reeds etc. are distributed through NGOs.

High yielding clonal pulp wood plantlets developed at HNL clonal complex are alsodistributed at subsidised rates. Approximately 155 lakh seedlings have been distributed

through this scheme among farmers all over Kerala.

Purchase at gate scheme was launched in 1998 as a complementary programme to FarmForestry scheme. As per this scheme, pulp wood materials are purchased directly from farmers

at a remunerative price at the company gate doing away with middle men.

CUSTOMERS

Newspapers printed on HNL newsprint greet millions of Indians daily morning. It is the

information carrier to millions. HNL Newsprint is preferred by the major publishing houses in

the country. Malayala Manorama, Mathrubhumi, Dina Tanti, Ee Naadu, Deshabhimani, Kerala

Kaumudi, Mangalam, Madhyamam, The Hindu, The New Indian Express, Sanmarg, Ananda

Bazaar Patrika, Eenadu, Vartha, Andhra Jyothi, Vijay Anand Printers, Deccan Chronicle, Deccan

Herald, Lokprakashan, Dinamalar, Sandesh, Thuglak, Kalki, Rashtra Deepika, Chandrika etc. are

the majors among HNL customers across the country. HNL is also establishing its market in

Srilanka and Malaysia.


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4.PRODUCT PROFILEHNL produces a wide range of newsprint grades and have begun production of writing &

printing paper (WPP) in last year. Initially, the company was producing 52 GSM (Grams per

Square Meter) newsprint. Later, to meet changing market demands, HNL commenced production

of 48.8 GSM newsprint. As requirement for newsprint with still lower GSM increased, HNL

started production of 45 GSM newsprint also. WPP is produced at 54 & 60 GSM based on the

customers demand. HNL maintains consistent quality in all grades of newsprint that it

manufactures. At the time of commissioning in 1982, HNL was producing newsprint having

brightness of just 48-50 % ISO. Later, it switched over to a superior and eco-friendly technology

in bleaching using Hydrogen Peroxide (H202). This change enhanced the brightness to 53-55%

ISO. The companys competitors soon followed suit. Always a step ahead, HNL further

advanced the brightness levels and is at present producing newsprint with 55 - 58 % ISO.

Today, brightness level is at par with that of imported newsprint. Further improvements

are possible by putting a premium value on the product.

In terms of quality, HNL newsprint has an enviable position in the domestic newsprint

market being comparable to the world-class product standards. HNL is highly customer focused

and cherishes good relationship with them. Regular visits are made by HNLs production

managers to newspaper establishments to understand the customers demands. It is found that

press room operators favour HNL newsprint for its excellent runability and printing properties.

The production technology at HNL is modified to match exacting requirements of sophisticated


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high-speed printing machines. The quality of the product is given primary importance in the

quality policy at HNL.

Newsprint is the major input for the newspaper industry. Quality newsprint provides

excellent prints to satisfy the discerning and demanding readers - the ultimate customers of the

product HNL commands leadership position in the domestic newsprint market. HNLs current

product range is from 48.8 GSM to 45 GSM, standard and pink newsprint. Quality of HNL

newsprint is well accepted in the market and services of HNL's marketing department have been

appreciated by customers across the country.

Today, HNL produces exceptional quality newsprint for the Indian and International market.

The strength properties of HNL newsprint are comparable to the best in world market. It is amatter of great pride for the company that its product is always compared with imported

newsprint. HNL, with its state-of-the-art technology, has emerged in its short span of operations

as a company that is truly contemporary in a global context.

5.LITERATURE REVIEWPERFORMANCE APPRAISAL

5.1 HISTORY:

The history of performance appraisal is quite brief. Its roots in the early 20th century can be

traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the

same may be said about almost everything in the field of modern human resources

management.


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As a distinct and formal management procedure used in the evaluation of work performance,

appraisal really dates from the time of the Second World War - not more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things

historical, it might well lay claim to being the world's second oldest profession!

There is"... a basic human tendency to make judgments about those one is working with, as

well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of

a carefully structured system of appraisal, people will tend to judge the work performance of

others, including subordinates, naturally, informally and arbitrarily.

The human inclination to judge can create serious motivational, ethical and legal

problems in the workplace. Without a structured appraisal system, there is little chance of

ensuring that the judgments made will be lawful, fair, defensible and accurate.Performance appraisal systems began as simple methods of income justification. That is,

appraisal was used to decide whether or not the salary or wage of an individual employee

was justified.

The process was firmly linked to material outcomes. If an employee's performance was

found to be less than ideal, a cut in pay would follow. On the other hand, if their performance

was better than the supervisor expected, a pay rise was in order.

Little consideration, if any, was given to the developmental possibilities of appraisal. If

was felt that a cut in pay, or a rise, should provide the only required impetus for an employee

to either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended; but more

often than not, it failed.

For example, early motivational researchers were aware that different people with

roughly equal work abilities could be paid the same amount of money and yet have quite

different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes; but

they were not the only element that had an impact on employee performance. It was found

that other issues, such as morale and self-esteem, could also have a major influence.


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As a result, the traditional emphasis on reward outcomes was progressively rejected. In

the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and

development was gradually recognized. The general model of performance appraisal, as it is

known today, began from that time.

5.2DEFINITION AND CONCEPT:Performance Appraisal is the process of obtaining, analyzing and recording

information about the relative worth of an employee. The focus of the performance

appraisal is measuring and improving the actual performance of the employee and also

the future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources,

performance appraisal is the systematic, periodic and an impartial rating of an

employees excellence in the matters pertaining to his present job and his potential for a

better job."

Performance appraisal is a systematic way of reviewing and assessing the

performance of an employee during a given period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee.

It helps to analyze his achievements and evaluate his contribution towards the

achievements of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart of

personnel management and reflects the managements interest in the progress of the

employees.


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5.3 PROCESS OF PERFORMANCE APPRAISAL:

5.4 PRE-REQUISITES FOR SUCCESSFUL PERFORMANCE APPRAISAL:

The essentials of an effective performance system are as follows:

1) Documentationmeans continuous noting and documenting the performance. It also

helps the evaluators to give a proof and the basis of their ratings.

2) Standards / Goals the standards set should be clear, easy to understand, achievable,

motivating, time bound and measurable.

3) Practical and simple format - The appraisal format should be simple, clear, fair and

objective.4) Evaluation technique An appropriate evaluation technique should be selected; the

appraisal system should be performance based and uniform.

5) Communication Communication is an indispensable part of the performance

appraisal process. The desired behavior or the expected results should be communicated

to the employees as well as the evaluators.


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6) Feedback The purpose of the feedback should be developmental rather than

judgmental.

7) Personal Bias Interpersonal relationships can influence the evaluation and the

decisions in the performance appraisal process.

5.5 CHALLENGES IN PERFORMANCE APPRAISAL:

In order to make a performance appraisal system effective and successful, an

organization comes across various challenges and problems. The main challenges

involved in the performance appraisal process are:

1) Determining the evaluation criteria-For the purpose of evaluation, the criteria selected

should be in quantifiable or measurable terms

2) Create a rating instrument- The focus of the system should be on the development of

the employees of the organization.

3) Lack of competence-Top management should choose the raters or the evaluators

carefully. They should have the required expertise and the knowledge to decide the

criteria accurately.

4) Errors in rating and evaluation-The rater should exercise objectivity and fairness in

evaluating and rating the performance of the employees

5) Resistance-The appraisal process may face resistance from the employees and the

trade unions for the fear of negative ratings. Therefore, the employees should be

communicated and clearly explained the purpose as well the process of appraisal.

5.6 METHODS OF PERFORMANCE APPRAISAL:

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

techniques of performance appraisal have been developed. Mainly they are of two types:

Traditional Methods Modern Methods.


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5.6.1 TRADITIONAL METHODS

1) Graphic Rating Scales:

Graphic rating scales compare individual performance to an absolute standard. In this

method, judgments about performance are recorded on a scale. This is the oldest and widely used

technique. This method is also known as linear rating scale or simple rating scale. The appraisers

are supplied with printed forms, one for each employee. These forms contain a number of

objectives, behavior and trait - based Qualities and characters to be rated like quality and volume

of work, job knowledge, dependability, initiative, attitude etc., in the case of workers and

analytical ability, creative ability, initiative, leadership qualities, emotional stability in the case

of managerial personnel. These forms contain rating of scales. Rating scales are of two types,viz., continuous rating scale and discontinuous rating scales. In continuous order like o, 1, 2, 3, 4

and 5 and in discontinuous scale the appraiser assigns the point to each degree. The points given

by the rater know performance regarding each character. The points given by the rater to each

character are added up to find out the overall performance. Employees are ranked on the basis of

total points assigned to each one of them.

One reason for the popularity of the rating scales is its simplicity, which permits many

employees to be quickly evaluated. Such scales have relatively low

Design cost and high in case of administration. They can easily pinpoint significant dimensions

of the job. The major drawback to these scales is their subjectivity and low reliability. Another

limitation is that the descriptive words often used in such lies may have different meanings to

different raters.

2) Ranking Method:

Under this method the employees are ranked from best to worst on some

characteristics. The rater first finds the employee with the highest performance and the

employees with the lowest performance in that particular job category and rates the former as the

best and the later as the poorest. Then the rater selects the next highest and next lowest and so on


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until he rates all the employees in that group. Ranking can be relatively easy and inexpensive,

but its reliability and validity may be open to doubt. It may be affected by rater bias or varying

performance standards. Ranking also means that somebody would always be in the backbench. It

is possible that the low ranked individual in one group may turn out to be superstar in another

group. One important limitation of the ranking method is that size of the different between

individuals is not well defined. For instance, there may be little difference between those ranks

third and fourth.

3) Paired Comparison Method:

This method is relatively simple. Under this method, the appraiser ranks the employees by

comparing one employee with all other employees in the group, one at a time. As illustrated,

this method results in each employee being given a positive comparison total and a certain %age

total positive evaluation.

Example: A B C D E

A - A A A A

B - - C D E

C - - - D E

D - - - - E

E - - - - -

To compute Employee's positive evaluations:

Number of positive evaluations X 100 = Employee's % Superior evaluation Total

number of evaluations

Employee A Employee B Employee C Employee D Employee E

(4/4)* 100=100% (0/4)* 100=0% (2/4)* 100=50% (1/4)* 100=25% (3/4) * 100 = 75%


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4) Forced Distribution Method:

The rater may rate his employees at the higher or at the lower end of the scale under the

earlier methods. Forced distribution method is developed to prevent the raters from rating too

high or too low. Under this method, the rater after assigning the points to the performance of

each employee has to distribute his ratings in a pattern to conform to normal frequency

distribution. Thus, similar to the ranking technique, forced distribution requires the raters

(supervisors) to spread their employee evaluation in a prescribed distribution. This method

eliminates central tendency and leniency biases. However, in this method employees are placed

in certain ranked categories but not ranked within the categories. Quite often work groups do not

reflect a normal distribution or individual performance. This method is based on the questionable

assumption, as group of employees will have the same distribution of excellent, average and

poor performers. If one department has all outstanding employees, the supervisor would find it

extremely difficult to decide who should be placed in the lower categories. Difficulties can also

arise when the raters most explain to the employee why he was placed in one grouping and

others were placed in higher groupings.

5) Checklist Methods:

The Checklist is a simple rating technique in which the supervisor is given a list of

statement or words and asked to check statements representing the characteristics and

performance of each employee. There are three types of checklist methods, viz, simple checklist,

weighted checklist and forced choice method.

(a) Simple Checklist Method:

The checklist consists of large number of statements concerning employee behavior.

Example: Simple Checklist Method,

Wadia Industries Ltd.,

Performance Appraisal Form

Name of Employee: Number:

Designation:

Department:


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Checklist of Qualities:

1. Behavior is the employee punctual in attending the office?

A) Yes B)No

2. Does the employee behave courteously with his superiors?

A) Yes B) No

3. Does the employee maintain sound customer relations'?

A) Yes B) No

4. Is the employee sincere in doing his job?

A) Yes B) No

The rater checks to include if the behavior of an employee is positive or negative to each

statement. Employee performance is rated on the basis of number of positive checks. The

negative checks are not considered in this method. A difficulty often arises because the

statements may appear to be virtually identical in describing the employee. The words or

statements may have different meanings to different raters.

(b)Weighted Checklist:

The weighted checklist method involves weighting different items in the checklist having

a series of statements about an individual, to indicate that some are more important than others.

The rater is expected to look into the questions relating to the employee's behavior, the attached

rating scale (or simply positive /negative statements where such a scale is not provided) and tick

those traits that closely describe the employee behavior. Often the weights are not given to the

supervisors who complete the appraisal process, but are computed and tabulated by someone

else, such as a member of the personnel unit. In this method the performance ratings of the

employee are multiplied by the weights of the statements and coefficients are added up. The

cumulative coefficient is the weighted performance score of the employee. Weighted

performance score is compared with the overall assessment standards in order to find out the

overall performance of the employee.


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The weighted checklist, however, is expensive to design to design, since checklist for

each different job in the organization must be produced. This may prove time consuming also in

the end. Though the weighted checklist method is evaluative as well as development, it has the

basic problem of the evaluator not knowing the items, which contribute mostly of successful

performance.

(c) Forced Choice Method:

This method was developed at the close of World War II. Under this method, a large

number of statements in groups are prepared. Each group consists of four descriptive statements

(treated) concerning employee behavior. Two statements are most descriptive (favorable) and

two are least descriptive (unfavorable) of each m tetrad. Sometimes there may be five statements

in each group out of which one would be neutral. The actual weightings of the statements are

kept secret.

The appraiser is asked to select one statement that that mostly describes employee's

behavior out of the two favorable statements are kept secret. The appraiser is asked to select one

statement that that mostly describes employee's behavior out of the two unfavorable statements.

The items are usually a mixture of positive and negative statements. The intent is to eliminate or

greatly reduce the rater's personal bias, specially the tendency to assign all high or low ratings.

The items are designed to discriminate effective from ineffective workers as well as reflect

valuable personal qualities.

6) Critical Incident Method:

Employees are rated discontinuously, i.e., once in a year or six months under the earlier

methods. The performance rated may not reflect real and overall performance, as the rater would

be serious about appraisal method, i.e., critical incident method has been developed. Under this

method, the supervisor continuously records the critical incidents of the employee performanceor behavior relating to all characteristics (both positive and negative) in a specially designed

notebook. The supervisor rates the performance of his subordinates on the basis of notes taken

by him. Since the critical incident method does not necessarily have to be a separate rating

system, it can be fruitfully employed as documentation of the reasons why an employee was

rated in a certain way.


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The critical incident method has the advantage of being objective because the rater

considers the records of performance rather than the subjective points of opinion.

7) Essay or Free From Appraisal:

This method requires the manager to write a short essay describing each employee's

performance during the rating period. This format emphasizes evaluation of overall

performance, based on strengths weakness of employee performance, rather than specific job

dimensions. By asking supervisors to enumerate specific examples of employee behavior, the

essay technique minimizes supervisory bias and halo effect.

8) Group Appraisal:

Under this method, an employee is appraised by a group of appraisers. This group

consists of the immediate supervisor of the employee, to other supervisors who have close

contact with employee's work, manager or head of the department and consultants. The head of

the department or manager may be the chairman of the group and the immediate supervisor may

act as the coordinator for the group activities. This group uses any one or multiple techniques

discussed earlier. The immediate supervisor enlightens others members about the job characters,

demands, standards of performance etc. Then the group appraises the performance of the

employee, compares the actual performance with standards, find out the deviations, discusses thereasons therefore, suggests ways for improvement of performance, prepares action plans, studies

the need for change in job analysis and standards and recommends change, it necessary. This

method is widely used for purpose of promotion, demotion and retrenchment appraisal.

9) Confidential Report:

Assessing the employee's performance confidentially is a traditional method of

performance appraisal. Under this method, superior appraises the performance of his

subordinates based on his observations, judgments and institutions. The superior keeps his

judgment and report confidentially. In other words the superior does not allowed the employee

to know the report and his performance. Superior writes the report about his subordinates,

strengths. Weakness, intelligence, attitude to work, sincerity, commitment, punctuality,

attendance, conduct, character, friendliness, etc.


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Though confidential report is a traditional method, most of the public sector organizations

still follow this method in appraising the employee's performance. This method suffers from a

number of limitations.

5.6.2 MODERN METHODS

1) Behaviorally Anchored Rating Scales (BARS):

The Behaviorally Anchored Rating Scales (BARS) method combines elements of the

traditional rating scales and critical incidents methods. Using BARS, job behaviors from critical

incidents - effective and ineffective behaviors are described more objectively. The method

employs individuals who are familiar with a particular job to identify its major components.

They then rank and validate specific behaviors for each of the components. BARS require

considerable employee participation; its acceptance by both supervisors and their subordinates

may be greater. Proponents of BARS also claim that such a system differentiates among

behavior, performance and results, and consequently is able to provide a basis for setting

developmental goals for the employee. Because it is job - specific and identities observable and

measurable behavior, it is more reliable and valid method for performance appraisal.

2) Assessment Centre:

This method of appraising was first applied in German Army in 1930. Later business and

industrial houses started using this method. This is not a technique of performance appraisal by

itself. In fact it is a system or organization, where assessment is done by several individuals and

also by various experts by using various techniques.

In this approach individual from various departments are brought together to spend two or three

days working on an individual or a group assignment similar to the ones they'd be handling

when promoted. All assess get an equal opportunity to show their talents and capabilities and

secure promotion based on merit. An assessment model is shown below.

Human Resource Accounting deals with cost of and contribution of human resource to

the organization. Cost of the employee includes cost of manpower planning, recruitment,

selection, induction, placement, training, development, wages and benefits etc. employee


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contribution is the money value of employee service which can be measured by labour

productivity or value added by human resources.

3) Management By Objectives (MBO):

Although the concept or management by objectives was advanced by Peter F.Duckers

way back in 1954, it was described only recently as 'large range' in performance appraisal.

Refinements brought out by George Odione, Valentines, Humble and others have enriched the

concept and made it more acceptable all over the globe as an MBO in their work settings. Some

of the companies which implemented MBO reported excellent results, others disappointments,

and many in decisions. Started briefly, MBO is a process whereby the superiors and subordinate

managers of an organization jointly identify its common goals, define each individual's major

areas of responsibility in terms of results excepted of him, and use these measures of guides for

operating the unit and assessing the contribution of its members. Generally, the unit and

assessing the contribution of its members.

Generally the MBO is undertaken along the following lines.

The subordinate and superior jointly determine goals to be accomplished during theappraisal period and what level of performance is necessary for the subordinate to

satisfactory achieve specific goals.

During the appraisal period the superior and subordinate update and later goals asnecessary due to changes in the business environment.

4) 360 DEGREE APPRAISALS:

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive

appraisal where the feedback about the employees performance comes from all the sources

that come in contact with the employee on his job. Organizations are increasingly using

feedback from various sources such as peer input, customer feedback, and input from

superiors. Different forms with different formats are being used to obtain the information

regarding the employee performance.


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5) Psychological Appraisal:

Psychological appraisal are conducted to assess the employee potential, Psychological

appraisal consist of

(a)In - depth interviews(b)Psychological tests(c)

Consultations and discussions with the employee

(d)Discussions with the superior's sub-ordinates and peers(e) Reviews of others evaluations.

Evaluation is conducted in the areas of (a) employee's intellectual abilities, (b)Emotional

stability, (c) motivational responses, (d) sociability, (e) employees ability to comprehend the

vents, and (f) ability to foresee the future.

6) Counseling:

After the performance of the employee is appraised, the superior should inform

the employee about the level of his performance, the reason for the same, need for and

the methods of improving the performance. The superior should counsel the employee

about his performance and the methods of improving it.


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Counseling is a planned, systematic intervention in the life of an individual who

is capable of choosing the goal and the direction of his development. Thus, the

purpose of counseling is to help the employee aware of his own performance, his

strengths and weakness, opportunities availabilities available for performance

counseling can be done in the form of performance interview by the superior.

ThePost Appraisal Interview:

The post appraisal interview has been considered by most of the organizations, as well as

employees, as the most essential part of appraisal system. This interview provides the employee

the feedback information, and an opportunity to appraiser to explain the employee his rating, the

traits and behavior he has taken into consideration for appraisal etc.

It also gives the opportunity to employee to explain his views about the rates, standards

or goals, rating scale, internal and external environment causes for low level of performance, his

resources responsible for performance etc. further it helps both the parties to review standards,

set new standards based on the reality factors, and helps the appraiser to offer his suggestions,

help, guide and coach the employee for his advancement. Thus, the post appraisal interview is

designed to achieve the following objectives.

1. To let employees know where they stand.2. To help employees do a better job by clarifying what is expected of them;3. To plan opportunities for development and growth;4. To strengthen the superior -subordinate working relationship by developing a mutual

agreement of goals;

5. To provide an opportunity for employees to experience themselves onperformance related issues.

Relating Performance Appraisal to Rewarding:

Management should recognize and performance. The forms of recognizing and rewarding

performance include: (a) Private and public praise, (b) Written commendation, (c) published

commendation, (d) increased autonomy, (e) change in job title, (f) Status symbols like office

space, furnishings, (g) performance bonuses, (h) salary increases, (i) promotion in grade, or


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increase in responsibilities and (j) various forms of supplementary compensation. Managers

should match the rewards both with performance and with the perception and needs of the

employee.

7) Managerial Appraisal:

It is relatively easy to appraise the performance of technical or operative employees

compared to managerial personnel. This is because; the performance of operative employees can

be measured quantitatively, whereas the performance of managers cannot be determined

quantitative terms. Harold Koontz has developed a concept of managerial functions, viz.,

planning, organizing, leading motivating, staffing and controlling. Performing a number of or

series of activities can perform each of these functions. For example, performing staffing

functions requires performing a series of activities like analyzing jobs of his department,

planning for human resources, deciding upon internal and external recruitment. Thus each

function and sub functions of manager are elaborated into a series of activities. The checklist

contain the questions in these areas is prepared with a five degree rating scale, i.e., externally

poor performance, neither poor nor fair performance and externally fair performance. Thus this

technique measures the performance of managers in managing organizational environment.

6. RESEARCH METHODOLOGY

6.1. INTRODUCTION

The research design adopted, description of tools, selection of sample, procedure of data

collection, and outline of techniques used for the analysis of data is described below under

appropriate.

6.2 RESEARCHMEANING

Research is an art of scientific investigation. According to Redmen and Mary defines

research as a systematic effort to gain knowledge.

Research methodology is way to systematically solve the research problem. It is a plan of

action for a research project and explains in detail how data are collected and analyzed. This

research study is a descriptive research study.


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6.3 RESEARCH DESIGN

A research design is a plan that specifies the objectives of the study, method to be

adopted in the data collection, tools in data analysis and hypothesis to be framed.

6.4 TYPE OF STUDY

Descriptive research design has been used in this study. This research includes surveys through

questionnaire and fact-finding enquires. Descriptive research is mainly promoted to know the

present state affairs. The descriptive research includes surveys and fact-finding enquire of

different kinds. The major purpose of descriptive research is description of the state affairs, as it

exists at present. The major characteristic of this method is the researcher has no control over the

variables, he can report only what has happened or what is happening. The methods of research

utilized in descriptive research are survey methods of all kinds, including comparative and

correlation methods. In this case the study includes the employees of Hindustan Newsprint

Limited, Kottayam.

6.5 POPULATION

In research, population refers to a total category of persons or objects that meet criteria for the

study established by the researcher, any set of persons, objects or measurements having an

observable characteristic in problem statement. In this project the population for the study is 740employees consisting of workmen, supervisors and executives in Hindustan Newsprint Limited,

Kottayam.

6.6 SAMPLING METHOD

Convenient sampling method was used for this study.

6.7 SAMPLE SIZE

A total of 50 respondents were contacted for this study.


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6.8SOURCES OF DATAThe sources of data used here is both primary and secondary data.

Primary data were collected from the respondents through questionnaire.

Secondary data were collected from the library books, official documents, journals etc.

6.9METHODS OF DATA COLLECTIONThe required data for the study were collected through survey method.

6.10 TOOLS USED FOR DATA COLLECTIONQuestionnaire was used to collect primary data. Questionnaire for the study was

formulated from the valid questionnaire developed by Dennis Organ, John Cook and Toby

Wall (1980) and Allen. N & Meyer. J. Ordinal scale was used to obtain response for the

questions. The variable used is agreement variable (strongly disagree, disagree, neutral,

agree, strongly agree) for collecting the response of employees.

6.11 TOOLS USED FOR ANALYSISIn this study datas are analyzed with the help of SPSS (Statistical Package for Social

Science). The statistical tools used are percentage analysis, correlation, regression and ANOVA.

a) Percentage analysis:Percentage analysis is the method to represent raw streams of data as a percentage (a part in

100 - percent) for better understanding of collected data. Percentage method refers to a specified

kind which is used in making comparison between two or more series of data. Percentages are

based on descriptive relationship. It compares the relative items. Since the percentage

reduces everything to a common base and thereby allow meaning comparison.


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b) ANOVA:Analysis of variance technique is used to test whether the means of several samples differ

significantly. It, therefore, tests whether given samples are drawn from populations with same

mean or all samples belong to the same population. Analysis of variance may be defined as a

technique which analysis the variances of two or more comparable series (or samples) for

determining the significance of differences in their Arithmetic means, and for determining

whether different samples under study are drawn from same population or not, with the help of

the statistical technique called F-test.

6.12 Tools used for the presentation of data collectionFor the presentation of data, tools like tabulation and pie chart were used

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