Employees Discernment And The Effect Of Performance Appraisal On Their Work Outcomes @ TRF Limited

submitted In partial fulfilment of Post Graduate Diploma in Management 2014 -2016

SUBMITTED BYAnkita SinghPGDM 2014-2016ROLL NO. 14DM008April to June 2015

INDUSTRY MENTORFACULTY MENTORMr. T. SandeepProf. Bala SubramanianManager HRAssistant ProfessorTRF LimitedBIMTECH11, Station Road,GothapatnaBurmamines, Jamshedpur-831007BBSR, Odisha-751003

Faculty Guide Declaration

Industry Guide Declaration

iiACKNOWLEDGEMENT

This project bears the imprint of many people who have assisted me in the successful completion of this report. I gratefully acknowledge the contribution of all the people who took active part and provided valuable support to me during the course of this project.

To begin with, I would like to offer my sincere thanks to TRF Limited for giving me an opportunity to do my summer internship with the esteemed organization.

With due reverence, I acknowledge the valuable support of T. Sandeep, Manager HR, for giving me the opportunity to do my summer internship under his guidance. Without his guidance, support and valuable suggestions during the research, the project would not have been accomplished.

My heartfelt gratitude also goes to the entire Human Resources team for their co-operation and willingness to answer all my queries, and provide valuable assistance.I also sincerely thank Bala Subramanian, my faculty mentor at BIMTECH, who provided valuable suggestions, shared his rich corporate experience, and helped me script the exact requisites.

Last, but not least, I would like to thank Richa Jena (Assistant Officer HR), Bipin Karkatta (Manager HR), Steve Gunjan (Senior Officer HR) for sharing their experience and giving their valuable time to me during the course of my project.

Ankita SinghPGDM (2014-16)Roll No. 14DM008BIMTECH, Bhubaneswar

iiiDeclaration

I, Ankita Singh, a student of Birla Institute of Management Technology (BIMTECH), hereby declare that I have worked on project titled Employees discernment and the effect of performance appraisal on their work outcomes during my summer internship at TRF Limited, in partial fulfilment of the requirement for the Post Graduate Diploma in Management program.

I guarantee my research work to be authentic and original to the best of my knowledge in all respects of the process carried out during the project tenure.

My learning experience at TRF Limited, under the guidance of Mr. T. Sandeep, Manager HR, and Prof. Bala Subramanian, Assistant Professor HR , has been truly enriching

Ankita SinghPGDM (2014-16)Roll No.14DM008

Date:

iv

LETTER OF TRANSMITTAL

Date:

Mr. T. Sandeep,TRF, 11 Station Road,Burma Mines, Jamshedpur-831007

Dear Sir,

Re: Summer Project Report

Attached herewith is a copy of my summer-project report Employees discernment and the effect of performance appraisal on their work outcomes which I am submitting in order to mark the completion of an Eight-week summer internship at you organization. This report was prepared by me using the best of practices and summarizes the work performed on the project and is being submitted in partial fulfilment of the requirements for award of diploma.

I would like to mention that the overall experience with the organization was very good, and helped me to know how work is carried out in real practice with the help of your esteemed organization. I feel honoured that I got an opportunity to work with TRF Limited, a company of great repute.

I hope I did justice to the project and added some value to the organization. Suggestions/comments would be appreciated.

Yours truly,

Ankita SinghPGDM (2014-16)Roll No.14DM008

vLETTER OF Authorization

viTable of ContentsPage No.

II aI bCertificateFaculty MentorIndustry Mentoriii

IIAcknowledgementIii

IIIDeclarationIv

IVLetter of TransmittalV

VLetter of AuthorizationVi

VITable of contentsVii

VIIList of tablesix

VIIIExecutive Summaryx

1.1 a1 b1 c1 dIntroduction to the companyProfileArea of businessTechnology associatesLocations12233

2.2 a2 a 12 a 22 a 32 a 42 a 5Review of LiteratureObjectives of performance appraisalDefinition of performance appraisalDiscernment of pa in the organizationConceptual framework of the study Employee discernment of performance appraisal Employee discernment of pa and work outcomes 4556677

3.3 a3 b3 cProblem DefinitionBackground to the problemStatement to the problemObjectives89910

4.4 a4 bApproach to the problemPath adoptedParameters taken to solve the problem111212

5.5 a5 b5 c5 dResearch MethodologyResearch DesignData CollectionSampling TechniqueQuestionnaire development1314141415

6.6 a6 b6 c6d6eData AnalysisDemographic characteristics of respondents Employees discernment of the existing pa at TRF Employees level of work performance at TRFEmployees level of work affective organizational commitment at TRF Employees level of work turnover intention at TRF 171820242628

7.Limitations30

8.Conclusions and Recommendations32

9.9 aExhibitsQuestionnaire3637

10.References40

List of tablesPage No.

IStratified Random Sampling Design15

IISex, Age, and Experience along with Department of the employees18

IIIEmployees discernment of the existing Performance Appraisal at TRF20

IVEmployees level of Work Performance at TRF24

VEmployees level of work Affective Organizational Commitment at TRF26

VIEmployees level of work Turnover Intention at TRF28

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Introduction to the problem

As we all are aware that in the world of competition as organizations make efforts to remain competitive and sustainable, human resource (HR) professionals and should collaborate strongly in designing strategies, which are more productive and more useful. Among these functions, one of the most critical ones that is performance appraisal. An organization implements the performance appraisal system to allocate rewards for the employee, provide development advice as well as to obtain their perspectives, and justice perception about their jobs, department, managers, and organization.

Employees discernment of fairness of performance appraisal is a significant factor in employee acceptance and satisfaction of performance appraisal. A good perception will create a positive working environment in the organization, while a negative perception will affect the company performance. These perceptions depend on the manager or supervisors actions and behaviours toward the employee. If performance appraisals are perceived as unfair, therefore, the benefits can diminish rather than enhance employees positive attitudes and performance.

Specifically, the discernment of unfairness can adversely affect employees organizational commitment, job satisfaction, performance as well as their work related stress, organization citizenship behaviour. The number of studies has examined that the effect of performance appraisal system on employee had increased. In another study by Brown 2010, revealed that there was a direct relationship between performance appraisal satisfaction and employee outcomes, which is mostly job satisfaction among employees.

Research Methodology

There were total 5 functions/departments in which survey was done. Then a questionnaire was prepared and data collection was done through:-

Hard Copy/Offline Survey Personal/ Telephonic SurveyxiAfter drafting the questionnaire, I got it verified with the mentor. Feedback from all the employees was collected through various means like, employees personal interviews with senior officials & submitting of responses in a hard copy. Further these responses were compiled and sent to the employees controlling officers through similar mechanism of (offline & personal interviews) for their evaluation.

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INTRODUCTION TO TRF LIMITED

INTRODUCTION TO THE COMPANY

ProfileThe combined competencies of three companies, the erstwhile Tata Robins Fraser (established in 1962), Tata Material Handling Systems (formerly Tata Man. Ghh., established in 1978), and Tata Technodyne (established in 1996), helped create TRF. The company is regarded as one of the most comprehensive sources of engineering equipment, systems and services. It manufactures bulk material handling and processing equipment, bulk material handling systems, coke oven equipment, coal dust injection systems for blast furnaces, coal beneficiation systems, and port and yard equipment. EPC and EPCM services including mini blast furnace technology are also provided. The company caters to diverse industries including power, metallurgy, chemical, mining and cement.

Areas of businessThe Company offers a wide range of products and services. Bulk material handling equipment:TRF manufactures conveyor components such as idlers, pulleys, take ups, scrapers, belt trippers / shuttle conveyors, blow feeders, apron feeders, vibrating/reciprocating feeders, steep angle conveyors and portable conveyors. Its range of yard equipment includes stackers, bucket wheel reclaimers, and scraper and blending reclaimers. Wagon handling equipment, such as wagon loaders, ship loaders and ship unloaders, is also produced. Bulk material processing equipment:Vibrating screens including scalping screens, de-water risers, de-sliming screens, and foundry shake-outs are manufactured. The company also produces crushing equipment such as, cone crushers, double roll crushers, hammer mills, impactors, jaw crushers, ring granulators, rotary breakers and single roll crushers. Bulk material handling systems:Conveyor systems for use in plants, cross country conveyor systems, underground conveyor systems, raw material bedding and blending systems, and rapid loading systems are manufactured.2 Coke oven equipment:The company produces stamping, charging and pushing equipment, charging gas transfer systems, and equipment for conventional top charge batteries, such as charging cars and pushing cars. Coal dust injection systems:The company manufactures injection systems whereby pulverised and dried coal is conveyed in dense flow mode and injected through blast furnaces for improved performance and reduced coke consumption. Coal beneficiation systems:Coal beneficiation systems that use the dense media cyclone- cum-floatation process and jig system process are produced. De shaling is done using barrel washer systems. Port and yard equipment:The Company manufactures slewing cranes, grab ship and barge un loaders, ship and barge loaders, barrel re claimers and stacker re claimers. It also makes special purpose EOT cranes for steel mills. EPC and EPCM services:TRF offers support services for infrastructure, power generation, ferrous and non-ferrous metals, including mini blast furnace technology and coal washeries.

Technology associates:The Company has several collaborators and technology associates. These include SAARTECH, Germany, for stamping, charging, pushing equipment, charging gas and transfer cars; Techint Italimpianti, Italy, for yard and port equipment manufacture; BMH, Germany, for coal dust injection systems; Schalke, Germany, for coke oven machinery; Hatch Associates, Australia, for high capacity conveying systems and coal washeries; SMS Demag, Australia, for mini blast furnace; Flour Daniel India and LTA Process Engineering.

LocationsThe companys headquarters and factory are located at Jamshedpur, with offices in Hyderabad, Mumbai, New Delhi and Nagpur.

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LITERATURE REVIEW

LITERATURE REVIEW

Performance appraisal is considered as one of the most important activities of HRM in both private and public sector organizations. The existence of performance appraisal principles has been observed since early 1900s.1.1. Objectives of PAAppraisal is the analysis of the success and failures of an employee and the assessment of their suitability for training and promotion in the future. Appraisal is a key component of performance management of employees. Its objectives are to: Increase motivation to perform effectively. Increase staff self-esteem. Gain new insight into staff and supervisors. Distribute rewards on a fair and credible basis. Develop valuable communication among appraisal participants.

1.2. Definition of PAA performance appraisal is known by other terms like employee appraisal, performance review. It has been defined as the process of identifying, evaluating and developing the work performance of employees in the organisation. It is conducted by self, peers, seniors and junior. But generally in formal method it is conducted by the immediate manager or supervisor under whom the person is directly working. Appraisal should measure both performance in accomplishing goals, plans and performance as a manager. Performance appraisal is defined as a tool used to achieve the following objectives with an organization: To retain control over their employees To involve the employee in setting goals for the organization. To evaluate the extent to which each employees day to day performance is linked to the goals established by the organization. To improve the employees performance by continuous communication and feedback between both the employee and the organization. To specify the behavior that employees must perform in accordance with the organizational objectives. 1.3. Discernment of PA in an organizationIt matters if performance appraisal gives a positive impact or a negative impact to the employees. It shows whether the employees get motivated to perform better, if they receive a good feedback or do they get de-motivated and loose interest in their job. Till now we discussed the purpose, uses of PA in the organization, but the discernment i.e. the understanding of Performance Appraisal is not taken into consideration in most cases which is important for the employee as well as the organization. If the employees don't recognize this, then they would suffer unnecessarily in the organization the reason being that, an employee has a certain level of expectation from his company when he joins it; he expects some kind of growth from it, also the organization expects a lot from him. But, a negative feedback of performance would largely hamper him mentally and make him loose his interest in his job. There would be change in his attitude, which would be problematic for him as well as the organization. He would be de motivated to achieve the organizational objectives. Most Employees think that , their promotion or salary increments largely depends on their performance. Employees therefore are in a dilemma and consider this situation as 'survival of the fittest' .They know for a fact that, their performance is only taken into consideration at the end of the day, and in order to grow in the company they need to be proactive towards their work. The feedback the employee receives from his superior, may simply describe the level of performance achieved. Hence, it is important for the managers to conduct the appraisal process properly.

1.4. Conceptual framework of the study

Employee's discernment of PA

1.5. Employees discernment of PA systemEmployee perception of fairness of performance appraisal has been studied as a significant factor in employing acceptance and satisfaction of performance appraisal .In discussing the performance appraisal process inside any organization, it is very important for the success of the PA, to determine how those employees who are responsible for conducting the appraisals (appraisers) as well as those being appraised (appraises) generally perceive the PA process.

1.6. Employees discernment of work outcomesIn the study of Kuvaas (2010), the perceived effectiveness of performance appraisal is found to have a positive relationship with work performance and organizational commitment. Further, employees perceptions about the politics of performance appraisal are negatively related to job performance and 8positively related to turnover intention. This is the major reason employees resist in implementing the performance management systems.

Work PerformanceIt can be defined in two ways:1. It views work performance as a result or consequences of action.2. It is the action or behavior that is relevant to achieving organizational goals

Organizational CommitmentOrganizational commitment is conceptualized by Allen and Meyer, (1990) into three dimensions:1. The first one is attitudinal or affective commitment, which is drawn from positive work experience,2. the second one is continuance commitment, which is derived from prior investment and possible cost of leaving the organization, 3. The third one also normative commitment, which is loyalty, or sense of obligation to remain attached to the organization.

Turnover IntentionTurnover intention (TOI) is defined as the reflection of employee intention either to stay or leave the organization they worked for due to dissatisfaction or searching new job opportunity. Turnover intention is an attitudinal factor affecting employee intent to quit and actually quitting an organization.7

PROBLEM DEFINITION

PROBLEM DEFINITION

Background of the Problem This study is conducted with the aim to explore the relation that is between employees discernment of PA and their work outcomes, in the form of work performance affective commitment and turnover intention, because one of the factors that affect employees work outcomes is their perception towards the performance appraisal practice of the organization. This has been done to realize the current state of the employee outcomes and create strategies to improve work performance and affective organizational commitment, thus reducing employees turnover.

Thus, the present study attempts to examine the perception of the employees towards the various aspects of the current performance appraisal system and its impact on their work outcomes. Opinions of employees could have important implications in the design and implementation of performance appraisal system in organizations.

Statement of the ProblemAs we know that performance appraisal is one of the main parts of organizational which can consist of several organizational processes such as measuring of work performance, establishing of purposes and reward management. In comparison to a lot of benefits the performance appraisal has many problems also which are the irrelevant criteria used to appraise the performance of the employees like: shortage of skills and knowledge of the raters, the subjectivity, favoritism and bias of the raters, lack of documentation and inability to provide feedback on time are some of the problems most employees raise. As a result of this situation the employees perception towards the PA system is adversely affected and they express dissatisfaction about the implementation of PA practice.

And if employees are satisfied with the PA of the organization, they will judge well and give every possible effort to carry out their responsibilities assigned to them efficiently and effectively. Having these; differences in perceptions of employee about the existing performance appraisal practice based on their perception of fairness is a big question at TRF Limited. This study is therefore, seeks to investigate the employee perception toward the existing PA practice and the resulting work outcomes by analyzing; What consequences will happen in the area of work performance, affective commitment and turn over intentions as result of employees different perception of performance appraisal practice at TRF.9ObjectivesGeneral objective of this study is to find out the employees discernment and the effect of performance appraisal on their work outcome at TRF LimitedWhereas the specific objective of this study which are develop on the basis of the general objective are as follows: To determine employees discernment about the existing PA of the organization To determine the employees work performance, affective organizational commitment and their intention to leave for the employees. To determine the employees work outcomes in the form of work performance, affective commitment and turnover intention with respect to their perception of the current performance appraisal system.

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APPROACH TO PROBLEM

APPROACH TO PROBLEM

Path AdoptedFirstly, the current perception of employees towards the performance appraisal is identified which has given signal to the human resource management of the organization to take remedial actions on the overall practice of performance appraisal in order to minimize the factors which are leading to negative perception of employees. Secondly, it is a contribution in the practice of performance appraisal at TRF Limited for further research to bring behavioural change in the area of performance appraisal both in the mind of the appraiser, appraises and those parties responsible in the design of the instruments of PA forms. Thirdly, it gives me the opportunity to gain deep knowledge in the practice of performance appraisal.

Parameters taken to solve the problemsThis study focused on two independent variable employees perception of performance appraisal and employees work outcomes in the form of work performance, affective organizational commitment, and turn over intention. Other variables being affecting and affected by the perception of employees on performance appraisal are not addressed.

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

This part includes the Research design, Data collection, Sampling techniques, Questionnaire development.Research DesignIt was done through a survey in the form of the questionnaire in which the data was collected across the population through sampling. Quantitative survey is the most appropriate one to use if the purpose is to describe the degree of relationship which exists between the variables.

Therefore; the quantitative method was used by considering all employees of the organization and questionnaires was distributed to respondents.

Data CollectionTo address the objectives both primary and secondary source of data are utilized. But the main data collection methods that are used are mainly focus on the primary source of data.

The primary data were collected through survey questionnaires and interview with the employees of the organization.

The secondary data were collected through books, journals, articles and from website, annual and quarterly report of the organization and other material found in the organizations library.

Sampling TechniquesThe sampling method which was used was both stratified and simple random sampling. To remove and to minimize the possible biasness the population of the study was stratified into five major target groups based on the structure of the organization. And to select the respondents from each stratum simple random sampling design was taken into consideration. To do so the existing employee list was obtained from HR department of the organization then the weight was assigned to each stratum in order to from the sampled data properly represent the population from which the stratified sample of existing employee is drawn.

14Sample Size:The formula to calculate the sample size isn = [N / { 1 + N *(e) ^ 2)}]Where: n = is the sample from the populationN = is the total population i.e. 311E = is the error term, which is 5% (i.e. at 95% confidence interval) Using the above formula the simple size of the study is determined asn = [311 / {1 + 311 *(0.05) ^ 2)}]= 174.964= 175Thus, the total sample size of the study was 175, which is 56% of the total population (175 /311= .563).

Table 1: Stratified Random Sampling Design S.NoTypes of StrataTotal PopulationSample size(56% of population)

1BMHE8950

2BMHS9855

3BMHG7441

4P & YE1810

5O & MS3218

TOTAL311175

Questionnaire developmentThe designed questionnaire includes three main parts; Part one is aimed to collect data on Demographic Variables Part two is aimed to collect data on Employees discernment of performance appraisal and, Part three is aimed to collect data on the Employees work outcome

In the first part of the questionnaire, 4 questions are included about different demographic characteristics of the respondents such as work experience, sex, age, division and departments.15 The second and third part of the questionnaire consists of question to using five-point Likert Scale :(1=strongly disagree, 2= Disagree, 3= Neutral, 4= agree and 5= strongly agree). Thus, the respondents were requested to select their own choice of the five point Likert scale in order to specify their own level of agreement or disagreement.

The second part of the questionnaire includes 9 closed- ended items aimed to measure the employees perception of performance appraisal. On the other hand, the third part of the questionnaire includes 16 closed- ended items to measure the employees work out comes in the form of work performance, affective commitment and turnover intention.

Therefore, the questionnaire includes a total of 29 items.

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ANALYSIS

ANALYSIS

Demographic characteristics of RespondentsTable 2: Sex, Age, and Experience along with Department of the employeesDemographic FactorsFrequencyPercentage

1. Sex

Male11867.4

Female5732.6

Total175100

2. Age

556034.2

Total175100

3. Experience at TRF