CHAPTER-1

INTRODUCTION TO THE TOPIC

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INTRODUCTION

Performance appraisal, often referred to as performance evaluation or performance review, is a

fundamental practice within organizations aimed at assessing and managing the performance of
employees. It is a systematic process that provides a structured framework for evaluating
employees' job performance, contributions, and achievements in relation to established goals,
expectations, and organizational standards. Performance appraisal serves as a critical tool for human
resource management, talent development, and organizational improvement.

The practice of performance appraisal is rooted in the need for organizations to ensure that their
workforce is aligned with strategic goals and objectives, while also nurturing individual employee
growth and development. It plays a multifaceted role within the workplace, encompassing aspects
of feedback, goal setting, motivation, and decision-making. Through the performance appraisal
process, organizations seek to achieve several essential objectives:

1. Feedback and Improvement: Performance appraisals offer employees valuable feedback

on their strengths and areas for improvement, fostering a culture of continuous learning and
growth.

2. Goal Alignment: They help align individual employee goals and tasks with the broader
objectives of the organization, ensuring that everyone is working toward common goals.

3. Recognition and Reward: High-performing employees may be recognized and rewarded

for their contributions, motivating them to maintain or improve their performance.

4. Development and Training: Performance appraisals identify skill gaps and training needs,
allowing organizations to invest in employee development and enhance their capabilities.

5. Succession Planning: They aid in identifying employees with high potential for leadership
roles and succession planning.

6. Decision-Making: Performance appraisals provide data that can inform HR decisions such
as promotions, transfers, salary adjustments, and terminations.

7. Communication: They facilitate communication between employees and managers,

ensuring that expectations are clear and understood.

8. Legal and Ethical Compliance: Performance appraisals help organizations ensure that
employment decisions are fair, objective, and in compliance with legal and ethical
standards.

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 9. Performance Measurement: They provide a basis for measuring the effectiveness of
various HR and organizational initiatives.

WHAT IS “PERFORMANCE APPRAISAL”?

Performance Appraisal is defined as the process of assessing the performance and progress of

an employee or a group of employees on a given job and his / their potential for future

development. It consists of all formal procedures used in working organizations and potential of

employees. According to Flippo, “Performance Appraisal is the systematic, periodic and an

important rating of an employee’s excellence in matters pertaining to his present job and his

potential for a better job.”

DEFINITION OF PERFORMANCE APPRISAL

Performance appraisal of an author" typically refers to the assessment and evaluation of an

author's literary work, writing skills, and contributions within the context of the publishing
industry or literary field. It involves reviewing an author's books, articles, or other written works
to determine their quality, impact, and relevance. The goal is to provide feedback on the author's
writing style, storytelling abilities, and overall contribution to the field of literature. This
evaluation can be conducted by literary critics, publishers, editors, or readers and may influence
an author's reputation, opportunities for publication, and future career prospects.

Effective performance Appersial

1. Goal setting
The first step in preparing for your performance appraisal is goal setting. Take time to reflect on
your achievements over the past year and set goals for the future.

Your goals should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). It
will show your manager that you are committed to your job and are willing to improve.
Setting goals is essential because it helps you focus on what you want to achieve and gives you a
sense of direction. It also shows your manager that you are proactive and taking ownership of your
development. When setting your goals, align them with your organization's objectives.

2. Feedback

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Don't wait until your performance appraisal to ask for feedback. Ask for feedback from your
colleagues, customers, and managers throughout the year.

This will help you identify areas for improvement and show your manager that you are proactive in
seeking feedback.

Collecting feedback can help you understand how others perceive you and your work. It also shows
you are open to constructive criticism and willing to improve. When asking for feedback, be
specific and ask for examples. Also, be open to feedback that may be difficult to hear.

3. Keep a Record
Recording your achievements and challenges throughout the year will help you provide evidence of
your accomplishments during your performance appraisal and give your manager a clear picture of
your work.

Keeping a record of your achievements is essential because it helps you remember what you have
accomplished and how you have contributed to your organization's success.

It also lets you be more specific when discussing your accomplishments during your performance
appraisal. Make sure to include any awards, recognition, or significant achievements.

4. Review your Job Description

Review your job description and make sure that you meet all the requirements. If you do not meet
these criteria, ask your manager for additional training or support.

Reviewing your job description is crucial because it helps you understand the expectations and
responsibilities.

It also helps you identify areas where you need additional support or training. Make sure to discuss
any concerns you may have with your manager.

5. Be Honest
Be honest with yourself and your manager about your strengths and weaknesses. It shows your self-
awareness and will to improve.

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Being honest is essential because it helps you identify areas for improvement and helps your
manager understand your perspective.

It also shows that you are willing to take ownership of your development. When discussing your
strengths and weaknesses, be specific and provide examples.

6. Prepare for Difficult Questions

Your manager may ask you some difficult questions during your performance appraisal. Prepare
yourself by thinking about potential questions and practicing your answers.

Preparing for difficult questions is essential because it helps you anticipate potential areas of
concern and develop strategies to address them.

It also helps you feel more confident and prepared during your performance appraisal. Some
potential questions may include, "What areas do you need to improve on?" or "What challenges
have you faced this year, and how did you overcome them?"

When preparing for difficult questions, make sure, to be honest and provide specific examples.
Avoid getting defensive or blaming others. Instead, focus on how you can improve and what steps
you will take to overcome challenges.

7. Be Professional
Lastly, remember to be professional during your performance appraisal. Dress appropriately, be on
time, and be respectful.

Remember that this is an opportunity to receive feedback and improve, so approach it with a
positive attitude.

Being professional is essential because it shows that you take your job seriously and respect the
process. It also shows that you are willing to listen to feedback and take action to improve. Listen
carefully to your manager's feedback and ask questions if you need clarification.

8. Communicate Effectively

Effective communication is key to a successful performance appraisal. This means that you should
be able to communicate your thoughts, ideas, and goals clearly and effectively. It also means that
you need to be able to listen actively to your manager's feedback.
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To communicate effectively, prepare a list of your achievements and goals. Be clear and concise
when communicating these to your manager. If you need clarification on any of their feedback,
don't be afraid to ask questions. This shows that you are engaged and willing to listen and learn.

Remember that effective communication is a two-way street. It's not just about what you say but
also how you say it. Be mindful of your tone and body language. Avoid defensive or argumentative
responses. Instead, stay calm and positive. It will help you to build a good rapport with your
manager and create a positive atmosphere for your appraisal.

9. Focus on Solutions

During your performance appraisal, you could be asked about areas for improvement. When
discussing these areas, it is crucial to focus on solutions rather than problems. This means that
instead of dwelling on the negatives, you should come prepared with ideas on how to improve, and
what steps to take to overcome challenges.

Start by identifying areas of improvement. Think about the skills you need to develop and what
resources you need to achieve your goals. Then, create an action plan that outlines the steps you
will take to achieve your objectives.

This will show your manager that you are proactive and committed to development. When
discussing solutions with your manager, be specific and realistic.

Avoid making unrealistic promises or commitments that you can't keep. Instead, focus on
achievable goals that will help you to improve your performance.

10. Take Responsibility

Taking responsibility for your actions and mistakes is essential during your performance appraisal.
It shows that you are accountable for your work and are willing to learn from your mistakes. This
means being honest about your strengths and weaknesses and being willing to take action to
improve.

To take responsibility during your appraisal, start by reflecting on your performance over the past
year.

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Identify areas where you could have done better and take ownership of errors. Then, create an
action plan that outlines the steps you will take to improve.

During your performance appraisal, be honest about your shortcomings and take responsibility for
them. Don't blame others or make excuses. Instead, focus on what you can do to improve and learn
from your mistakes.

11. Stay Positive

Approach your performance appraisal with a positive attitude. Remember that this is an opportunity
to receive feedback and improve. Don't get defensive or argumentative. Instead, be open-minded
and receptive to feedback.

To stay positive during your performance appraisal, start by preparing mentally for the process.

Visualize a positive outcome and focus on your achievements and strengths. Then, approach the
appraisal with an open mind and a willingness to learn.

During the appraisal, stay calm and positive. Listen carefully to your manager's feedback and
respond constructively. Avoid getting defensive or argumentative. Instead, ask questions and seek
clarification where necessary.

This will help you to build a good rapport with your manager and create a positive atmosphere for
your appraisal.

12. Follow Up

After your performance appraisal, it's important to follow up with your manager to discuss any
action plans or next steps. This shows that you are committed to your development and willing to
take action to improve.

To follow up effectively, start by reviewing the feedback and action plans that were discussed
during the appraisal.

Identify areas that need further clarification or follow-up. Then, schedule a meeting with your
manager to discuss this.

CHARACTERISTICS
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  Performance Appraisal is a process.
 It is the systematic examination of the strengths and weakness of an employee in
 terms of his job.
 It is scientific and objective study. Formal procedures are used in the study.
 It is an ongoing and continuous process wherein the evaluations are arranged
 periodically according to a definite plan.
 The main purpose of Performance Appraisal is to secure information necessary for
 making objective and correct decision an employee.

PROCESS

The process of performance appraisal:

 Establishing performance standards

 Communicating the Standards
 Measuring Performance
 Comparing the actual with the standards
 Discussing the appraisal
 Taking Corrective Action

LIMITATIONS

 Errors in Rating
 Lack of reliability
 Negative approach
 Multiple objectives
 Lack of knowledge

Objectives of Performance Appraisal

The main objectives of performance appraisal is to secure information necessary for making
objectives and correct decisions on employees. It provides information for personnel decisions
just like – promotion, transfers, demotions, terminations, etc.

Appraisal of managerial performance is very important and a manager is responsible for

achieving the targets of his work unit. A sound appraisal system should include the post-
appraisal interview and interview provides an opportunity to the employee to explain his views
about performance standards.

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The main objectives of performance appraisal has been discussed in the following:

(1) It provides feedback to employees so that they came to know where they stand and can
improve their job performance.

(2) It provide a vital database for personnel decisions concerning placements, pay, promotion,
transfer and punishment etc.

(3) It diagnose the strengths and weaknesses of individuals so as to identify further training
needs.

(4) It provides coaching, counselling, career planning and motivation to subordinates.

(5) It helps to develop positive superior- subordinate relation, and thereby reduce grievances.

(6) It facilitates research in personnel management.

(7) It also helps to test the effectiveness of recruitment, selection, placement and induction
programmes.

The different appraisers are discussed below:

1. Self-Appraisal:

Self-appraisal is a common practice today, with the employees being given a role in evaluating
their own performance. The employee himself is best equipped to evaluate his performance
because he understands his strengths and weaknesses the best.

He can easily identify the problem areas that need training and development. The employees
however have to be trained to be rational and critical in their appraisal. Pre-determined and
measurable objectives can help to ensure a more objective appraisal.

2. Supervisors:

It is the responsibility of the supervisor to ensure that his subordinates perform their jobs well.
Hence, the authority to evaluate the employee performance has traditionally been with the
supervisor. Even today, the supervisor has a very important role to play in the appraisal of his
subordinates.

Many supervisors dread the exercise, as they do not want to spoil their relationship with the
employees. The organisation has to develop an open and professional culture, where the
process of appraisal is held in a healthy and constructive manner.

3. Peers:

Peer evaluation is a very sensitive area as it may lead to false and unhealthy appraisals,
because of the competition among peers. The organisation has to reach an advanced stage of
development before it can handle peer appraisal. Peer appraisal has to be used to assess the

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communication and interpersonal skills of the employee, which can affect the team
performance.

4. Customers/Clients:

The performance of an employee has a direct and immediate impact on his customers, either
internal or external. In service organisations like banks and hotels, customer feedback has
become the most important tool in evaluating employee performance. In manufacturing
organisations, the internal customer evaluates the performance of the employee.

For example, the customer of a worker in the assembly line is the next worker in the line, who
may assemble the parts provided by the former. Today, when service is an increasingly
important source of competitive advantage, customer/client appraisal is becoming extremely
relevant.

5. Subordinates:The concept of the subordinates evaluating the performance of his

supervisor is yet to gain acceptance in most Indian companies. The Indian culture does not
encourage the idea of a subordinate appraisal. However, with more and more MNCs operating
in the country today, this concept is likely to gain ground.

The 360 degree feedback system, which enables appraisal by subordinates, is being adopted by
many Indian organisations, especially the new economy players. However, this needs a high
level of organisational as well as employee maturity for its successful and effective
implementation

Role And Importance

In most organizations, appraisals are conducted only once per year. Organizations usually
conduct appraisals in order to improve organizational effectiveness by providing vital
information pertaining to the suitability and capability of its human resource.

Performance appraisal is usually conducted by the organizations for administrative and/or

developmental purposes.

The role and importance of performance appraisal in these areas is discussed

below:

1. Human Resource Planning:

Performance appraisal generates significant, relevant, and useful information about the
promotability and the potential of employees. This information is used to assess the
organization’s internal supply of human resources and availability of managerial personnel for
succession planning.

2. Recruitment and Selection:

Evaluation made in performance appraisal can be used to find out the particular areas of
knowledge, skills, and experience possessed by successful performers. This information can be
used to review effectiveness of recruitment and selection procedures and practices so that right
type of candidates can be selected for the right job.

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3. Training and Development:

Performance appraisal helps in identifying development needs of employees. This information

can be used to devise suitable training and development programmes to enable employees to
overcome their weaknesses and improve their strengths. Improvement in employees’
performance will bring about improvement in their department’s performance also.

4. Career Planning and Development:

Feedback guidance from reporting officers can enable employees to bring about changes in
their behaviours, attitudes, skills and knowledge, and set realistic goals for themselves.
Employees can also be counselled to develop their potential for particular types of work,
keeping in view their strengths and weaknesses.

5. Compensation:

Information gathered through performance appraisal provides inputs for making decisions
concerning salary administration, financial incentives, appreciations, additional
responsibilities, promotions etc. On the basis of this information, achievers can be rewarded
and poor performers can be given appropriate signals.

6. Employee Relations:

Employees can have a continuous dialogue with their managers for clarifying
misunderstandings and explaining mutual expectations. They can thus be motivated and
developed for better performance and higher productivity. Data gathered through performance
appraisal can also be used for making decisions concerning transfer, demotion, or dismissal.

Sometimes an employee’s performance in one position or under one manager may not be an
accurate indicator of job success. In such cases, a transfer may be called for, and the employee
can be tried in another job or under another manager.

Persistent substandard performance, despite opportunities to improve it, may result in

demotion, or even dismissal. Performance appraisal provides legal and organizational
justification for such decisions.

BENEFITS OF PERFORMANCE APPRAISALS

Traditional performance appraisals: A superior conducts an evaluation based on an

employee's work with evidence supporting how well they are doing.

360-degree review: Superiors, colleagues, supervisors and the individual make an evaluation,
allowing for feedback from all directions of the team.

Self-appraisals: An employee reviews their own performance, considering their

accomplishments and mistakes.

Employee-initiated review: An employee asks their manager for a review to determine how
they are performing and to request to take on more projects or a higher position.

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Group performance appraisal: Superiors review how the overall team in an organization is
performing, sometimes opening the feedback for employees to review their peers.

Upward appraisal: Staff members provide feedback on how their team leads are doing.

Negotiated appraisal: A mediator helps a manager and employee discuss work performance,
usually starting with a review of the employee's positive performance before offering
constructive criticism.

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 CHAPTER 2
COMAPANY PROFILE

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AMUL

Company Profile: Amul Private Limited

Introduction

Amul Limited, often referred to as Amul, is one of India's most iconic and successful dairy
cooperatives. Founded in 1946, it has grown into a multi-billion-dollar enterprise that has
revolutionized India's dairy industry and earned global recognition for its quality dairy products.
Amul's journey from a small cooperative to a global brand is a remarkable testament to the power of
collective effort and innovation.

Amul is an acronym of the Indian cooperative society named Gujarat Milk Marketing
Federation based in Anand, Gujarat.[2][3] It is under the ownership of Gujarat Cooperative Milk
Marketing Federation Limited, Department of Cooperation, Government of Gujarat. It is
controlled by 3.6 million milk producers.[4]

Historical Background

Amul's roots can be traced back to the Indian state of Gujarat, where it was founded by Dr.
Verghese Kurien, a visionary and renowned dairy technologist, along with a group of local farmers.
The establishment of the Kaira District Cooperative Milk Producers' Union Limited (KDCMPUL),
better known as Amul, marked the beginning of India's White Revolution.

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Milk, The inspiration behind a revolution

Over seven decades ago the life of a farmer in Kaira was very much like that of farmers anywhere
else in India. His income was derived almost entirely from seasonal crops. Many poor farmers faced
starvation during off-seasons. Their income from milch buffaloes was undependable. The milk
marketing system was controlled by contractors and middlemen. As milk is perishable, farmers
were compelled to sell their milk for whatever they were offered. Often they had to sell cream and
ghee at a throwaway price.

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They were in general illiterate. But they could see that the system under which contractors could
buy their produce at a low price and arrange to sell it at huge profits was just not fair. This became
more noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk
had to be transported 427 kilometers, from Anand to Bombay. This could be done only if milk was
pasteurized in Anand.

After preliminary trials, the Government of Bombay entered into an agreement with Polsons
Limited to supply milk from Anand to Bombay on a regular basis. The arrangement was highly
satisfactory to all concerned – except the farmers. The Government found it profitable; Polsons kept
a good margin. Milk contractors took the biggest cut. No one had taken the trouble to fix the price
of milk to be paid to the producers. Thus under the Bombay Milk Scheme the farmers of Kaira
District were no better off ever before. They were still at the mercy of milk contractors. They had to
sell their milk at a price the contractors fixed. The discontent of the farmers grew. They went in
deputation to Sardar Patel, who had advocated farmers’ co-operatives as early as 1942.

Sardar Patel reiterated his advice that they should market their milk through a co-operative society
of their own. This co-operative should have its own pasteurization plant. His advice was that the
farmers should demand permission to set up such a co-operative. If their demand was rejected, they
should refuse to sell their milk to middlemen.

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Sardar Patel pointed out that in undertaking such a strike there should be some losses to the farmers
as they would not be able to sell their milk for some time. If they were prepared to put up with the
loss, he was prepared to lead them. The farmers’ deputation readily accepted his proposal.

Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk co-
operative – and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village on January
4, 1946. It was resolved that milk producers’ co-operative societies should be organized in each
village of Kaira District to collect milk from their member-farmers. All the milk societies would
federate into a Union which would own milk processing facilities. The Government should
undertake to buy milk from the Union. If this wasn’t done, the farmers would refuse to sell milk to
any milk contractor in Kaira District.

The Government turned down the demand. The farmers called a ‘milk strike’. It lasted 15 days. Not
a drop of milk was sold to the milk merchants. No milk reached Bombay from Anand, and the
Bombay Milk Scheme almost collapsed. After 15 days the milk commissioner of Bombay, an
Englishman, and his deputy visited Anand, assessed the situation and accepted the farmers’
demand.

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This marked the beginning of the Kaira District Co-operative Milk Producers’ Union Limited,
Anand. It was formally registered on December 14, 1946. Its objective was to provide proper
marketing facilities for the milk producers of the district. The Union began pasteurizing milk in
June 1948, for the Bombay Milk Scheme – just a handful of farmers in two village co-operative
societies producing about 250 liters a day.

An assured market proved a great incentive to the milk producers in the district. By the end of 1948,
432 farmers had joined village societies, and the quantity of milk handled by the Union had
increased to 5000 liters a day. In the early stages, rapid growth brought in its wake serious
problems. Their solution provided the stimulus for further growth. For example, as the co-operative
movement spread in the district, it was found that the Bombay Milk Scheme could not absorb the
extra milk collected by the Union in winter, when buffaloes yielded an average of 2.5 times their
summer yield. Thus by 1953, the farmer-members had no regular market for the extra milk
produced in winter. They were again forced to sell a large surplus at low rate to middlemen.

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The only remedy was to set up a plant to process the extra milk into products like butter and milk
powder. The logic of this step was readily accepted by the Government of Bombay and the
Government of India, except for a few doubting Thomases. The government of India helped the
Union to get financial help from UNICEF and assistance from the Government of New Zealand
under the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 – lakh factory to process
milk powder and butter was blueprinted. Its foundation stone was laid by the then President of India
the late Dr. Rajendra Prasad on November 15, 1954. The project was completed by October 31,
1955, on which day the late Pandit Jawaharlal Nehru, the then Prime Minister of India, declared it
open. The new dairy provided a further fillip to the co-operative movement among milk producers.
The union was thus enabled to organize more village co-operative societies and to handle more and
more milk each year. This event also brought a breakthrough in dairy technology as the products
were made processing buffalo milk for the first time in the world. Kaira Union introduced the brand
“Amul” for marketing its product range. The word “Amul” is derived from Sanskrit word ‘Amulya’
which means ‘priceless’ or precious’. In the subsequent years Amul made cheese and baby food on
a large commercial scale again processing buffalo milk creating a history in the world.

1964 was the turning point in the history of dairy development programme in India. Late Shri Lal
Bahadur Shastri, the then Prime Minister of India who visited Anand on 31s October for
inauguration of Amul’s Cattle Feed Plant, having spent a night with farmers of Kaira and
experiencing the success wished and expressed to Mr Kurien, then the General Manager of Amul
that replicating Amul model through out our country will bring a great change in the socio-
economic conditions of the people. In order to bring this dream into reality, 1965 The National
Dairy Development Board (NDDB) was established at Anand and by 1969-70 NDDB came out
with the dairy development programme for India popularly known as “Operation Flood” or “White
Revolution”. The Operation Flood programme, even today, stands to be the largest dairy
development programme ever drawn in the world. This saw Amul as model and this model is often
referred in the history of White Revolution as “Anand Pattern”. Replication of “Anand Pattern” has
helped India to emerge as the largest milk producing nation in the world.

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Amul meant different things to different people :
To a Milk Producer … A life enriching experience
To a Consumer … Assurance of having wholesome milk
To a Mother … A reliable source of nourishment for her child
To the Country … Rural Development and Self Reliance
The White Revolution

The White Revolution, launched in the 1970s, was a transformative movement aimed at boosting
milk production and making India self-reliant in dairy products. Dr. Kurien's pioneering work in
introducing modern dairy farming techniques, establishing a cooperative model, and promoting the
use of technology played a pivotal role in this revolution. His efforts led to India becoming the
world's largest milk producer.

Cooperative Model

Amul's success is deeply rooted in its cooperative structure, which involves millions of dairy
farmers as stakeholders. These farmers, who are members of various cooperative societies, supply
milk to Amul, and in return, they receive a fair price for their milk production. This cooperative
model has empowered rural farmers, improved their livelihoods, and contributed significantly to
India's dairy industry's growth.

Product Portfolio

Amul offers a diverse range of dairy products, catering to the varied tastes and preferences of
consumers. Some of its most prominent product categories include:

1. Milk and Milk Products

 Fresh Milk

 Butter

 Ghee (clarified butter)

 Paneer (cottage cheese)

 Cheese

 Curd and Yogurt

 Milk Powders

2. Ice Creams

Amul ice creams have become a household favorite, offering an array of flavors and varieties.

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3. Chocolates

Amul has ventured into the chocolate segment, producing high-quality chocolate bars and
confectionery items.

4. Beverages

Amul also offers flavored milk and beverages, catering to different age groups.

5. Bakery Products

The company produces bakery products such as biscuits and cakes under its "Amul Delicious"
brand.

Marketing and Branding

Amul's marketing and branding strategies have been instrumental in its success. The brand's mascot,
the Amul Girl, has become an iconic figure in Indian advertising. The Amul Girl, with her witty and
topical advertisements, has effectively communicated the brand's message to consumers for
decades.

Amul's marketing campaigns focus on quality, purity, and the goodness of dairy products. It has
consistently positioned itself as a trustworthy and affordable choice for consumers. The brand's
"Utterly Butterly Delicious" campaign for Amul butter is one of the most memorable in Indian
advertising history.

Global Presence

While Amul has its roots in India, it has expanded its footprint globally. Amul products are
exported to more than 60 countries, including the United States, Australia, the Middle East, and
Africa. The brand's quality and reputation have helped it carve a niche in international markets,
making it one of India's most successful dairy exporters.

Financial Performance

Amul's financial performance has been consistently impressive. The cooperative has reported
steady revenue growth year after year. Its ability to maintain profitability while ensuring fair prices
to dairy farmers showcases its commitment to sustainable growth and the welfare of its
stakeholders.

Corporate Social Responsibility (CSR)

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Amul takes its corporate social responsibility seriously. The company has initiated several programs
aimed at improving the livelihoods of dairy farmers and promoting sustainable agricultural
practices. It has also invested in education and healthcare facilities in rural areas, contributing to the
overall development of these communities.

Research and Development

Amul has invested significantly in research and development (R&D) to enhance product quality,
develop new dairy products, and improve production processes. This commitment to innovation has
helped the company stay competitive in a rapidly evolving market.

Sustainability Initiatives

In recent years, Amul has taken steps to reduce its environmental footprint. It has introduced eco-
friendly packaging and adopted sustainable practices in its supply chain. These efforts align with
global trends towards sustainability and responsible business practices.

Challenges and Future Outlook

While Amul has achieved tremendous success, it faces challenges such as changing consumer
preferences, increased competition, and the need to adapt to evolving technology. However, the
cooperative's strong foundation, commitment to quality, and innovative spirit position it well for
continued growth and success in the future.

Conclusion

Amul Limited's journey from a small cooperative in Gujarat to a global dairy giant is a story of
resilience, innovation, and social impact. Its commitment to farmers, quality, and affordability has
made it a beloved brand in India and beyond. As Amul continues to evolve and expand its product
portfolio, it remains an inspiration for businesses worldwide and a testament to the power of
cooperative models in transforming industries and improving lives.

It all began when milk became a symbol of protest Founded in 1946 to stop the exploitation by
middlemen Inspired by the freedom movement The seeds of this unusual saga were sown more than
65 years back in Anand, a small town in the state of Gujarat in western India. The exploitative trade
practices followed by the local trade cartel triggered off the cooperative movement. Angered by
unfair and manipulative practices followed by the trade, the farmers of the district approached the
great Indian patriot Sardar Vallabhbhai Patel for a solution. He advised them to get rid of
middlemen and form their own co-operative, which would have procurement, processing and
marketing under their control. In 1946, the farmers of this area went on a milk strike refusing to be

22
cowed down by the cartel. Under the inspiration of Sardar Patel, and the guidance of leaders like
Morarji Desai and Tribhuvandas Patel, they formed their own cooperative in 1946. This co-
operative, the Kaira District Co-operative Milk Producers Union Ltd. began with just two village
dairy co-operative societies and 247 litres of milk and is today better known as Amul Dairy. Amul
grew from strength to strength thanks to the inspired leadership of Tribhuvandas Patel, the founder
Chairman and the committed professionalism of Dr Verghese Kurien,who was entrusted the task of
running the dairy from 1950. The then Prime Minister of India, Lal Bahadur Shastri decided that the
same approach should become the basis of a National Dairy Development policy. He understood
that the success of Amul could be attributed to four important factors. The farmers owned the dairy,
their elected representatives managed the village societies and the district union, they employed
professionals to operate the dairy and manage its business. Most importantly, the cooperatives were
sensitive to the needs of farmers and responsive to their demands. At his instance in 1965 the
National Dairy Development Board was set up with the basic objective of replicating the Amul
model. Dr. Kurien was chosen to head the institution as its Chairman and asked to replicate this
model throughout the country.

The Amul Model The Amul Model of dairy development is a three-tiered structure with the dairy
cooperative societies at the village level federated under a milk union at the district level and a
federation of member unions at the state level.

Establishment of a direct linkage between milk producers and consumers by eliminating middlemen

Milk Producers (farmers) control procurement, processing and marketing

Professional management

The Amul model has helped India to emerge as the largest milk producer in the world. More than
15 million milk producers pour their milk in 1,44,500 dairy cooperative societies across the country.
Their milk is processed in 184 District Co-operative Unions and marketed by 22 State Marketing
Federations, ensuring a better life for millions. GCMMF Gujarat Cooperative Milk Marketing
Federation Ltd. (GCMMF), is India's largest food product marketing organisation with annual
turnover (2017-18) US$ 4.5 billion. Its daily milk procurement is approx 18 million lit per day from
18,554 village milk cooperative societies, 18 member unions covering 33 districts, and 3.6 million
milk producer members. It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly
known as 'AMUL',which aims to provide remunerative returns to the farmers and also serve the
23
interest of consumers by providing quality products which are good value for money. Its success
has not only been emulated in India but serves as a model for rest of the World. It is exclusive
marketing organisation of 'Amul' and 'Sagar' branded products. It operates through 56 Sales Offices
and has a dealer network of 10000 dealers and 10 lakh retailers, one of the largest such networks in
India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza
cheese,Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc. GCMMF is India's largest
exporter of Dairy Products. It has been accorded a "Trading House"status. Many of our products are
available in USA, Gulf Countries,Singapore, The 16

Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from
Government of India for Excellence in Dairy Product Exports for the last 16 years. For the year
2009-10, GCMMF has been awarded "Golden Trophy" for its outstanding export performance and
contribution in dairy products sector by APEDA. In 2013-14, GCMMF took giant strides in
expanding its presence in International markets. Amul’s presence on Global Dairy Trade (GDT)
platform in which only the top six dairy players of the world sell their products, has earned respect
and recognition across the world. By selling milk powders on GDT, GCMMF could not only realize
better prices as per market demand but it also firmly established Amul in the league of top dairy
players in world trade. For its consistent adherence to quality, customer focus and dependability,
GCMMF has received numerous awards and accolades over the years. It received the Rajiv Gandhi
National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's Most
Respected Company Award instituted by Business World. In 2003, it was awarded the The IMC
Ramkrishna Bajaj National Quality Award - 2003 - certificate of merit- for adopting noteworthy
quality management practices for logistics and procurement. GCMMF is the first and only Indian
organisation to win topmost International Dairy Federation Marketing Award for probiotic ice
cream launch in 2007. For the innovations, GCMMF has received AIMA-RK Swamy High
Performance brand award 2013 and CNN-IBN Innovating for better tomorrow award in 2014.
World Dairy Innovation Awards- 2014 for Best Marketing Campaign - "Eat Milk with Every
Meal". For the tree plantation activity GCMMF has received seven consecutive Good Green
Governance award from Srishti during 2007 to 2013. The Amul brand is not only a product, but
also a movement. It is in one way, the representation of the economic freedom of farmers. It has
given farmers the courage to dream. To hope. To live.

COMPANY DETAILS

Year of Establishment 1973

24
 Members 18 District Cooperative Milk Producers' Unions
No. of Producer Members 3.6 Million
No. of Village Societies 18,549
Total Milk handling capacity per day 30 Million litres per day
Milk Collection (Total 2017) 6.44 billion litres
Milk collection (Daily Average 2017) 17.65 million litres
Cattle feed manufacturing Capacity 7800 Mts. per day

HEAD OFFICE:

Gujarat Cooperative Milk Marketing Federation Ltd. Amul Dairy Road, P B No.10, Anand –
388001, Gujarat, India.

VISION: -

Liberate our farmers from economic oppression and lead them to prosperity

MISSION: -

Dairy cooperatives of Gujarat turnover of Rs. 27000 crores by the year 2020. - To satisfy the taste
and nutritional requirements of the consumers and increasing numbers of these consumers today are
to be found only at the large format stores. Hence, in order to reach these consumers, we need to
form equitable alliances with organized retail chains wherever possible.

Objective:

Is to ensure that the maximum share of the consumer’s rupee goes back to the milk producers.

Future Plan:
Expansion of distribution network, creative marketing, consumer education and product
innovation, we will leverage effectively on rising income levels and growing affluence among
Indian consumers.  Tapping the rising demand for new value-added products.  Milk shed area will
increase to 231 lakh kg per day (23.1 million kg per day), at an annual growth rate of 4% 
Installing Bulk Milk Chillers and Automatic Milk Collection Systems in all our village cooperative
societies.  Collect as much as 195 lakh kg per day (19.5 million kg per day) of milk in the peak
flush season.  Satellite dairies with combined processing and liquid milk packaging capacity of 50

25
LKPD will be established in major metro market  We plan to double to processing capacity of our
dairy plants to 20.7 million kg per day, by 2020  Milk drying capacity will also be enhanced by
200 MT’s per day  Plan to expand our cattle feed manufacturing capacity, more than four times to
12,000 MT’s per day, by 2020.  Total investments envisaged for creating all the required
infrastructure would be Rs. 2,600 crores (Rs. 26 billion) till the year 2020

Amul Products List

Amul, an Indian dairy cooperative, offers a wide range of dairy and food products. Some of their
popular products include:

 Milk: Various types of milk, including fresh milk, toned milk, and skimmed milk.
 Butter: Amul Butter is a well-known product.
 Ghee: Amul Ghee is a clarified butter product.

Cheese: They produce a variety of cheese types like processed cheese, mozzarella, and cheddar.

Ice Cream: Amul Ice Cream comes in various flavors.

Milk Powders: Products like Amul Spray Milk Powder and Amul Mithai Mate.

Yogurt and Curd: Different yogurt and curd varieties.

Chocolates: Amul Chocolates are popular in India.

Paneer: A type of Indian cottage cheese.

Snacks: They also offer snac…

SWOT ANALYSIS
A SWOT analysis for Amul, an Indian dairy cooperative, can provide insights into its Strengths,
Weaknesses, Opportunities, and Threats:

Strengths:

Strong Brand: Amul is one of the most recognized and trusted dairy brands in India, known for its
quality and reliability.

26
Wide Product Range: It offers a wide range of dairy products, including milk, butter, cheese,
yogurt, and ice cream, catering to diverse consumer needs.

Robust Distribution Network: Amul has a well-established and extensive distribution network,
ensuring its products reach even remote areas of India.

Cooperative Model: It operates as a cooperative, empowering millions of dairy farmers and

promoting rural development.

Quality Control: Amul maintains strict quality control standards, assuring consumers of safe and
hygienic products.

Weaknesses:

Limited International Presence: While Amul has a strong domestic presence, its international
footprint is relatively small compared to some global dairy giants.

Dependency on Dairy: Amul's business heavily relies on dairy products, making it vulnerable to
fluctuations in milk production and demand.

Competition: The dairy industry in India is competitive, with other players vying for market share.

Supply Chain Challenges: Issues related to milk procurement and transportation can impact
Amul's operations.

Opportunities:

Diversification: Amul can explore diversification into non-dairy products or value-added dairy
products to capture new market segments.

Export Expansion: There is potential for Amul to expand its international presence by exporting
its products to more countries.

Health and Wellness Trends: With the growing focus on health and wellness, Amul can develop
and market healthier dairy products to cater to changing consumer preferences.

Technology Adoption: Embracing technological advancements in farming, processing, and

distribution can enhance efficiency and reduce costs.

Threats:

Competition: Intense competition from other dairy companies, both domestic and international,
poses a threat to Amul's market share.

27
Milk Price Volatility: Fluctuations in milk prices can impact Amul's profitability and the income
of dairy farmers.

Regulatory Changes: Changes in government regulations related to the dairy industry can affect
Amul's operations and business model.

Consumer Preferences: Shifting consumer preferences, such as a move towards plant-based

alternatives, could impact demand for traditional dairy products.

Global Economic Factors: Economic downturns and currency fluctuations can affect Amul's
exports and international business.

In conclusion, Amul has several strengths, such as a strong brand, a wide product range, and a
cooperative model. However, it also faces challenges, including competition and milk price
volatility. To thrive in the evolving dairy industry, Amul should explore diversification, expand
internationally, and adapt to changing consumer

28
 CHAPTER-3
REVIEW OF LITERATURE

29
LITERATURE REVIEW
PERFORMANCE APPRAISAL
Performance appraisal is one of the most important requirements for all successful business and
human resource policy (Kressler, 2003). Rewarding and promoting effective performance in
organization, as well as identifying ineffective performers for resource management (Pulakos,
2003). The ability to conduct performance appraisal relies on the ability to assess an employee's
performance in a fair and accurate manner. Evaluating employee performance is a difficult task.
Once the supervisor understands the nature of the job and the source of information, the information
needs to be collected in a systematic way, provided as feedback, and integrated into the
organization's performance management processor use in making compensation, job placement and
training decisions and assignment (London, 2003).
Performance evaluations have been conducted since the times of Aristotle (Landy, Zedeck,
Cleveland, 1983). The earliest formal employee performance evaluation program is thought to have
originated in the United States military establishment shortly after the birth of the republic
(Lopez,1968). The measurement of an employee's performance allows for rational administrative
decisions at the individual employee level. It also provides for the raw data for the evaluation of the
effectiveness of such personnel-system components and processes as recruiting policies, training
programs, selection rules, promotional strategies, and reward allocations (Landy, Zedeck,
Cleveland, 1983).In addition, it provides the foundation for behaviorally based employee
counseling. In the counseling setting, performance information provides the vehicle for increasing
satisfaction, commitment, and motivation of the employee. Performance measurement allows the
organization to tell the employee something about their rates of growth, their competencies, and
their potentials.
There is little disagreement that if well done, performance measurements and feedback can play a
valuable role in effecting the organization (Landy, Zedeck, Cleveland, 1983).
30
BASIC PURPOSE
Performance appraisalsshould focus on three objectives: performance, notpersonalities; valid,
concrete, relevant issues, rather that subjective emotions and feelings; reaching agreement on what
the employee is going to improve in his performance and what you are going to do
(MeKirehy,1998). Both the supervisor and employee should recognize that a strong relationship
exists between training and performance evaluation (Barr, 1993).
Each employee should be allowed to participate in periodic sessions to review performance and
clarify expectations. Both the supervisor and the employee should recognize these sessions as
constructive occasions for two-way should include opportunities for self-assessment as well as
supervisor feedback.
The supervisor should keep in contact with the employee to assure the training experiences are
producing desired impact (Barr, 1993). A portion of the process should be devoted to an
examination of potential opportunities to pursue advancement of acceptance of more complex
responsibilities. The employee development goals should be recognized as legitimate, and plans
should be made to reach the goals through developmental experiences or education (Barr, 1993).
Encouraging development is not only a supervisor's professional responsibility, but it also motivates
an employee to pursue additional commitments. In addition, the pursuit of these objectives will also
improve the prospect that current employees will be qualified as candidates when positions become
available. This approach not only motivates current performance but also assists the recruitment of
current employees as qualified candidates for future positions (Barr, 1993).

BENEFITS OF PRODUCTIVE PERFORMANCE APPRAISALS

Employee learns of his or her own strengths in addition to weaknesses. New goal and objectives are
agreed upon. Employee is an active participant in the evaluation process. The relationship between
supervisor and employees is taken to an adult-to-adult level. Work teams may be restructured for
maximum efficiency. Employee renews his or her interest in being a part of the organization now
and in the future. Training needs are identified. Time is devoted to discussing quality of work
without regard to money issues.
Supervisor becomes more comfortable in reviewing the performance of employees.
Employees feel that they are taken seriously as individuals and that the supervisor is truly
concerned about their needs and goals. (Randi, Toler, Sachs, 1992).
PITFALLS TO AVOID
When conducting performance appraisals on any level, it is important to keep in mind the common
pitfalls to avoid.
These pitfalls may include but are not limited to:
1. Bias/prejudice-Race, religion, education, family background, age, and/or sex.
2. Trait assessment-Too much attention to characteristics that have nothing to do with the job is
difficult to measure.
3. Over-emphasis on favorable or unfavorable performance of one or two tasks which could lead to
an unbalanced evaluation of the overall contribution.
4. Relying on impressions rather than facts.

31
5. Holding the employee responsible for the impact of factors beyond his/her control.
6. Failure to provide each employee with an opportunity for advance preparation (Maddux, 1993).
LEGAL IMPLICATIONS
Any performance appraisal system used to make employment decisions about a member of a
protected class (i.e. Based on age, race, religion, gender or national origin) must be a valid system
an accurate measure of performance associated with job requirements. Other it can be challenged in
the courts based on Title VII of the 1964, Civil Rights Act, the Civil Rights Act of 1991 and the
Age Discrimination in Employment Act of 1975 (London, 2003).
Effectiveness of performance Appraisal system it is argued is a function of applying the right
system in right context. -By Klein; the Art of Appraisal.
Performance appraisal system are "homework" that provides the information you need in order to
make appropriate administrative recommendations, hold meaningful feedback discussions with staff
members, and determined were performance improvement is required. - By Marion E. Haynes;
Managing Performance.
The effectiveness of an Appraisal System is determined by the quality of communication between
the manager and staff member, not by multiple raters, complex scoring methods, or the form used.-
By John D. Drake; Performance Appraisal.
One More Time Performance appraisal can actually be counter-productive for employees who are
in the greatest need of training and further development.-By Victor Buzzottan; improving your
Performance Appraisal.
One of the measure reason Performance management and Performance Appraisal fail is that too
much time is spent on Appraising performance using vague criteria and not enough time and effort
put into helping employee understands what his job is about, and the goals and objectives he/she is
expected to achieve to be successful. Learn to do goals setting painlessly. - By Robert Dacal;
Learn to plan Performance and set employee goals.
Maximizing and measuring our own performance and that of the people who work for us is a basic
tenant of the work environment. Always use of simple too land approach that can be beneficial in
achievement performance plan.-By Zack Mansdorf; Performance Management; Identifying work
goals.
Most managers and supervisors today are attempting to quantify their departmental objective and
pass them on their employees through performance standards. Despite the simplicity of this
management-by-objective approach, deadlines are missed, quality is relatively poor and productive
is low. The reasons for this may not be the fault of the employees carrying out the work. The cause
is most often associated with the immediate supervisor's lack of attention to the realities
surrounding objectives and performance standards require a careful analysis of all the relevant
issues. -By Gregory Isaac; Plan for performance.
Organizations striving to develop an open and participative approach have begun to give employees
the chance to say what they think of their managers. Such appraisals can only work in a culture
where mangers are willing to listen and learn and effect any necessary changes as a result.- By
Madhukar Shukla; Upward Appraisal and Organizationalculture.
A tone stage performance appraisal relied mainly on personality characteristics.

32
Subordinates were being appraised by their superior on the extent to which they exhibited
characteristic like, tact, willingness, enthusiasm, and maturity. Mangers were being put into position
of psychologists and required to make subjective ratings without any point of reference expect their
own opinion. -By Bob Nelson: Performance Assessment.
Performance appraisal is a part of overall performance management system of anorganization.
Through the appraisal process, gap between an individual's agreed performance standard his actual
performance is assessed and appropriate strategies are drawn for subsequent performance cycle.
This is a useful performance enhancement exercise. In many Organizations, PMS is linked with
other systems like salary & Benefits, Training & Development and Succession Planning. - By H. K.
Shukla: Striates Human Resource Management.
A literature review on the topic of performance appraisal provides insights into the various aspects,
methodologies, and challenges associated with assessing and managing employee performance
within organizations. Below, I'll outline key themes and findings from existing literature up to my
last knowledge update in September 2021:
1. Theoretical Foundations of Performance Appraisal:
 Early theories of performance appraisal, such as Frederick Taylor's Scientific
Management, emphasized the need for systematic evaluation to improve productivity
and efficiency.
 Later theories, like McGregor's Theory X and Theory Y, highlighted the importance
of motivation and employee involvement in performance appraisal.
2. Methods and Approaches:
 Traditional Methods: Literature has extensively covered traditional appraisal
methods like graphic rating scales, ranking, and forced distribution, which involve
subjectivity and have been criticized for their reliability and fairness.
 Modern Methods: More recent literature discusses contemporary methods like 360-
degree feedback, Management by Objectives (MBO), and continuous performance
management, which aim to provide a more holistic view of employee performance.
3. Effectiveness and Impact:
 Studies have examined the effectiveness of performance appraisal systems in
improving employee performance, motivation, and job satisfaction.
 Findings vary, with some studies suggesting positive outcomes, while others show
mixed or negative results, often influenced by factors like the quality of feedback,
the fairness of the appraisal process, and the organization's culture.
4. Performance Appraisal Challenges:
 Bias and Fairness: Discrimination and bias in performance appraisal, such as gender
or racial bias, have been well-documented challenges.
 Rater Errors: Literature explores various rater errors like halo effect,
leniency/severity, and central tendency, which can affect the accuracy of appraisals.
 Resistance: Employees and managers may resist the performance appraisal process,
perceiving it as time-consuming or bureaucratic.

33
 5. Performance Feedback and Development:
 Effective feedback delivery is crucial in the performance appraisal process. Research
has emphasized the importance of timely, specific, and constructive feedback.
 Performance appraisals can serve as a foundation for employee development, with
literature discussing how appraisal results can inform training and development
initiatives.
6. Technological Advancements:
 Recent literature explores the role of technology, such as HR software and AI-driven
analytics, in streamlining performance appraisal processes and enhancing objectivity.
7. Cultural and Global Perspectives:
 Cross-cultural research highlights variations in performance appraisal practices
across different cultures and regions, emphasizing the need for cultural sensitivity.
8. Legal and Ethical Considerations:
 Literature addresses legal and ethical issues in performance appraisal, including
compliance with anti-discrimination laws and ensuring fairness and transparency.
9. Future Directions:
 Emerging trends in performance appraisal, such as the use of artificial intelligence
and data analytics, have been discussed as potential game-changers in the field.
 Greater emphasis on continuous feedback and agile performance management is also
a focus of ongoing research.
It's important to note that the field of performance appraisal is dynamic, and new research and
developments may have emerged since my last update in September 2021. Researchers and
practitioners continue to explore ways to enhance the effectiveness and fairness of performance
appraisal processes in organizations.
Employees are important assets for the company, because the roles and functions of employees
aim to help expedite productivity and maximize performance and use time effectively and
efficiently. This study aims to determine the effect of work assessment to performance employee in
something company and also aim for review the effect of performance appraisal on employees in an
organization or company. This study uses the Literature Review method or literature review.
Performance appraisal is also known as a performance review, performance evaluation, or
employee appraisal which aims to increaseemployee productivity in a company. The purpose of
performance appraisal is as follows: (1) As a basis for decisi…

DEFFINATIONS OF PERFORMANCE APPRAISAL

Everything you need to know about the definitions of performance appraisal. After selection,
training and development of employees and they being on job for some time, it is essential to
appraise their performance which will give a fairly good idea about the effectiveness of the
processes of selection, training and development undertaken by the organisation.

The outcome of performance appraisal also indicates whether the organisation is going in the
right direction or not.

34
Performance appraisal is one of the important sub-functions of staffing in management. Human
behaviour is a complex phenomenon because no one can anticipate accurately what exactly a
man is going to do.

Edwin B. Flippo, “Performance appraisal is a systematic, periodic and so far as humanly

possible, an impartial rating of an employee’s excellence in matters pertaining to his present
job and to his potentialities for a better job.”

Methods of Performance Appraisals

Performance appraisals come in many forms. Managers and human resources staff responsible
for these appraisals need to choose the best methods based on the size of their organization and
what sorts of responsibilities the employees fulfill.

1. 720-Degree Feedback

You could say that this method doubles what you would get from the 360-degree feedback!
The 720-degree feedback method collects information not only from within the organization
but also from the outside, from customers, investors, suppliers, and other financial-related
groups.

2. The Assessment Center Method

This method consists of exercises conducted at the company's designated assessment center,
including computer simulations, discussions, role-playing, and oth…

3. Behaviorally Anchored Rating Scale (BARS)

This appraisal measures the employee’s performance by comparing it with specific established
behavior examples. Each example has a rating to help collect the data.

4. Checklist Method

This simple method consists of a checklist with a series of questions that have yes/no answers
for different traits.

5. Critical Incidents Method

Critical incidents could be good or bad. In either case, the supervisor takes the employee’s
critical behavior into account.

6. Customer/Client Reviews

This method fits best for employees who offer goods and services to customers. The manager
asks clients and customers for feedback, especially how they perceive the employee and, by
extension, the business.
35
7. Field Review Method

An HR department or corporate office representative conducts the employee's performance

evaluation.

8. Forced Choice Method

This method is usually a series of prepared True/False questions.

9. General Performance Appraisal

This method involves continuous interaction between the manager and the employee, including
setting goals and seeing how they are met.

10. Human Resource Accounting Method

Alternately called the “accounting method” or “cost accounting method,” this method looks at
the monetary value the employee brings to the company. It also includes the company’s cost to
retain the employee.

11. Management By Objective (MBO)

This process involves the employee and manager working as a team to identify goals for the
former to work on. Once the goals are established, both parties discuss the progress the
employee is making to meet those goals. This process concludes with the manager evaluating
whether the employee achieved the goal.

12. Performance Tests and Observations

This method consists of an oral test that measures employees' skills and knowledge in their
respective fields. Sometimes, the tester poses a challenge to the employee and has them
demonstrate their skills in solving the problem.

13. Project Evaluation Review

This method involves appraising team members at the end of every project, not the end of the
business year.

14. Rating Scales

These ratings measure dependability, initiative, attitude, etc., ranging from Excellent to Poor or
some similar scale. These results are used to calculate the employee's overall performance

Advantages of Performance Appraisal:

36
Feedback and Improvement: Provides employees with feedback on their performance,
helping them understand their strengths and areas needing improvement, which can contribute
to personal and professional growth.

Goal Alignment: Aligns employee goals with organizational goals, ensuring that individuals
are working toward common objectives.

Recognition and Rewards: Recognizes and rewards high-performing employees,

motivating them to continue excelling in their roles.

Identification of Training Needs: Helps identify training and development needs,

enabling employees to acquire new skills or knowledge to perform better.

Communication:Fosters open communication between employees and managers, allowing

for discussions about job expectations and career aspirations.

Succession Planning: Aids in identifying potential leaders and successors within the
organization.

Legal Protection: Provides documentation of performance-related issues, which can be

valuable in defending against legal claims related to employment decisions.

Disadvantages of Performance Appraisal:

Subjectivity:Assessments can be influenced by the personal biases and perceptions of the

evaluator, leading to unfair evaluations.

Stress and Anxiety: Employees may experience stress and anxiety leading up to and during
performance reviews, potentially affecting their well-being and work performance.

Time-Consuming: Conducting performance appraisals can be time-consuming, especially

for managers with many direct reports.

Inaccuracy:It may not accurately capture an employee's overall performance due to limited
data or a focus on recent events rather than a comprehensive view.

Demotivation:Poorly executed appraisals or overly critical feedback can demotivate

employees and decrease morale.

Resistance:Employees and managers may resist the process, viewing it as bureaucratic or

unhelpful.

Administrative Burden: Requires significant administrative effort, including record-

keeping and documentation.

37
Lack of Focus on Development: If performance appraisals are solely tied to rewards and
promotions, they may fail to promote employee development and growth.

The Importance of Performance Appraisal in Organizations

It is clearly that the HRM makes a great contribution for either private or public sector
organizations to achieve organization goals, therefore, as an important function of HRM, the
performance appraisal has significant importance in organizations. If there is no performance
appraisal system, an organization can hardly have a clear understanding of its current situation,
therefore it cannot get the direction and goals for improvement for future, the situation of the
organization will be dangerous. If the performance appraisal system is full of deviation or even
error, it can possibly lead the organization into a wrong direction of resource inputting, thus the
organization will lose its long-term competitiveness. On the contrary, an effective performance
appraisal system can ensure resources of the organization invested into the most critical processes,
which can improve competitive advantage of organization.

Generally speaking, the importance of performance appraisal to organization is mainly reflected in

three aspects:

1. Affecting the productivity and competitiveness of organization. Performance of employees has a

huge effect on productivity and competitiveness of the organization. Performance can be measured
from work results, work action and work attitude of employees;

2. Performance appraisal result is an important indicator of personnel decisions. Performance

evaluation offers important reference when organization making personnel decisions, such as
promotion or demotion, secondment, salary adjustment and so on;

3. Effectively performance appraisal leads to better staff management. It means that an organization
can make better evaluation of staff performance, which results in more reasonable remuneration and
incentive. It also means that an organization will be able to offer more help to employees’ self-
development since performance evaluation can explore the potential of employees and help them
know clearly about what they should do to meet expectations better. Besides, it will help to achieve
better communication between superiors and staffs, which promote greater unity of purpose.
38
It is no doubt to say that strategic control plays an important role in meeting strategic business
objective of the organizations. “Strategy implementation is best accomplished through high-
performing people” (Michlitsch, 2000), that is to say, the HRM functions are important strategic
control measurements. The ability of the organization to obtain a benefit from the professional
knowledge and employees’ vision will be limited if there is an invaluable link between human
resources functions and strategic plans of organization (Humphreys, 2005), so the link between the
HRM and strategic objective is so important. As one of the core functions of the HRM, performance
appraisal has purpose on administration and motivation, it provides important information and
feedback for the HRM, so it is necessary for leaders of organizations to understand and create
accomplished performance appraisal and feedback systems, which can “link human resource
management activities with the strategic needs of the business” (Schuler, Fulkerson and Dowling,
1991).

On the other hand, according to the research of Walsh and Fisher (2005), “organizations’
performance appraisal processes operate in ways that are less than ideal”. Performance appraisal
may be leaded to useless and inaccurate situation by many factors such as time pressures,
complicated forms and psychological defense. What’s more, the appraisal process may become
unclear and incoherent since employees and organizations try to meet different needs by
performance appraisal. That is why most organizations agree that performance appraisal is
important and must be executed, but only a few organizations can execute it continuously, usefully
and effectively. Besides, “a performance appraisal system should build clarity and reinforce a
strategic corporate mission/direction” (Chadwick, 1991), different parts of the organization will
make effort to achieve the objectives in their one-sided view if a performance appraisal system
didn’t build clarity and strengthen strategic organization objective, this may lead to sabotaging to
overall organization goal. If things come to this situation, performance appraisal cannot act as an
important and useful role in the HRM, let alone in strategic control.

NEED FOR PERFORMANCE APPRAISAL

Feedback and Improvement: It provides employees with feedback on their performance, helping
them understand their strengths and weaknesses. This feedback is crucial for personal and
professional growth.

Goal Alignment: It helps align individual goals with organizational goals. By evaluating how well
an employee's performance contributes to the overall objectives, organizations can ensure everyone
is working towards the same goals.

Reward and Recognition: Performance appraisals are often tied to rewards, promotions, and
bonuses. Recognizing and rewarding high-performing employees can motivate them and boost
morale.

Identifying TrainingNeeds: It helps identify areas where employees may need additional training
or development. This can be essential for skill enhancement and career progression.

Succession Planning: Organizations can identify potential future leaders through performance
appraisals. This aids in succession planning and ensures a pipeline of talent for critical roles.

Legal and Documentation: Performance appraisals can serve as a record of an employee's

performance. This documentation can be important in cases of disputes, promotions, or
terminations, helping protect both the employee and the organization.

39
Communication: Regular performance reviews encourage communication between managers and
employees. It provides a platform for discussing concerns, setting expectations, and fostering a
healthy working relationship.

Performance Measurement: It allows organizations to assess the effectiveness of their human

resource management practices. By analyzing appraisal data, they can make informed decisions
about talent management and development strategies.

40
 CHAPTER-4
RESEARCH METHODOLOGY

41
INTRODUCATION
Research methodology is a tool that helps in investigation or inquiry to gain new knowledge.
The research process or the steps undertaken is as follows.
The project titled procedures & documentation of Human Resource consultancy. Is clearly
defined & based on systematic research design to meet the objectives of the study. The
logical analysis of various aspects of the data is made to arrive at the results of the study.
Research is an active, diligent and systematic process of inquiry in order to discover interpret
or revise facts, events behaviours, or theories or to make practical application with the help of
such facts, laws or theories. The term “research” is also used to describe the collection of
information about a particular subject.
A research design is a specification of methods and procedures for acquiring the
information needed. It is overall operation pattern and the framework of the project that
stipulates what information is to be collected from which source and by what procedure.
The research design undertaken for the study was an exploratory one. The reason for using an
exploratory research method was to obtain qualitative data and also since the nature of study
is as such that it required the exploration of various aspects within and outside the company

OBJECTIVE OF STUDY
 To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
 To identify the strengths and weaknesses of employees to place right men on right job.
 To maintain and assess the potential in a person for growth and development.
 To provide a feedback to employees regarding their performance and related status.
 It serves as a basis for influencing working habits of the employees.
 To review and retain the promotional and other training programmes.

SCOPE OF THE STUDY

 Provide employees with a better understanding of their role and responsibilities.
 Increase confidence through recognizing strengths while identifying training needs to
improve weaknesses.
 Improve working relationships and communication between supervisors and subordinates.
 Increase commitment to organizational goals; develop employees into future supervisors.
 Assist in personnel decisions such as promotions or allocating rewards.

LIMITATION OF THE STUDY

 Lack of Timeliness:Annual or infrequent performance appraisals may not provide
timely feedback, hindering employees' ability to make immediate improvements.

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  Demotivation: Poorly conducted appraisals can demotivate employees if they perceive
them as unfair or biased, potentially leading to decreased performance.
 Incomplete Assessment: Appraisals may not capture the full spectrum of an employee's
contributions, focusing too heavily on recent events or easily measurable metrics.
 Resistance to Change:Both managers and employees may resist the process, viewing it
as time-consuming and bureaucratic rather than a constructive tool for development.
 Legal and Ethical Concerns:Mishandling appraisals can result in legal issues, such as
discrimination claims, if not conducted objectively and in compliance with relevant laws
and regulations.
 Data : All the secondary data required were not available.
 Allow time for self-reflection, self-appraisal and personal goal setting.

RESEARCH DESIGN
“A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.”
DESIGN USED IN OUR RESEARCH
Descriptive cum Analytical Design.
Descriptive research includes surveys and fact- finding enquiries of different kinds. The
major purpose descriptive research is description of the state of affairs as it exists at present.
In analytical research, on the other hand, the researcher has to use facts or information
already available, and analyse these to make a critical evaluation of the material.

DESIGN USED IN OUR RESEARCH

Descriptive cum Analytical Design.
Descriptive research includes surveys and fact- finding enquiries of different kinds. The
major purpose descriptive research is description of the state of affairs as it exists at present.
In analytical research, on the other hand, the researcher has to use facts or information
already available, and analyse these to make a critical evaluation of the material.

SAMPLING
Population: The target population for this study comprises all employees of Amul India who are
actively involved in the performance appraisal process, including managers and non-managerial
staff.
Sampling Method: Stratified random sampling will be used. Different strata will be created based on
job roles and levels within the organization, and then random samples will be drawn from each
stratum.

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Sample Size: The sample size will be determined using a confidence level of 95% and a margin of
error of 5%. Based on the approximate number of employees in each stratum, a sample size of
approximately 300 employees will be selected.
Sampling Criteria: Inclusion criteria include employees who have been with the organization for at
least six months to ensure they have experience with the performance appraisal process. Exclusion
criteria involve employees on temporary contracts or who are not directly involved in the appraisal
process.

SAMPLE UNIT
 Communication, asking questions and receiving a response in person.
 Visiting the various organizations, libraries, internet and also preparation of the questionnaire
with the help of the project guide.
 Sample size is 100. Data was analysed by surveying employees from different departments.
 This part is done through discussing and analysing with my project guide and referring to the
subject regarding this topic. It was a random sampling.

METHOD OF DATA COLLECTION

Data collection is one of the most important aspects of research. For the success of anyproject
accurate data is very important and necessary. The information collected throughresearch
methodology must be accurate and relevant. The data collection method can be
classified into two methods.

Two types of data are being collected:

Primary data are those which afresh and for the first time, and thus happen to be original
incharacter. Secondary data, on other hand, are those which have already beencollected bysomeone
else and which have already been passed through the statistical process.

PRIMARY DATA
Data collected by a researcher is known as primary data. It is collected by a person for hisown use
obtained from findings. This is considered as first-hand information. This is that datawhich is
collected by us to meet our own specific purpose. The data is collected by the meansof
questionnaire filled in by the employees at different posts of Nagpur area office. Thismethod of data
collection is very popular particularly in big organizations.
THE RESEARCH APPROACH: Survey Method.
THE RESEARCH INSTRUMENT: Questionnaire.
THE RESPONDENTS: The employees of the organization.

SECONDARY DATA
Secondary data means data that are already available. They refer to data which has alreadybeen
collected and analysed by someone else. This type of data information can also be usedby the
44
researcher for his use as second hand information sources through which secondarydata can be
collected. Secondary data may either be published data or unpublished data.
Published data used here is from:
 Magazines
 Annual reports of the company
 Newspapers etc.

TOOLS USED FOR DATA COLLECTION

 Primary data collected through
 Questionnaire
 Informal interviews.
 Secondary data collected through
 Magazines
 Websites
 Other corporate publications.

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 CHAPTER-5
DATA ANALYSIS
AND
INTERPRETATION

QUESTION NO. 1 Are you aware about the modern techniqes use in performance appraisal?
46
(A) Yes (B) No

Question Yes No

Sample size 100 employees 60 40

Yes No

Interpretation Near about 60% of the employees had aware about modern performance appraisal
techniques . 40% employees had not aware about modern performance techniques .

Question No. 2 Performance appraisal techniques make you better eligible for promotion ,demotion and
transfer ?

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(A) agree (B) Not Agreed

Question Agreed Not Agreed

Sample size 100 employees 80 20

Agreed Not Agreed

InterpretationThe 80% of the respondent’s shows that PARs as a good strategyto go ahead with
promotion while 20% of respondents do not agree with it.

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Question No. 3 Are you aware about your performance appraisal or any evaluationdone by your
superior

(a) Yes (b) No

Question Yes No

Sample size 100 employees 80 20

Agreed Not Agreed

Interpretation 80 % the employees had responded in favour of that theywere aware about
performance appraisal.20 % employees had not responded in favour of that were aware about
performance appraisal.

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Question No.4 performance appraisal increases employees motivation ?

(a) Agreed (b) Not Agreed

Question Agreed Not Agreed

Sample size 100 employees 80 20

Agreed Not Agreed

Interpretation The 80% of the respondent’s shows that P.A. as a good strategy to
go ahead with promotion while 20% of respondents do not agree with it

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Question No. 5 Do you think performance appraisal is useful or just a waste oftime?

a) Useful (b) Waste of time

Question Useful Waste of Time

Sample size 100 employees 92 8

useful Waste of time

Interpretation More than 92% of the employees say that performance appraisal useful for their
self-assessment and promotions. Thus, they cannot ignore it.And rest of the employees thinks it as a
waste of time. 8 % employees say that performance appraisal waste of time .

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Question No. 6 Proper and adequate performance appraisal plays a crucial role inyour career
development

(a) Yes (b) No

Question Yes No

Sample size 100 employees 92 8

Yes No

Interpretation 92% of the responses show that Performance Appraisal Report helps a lot in the
promotional activities. 8 % of the response show that performance appraisal report not help a lot in
the promotional activities.

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Question No. 7 Does performance appraisal report is helpful in identifying Trainingand
Development need or it lay development plan for you?

a)To a large extent (b) To some extent (c) Not at all

Question To a large extend To some Extend Not at all

Sample size 100 60 30 10

employees

To a large entend To some extend Not at all

Interpretation 60% of the respondents are satisfied by the performanceappraisal report as it helps
them to understand the job profile and helps intraining need identification. 30 % of the respondent
are to some extend .10% of the respondent are not at all.

Question No. 8 Performance appraisal is most of the time fair and unbiased?

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A) Agreed B) Not agreed

Question Agreed Not Agreed

Sample size 100 employees 85 15

Agreed Not Agreed

Interpretation 85 % of the respondents show that Performance Appraisal reportis time fair &
unbiased. 15% of the respondents show that performance appraisal is time not agreed.

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Question No. 9 In your opinion, does the performance Appraisal system give a proper of your
contribution to the organisation?

(a) Yes (b) No

Question Yes No

Sample size 100 80 20

employees

Yes No

Interpretation There is a close response from the respondents onPerformance appraisal report
where on one hand (near about 40%) say that itmakes feel refreshed & know there better
responsibility. On the other hand somesay that it has helped them in improving their skills not to
define their futureresponsibility and performance.

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Question No. 10 is performance appraisal important in your organisation ?

(a) Yes (b) No

Question Yes No

Sample size 100 employees 92 8

Yes No

Interpretation 92% employees are responded yes and 8 % employees are responded
No .

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 CHAPTER 6
CONCLUSION AND SUGGESTION

57
CONCLUSION

 Mostly employees are aware about modern techniques use in performance appraisal.
 Employees are performance appraisal techniques make you better for
promotion,demotion,transfer.
 Mostly employees are aware about performance appraisal.
 Employees are saying performance appraisal increasing motivation of employees.
 Empoyees are saying performance appraisal useful .
 Proper and addequate performance appraisal plays a crucial role in your career.
 Performance appraisal report is identifying training and devlopment.
 Performance appraisal is most of the time fair and unbaised .
 performance Appraisal does system give a proper of your contribution to the organisation.
 Employees are saying.that Performance appraisal is important .

RECOMMENDATION AND SUGGESTION

In the light of my findings and conclusion mentioned in my research paper, I recommendfollowing

to my respective organization:

The emphasize should be more on their employees, as they are important asset ofthe organization.
In this way they will think themselves important and hence perform- more and will be more
motivated and committed.

The reward system should be more efficient so to motivate; and satisfy those fewemployees who
are de-motivated.

Some employees think that they are not being compensated fairly or the appraisalsystem is more
opaque. The appraisal system should be more transparent so thatevery employee thinks it as fair and
unbiased.

About the barriers to the performance faced by employees, management shouldtake strict- action
against the problems faced by employees.

People see top management control and lack of resources as the biggest barrier inthe way of
performance. This gap must be filled with open door policy and givingemployees some
empowerment.

58
 Most of the employees are not satisfied with the salary package. So Ericssonshould not ignore
these employees because it can damage the organization in thelong term. So Ericsson should
redesign their salary packages.

Some of the employees think that the reward system of Ericsson is not good ascompared to market.
So the reward system should be reconsidered and redesigned.

The performance appraisal system should be made better because some employeesdoubt about the
fairness of performance appraisal system of Ericsson.The development of better-integrated,
balanced, and strategically driven performance measurement frameworks has been accompanied by
an increase in the practice of performance measurement. PMSs can be a formidable tool in
monitoring and continually improving organizational performance. However, in spite of the
significant advances made, some issues require further study if measurement systems are to be fully
effective in the process of management through monitoring and decision making (Santos et al.,
2002). Among the issues to keep in mind when considering the design and use of PMS are these:

Be clear on what must be measured and why.

Use the right metrics.

Consider the limited perspective of performance measurement systems.

Beware ...

Suggestion # 1. Behaviourally Based Measures:

Evidence strongly favours behaviourally based measures over those developed around traits. Many
traits often considered to be related to good performance may, in fact, have little or no performance
relationship.

Traits like loyalty, initiative, and reliability may be prized by managers, but there is no evidence to
support that these traits will be adequate synonyms for performance in a large number of jobs. A
second weakness in traits is the judgement itself. What is loyalty? What one person considers as
‘loyalty’ the other may not. So traits suffer from weak interrater agreement.

Suggestion # 2.Combine Absolute and Relative Standards:

The appraisal methods that combine both absolute and relative standards should be adopted by
evaluators. For example, the evaluators may want to use graphic rating scale and individual ranking
method.

59
This dual method of appraisal has been instituted at some organisations to deal with the problem of
grade inflation. Employees get an absolute grade-A, B, C, D or E and next to it is a relative mark
showing how this employee ranked in the particular department or job circle. In this way, the
drawbacks of relative or absolute standards can be removed.

Suggestion # 3:Multiple Rate

The managers should share with the subordinates both expectation and disappointment on a day to
day basis. By providing t…

Suggestion # 4:Ongoing Feedback

As the number of evaluators increases, the possibility of attaining more accurate information
increases. If a person has 10 evaluators, nine having rated him excellent and one poor, the value of
one poor evaluation can be discounted. Therefore, by moving employees about within the
organisation so as to gain a number of evaluations, the probability of achieving more valid and
reliable evaluation increases.

Suggestion # 5. Selective Rating:The appraisers should rate in those areas in which they have
significant job knowledge. If appraisers make evaluations only on those dimensions on which they
are in a good position to rate, the chances of inter-rater

agreement increase and evaluation becomes a more valid process.

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CHAPTER 7
ANNEXURE

61
BIBLOGRAPHY
Books
 "Human Resource Management" by Gary Dessler
 "The HR Scorecard" by Dave Ulrich and Wayne Brockbank
 "The New HR Leader's First 100 Days" by Alan Collins and Nancy Lee
 "First Break All the Rules" by Marcus Buckingham and Curt Coffman
 "Drive: The Surprising Truth About What Motivates Us" by Daniel H. Pink

QUESTIONNAIRE

Question No.1 Are you aware about the modern techniqes use in performance appraisal?

(A) Yes (B) No

Question No. 2 Performance appraisal techniques make you better eligible for promotion ,demotion
and transfer ?

A) agree (B) Not Agreed

Question No. 3 Are you aware about your performance appraisal or any evaluationdone by your
superior

(a) Yes (b) No

Question No.4 performance appraisal increases employees motivation ?

(a) Agreed (b) Not Agreed

Question No. 5 Do you think performance appraisal is useful or just a waste oftime?
a) Useful (b) Waste of time

Question No. 6 Proper and adequate performance appraisal plays a crucial role inyour career
development
(a) Yes (b) No

62
Question No. 7 Does performance appraisal report is helpful in identifying Trainingand
Development need or it lay development plan for you?
a)To a large extent (b) To some extent (c) Not at all

Question No. 8 Performance appraisal is most of the time fair and unbiased?

A) Agreed B) Not agreed

Question No. 9 In your opinion, does the performance Appraisal system give a proper of your
contribution to the organisation?
(a) Yes (b) No

Question No. 10 is performance appraisal important in your organisation ?

(a) Yes (b) No

63