A STUDY OF PERFORMANCE APPRAISAL SYSTEM IN USL Introduction to Performance Appraisal The performance appraisal is part of a larger system known

as the performance management system. This system is the approach to the management of people using performance, planned goals and objectives, measurement, feedback and recognition to motivate people to realise their maximum potential. Performance appraisal involves the setting of clear quantifiable goals and objectives and assessing individual performance against these measures. Performance Appraisal is a process of evaluating an employees performance in terms of its requirements. Performance Appraisal can also be defined as the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes o administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally. 1.2 Aim Performance appraisals are a way to give feedback to staff regarding their performance. The appraisal can be used to encourage good work as well as point out opportunities for improvement. Appraisals can also be used to set measurable targets and objectives to continually spur performance improvement. Increasing Role Clarity Performance appraisal is a tool for communicating the skills, knowledge and attitudes required for the different job roles. The appraisal criteria acts as a guide to the attitudes and behaviours that XYZ COMPANY would like their staff in their various capacities to have.

Training and Development Performance appraisals measure an individuals performance and can identify opportunities for improvement or learning through training. Compensation and Reward As XYZ COMPANY bonuses and annual increments are linked to performance, a system for measuring performance in an equitable way is necessary. The performance appraisal encourages the use of objective, quantifiable criteria to measure performance which will be known to all staff. This system improves fair judgement and the perception of equity among staff Career Planning Performance appraisals will allow XYZ COMPANY to assess the skill set of their existing staff to ascertain the career path for each individual. Enhance Corporate Values XYZ COMPANYs corporate value is the pursuit of innovative quality in the areas of Customers, Employees, Society, Products, Technology, Management and Fairness. These values are translated to performance measures that are used in the appraisal. This enhances awareness of corporate values and promotes behaviours that are in line with XYZ COMPANYs values. The Importance of Having a Performance Appraisal Program A performance appraisal program (PA program) is important to employees professional development, to meeting the firms goals or objectives and, ultimately, to contributing to the companys or firms bottom line. No employer, whether a small CPA firm, a Big Four firm, a non-profit organization, a government institution or a private or public company, should be exempt from having a formal PA program. Other benefits that could be derived from having a PA program include enhanced communications, an opportunity to effectively address performance problems, and improved employee morale.

Before creating a PA program, there are several factors to consider. The employer should first determine the objectives for the program. Second, the employer should develop a plan and timeframe for launching the program. Finally, the employer should prepare for any obstacles that might appear, and regularly consider ways to improve the program. RESEARCH METHODOLOGY Aim of the Research To study and understand the type and purpose of Performance Appraisal System followed in United Spirits Limited. Objectives of the Study The following are the objectives of the study To study the Performance Management System in United Spirits Limited. To understand the type of Performance Appraisal Process that is being followed in USL. To study and understand the purpose of Performance Appraisal (where and how the performance appraisal data is used). To understand & evaluate the bottlenecks in the process and suggest ways to enhance the present Performance Appraisal System.

Research Design

A research design is a type of blueprint prepared on various types of blueprints available for the collection, measurement and analysis of data. A research design calls for developing the most efficient plan of gathering the needed information. The design of a research study is based on the purpose of the study. A research design is the specification of methods and procedures for acquiring the information needed. It is the overall pattern or framework of the project that stipulates what information is to be collected from which source and by what procedure The Research design of the study involves the following steps.

 Determining Data Collection design. Determining Data Collection methods and sources. Determining Sampling plan. Data Presentation and Analysis. Depending on the objective of the study the type of design adopted is Descriptive Research. The term descriptive research refers to the type of research question, design, and data analysis that will be applied to a given topic. Descriptive research can be either quantitative or qualitative. The study involves the collection of quantitative information that can be tabulated along a continuum in numerical form and also the collection of categories of information such as patterns of interaction in accordance to the study. Visual aids such as graphs and charts are used to aid the reader in understanding the data distribution.

Data collection method Collection of data is the first step in statistics. The data collection process follows the formulation for research design including the sample plan.

Collection of Primary Data: During the course of the study or research primary data was collected through observations and through direct communication with respondents on one form or another as well as through personal interview. In the study, Structured Questionnaire was used as the Research Instrument. Primary data is collected from the employees including Managers and Sub-ordinates by interview method using questionnaire. The Questionnaire was formulated keeping in mind the objectives of the study.

Secondary Data means data that is already available i.e., they refer to data, which has already been collected and analysed by someone else. Sources of secondary data of the study include information from various books, periodicals, magazines and Internet.

Sampling Plan A Pilot Study was undertaken and the data was collected from the entire Population. The Population under study include Managers and Executives (Administration Level) of the Organisation. Size of the Population Area of Population : 30 : United Spirits Limited, Kanjikode, Palakkad. Duration of study/work : 3 months.

Data Presentation and Analysis Data is presented and analysed using various Statistical tools such as Bar charts Line Graphs Pie-Diagrams Radar charts Doughnut Frequency and Percentage Analysis.

LIMITATIONS The following are the limitations faced during the course of the study. There is no concrete basis to prove the response given is a true measure of the opinion of all the employees as a whole. The response of the respondents may not be accurate always as they have a feeling that the Management might mistreat the data. Some of the respondents might be influenced by their peers in answering the questions. Sensitive company information cannot be displayed in the project report.

DATA ANALYSIS AND INTERPRETATION Responses based on the Method of Performance Appraisal System followed in USL Method of PA Comparison with colleagues Immediate superior prepares a descriptive report Company shares its strategic objectives/goals with its employees Opportunities to learn and develop career Individual goals are assigned based on customer, financial, process, learning and development perspective Involved in setting my goals and standards of organisation Adequate feedback is given about my performance Evaluation is based on feedback given by superiors, subordinates, customers and self 26.67 26.67 0.00 26.67 20.00 33.33 46.67 13.33 6.67 0.00 53.33 46.67 0.00 0.00 0.00 46.67 53.33 0.00 0.00 0.00 53.33 40.00 0.00 6.67 0.00 Strongly agree 0.00 0.00 Agree Neutral 13.33 26.67 40.00 6.67 Disagree 13.33 46.67 Strongly disagree 33.33 20.00

33.33

33.33

26.67

6.67

0.00

Chart represents the respondents opinion on the Method of Performance Appraisal System followed in USL

An analysis of Table 4.2 and chart 4.6 indicates the following:

All respondents agree that the individual goals are assigned based on the four perspectives namely customer, financial, process, learning and growth. It is also evident that United Spirits Limited provides opportunities to learn and develop individual career.

53 % of the respondents strongly agree that United Spirits Limited shares its strategic objectives/goals with its employees. 90 % of the respondents agree that they are involved in setting up of individual goals and standards of organisation. The above analysis is the indicative of theory where Kaplan and Norton (1992:71) have identified four perspectives each representing an important face of the organisation namely financial, customer, process, learning and development. The balanced scorecard is a strategic planning and management system that is used extensively in business and

industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Hence, it is concluded that the current method of Performance Appraisal System followed in USL is Balanced Scorecard Approach.

66 % of the respondents agree that they are provided adequate feedback about individual performance and 26 % of the respondents are neutral in their opinion. This indicates that there is scope for improvement to further enhance strategic feedback which provides the capability for organisational learning at the executive level.

Purpose of PA
100% % OF EMPLOYEES 50% 0% STRONGLY DISAGREE DISAGREE NEUTRAL AGREE STRONGLY AGREE

Chart indicates the percentage of responses as regards the purpose of PA in USL.

From Chart 4.15 it is evident that a majority of 80 percent of the employees agree in their opinion that Performance Appraisal data is used by the organisation in making payroll and compensation decisions and strengthening the relationship between employees and management. Hence, from the above analysis, the main purposes of Performance Appraisal Process followed in USL are as follows. To make payroll and compensation decisions. To strengthen the relationship between employee and management. To link individual and overall organisational goals. To give accurate assessment of employee performance. To make decisions on promotions and transfers.

FINDINGS AND CONCLUSION The following are the findings and conclusions derived from this particular research study. 1. The outcome of the survey illustrates that the employees are widely distributed between the age group of 40-50 years and majority are graduates. 2. Even though a major part of the employees who are associated with USL between (1-5) years say that the present process is effective, there are also a few respondents who are not very satisfactory about the Appraisal System followed. One of the reasons is that incentives were not properly given. There is a very good scope for the Organisation to identify the areas where the employees are dissatisfied, and necessary changes could be incorporated to make the process effective. 3. From the biographical information obtained, it is found that most of the employees are highly experienced with more than 10 years of total work experience. 4. It is also found that almost all the employees are very well aware of the current mode of performance appraisal system followed in the organisation. This indicates that there is good communication between the organisation and the employees which is also indicated by the fact that the organisation uses various modes of communication such as bulletins, conferences, via mail, through immediate superior and other company officials. 5. Even though the organisation provides international access to the Performance Appraisal System followed, most of the employees have given their opinion that the accessibility is only nationwide. This indicates that there is lack of knowledge among the employees. 6. It is also found that there is annual revision of the Performance Appraisal Process followed in the organisation. 7. Based on the experience of the employees it is found that online PMS is pretty good in speed, security and user-friendliness. 8. As a result of the responses based on the method of Performance Appraisal System followed in USL, it is clearly evident that the individual goals are

assigned based on the four perspectives namely customer, financial, process, learning and growth. It is also evident that United Spirits Limited provides good opportunities to learn and develop individual career. 9. It is also proved that USL shares its strategic objectives/goals with its employees and that they are involved in setting up individual goals and standards of the organisation. 10. This analysis is the indicative of theory where Kaplan and Norton (1992:71) have identified four perspectives each representing an important face of the organisation. Hence it is clearly concluded that the current mode of Performance Appraisal System followed in USL is Balanced Scorecard Approach. 11. The survey also indicates that adequate feedback about individual performance could be provided so that there is scope for the organisation to further enhance strategic feedback which provides the capability for organisational learning at the executive level. 12. It is also proved that there is huge scope for the organisation to enforce a better feedback system which identifies the critical factors that play an important role towards increasing the effectiveness of the current PA system. 13. As regards the purpose of PA, the following conclusions are drawn from the above analysis. The main purposes of Performance Appraisal Process followed in USL are prioritised as follows. (i) (ii) (iii) (iv) (v) (vi) (vii) To make payroll and compensation decisions. To strengthen the relationship between employee and management. To link individual and overall organisational goals. To give accurate assessment of employee performance. To make decisions on promotions and transfers. To identify gap between the desired and actual performance. To diagnose the Training and development needs of the future. improve performance through counselling, coaching and

(viii) To

development. (ix) To reduce the grievances of employees.

14. The above analysis as regards to the purpose of PA illustrates the following. Need to provide counselling and coaching to the employees towards improving their performance. There is a good link between the individual goals and the overall organisational goals ensuring individual goal clarity and better realization of organisational strategy. There is further scope for improvement towards identifying the gap in the desired and actual performance. Thus the following conclusions are drawn from the research undertaken.

SUGGESTIONS AND RECOMMENDATIONS Based upon the opinion of the employees the following suggestions are recommended in order to make the present method of PA process more effective. 1. Transparency into the system should be ensured through discussion regarding the employees performance with the employee concerned and trying to find out the grey areas so that training can be implemented to improve on that. 2. Along with Balanced Scorecard Approach, the method of Management by Objective could also be accompanied. 3. The organisation could conduct more sessions on training and development so that the PA system is used effectively. 4. Also video conferencing could be incorporated to the training sessions. 5. To further strengthen the PA process, goals should be revised at least half yearly basis. 6. Individual goals should be detailed clearly, evaluate the goals and reasons for not achieving them should be identified and appropriate training has to be provided to achieve them. 7. The organisation could take necessary steps towards solving individual employee grievances.

8. Performance Appraisal data could be used more effectively in order to improve accuracy in assessing the individual performance. 9. Rewards and incentives could be awarded so that they serve as an element of motivation and increases employee commitment and job involvement. 10. The organisation must provide proper feedback to the employees enabling them to understand the factors in which they are under rated. 11. Periodic counselling and coaching could be provided to the employees towards improving their performance.