APRIL 15, 2018

UNIVERSITY OF MYSORE
B.N. BAHADUR INSTITUTE OF
MANAGEMENT SCIENCES

A STUDY ON THE EFFECTIVENESS OF

PERFORMANCE APPRAISAL SYSTEM AND
ITS INFLUENCE WITH THE SOCIO-
DEMOGRAPHIC FACTORS OF THE
EMPLOYEES OF A MANUFACTURING
INDUSTRY IN TAMIL NADU

DEVKI S
Ist MBA
 Abstract
Managing human resources in today's dynamic environment is becoming more and more complex as well

as important. Recognition of people as a valuable resource in the organization has led to increases trends

in Employee maintenance, job security, etc. In the present competitive environment, organizations have to

ensure peak performance of their employees continuously in order to compete the market place,

effectively and traditionally, this objective was attempted to achieve though employee performance

appraisal which was more concerned with telling employees where they lacked in their performance.

Once the employee has been selected trained and motivated, he is then appraised for his performance.

Performance appraisal is the step where the management finds out how effective it has been at hiring and

placing employees. If any problems are identified, steps are taken with the employed and to remedy them.

The performance of an employee is influenced with various factors. The socio demographic factored has

influenced in many ways. This research tries to find out the effectiveness of the performance appraisal

system in Tamil Nadu based manufacturing industry, India. It is a descriptive type of research, simple

random sampling was adopted, and self-prepared, structured questionnaire with the five-point scale was

used to collect the primary data. The finding is the socio demographic factors and the overall performance

of the employee has the influence.

Key words

Performance Appraisal, Performance management, Employee appraisal, Human Resource.

INTRODUCTION

Performance Appraisal is a process of evaluating an employee performance of job in terms of its

requirements. Heyel observes, “ It is the process of evaluating the performance and qualifications of the
employees in terms of the requirement of the job for which he is employed, for purposes of administration
including placement, selection for promotions, providing financial rewards and other action which require
differential treatment among the members of a group as distinguished from actions affecting all members
equally others regard, it as a process of estimating or judging the value excellence, qualities or status of
some object, person or thing.” collectively, it is a part of all the other staffing processes, recruitment,
selection, placement and indoctrination. It is found systematic assessment of how well employees are
performing their jobs in relation to established standards and the communication of that assessment to
employees”.

Employee appraisal techniques was used for the first time during the First World War, when, Walter dill
Scott, the US army adopted the man to man rating system for evaluating military personnel. During the
1920-30 periods, rational wage structures for hourly paid workers were adopted in industrial units. Prof.
Beach has charted out, showing the changes in the terminology of employee appraisal that have taken
place since 1920. The major aim of performance appraisal is to enable an organization to maintain an
inventory of the number and quality of all managers and to identify and meet their training needs and
aspirations. In addition, increments rewards, maintain individual and group development and improving
the employee’s performance. To measure the performance appraisal there are several methods and
techniques. The method and scales differ for obvious reasons. These are based on the sources of traits or
qualities, different kinds of workers, and degree of precision of the employees. The types of performance
appraisal are involved both in traditional and modern methods. Perhaps we have various types of
appraisal methods they have certain limitations. Mamoria C.B, (2004) pointed out that, if the factors
included in the assessment are irrelevant, the result of merit rating will not be accurate. Some of the
factors are highly subjective thereby making the rating on scientific lines highly difficult. Supervisors are
guided by their personal emotions, likes and dislikes. This makes their ratings highly biased. But at
present every organisation has their own method to appraise the employees. The appraisal systems are
based on their immediate internal and external environment. Even though there are some tested tool to
measure the employee performance it is difficult to follow because, the organisation’s climate may differ
from industry to industry. Many organisations they have formulated their own system which are prepared
based on their own circumstance. This research tries to show the influence of the socio demographic
factors on performance appraisal system in a manufacturing industry situated at Tiruchirappalli, Tamil
Nadu, India.

STATEMENT OF THE PROBLEM

The problem of this research is to identify the relationship between socio demographic factors and the
performance appraisal system, further how it influenced on promotion, enhancing the job skills and
qualities, fixing of salary, and increment.
PURPOSE OF THE STUDY
The major objective of this study is to find out the effectiveness of the performance appraisal system
with the relevance of the socio demographic factors of the employees.

HYPOTHESIS
There is an association between socio demographic factors and the overall performance appraisal system.

SCOPE OF THE STUDY

This study has scope as it covers a wide range of the effectiveness of the performance appraisal system.
This study would not only provide a vital input in the reformulation of a new PA system but also identify
the influence of PA system with the socio-demographic factors. Further this study would make the
employees understand about the ways and means to develop a sound financial viability and growth. More
than it enhances the performance of the whole organization considerably.

METHODOLOGY OF THIS STUDY

It is purely an empirical and the descriptive form of study. The pilot study was conducted in a cement
manufacturing industry situated at Tiruchirappalli District of Tamil Nadu state in India. The researcher
has formulated the questionnaire based on the objective of this study. The questionnaire was properly
tested its reliability and validity with the level of 0.8261, the Split half Guttmann method was used. Ten
questionnaires were given to the respondents for the pre-testing. The population was 200 employees 5 per
cent simple random sampling was taken for the study. The primary data were collected through the
questionnaire. The secondary data were collected through various books, journals and some web journals.
The data were analysed with the proper statistical application. This study has certain limitations. The
study was conducted only at a single cement manufacturing industry. Therefore, the findings are not
generalized with other industries. The reliability of the research report is purely based on the consistency
of the responses given by the respondents.

DATA ANALYSIS AND INTERPRETATIONS

Data Analysis and Interpretation The data were analysed in two ways, a simple percentage and statistical
analysis were carried out.

Analysis based on Socio-demographic factories

Table 1 : Source Primary data

 Sl. no Details A B C D E

Age Below 25 26-35(22%) 36-45(16%) 46 and above

1 (44%) (18%)
Gender 92 % (Male) 8% (Female)
2
Educational Diploma UG (51%) PG (22%)
3 Qualification (17%)
Designation Supervisors Engineers (41 Managers
4 (28%) %) (31%)
Experience Below 5 years 6-10 (10%) 11-15(6%) Above 16
5 (52%) years (32%)
6 Monthly Below 10001-20000 20001-30000 30001- 40001 and
Income 10000(4%) (14%) (38%) 40000(26%) above
(8%)
Marital 52% (Married) 48%
7 Status (Unmarried)

From the table No.1 it is revealed that the socio demographic factors of the employees. From this 44 per
cent of the respondents are below the age 25 years. Regarding gender wise distribution, 92 per cent of the
respondents are male and 8 per cent of the respondents are female. Therefore, it is manufacturing industry
perhaps most of the respondents are male. In this half of the respondents are qualified at undergraduate
level. Maximum numbers of respondents are from engineers. While 50 per cent of the respondents have
received monthly salary between Rs.20001-30000, and 52 per cent of the respondents are married level.

Age wise distribution Marital status

ANALYSIS ON PERFORMANCE APPRAISAL SYSTEM
Regarding the opinion of the respondents on the performance appraisal system in the industry, there are
fifteen selected statements analysed. First, the opinion on the level of PA system, majority of the
respondents (60 per cent) has agreed that the existing PA system is good. Whereas the PA system helps to
the employees to identify the areas that need to improve and asses the training needs of the employees,
majority of the respondents (82 per cent) have agreed; only minimum number of the respondents (8 per
cent) have disagreed.

The statement regarding exposure about why performance appraisal is conducted, for this statement half
of the respondents have agreed (57 per cent) that to know the employees actual performance. Only
minimum number of the respondents have disagreed (37 per cent). Regarding PA by the subordinates,
majority of the respondents (60 per cent) have agreed and only few members (26 per cent) have
disagreed. It is seen that the industrial democracy is practised well in the organisation.

Training needs and Performance Appraisal Opportunity to express views on Performance Appraisal

The statement regarding the opportunity to express their views on PA system, majority of the respondents
(66 per cent) have agreed the statement. Minimum numbers of the respondents have disagreed. The
statement regarding PA helps the employee to understand their ability and inability about performance
majority of the respondents have agreed and only minimum numbers of the respondents have disagreed.
Next the statements regarding periodically conducting of PA system, majority of the respondents (62per
cent) have agreed and welcomed the periodical assessment. Only minimum numbers of the respondents
have disagreed, whereas the results of PA is properly communicated to the employees nearly half of the
respondents only agreed that statement. The remaining is disagreed. It is found that the results are not
properly communicated. 72 per cent of the respondents have agreed the statement regarding the PA
system increased my skills and quality, Only 6 per cent of the respondent s have disagreed. It is shown
the PA system not only the technical part but also it covers the employees qualities like behaviour,
interrelationship.

While, the confidentiality of the PA system, majority of the respondents (68 per cent) have agreed that it
is confidential. Minimum number of the respondents (26 per cent) have disagreed the statement. It is
found the result of the PA system is not shown to other employees, because it may create quarrels
between the employees.
 Confidentiality of Performance Wage and increment with Performance
Appraisal Appraisal

The statement regarding fixing of wage and increment and the result of PA, a vast majority of the
respondents (74 per cent) have agreed that the wage and increment have been fixed based on the result of
the PA. Only 14 per cent of the respondents have disagreed. It is observed that the performance appraisal
system gets its value. The results of the performance appraisal reflects actual performance, in this
statement a vast majority of the respondents have agreed the statement. (74 percent). It means the PA is
properly conducted in this organisation. This outcome is correlated with the statement number 1 of this
table. The statement regarding promotion it is based on the results of PA majority of the respondents
(68per cent) have agreed. Only minimum numbers are disagreed. It shows that the importance of the PA
system in an organisation. Whereas the statement regarding timely and effective feedback system
followed in the organization a good number of the respondents (66 per cent) have agreed and only
minimum numbers are disagreed (12 per cent). It is observed that the feedback system followed in the
organisation is good.

FINDINGS
Findings based on Socio demographic factors

Majority of the respondents (44%) are belonging to the age group below 25 years. It is found that this
industry has younger Human resources. A vast majority of the respondents (92%) are male members
though it is a manufacturing industry; the nature of the work is very hard perhaps most of the respondents
are male. (52%) are unmarried. It reveals that there are more newly recruited employees. Half of the
respondents (50%) receive salary between Rs.10001-15000. Majority of the respondents (52%) have less
than 5years of experience. It is seen that this industry is filling the vacancies immediately after the
retirement of the employees. It is a good practice.
Findings based on Performance Appraisal system

The existing PA system is good. The PA system helps the employees to identify the areas of
improvement. Employees have proper awareness on PA system. The PA system helps to assess the
training needs of the employees. PA helps the employee to understand their ability and inability. The PA
is periodically conducted in the organisation. Employees have the opportunity to express their views on
PA system. The results of PA are properly communicated to the employees. The result of the performance
appraisal reflects actual performance. The result of the PA helps to increase the job efficiency of the
employees. Promotion is based on the results of PA in this organisation. It shows that the importance of
the PA system in an organisation.

The result of PA system plays a vital role in fixing of wage and increment. It is observed that the
performance appraisal system gets its value. The PA system conducted in the organisation is confidential,
it is found the result of the PA system is not shown to others, because it is happened it may create quarrels
between the employees. The subordinates are also involved in the PA system. It shows that the industrial
democracy of the organisation. The PA system includes or covers of qualitative aspects, It is shown the
PA system not only the technical part but also it covers the employees qualities like behaviour,
interrelationship. There is a timely and effective feedback system followed in the organization. PA
conducted in this organisation is without any partiality.

SUGGESTION
There are some deviants or they have difference of opinion on the PA system or they may not be
interested in the PA system. The organisation has to identify them and give proper training to them to
make involve in the organisation activities regularly. Further the HR professionals have to make the
appraisal system more pragmatic way.

CONCLUSION
Employee’s performance appraisal is necessary to the industry to achieve the goals of the industry. It is
the duty of every organisation to give proper training and improve the efficiency of the employees in a
better way. Employees are considered as the valuable assets of all organisations. The progress of the
employees is closely linked with the performance. If the performance is improved obviously the quality
of the organisation is improved. In way the performance appraisal system is an important factor to
improve the quality of the employee as well as the industry. Here the study results clearly show that the
performance appraisal system of the particular industry is good and effective and have a high influence in
the socio demographic factors.

REFRENCES
Aswathappa, K. (1997). “Human Resources and Personal Management”, New Delhi, Tata McGraw Hill
publishing company.
Biswajeet Pattanayak (2000), “Human Resource Management”, Prentice Hall of India Private Limited,
New Delhi.

Dr. J. Vincent Xavier (2015), “Performance Appraisal Management”, St. Joseph’s College,
Tiruchchirappalli, Tamil Nadu.