PEPSI PROJECT HRM

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PERFORMANCE APPRAISAL AT PEPSI
HRM PROJECT
ANALYZING
PERFORMANCE APPRAISAL SYSTEM AT
PEPSI

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ACKNOWLEDGEMENT
‘’Vital to every operation is cooperation”. We really agree to this wonderful quotationput
forth by MR. FrankTyger. This project is successfuldue to the cooperation extended by
people who have truly contributed towardsit. We grately thankful to Ma’am Mahreen
khalil for giving us thisopportunity to experience. We would also like to thank HR
Executive Mr. Saad Naeem who empowered us with valuable information.

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Table of contents
Sr.No Title Page
no.
1. Introduction 5
2. CompanyProfile & Hierarchy 7
3. CompanySlogans 11
4. Human resource Management 12
5. Performance appraisals 13
6. Importance & Purpose 14
7. Performance Structure inthe organization 15
8.  Usesof PerformanceAppraisals 16
 MethodsOf PerformanceAppraisals 17
 Processof Performanceappraisals 20
9. Performance Appraisalasa motivationtools 21
10. Importance of Performance appraisal atpepsi 22
 SWORTAnalysis 23
  Rcommendations 24
 Conclusion 25
 

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INTERVIEWEE
MR. SAAD NAEEM
‘’SENIOR HR EXECUTIVE AT PEPSI PAKISTAN’’

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INTRODUCTION
Pepsi Cola
Pepsi was foundin 1892.
Pepsi cola started in the January 1898, from a small Drug store in the city of North Carolina. The
owner of the Drug store, Mr. Caleb Bradham, prepared a drink, which the customers called "the
Bred Drink". Bred registered this drink with the name of Pepsi Cola in 1903. Then he started his
own production at Macro level and established his own company. In 1909 this company reached
to 24 states of America with more than 250 dealers. The very first packing of Pepsi was in 16.5
ounce.
In 1932 Pepsi cola has introduced its new packing in 12 ounce. In 1950 Pepsi Cola has started its
new Advertising Campaign with the name of "Refresh without Filling". It also changed the
chemical formula and decreased its sweetness and calories.
With the efforts of the Sales & Marketing Department, Pepsi got so much fame that it established
new plants at a rate of thirty per annum.
Today Pepsi is available in more than 155 countries of the world including Soviet Union &
China.
PEPSI COLA IN PAKISTAN
In 1959 Pepsi Cola was introduced in Pakistan but due to lack of awareness, it was unsuccessful
therefore the headquarters decided to windup their business in Pakistan 1963. It came again with
much revised Strategy, facing a lot of difficulties in promoting there product and competing
against COCA COLA which was a well established brand here in Pakistan and for that reason
Pepsi once again went back,1979 Pepsi had secretly promoted its diversified products and carter
to all demographic groups of Pakistan there for in with in 5 years they emerged as a market
leader, having 62% of market share while COCO COLA had only 32% share.The marketin
PakistanissurelydominatedbyPepsi.Ithasprovenitself tobe the No.1 softdrink inPakistan.PEPSI

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Now days Pepsi is recognized as Pakistanis National drink. In 1971, first plant of Pepsi was
constructed in Multan, and from there after Pepsi is going higher and higher. Pepsi is the
choice soft drink of every one.
It is consumed by all age groups because of its distinctive taste. Compared with other Cola in
the market, it is a bit sweeter and it contributes greatly to its liking by all. Consumer’s survey
results explain the same outcome and Pepsi has been declared as the most wanted soft drink of
Pakistan.
Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Coke’s
basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick
diversification in creating and promoting new ideas and product packaging, is successfully
maintaining is No.1 position in Pakistan.
In coming future Pepsi is also planning to enter into the field of fruit drinks. For this purpose it
has test marketed its mango juice in Karachi for the first time.

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COMPANY’SPROFILE
 1898: Pharmacist Caleb D. Bradham begins selling a cola beverage called Pepsi-Cola.
 1905: Bradham begins establishing a network of bottling franchises.
 1923: Bradham's company goes bankrupt.
 1928: Roy C. Megargel reorganizes the firm as the National Pepsi-Cola Company.
 1931: Company again goes bankrupt and is resurrected by the president of Loft Inc.,
Charles G. Guth.
 1933: The size of Pepsi bottles is doubled, increasing sales dramatically.
 1936: Pepsi-Cola Company becomes a subsidiary of Loft.
 1939: First national radio advertising of the Pepsi brand.
 1941: Loft and Pepsi-Cola merge, the new firm using the name Pepsi-Cola Company.
 1964: Diet Pepsi debuts; Mountain Dew is acquired from Tip Corporation.
 1965: Pepsi-Cola merges with Frito-Lay to form PepsiCo, Inc., with the two predecessors
becoming divisions.
 1967: Frito-Lay introduces Doritos tortilla chips to the national U.S. market.
 1977: PepsiCo acquires Taco Bell.
 1978: PepsiCo acquires Pizza Hut.
 1981: Frito-Lay introduces Tostitos tortilla chips.
 1986: The Kentucky Fried Chicken (KFC) chain is acquired.
 1997: Taco Bell, Pizza Hut, and KFC are spun off into a new company called Tricon
Global Restaurants.
 1998: PepsiCo acquires Tropicana Products for $3.3 billion.
 1999: Pepsi Bottling Group is spun off to the public, with PepsiCo retaining a 35 percent
stake
 2000: PepsiCo reaches an agreement to acquire the Quaker Oats Company for $13.4
billion.
ADDITIONAL DETAILS
 Public Company
 Incorporated: 1965
 Employees: 118,000
 Sales: $20.37 billion (1999)
 Stock Exchanges: New York Chicago Swiss Amsterdam Tokyo
 Ticker Symbol: PEP

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HIERARCHY

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VISSION & MISSION STATEMENT
Mission
Our mission is to be the world's premier consumer Products Company focused on convenient
foods and beverages. We seek to produce financial rewards to investors as we provide
opportunities for growth and enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do, we strive for honesty, fairness and
integrity.
Vision
"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate -
environment, social, economic - creating a better tomorrow than today."
Our vision is put into action through programs and a focus on environmental stewardship,
activities to benefit society, and a commitment to build shareholder value by making PepsiCo a
truly sustainable company.

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PRODUCTLINES

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SLOGANS

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HUMANRESOURCEMANAGEMENT
Human Resource Management (HRM) is a process of bringing people and organization together
so that the goals of the each department are met. . It is that part of the management process
which is concerned with managing Human Resources in an organization.
Simply put, Human Resource Management is a management function that helps
manager recruit, select, train and develops members for an organization. In short, it may be
defined, as the art of procuring, developing and maintaining competent work force to achieve the
goals of an organization in an effective and efficient manner.
Human Resource Objectives
HR objective are designed to look out for the well being of all employees of the company.
 Provide leadership and direction to employees of the company.
 Career Development planning for all employees of the company
 Ensure thorough training of nationwide employees.
 To provide individual employees with orientation on the company at the time of joining.
 To provide employees with solutions to their problems.
 Maintaining data records of all employees of PEPSICO (Human Resources information
System).
 To evaluate and retain those employees who are assets to the company.

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PERFORMANCE APPRAISALS
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 to communicate with the employee and remedy them.
‘’Performance Appraisal is a process of evaluating an employee s
performance in terms of its requirements’’.
In simple terms performance appraisal may be understood as the assessment of an individual’s
performance in a systematic way, the performance being measured against such factors as job knowledge,
quality and quantity of output, initiative, leadership abilities,supervision,dependability,co-operation,
judgment, versatility, etc. Performance Appraisal is a systematic and periodic way of conducting an
impartial rating of an employee’s excellence in matters pertaining to his present job and to his
potentialities for a better job. Thus under Performance Appraisal, we not only evaluate the performance of
a worker but also his potential for development.
Objectives of Performance Appraisal
The main purposes of employee assessment are:
Training and Transfers have been effective or not. Performance is concerned and to assist them
with constructive criticism and guidance for the purpose of their development for dialogue
between the superior and the subordinate, and improves understanding of personal goals and
concerns.
 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.
 To determine increment rewards and to provide reliable index for
promotions and transfers to positions of greater responsibility.
 To suggest ways of improving the employee s performance when he is not found to be up
to the mark during the review period.
 To identify training and development needs and to evaluate
effectiveness of training and development programmes.
 To plan career development, human resource planning base potentials.

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 When to Appraise?
The appraisals are conducted whenever the supervisor or personnel managers feel it necessary.
However systematic appraisals are conducted on a regular basis; say for example every six
months or annually.
 Whose Performance should be rated?
To the question as to whose performance should be rated? That is, who can be rated? The answer
is obviously – Employees and when we say employees, it may be individual, group, teams, or
division.
 Who are Raters?
Raters are immediate Supervisors, specialists from HR Department, Subordinates, Peers,
Committees, Clients, Self-appraisals, or a combination of several.
IMPORTANCE &PURPOSE
Performance measures also link information gathering and decision making
processes which provide a basis for judging the effectiveness of personnel sub-divisions
such as recruiting, selection, training and compensation. Accurate information plays a
vital role in the organization as a whole. They help in finding out the weaknesses in the
primary areas.
Formal Performance Appraisal plans are designed to meet three needs, one of the
organization and the other two of the individual namely:
 They provide systematic judgments to back up salary increases, transfers,
demotions or terminations.
 They are the means of telling a subordinate how he is doing and
suggesting needed changes in his behavior, attitudes, skills or job
knowledge. They let him know where he stands with the BosS

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PERFORMANCEAPPRAISAL
STRUCTUREIN THE
ORGANIZATION
 Performance Standards
How does the Team Leader decide what's acceptable and what's unacceptable
performance? The answer to this question is the first step in establishing written
standards.
Performance expectations are the basis for appraising employee performance. Written
performance standards let the Team Leader to compare the employee's performance with
mutually understood expectations and minimize ambiguity in providing feedback.
Having performance standards is not a new concept; standards exist whether or not they
are discussed or put in writing.
When the Team Leader observes an employee's performance, he usually makes a judgment
about whether that performance is acceptable.
Standards identify a baseline for measuring performance.
From performance standards,the Team Leader can provide specific feedback describing the gap
between expected and actual performance.
 Performance Measurements
There are many effective ways to monitor and verify performance, the most common of
which are:
 Direct observatioN
 Specific work results (tangible evidence that can be reviewed without the
employee being present)
 Reports and records, such as attendance, safety, inventory, financial records, etc.
Commendations or constructive or critical comments received about the
employee's work.

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Uses of Performance Appraisal
Poor Performance indicates the need for retraining. Likewise, good performance may indicate
untapped potential that should be developed.
Followings are the some major use of Performance Appraisal to the organization:
Compensation Adjustments
Performance evaluations help decision-makers determine who should receive pay raises.
Many firms grant part or all of their pay increases and bonuses based upon merit, which is
determined mostly through performance appraisals.
Promotions
Promotions, transfers and demotions are usually based on the past or present performance. Often
promotions are reward for past performance.
HR performance
Good/bad performance throughout the organization indicates how well the human resource is
functioning.
Feedback
Performance feedback allows the employee, manager, and personnel specialists to intervene with
appropriate actions to improve performance.
Job DesignErrors
Poor performance may be a symptom ill-conceived job designs. Appraisals help diagnose these
errors.
Deficiencies
Good or bad performance implies strengths or weakness in the personnel department’s staffing
procedures.

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METHODSOF PERFORMANCE
APPRAISALS
PepsiCo uses the 180 degrees appraisal cycle through the technique or methods that have been
used by the PepsiCo is the Graphical Rating Scale also known as the tabulation method. It is
conducted through the ERP system which is supported by the Oracle. In PepsiCo the appraisal
system is known as the PDR i.e. performance development review.
Graphical Rating Scale
The Rating Scale is a form on which the manager simply checks off the employee’s level of
performance. This is the oldest and most widely method used for performance appraisal. The
scales may specify five points, so a factor such as job knowledge might be rated 1 (poorly
informed about work duties) to 5 (has complete mastery of all phases of the job).
Content of appraisal:
 Quantity of work:
Volume of work under normal working conditions.
 Quality of work:
Neatness, thoroughness and accuracy of work Knowledge of job.
 It is a performance appraisal form that contains five sections:
 Employee qualification
 Performance
 Integrity Section
 Leadership skills Section
 Succession planning and resource training. Dependability. Conscientious, thorough,
reliable, accurate, with respect to attendance, relief, lunch breaks, etc

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3. Rating scales
Rating scales can include 5 elements as follows:
• Unsatisfactory
• Fair
• Satisfactory
• Good
• Outstanding
4. Advantages of the rating scales
•Graphic rating scales are less time consuming to develop.
• They also allow for quantitative comparison.
5. Disadvantages of the rating scales
• Different supervisors will use the same graphic scales in slightly different ways.
• One way to get around the ambiguity inherent in graphic rating scales is to use behavior based
scales, in which specific work related behaviors are assessed.
• More validity comparing workers ratings from a single supervisor than comparing two workers
who were rated by different supervisors.
MANAGEMENTBY OBJECTIVES
(MBO)
AccordingtoProf. Reddin, “M BO is t he e s t a b l i s h m e n t o f e ffe c t i v e n e s s
a r e a s a nd effectiveness standards for the managerial positions and the periodic conversions
of these into measurable time bound objectives linked vertically and horizontally and with future
planning”.
MBO identifies performance deficiencies and enables the management and the
emplo yee s to set individ ua l i ze d self- impro ve me nt goals and
thus proves effect ive Training and Development program.

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Howis PDR conductedat PepsiCo?
There are certain steps and procedures the company follows while conducting the PDR and they
are as follows:
Step1
To Set the objectives and goals for the employees.
Step2
Review the performance after three months.
Step 3
The next review is held in the mid of the year. This review is to evaluate if any employee is
lacking or behind the targeted standards. And if it is so Special Training is given to speed up the
work process.
Step 4
The next step is of self-evaluation held in October-November.
Step 5
Finally the performance appraisal is conducted by the HR department.

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Process of PerformanceAppraisal
Performance Appraisal is a nine step process:-
Step 1
In this , the performance standards are established based on the Job Description and Job
Specification.
Step 2
Under this step, the Performance Standards are informed to all the employees including
Appraisals.
Step 3
In this, measurement of employee performance by the appraisers through observation, interview,
records and reports are done.
Step 4
This step finds out the influence of various internal and external factors on actual performance.
Step 5
This step is to comparing the actual performance with that of other employees and previous
performance of the employee and others.
Step 6
The sixth step of Performance Appraisal Process, the actual performance ismeasured with the
standards and finding out deviations.
Step 7
It compares the actual performance of the employee and other employees doing the same job and
discuss with him
Step 8
This step suggests necessary changes in standards, job analysis, internal and external
environment
Step 9 The last step is the follow-up of performance appraisal report. This step includes guiding,
counseling, coaching .

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MOTIVATION
Firms often face the problem of employee de-motivation when it comes to performance appraisal
and so PepsiCo is no exception.
In order to overcome this hurdle special training sessions are held by the company throughout
the year. In these training sessions employee are informed and convinced about the importance
and benefit of performance appraisal.
First, the employee gets a very clear cut understanding of his job duties, authority and
responsibility in the organization. Second, the employee is appraised of his highs and lows in
performance. When the highs are rewarded, the employee's morale is boosted tremendously and
when the lows are reprimanded, he takes care not to repeat the same mistakes in the future.
For the management, performance appraisals bring out the key and non-key performers. The
management then takes steps to hone the key performers and develop the non-key performers
into putting in their best. Performance appraisals identify the areas where training and
development are needed.
Performance Appraisalas a MotivationTool
Motivation is the process that energizes employees and propels them to pursue their Appraisals
have the power to motivate employees because they provide a number of interconnected
benefits:
When employees are satisfied, some of the most visible indicators are reduced turnover,
absenteeism, and tardiness.
They enhance personal development. Performance evaluations are motivational for employees
who are looking to enhance their personal learning, growth, and development.
Appraisals are a highly valuable source of information, insights, and tools necessary for such
progress. Performance appraisals are similarly motivational for employees whose needs are
centered on achievement, goal attainment, and sensing personal effectiveness, respect, and trust.

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Importanceof Performance Appraisalfor
PepsiCo
Performance appraisals, a very important function of the human resources department for any
organization, are conducted to gauge the net worth of all its employees. Appraisal methods
benefit the organization immensely. The aim of appraisals is to improve the present performance
of the employees and draw on the future potential.
The HR department undertakes this processes usually annually in which they procure, analyze
and document facts about the performances of the employees of the organization. Similarly,
PepsiCo conducts evaluation in a sequence as mentioned earlier after three months, than at mid-
year, following this in October-November than the final performance appraisal at the end of the
year.
During a performance appraisal review, a supervisor and an employee discuss the employee's
strengths and weaknesses. This gives the employee individual face time with the supervisor and
a chance to address personal concerns.
Feedback is enhanced through performance appraisal. Employees need to know when their job
duties are being fulfilled and when there are issues with their work performance. Managers
should schedule this communication on a regular basis. This leads to motivate the employees for
their good performance.
Performance appraisals allow employees and supervisors to discuss goals that must be met to
advance within the company and build a strong career. This can include identifying skills that
must be acquired, areas in which one must improve, and educational courses that must be
completed.

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SWOTAnalysis

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Recommendations
PepsiCo should build a strong management and development framework to stand the vigorous
competition from the various industries.
There should be on-line information of all the employees regarding all the activities performed
by them like performance, communication skills, quality of work, over time devoted by each
employee, etc.
By adopting MBO method, Employees compete against each other and don’t help others.

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Conclusion
PepsiCo is a name of standard and quality product. PepsiCo is stressing more on its short term
planning strategies to make its image good enough in the world community.
And is stressing more on the customer services and health and nutrition factors. It has a strong
management to keep the PepsiCo on the height of professionalism and commitment to quality.
The Performance Appraisal methods vary from one organization to another. Change in method
of Performance Appraisal has observable and immediate side effect on organizational processes
like work task, job design, organizational structure, knowledge and skill required, and values,
attitudes and behavior of employees.
Substantive changes in one or more of the above factors leads to perceive or actual psychological
threat of job displacement, reduction in economic security, disruption of social arrangements
and redefining of authority relationships.

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