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Mba project report

  1. 1. Satisfaction of managerial employees on performance appraisal system in Apollo Tyres Limited, Kalamassery Project Report submitted in partial fulfillment for the award of degree of Master of Business Administration of Cochin University of Science and Technology by JOB THOMAS Reg. No. 85301011 under the guidance of Prof. Dr. Sebastian Rupet Mampilly School of Management Studies Cochin University of Science and Technology Cochin, Kerala, India PIN 682 022 March 2013
  2. 2. DECLARATION I, Job Thomas do hereby declare that this project report entitled “Satisfaction of managerial employees on performance appraisal system in Apollo Tyres Limited, Kalamassery” is a bonafied record of the work done by me under the guidance of Prof. Dr. Sebastian Rupet Mampilly in partial fulfillment for the award of degree of Masters of Business Administration of Cochin University of Science and Technology. I also declare that this thesis report has not been submitted by me fully or partially for the award of any degree, diploma or title or recognition before. Place: Kochi-22 Date: 14th April 2013 JOB THOMAS
  3. 3. ACKNOWLEDGEMENT First and foremost, I thank the almighty God for bestowing me with good health and confidence to complete the project on time. I would like to express my hearty gratitude to Dr. M. Bhasi, Director, School of Management Studies for introducing me to the organization Apollo Tyre Limited, Kalamassery. I whole heartedly record my sincere gratitude to my supervisor Prof. Dr. Sebastian Rupet Mampilly of SMS for guiding me on the research aspects of the thesis. I am extremely thankful to Dr. Rajitha Kumar, MBA (PT) Coordinator of SMS for guiding me on practical sampling techniques of questionnaire survey method. I express sincere thanks to Dr. Sam Thomas, MBA (PT) 2010-13 batch mentor of SMS for guiding me on organizational certificate requirements of the thesis. I record my gratitude to Mr. Shefin Salam, Executive of Human Resource Department, Apollo Tyres Limited, Kalamassery for facilitating to carryout this research work in the organization. JOB THOMAS Place: Kochi-22 Date: 14th April 2013
  4. 4. CERTIFICATE This is to certify that project report entitled “Satisfaction of managerial employees on performance appraisal system in Apollo Tyres Limited, Kalamassery” is a bonafied record of the work done by Mr. Job Thomas, sixth semester MBA (PT) student of this school submitted in partial fulfillment of the requirement of award of degree of Mater of Business Application of Cochin University of Science and Technology during April 2013. Dr. Sebastian Rupet Mampilly Dr. M. Bhasi Project guide Director
  5. 5. CONTENTS Title Page number Chapter 1 Introduction 1.1. Overview 1 1.2. Performance appraisal and employee satisfaction 2 1.3. Summary 3 Chapter 2 Industry and company profile 2.1. Industry structure and development 4 2.2. International scenario 5 2.3. Global competitors 6 2.4. Indian scenario 7 2.5. Competing Indian tyre companies 7 2.6. Highlights of Indian tyre industry 8 2.7. Apollo tyres limited 9 2.8. Corporate overview 9 2.9. Vision and values 10 2.10. Presence 10 2.11. Brands 11 2.12. Sustainability 13 2.13. Summary 14 Chapter 3 Theoretical frame work 3.1. Introduction 15 3.2. Definition of Performance appraisal 15 3.3. History of Performance appraisal 16 3.4. Purposes of performance appraisal 17 3.5. Uses of performance appraisal 20 3.6. Approaches of Performance appraisal 20 3.7. Timing of appraisal 21 3.8. Objectives of performance appraisal 21 3.9. Process of performance appraisal 22 3.10. Performance Appraisal for different workgroups 24 3.11. Performance Appraisal Methods 26 3.12. Employee satisfaction 29 3.13. Definition of Employees satisfaction 30 3.14. Meaning of employee satisfaction 30 3.15. Historical development of measurement of Employee satisfaction 31 3.16. Sources of employee satisfaction 32 3.17. Performance appraisal at Apollo Tyre Limited, Kalamassery 34 3.18. Summary 36
  6. 6. Chapter 4 Research methodology 4.1. Introduction 37 4.2. Need for study 37 4.3. Statement of the problem 37 4.4. Research objectives 37 4.5. Survey method 38 4.6. Sampling 38 4.7. Data collection 39 4.8. Method of data analysis 40 4.9. Organization of research report 41 4.10. Summary 42 Chapter 5 Data analysis and interpretations 5.1. Introduction 43 5.2. Demographic details of the respondents 43 5.3. Frequency of response 46 5.4. Descriptive statistics 54 5.5. Performance appraisal – satisfaction index (PASI) 57 5.6. Testing of hypothesis 57 5.7. Influence of age of employee on performance appraisal satisfaction 61 5.8. Influence of formal education on satisfaction of performance appraisal 72 5.9. Influence of company experience on satisfaction of performance appraisal 85 5.10. Summary 97 Chapter 6 Summary, Finding, Conclusions and Recommendations 6.1. Summary 99 6.2. Findings 99 6.3. Conclusions 101 6.4. Recommendations 101 Bibliography 102 Appendix A- Questionnaire 104
  7. 7. List of Tables Title Page number Table 4.1. ANOVA computation 41 Table 5.1. Gender statistics 43 Table 5.2. Age statistics 44 Table 5.3. Formal education statistics 45 Table 5.4. Experience statistics 45 Table 5.5. Frequency of response for statements 47 Table 5.6. Statistics of score of response for statements in questionnaire 55 Table 5.7. Statistical evaluation of the overall responses 58 Table 5.8. Correlation coefficient matrix of factors influencing employee satisfaction and performance appraisal 59 Table 5.9. Results of ANOVA using Microsoft® excel program 60 Table 5.10 Comparison of frequency of response of statements by employees of different age groups 61 Table 5.11. Descriptive statistical analysis of influence of age on response of scores for statements in questionnaire 69 Table 5.12. The correlation of mean of scores of statements by different age groups 71 Table 5.13. Results of ANOVA of mean scores of responses of different age groups 72 Table 5.14 Comparison of frequency of response of statements by employees having different education 73 Table 5.15. Descriptive statistical analysis of influence of formal education on response of scores for statements in questionnaire 81 Table 5.16. The correlation of mean of scores of statements by different employees groups differ in formal education 84 Table 5.17. Results of ANOVA of mean scores of responses of employees groups differ in formal education 84 Table 5.18 Comparison of frequency of response of statements by employees differ in experience 85 Table 5.19. Descriptive statistical analysis of influence of company experience on response of scores for statements in questionnaire 93 Table 5.20. The correlation of mean of scores of statements by different employees groups differ in company experience 96 Table 5.21. Results of ANOVA of mean scores of responses of employees groups differ in company experience 97
  8. 8. List of Figures Title Page number Fig. 2.1. Rubber consumption in India 6 Fig. 2.2. Ranking of Tyre companies based on revenue in global market 7 Fig. 2.3. Ranking of tyre companies based on production in India 8 Fig 2.4. Details showing the world-wide presence of Apollo 10 Fig 3.1. Purposes of performance appraisal 16 Fig 3.2 Performance appraisal process 21 Fig 3.3 Factors influencing employee satisfaction 33 Fig 5.1. Gender statistics of respondents 44 Fig 5.2. Age statistics of the respondents 44 Fig 5.3. Education statistics of the respondents 45 Fig 5.4. The Apollo Tyres Ltd experience statistics of respondents 46 Fig. 5.5. The frequency of response for statement no.1 48 Fig. 5.6. The frequency of response for statement no.2 48 Fig. 5.7. The frequency of response for statement no.3 49 Fig. 5.8. The frequency of response for statement no.4 49 Fig. 5.9. The frequency of response for statement no.5 50 Fig 5.10. The frequency of response for statement no.6 51 Fig 5.11. The frequency of response for statement no.7 51 Fig 5.12. The frequency of response for statement no.8 52 Fig 5.13. The frequency of response for statement no.9 53 Fig 5.14. The frequency of response for statement no.10 53 Fig 5.15. The range and mean of the scores of the statements 54 Fig 5.16. PASI of respondents 57 Fig 5.17. Influence of age on response of statement number 1 63 Fig 5.18. Influence of age on response of statement number 2 64 Fig 5.19. Influence of age on response of statement number 3 64 Fig 5.20. Influence of age on response of statement number 4 65 Fig 5.21. Influence of age on response of statement number 5 65 Fig 5.22. Influence of age on response of statement number 6 66 Fig 5.23. Influence of age on response of statement number 7 67 Fig 5.24. Influence of age on response of statement number 8 67 Fig 5.25. Influence of age on response of statement number 9 68 Fig 5.26. Influence of age on response of statement number 10 68 Fig 5.27. Influence of age of employees on the mean score of responses for the statements 1 to 10 71 Fig 5.28. Influence of formal education on response of statement number 1 75 Fig 5.29. Influence of formal education on response of statement number 2 76 Fig 5.30. Influence of formal education on response of statement number 3 76 Fig 5.31. Influence of formal education on response of statement number 4 77 Fig 5.32. Influence of formal education on response of statement number 5 77 Fig 5.33. Influence of formal education on response of statement number 6 78 Fig 5.34. Influence of formal education on response of statement number 7 79 Fig 5.35. Influence of formal education on response of statement number 8 79 Fig 5.36. Influence of formal education on response of statement number 9 80 Fig 5.37. Influence of formal education on response of statement number 10 80
  9. 9. Fig 5.38. Influence of formal education of employees on the mean score of responses for the statements 1 to 10 83 Fig 5.39. Influence of company experience on response of statement number 1 87 Fig 5.40. Influence of company experience on response of statement number 2 88 Fig 5.41. Influence of company experience on response of statement number 3 89 Fig 5.42. Influence of company experience on response of statement number 4 89 Fig 5.43. Influence of company experience on response of statement number 5 90 Fig 5.44. Influence of company experience on response of statement number 6 90 Fig 5.45. Influence of company experience on response of statement number 7 91 Fig 5.46. Influence of company experience on response of statement number 8 92 Fig 5.47. Influence of company experience on response of statement number 9 92 Fig 5.48. Influence of company experience on response of statement number 10 93 Fig 5.49. Influence of company experience of employees on the mean score of responses for the statements 1 to 10 96
  10. 10. EXECUTIVE SUMMARY Performance appraisal is an essential management technique. The study aims to measure the satisfaction of the managerial employees on the performance appraisal system in Apollo Tyres Limited, Kalamassery. The questionnaire survey method is adopted for evaluating the satisfaction of the employees. Apollo is a leading tyre factory having world wide presence. In India, Apollo stands first based on revenue and second based on production. Performance appraisal is an important management tool to audit human capital. In many organizations, appraisal results are used as a tool to fix the reward. The appraisal results are used to identify better performing employees for placement to higher post in the hierarchy of organizational structure. The satisfaction of employee towards the appraisal system of the company depends on many factors such as communication, measurement policies and post review policies. The total output of the organization depends on satisfaction level of employees. The performance appraisal is an important tool to many human resource functions. Hence, relationship between employee satisfaction and performance appraisal is an important area of research. The questionnaire method is adopted for the collection of data. The level of agreement to the ten statements are allowed to mark in 5 point score Likert-scale. The sample has been drawn from the population based on the judgment method. The duly filled questionnaire is collected from the respondents. The frequency and descriptive statistical analysis of responses are carried out. The influence of age, formal; education and company experience is studied. The statistical approach ANOVA is used for the analysis of responses. A fair performance appraisal process helps to improve the satisfaction in employees. The willingness to invest additional effort of towards enhancing production and there by market and financial position increases with employee satisfaction. The performance appraisal accounting for the individual and team performance of the members will help to increase the plant output. Based on the questionnaire survey conducted, it can be concluded that employees of Apollo Tyre Limited, Kalamassery are satisfied with the performance appraisal process. Employees satisfaction depends on the many aspects of performance analysis and company have to look into the balanced blend of important aspects like communication, measurement policies and post-review decisions. *****
  11. 11. Chapter 1 1. Introduction 3.1. Overview Every organization is struggling to remain sustainable and competitive. To implement this aspect, strategic planners and human resource professionals collaborate more intensively in designing strategies that are productive and humane. Marquardt (2004) pointed out that the organizations aiming at maximum productivity and quality have never encountered so many challenges. However, the situations are changed and challenges are identified as the opportunities to grow. In 21st century, the success of the organization lies in implementing focused and integrated human resource processes and systems. The enormous transformations processes that take place in social, political and economic regime drive the need for organization to become more responsive to the rapid development of global strategies and local operational levels. Reid and Hubbell (2005) stated that culture in the organization makes the people to engage more in the business activities. Human resource management focuses on personnel related areas such as job design, resource planning performance management system, recruitment, selection, and compensation and employee relations. Among the various formal intentions, performance evaluation and management system is the one of the important aspects that relates to the satisfaction of employee. Building block of enhancing performance is creating a performance culture. The satisfaction of employees on performance evaluation increases when the gap between exceptions and outcome converges. To have the right expectations, knowledge about the performance measurement system is essential. The various aspects of performance appraisal system in a private limited company is studied in this thesis
  12. 12. work. The organization selected for the study is Apollo Tyres Limited at Kalamassery, Cochin. 3.2. performance apprisal and Employee satisfaction Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. Performance appraisal is a powerful tool to calibrate, refine and reward the performance of the employee. Performance appraisal helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. Employee satisfaction is the terminology used to describe whether employees are happy and contented and fulfilling their desires and needs at work. Many measures purport that employee satisfaction is a factor in employee motivation, employee goal achievement, and positive employee morale in the workplace. Factors contributing to employee satisfaction include treating employees with respect, providing regular employee recognition, empowering employees, offering above industry-average benefits and compensation, providing employee perks and company activities, and positive management within a success framework of goals, measurements, and expectations.
  13. 13. Employee satisfaction is often measured by anonymous employee satisfaction surveys administered periodically that gauge employee satisfaction. Performance appraisal in an organization is aimed at imbibing information to the employees about their job and amount of effort and behaviour expected from them. On the other hand, satisfaction of employees is meeting expectations. The performance appraisal is a tool for promotion and pay fixation in the company. Hence satisfaction of the employee on performance appraisal plays and important role in the productivity. The performance appraisal is the creation of shared version of organizational objectives, occasionally through mission statements communicated to the employees. Performance review measures the individual targets relating to target of the operating units within the organization. The satisfied employee will show progress towards the targets of the organization. Performance review helps to identify training needs among employee. Hence study on the satisfaction of the employees with the performance appraisal process in an organization is important area of human resource management. 3.3. SUMMARY Performance appraisal is an essential management technique. The study aims to measure the satisfaction of the managerial employees on the performance appraisal system in Apollo Tyres Limited, Kalamassery. The questionnaire survey method is adopted for evaluating the satisfaction of the employees. The responses indicated that the employees are satisfied with the performance appraisal system in Apollo Tyres Limited, Kalamassery.
  14. 14. Chapter 2 2. The INDUSTRY AND Company Profile 3.4. INDUSTRY STRUCTURE AND DEVELOPMENT The Indian tyre industry, in comparison to its western counterparts, lags behind in radial trends. Use of radial tyres for passenger vehicle tyres were maintained at 98%, while for commercial vehicle segment it was pegged at 22% – a significant growth was observed in the last year. The top 5 players – Apollo, Birla, Ceat, JK Tyres and MRF – command over 70% of the market, with product offerings across all major categories. India continues to be driven by the commercial vehicle tyre segment, where truck and bus tyres contribute as much as 55% of the industry’s revenue. The replacement market accounts for 70% of the revenues, though the original equipment segment continues to play a crucial role in terms of volumes and ensuring product acceptability in the consumers’ mind. Amongst those who set up new manufacturing units in the country were Bridgestone, JK Tyres and MRF. Bridgestone’s Rs 4.3 billion plant in central India was completed in July 2011. The unit is geared to produce 12,000 truck-bus radials and 120,000 passenger car radials every month. Both JK Tyres and MRF, like Apollo, chose the southern Indian state of Tamil Nadu as their preferred manufacturing location. JK Tyres’ facility, which was completed in February 2012 with an investment of Rs 10 billion, is equipped to manufacture around 208,000 passenger car radials and 33,000 truck-bus radials each month. MRF’s facility, built with an investment of Rs 9 billion, has a capacity of 350,000 passenger car radials and 60,000 truck-bus radials per month. Ceat also ramped up capacity at its unit in Western India with a radial capacity of 150 tonnes per day. The Michelin facility in Tamil Nadu with a capacity of 2 million truck-bus radial tyres per
  15. 15. year, is currently under construction and expected to begin production later in the year. Apollo’s manufacturing unit in Tamil Nadu, which will attain full capacity in December 2012, has been constructed to accommodate a manufacturing capability of 480,000 passenger car radials and 180,000 truck-bus radials each month. Apollo, Birla, BKT, Falcon, JK Tyres and MRF also sought to expand capacities in their existing facilities – with combined investment to the tune of Rs 35 billion. In financial year 12, while production of truck-bus and passenger car tyres went up by a marginal 3% and 4% respectively, light commercial vehicle and industrial tyre production jumped 11%. The total production in the industry grew by around 5% – a trend which is expected to continue in the near future. Exports out of India grew in most categories and registered the highest growth of 65% in the off-the road tyre segment. In policy developments, legislation on tyre labeling is scheduled to be implemented in Europe in November 2012; most manufacturers are working towards achieving compliance for the same. With the new tyre labeling system, consumers will be informed upfront on where each tyre stacks up on the 3 key areas of rolling resistance, wet grip and exterior noise. In South Africa, the 4 local manufacturers – Apollo, Bridgestone, Continental and Goodyear – continue to compete in a market which is dominated by imports. Growth plans were mostly put on hold due to political and economic concerns in various African countries. In year 2011, for domestic manufacturers, while the passenger car tyre category grew marginally, truck bus tyres had a flat year in South Africa. 3.5. INTERNATIONAL SCENARIO The automobile industry is the single largest consumer of natural rubber in the form of auto tyres and tubes and certain other parts and accessories. For instances Bridgestone Corporation in Japan is the world’s largest producer of tyres. Bridgestone consumes 3 lakh tones of natural rubber annually to produce 68 different types of tyre. Pirelli SpA
  16. 16. from Italy consumes 1.2 lakh tones of natural rubber in the production of tyres. Economic recession anywhere in world generally hit first on this industry prior to other industry. World production has been fairly stable in the last five years. Wherein, the production in India is found to be consistently increasing with an average growth rate of 6 percent during the last 10 years. The growth of the consumption of tyres in Indian market is steady. The variation in world’s production and consumption is the major sources of concern on the price front for Indian rubber sector in the free market regime, where global pressure of imports and exports could make the rubber prices more volatile. About 47 percent of the natural rubber consumed in the country goes into the production of auto tyres and tubes and the details of rubber consumption in India are given in Figure 6. This fairly establishes the diffused nature of consumption of natural rubber. RUBBER CONSUMPTION IN INDIA 47% 13% 10% 7% 6% 5% 4% 8% Auto tyre and tube 47% Cycle tyre and tubes-13% Footwears-10% Belts and hoses-7% Camel black-6% Latex foam-5% Dipped rubber good-4% Other rubber products-8% Fig. 2.1. Rubber consumption in India 3.6. GLOBAL COMPETITORS The global competitors are Bridgestone, Michelin etc. Based on the revenue generated, Apollo is in 15th position. In Vision 2016, Apollo aims to become in 10th position in global market.
  17. 17. Fig. 2.2. Ranking of Tyre companies based on revenue in global market 3.7. INDIAN SCENARIO The annual production of rubber from India is about 6 lakh tones and over 90 percent of the production is from southern part of Kerala. Indian rubber industry comprises of 32 tyre factories, about 250 medium scale units and 6000 small-scale units. Small scale units are producing every conceivable rubber product from toy, balloons etc. The annual turn over of the industry is INR 20,000 crores. Salient Features of Indian Tyre Industry • Adaptability and absorption • Exports • Innovations • Indigenous and ready availability • Technology progression • Wide product range for diverse use • Self efficiency and vibrant marketing setup 3.8. COMPETING INDIAN TYRE COMPANIES The Indian competitors are MRF, JK etc. Based on the production, Apollo is in second position. 1.Bridgestone 2.Michelin 3.GoodYear 4.Continental 5.Pvrelli 6.Sumitomo 7.Hankook 8.Yokohama 9.Giti 10.Maxxis 11.Cooper 12.Hangzhou-Zhongce 13.Kumho 14.Toyo 15.Apollo 16.Triangle 17.MRF 18.Nokian 19.ShandongLingoy 20.XingYuan
  18. 18. 1. MRF 2. Apollo 3. JK 4. CEAT 5. Modi 6. Birla 7. Good Year 8. Vikrant Fig. 2.3. Ranking of tyre companies based on production in India 3.9. HIGHLIGHTS OF INDIAN TYRE INDUSTRY • The tyre industry is doing business worth Rs. 20,000 cores • The export by tyre industry is Rs.3,000 cores • The future of this industry depends on the agricultural and industrial performance of the economy, the transportation needs and production of vehicles • Tyre industry in India is fairy concentrated, with the top eight companies accounting for more than 80 percent of the total production of tyres • The entry barriers are high in tyre industry in India. It is highly capital intensive industry. A plant with annual capacity of 1.5 million cross-ply tyres cost between Rs.4000 and Rs.5000 million. A similar plant producing radial tyres costs Rs. 8000 million. The automobile tyre industry is dominated by organized sector and the bicycle tyre industry is hold by unorganized sector. • Natural rubber constitutes 25 percent of the total raw material cost in tyre manufacture. • The ratio of natural rubber content to synthetic rubber content is 80:20 in Indian tyres, whereas it is 30:70 abroad. • The tyre industry consumes nearly 50 percent of natural rubber produced in the country.
  19. 19. 3.10. APOLLO TYRES LIMITED Specialty of Apollo Tyres Ltd. is the • Fastest growing global tyre producers. • First Indian tyre company to cross US$2.5 billion of net sales. • Leading tyre producers in India with well balanced product portfolio. • Largest radial tyre manufactures in India. • UHP and winter tyre capabilities. • Manufacturing plant across three continents with global production capacity of 1649 MT/Day. • Strong portfolio of global and regional brands. • Consistent performance amidst volatile market. o Growth in net sales is 26.9 percent CAGR over the last five years. o EBITDA grew at 18.2 percent CAGR over last five years • Extensive distribution network o 4000 retail dealers in India o 3100 outlet in Europe • Over 15000 employees globally 3.11. Corporate Overview Apollo Tyres Ltd, with its corporate headquarters in Gurgaon, India, is in the business of manufacture and sale of tyres since its inception in 1972. Over the years, the company has grown manifold, establishing its footprint across the globe. The company has manufacturing presence in Asia, Europe and Africa, with 9 modern tyre facilities and exports to over 118 countries. Powered by its key brands - Apollo,
  20. 20. Dunlop (brand rights for 32 African countries) and Vredestein, the company offers a comprehensive product portfolio spread across passenger car, light truck, truck-bus, off highway and bicycle tyres, re-treading material and re-treaded tyres. At the end of its financial year on March 31, 2012, Apollo Tyres had clocked a turnover of US$ 2.5 billion, backed by a global workforce of approximately 16000 employees. Apollo Tyres Ltd is traded in India on the Bombay, National and Kochi Stock Exchanges, with 53.06% of shares held by the public, government entities, banks and financial institutions as on June 30, 2012. 3.12. Vision and values Vision : A significant player in the global tyre industry and a brand of choice, providing customer delight and continuously enhancing stakeholder value. Values : The values are • Customer First • Business Ethics • Care for Society • Empowerment • Communicate Openly • One Family 3.13. Presence The world-wide presence is the specialty of company and is given in Fig. 2.4.
  21. 21. Fig 2.4. Details showing the world-wide presence of Apollo Tyres Limited 3.14. Brands When Apollo Tyres was established in 1972, it was a single brand enterprise. Over the years, as the organization grew and expanded its footprint across geographies, several brands either joined or were born into its fold. Today, the company owns 6 key brands — Apollo, Dunlop (brand rights for 32 African countries), Kaizen, Maloya, Regal and Vredestein. While brands Apollo, Dunlop and Vredestein comprise of tyres across categories — from passenger andcommercial vehicles to off highway tyres, the remaining 3 brands are more product category specific. Regal and Kaizen focus on the truck- bus tyre segment while Maloya continues to operate within the passenger vehicle tyre category. Each brand from the company is equipped with its own distinctive visual language and targeted at a specific customer need. This approach has enabled Apollo Tyres to provide a wide range of products for various applications, across geographies — ending with a delighted customer. Corporate Headquarter Manufacturing Locations Focus Markets Markets available in Established markets
  22. 22. Apollo: Driven by attention to safety, Apollo tyres are manufactured in India and are available across almost all categories, including commercial and passenger vehicles, farm and industrial. The core idea behind brand Apollo is safety. At all times Apollo is willing to travel that extra mile to deliver what its stakeholders need. Apollo enables individuals to maximise their own potential, as reflected in its tagline "go the distance". Apollo tyres, manufactured in India, are available across almost all categories, including commercial and passenger vehicles, farm and industrial. Brand Apollo Tyres' genesis dates back to the mid 1970s, when the first corporate identity was unveiled. It stood for passion, aggression and determination to achieve excellence in all spheres. Popularly known as the unending road, the logo mirrored the long journey the company would make for its evolution as a dynamic, multi-cultural and multi-location entity. This identity served Apollo's dreams and ambitions for over 30 years. Dunlop: An established name in passenger vehicle segment, Dunlop also manufactures commercial vehicle and off highway tyres; with 2 facilities in Durban and Ladysmith. A brand centered on attention to detail and quality in all aspects of its existence — suitably reflected in its tagline "Driven By Precision". Apollo Tyres Ltd owns right to brand Dunlop for 32 African countries. Dunlop's history is arguably the most impressive in the world of tyres. In 1888, Scottish veterinarian John Boyd Dunlop created the first practical pneumatic tyre for his son's tricycle, to help it go faster and smoother over cobblestones. Just one year after it was patented, John Boyd's tyres was fitted to a bicycle and won its first race. Soon J B Dunlop
  23. 23. became one of the founders of the Dunlop Pneumatic Tyre Company; beginning of a revolution in the automobile industry and start of Dunlop Tyres' journey from strength to strength, with a succession of product innovations achieved over 123 years. VREDESTEIN: With a heritage older than 100 years, brand Vredestein's unique story is best captured through its tagline "Designed To Protect You", which is also its brand promise. A winning combination of Dutch dedication and Italian elegance, Vredestein is best known for its premium high performance passenger vehicle tyres, especially in the winter tyre segment. Moreover, it offers a wide array of equally exclusive and performance driven tyres for the agriculture, industrial and bicycle categories. Manufactured out of a state-of-the-art facility in Enschede, in The Netherlands, its products are sold largely in the aftermarket. Vredestein tyres can be found adorning a whole range of luxury vehicles across the European Union, the United States, the Middle East and China. 3.15. Sustainability As an organization, Apollo Tyres is committed towards creating values for its stakeholder. And the crucial link here is building a sustainable business, driven by strategic growth and responsible actions. Apollo Tyres believes that to truly move up the value chain, it is critical to use fewer natural resources to produce more. For a growing organization, with a long-term focus and commitment, it is critical to safeguard resources for the future even as it creates value today. At Apollo, emphasis is laid on using natural resources cautiously and with care.
  24. 24. In 2011, the company published its 1st Sustainability Report as per Global Reporting Initiative Version 3. The disclosures and identified gaps have further enabled the company to better define and evolve its internal systems relating to environmental and social aspects. Bulk of this work pertains to energy, water, health and safety issues across operations. The company’s systems and processes have made it possible for it to report at Level B and the company is positive about achieving Level A across its operations in the next 2 years. The company undertook a complete audit for all operations globally and our offices on critical environmental factors and striving to achieve the “green company” status. The efforts to health,, HIV-AIDS awareness and prevention is strengthened with 21 health care centres across the country catering to commercial trucking community. The company embarked Project-U which educates trains and undertakes livelihood for young unemployed. 3.16. SUMMARY Tyre industry consumes major part of natural rubber. The revenue in the tyre industry is affected by recession or decrease in hand to month of citizens. Apollo is a leading tyre factory having world wide presence. Among the India competitors, Apollo stands first based on revenue and second based on production. This indicates that Apollo has a strong and dedicated marketing network.
  25. 25. Chapter 3 3. THEORITICAL FRAME WORK 3.17. introduction In simple terms, appraisal is the assessment of an individual performance in a systematic way. The performance are generally measured against such factors as knowledge about job, quality and quantity of output, initiatives, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health etc. The assessment of an employee is expected to cover both past performance and potentials that can be drawn in future. Alternate terms used for performance appraisal (PA) are performance review, performance evaluation, (career) development discussion, or employee appraisal. Employee satisfaction is a measure of how happy workers are with their job and working environment. Keeping morale high among workers can be of tremendous benefit to any company, as happy workers will be more likely to produce more, take fewer days off, and stay loyal to the company. There are many factors in improving or maintaining high employee satisfaction, which wise employers would do well to implement. Employee satisfaction is related to the performance appraisal system in the company. In the appraisal system, strengths of the employee shall be recognized and rewarded to improve the satisfaction. Similarly, the weaknesses shall be pointed out in the appraisal system for education and career development. 3.18. Definition of Performance appraisal Performance appraisal is the systematic evaluation of the individual with respect to his or her performance on job and his or her potential for development.
  26. 26. Performance appraisal is the formal, structured system of measuring and evaluating the employees job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that employee, organization and society all benefit. (Aswathappa, 2005). Performance appraisal is the process of identifying, observing, measuring and developing human performance in organization (Carrol and Scheider, 1982) 3.19. History of Performance appraisal Fig 3.1. Purpose of performance appraisal Performance appraisal Administrative purpose Self-development of employees Promotion and placement Transfer and demotions Wages and salary fixation Training and manpower planning Personnel research Creating favourable impact on employees Miscellaneous administrative purposes Identification of strength weakness future training needs
  27. 27. Sashkin (1944) suggests that performance appraisal has been with us for all human history and it show no prospects of being ready for the rubbish heap. Scotts et al. (1941) cited that the performance appraisal was first used by army in World war one to assess the performance of officers. Murphy and Cleveland (1995) pointed out that performance appraisal probably began in United States in 1813 when US Army General Lewis Cass submitted an evaluation of men in the crew to War department. In the late 1960’s, performance appraisal was used by many companies that experienced outback in government contracts to make layoff and retention decisions. North (2005) stated that performance appraisal can be claimed to be the world’s second oldest profession. 3.20. Purposes of performance appraisal Appraisal of the performance of the employees is carried out for two major purposes, namely, administrative purpose and self improvement and self development of employees and is shown in Fig. 3.1. Promotion and placement of employees One of the major administrative purposes of performance appraisal is to promote the employees taking into account of their competence and performance over certain period of service. Quality and quantum of work performed serves as the basis for promotion in cases when promotions are giving by merits. Appraisal system identifies whether the employee can be assigned higher positions in the organization. The promotion on the basis of appraisal is in the interest of both the management an employee. Performance appraisal is useful for posting the right candidate within the organization. The performance appraisal is not useful for the initial placement but is useful for the subsequent placements.
  28. 28. Transfers and demotions In organization, certain personnel actions, namely, transfer, demotions, disciplinary actions and discharges are required to be taken by the management. Such actions need to be taken in a fair and impartial manner. The performance appraisal reports can be used for taking final decisions on such activities. The suitable employee can be identified for new assignments or deputation by evaluating the performance appraisal. Wages and salary payment Wage or salary payment is normally linked with performance appraisal. Wage increase is based on the performance appraisal reports. Better performance in the managerial level is normally rewarded by additional salary payment. For judging the performance of executives, periodical appraisal is essential. It is also useful for allocating rewards to deserving employees. Training and manpower development Performance appraisal is useful for validating the selection for specialized training and development programmes. Appraisal helps to identify the skills and competences and also the weakness in the employee. The appraisal enables management to identify the areas of training programme to be organized in future. The need for executive training for managers in the new placements is organized after evaluation of performance appraisal. The appraisal helps to identify requirement of in-house or institutional training. Performance appraisal is a useful tool of evaluating training and development needs of the organization. Personnel research Performance appraisal serves as a feedback to management in the area of personnel research. The human capital in the organization can be measured and forecasted based on
  29. 29. the appraisal. The manpower replacement procedure can be initiated for the retiring personnel in the organization. The appraisal is one of the components used for the manpower demand forecast. The valuable information in the appraisal can be used to measure motivation and satisfaction in employees. Favorable impact on employees The performance appraisal creates a favourable impact on employees. The appraisal is a tool for identifying talented persons, promotions, training and salary fixation. The employees will be motivated to score high in the appraisal system for receiving incentives or better placement. The, appraisal will help to take a meaningful decision in transfer and promotions. In brief, performance appraisal gives favourable impact on employees. Performance appraisal improves the morale and offers opportunities of career development. Miscellaneous administrative purposes of appraisal The miscellaneous administrative purposes are (i) to confirm the service probationary of the employees after the completion of probationary period successfully, (ii) to improve communication and cooperation between superior and subordinates and (iii) to determine whether HR programmes, namely, selection, training and transfers are effective or not. Self improvement of employees In addition to administrative purpose, performance appraisal facilitates self improvement and development of employee. Appraisal suggests the weakness and shortcomings of the employee. It serves as feed back to the employee. Appraisal is followed by discussion between the rater and employee in a spirit of cooperation and mutual understanding. Counseling of employees for improving their performance is conducted by post appraisal interviews. Performance appraisal is important and useful for the organization to achieve
  30. 30. long term goals. Performance appraisal helps to improve, grow and develop for higher positions in the organization. 3.21. Uses of performance appraisal The uses of performance appraisal are administrative, maintenance use and documentation. Administrative use of performance appraisal is to measure performance for administrative decisions of employees. The purposes include rewarding, promotion, layoff, training etc. The appraisal is a tool for measuring individual performance in the organization. In this case, manager is featured more as counselor than a judge. The emphasis is given for identifying potential and planning growth opportunities of employee. Maintenance use of performance appraisal is to carry functions such as human resource planning, determining training needs etc. for the smooth functioning of sub-systems. Documentation of performance appraisal is used for the purpose of recording the development of employee throughout the career in the organization. 3.22. Approaches of Performance appraisal There are two approaches in performance appraisal, namely, informal approach and systematic approach. Informal approach is conducted whenever the supervisor feels it is necessary. The day-to-day working relationship between a manager and employee offers an opportunity for the judgment of employee performance. The judgment of informal approach is communicated on job or on coffee time conversation. Frequent internal feedback to employees can avoid surprises when the formal evaluation is communicated. Systematic appraisal is used when the contact between the manager and the employee is formal and system is in place to report managerial impressions and observations on employee performance. Its aim is to support administrative and developmental decisions.
  31. 31. 3.23. Timing of appraisal A regular time interval is a feature of systematic appraisals that distinguishes them from informal appraisals. The appraisals are conducted once or twice in an year. The companies in high technology or software field conduct appraisal in every six months so that the employees are promoted more frequently. This results in reduction in turnover of employees. In Apollo, the appraisal is conducted in every year. 3.24. Objectives of performance appraisal • To review the performance of the employees over a period of time • To judge the gap between actual and desired performance • To help the management in exercising organizational control. • Helps to strengthen the relationship and communication between superior and subordinates • To diagnose the strengths and weakness of the individuals so as to identify the training and development needs in the future • To provide feedback to the employees regarding their past performance • Provide information to assist in the other personal decisions in the orgnaisation. • Provide information to assist in other personal decisions in the organizations. • To provide clarity of expectations and responsibilities of the functions to be performed by employees • To judge the effectiveness of the human resource functions, namely, recruitment, selection, training and development. • To reduce the grievances of the employees • To calibrate, refine and reward the performance of the employee.
  32. 32. • To focus the progress in performance of employees. 3.25. Process of performance appraisal Establishing performance standards Evaluation without standards is meaningless. As such, appraisal process starts with the search of standards. The right standards are to be selected, defined and established for making appraisal meaningful and clear. The standards established by careful analysis should be used as the base for rating the actual performance of employees. The standards set should be comprehensive, integrating all aspects of the desired performance and they should also clear, easily understandable and measurable. Fig 3.2 performance appraisal process Communicating standards For better working of the appraisal system, all the employees should be aware of the process and methods. The information about the standards and usefulness to appraise the Establishing performance appraisal Communicating standards and expectations Measuring actual performance Comparing with standards Discussing results Decision making and corrective action
  33. 33. performance should be communicated to the employees of the organization. The employee should also seek to know the standards and the application in appraisal process. Well-informed employees will be clear about the roles and performance expectations. Supervisors will be clear about the roles of the evaluators. Good communication helps in meaningful discussions, clarifications and commitment. It gives an opportunity to modify standards at the initial stage itself based on relevant feedback from the employees or evaluators. Measuring the actual performance The most difficult part of the performance appraisal process is measuring the actual performance or the work done by the employee over a specific period of time. It is continuous process which involves monitoring the performance through the year. This stage requires careful selection of appropriate technique of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than inferring in employee’s work. Comparing the actual performance with standards The actual performance is compared with standard performance. The comparison tells the deviations in the performance of the employee from the established standard. The results can bring out the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It induces recalling, evaluating and analysis of data related to the employee performance. Discussing results
  34. 34. The result of the appraisal is communicated and discussed with the employee on one-to- one basis. The focus of the discussion is on communication and listening. The result, the problems and the possible solution are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employee future performance. The purpose of the meeting is to solve the problems faced and motivate the employees top perform better Decision making The last step of the performance appraisal process is to take decisions in order to improve performance, identify corrective actions or implement HR decisions such as rewards, promotions, transfers etc. A better performance appraisal system should focus on the individuals and his development so as to make-up the employee to perform the desired performance. Performance appraisal is having direct linkage with personnel management in the areas of selection, mobility, training etc. 3.26. Performance Appraisal for different workgroups Workforce alignment empowers managers and employees by creating ownership and commitment in the organisation's success by aligning goals and development to overall strategy and objectives. Furthermore, organisations taking a competence-based Performance Appraisal approach achieve better business results, get more engaged employees and increased retention. Performance Appraisal permits to build, streamline, and deliver strategic initiatives across recruiting, on-boarding, performance appraisals, competence assessments, learning and development, succession planning and more. • Goal alignment & Performance Appraisal
  35. 35. • Feedback and recognition • Development planning • Reports and Analytics • Flexible forms Goal management functionality shows each employee how their individual performance goals align and support the organisation's strategy. By setting SMART goals (Specific – Measurable – Achievable – Realistic – Timely) and activities to achieve these, managers and employees get a practical and concrete tool to ensure they are on the right course. Performance Appraisal simplifies and streamlines the entire employee performance evaluation and can be used standalone or integrated with any of the other modules to deliver a complete cloud-based, performance driven human capital management solution. HR professionals: Get the most convenient and cost-effective way to conduct performance evaluations, align and track goals, track employee profiles, develop critical competence and more. Now, HR can play a strategic role in helping the organisation build a world-class workforce that is aligned and delivering on the business strategy. Management: Get a single system that keeps the organisation aligned. They can see how employee goals are aligned with those of the organisation, know where performance gaps exist and how they're being addressed, and ensure the organisation has the skills it needs to succeed.
  36. 36. Managers: Get a convenient and powerful tool for aligning and tracking goals, managing employee performance, providing meaningful feedback and coaching, and supporting employee development. Employees: Get their own personalized page where they can access their appraisals, goals, development plans and more, in just a few clicks. Employees feel more connected and engaged because they know what's expected of them and can see how they're helping the organisation succeed. 3.27. Performance Appraisal Methods The appraisal method is one component of the overall appraisal system. Most performance appraisals fall broadly into three categories: traditional performance appraisal (emphasis on traits of the individual); use of behavioral criteria; and objective- setting (results oriented) performance appraisal. There are various methods used to assess the performance of employees. Such methods include trait checklist, responsibility rating, Management by Objective (MBO), free form, essay, graphic rating scale, forced choice, critical incident and work standards. Trait checklist features standardized rating forms for broad groups of employees. For each group, qualities or "traits" of employee performance are listed. Examples are as follows: quantity of work, quality of work, dependability, effort, initiative, job knowledge, cooperativeness, planning, timeliness, and attitude. The advantage of the trait checklist method is that it is easy to install and administrate. All employees are ranked on the same traits. There are some disadvantages to this method. The traits are general and do not specifically relate to job performance. There is a tendency to focus on personal characteristics rather than job performance. Responsibility rating involves the
  37. 37. development of and use of position descriptions for each position to include all major responsibilities and, where appropriate, standards of performance. Supervisors rate employees on responsibilities identified on the position description. The advantage of responsibility rating is that rating factors are specific to the job and rating scales are the same for all employees. Employees see a direct relation between superior performance and superior rating. The disadvantages of responsibility rating is that it may lead to proliferation of position descriptions (to make duties and performance standards apply specifically to each employee) The key features of Management by Objective (MBO) are that the employee suggests and the supervisor agrees on the employee's performance objectives for corning year. MBO focuses directly on the achievement of business results and not on the personal characteristics that may contribute to the results. The disadvantage of MBO is that each employee is rated on different factors and on different scales. This could lead employees to perceive inequity in the system. MBO is also very time-consuming because extensive goal setting is required. The free form rating method has little or no prescribed format. The advantage to free form is that supervisors are free to rate performance directly without being forced to rate specific aspects and attributes. The disadvantage to free form is that it is totally susceptible to varying standards of problems associated with rating employees because employees are rated without either common rating factors or rating scales. Thus, it is difficult to reach an overall rating needed for salary administration when the free form method is used. In addition to the four commonly used performance appraisal methods, there are six techniques that can be applied to most of these. Essay appraisal is the simplest form and is easily by most raters. Raters are asked to write a paragraph or more
  38. 38. covering an individual's strengths, weaknesses, potential, and so on. The drawback is the variability in length and content and the difficulty in combining or comparing ratings. A graphic rating scale does not yield the depth of essay appraisal but is more consistent and reliable. Graphic rating assesses a person on the quality and quantity of work (outstanding, above average, etc.) and on a variety of other factors that vary with the job (reliability, oral and written communication). Forced-choice rating was developed to reduce bias and establish objective standards of comparison between individuals. Raters choose from among groups of statements those which best fit the individual being rated and those which least fit him. The statements are then weighted or scored. Critical incident appraisal gives supervisor actual, factual incidents to discuss with an employee. Supervisors keep a record on each employee and record actual incidents of positive or negative behavior. The discussion deals with actual behavior of the employee. Using the work-standards approach, organizations set measured daily work standards. These standards establish work and satisfying targets aimed at improving productivity. This method is most commonly used in manufacturing and production organizations. 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback
  39. 39. regarding the "on-the-job" performance of the employee. 360 degree appraisal has four integral components, namely, self appraisal, superior’s appraisal, subordinate’s appraisal and peer appraisal. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree performance appraisal where the employees’ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others. 3.28. Employee satisfaction Human resource is vital component of company. They are the wealth of the organization utilized for achieving goals. In the present complex business environment, no business and organization survive and grow without healthy human resources. The success of an enterprise depends on the caliber of person working in the company. The human resource management refers to systematic approach to the problem of selecting, training, motivating and retaining personnel in an organization. Employee is the most important asset of the organization. Planning for human resource is an important managerial function. It ensures adequate supply, proper quantity and quality, as well as effective utilization of human resource. An organization will determine its manpower resource from which requirements are met. If sufficient manpower is not available, the work in company will suffer. Under developed countries are suffering from shortage of trained managers. Job opportunities are available in these countries but proper personnel are not available. These countries imports skills from other countries. Therefore in order to meet
  40. 40. human resource needs, organization will have to plan in advance about the requirements and resources. 3.29. Definition of Employees satisfaction Employee satisfaction is defines as a pleasurable and positive emotional state resulting from appraisal of one’s job or job experiences (Locke 1976). Employee satisfaction is nothing but customer satisfaction, since employee is the internal customers to the organization, customer feel satisfaction when they perceive goods and services that meet exceed their expectations and needs (Anderson and Sullivan, 1993) 3.30. Meaning of employee satisfaction In simple words, employee satisfaction can be defined as the extent of positive feelings or attitudes that individuals have towards the job. High employee satisfaction mans that employee really likes the job, feels good about it and values the job highly. There are three important dimensions to employee satisfaction Employee satisfaction can not be seen, it can only be inferred. It relates to one’s feeling towards the job. Employee satisfaction is often determined by extent of outcome meet the requirement. If the employee working in the organization feels that they are working much more than others in the department, but receives only lower rewards, they will be dissatisfied and have negative attitudes towards job, superior and co-workers. On the other hand, if they feel that they are being paid fairly and treated well by the organization, they will be satisfied with the jobs and will have positive attitude towards the job.
  41. 41. Employee satisfaction and job attitudes are typically used inter-changeably. Positive attitude towards the jobs are conceptually equivalent to employee satisfaction and negative attitude towards the job indicate job dissatisfaction. Employee satisfaction is very important because most of these employees spend their major portion of the life at the working place. Moreover, employee satisfaction creates impact on general life of the employee also, because a satisfied employee is a happy human being. A highly satisfied worker is a better physical and mental well being. Employee satisfaction is influenced by psychological, physiological and environmental factors. 3.31. Historical development of measurement of Employee satisfaction One of the biggest preludes to the study of employee satisfaction was the Hawthorne studies. These studies (1924–1933), primarily credited to Elton Mayo of the Harvard Business School, sought to find the effects of various conditions (most notably illumination) on workers’ productivity. These studies ultimately showed that novel changes in work conditions temporarily increase productivity (called the Hawthorne Effect). It was later found that this increase resulted, not from the new conditions, but from the knowledge of being observed. This finding provided strong evidence that people work for purposes other than pay, which paved the way for researchers to investigate other factors in employee satisfaction. Scientific management or Taylorism had a significant impact on the study of employee satisfaction. Frederick Winslow Taylor’s 1911 book, Principles of Scientific
  42. 42. Management, argued that there was a single best way to perform any given work task. This book contributed to a change in industrial production philosophies, causing a shift from skilled labor and piecework towards the more modern of assembly lines and hourly wages. The initial use of scientific management by industries greatly increased productivity because workers were forced to work at a faster pace. However, workers became exhausted and dissatisfied, thus leaving researchers with new questions to answer regarding employee satisfaction. It should also be noted that the work of W.L. Bryan, Walter Dill Scott, and Hugo Munsterberg set the tone for Taylor’s work. Maslow’s hierarchy of needs theory, a motivation theory, laid the foundation for employee satisfaction theory. This theory explains that people seek to satisfy five specific needs in life – physiological needs, safety needs, social needs, self-esteem needs, and self-actualization. This model served as a good basis from which early researchers could develop employee satisfaction theories. Employee satisfaction can also be seen within the broader context of the range of issues which affect an individual's experience of work, or their quality of working life. Employee satisfaction can be understood in terms of its relationships with other key factors, such as general well-being, stress at work, control at work, home-work interface, and working conditions. 3.32. Sources of employee satisfaction Salaries and wages are the most important variable that influences the employee satisfaction. Employees shall be provided with competitive salary packages when compared to in-house co-workers and outsiders of same industry. Fair and equitable rewards are expected to improve employee satisfaction. All employees will have the
  43. 43. desire to get posted in higher position in the organization. The employee satisfaction increases with more chances of getting promotion in the company. Favourable company policies on timing, transfer, medical coverage, transportation facility, bonus, safety aspects etc. improve the employee satisfaction. The impartial behaviour of supervisors, cooperation of the co-workers and subordinates play an important role in the employee satisfaction. Fig 3.3 Factors influencing employee satisfaction The employee satisfaction increases in clean working environment. Job scope includes responsibly, achievements and recognition. The change in job execution rather than monotonous way of performing would help to improve the employee satisfaction. Autonomy in decision making and execution of the job and certainty in the role to be played would help to increase the job perfection and satisfaction. Aged and senior employee may expect more from the company and hence generally seems to be dissatisfied. The tenure and personality of the employee influences perception, attitude and learning. The employee having longer tenure and personality will be ambitious and will be satisfied in companies having greater promotion chances and job content. Employee satisfaction Organizational factors Salaries and wages Promotion chances Company policies Work environmental factors Supervision Work group Working condition Work itself Personal factors Job scope Variety Autonomy Role certainty Age & seniority Tenure Personality
  44. 44. Outcome of employee satisfaction are productivity, employee turnover and absenteeism. Employee productivity will be higher in company having more number of satisfied employees. The turnover or absenteeism will be minimum among satisfied employees in an organization. Highly satisfied employee tend to have better physical and mental health, learn tasks quickly, more co-operative and maintain less job stress. 3.33. Performance appraisal at Apollo Tyre Limited, KalamAssery The self appraisal of officer managers at Apollo is received in standard review forms. The appraisal is being evaluated once in every year. The appraisal in the year 2012 was conducted in the month of June. The details of employee development review (EDR) procedure are given below. EDR cycle:- • The EDR cycle is from April 1st to March 31st of each financial year • All confirmed employees as on 31st March are eligible fro EDR • The EDR recommendations will be effective from 1st April Rating design :- The appraise has to be rated on a four point scale • Outstanding • Good • Average • Below average
  45. 45. Areas of measurement • Contribution to organizational goals (WHAT) o Review of Key research area (KRA) performance o Review of functional/ organizational initiatives taken apart from KRAs • Measurement of critical attributes – skills and competencies (HOW) • Career progression o Job rotation o Potential assessment • Overall rating Form design:- The EDR forms consists of following sections • Contribution to organizational goals o Demonstrated performance o Key initiatives o Skills and competences • Career promotions • Performance summary • Training and development Evaluation procedure:-
  46. 46. The employee development review (EDR) process is three fold. The EDR forms shall be filled by appraise, discussed with appraiser and finally approved by reviewer. The recommendation of reviewer is considered as final. 3.34. SUMMARY Performance appraisal is an important management tool to audit human capital. In many organizations, appraisal results are used to fix the reward. The appraisal results are used to identify better performing employees. However, satisfaction of employee towards the appraisal system of the company depends on many factors. The total output of the organization depends on satisfaction level of employees. The performance appraisal is an important tool to many human resource functions. Hence, relationship between employee satisfaction and performance appraisal is an important area of research. Chapter 4 4. research methodology 3.35. introduction Work performance appraisal systems assess the employee's effectiveness, work habits and also the quality of the work produced. The research methodology used is to evaluate the accuracy and effectiveness of the appraisal instrument and its influence on employee satisfaction. The quantitative data is collected by questionnaire method from a convenience sample. The responses are analyzed and arrived at conclusions. 3.36. Need for study Apollo Tyre Limited is a very large organization having world wide presence. According to the statistics published for the month of October 2012, the daily production at Apollo
  47. 47. Tyre Limited, Kalamassery is 57.64 MT against the target of 94.93MT. The gap between the realized and target daily production is attributed not only to the technical reasons, but also to the level of satisfaction of employees. The performance appraisal system is one of the components that influence the employee satisfaction. The influence of performance appraisal system of Apollo Tyre Limited, Kalamassery on employee satisfaction is not being studied earlier in the company. Present study attempts to fill this lacuna. 3.37. Statement of the problem The study is aimed at to evaluate whether the employee is satisfied in the present performance appraisal system at Apollo Tyre Limited, Kalamassery. 3.38. Research objectives The objectives are to study:- 1. The effectiveness of the communication describing purpose of performance appraisal (PA). 2. The fairness in present performance appraisal. 3. The capability of appraisal system for reflecting strengths of employee 4. The purpose of performance appraisal (promotion/ pay fixation/ reward/ career development/ education). 5. The usefulness of performance appraisal system as a management tool. 6. The potentiality of the performance appraisal system to build team spirit and cooperation 7. The effectiveness of conveying corrective actions/ feed back. 8. The employee satisfaction on the performance appraisal procedure and 3.39. SURVEY METHOD The questionnaire based survey is used in this study. The data collection and analysis is carried-out based on statistical theories. The questionnaire is composed of ten questions to evaluate the response of the employees. The questionnaire was issued in person. Employee were allowed to fill the questionnaire anonymously and allowed to put in the collection box. The questionnaire consists of different types of questions. The information about demographic data of the participants is gathered using multiple choice questions
  48. 48. (closed), for which the respondents are required to tick the right answers. Demographic questions are used to correlate the response between different types of groups. This is very important to find whether the responses are consistent across the group. The main part of the questionnaire, which is related to the hypothesis of the thesis, consists of likert-scale questions. Answer to these questions helps to find how strongly the respondents agree with the particular statement. The answers of the questions are based on the five-level scale and options are strongly agree, agree, neither agree nor disagree, disagree, strongly disagree. The questionnaire is given in Appendix A 3.40. sampling In statistics and survey methodology, sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate characteristics of the whole population. Two advantages of sampling are that the cost is lower and data collection is faster. The types of sampling are given in Fig. 4.2. Probability samples are selected from the population and are considered as the representative of the population. They provide the most valid or credible results because they reflect the characteristics of the population from which they are selected. Non- probability samples are not truly representative and less desirable than probability samples. Non-probability samples are used when a researcher may not be able to obtain a random or stratified sample, or it may be too expensive. A researcher may not care about generalizing to a larger population. The validity of non-probability samples can be increased by trying to approximate random selection, and by eliminating as many sources of bias as possible. In this study, judgment sampling is used. Judgment sampling is a non-probability sampling technique where the researcher selects the sample based on judgment. In this method, the researcher may decide to draw the entire sample from one "representative" group identified, even though the population includes all such groups. When using this method, the researcher must be confident that the chosen sample is truly representative of the entire population. In the present study, the researcher collected the response of the employees of managerial cadre who joined in the afternoon shift in the Apollo Tyre Limited, Kalamassery Unit on 4th February 2013. The size of the population is the members in managerial cadre and is ninety at Apollo Tyre Limited, Kalamassery Unit.
  49. 49. Out of the 90 managerial staff, 31 staffs were present on the day of data collection. The response of 31 staffs was collected with the aid of questionnaire. 3.41. Data collection The information in the thesis is collected by questionnaire method. The questionnaire was composed of ten questions relating to the parameters, namely, communication, equality, objectivity, social behaviour, recognition, monetary benefits and career development. The list of manager level employees available in the scheduled data is collected from human resource office. The paper copy of questionnaire were given in hand to these employees and requested to fill up. After one hour, the duly filled questionnaires were collected back by allowing the employees to drop in the sealed cover to maintain the confidentiality. The questionnaire consists of different types of questions. The information about demographic data of the participants is gathered from the multiple choice question (closed), for which just required that right answers be ticked by the respondents. The demographic details help to get the status of the work group in terms of gender, age, education and experience in the company. The main part of the questionnaire, which is focused to evaluate the postulates given in the hypothesis, consists of Likert-scale questions. These questions help to find how strongly the respondents agree with the particular statement. The answers to the questions are based on the five-level scale and the options are strongly agree, agree, nether agree nor disagree, disagree and strongly disagree. 3.42. Method of data analysis The statistical analysis of the data collected based on the questionnaire is carried out. The frequency of the responses is determined and compared. The score was assigned to the options strongly agree, agree, nether agree nor disagree, disagree and strongly disagree are 5 to 1. The minimum, maximum, mean, standard deviation and variance of the scores of the responses corresponding to each statement is computed and reported in this thesis. The descriptive statistical analysis is carried out. The performance appraisal satisfaction index (PASI) of the employee is computed based on the scores assigned to the responses. PASI is given by 100 5 X (%)PASI ×=
  50. 50. where the denominator 5 represents the highest magnitude of the score, X is the mean score and is given by 10 X X 10 1i i∑= = the testing of hypothesis is carried out. Cronbach's alpha (Devllis 1991) is a measure of internal consistency, that is, how closely related a set of items are as a group. Cronbach's alpha is coefficient or reliability. Cronbach's alpha is given by             − − = ∑= 2 X N 1i 2 iY 1 1N N σ σ α where N is the number of components or statements and equal to 31 persons in the present study. 2 Xσ is the variance of observed test score and 2 iYσ is the component i in the sample of persons. Pearson’s correlation coefficient (r) is given by ∑=       −       − − = n 1i Y i X i YYXX 1N 1 r σσ where       − X i XX σ , X and Xσ are the standard score, sample mean, and sample standard deviation, respectively. ANOVA is use to test the hypothesis the computation details of ANOVA is given in Table 4.1. Table 4.1. ANOVA computation Source Sum of Squares (SS) Degree of Freedom (df) Mean Square df SS MS = F-Statistics P-value Between Samples SSB k-1 1k SSB MSB − = MSE MSB F = Value from Table Within Samples SSE n-k kn SSE MSE − = -- -- Total SSTO n-1 -- -- -- 3.43. Organization of research report The report is organized in the following headings.
  51. 51. Chapter 1 Introduction Chapter 2 Industry and company profile Chapter 3 Theoretical frame work Chapter 4 Research methodology Chapter 5 Data analysis and interpretations Chapter 6 Conclusions In Chapter 1, brief introduction on overview of the present scenario of performance appraisal is mentioned. The relationship between performance appraisal and satisfaction of employees is discussed in Chapter 1.The details on the various chapters are discussed in Chapter 1. Chapter 2 contains the profile of tyre industry and Apollo tyres limited. The global competitors and Indian scenario of the tyre market is provided in Chapter 2. The brands of Apollo tyres limited in various country is mentioned in Chapter 2. The theoretical background on the performance appraisal and employee satisfaction is discussed in Chapter 3. The history of development and purposes of performance appraisal are discussed in Chapter 3. The method and timing of performance appraisal is discussed in Chapter 3. The sources of employee satisfaction are discussed in Chapter 3. The performance appraisal procedure at Apollo Tyres limited, Kalamassery is discussed in Chapter 3. The research methodology is discussed in Chapter 4. The method of data collection and sampling is discussed in Chapter 4. The objectives of research are given in Chapter 4. The data collection and the theoretical details of the data analysis is given in Chapter 4.
  52. 52. The analysis of collected data based on questionnaire survey and interpretation of analysis results is discussed in Chapter 5. The frequency of the response and descriptive statistical analysis of data is carried out and the results are discussed in Chapter 5. The summary, finding and conclusions of the study are discussed in Chapter 6. 3.44. SUMMARY The various aspects of design of experiments are described. The questionnaire method is adopted for the collection of data. The level of agreement to the ten statements are allowed to mark in 5 point score Likert-scale. The sample has been drawn from the population based on the judgment method. The duly filled questionnaire is collected from the respondents. The frequency and descriptive statistical analysis of responses are carried out.
  53. 53. Chapter 5 5. DATA ANALYSIS AND INTERPRETATIONS 3.45. introduction The duly filled-up questionnaire was collected from 31 managerial cadre employees of Apollo Tyre Limited, Kalamassery. The data of response is analyzed using Microsoft excel software. The ratio of the response to the total number of respondents is computed and expressed in percentage. The response for the questions related to the subject area of the studty is collected in Likert-scale. The descriptive statistical method is also used to analyze the data. The minimum, maximum, mean, standard deviation and variance have been computed based on the five point scale response of the employees 3.46. demographic details of the respondents The first part of the questionnaire was designed to collect the demographic details of the respondents. The demographic information gives the details of gender, age, education and experience at Apollo Tyre Limited, Kalamassery of employees of managerial cadre. The demographic information of the respondents are given in Table 5.1. Gender statistics Gender Respondents Percentage Male 29 94% Female 2 6% Total 31 100%
  54. 54. Gender Statistics 0% 20% 40% 60% 80% 100% Male Female Respodents Fig 5.1. Gender statistics of respondents The gender statistics of the respondents are given in Fig 5.1. The male respondents are found to be 94 percent. Apollo Tyres Limited, Kalamassery is a manufacturing firm and majority of the workers are males. The managers are required to attend the production plant issues. Hence males are more appropriate and being employed in the company. Table 5.2. Age statistics Age Respondents Percentage 25 to 35 years 15 49% 35 to 45 years 10 32% 45 to 55 years 6 19% Total 31 100% Age statistics 0% 20% 40% 60% 80% 100% 25-35 35-45 45-55 Age (years) Respodents Fig 5.2. Age statistics of the respondents
  55. 55. The age statistics of the respondents is given in Fig 5.2. The managers having formal age less than 35 years is found to 49 percent. It is found the majority of employees in the managerial cadre are young and in the age group of 25 to 35 years. Table 5.3. Formal education statistics Education Respondents Percentage < Bachelor degree 2 6% Bachelor degree 12 39% > Bachelor degree 17 55% Total 31 100% Statistics of formal education 0% 20% 40% 60% 80% 100% <Bachelor degree Bachelor degree >Bachelor degree Respodents Fig 5.3. Education statistics of the respondents The education statistics of respondents is given in Fig 5.3. The managers having formal education greater than bachelors degree is found to 55 percent. The majority of the employees in the managerial cadre are well educated. Table 5.4. Experience statistics Experience Respondents Percentage 0 to 2 years 2 6% 2 to 5 years 6 19% > 5 years 23 75% Total 31 100%
  56. 56. Company experience statistics 0% 20% 40% 60% 80% 100% 0-2 2-5 >5 Experience (years) Respodents Fig 5.4. The Apollo Tyres Ltd experience statistics of respondents The experience of the respondents in Apollo Tyres Ltd is given in Fig 5.2. The respondents having experience greater than 5 years is found to be 75 percent. The majority of the respondents is well experienced and hence might have undergone employee development review cycle in many occasions. 3.47. FREQUENCY OF response The second part of the questionnaire is connected with hypothesis of the research. There were 10 statements on various aspects of performance appraisal and the respondents are requested to tick the level of agreement or disagreement in a Likert scale. The frequency of the responses of the employees is given in Table 5.5. The highest magnitude of the frequency is found to be 74% against the option ‘agree’ for the statement clarifying the use of performance appraisal as promotion and pay fixation. No respondents have opted ‘strongly disagree’ for any of the questions posted in the questionnaire. For all questions, the highest frequency of response is found to be corresponding to the option ‘agree’. The highest magnitude of the frequency for various statements is found to be between 52 to 74 percent. This indicates that the various aspects of performance appraisal stated in the questionnaire are positively correlated to the
  57. 57. satisfaction of the employee. The result of frequency analysis of the employees is given in Table 5.5. Table 5.5. Frequency of response for statements Statement Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree 1. I clearly understand the purpose of performance appraisal 48% 52% 0% 0% 0% 2. Performance appraisal in my company is fair 26% 68% 6% 0% 0% 3. Performance appraisal reflects objectively my performance 13% 71% 16% 0% 0% 4. Performance appraisal is a tool for promotion and pay fixation 23% 74% 3% 0% 0% 5. Performance appraisal process helps my superior to manage people better 10% 61% 23% 6% 0% 6. Performance appraisal process encourages co-operation and team spirit 13% 55% 26% 6% 0% 7. Performance appraisal influences individual performance positively 19% 72% 3% 6% 0% 8. Present appraisal system recognizes improved performance of individual 16% 65% 13% 6% 0% 9. Performance appraisal is a career developmental and educational tool 16% 52% 29% 3% 0% 10. Performance appraisal feedback will be conveyed to me 13% 62% 6% 19% 0%
  58. 58. 1. I clearly understand the purpose of performance appraisal 48% 52% 0% 0% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig. 5.5. The frequency of response for statement no.1 The frequency of the response of question on knowledge of the employee on performance appraisal is given in Fig. 5.5. It is found that 48 percent respondents opted ‘strongly agree’ and 52 percent respondents opted ‘agree’. This indicates that communication regarding the purpose of performance appraisal is satisfactory. 2. Performance appraisal in my company is fair 26% 68% 6% 0% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig. 5.6. The frequency of response for statement no.2 The frequency of the response on the opinion about the present appraisal system in Apollo Tyres Ltd., Kalamassery is given in Fig 5.6. It is found that 26 percent respondents opted ‘strongly agree’, 68 percent respondents opted ‘agree’ and 6 percent
  59. 59. opted ‘neither agree nor disagree’. This indicates that majority of the respondents positively agrees on the fact that the performance appraisal in the company is fair. 3. Performance appraisal reflects objectively my performance 13% 71% 16% 0% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.7. The frequency of response for statement no.3 The frequency of response on the capability of the present performance appraisal system to reflect the employee performance is given in Fig. 5.7. It is found that 13 percent respondents opted ‘strongly agree’, 71 percent respondents opted ‘agree’ and 16 percent opted ‘neither agree nor disagree’. This indicates that majority of the employees are convinced with the fact that the preset system for performance appraisal objectively reflects the employee’s performance. 4. Performance appraisal is a tool for promotion and pay fixation 23% 74% 3% 0% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig. 5.8. The frequency of response for statement no.4
  60. 60. The frequency of the response on the statement that performance appraisal is a tool for promotion and pay fixation is given in Fig. 5.8. It is found that 23 percent respondents opted ‘strongly agree’, 74 percent respondents opted ‘agree’ and 3 percent opted ‘neither agree nor disagree’. This indicates that majority of the respondents accept the fact that as found in other companies, performance appraisal in Apollo Tyres Ltd., Kalamassery is a tool for promotion and pay fixation. 5. Performance appraisal process helps my superior to manage people better 10% 61% 23% 6% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig. 5.9. The frequency of response for statement no.5 The frequency of the response on the statement that performance appraisal helps to superior to manage subordinates is given in Fig. 5.9. It is found that 10 percent respondents opted ‘strongly agree’, 61 percent respondents opted ‘agree’, 23 percent opted ‘neither agree nor disagree’ and 6 percent opted disagree. This indicates that majority of the respondents accept the fact that performance appraisal in Apollo Tyres Ltd., Kalamassery is tool for effective management.
  61. 61. 6. Performance appraisal process encourages co- operation and team spirit 13% 55% 26% 6% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.10. The frequency of response for statement no.6 The frequency o the response of the statement on the benefits of performance appraisal towards generating co-operation and team spirit is given in Table 5.10. Thirteen percent of the respondents opted ‘strongly agree’, fifty five percent opted ‘agree’, twenty six percent opted ‘neither agree nor disagree’, six percent opted ‘disagree’. Though there is a general opinion that the performance appraisal encourages co-operation and team spirit, it seems that there is a scope for improvement in this aspect. 7. Performance appraisal influences individual performance positively 19% 72% 3% 6% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.11. The frequency of response for statement no.7
  62. 62. The frequency of the response on aspect that individual performance is being explicitly accounted for in the performance appraisal process is given in Fig. 5.10. It is found that 19 percent respondents opted ‘strongly agree’, 72 percent respondents opted ‘agree’, 3 percent opted ‘neither agree nor disagree’ and 6 percent opted disagree. This indicates that majority of the respondents accept the fact that individual performance is positively accounted for in performance appraisal in Apollo Tyres Ltd., Kalamassery. 8. Present appraisal system recognizes improved performance of individual 16% 65% 13% 6% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.12 The frequency of response for statement no.8 The frequency of the response on aspect that improved performance of individual is being explicitly accounted for in the performance appraisal process is given in Fig. 5.12. It is found that 16 percent respondents opted ‘strongly agree’, 65 percent respondents opted ‘agree’, 13 percent opted ‘neither agree nor disagree’ and 6 percent opted disagree. This indicates that majority of the respondents accept the fact that improved performance of individual is accounted for in performance appraisal in Apollo Tyres Ltd., Kalamassery.
  63. 63. 9. Performance appraisal is a career developmental and educational tool 16% 52% 29% 3% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.13 The frequency of response for statement no.9 The frequency of the response on aspect that performance appraisal is a developmental and educational tool is given in Fig. 5.13. It is found that 16 percent respondents opted ‘strongly agree’, 52 percent respondents opted ‘agree’, 29 percent opted ‘neither agree nor disagree’ and 3 percent opted disagree. Though there is a general opinion that the performance appraisal is a career development and education tool, it seems that there is a scope for improvement in this aspect. 10. Performance appraisal feedback will be conveyed to me 13% 62% 6% 19% 0% 0% 20% 40% 60% 80% 100% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Response Respondents Fig 5.14 The frequency of response for statement no.10
  64. 64. The frequency of the response on aspect that feedback of performance appraisal is conveyed to employee is given in Fig. 5.14. It is found that 13 percent respondents opted ‘strongly agree’, 61 percent respondents opted ‘agree’, 6 percent opted ‘neither agree nor disagree’ and 19 percent opted disagree. Though there is a general opinion that the feedback is communicated after conducting the performance appraisal, it seems that there is a scope for improvement in this aspect. 3.48. descriptive statistics The statements in the questionnaire have been reviewed statistically. Descriptive statistics quantitatively describes the main features of a collected data. For this purpose, the scores assigned to various options are as follows:- 5 to ‘strongly agree’, 4 to ‘agree’, 3 to ‘neither agree or disagree’, 2 to ‘disagree’ and 1 to ‘strongly agree’. Univariate analysis is carried out, which involves describing the distribution of a single variable, including its central tendency and dispersion. The central tendency of the data computed is mean and dispersion of score is represented by maximum, minimum, standard deviation and variance. The descriptive statistics of the score data is given in Table 5.5. The minimum, maximum and mean of scores is presented in Fig. 5.15. 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 Question number Score Mean Minimum Maximum Fig 5.15. The range and mean of the scores of the statements
  65. 65. Table 5.6. Statistics of scores of response for statements in questionnaire Statement Minimum Maximum Mean* Standard deviation Variance 1. I clearly understand the purpose of performance appraisal 4 5 4.48 0.51 0.26 2. Performance appraisal in my company is fair 3 5 4.19 0.54 0.29 3. Performance appraisal reflects objectively my performance 3 5 3.97 0.55 0.30 4. Performance appraisal is a tool for promotion and pay fixation 3 5 4.19 0.48 0.23 5. Performance appraisal process helps my superior to manage people better 2 5 3.74 0.73 0.53 6. Performance appraisal process encourages co- operation and team spirit 2 5 3.74 0.77 0.60 7. Performance appraisal influences individual performance positively 2 5 4.03 0.71 0.50 8. Present appraisal system recognizes improved performance of individual 2 5 3.90 0.75 0.56 9. Performance appraisal is a career developmental and educational tool 2 5 3.81 0.75 0.56 10. Performance appraisal feedback will be conveyed to me 2 5 3.68 0.94 0.89 *Total number of respondents = 31 The minimum score for every statement in the questionnaire is given in second column of Table 5.5. The highest score in second column is 4, which corresponds to the response ‘agree’ and is for statement no. 1. The lowest score in the second column is 2, which
  66. 66. corresponds to the response ‘disagree’, and is for statement number 5 to 10. This indicates that there is scope for improvement for the parameters pointed out in statement number 5 to 10. The maximum score of the statements are given in third column of Table 5.6. The maximum score for all statements is 5, which corresponds to the response ‘strongly agree’. The mean of score is given in fourth column of Table 5.5. Higher the magnitude of mean indicates that higher is the level of agreement on the statement and vice versa. Highest magnitude of means is found to be 4.48 and is for statement number 1. This indicates that the purpose of performance appraisal is clear among employees. The lowest magnitude of mean is found to be 3.68 and is found to be for statement number 10. This indicates that there is scope for improvement in the communication of feedback in the performance appraisal process. The standard deviation and variance of the score data indicate the spread of the data from the mean and is given in Table 5.6. The deviation is 0.48 for statement number 4. This indicates that the pay fixation and promotion based on the performance appraisal is effectively communicated and it reaches to all the members. The deviation is 0.94 for statement number 10. This indicates that communication regarding the feedback is not reaching to all the employees equally. It is suggested that mechanism shall be implemented to confirm that feedback of performance appraisal is reached to the employees. The variance is indicative of variation from the mean. The variance is correlated standard deviation, the arguments for placed for standard deviation can be extended to variance also.
  67. 67. 3.49. performance appriasal – satisfaction index (pasi) The performance appraisal satisfaction index (PASI) of the employee is computed based on the scores assigned to the responses in section 5.4. The performance appraisal satisfaction index (PASI) of respondents is plotted in Fig. 5.16. 20% 40% 60% 80% 100% 1 4 7 10 13 16 19 22 25 28 31 Respondent number Performanceapprisal satisfactionindex Mean = 79% SD = 9% Fig 5.16. PASI of respondents The maximum magnitude of PASI is found to be 100 percent and lowest magnitude of PASI is found to 56 percent. Respondent number 17 and 19 scored PASI of 56 percent. The commonality of the demographic details among two respondents was, they were males having bachelor degree and experience more than 5 years. Hence it is recommended that the special attention shall be considered to accommodate the needs of experienced employee having more than five years of experience in the performance appraisal. 3.50. testing of hypothesis The details of overall satisfaction are given in Table 5.7. The hypothesis of the research work was “The employees in Apollo Tyres Limited, Kalamassery are satisfied with the
  68. 68. performance appraisal.” The range of scores of the responses is 2 to 5. The magnitude of mean of scores is an indication to the overall satisfaction level of employees. The mean of scores is 3.97, which is greater than mid value of maximum score (equal to 2.5). This indicates that, in general, employees are satisfied with the performance appraisal process in Apollo Tyre Limited, Kalamassery. The standard deviation is 0.79, which is less than the increment in magnitude of score (equal to 1) considered for different options in the questionnaire. This indicates that the deviation of collected data from the mean is low and hence the interpretation based on mean is can be acceptable. The variance is 0.52. Cronbah’s alpha is 0.787, a magnitude greater than 0.7 indicates that the data is reliable for testing the hypothesis (Nunnaly, 1978). Table 5.7. Statistical evaluation of the overall responses Statements under consideration Minimum Maximum Mean Standard deviation Variance Cronbach’s alpha Overall (statement number 1 to 10) 2 5 3.97 0.72 0.52 0.787 The research hypothesis is to study the level of satisfaction of employees on the performance appraisal of the company. The aspect of satisfaction is explicitly stated in the questionnaire. Statement in questionnaire: 2. Performance appraisal in my company is fair The relationship of response of statement no.2 with the major parameters of satisfaction, namely, communication, measurement policy and post-review decision are analyzed statistically. The statements corresponding to these parameters are given below. Parameter 1: Communication 1. I clearly understand the purpose of performance appraisal 10. Performance appraisal feedback will be conveyed to me
  69. 69. Parameter 2: Measurement policies 3. Performance appraisal reflects objectively my performance 7. Performance appraisal influences individual performance positively 8. Present appraisal system recognizes improved performance of individual Parameter 3: Post-review decisions 4. Performance appraisal is a tool for promotion and pay fixation 5. Performance appraisal process helps my superior to manage people better 6. Performance appraisal process encourages co-operation and team spirit 9. Performance appraisal is a career developmental and educational tool The responses of the various statements in the questionnaire are combined to evaluate each parameter. The sum of the scores of responses of statements is assumed to be the response of each of three parameters. The statistical analysis, namely, correlation coefficient and F-test are carried out. The correlation matrix between the parameter 1 to 3 and satisfaction is computed and is given in Table 5.8. The correlation study indicates that the overall satisfaction is strongly related to the communication (parameter 1), measurement policies (parameter 2) and post-review decisions (parameter 3). It may be also noted that the parameters communication, measurement policies and post-review decisions are interdependent. Table 5.8. Correlation coefficient matrix of factors influencing employee satisfaction and performance appraisal Satisfaction Parameter 1 Parameter 2 Parameter 3 Satisfaction 1 0.5460 0.5357 0.3867 Parameter 1 0.5460 1 0.7493 0.4202 Parameter 2 0.5357 0.7493 1 0.6945 Parameter 3 0.3867 0.4202 0.6945 1 Analysis of variance is carried out for testing the hypothesis. F-statistics of the responses for satisfaction and paratemeters1 to 3 is computed for testing hypothesis. The details of ANOVA are given in Table 5.9.

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