Performance Appraisal System Impact on Employees Apollo Tyres

executing judgment System partake on Employees Apollo Tyres1.1 launchingharmonize to Mayo, 2000, Human resources management is an all-important(prenominal) function of a designetary house because the machines can be comfortably directed, repaired and utilised but employees argon living organisms with emotions and prejudices and can non be easily directed, repaired and utilised. In 20th century the theoretical as well as possible aspects of the Human resources management got a scientific dimension, the consistent efforts of the management to mitigate the coifance of the watertight has coreed in the movement evaluation of human resources or employees. The employees argon the building blocks of a strong and the defective block leave behind deform the entire firm so it is the responsibility of the management to term these building blocks according to the needs. The feat estimation brass is not naked as a jaybird concept it has an age old history to tell but the neo estimate constitution of rules has evolved in the mid of 20th century.The execution estimate system, which integrates umteen departments of the firm, is aimed at the enhancement of murder of the employees. The employees who argon not grading in the writ of execution estimate period ar required to sustain training and skill development programme. The surgical cognitive operate judgement was believed to be a motivation means but in practise some studies acquire shown that it is not always act as a motivational federal agent but some prison terms has de-motivational printing on the appraised. The system which counterfeits the rules and regulations to motivate the employees to perform better in the next estimation period can be c all(prenominal)(prenominal)ed as a best suited system for that particular firm because there is no optimum method or procedure to be followed in a procedure estimation system in a firm. (Nishad, 2005)The motivation and de-motivati on factors whitethorn be salute in the same deed judgement system. The assessment may be motivational to some employees lag it is de- cause for some separates. The combined effect is a universal thing in all appraisal system but the proportion of motivation to de-motivation factors should be proud differentwise the entire objective of the mental process appraisal result be failed. (Seong and Lewis, 2009)There ar m both a(prenominal) another(prenominal) factors which affect the result of capital punishment appraisal the main factor is the appraisal procedure and the evaluation criteria, the next important factors argon societal, cultural, economical and policy-making aspects of the employees. The accessible and cultural aspects atomic number 18 cognise as permanent factors which cannot be nullified so it becomes the duty of the employer to plan a PA system which suits the socio-cultural aspects of the employees in addition to the due amity for the policy-makin g as well as the economics factors. (Nishad, 2005)1.2 Background and apology of the lead1.2.1 Background of the StudyApollo Tyres Ltd is a multinational company having many divisions all almost the world. It is a private ara company with modified liability. The death penalty track of ATL has attracted many foreign firms to initiate joint supposition with this company in UK, US and African continent. The performance of this company and the varied product categories it offers to the customers argon the key for its success. (Company profile, 2010)Apollo Tyres Ltd is emerging as a world(prenominal) tyre manufactures and it dresss its strength in the availability of materials and savvy at a lower price than its competitors. The annual r level offue for 2009 financial yr was 1.2 million USD. The main source of income is form the domestic production recently the firm has acquired many other international firms untold(prenominal) as the Dunlop Tyres in 2006 and VBBV of Nether lands as well as the Russias largest tyre manufacturing company Amtel-Vredestein NV. ATL has a direct merc go throughise strategy and has 2500 showroom all over the world withdrawity of it are in India. There are 4000 dealerships India and more than 100 dealers internationally. (Company profile, 2010 and Stanley, 2009)The globalisation has brought many challenges to ATL as new multinational companies afford entered the health care sector in India. ATL has coped with challenges with diversified product plan and for that it has invested billion of Indian Rupee, as a result the company has major market share in India. It is a matter of credit that around 10% of Tyre Products usable all over world be massive to ATL because of the export activities of the company. The company is so successful because of the work on force it got. (Company profile, 2009)The workers are being provided by reliable facilities such as good on the job(p) environment, good salary, flexible cartridge cl ip schedule and holiday and festive allowances and so on The Management has already providing them a contributory pension fund and insurance scheme for the employees. The educational pupil ships and education facility up to high school for the children of employees are provided by the company itself, apart from the re expressionntial facility. (Company profile, 2010 and Stanley, 2009)The annual report from financial year 2006 to 2009 has proved that the productivity has been getting decreased year by year. In 2006 it was 2.6% decrease and in 2009 it has reached the alarming 18% decrease. The management has a performance appraisal system since 1971 and counselling programme as well as skill development programmes are provided for the chthonicperformed employees. Still the productivity graph records a downward growth. And this proposed information indents to find out the effectiveness and tinct of the appraisal system on the employees and the productivity. (Stanley, 2009)1.2.2 Ju stification of the bailiwick both organisation around the world has vision and missionary work, whatever the philosophy behind the vision and mission there result be a common factor in the philosophy improved performance. The improved performance might bring usefulness to the organisation. The overall development of the organisation may be championness military position of the improved performance of the firm. the improved performance means the enhanced performance of the its various departments such as Human resources management, financial management, production and operations management, sales management, marketing management, customer care managementetc. In all of these departments the human factor is a matter of serious consideration. The dep destinationable people for the right job make all the differences. (Taylor, 2001)All the firms create some or other method to measure and analyse the performance of it. The abstract of this performance and the accomplishments pl ans to be taken to improve the performance are of corking importance of every firm. To manage the performance appraisal of its employees the firms present a separate appraisal department under the human resources department. The functions of appraisal department are integrated with other department such as financial department to coordinate the appraisal rewards and punishments, if any. (Qureshi, 2005)The performance appraisal is a complicated disciple of study because the appraisal result might not be the int oddmented and assumed motivation of the employees. The studies relieve aceself revealed that in many firms around world the appraisal process and bettering measures fill resulted in the declined performance of the employees indicating the de-motivational effect of the appraisal system. (Nishad, 2005)The appraisal methods and criteria should be defined curiously for each firm because the appraisal results and the impact of the employees are very more depended on the ex ternal internal factor of the firm. The external factors such as socio-cultural traits of the employees, the economic and policy-making situation of the geographical location of the firmetc. The internal factors mean the genius of the jobs, the leisure and pleasure in the job, the working conditions, organisational cultureetc. (Nishad, 2005)The appraisal theories when applied to the Asiatic countries the result may be devastating because the western sandwich appraisal theories pee-pee a great limitation in the Asian countries because of the social and cultural difference of the Asian people. So it is imperative to analyse the appraisal system on the primer of local factor which ascertain the management and the organisational behaviour of the employees. (Taylor, 2001and Nishad, 2005)In the proposed study, ATL- Kalamassery, in the Kerala state, India, is taken because the semipolitical and the economical situations of the state. The Kerala is world famous for the various politi cal ideologies such as communism and socialism. The economic backwardness of the state is likewise factor to take this unit of measurement of ATL for the study. According to Taylor (2001) the social- cultural traits of the employees in India are very much diverse from the western countries. The social behaviour of Indians is sometimes unacceptable social etiquettes for westerners. The social bond and relations are different from that of the western countries. The proposed study would like to analyse the impact of the factors in the appraisal system and how far the appraisal system of ATL can manage its employees in the improvement of performance.1.2.3 Literature Re ascertainPerformance appraisal has a long history it emerged with the civilisation. When the people are interacting to each other in an bully fashion then it may require some laws to govern the communicate of the people in the group. This preliminary law system is called grundnorm which means the home base norm, an d these base norms were designed to control the conduct and also the distributed duties. The distribution of duties let in various works later on when these works required competency then performance of the individual and the groups were began to analyse. So it can be establish tongue to that the performance appraisal was there in the primitive societies and in the level of time the application and the method of evaluation has been deviated a lot. (Rajeev, 2000)According to Mayo, (2000), in the modern world, where everything is measured in time, the performance evaluation has great importance. The performance of each member of a group is important for the purpose of performance evaluation. After the industrial revolution new management theories came in to being and many of them went in to oblivion, those survived gave emphasis on the evaluation of the performance on the basis of scientific criteria. The industrial world tries to motivate its man government agency so that bette r performance can be obtained from each of the employees.The motivational aspect of the performance appraisal has been subject for deep reconcileed debates which are establish on the many disciplines of study such as psychology, anthropology, sociologyetc. The complexity of the subject matter indicates the intricacies involved in the performance appraisal process and its impact on the employees. (Nishad, 2005)The motivational theories such as Vrooms expectancy possibleness and hygiene theory suggest that the employees are not motivated by giving them better facilities or salary but there is a mental dimension such as appreciation, recognition, career growth etc. The modern appraisal theory which is based on these concepts where as the unspotted theory of performance appraisal all support the deterrent method, that is, the employees who are performing well forget be p abet better and those who are not go away be sacked. This onslaught has many loop holes such as the mental st rain during the appraisal period the employees get down and the wish of loyalty from the part of the employees and it was proved to be ineffective in motivating the employees. (Rajeev, 2000)The modern approach, meanwhile, support more over a lenient approach towards the employees. The basic philosophy is to picture the basic paradox in the underperformance of the employees. The root cause may not be related to the employment or it may be related of some physiological problems, whatever it may the manager or the supervisor who is in charge of the appraisal process is responsible to understand it. The counselling process is designed to understand the problems and give suggestions to solve the problems of the employees. The training and improvement programmes are also conducted in many modern industries to increase the performance level of the employees. (Rajeev, 2000)The performance appraisal is normally begins with the formulation of the criteria on which each and every employee impart be analysed. The criteria formation is very complex and ordain be crotchety according to the nature of employment as well as the philosophy of the management. The criteria then communicated to the employees and a time period go out be given to them to opine nearly the criteria and after the evaluation of the suggestions from the various sources the management may change the criteria or stick on with it. The appraisal process will start and the each employee will be informed about the appraisal period. The appraisal result will be published publically and remedial measures will be taken thereafter. The remedial measures include the training and improvement programme and even the removal of the underperformance form the employment. (North, 2006)The problem with the performance appraisal begins when the employees are instructed to afford the remedial measures. According to Nishad (2005), the social and cultural factors of the employees as well as the political strength are important factors that dictate the appraisal process. contrary the western world in Asian countries the political strength of the employees unions is much stronger and the savvy laws are much lenient to support the employees. The appraisal system in the Asian countries shall not follow the procedures of the western firms. The motivational factors and the de-motivational factors are different and contradictory in western and eastern world. The factors which motivate a westerner may a factor for de-motivation in Asian countries.According to Taylor (2001), the social-cultural aspects of the employees have significant effect on the appraisal system in the Asian countries. The peck unionism and the political inclination of these unions are other factors which will affect the appraisal system adversely. The behavioural pattern of the employees have to be analysed before the formulating the appraisal strategy.The political philosophy of the political parties in Kerala varies from lefti st ideology to the rightist capitalism. The political parties strongly support one or the other political ideologies communism and socialism are the major philosophies which are being followed in the state for more than a century. The workmanship unions of the state are affiliated to anyone of the political parties and the look at unions enjoys the protection of labour laws of the land. (Ashok, 2007)Situation in the ATL is not different from the political situation of the state. The political parties have a great influence on the trade unions and the lives of the employees. all employee in the ATL is affiliated to any one of the political parties. This is basically a survival strategy for the employees as well as the trade unions. (Ashok, 2007)The put inive bargaining of the trade unions and the threat of strikes hampered the growth of many industries in the state. The actual situation in the firm is also same and the management have to discuss and reach in a consensus to impl ement any change in work schedule or in bonus or in the salary. The strength of the management is in the bargaining power and that of the trade unions is in the unity and threat to strike. (Uppal, 2009)The performance appraisal system of any industry is under the scrutiny of the trade unions, the performance criteria should be passed by the trade union so that it can be smoothly run. The remedial measures are also supervised by the trade unions and any action which will be a potential threat will be strongly resisted by the unions. (Uppal, 2009)1.2.4 AimThe present study aims to analyse the Performance approximation System of the Apollo Tyres Ltd and the motivating as well as the de-motivating effects of the appraisal system on the basis of the socio-cultural and politico-economical situations and to suggest the strategies and procedures to improve the performance of the employees.1.2.5 Hypothesis(A) Null dead reckoning H0Impact of a performance appraisal system on the employees i s depended on the social, cultural, political and economic environment of the firm and the employees(B) Alternative HyposthesisH1 Impact of a performance appraisal system on the employees is NOT depended on the social and Cultural environment of the firm and the employeesH2 Impact of a performance appraisal system on the employees is NOT depended on the political and economic environment of the firm and the employeesThe null hypothesis is statistical hypothesis that is tested for possible rejection under the assumption that it is true (usually those observations are the result of chance). The concept was introduced by R.A.Fisher (Gonick and Smith, 2006)In this proposed study, the null hypothesis considers the independent variables such as social, cultural, political and economic factors of the environment in which the firm operates. The null hypothesis is assumed to be trued based on the various lowly selective information. The alternative hypothesis is divided in to twain part on e with the factors such social and cultural factors and the second one is political and economic factors.According to Malhotra (2008), the social and cultural factors cannot be unaffectionate as it is has strong influence on each other. The social factor is formed based on the cultural factor and the cultural is nurtured and propagated by means of social circumstances. According to Cumbler (2003), The political philosophy is always related with the saving of the country, the political affiliation is more over has direct influence on the economy of the people. It is noteworthy that the communism and other labourer favoured philosophies are roaring the third world countries because of the poor economic conditions. Once these countries become developed nations the leftist philosophies will cease to exist in course of time.1.2.6 particular Objectives of the Study1. To analyse the performance appraisal system in oecumenic and particularly in the Apollo Tyres Ltd (ATL)2. To underst and analyse the signification of the performance appraisal system in achieving the goals and objectives of a firm3. To study and analyse the mutation of performance appraisal from conventional to modern and the major factors influenced the transition4. To understand the motivating and de-motivating effect of the appraisal system on the employees in general and particularly in the ATL5. To analyse effect of social and cultural factors and political and economical factors of the employees on the appraisal system in general and particularly in the ATL.1.2.7 Research QuestionsTo fulfil the unproblematic objective of the study the following explore questions are proposedPerformance Appraisal its meaning and definitionsWhat are the significance of performance evaluation system in accomplishing the organisational objective and goals?What are the differences in the modern as well as in the conventional appraisal system?What is the relation between the motivation of the employee and appr aisal system?How do the socio-cultural and politico-economical factors of the employee affect the Appraisal System in a firm?Does the performance appraisal system in the Apollo Tyres Ltd have a motivational effect on the employees?What are the strategies that the ATL follows in the appraisal process to enhance the performance of the employees in the particular socio-cultural and politico-economical background?2. Research method and Approach2.1 IntroductionThe look method and approach is devised to study and understand Performance Appraisal System in the Apollo Tyres Ltd (ATL). The study involves the opinion of the employees and the management on the present appraisal system in ATL. The consultation method will be apply to understand the management side of story on the Performance Appraisal system in the ATL. The questionnaire method is used to understand the employee side story. The literature reviews are depended to make a order work on the theoretical concept of the study. Var ious statistical methods will be used to analyse the entropy and it will be explained on the basis of germane(predicate) literature. The span of the research will be six months. In the month of March, 2010 the study will be commenced and the final report will be submitted in September, 2010.2.2 Research Methodology of the studyThe research methodology of the study is designed to understand the Performance Appraisal System in the ATL and the impact of present system on the employees.According to Kothari, (2002) the research method equal for a study where the relevant literatures as well as the direct data are used the two research methods are principally used such as the exploratory methods and the constructive methods. The constructive methods are used when the subject matter of the research needs some general anatomy of reference to handle the entire research results. For example, in international marketing research, sometimes, the cultural traits of customers have to be ta ken the basis or frame of reference of the study because this trait will affect all the research questions under study.2.2.1 Exploratory research methodsExploratory research methods are wildly used in the secondary data accumulation. In this present study the literature review will be used to understand and to formulate the theoretical frame work of the entire study. The history of the appraisal system, the relevancy of the appraisal system, the motivational as well as the de-motivational aspects of the PA system, the social and cultural factors as well as the political and economic factors will be extensively studied through relevant literature. The relevant sources will be explored to understand the subject matter of the study deeply therefrom exploratory research methods. (Kothari, 2002)2.2.2 Constructive Research MethodsConstructive research methods are used when the research result cannot be generalised due the influence of dominant factors in the study. (Kothari, 2002)In the present study the performance appraisal system is analysed based on the social and cultural aspect of the employees. The political and economical aspects are also considered for the study because all these factors have a dominant effect on the study. In other words, without taking these factors under consideration the research will be completed. The geographical location of the unit under study is in the Kerala state, India, which is an economically backward place and the political philosophies, such communism and socialism have formidable impact on the people living there. The social and cultural factors are different from the western world and the social bonds and family cohesions are very important aspects this culture. The social fundamental interaction and etiquettes are different from that of the western world so the theories applicable in the western world no longer stand good in these situations. So it is mandatory for this study to form a frame work on these factors to anal yse the subject matter of the research.2.2.3 Questionnaire and interview method wonder and questionnaire methods are generally used to collect the data first hand (Kothari, 2002). In this study these methods are preferred to get the information on the appraisal system of ATL and the impact of such system on the employees. The questionnaires will be used to get the opinions of the employees on the performance appraisal system as well as the appraisal rewards and the methods of the PA system.According to Saunders et al., 2003 the informal end interviews are useful to gather data in a larger perspective. The blunt end interview questions and the resolvings to it will give the interviewer the chance to ask other relevant questions to the interviewee based on the previous answer and can get more lucubrate from the interviewer.The interview questions are open end in nature and the questions will be asked to the officials of ATL. According to the answers of these officials other relat ed questions will be asked to get more comprehensive view on the subject. This method is used to interview the officials only because there are very few in number.The questionnaire will be distributed to the employees and the responses will be collected back within one month of distribution. This method is take because in this unit there are 2100 employees and interviewing all them will not be possible due to time constrain.2.3 Method of StudyThe proposed study requires both main(a) data as well as the secondary data to meet the objectives of the study. The method of study thus designed to collect the primary as well as the secondary data. The primary data will be collected from the management staffs and from the employees. The secondary data will be collected by referring books, Articles, the e-journals and paper journals, web sitesetc.2.4 elementary data accruements methodsPrimary data will be collected from the employees and the managers of the ATL directly. The employees will be distributed the self-structured close end questionnaire to be answered and 2 weeks time will be given to them to fill it and return. Managerial staff will be interview with open end interview questions. According to Saunders et al., 2003, the open end questions are very apt for interviewing a small sample in a study it also very effective because the open end questions will provide enough opportunity to ask more questions based on the answer for the previous questions and clarify the doubts on the statements if any.2.5 Secondary data collection methodsThe secondary data collection is highly recommended information accumulation process in any research work. The researcher should be patient enough to select apt resources and updated information. In management subjects the data collection should be done through updated resources and latest editions books, articles and journals because new concept and theories and its applications are emerging day by day and it is the responsibil ity of the researcher to find out the up dated information for his research work. (Kumar, 2005)The secondary data collection method includes access to the relevant and updated books, journals and articles. The website will be extensively used if the authenticities of the sites are known. The university library and online facility will be extensively used for this research. The data regarding the company profile will be gathered though company website and referring the ISO manual of ATL and the annual report which is available in the web site of ATL.2.6 Method of Data analysisIn the proposed study the primary data as well as the secondary data will be used to reach a conclusion and the recommendations. The primary data will be analysed with various statistical tools such as chi square test, ANOVA etc and the variance analysis will be done to understand the impact of the statement with the literature review. Both the primary and secondary data will be simultaneously used to catch the results of the research.2.7 Scope, ethics and Limitation of the StudyScopeThe proposed study is on the performance appraisal system and the impact of it on the employees. The scope of the research includes the analysis of the various factors such as the social-cultural aspects and the political-economic factors of the environment in which the Apollo Tyres Limited is operating. The social and cultural aspect of the employees will be analysed and the satisfactory strategy for the appraisal system will be studied. The political and economic situation of the employees will be analysed and the performance appraisal approach of the management will be studied based on these factors. The scope of the research will be on the formulation appraisal strategy which will be suitable under the various research variables. The motivational and the de-motivational impact of the appraisal system will be analysed based on the four above mentioned aspects of the employees.EthicsAccording to Kothari ( 2002), a research study will provide true results and will provide a valid conclusion if it has followed a research ethics. In this proposed study the permission to do the research is obtained from the management of Apollo Tyres Limited, Kalamassery Unit, Kerala state, India. The survey among the employees of the ATL will be conducted confidentially. The questionnaire will not contain any whereabouts of the employees only the service, age, gender and positions. It will not ask for any mortalal details such as the address, name or any name of unique post. The research will seek the written permission from the management for the interview of the Management staffs so the evidence of opinion can be adduced in the Dissertation. Relevant literature will be collected and analysed to gather the familiarity base on the subject matter so that the research should have a through theoretical support.LimitationsShort span of time is problem in the research as the time period is limited to 3 months. The data collection and the analysis of the primary data will be done with maximum speed and there is a chance the responses of the employees is not 100% true to the fact. The literature available on the performance appraisal is numerous and reading the relevant one requires great time. The limited time may limit the number of literature that can be analysed by the researcher.The data will be gathered through research aid wing of Indian Management Association (IMA). The representative of IMA will be hired for the purpose of the data collection the knowledge limit of the person on the research objective may prove to be a problem in translating the questionnaire to the employees.The cooperation from the part of the employees and other management staff is meaty for the success of the research. The research will suffer if there is limited cooperation from the staffs of the Apollo Tyres Limited.2..8 finis and RecommendationsConclusionThe trade unionism and the political inclina tion of these unions are other factors which will affect the appraisal system adversely. The behavioural pattern of the employees have to be analysed before the formulating the appraisal strategy. The political philosophy of the political parties in Kerala varies from leftist ideology to the rightist capitalism. The political parties strongly support one or the other political ideologies communism and socialism are the major philosophies which are being followed in the state for more than a century. The trade unions of the state are affiliated to anyone of the political parties and the trade unions enjoys the protection of labour laws of the land. Situation in the ATL is not different from the political situation of the state. The political parties have a great influence on the trade unions and the lives of the employees. Every employee in the ATL is affiliated to any one of the political parties. This is basically a survival strategy for the employees as well as the trade unions. T he bodied bargaining of the trade unions and the threat of strikes hampered the growth of many industries in the state. The sure situation in the firm is also same and the management have to discuss and