Satisfaction of Managerial Employees On Performance Appraisal System of An Origination

Satisfaction of managerial employees on performance
appraisal system of an origination
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
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
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
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
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
Chapter 4 Research methodology
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

5.2. 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

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
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
by different employees groups differ in formal education 84
of employees groups differ in formal education 84
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
by different employees groups differ in company experience 96
of employees groups differ in company experience 97
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 5.10. The frequency of response for statement no.6 51
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 5.27. 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 5.38. 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 5.49. Influence of company experience of employees on the mean score
of responses for the statements 1 to 10 96
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.
*****
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

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 employees 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.

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.
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 industrys 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. Bridgestones 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. MRFs 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
year, is currently under construction and expected to begin production later in the year.
Apollos 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 worlds largest producer of tyres. Bridgestone consumes 3
lakh tones of natural rubber annually to produce 68 different types of tyre. Pirelli SpA
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 worlds 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.
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. MRF
9. Giti
3. Good Year
7. Hankook
18. Nokian
19. Shandong Lingoy
20. Xing Yuan
10. Maxxis
1. Bridgestone
5. Pvrelli
8. Yokohama
12. Hangzhou- Zhongce
16. Triangle
2. Michelin
11. Cooper
13. Kumho
15. Apollo
4. Continental
6. Sumitomo
14. Toyo
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. 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.
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,
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.
Corporate Headquarter
Manufacturing Locations
Focus Markets
Markets available in
Established markets
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.

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
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.

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 companys 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.

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.

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
PERFORMANCE APPRAISAL
Administrative Self-development of
purpose employees
Promotion and Identification of

placement strength
Transfer and demotions weakness
Wages and salary future training needs
fixation
Training and
manpower planning
Personnel research
Creating favourable
impact on employees
Miscellaneous
administrative
purposes
Fig 3.1. Purpose of performance appraisal

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 1960s,
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 worlds 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.
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
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
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.
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.

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.
Establishing performance appraisal
Communicating standards and expectations
Measuring actual performance
Comparing with standards
Discussing results
Decision making and corrective action
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
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 employees 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
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

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.
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

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
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
regarding the "on-the-job" performance of the employee. 360 degree appraisal has four
integral components, namely, self appraisal, superiors appraisal, subordinates 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. Superiors
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, superiors 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
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 ones 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 ones 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.
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 (19241933), 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 Taylors 1911 book, Principles of Scientific 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 Taylors work.
Maslows 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
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.
Employee satisfaction
Organizational Work Work itself Personal factors

factors environmental
factors
Salaries and wages Supervision Job scope Age & seniority

Promotion chances Work group Variety Tenure
Company policies Working condition Autonomy Personality
Role certainty
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.
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
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:-
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
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
(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.
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
X
PASI (%) 100
5
where the denominator 5 represents the highest magnitude of the score, X is the mean
score and is given by
10
X i
X i 1
10
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
N

N
Yi 2

1 i 1
N 1 X
2

where N is the number of components or statements and equal to 31 persons in the
is the variance of observed test score and Y i is the component i

2
present study. X
2
in the sample of persons.

Pearsons correlation coefficient (r) is given by
1 n Xi X Yi Y
r
N 1 i 1 X

Y
Xi X
where , X and X are the standard score, sample mean, and sample standard
X
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
Sum of Degree of Mean Square
Source Squares Freedom SS F-Statistics P-value
MS
(SS) (df) df
Between SSB MSB Value from
SSB k-1 MSB F
Samples k 1 MSE Table
Within SSE
SSE n-k MSE -- --
Samples nk
Total SSTO n-1 -- -- --
3.43. Organization of research report

The report is organized in the following headings.
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.
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.
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%
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%
Fig 5.2. Age statistics of the respondents

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%
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%
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

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

Neither
Strongly agree Strongly
Statement Agree Disagree
agree nor disagree
disagree
1. I clearly understand the purpose
48% 52% 0% 0% 0%
of performance appraisal
2. Performance appraisal in my
26% 68% 6% 0% 0%
company is fair
3. Performance appraisal reflects

13% 71% 16% 0% 0%
objectively my performance
4. Performance appraisal is a tool

23% 74% 3% 0% 0%
for promotion and pay fixation
5. Performance appraisal process

helps my superior to manage 10% 61% 23% 6% 0%
people better
6. Performance appraisal process

encourages co-operation and team 13% 55% 26% 6% 0%
spirit
7. Performance appraisal
influences individual performance 19% 72% 3% 6% 0%
positively
8. Present appraisal system

recognizes improved performance 16% 65% 13% 6% 0%
of individual
9. Performance appraisal is a
career developmental and 16% 52% 29% 3% 0%
educational tool

13% 62% 6% 19% 0%
feedback will be conveyed to me
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.
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 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.
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 employees performance.

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.
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.

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.

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.
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.

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.

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.
Fig 5.15. The range and mean of the scores of the statements
Table 5.6. Statistics of scores of response for statements in questionnaire
Standard
Statement Minimum Maximum Mean* Variance
deviation
1. I clearly understand the
purpose of performance 4 5 4.48 0.51 0.26
appraisal
2. Performance appraisal in my
3 5 4.19 0.54 0.29
company is fair
reflects objectively my 3 5 3.97 0.55 0.30
performance
tool for promotion and pay 3 5 4.19 0.48 0.23
fixation
process helps my superior to 2 5 3.74 0.73 0.53
manage people better
process encourages co- 2 5 3.74 0.77 0.60
operation and team spirit
influences individual 2 5 4.03 0.71 0.50
performance positively
8. Present appraisal system

recognizes improved 2 5 3.90 0.75 0.56
performance of individual
career developmental and 2 5 3.81 0.75 0.56
educational tool

feedback will be conveyed to 2 5 3.68 0.94 0.89
me
*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
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.

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.
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
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.
Cronbahs 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 Minimum Maximum Mean Standard Variance Cronbachs
consideration deviation alpha
Overall
(statement number 2 5 3.97 0.72 0.52 0.787
1 to 10)
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
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.

The null hypothesis is:-
The satisfaction of employee is unrelated to communication (parameter 1) in
performance appraisal.
The satisfaction of employee is unrelated to measurement policies (parameter 2) in
performance appraisal.
The satisfaction of employee is unrelated to post-review decisions (parameter 3) in
performance appraisal
Table 5.9. Results of ANOVA using Microsoft excel program

F value
ANOVA (df1=1, df2=30, = 0.05) p-value
F-calculated F-critical
Parameter1
Satisfaction 311.2963 4.0012 2.00E-25
Communication
Parameter2
Satisfaction Measurement 257.9866 4.0012 2.12E-23
policies
Parameter3
Satisfaction Post-review 855.4469 4.0012 3.32E-37
decisions
The calculated and critical F-value of ANOVA is given in Table 5.8. It may be noted that
the calculated F-value is greater than critical F-value, which indicate that notion that
variance are equal shall be rejected. Hence, the null hypothesis is rejected and it may be
concluded that the parameters, namely, communication, measurement policies and post-
review decisions are strongly related to the satisfaction. The magnitude of p-value is very
small for all parameters, which indicate that it is more certain to conclude that null
hypothesis is false.
3.51. Influence of age OF EMPLOYEE ON PERFORMANCE
APPRAISAL SATISFACTION
The influence of age on the satisfaction of employees is studied. The response of
employees of age group 25 to 35 and above 35 is compared. The frequency response of
the two age groups is given in Table 5.10.
Table 5.10 Comparison of frequency of response of statements by employees of different

age groups
Strongly Agree Neither agree Disagree Strongly
Statement agree nor disagree disagree
AG1* AG2+ AG1* AG2+ AG1* AG2+ AG1* AG2+ AG1* AG2+
1. I clearly
understand the
purpose of 19% 29% 29% 23% 0% 0% 0% 0% 0% 0%
performance
appraisal
2.
Performance
appraisal in 10% 16% 39% 29% 0% 6% 0% 0% 0% 0%
my company
is fair
3.
Performance
appraisal
reflects 3% 10% 42% 29% 3% 13% 0% 0% 0% 0%
objectively
my
performance
4.
Performance
appraisal is a
13% 10% 35% 39% 0% 3% 0% 0% 0% 0%
tool for
promotion and
pay fixation
5.
Performance
appraisal
process helps 3% 7% 32% 29% 13% 10% 0% 6% 0% 0%
my superior to
manage
people better
6.
Performance
appraisal
process
3% 10% 32% 23% 10% 16% 3% 3% 0% 0%
encourages
co-operation
and team
spirit
7.
Performance
appraisal
influences 6% 13% 39% 33% 3% 0% 0% 6% 0% 0%
individual
performance
positively
8. Present
appraisal
system
recognizes 6% 10% 35% 30% 6% 7% 0% 6% 0% 0%
improved
performance
of individual
9.
Performance
appraisal is a
career
6% 10% 26% 26% 16% 13% 0% 3% 0% 0%
developmental
and
educational
tool
10.
Performance
appraisal
6% 7% 35% 27% 3% 3% 3% 16% 0% 0%
feedback will
be conveyed
to me
*
AG1 = Age group 25 to 35 years & number of respondents = 15
+
AG2 = Age group greater than 35 years & number of respondents = 16
The magnitude of frequency of response given in Table 5.10 indicates that response of
employees having age of 25 to 35 and greater than 35 years is comparable. Hence it may
be concluded that the satisfaction level on the performance appraisal between the
different age group of employees is almost same. The highest magnitude of the frequency
of response of employees of age 25 to 35 years is found to be 42 percent and is for
statement number 3. The highest magnitude of the frequency of response of employees of
age greater than 35 years is found to be 39 percent and is corresponding to the statement
number 5. Hence it may be concluded that the statement number 4 is accepted by
majority of the workers of age group 25 to 35 and statement number 5 by age group
greater than 5.
Fig 5.17. Influence of age on response of statement number 1
The influence of age of the employees on the response of the statement number 1 is given
in Fig 5.17. The frequency of the response of the statement on awareness of the purpose
of performance appraisal is evaluated in statement number 1. Twenty nine percent of the
employees of age group greater than 35 years are opted strongly agree and twenty nine
percent of the employees of age group between 25 and 35 opted agree.

in Fig 5.18. The frequency of the response of the statement on the fair execution of the
performance appraisal is evaluated in statement number 2. Twenty nine percent of the
employees of age group greater than 35 years are opted agree and thirty nine percent of
the employees of age group between 25 and 35 opted agree.
in Fig 5.19. The frequency of the response of the statement on the satisfaction level on
objectiveness of performance appraisal is evaluated in statement number 3. Twenty nine

percent of the employees of age group greater than 35 years are opted agree and forty
two percent of the employees of age group between 25 and 35 opted agree.
in Fig 5.20. The frequency of the response of the statement on the purpose of performance
appraisal as promotion and pay fixation tool is evaluated in statement number 4. Thirty
nine percent of the employees of age group greater than 35 years are opted agree and
thirty five percent of the employees of age group between 25 and 35 opted agree.
appraisal as management tool is evaluated in statement number 5. Twenty nine percent of
the employees of age group greater than 35 years are opted agree and thirty two percent
of the employees of age group between 25 and 35 opted agree.
appraisal as tool to improve cooperation and team sprit is evaluated in statement number
6. Twenty three percent of the employees of age group greater than 35 years are opted
agree and thirty two percent of the employees of age group between 25 and 35 opted
agree.

in Fig 5.23. The frequency of the response of the statement on capability of performance
appraisal to individual performance is evaluated in statement number 7. Thirty three
percent of the employees of age group greater than 35 years are opted agree and thirty
nine percent of the employees of age group between 25 and 35 opted agree.
in Fig 5.24. The frequency of the response of the statement on capability of performance
appraisal to improved performance of an individual is evaluated in statement number 8.
Thirty percent of the employees of age group greater than 35 years are opted agree and
thirty five percent of the employees of age group between 25 and 35 opted agree.
in Fig 5.25. The frequency of the response of the statement on purpose of performance
appraisal as career development and education (training) tool is evaluated in statement
number 9. Twenty six percent of the employees of age group greater than 35 years are
opted agree and twenty six percent of the employees of age group between 25 and 35
opted agree.
The influence of age of the employees on the response of the statement number 10 is
given in Fig 5.26. The frequency of the response of the statement on communication of
feedback of performance appraisal is evaluated in statement number 10. Twenty seven

percent of the employees of age group greater than 35 years are opted agree and thirty
five percent of the employees of age group between 25 and 35 opted agree.
Table 5.11. Descriptive statistical analysis of influence of age on response of scores for
statements in questionnaire
Minimum Maximum Mean Standard Variance
Statement deviation
1. I clearly
understand the
purpose of 4 4 5 5 4.40 4.56 0.51 0.51 0.26 0.26
performance
appraisal
2. Performance
appraisal in
4 3 5 5 4.20 4.19 0.41 0.66 0.17 0.43
my company is
fair
3. Performance
appraisal
reflects 3 3 5 5 4.00 3.94 0.38 0.68 0.14 0.46
objectively my
performance
4. Performance
appraisal is a
tool for 4 3 5 5 4.27 4.13 0.46 0.50 0.21 0.25
promotion and
pay fixation
5. Performance
appraisal
process helps
3 2 5 5 3.80 3.69 0.56 0.87 0.31 0.76
my superior to
manage people
better
6. Performance
appraisal
process
2 2 5 5 3.73 3.75 0.70 0.86 0.50 0.73
encourages co-
operation and
team spirit
Statement deviation
7. Performance
appraisal
influences
3 2 5 5 4.07 4.00 0.46 0.89 0.21 0.80
individual
performance
positively
8. Present
appraisal
system
recognizes 3 2 5 5 4.00 3.81 0.53 0.91 0.29 0.83
improved
performance of
individual
9. Performance
appraisal is a
career
developmental 3 2 5 5 3.80 3.81 0.68 0.83 0.46 0.70
and
educational
tool
10.
Performance
appraisal
2 2 5 5 3.93 3.44 0.70 1.09 0.50 1.20
feedback will
be conveyed to
me
Overall
(statement 2 2 5 5 4.02 3.93 0.57 0.83 0.33 0.69
number 1 to
10)
*
AG1 = Age group 25 to 35 years & number of respondents = 15
+
AG2 = Age group greater than 35 years & number of respondents = 16
The score based comparative study of scores of responses of the employees is given in
Table 5.11. The rank of 5 to 1 is given corresponding to the option strongly agree to
strongly disagree. The minimum score opted by age group between 25 and 35 years is
found to be 2 and is corresponding to the statement 6 and 10. The maximum score opted
for all statements by age group between 25 and 35 years is found to be 5. The minimum
score opted by age group greater than 35 years is found to be 2 and is corresponding to
the statement 5 to 10. The maximum score opted for all statements by age group greater
than 35 years is found to be 5. The mean, standard deviation and variance of score of the
responses opted by different age group is compared in Table 5.11.
Fig 5.27. Influence of age of employees on the mean score of responses for the statements
1 to 10.
The mean of the scores opted by age group between 25 and 35 years is compared with the
corresponding data of age group greater tan 35 years and is also given in Fig 5.27. The
magnitude of mean of score opted by the two age groups is found to be comparable and
hence it may be concluded that age of employees does not influence the satisfaction level
of employees on performance appraisal system significantly.
Table 5.12. The correlation of mean of scores of statements by different age groups
Age 25 to 35 years Age >35 years
Age 25 to 35 years 1 0.8424
Age > 35 years 0.8424 1
The correlation coefficient of mean of scores for the statements in the questionnaire opted
by the two age groups namely 25to 35 years and greater than 35 years is found to be
0.8424 and is given in Table 5.12. This indicates that the mean of the scores of two age
groups is correlated.
The null hypothesis of this part of the study is the response of employees of age group
between 25 and 35 years is unrelated to the response of the employees of age group
greater than 35 years on the performance appraisal system in Apollo Tyres Limited,
Kalamassery. The ANOVA is carried out to test the null hypothesis and the results are
given in Table 5.13.
Table 5.13. Results of ANOVA of mean scores of responses of different age groups
F value
Age group
Age group
between 25 and 0.5462 4.4138 0.4693
greater 35 years
35 years
The results of the ANOVA indicate that the null hypothesis is false. The mean of the score
of responses of two age groups namely 25to 35 years and greater than 35 years is not
mutually exclusive.
3.52. Influence of FORMAL EDUCATION ON SATISFACTION OF

PERFORMANCE APPRAISAL
The influence of education on the satisfaction of employees is studied. The response of
employees of education group up to bachelor degree and above bachelor degree is
compared. The frequency response of the employee groups differ in formal education is
given in Table 5.14.

Table 5.14 Comparison of frequency of response of statements by employees having
different education
ED1* ED2+ ED1* ED2+ ED1* ED2+ ED1* ED2+ ED1* ED2+
1. I clearly
understand the
purpose of 16% 32% 29% 23% 0% 0% 0% 0% 0% 0%
performance
appraisal
2.
Performance
appraisal in 13% 13% 29% 39% 3% 3% 0% 0% 0% 0%
my company
is fair
3.
Performance
appraisal
reflects 6% 7% 32% 39% 6% 10% 0% 0% 0% 0%
objectively
my
performance
4.
Performance
appraisal is a
16% 7% 26% 48% 3% 0% 0% 0% 0% 0%
tool for
promotion and
pay fixation
5.
Performance
appraisal
process helps 10% 0% 19% 42% 10% 13% 6% 0% 0% 0%
my superior to
manage
people better
6.
Performance
appraisal
process
10% 3% 19% 36% 13% 13% 3% 3% 0% 0%
encourages
co-operation
and team
spirit
7.
Performance
appraisal
influences 3% 16% 35% 37% 0% 3% 6% 0% 0% 0%
individual
performance
positively
8. Present
appraisal
system
recognizes 13% 3% 23% 42% 3% 10% 6% 0% 0% 0%
improved
performance
of individual
9.
Performance
appraisal is a
career
13% 3% 10% 42% 19% 10% 3% 0% 0% 0%
developmental
and
educational
tool
10.
Performance
appraisal
13% 0% 23% 39% 0% 6% 10% 9% 0% 0%
feedback will
be conveyed
to me
*
ED1 = Group of employees having formal education up to Bachelor degree
& number of respondents = 14
+
ED2 = Group of employees having formal education greater than Bachelor degree
The magnitude of frequency of response given in Table 5.14 indicates that response of
employees having formal education up to bachelor degree and greater than bachelor
degree is comparable. Hence it may be concluded that the satisfaction level on the
performance appraisal between employees differ in experience is almost same. The
highest magnitude of the frequency of response of employees having formal education up

to bachelor degree is found to be 48 percent and is for statement number 4. The highest
magnitude of the frequency of response of employees having formal education greater
than bachelor degree is found to be 35 percent and is corresponding to the statement
number 7. Hence it may be concluded that the statement number 4 is accepted by
majority of employees having formal education up to bachelor degree and statement
number 7 by employees having education greater than bachelor degree.
Fig 5.28. Influence of formal education on response of statement number 1
The influence of formal education of the employees on the response of the statement
number 1 is given in Fig 5.28. The frequency of the response of the communication of the
purpose of performance appraisal is evaluated in statement number 1. Thirty two percent
of the employees having formal education greater than bachelor degree are opted
strongly agree and twenty nine percent of the employees having formal education up to
bachelor degree opted agree.

number 2 is given in Fig 5.29. The overall satisfaction on the performance appraisal is
evaluated using statement number 2. Thirty nine percent of the employees having formal
education greater than bachelor degree are opted agree and twenty nine percent of the
employees having formal education up to bachelor degree opted agree.
number 3 is given in Fig 5.30. Whether the appraisal system objectively evaluates
individuals performance is studied using statement number 3. Thirty nine percent of the
employees having formal education greater than bachelor degree are opted agree and
thirty two percent of the employees having formal education up to bachelor degree opted
agree.
number 4 is given in Fig 5.31. The frequency of the response of the statement on the
purpose of performance appraisal as promotion and pay fixation tool is evaluated in
statement number 4. Forty eight percent of the employees having formal education
greater than bachelor degree are opted agree and twenty six percent of the employees
having formal education up to bachelor degree opted agree.

purpose of performance appraisal as management tool is evaluated in statement number 5.
Forty two percent of the employees having formal education greater than bachelor degree
are opted agree and nineteen percent of the employees having formal education up to
bachelor degree opted agree.
purpose of performance appraisal as tool to improve cooperation and team sprit is
evaluated in statement number 6. Thirty six percent of the employees having formal
education greater than bachelor degree are opted agree and nineteen percent of the

number 7 is given in Fig 5.34. The frequency of the response of the statement on
capability of performance appraisal to individual performance is evaluated in statement
number 7. Thirty seven percent of the employees having formal education greater than
bachelor degree are opted agree and thirty five percent of the employees having formal
education up to bachelor degree opted agree.
capability of performance appraisal to improved performance of an individual is

evaluated in statement number 8. Forty two percent of the employees having formal
education greater than bachelor degree are opted agree and twenty three percent of the
number 9 is given in Fig 5.36. The frequency of the response of the statement on purpose
of performance appraisal as career development and education (training) tool is evaluated
in statement number 9. Forty two percent of the employees having formal education
greater than bachelor degree are opted agree and nineteen percent of the employees
having formal education up to bachelor degree opted neither agree nor disagree.

communication of feedback of performance appraisal is evaluated in statement number
10. Thirty nine percent of the employees having formal education greater than bachelor
degree are opted agree and twenty three percent of the employees having formal
education up to bachelor degree opted agree.
Table 5.15. Descriptive statistical analysis of influence of formal education on response of

scores for statements in questionnaire
Statement deviation
1. I clearly
understand the
purpose of 4 4 5 5 4.36 4.59 0.50 0.51 0.25 0.26
performance
appraisal
2. Performance
appraisal in
3 3 5 5 4.21 4.18 0.58 0.53 0.34 0.28
my company is
fair
3. Performance
appraisal
reflects 3 3 5 5 4.00 3.94 0.55 0.56 0.31 0.31
objectively my
performance
4. Performance
appraisal is a
tool for 3 4 5 5 4.29 4.12 0.61 0.33 0.37 0.11
promotion and
pay fixation
5. Performance
appraisal
process helps
2 3 5 4 3.71 3.76 0.99 0.44 0.99 0.19
my superior to
manage people
better
Statement deviation
6. Performance
appraisal
process
2 2 5 5 3.79 3.71 0.89 0.69 0.80 0.47
encourages co-
operation and
team spirit
7. Performance
appraisal
influences
2 3 5 5 3.79 4.24 0.80 0.56 0.64 0.32
individual
performance
positively
8. Present
appraisal
system
recognizes 2 3 5 5 3.93 3.88 1.00 0.49 0.99 0.24
improved
performance of
individual
9. Performance
appraisal is a
career
developmental 2 3 5 5 3.71 3.88 0.99 0.49 0.99 0.24
and
educational
tool
10.
Performance
appraisal
2 2 5 4 3.86 3.53 1.10 0.80 1.21 0.64
feedback will
be conveyed to
me
Overall
(statement 2 2 5 5 3.96 3.98 0.83 0.61 0.70 0.37
number 1 to
10)
*
ED1 = Group of employees having formal education up to Bachelor degree
+
ED2 = Group of employees having formal education greater than Bachelor degree
Table 5.15. The rank of 5 to 1 is given corresponding to the option strongly agree to
strongly disagree in the questionnaire. The minimum score opted by employees having
formal education up to bachelor degree is found to be 2 and is corresponding to the
statement 5 and 10. The maximum score opted for all statements by employees having
formal education up to bachelor degree is found to be 5. The minimum score opted by
employees having formal education greater than bachelor degree is found to be 2 and is
corresponding to the statement 5 to 10. The maximum score opted for all statements by
employees having formal education greater than bachelor degree is found to be 5. The
mean, standard deviation and variance of score of the responses opted by different age
group is compared in Table 5.15.
Fig 5.38. Influence of formal education of employees on the mean score of responses for
the statements 1 to 10.
The mean of the scores opted by employees having formal education up to bachelor
degree is compared with the corresponding data of employees having formal education
greater than bachelor degree and is also given in Fig 5.38. The magnitude of mean of
score opted by the two age groups is found to be comparable and hence it may be
concluded that formal education of employees does not influence the satisfaction level of
employees on performance appraisal system significantly.

Table 5.16. The correlation of mean of scores of statements by different employees
groups differ in formal education
Education up to Education greater than
Bachelor degree bachelor degree
Education up to
1 0.7014
Bachelor degree
Education greater than
0.7014 1
bachelor degree
by the two employees groups differ in formal education namely education up to Bachelor
degree and education greater than bachelor degree is found to be 0.7014 and is given in
Table 5.16. This indicates that the mean of the scores of two age groups is correlated.
The null hypothesis of this part of the study is the response of employees having formal
education up to bachelor degree is unrelated to the response of the employees having
formal education greater than bachelor degree on the performance appraisal system in
Apollo Tyres Limited, Kalamassery. The ANOVA is carried out to test the null hypothesis
and the results are given in Table 5.17.
Table 5.17. Results of ANOVA of mean scores of responses of employees groups differ in
formal education
F value
Formal Formal
education up to education
0.0215 4.4138 0.8848
Bachelor greater than
degree bachelor degree
of responses of two employees groups differ in formal education namely up to bachelor
degree and greater than bachelor degree is not mutually exclusive.

3.53. Influence of COMPANY EXPERIENCE ON SATISFACTION
OF PERFORMANCE APPRAISAL
The influence of company experience on the satisfaction of employees is studied. The
response of employees of experience up to 5 years and above 5 years is compared. The
frequency response of the two employee groups differ in experience is given in Table
5.18.
Table 5.18 Comparison of frequency of response of statements by employees differ in

experience
EX1 EX2 EX1 EX2 EX1 EX2 EX1 EX2 EX1* EX2+
* + * + * + * +
1. I clearly
understand the
purpose of 10% 38% 16% 36% 0% 0% 0% 0% 0% 0%
performance
appraisal
2.
Performance
appraisal in 10% 16% 16% 52% 0% 6% 0% 0% 0% 0%
my company
is fair
3.
Performance
appraisal
reflects 3% 10% 19% 52% 3% 13% 0% 0% 0% 0%
objectively
my
performance
4.
Performance
appraisal is a
6% 17% 19% 55% 0% 3% 0% 0% 0% 0%
tool for
promotion and
pay fixation
EX1* EX2+ EX1* EX2+ EX1* EX2+ EX1* EX2+ EX1* EX2+
5.
Performance
appraisal
process helps 3% 7% 16% 45% 6% 17% 0% 6% 0% 0%
my superior to
manage
people better
6.
Performance
appraisal
process
3% 10% 10% 45% 10% 16% 3% 3% 0% 0%
encourages
co-operation
and team
spirit
7.
Performance
appraisal
influences 0% 19% 23% 49% 3% 0% 0% 6% 0% 0%
individual
performance
positively
8. Present
appraisal
system
recognizes 3% 13% 23% 42% 0% 13% 0% 6% 0% 0%
improved
performance
of individual
9.
Performance
appraisal is a
career
6% 10% 10% 42% 10% 19% 0% 3% 0% 0%
developmental
and
educational
tool
10.
Performance
appraisal
6% 7% 16% 46% 3% 3% 0% 19% 0% 0%
feedback will
be conveyed
to me
*
EX1 = Group of employees having experience up to 5 years & number of respondents = 8
+
EX2 = Group of employees having experience greater than 5 years & number of
respondents = 23
The magnitude of frequency of response is given in Table 5.18. The response of

employees having company experience greater than 5 years is be greater in magnitude
than those up to 5 years. The highest magnitude of the frequency of response of
employees having company experience up to 5 years is found to be 23 percent and is for
statement number 7 and 9. The highest magnitude of the frequency of response of
employees having experience greater than 5 years is found to be 55 percent and is
corresponding to the statement number 4. Hence it may be concluded that the statement
number 4 is accepted by majority of employees having experience greater than 5 years.
The frequency of response of the employees having experience greater than 5 years is
found to be greater in magnitude when compared to corresponding data of employees
having experience up to 5 years.
Fig 5.39. Influence of company experience on response of statement number 1

The influence of company experience on the response of the statement number 1 is given
in Fig 5.39. The frequency of the response of the communication of the purpose of
performance appraisal is evaluated in statement number 1. Thirty six percent of the
employees having company experience greater than 5 years are opted agree and thirty
eight percent of the employees having company experience up to 5 years opted strongly
agree.
The influence of company experience of the employees on the response of the statement
number 2 is given in Fig 5.40. The overall satisfaction on the performance appraisal is
evaluated using statement number 2. Fifty two percent of the employees having company
experience greater than 5 years are opted agree and sixteen percent of the employees
having company experience up to 5 years opted agree.

number 3 is given in Fig 5.41. Whether the appraisal system objectively evaluates
individuals performance is studied using statement number 3. Fifty two percent of the
employees having company experience greater than 5 years are opted agree and ninteen
percent of the employees having company experience up to 5 years opted agree.
purpose of performance appraisal as promotion and pay fixation tool is evaluated in
statement number 4. Fifty five percent of the employees having company experience
greater than 5 years are opted agree and nineteen percent of the employees having
company experience up to 5 years opted agree.
purpose of performance appraisal as management tool is evaluated in statement number 5.
Forty five percent of the employees having company experience greater than 5 years are
opted agree and sixteen percent of the employees having company experience up to 5
years opted agree.

purpose of performance appraisal as tool to improve cooperation and team sprit is
evaluated in statement number 6. Forty five percent of the employees having company
experience greater than 5 years are opted agree. Ten percent of the employees having
company experience up to 5 years opted agree.
capability of performance appraisal to individual performance is evaluated in statement
number 7. Forty nine percent of the employees having company experience greater than 5
years are opted agree and twenty three percent of the employees having company
experience up to 5 years opted agree.

capability of performance appraisal to improved performance of an individual is
evaluated in statement number 8. Forty two percent of the employees having company
experience greater than 5 years are opted agree and twenty three percent of the
employees having company experience up to 5 years opted agree.
number 9 is given in Fig 5.47. The frequency of the response of the statement on purpose
of performance appraisal as career development and education (training) tool is evaluated

in statement number 9. Forty two percent of the employees having company experience
greater than 5 years are opted agree and ten percent of the employees having company
experience up to 5 years opted neither agree nor disagree.
communication of feedback of performance appraisal is evaluated in statement number
10. Forty six percent of the employees having company experience greater than 5 years
are opted agree and sixteen percent of the employees having company experience up to
5 years opted agree.
Table 5.19. Descriptive statistical analysis of influence of company experience on

response of scores for statements in questionnaire
Statement deviation
1. I clearly
understand the
purpose of 4 4 5 5 4.38 4.52 0.52 0.51 0.27 0.26
performance
appraisal
Statement deviation
2. Performance
appraisal in
4 3 5 5 4.38 4.13 0.52 0.55 0.27 0.30
my company is
fair
3. Performance
appraisal
reflects 3 3 5 5 4.00 3.96 0.53 0.56 0.29 0.32
objectively my
performance
4. Performance
appraisal is a
tool for 4 3 5 5 4.25 4.17 0.46 0.49 0.21 0.24
promotion and
pay fixation
5. Performance
appraisal
process helps
3 2 5 5 3.88 3.70 0.64 0.76 0.41 0.58
my superior to
manage people
better
6. Performance
appraisal
process
2 2 5 5 3.50 3.83 0.93 0.72 0.86 0.51
encourages co-
operation and
team spirit
7. Performance
appraisal
influences
3 2 4 5 3.88 4.09 0.35 0.79 0.13 0.63
individual
performance
positively
8. Present
appraisal
system
recognizes 4 2 5 5 4.13 3.83 0.35 0.83 0.13 0.70
improved
performance of
individual
Statement deviation
9. Performance
appraisal is a
career
developmental 3 2 5 5 3.88 3.78 0.83 0.74 0.70 0.54
and
educational
tool
10.
Performance
appraisal
3 2 5 5 4.13 3.52 0.64 0.99 0.41 0.99
feedback will
be conveyed to
me
Overall
(statement 2 2 5 5 4.04 3.95 0.63 0.75 0.39 0.56
number 1 to
10)
*
EX1 = Group of employees having experience up to 5 years & number of respondents = 8
+
EX2 = Group of employees having experience greater than 5 years & number of
respondents = 23
Table 5.19. The rank of 5 to 1 is assigned to the option strongly agree to strongly
disagree in the questionnaire. The minimum score opted by employees having company
experience up to 5 years is found to be 2 and is corresponding to the statement 6 and 10.
The maximum score opted for all statements by employees having company experience
up to 5 years is found to be 5. The minimum score opted by employees having company
experience greater than 5 years is found to be 2 and is corresponding to the statement 5 to
10. The maximum score opted for all statements by employees having company
experience greater than 5 years is found to be 5. The mean, standard deviation and
variance of score of the responses opted by different age group is compared in Table 5.15.
Fig 5.49. Influence of company experience of employees on the mean score of responses
for the statements 1 to 10.
The mean of the scores opted by employees having company experience up to 5 years is
compared with the corresponding data of employees having company experience greater
than 5 years and is also given in Fig 5.49. The magnitude of mean of score opted by the
two age groups is found to be comparable and hence it may be concluded that company
experience of employees does not influence the satisfaction level of employees on
performance appraisal system significantly.
Table 5.20. The correlation of mean of scores of statements by different employees

groups differ in company experience
Company experience Company experience
up to 5 years greater than 5 years
Company experience up
1 0.5259
to 5 years
Company experience
0.5259 1
greater than 5 years
by the two employees groups differ in company experience namely up to 5 years and
greater than 5 years is found to be 0.5259 and is given in Table 5.20. This indicates that
the mean of the scores of two age groups is correlated.

The null hypothesis of this part of the study is the response of employees having company
experience up to 5 years is unrelated to the response of the employees having company
experience greater than 5 years on the performance appraisal system in Apollo Tyres
Limited, Kalamassery. The ANOVA is carried out to test the null hypothesis and the
results are given in Table 5.21.
Table 5.21. Results of ANOVA of mean scores of responses of employees groups differ in
company experience
F value
Company
Company
experience
experience up 0.4703 4.4138 0.5015
greater than 5
to 5 years
years
of responses of two employees groups differ in company experience namely up to 5 years
and greater than 5 years is not mutually exclusive.
3.54. summary
The demographic details of the manager respondents, namely, gender, age, educational
qualification and experience in the company were analyzed statistically. It is found that
the majority of respondents are male in the age group of 25 to 35 years having
educational qualification greater than bachelor degree and experience more than five
years. The frequency of response to the 10 statements related to the hypothesis of the
thesis is determined. It is found that the highest magnitude of the frequency for various
statements is found to be between 52 to 74 percent. The descriptive statistics terms have
been evaluated. The descriptive statistics of responses, namely, range, mean, standard
deviation and variance is determined based on the 5 point scale. The highest magnitude of
score for all the statements was found to be 5 and lowest magnitude of score is found to
be varying between 2 and 4. The performance appraisal satisfaction (PASI) index of the
respondent is computed and is found to be between 56 to 100 percent. The testing of null
hypothesis is carried out. It is found that, in general, the employees of Apollo Tyres
Limited, Kalamassery are satisfied with the performance appraisal process. The influence
of parameters such as age, formal education and company experience on the response of
the employees of Apollo Tyres Limited, Kalamassery is examined. It is found that the
influence of age, formal education and company experience of employees on response on
the satisfaction of performance appraisal system is insignificant.

Chapter 6
2. Summary, findings, CONCLUSIONS AND
RECOMMENDATIONS
6.1. Summary
The satisfaction of managerial cadre employees of Apollo Tyre Limited, Kalamassery on
the performance appraisal system of the company is studied. The performance appraisal
system in Apollo Tyre Limited, Kalamassery is studied. The factors influencing the
satisfaction of performance appraisal is identified. The parameters, namely,
communication, measurement policies and post review decisions of the performance
appraisal system are considered for the analysis. A questionnaire containing ten
statements is prepared and the response of employees is collected. The managers attended
one shift of company is taken as the sample of population. The frequency of the responses
is analyzed. The responses of the mangers are mapped to a 5 point score Likerts scale.
The descriptive statistical analysis of the score of the responses is carried out. The
influence of the parameters such as age, formal education and experience on the
responses is statistically analyzed using correlation and ANOVA approaches.
6.2. FINDINGS
The findings of the questionnaire based research on the satisfaction of the employees in
the managerial cadre on performance appraisal system in Apollo Tyre Limited,
Kalamassery are:-
1. Majority of the employees in the managerial cadre is males.
2. Majority of the employees in the managerial cadre is in the age group of 25 to 35
years
3. Majority of the employees in the managerial cadre is having formal education
more than bachelors degree
4. Majority of the employees in the managerial cadre is having a company
experience more than 5 years.
5. The analysis of the frequency of the responses indicated that the employees are
satisfied with the performance appraisal system of the company.
6. About 52 percent of the sample agreed to the fact that knowledge about the
performance appraisal is clear.
7. About 68 percent of the managers agreed that the performance appraisal system of
the company is fair.
8. About 71 percent of the managers opted agree for the statement that the
performance appraisal reflects objectively on individuals performance.
9. About 74 percent of the managers agreed to the fact that the performance
appraisal is a tool for promotion and pay fixation.
10. About 61 percent of the managers agreed that the performance appraisal is a
management tool and helps to manage people better.
11. About 55 percent of the respondents opted agree for the statement that the
performance appraisal process encourages cooperation and team spirit.
12. About 72 percent of the managers agreed that the performance appraisal
influences individual performance positively.
13. About 65 percent of managers opted agree for statement that the performance
appraisal system recognizes improved performance of individual.
14. About 52 percent of respondents agreed that performance appraisal is a career
developmental and educational tool.
15. About 61 percent of the managers agreed that the performance appraisal feedback
is conveyed to the individual.
16. The descriptive statistical analysis indicated that the mean of the score is greater
than 3.0 for all ten statements in the questionnaire
17. The standard deviation of the score is less than 1.0 for all ten statements in the
questionnaire.
18. The mean performance satisfaction index is found to be 79 percent
19. The mean score of satisfaction of performance appraisal system accounting for all
the questions and all the respondents is found to 3. 97.
20. The ANOVA indicated that the communication and satisfaction of performance
appraisal are strongly correlated.
21. The ANOVA indicated that the measurement policies and satisfaction of
performance appraisal system are strongly correlated.
22. The ANOVA indicated that the post-review decisions and satisfaction of
performance appraisal system are strongly correlated.
23. The ANOVA indicated that the age of employees and satisfaction of performance
appraisal system are unrelated.
24. The ANOVA indicated that the formal education of employees and satisfaction of
performance appraisal system are unrelated.
25. The ANOVA indicated that the company experience of employees and satisfaction
of performance appraisal system are unrelated.
6.3. CONCLUSIONS
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.
6.4. RECOMMENDATIONS
It is recommended that the company may look into the following aspects of performance
appraisal that are being reviewed in this research in Likert-scale, to improve the score of
employee satisfaction.
Objectively reflecting individuals performance
As managerial tool
Improvement in cooperation and team spirit
Recognition for improved performance
As a educational (training) and career development tool
Communication of feedback
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Appendix A - Questionnaire
Department :
Designation :
Please indicate your preference among alternate answers for each question
by ticking in the appropriate box
a Gender : Male Female
b Age: 25-35 35-45 45-55
c Education: < Bachelor degree Bachelor degree >Bachelor degree
d I work in Apollo for: 0 to 2 years 2 to 5 years > 5 years
No. Statement Strongly Agree Neither Disagree Strongly

agree agree disagree
nor
disagree
1 I clearly understand the
purpose of performance
appraisal
2 Performance appraisal in
my company is fair
3 Performance appraisal
reflects objectively my
performance
4 Performance appraisal is a
tool for promotion and
pay fixation
process helps my superior
to manage people better
process encourages co-
operation and team spirit
influences individual
performance positively
8 Present appraisal system
recognizes improved
performance of individual
9 Performance appraisal is a
career developmental and
educational tool
feedback will be
conveyed to me

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Satisfaction of managerial employees on performance

appraisal system of an origination

submitted in partial fulfillment for the award of degree of

under the guidance of

Prof. Dr. Sebastian Rupet Mampilly

School of Management Studies

I would like to express my hearty gratitude to Dr. M. Bhasi, Director, School of

I record my gratitude to Mr. Shefin Salam, Executive of Human Resource Department,

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

submitted in partial fulfillment of the requirement of award of degree of Mater of

Dr. Sebastian Rupet Mampilly Dr. M. Bhasi

Title Page number

Chapter 2 Industry and company profile

Chapter 3 Theoretical frame work

Chapter 5 Data analysis and interpretations

Chapter 6 Summary, Finding, Conclusions and Recommendations

Appendix A- Questionnaire 104

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Table 4.1. ANOVA computation 41

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Fig. 2.1. Rubber consumption in India 6

Performance appraisal is an essential management technique. The study aims to measure

focused and integrated human resource processes and systems.

design, resource planning performance management system, recruitment, selection, and

satisfaction of employee. Building block of enhancing performance is creating a

performance culture. The satisfaction of employees on performance evaluation increases

of performance appraisal system in a private limited company is studied in this thesis

3.2. performance apprisal and Employee satisfaction

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

performance of the employee. Performance appraisal helps to analyze his achievements

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.

administered periodically that gauge employee satisfaction.

Performance appraisal in an organization is aimed at imbibing information to the

the other hand, satisfaction of employees is meeting expectations. The performance

performance appraisal is the creation of shared version of organizational objectives,

occasionally through mission statements communicated to the employees. Performance

organization. Performance review helps to identify training needs among employee.

in an organization is important area of human resource management.

the satisfaction of the managerial employees on the performance appraisal system in

3.4. INDUSTRY STRUCTURE AND DEVELOPMENT

the last year.

volumes and ensuring product acceptability in the consumers mind.

completed in February 2012 with an investment of Rs 10 billion, is equipped to

2012, has been constructed to accommodate a manufacturing capability of 480,000

passenger car radials and 180,000 truck-bus radials each month.

existing facilities with combined investment to the tune of Rs 35 billion. In financial

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

exterior noise. In South Africa, the 4 local manufacturers Apollo, Bridgestone,

Continental and Goodyear continue to compete in a market which is dominated by

3.5. INTERNATIONAL SCENARIO

Corporation in Japan is the worlds largest producer of tyres. Bridgestone consumes 3

India is found to be consistently increasing with an average growth rate of 6 percent

6. This fairly establishes the diffused nature of consumption of natural rubber.

Fig. 2.1. Rubber consumption in India