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A Study of Effectiveness of Performance Management

System (PMS) at Maruti Suzuki India Limited

Performance management consists of all organizational
processes which determine how well employees, teams and
ultimately, the organization perform. The process of
performance management includes :-

1. HR planning,

2. Employee recruitment and selection,

3. Training &Development,

4. Career planning and development,

5. Compensation.
Performance management is integrated process of
performance planning, performance appraisal, performance
Dr. Aditi R. Khandelwal feedback, performance counseling or consolidates goal
Assistant Professor setting, performance appraisal, development in to a single
The IIS University common system. The aim of such a system is to ensure
Jaipur that employee's performance is supporting the company's
strategic aim.
Performance management is the systematic process of,
planning work and setting expectations, continually
monitoring performance, developing the capacity to
perform, supporting on the "How" perspective of
performance, periodically reviewing performance and
rewarding desirable performance.

Company Profile — Maruti Suzuki India Limited

Maruti Suzuki is the car company that leads the Indian

auto industry. Maruti started its operation in 1982 and
today Maruti Suzuki alone makes 1.5 million family cars
every year. All this happened due to teamwork of over
12500 dedicated and passionate professionals.

Maruti Suzuki offers a dynamic, challenging and

professional environment where an employee can grow and

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learn, build on a rewarding career. Career development is an ongoing, lifelong process to • Assessment of Functional KRAs
help individual learn and achieve more in their career. Success in career is a combination
• Assessment of Behavioral Traits
of various factors like performance, potential, competence, results and positive attitude.
Performance is measured through a well-defined and robust Performance Management Mid Term Performance Review forms an important base for Final Assessment at the
System (PMS) which assesses employee performance on functional KRAs (Key Result year end, therefore utmost focus & precision is solicited.
Areas) and behavioral traits and competencies.
Final Performance Review Process
Performance Management System in Maruti Suzuki
As mentioned earlier, Relative Performance Assessment has two components.
To ensure a performance driven culture in an organization like MSIL, where most of the
• Assessment of KRAs (Functional Targets)
employee's achieve performance targets it becomes imperative to have a mechanism for
assessment of how effectively these targets have been achieved. To ensure an objective & • Assessment of Behavioral Traits
transparent system of employee's performance assessment and to facilitate employee
Based on weightage of the two components overall rating is provided.
development and career growth towards building a performance oriented culture. It is an
online process, based on clear & measurable Key Result Areas (KRAs) and involves
active participation from appraiser & appraise, ensuring feedback & suggested
Rating Scale Description
Performance Management System at MSIL is directly linked to- Exceptional (EC) S Significantly and consistently exceeds performance requirements and expectations

Star Performer (SP) 4 Exceeds performance requirements and expectation

▪ Career Growth
High Performer (HP) 3 Meets performance requirement and expectation
• Employee Development
Performer (PF) 2 Meets performance requirements and expectations with support nd direction
• Compensation & Rewards Performance needs improvement to meet the targets
Average (AV) 1
• Employee benefits Needs Improvement 0 This is an optional grade used only based on Management Decision for

(NI) performance which is below minimum requirements

Stages in Performance Assessment


Khan Muhammad FaseehUllah (Mar.-Apr.2013), in his paper "Role of Performance
Appraisal System on Employees Motivation" opines that the appraisal process should
adopt such methods in which both the appraiser and the appraise take keen interest. For
Mid Term Performance Review Process
the successful implementation of performance system regular training, focused approach
Mid-term Performance Review is a Developmental tool which helps establish the and accountability of person using is required. Both financial and non-financial incentives
following : should be linked to annual appraisal system.

• extent to which results have been achieved MiahM.Khasro(June.2012), Performance Management System in UK Retail Industry.
Sainsbury's has developed a powerful performance appraisal system measuring financial
measure gaps in performance performance based on target achievement. Their approach of conducting PMS may result
arrive at reasons for the deviation negatively in long term in terms of development of their employees.

• ways to bridge the gaps performance Shrivastava Pallavee, RaiUshaKiran, Performance Appraisal Practice in Indian Banks.
Performance system should be correlated with the organization's philosophies and mission,
• preparing well in advance forms the basis of a fair Performance Review process. cover assessment of performance as well as potential for development, look after the
Steps of Relative Performance Assessment during Mid Term Performance Review: needs of both the individual and the organization, help create a clean environment, rewards

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linked to achievements, generate information for personnel development and career 3. Behavioral Trait assessment
planning, suggesting appropriate person task matching etc.
4. Final Assessment .
Nair Bindu , PareekAshish, Performance Management Systems adopted by select Indian
Private Sector. Organizations have now come to realize the importance of a performance The analysis was descriptive. The data collected was tabulated. The frequencies of response
measurement & management system that enables them to more effectively drive and were measured using percentage as a tool. Logical analysis was done. Evaluation was
manage their business operations. They are now aligning the individual and team made by using inferences and final conclusion was drawn.
performances to the organization strategies so that compensation &.incentives are aligned Limitation of Study
to strategic performance.
• The data collected under this study is restricted to respondents of five regional
Yadav Rajesh K., DabhadeNishant, Performance Management Systems in Maharatna
Companies (a case study of B.H.E.L.,Bhopal). offices(1) Jaipur (2) Mumbai (3) Pune (4) Ahmedabad (5) Chandigarh. So, the
One performance appraisal program should sample chosen may not be a good representative for the whole population.
not be designed to serve a numerous of purposes because it may be unclear and difficult
& results into failure. The solution is to separate assessment program should be designed • Many respondents were reluctant to furnish responses on the ground of
for development of employees.
Objective & Scope of the Study: The study looks at performance management system at Data Analysis and Interpretation
KRA Setting, Understanding & Congruence.
• Checking the effectiveness of Performance Management System in MSIL.
.1: Do you un erstan t e
• To find out the level of employees satisfaction at MSIL. Performance Management
System of our Company?
Research Methodology & Action Plan - Yes - Somewhat Ns No

Type of Study: The study uses both qualitative and quantitative techniques. The analysis
is descriptive in nature.

Source & tools for collection of Data: For this study questionnaire method of data
collection is used. A structured questionnaire containing 16 questions was formulated
and was administered to the employees. The data so collected was tabulated, analyzed
&calculated to find out the final conclusion.

Sample: This is convenience sampling. The sample units were employees working at
MSIL regional office situated at From the above figure we can analyze that 67% have complete understanding of PMS.

1. Jaipur
.2 :Rate PMS on t e sca e o 1
to 3 for effectiveness.
2. Mumbai
1 .2
3. Pune
4. Ahmedabad

5. Chandigarh.

Sample Size: The questionnaire was filled by 200 respondents for the purpose of this

Method of Analysis: The questionnaire consists of four important aspects of PMS.

1. KRA Setting, understanding & congruence
On scale of 1 to 3, about 55% of sample size have given rating of 2 and only 22% people
2. Mid-Term process quality have given rating of 3.
PO40444,-*****Cj4: 47
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. : s your KRA set accor
to your role description? 3: KRA s setting is 0/
discussion or top down by

Bey D r Top Diowr



Only 61% population feels that KRA is set according to their Role description.

Only 55% people believe KRA is set by discussion whereas 45% says it is top down by
Q.4:Are ou appraiser.

understand your KRA

re you a e to a ign your KRA
Yes Sometimes w N with departmental goal, divisional
goal and business goal?


75% employees said that they are made to understand their KRA

Only 66% of employees are able to align their KRA with goals of company, division and


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Mid-term Process Quality. ISSN - 2395-6771 (Online)

Q.7: Does mid -term pe ormance Q.9. Do you receive meanie; u

review take place? feedback from your appraiser during
mid- term performance review?

Sometimes 35% Sometimes
No 57%
I No

87% say that YES mid-term performance review takes place. Only 57% people believe that they receive meaningful feedback while 8% feel that the
feedback they receive is not at all meaningful.

Q,8: Does a qua ity iscussion ta e

Q.10: Does t is mi. -term
place between appraiser and you
performance review help you to take
during mid. term performance
course correction?


34% Somewhat

56% of employees feel that a quality discussion takes place with Appraiser.
Only 56% believe that review helps them to take course correction whereas 32% believe
sometimes it helps.


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Behavioral Traits.
Q.11. Are 'e aviora traits Re ine to
Q.13: WI t e ogue on e aviora
help complete understanding of
trait help you in shaping as good M91
business leader?


Only 44% believe that Behavioral Traits are defined to help complete understanding of
expectations whereas 13% said No.
Only 60% people say that dialogue on behavioral trait will help them in shaping as good
MSIL leader while 33% say may be.

Q. :ls t ere su !cleat iscussion o

Q14: Is t e pe ormance iscusse
behavioral traits to help you
understand the performance? elaborately during final assessment?

Yes 'Somewhat *No


Only 32% believe that sufficient discussion takes place on Behavioral traits whereas 23%
said no discussion takes place.
47% believe that performance is discussed elaborately whereas 37% say somewhat it is

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s t ere su 'tient time a otte
to final assessment?
Comparison Sheet - Aspect wise

Aspect Options Overall

KRA Setting, Understanding &
Highly Satisfied 58%
(Effectiveness, Alignment with Role
Somewhat Satisfied 28%
business goal ,Setting KRA by
Not Satisfied 14%
Discussion or Top Down)
Mid-Term Process Quality Highly Satisfied 64%
47% believe that performance is discussed elaborately whereas 37% say somewhat it is (Quality Discussion, Meaningful
discussed. Somewhat Satisfied 28%
Feedback, Help in Course
Not Satisfied
Correction) 8%
re t e next year s goa
finalized during your final Dehaviorial Traits Highly Satisfied 45%
assessment? (Undersanding of Expectations, Somewhat Satisfied 41%
Sufficeint Discussion, Help in
Not Satisfied
shaping MSIL Business Leader) 14%
Highly Satisfied 52%
Final Assessment
Somewhat Satisfied 23%
(Elaborate Discussion, Next year
goal finalization, Sufficient Time Not Satisfied
Allotment) 25%

72% say that sufficient time is allotted to Final Assessment while other 28% say no.
• More Sessions for Departmental Managers (DPM) should be held to make them
understand importance of PMS.
• Concerned DPMs should counsel their people.

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• PMS process should be available on company internal website so that people have
direct access to it.
• HR should take more initiative to make PMS more effective and transparent.
• Employees should be made aware of PMS by more one to one sessions.

PMS Process should be explained to new joinees during their Induction Process.
Khan Muhammad FaseehUllah (2013). Role of Performance Appraisal System
on Employees Motivation, IOSR Journal of Business and Management, Volume
8, Issue 4, 66-83.
MiahM.Khasro (2012). Performance Management System in UK Retail Industry,
Far East Journal of Psychology and Business, Volume 7, No.3, 13-25.
3. Shrivastava Pallavee, Rai Usha Kiran, (2012). Performance Appraisal Practice in
Indian Banks, Integral Review - A Journal of Management , Volume 5, No 2,46-
4. Nair Bindu, Pareek Ashish, (2011). Performance Management Systems adopted
by select Indian Private Sector— International Journal of Research in Commerce
& Management ,Volume 2, Issue No 6,43-46.
5. Yadav Rajesh K., Dabhade Nishant (2013). Performance Management Systems
in Maharatna Companies (a case study of B.H.E.L.,Bhopal.)— International letter
of Social and Humanistic Sciences, Issue No 4,49-69.
6. Negi Karan Singh (2014). Study of Workplace Performance Management Through
Performance Appraisal Systems in Major Government Owned Commercial
Organizations of India— Global Journal of Finance and Management, Volume6,
Number 2, pp.143-146.
Gautam Abhinanda (2014). A study on performance appraisal system practiced in
sugar mills, and its impact on employees motivation-A case study of Simbhawli
sugar limited, Asian Journal of Management Research, Volume 4, Issue 3, 350-
Suresh P , Mohideen Akbar M. Dr. (2013). A study on performance appraisal of
automobile industries at Chennai, Tamilnadu. International Journal of Marketing,
Financial Services & Management Research, Volume 2, No.5, May, 110-122.