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Performance Appraisal of Maruti Suzuki.
Submitted by: Submitted to:Sukhvinder Singh Roll no: - RV8901A07 Mr. Munish Kumar lecturer of L.S.H
Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor Corporation, Japan. MSIL has been the leader of the Indian car market for over two and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over a 1.2 million (1,200,000) passenger car units annually. The company plans to expand its manufacturing capacity to 1.75 million by 2013. For this the company will be investing around Rs. 60 Billion (Rs 6,000 Crores) over the period till 2013.
The company offers a wide range of cars across different segments. It offers 14 brands and over 150 variants - Maruti 800, people movers, Omni and Eeco, international brands Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, offroader Gypsy, SUV Grand Vitara, sedans SX4 and Swift DZire In an environment friendly initiative, in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. In fiscal 2009-10 Maruti Suzuki became the only Indian company to manufacture and sell One Million cars in a year.
20.09. at the end of March 2010.922 2. (Rs.78.198 The company is listed on Bombay Stock Exchange and National Stock Exchange. In 2009-10. to have received this prestigious award.3 per cent of the Indian passenger car market.18.583 Year 2005-06 2007-08 2009-10 Net Sales 1. With this.603 3. the company sold a record 10. Maruti Suzuki is one of the six companies.600 (as at end March 2010). in Million) Year 2004-05 2006-07 2008-09 Net Sales 1.47. Maruti Suzuki's revenue has grown consistently over the years. Vision:- We believe our core values drive us in every endeavour.034 1.45.Maruti Suzuki has employee strength over 7.365 vehicles including 1.01. Maruti Suzuki had a market share of 53. Maruti's Million .108 1.575 units of exports. as also one among two outside Japan.03. The Government of Japan has honoured Maruti Suzuki with the METI Award for promotion of Japanese brand in India.
North India are the tangible evidence of Quality. and Supervisors). Haryana. each car from the Maruti Suzuki factories at Gurgaon. Our scale and manufacturing complexity have today moved to a different league from when it began. . PMS:Production Management System (PMS) is the next step towards moving ahead to sustain the momentum. Having achieved the target of selling a million cars in the financial year 2009 . Today. This feat is entirely based on the company's constant endeavour to meet aspirations of a large and diverse demography. manufacturing standards and efficiency. Executives. The result is clarity of content.We began our operations way back in 1983. and Manesar. Today. with the Maruti 800 . It is a strategy to achieve Manufacturing Excellence evolved through participative approach. PMS has lead the production team towards greater enhanced productivity with perfection.2010. one in every two cars in India is a product of Maruti Suzuki. The system is people driven and ensures involvement of all levels (Managers. better understanding and openness towards feedback. The concept ensures participation and error free communication.the vehicle which brought about a revolution in the Indian car market. by providing the best through innovative products and services. We have reached a capacity of one million cars annual production this year. These values make PMS a sustainable system.
Financial highlights for the fiscal year 2009: . the company launched a 125cc motorcycle 'Colleda'. 3G and 3K In order to bring an improvement in overall processes and systems in Production Division through involvement of all levels. Each of these products were epoch-making in their own right as they were developed and manufactured by optimizing the most advanced technologies of that period. Suzuki Motor Corporation The Company started its business in the year 1909 as Suzuki Loom Works and then was incorporated as Suzuki Motor Corporation in the year 1920. During the post WW II period. Through various phases of PMS the company embarked on its journey of bring in a) Clarity of Role. Commitment and Standardization in all our process and systems across the production division. Suzuki stands behind this global symbol with a determination to maintain this confidence in the future as well. PMS was launched in Maruti Suzuki. With headquarters at Hamamatsu. Japan. Suzuki's trademark is recognized throughout the world as a brand that offers high quality. the company's 'Power Free' motorized bike earned a good reputation. reliable and genuine products. Suzuki today offers its customers a wide range of motorcycles. never stopping in creating such advanced 'value-packed' products. Suzuki has steadily grown and expanded its business across geographies. and later launched its first lightweight car 'Suzulight' that marked the start of Japan's automotive revolution.PMS is derived from the basic Japanese principles of 5S. automobiles. Ownership. Post the success of its first motorized bike 'Power Free'. outboard motors and related products such as generators and motorized wheelchairs. Non-duplication of work.
.5 trillion (up 1.Net sales ¥ 2.8% y-o-y) Net Income ¥ 30.3% y-o-y) Operating Income ¥ 80. It is negative in nature in the Indian context.8% y-o-y) MEANING OF SELECTION It is the process of searching the potential candidate.0 billion (up 3. But it is positive in the US context.0 billion (up 0.
at each stage. It is a series of successive hurdles or barriers which an applicant must cross. Performance appraisal . facts may come light which may lead to the rejection of the applicant. These hurdles or screens are designed to eliminate an unqualified candidate at any point in the selection process There is no standards selection procedure to be used in all organizations or for all jobs.Steps in Selection Process of Maruti udyog ltd Selection process consists of a series of steps. The complexity of selection procedures increases with the level and esponsibility of the position to be filled.
also known as employee appraisal. 4) Form a basis for personnel decisions: salary increases. A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. 2) Identify employee training needs. 3) Document criteria used to allocate organizational rewards. This is known as 360° appraisal. disciplinary actions. Performance appraisal is a part of career development. promotions. Performance appraisals are regular reviews of employee performance within organizations Generally. 6) Facilitate communication between employee and administrator. subordinates and customers while also performing a self assessment. cost and time). quantity. In some companies. The most popular methods that are being used as performance appraisal process are: 1) Management by objectives 2) 360 degree appraisal 3) Behavioral Observation Scale 4) Behaviorally Anchored Rating Scale . peers. 7) Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. is a method by which the job performance of an employee is evaluated (generally in terms of quality.Performance appraisal. employees receive assessments from their manager. the aims of a performance appraisal are to: 1) Give feedback on performance to employees. 5) Provide the opportunity for organizational diagnosis and development. etc.
The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. but it cannot be the organization’s aim. if the job of the Corporate Communications manager is to ensure that all mass communication about the brands and about the company is effective and in cohesion.Trait based systems. even before the appraisal year starts. Effective performance appraisal A tricky issue facing most organizations is the carrying out of effective and fair performance appraisal. then these should be laid out as her primary performance appraisal criteria. let us look at some key criteria that an appraisal system must satisfy. Far too often companies find that many employees are left grumbling about “unfairness” and bias. The organization’s aim has to be to put in place a system that actually improves performance. are also commonly used by businesses. The reasons for this are two-fold: 1) Because trait based systems are by definition based on personality traits. Yes. The first step must be to understand clearly what is expected from each employee / position in the organization. Once the criteria are clearly laid out. are more easily influenced by office politics. the aim of the performance appraisal from the company’s point of view cannot be to just determine increments or promotions. they make it difficult for a manager to provide feedback that can cause positive change in employee performance 2) Trait based systems. they should be communicated to her . And this must be done well before appraisal time. because they are vague. in fact. causing them to be less reliable as a source of information on an employee's true performance. which rely on factors such as integrity and conscientiousness. At a macro-level. For instance. While first accepting that there is probably no system which is close to perfect. that is how it affects the individuals. Let us now look at the specific criteria for the system.
However. If a front desk’s performance is to be evaluated on the level of courtesy shown to visitors. There are steps that ensure that subjectivity does not degenerate to bias in the performance appraisal context One such step is periodicity. and therefore less susceptible to suspicions of “unfairness”. one goal for a brand manager could be that his brand must have at least X per cent awareness in the market Making the goals quantitative in nature makes evaluation easier and less subjective. One of the main reasons why transparency is a casualty in most appraisals is that most managers are not comfortable giving negative feedback. it is not a good idea to get caught up in making all goals quantitative. and what extra efforts / course correction are required to improve the performance. Maybe it is a cultural issue. It is useful if some form of appraisal can be done every three months. It is useful if these goals can be quantified. Too often. but I wouldn’t say excellent” and that they need to try harder. among others. people are told something like “your performance has been good. for instance. but pointing out problems or giving negative feedback in a one-on-one face-to-face setting and in a calm matter-of-fact manner is not . courtesy.in unambiguous fashion so that she knows what to work towards and how she is going to be evaluated. It is a fact of life that not all things can be measured or quantified. The individual needs to know what scores he / she is being given and why. For example. Such feedback is little better than useless as it offers no direction whatsoever to the individual. Subjectivity need not automatically mean bias. then this cannot be quantified very easily but certain pointers can be got from the number of complaints about discourtesy and general observations about the person’s deportment. Such non-quantifiable measures will involve a certain amount of subjectivity. Another crucial requirement is transparency. This would tell the person whether he / she is going in the right direction.
but attention given to these points will go a long way indeed. Effective performance appraisal clearly needs a lot more than the few points outlined here. Transparency is again crucial to dispel lingering doubts of bias.something most managers are comfortable doing. For that matter. Maruti adopts `360 degree' appraisal system . but is equally dependent on the company’s financial performance and outlook. In many companies. most individuals are not comfortable receiving this either. This can only be tackled through extensive counseling and this too needs to start well before appraisal time. This again has to be handled with a certain degree of tact. Employees also need to be counseled that the amount of increment given is dependent on the appraisal score. such decisions are veiled in secrecy and there is talk of “normalization” which no one really understands.
but also by peers. the performance appraisal process to make it as fair as possible has been the dream of every HR manager. With an increasing number of qualitative factors that affect employees at the workplace. With cubicles giving way to open offices. The company has introduced a unique 360-degree feedback system. the employee is rated not just by his superiors. .Employee to be evaluated not just by superiors. their performance was being appraised only by the Directors and the Managing Director. Under the 360-degree feedback system. And now qualitative factors are not just at play in the services sector. the top-down approach to employee performance appraisal is also on its way out. subordinates It would seem that there is no corporate human resources policy that has not had its share of controversies for being biased. "We are starting the 360-degree feedback process with employees in the top management such as chief general managers and general managers. One company that has set itself on course to further demonstrating and opening up its employee evaluation process is car market leader Maruti Udyog. Siddiqui." says Maruti's Chief General Manager (HR).Y. The new system has been co-developed with Ernst & Young and has been put in place recently. whose performance will now be assessed based on feedback from their peers and junior management employees within the same department. but also by his peers and subordinates. starting with its senior leadership. but also in manufacturing. Mr S. Till last year.
1981. Establishment of Maruti Udyog Limited • Incorporated on February 24. • License and JV agreement signed on Oct 2. he can compare his self-appraisal with the assessment of his subordinates and peers. which is consulted on all major HR issues. when they are asked to offer their feedback about their superiors. has listed a set of leadership competencies that are expected in a general manager. One of the benefits that Maruti is hoping to get out of the 360-degree feedback process is the sense of empowerment and importance felt by subordinates. asking people to support the online questionnaire process. it has prepared a questionnaire to which peers and subordinates can respond online. Although acknowledged as an effective tool for leadership development in the West. . Maruti currently has over 4. Indian companies have been shy of introducing such a feedback system for fear of disturbing traditional hierarchical structures.Ernst & Young. called Human Resource Inter Divisional Committee (HRIDC). Mr Jagdish Khattar. Maruti has handled this by getting E&Y and other consultants to make detailed presentations to the senior management personnel before the process got under way. Based on that. The company has a committee of general managers. 1982. The 360-degree feedback system will also include a self-appraisal by the general manager. At the end of the process. 1982. in consultation with Maruti. HR consultants feel that the critical issues in implementing such a system include assuring respondents that their feedback will remain confidential and convincing the person receiving the feedback that this is a development tool and not an appraisal tool. Haryana. The initiative has been unveiled with an e-mail by Maruti's Managing Director. • MOU signed on April 4. • Plants located at Gurgaon.000 employees on its rolls.
A pride of India.GOI 49.• Head office located at New Delhi. SMC 50%. • Ownership . creating customer delight and shareholders’ wealth. if not the Country CAREER DESIGN • Performance & Potential based Appraisals • Fast Track Option for High-performers • Promotions after Managers Vacancy based . · Highest paid workforce in the Industry. VISION “The leader in the Indian Automobile Industry.74%. create a learning and vibrant organisation with high sense of pride amongst its members APPRAISAL & REWARD APPRAISAL · New Appraisal System based on KRAs &Targets · Review of Targets at regular Intervals · People Development an important KRA REWARD · Promotions based on Performance · Productivity & Profit-linked Incentive Schemes · Training including Long-term SMC Japan Trg.” HR VISION Lead and Facilitate continuous change towards organisational excellence .
Residential Colonies for Employees – Chakkarpur & Bhondsi .. Service & speedy redress · Proposed MUL Pension Scheme · Learning Opportunity . Japan · Job Rotation & Job enrichment EMPLOYEE ENGAGEMENT ESOPs • Maruti Udyog Ltd.Benchmark in Auto Technology · Professional Value addition through Training · Opportunity for foreign training at SMC.Annual Advance · MUL PF Trust – for better Mgt.Household Equipment Loans . Employees Mutual .• Interviews for promotions above Managers • Selection of Supervisors: – Performance / Attendance / Discipline record – Written Test & Interview • Job Rotation .Hospitalisation Reimbursement – on actuals without Ceiling .Vehicle Loans .including Inter-functional RETENTION & EMPLOYEE WELFARE · Employee Welfare .House Building Advance .
1implmented/employee/month Other areas .13 meetings/QC Gp.69 Crores iii) Number of QC Groups . 165 crores (25%)increase for the Company QC Meeting .8.Prod.52. & VI ./ Year Targ • Company-wide QC Groups (8-15 members per group) • Monthly QC Meetings on the First Wednesday each Month • Company-wide QC Competitions .Best Team sent to SMC .Benefit Fund Scheme • Managed by a 10-member Trust • Fixed Equity of 0.054 ii) Cost Saving (in crores) .7189 • Target for SS & QC for 2000-01: Suggestions Implemented .510 iv) QC Meetings held .Rs. 131.4 implemented/employee/month Cost Saving Rs.26% • Lock-in period of 3 years \ • Transferable Internally Maruti SUGGESTION SCHEME & QUALITY CIRCLES • For better quality and productivity • Through involvement of all employees and teamwork • During the year 1999-2000 :i) Suggestions Implemented .
Applicability (in work area/entire plant) • SUGGESTIONS : Monetary Reward MARUTI Criteria .• MD’s lunch with Best QC Team & Best Suggestion Winner • SUGGESTION MERIT EVALUATION : 5 LEVELS (A to E) Criteria .Idea .BUILD A LEARNNG ORGANISATION .Result : Cost reduction / Q Improvement / Productivity Improvement FUTURE CHALLENGES .Efforts .HR INITIATIVES • REALIGNING ORGANISATION CULTURE BASED ON NEW VISION & VALUES • OBJECTIVE PERFORMANCE SYSTEM MANAGEMENT & DEVELOPMENT • TRANSPARENT JOB ROTATION & JOB ENRICHMENT • PERFORMANCE LINKED REWARD AND RECOGNITION SYSTEM • CAREER PLANNING & PROMOTION POLICY • REVISED RECRUITMENT POLICY • COMPETENCY MAPPING • STRONG FUCUS ON TRAINING INITIATIVES .Ingenuity of Suggestion (depth of study) .Cost Saving (per annum/one time) .
So. Maruti Udyog Ltd (MUL) has drawn up a new human resources policy.. increments to even the basic salary will now depend on the employees' performance during the year.TRAINING TO THE PERSONNEL OF BUSINESS PARTNERS • INTERNAL COMMUNICATION • UNION ALIGNMENT • EMPLOYEE INVOLVMENT & PARTICIPATION et . The new performance appraisal and compensation system is likely to affect over 1.CONTINUOUS VALUE ADDITION TO PROFESSIONAL SKILL . the official said. MUL has traditionally had a performance-based component of about 30 per cent in its compensation package for its executives.'' the official said. But now it has gone the whole hog and decided that in addition to the hike in individual perquisites. ``Over the past week. which for the first time. . entirely links performance to pay packets for all its executives and managers. productivity RENEWING its efforts at cutting costs and improving productivity. the principle underlying the new system has been communicated at length throughout the company and feedback has been obtained.CUSTOMISED TRAINING .100% link between pay. Company officials said the changeover to a completely performance-based compensation system has been under discussion amongst MUL's senior management and directors for quite sometime now.34 marks / suggestion MUL to change gear on performance appraisal -. the new appraisal process has not come as a surprise for most of the employees and has been accepted by them.000 employees -.executives and senior and middle level managers.
it is e xpected to apply equally to all the staff members. It incorporates qualitative aspe cts. review and counselling by managers throughout the year. The new system will take effect from this year. along with quantitative targets. MUL has slipped into the red and recorded a loss during the year 2000-01. while making the organisation more capable of assessing its costs and returns. The employees are being put through workshops to train them on the various aspects of the system developed with Mr Athreya. For the first time.B. MUL sources said rather than appraise employees through confidential reports.2007. company sources said. The VRS programme received in-principle approval from the board last month. .In the run-up to the new remuneration system. which has been beleaguered by low margins and a falling bottomline. The performance measurement process will complement the new remuneration s ystem. The new system has been co-developed with Ernst & Young and has been put in place recently. the company has also developed a new performance measurement and development method along with the noted consultant. The new system is expected to help enhance managerial performance and skills. Maruti MUL has also drawn up a voluntary retirement scheme (VRS) for its employees. HBL) Maruti has introduced a unique 360-degree feedback system. starting with its senior leadership. has also been forced to take a hard look at its costs this year. the new performance measurement system involves an interactive process of goal setting. Mr M. including the shop floor workers. Athreya. While the VRS proposal is yet to be formally notified and offered to the company's employees. Maruti adopts `360 degree' appraisal system ( February '5. MUL. The move is also indicative of the company's renewed stress on increasing per employee productivi ty.
" says Maruti's Chief General Manager (HR). called Human Resource Inter Divisional Committee (HRIDC). when they are asked to offer their feedback about their superiors. Indian companies have been shy of introducing such a feedback system for fear of disturbing traditional hierarchical structures. in consultation with Maruti. Based on that. Till last year.Y. Mr Jagdish Khattar. HR consultants feel that the critical issues in implementing such a system include assuring respondents that their feedback will remain confidential and convincing the person receiving the feedback that this is a development tool and not an appraisal tool. but also by his peers and subordinates. whose performance will now be assessed based on feedback from their peers and junior management employees within the same department. Maruti has handled this by getting E&Y and other consultants to make detailed presentations to the senior management personnel before the process got under way. The 360-degree feedback system will also include a self-appraisal by the general manager. it has prepared a questionnaire to which peers and subordinates can respond online. "We are starting the 360-degree feedback process with employees in the top management such as chief general managers and general managers. Mr S. Ernst & Young. Although acknowledged as an effective tool for leadership development in the West.Under the 360-degree feedback system. . he can compare his self-appraisal with the assessment of his subordinates and peers. One of the benefits that Maruti is hoping to get out of the 360-degree feedback process is the sense of empowerment and importance felt by subordinates. their performance was being appraised only by the Directors and the Managing Director. The company has a committee of general managers.000 employees on its rolls. Maruti currently has over 4. At the end of the process. The initiative has been unveiled with an e-mail by Maruti's Managing Director. asking people to support the online questionnaire process. has listed a set of leadership competencies that are expected in a general manager. Siddiqui. which is consulted on all major HR issues. the employee is rated not just by his superiors.
Training and Development of dealer Sales Executives Development and Updation of Training Modules The Sales Training Department develops new modules along with training agencies based on market requirements. specific needs identified and feedback received .
Pretests and post-tests are conducted during training. • Training Path /Norms for all Dealer Sales persons are as follows: All Dealer Sales Executives need to attend Induction Training before or within a month of joining the dealership (depending on when the program is scheduled in the region) After Induction then the Sales executives needs to attend a segment B program. he can attend other courses like segment C etc. MGA etc and how to develop and maintain relationship with customers After gaining experience. Feedback is taken from . They also should attend ‘ Car Advisor for life Program’ which trains him to be a one point contact with the customers handling all his car related needs like finance. extended warranty. Monitoring and feedback: Monitoring and Evaluation of Sales force is done on a continuous basis.Conducting Training Annual Training Calendar is fixed based on: Number of Sales Executives in the sales network Training path requirement of Sales Executives Review of training programs done in the previous year Market Share/ Market situation/Focus areas and new product launches • Training conducted regionally based on fixed monthly calendar. insurance.
Communication: Sales Training Department sends monthly Newsletter “Creating Winners” to all DSE’s.participants on trainers and from trainers on participants. . It also provides two-way communication. It is a monthly communication containing articles on various aspects of product knowledge. It is conducted at regional levels and culminates in an all India level contest. Monitoring is also done through tests and audits at the dealerships. selling skills.It is a forum for effective communication of new ideas and strategies. market etc . An Annual Selling Skill Contest is organized to test the selling skills of the sales executives.
The employees are being put through workshops to train them on the various aspects of the system developed with Mr Athreya.executives and senior and middle level managers. The new performance appraisal and compensation system is likely to affect over 1. while making the organisation more capable of assessing its costs and returns. Company officials said the changeover to a completely performance-based compensation system has been under discussion amongst MUL's senior management and directors for quite sometime now. The new system will take effect from this year. The new system is expected to help enhance managerial performance and skills.000 employees -. .CONCLUSION As per my observation I felt that Maruti Udyog Ltd (MUL) has drawn up a new human resources policy. The move is also indicative of the company's renewed stress on increasing per employee productivity. which for the first time. entirely links performance to pay packets for all its executives and managers.