A MINOR RESEARCH PROJECT

ON

‘To study the performance appraisal mechanism in Cooperative Banks with special
reference to Kalyan Janata Sahakari Bank in Ulhasnagar’

SUBMITTED BY

Mrs. RAKHI V. GULATI

Assistant Professor, Department of Commerce,

S.I.C.E.S Degree College of Arts, Science & Commerce,
Ambernath – 421 505, Dist-Thane

(Research Project No. 595, Ref. No. - APD/237/601 of 2019 dated 27th March, 2019

Submitted to

University of Mumbai,
Mumbai

Year

August, 2019

ACKNOWLEDGEMENT
 I am indebted to each and every individual who helped me in many ways in the preparation of
this Minor Research Project titled “To study the performance appraisal mechanism in Cooperative
Banks with special reference to Kalyan Janata Sahakari Bank in Ulhasnagar”.

I express my gratitude to the authorities of University of Mumbai, Mumbai for providing me an

opportunity to do the Minor Research Project.
I am grateful to the Management, Principal, Teaching and Non-teaching Staff of S.I.C.E.S
Degree College of Arts, Science & Commerce, Ambernath – 421 505, Dist-Thane, for the support,
encouragement and guidance extended to me.
I express my heart-felt thanks to the Managers, Office bearers and H.R’s of the Kalyan Janata
Sahakari Bank, in all the 3 branches in Ulhasnagar .
I express my sincere thanks to my PhD. Guide Dr. Anita Manna for their valuable guidance and
suggestions in finalizing the Project work. I also thank my Head of departments Asst. Prof. Mrs. Uma
V. Tanwar for their encouragement.
I am thankful to our college librarian Dr. Sangharsh Gajbe and my colleague Ms. Neelam
Jaiswar who helped me in completing my minor project.
I owe a great deal of regards and gratitude to my Parents, my husband Mr. Vicky Gulati, my dear
daughter and son Sakshi and Shlok, my Family Members, Friends and my entire Student Community for
their encouragement and support all throughout.

Mrs. Rakhi V. Gulati

 CONTENTS

TITLE OF CONTENTS PAGE NO.

TITLE OF THE CHAPTER

Chapter- I Introduction 01-08

Chapter- II Review of Literature 09-10

Chapter-III Research Methodology 10

Chapter- IV Profile of Ulhasnagar and History of Kalyan Janata 11

Sahakari Bank
Chapter- V Findings
Chapter- VI Data Analysis and Interpretation

Chapter- VII Suggestions

Annexure: I- Bibliography 11
Appendix: I- Questionnaire ( Google form) 13-18
Appendix: II- Maharashtra State Map 18
Appendix: III- Thane District Map 19
Appendix: IV- Ulhasnagar Map 20
 CHAPTER 1

INTRODUCTION

The year 2012 was observed as an International year of Cooperatives with the main feature as
''Cooperative Enterprises Build a Better World". The term Urban Co-operative banks, though not
formally defined, refer to primary co-operative banks located in urban and semi-urban areas. Urban Co-
operative banks are classified as Scheduled urban Co-operative banks and Non-scheduled urban co-
operative banks.

Definition of Cooperative Bank

A bank that holds deposits makes loans and provides other financial services to cooperatives and
member-owned organizations.

Meaning of Cooperative Banks

The history of Indian cooperative banking started with the passing of Cooperative Societies Act in
1904. The objective of this Act was to establish cooperative credit societies “to encourage thrift, self-
help and cooperation among agriculturists, artisans and persons of limited means.”
Cooperative banks are owned by their customers and follow the cooperative principle of one person, one
vote. Co-operative banks are often regulated under both banking and cooperative legislation. They provide
services such as savings and loans to non-members as well as to members, and some participate in the
wholesale markets for bonds, money and even equities.
The banking system comprises of various banks of public as well as of private nature such as
Cooperative Banks, Commercial Banks, Scheduled and Non-Scheduled Banks, Regional Rural Banks
etc. Cooperative banks serve an important role in the Indian economy, especially in rural areas. They are
registered under the Cooperative Societies Act, 1912. They are regulated by the Reserve
Bank of India under the Banking Regulation Act, 1949 and Banking Laws (Application to Co-
operative Societies) Act, 1965.Cooperative banking is retail and commercial banking organized on
a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the
world. Banks that are operating in the economy under cooperative model of ownership. This is a
situation where a number of people get together and form a cooperative and then run the bank jointly.
Till 2004, there were 100 Cooperative banks in India.
Urban Cooperative Bank:
A cooperative bank located in urban/semi-urban centre is known as Urban Cooperative Bank (UCB).
These banks are essentially formed to finance small business. Usually a cooperative society is formed
around communities, localities or small groups with a common interest.

 Scheduled urban cooperative bank:

‘Banks which are included in the second schedule of the RBI Act, 1934 are Scheduled Urban co-
operative banks’.

 Non-Scheduled urban cooperative bank:

‘Banks which are not included in the second schedule of the RBI Act, 1934 are Scheduled Urban co-
operative banks’.

Urban Cooperative banks are required to maintain certain amount of cash reserve and liquid assets. The
scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an
average daily balance, the amount of which should not be less than 5 per cent of their net demand and
time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non-scheduled
(urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As
Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total
demand and time liabilities in India on day-to-day basis. For scheduled cooperative banks, CRR is
required to be maintained with Reserve Bank of India, whereas for non-scheduled cooperative banks, it
can be maintained by way of either cash with themselves or in the form of balances in a current account
with the Reserve Bank of India or the state co-operative bank of the state concerned or the central
cooperative bank of the district concerned or by way of net balances in current accounts with public
sector banks. In addition to the cash reserve, every primary (urban) cooperative bank (scheduled/non-
scheduled) is required to maintain liquid assets in the form of cash, gold or unencumbered approved
securities which should not be less than 25 per cent of the total of its demand and time liabilities in
accordance with the provisions of Section 24 of the Banking Regulation Act,1949 (As Applicable to
Cooperative Societies).The performance of these banks can be analyzed on the basis of their capital,
number of branches, number of employees, quality of services, profitability, non- performing assets etc.

Taking in mind above points, the present research work is proposed to study the comparative
performance of scheduled and non scheduled urban cooperative banks banks in changing scenario of
Indian banking system especially in urban areas.
PERFORMANCE APPRAISAL:
Performance Appraisal/Management is a whole work system that begins when a job is defined as
required. The same ends when an employee leaves the organization. This study emphasises the
performance appraisal mechanism of cooperative banks in the Ulhasnagar with special reference to
Kalyan Janata Sahakari Bank. In this study the performance appraisal of lower end as well as upper end
employees will be taken. To make the study more viable a consumer service survey will also be done.

Definition of Performance Appraisal

A performance appraisal is a systematic general and periodic process that assesses an individual
employee's job performance and productivity in relation to certain pre-established criteria and
organizational objectives.

Meaning of Performance Appraisal

An annual review of an employee's overall contributions to the company by his/her
manager. Performance appraisals, also called annual reviews, evaluate an employee's skills,
achievements and growth, or lack thereof. Companies use performance appraisals to give employees
big-picture feedback on their work and to justify pay increases and bonuses, as well as termination
decisions. A performance appraisal (PA), also referred to as a performance review, performance
evaluation, (career) development discussion or employee appraisal is a method by which the job
performance of an employee is documented and evaluated. Performance appraisals are a part of career
development and consist of regular reviews of employee performance within organizations. Other
aspects of individual employees are considered as well, such as organizational citizenship behavior,
accomplishments, potential for future improvement, strengths and weaknesses, etc. To collect PA data,
there are three main methods: objective production, personnel, and judgmental evaluation. Judgmental
evaluations are the most commonly used with a large variety of evaluation methods. Historically, PA
has been conducted annually (long-cycle appraisals); however, many companies are moving towards
shorter cycles (every six months, every quarter), and some have been moving into short-cycle (weekly,
bi-weekly) PA. The interview could function as "providing feedback to employees, counseling and
developing employees, and conveying and discussing compensation, job status, or disciplinary
decisions". PA is often included in performance management systems. PA helps the subordinate answer
two key questions: first, "What are your expectations of me?" second, "How am I doing to meet your
expectations?"Performance management systems are employed "to manage and align" all of an
organization's resources in order to achieve highest possible performance. "How performance is
managed in an organization determines to a large extent the success or failure of the organization.
Therefore, improving PA for everyone should be among the highest priorities of contemporary
organizations". Some applications of PA are compensation, performance improvement, promotions,
termination, test validation, and more. While there are many potential benefits of PA, there are also
some potential drawbacks. For example, PA can help facilitate management-employee communication;
however, PA may result in legal issues if not executed appropriately, as many employees tend to be
unsatisfied with the PA process.

STATEMENT OF PROBLEM

‘To study the performance appraisal mechanism in Cooperative Banks with special reference to Kalyan
Janata Sahakari Bank in Ulhasnagar’.

OBJECTIVES OF THE STUDY

1. To study the demographic profile of bank.

2. To analyse the conceptual knowledge of performance appraisal among the bank employees.
3. To identify the training needs of employees after performance appraisal.
4. To identify the promotion strategy of bank as per performance appraisal result.

HYPOTHESIS

1. Kalyan Janata Sahakari Bank employees are aware of the performance appraisal mechanism
followed by bank.
2. After performance appraisal bank do training programmes for its employees.
3. Banks provides any monetary or non monetary benefits to its employees after their performance
appraisal.

SIGNIFICANCE OF THE STUDY

This study will help from three points of view as under:

1. Importance to the Researcher:

 The researcher through this study will get a clear idea about the performance appraisal
mechanism used in the banks its importance, limitations if any. The researcher can further
through the study give proper knowledge to his/her students.

2. Importance to the Society:

Through this study the people who wish to join the banks for job purpose can get a clear idea
about the performance appraisal mechanism. Further, if the mechanism is justifiable the capable
candidates may select the bank to do the job. It may also help the existing staff especially lower
end staff to perform well so that through their good performance they may get new prospects.

3. Importance to the RBI

RBI will get a proper information about the bank and its performance appraisal mechanism so
that if any improvement or action could be taken.

SCOPE AND LIMITATIONS OF THE STUDY

This study has the following scope and limitations:

1. This study is related to performance appraisal mechanism of Janata Sahakari Co-operative Banks
only.
2. This study restricted to Ulhasnagar area only.
3. This study helps employees with a better understanding of their role and responsibilities.
4. Study gives proper assistance in personal decisions such as promotion/allocating rewards.
5. Study improves working relationships and communication between superiors and subordinates.
 CHAPTER 2
REVIEW OF LITERATURE:

D.Krishna (1998) argued that the cooperative directly or indirectly work towards peace, progress and
prosperity. He cited that the following five good reason for encouraging cooperatives, following the
pronouncements of United Nations, and the international cooperative alliance: cooperatives are
community enterprises, they promote democracy, they build open markets, they raise human dignity and
they are systems for development. He strongly favoured that the cooperative must be encouraged so that
they can reduce disparities and social tension and conflicts. So cooperative should be promoted as per
the values and principles of cooperation so that they can promote peace and bring progress and
prosperity to the society.

Murugan M. Sakthivel (2009) `in his article entitled “A Study on Organizational Culture and Its
Impact on the Performance.” In the case of Chennai, the main objectives of organizational culture
influencing performance among the employees of the IT (Information Technology) industry are
encouraging developments, facilities and relationships. Employees may be developing through HRD
practices. Also it focuses some important points that are organizational culture practices encompass the
various development activities like performance assessment, potential appraisal, training and
development, job rotation and career planning.

Jabeen Maimona (2010) studied in her article “Impact of Performance Appraisal on Employees
Motivation”.Appraisal is essential tool to measure the efficiency and performance of employees. The
aim of the researcher is to examine the relationship between Performance appraisal and Employee
motivation. Performance appraisal helps to employee by identifying the strengths and weaknesses
develop him for his career development, converse directorial aims, along with nurturing optimistic
associations between supervision and workforce. Researcher concluded that Performance appraisals
provide a recognized, recorded, customary assessment of an individual’s routine and a sketch for
potential enlargement and increases motivation.

Adhir Ambavane (May, 2011) concluded that Training is an important tool for increasing the overall
productivity of an organization. The emergence of new sectors, where human elements play a pivotal
role, has exponentially increased the need for training.
A. Ramachandran, D.Siva Shanmugam (May, 2012) emphasised that the future of urban cooperative
banks is challenging because of the competition from public sector banks and private sector banks.
Public sector banks and private sector banks are concentrating on their major expansion activities both
vertically and horizontally.

Anil Matkar (2012) viewed that the increase in the net non – interest income, profit per employee,
business per employee, capital adequacy ratio and decrease in the operating expenses, staff cost level of
non-performing assets by the last few years indicates that the financial performance of the MSC Bank in
retail banking products has been good and retail banking has also contributed well to overall progress of
the MSC Bank.

B. Muniraja Sekhar, B. Sudhir (August, 2012) was of the view that the technology laggard
cooperative banks should realize that the economic class and age composition of their customers is
already not favourable. It would obviously be difficult for laggard co operative banks to attract new
young customers if they do not increase their investments on IT in right direction with cautious
approach.
 CHAPTER 3

RESEARCH METHODOLOGY:

 TYPE:
This research method is of descriptive type in which emphasis is given on collecting primary
data by way of survey method.
 SAMPLING:
Ulhasnagar area is covered having three branches of the bank.
 TOOLS:
Questionnaire is prepared in the form of Google form and distributed among the respondents.
 ANALYSIS:
As per the data collection, it is evaluated, analysed for further conclusion.
 CHAPTER 4

PROFILE OF THE STUDY AREA:

Ulhasnagar is a town located in the Thane district of Maharashtra state in Konkan division, located
about 55 km from Chhatrapati Shivaji Maharaj Terminus railway station. This city is part of Mumbai
Metropolitan Region managed by MMRDA. It had an estimated population of 506,098 at the 2011
Census. Ulhasnagar is a municipal town and the headquarters of the Tehsil bearing the same name. It is
a railway station on the Mumbai-Pune route of the Central Railway zone.

BANK HISTORY

The Kalyan Janata Sahakari Bank Ltd.has completed more than four decades of dedicated service to the
people of Kalyan city and surrounding areas. From a modest beginning in December, 1973, the bank has
grown by leaps and bounds in a short span of 40 years with a business mix of over Rs. 4548 crores
today. With over 55000 shareholders and a satisfied client base of over 3 lakhs, the Bank is continuously
striving to improve quality and set standards in customer service and become a 'Janata' bank in the truest
sense.

The history of the bank dates back to the year 1970 when Advocate Bhaurao Sabnis and Shri. Vasantrao
Purohit took the initiative, against heavy odds, in founding a bank for the predominantly middle class
people of Kalyan. It was around the same time that The Kalyan Peoples' Co Operative Bank had failed
leading to severe discontent among the people. Against this background, raising share capital for a bank
was an extremely daunting task but their determined and relentless efforts culminated in a modest
beginning on 23rd December, 1973 in a 180 sq.ft. office with three employees, share capital of Rs.
50,000/- and deposits of Rs. 80,000/-.

The first ones to be on the Board of Directors of the bank were Shri B.P.Joshi, Dr.P.V.Karkhanis,
Advocate Shri Bhaurao Sabnis, Shri V.G.Phadke-Chartered Accountant, Prof.A.P.Pradhan, Shri
S.M.Oak, Advocate U.S.Sheikh, Shri N.D.Bhoir, Shri G.S.Kadam, Shri V.H.Purohit, Shri W.D.Sathe
among others. The visionary zeal of these pioneers has catapulted the bank into a prominent co operative
bank in Maharashtra with a branch network of 26 branches spread across Mumbai, Navi Mumbai,
Thane, Pune, Satara, Kolhapur and Nashik districts.
 The no. of employees in the branches including the Manager, Clerk/secretary, Accountant, Sub staff. are
of Branch in Ulhasnagar-2 is 10, Branch in Ulhasnagar 4 is apprx. 23 and the Branch in Ulhasnagar-5 is
07.

Address of the 3 branches of Kalyan Janata Sahakari Bank situated at ulhasnagar is as under:

1. Maruti Chambers, Plot No.394 Vithalwadi Police Staff Quarter, Camp 4, Vitthalwadi,
Ulhasnagar, Maharashtra 421004

2. Nij dham Ashram, Nij dham Marg Gandhi Road, Opposite Petrol Pump Thane, Ulhasnagar,
Maharashtra 421005

3. Near, shop No. 2& 3, Shiv Shakti Complex, Central Hospital Rd, Press Bazar, Ulhasnagar,
Maharashtra 421002

BIBLIOGRAPHY

1. D. Krishna, (1998), Peace progress and prosperity through Urban Co-operative Banks, The Cooperator,
Vol.36. No.5, NCUI, New Delhi.
2. Cooperative banks are owned by their customers and follow the cooperative principle of one
person, one vote. Co-operative banks are often regulated under both banking and cooperative
legislation. They provide services such as savings and loans to non-members as well as to
members, and some participate in the wholesale markets for bonds, money and even equities.

WEBLIOGRAPHY

1.http://www.investopedia.com/terms/p/performance-appraisal.asp-0#ixzz4wsiJ4HQh

2. https://en.wikipedia.org/wiki/Performance_appraisal

3. http://www.shodhganga@INFLIBNET, The International Journal of HRM>volume 22, 2011-Issue

4. https://shodhganga.inflibnet.ac.in/bitstream/10603/203363/8/chapter%207.pdf

5.https://www.researchgate.net/publication/313829278_The_Relationship_between_Performance_Appr
aisal_Satisfaction_and_Employee_Outcomes_With_Special_Reference_of_Bank_of_Ceylon_Head_Off
ice
6.https://www.ijser.org/researchpaper/Core-Banking-Solutions-in-Urban-Cooperative-Banks-Issues-
and-Challenges.pdf

Appendix: I- Questionnaire

Google Form

To study the performance appraisal mechanism of employees of Co-

operative bank with special reference to Kalyan Janata Sahakari Bank in
Ulhasnagar

I Rakhi Gulati, working as an Assistant Professor in Department of Commerce in S.I.C.E.S Degree

college, Ambernath (W). I am collecting data on performance appraisal mechanism of employee of
co-operative bank for my minor research work. I request you to kindly ll my questionnaire.

* Requred

1. Name

Your answer

2. Name of Bank and Branch

Your answer

3. Department or Branch

Your answer
4. Age: *

Upto 25 years

26 years to 35 years

36 years to 45 years

46 years and above

5. Educational Qualication *

S..S.C

H.S.C

Graduate

Post Graduate

Other:

6. Designation at present: *

Manager

Accountant

Clerk/Secretary

Sub staff

7. Work Experience in the Organization: *

 Less than 10 years

10 years to 20 years

20 years to 30 years

More than 30 years

8. Does your organization have any performance appraisal system? *

Yes

No

9. What according to you, the purpose of performance appraisal is

*Assessment of individual performance at job

Assessment of training needs

Potential for promotion

Assessment of Individual weaknesses

Tool in hand of management for controlling the employee's performance

10. Is the result of performance appraisal result communicated to

the employees? *

Yes

NO

11 As per the results, is any action taken? *

Yes
 NO

12. As per the result do the employees get promotion or demotion?

Yes

NO

13. As per the result do the employees get training? *

Yes

NO

14. How many times you were promoted as per the result? *

Never

Once

Twice

Thrice

More than three times

15. What is the Promotional Policy of your organization? *

Seniority

Merit

Result of performance appraisal

Written test with merit

Other:
16. What method of promotion do you support? *

Seniority

Merit

Result of performance appraisal

Written test with merit

Other:

17. Have you ever been transferred? *

Yes

No

Appendix: II- Maharashtra State Map

Appendix: III- Thane District Map
THANE DISTRICT MAP
Appendix: IV- Ulhasnagar MAP

Ulhasnagar Map
DATA ANALYSIS & INTERPRETATION:
The research methodology is of descriptive type in which emphasis is given on collecting primary data
by way of survey method. Google forms were prepared to make the use of the latest technology and do
the work paperless. In all 26 responses were received out of total 40 employees in 3 branches including
the Manager, Clerk/secretary, Accountant, Sub staff.
As per the data received, the following chart is prepared:
 Reply in
percentage
Sr. Question No. Yes No Analysis
No
1. Does your organisation have 44.0% 56.0% As per the question I have found that
performance appraisal system? though the post actions of
performance appraisal are taken but
the employees are not aware of the
same by taking its name.
2. As per the results is any action 62.5% 37.5% Here, more than 50% respondents
taken? have given their reply in Yes that the
action is taken
3. As per the results do the 87.5% 12.5% The respondents are quite positive
employees get training? about the training they get after
appraisal.
4. As per the results do the 68.8% 31.3% 68.8% respondents have given a
employees get promotion or positive reply as to the promotion and
demotion? demotion done after evaluating their
performance
5. Is the result of performance 52.9% 47.1% The results of their performance is
appraisal communicated to the been passed to them, this is a positive
employees? thing

FINDINGS & SUGGESTIONS:

As per the data received I can conclude that the bank should have a good system of giving training, promotion,
demotion to their employees, though they are doing but they are not having a proper and systematic system
and as far as my search, employees are unaware of the same. For this purpose the bank should adopt a proper
Performance Appraisal system, which is to be communicated to the employees with a proper channel and in a
proper manner. If this happens it will have the following advantages:

1. The employees will get motivated and will do their work in a more efficient manner.
2. The employee morale will increase.
3. If the hardworking and efficient employees get good training and promotion, then there will be an
essence of improvement and enthusiasm in the entire organisation.
4. The employees working with great motivation and dedication will in turn benefit the organisation.
5. Even the head post Managers should get a good scope for progress, promotion, and improving
themselves by giving them incentives for their hard and extra work, this will create a good sense of
responsibility in them..
6. Some of the employees said that the promotion should be done as per seniority, some said it should be
done as per merit, this means that still the bank has not set a proper system, which should be set so that
in both the cases the bank will get advantage.
7. It is because if the leaders will be highly motivated, the employees will automatically get motivated.
Thus to conclude , the bank is a growing bank but if they will follow a proper Performance Appraisal
system, then the employees will get a good reason to grow, develop and become more efficient.